Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
 	 	 	
þ	 	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the quarterly period ended September 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	 	(I.R.S. Employer Identification No.)	
incorporation or organization)	 	 	
 	 	 	
1850 North Central Avenue, Suite 1900	 	 	
Phoenix, Arizona	 	85004-4565	
 	 	 	
(Address of principal executive offices)	 	(Zip Code)	
(602) 207-4000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	 	Accelerated filer þ	 	Non-accelerated filer o	 	Small reporting company o	
 	 	 	 	(Do not check if a smaller reporting company)	 	 	
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
As of October 31, 2011, there were 20,124,707 shares of common stock ($1.50 par value) outstanding.

 

TABLE OF CONTENTS

									
PART I—FINANCIAL INFORMATION	
	Item 1. Financial Statements	
		CONDENSED CONSOLIDATED BALANCE SHEETS	
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	
		CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	
	Item 4. Controls and Procedures	
PART II—OTHER INFORMATION	
	Item 1A. Risk Factors	
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	
	Item 6. Exhibits	
SIGNATURES	
Exhibit 31.1	
Exhibit 31.2	
Exhibit 32.1	
Exhibit 32.2	
EX-101 INSTANCE DOCUMENT	
EX-101 SCHEMA DOCUMENT	
EX-101 CALCULATION LINKBASE DOCUMENT	
EX-101 LABELS LINKBASE DOCUMENT	
EX-101 PRESENTATION LINKBASE DOCUMENT	

Table of Contents
PART I—FINANCIAL INFORMATION

Item 1.	 	Financial Statements.	
VIAD CORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 	 	 	 	 	 	 	 	 	
 	 	September 30, 2011	 	 	December 31, 2010	 	
 	 	(in thousands, except share data)	 	
ASSETS	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	104,553	 	 	$	145,841	 	
Accounts receivable, net of allowance for doubtful accounts of $1,624 and $1,172, respectively	 	 	61,931	 	 	 	47,187	 	
Inventories	 	 	40,410	 	 	 	38,670	 	
Deferred income taxes	 	 	22,922	 	 	 	22,057	 	
Other current assets	 	 	19,559	 	 	 	17,160	 	
 	 	 	 	 	 	 	
Total current assets	 	 	249,375	 	 	 	270,915	 	
Property and equipment, net	 	 	174,022	 	 	 	149,346	 	
Other investments and assets	 	 	31,911	 	 	 	31,363	 	
Deferred income taxes	 	 	35,901	 	 	 	35,875	 	
Goodwill	 	 	131,909	 	 	 	127,441	 	
Other intangible assets, net	 	 	2,278	 	 	 	1,563	 	
 	 	 	 	 	 	 	
Total Assets	 	$	625,396	 	 	$	616,503	 	

LIABILITIES AND STOCKHOLDERS’ EQUITY	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	58,089	 	 	$	47,933	 	
Other current liabilities	 	 	96,256	 	 	 	96,749	 	
Current portion of long-term debt and capital lease obligations	 	 	2,200	 	 	 	6,639	 	
 	 	 	 	 	 	 	
Total current liabilities	 	 	156,545	 	 	 	151,321	 	
Long-term debt and capital lease obligations	 	 	1,420	 	 	 	2,438	 	
Pension and postretirement benefits	 	 	32,603	 	 	 	33,008	 	
Other deferred items and liabilities	 	 	43,558	 	 	 	43,025	 	
 	 	 	 	 	 	 	
Total liabilities	 	 	234,126	 	 	 	229,792	 	
 	 	 	 	 	 	 	
Commitments 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	 	 	 	37,402	 	
Additional capital	 	 	599,347	 	 	 	606,902	 	
Retained deficit	 	 	(6,145	)	 	 	(19,229	)	
Unearned employee benefits and other	 	 	(3,520	)	 	 	(4,433	)	
Accumulated other comprehensive income (loss):	 	 	 	 	 	 	 	 	
Unrealized gains on investments	 	 	183	 	 	 	282	 	
Cumulative foreign currency translation adjustments	 	 	31,519	 	 	 	38,979	 	
Unrecognized net actuarial loss and prior service credit	 	 	(10,543	)	 	 	(10,410	)	
Common stock in treasury, at cost, 4,809,459 and 4,710,988 shares, respectively	 	 	(265,400	)	 	 	(270,534	)	
 	 	 	 	 	 	 	
Total Viad Corp stockholders’ equity	 	 	382,843	 	 	 	378,959	 	
Noncontrolling interest	 	 	8,427	 	 	 	7,752	 	
 	 	 	 	 	 	 	
Total stockholders’ equity	 	 	391,270	 	 	 	386,711	 	
 	 	 	 	 	 	 	
Total Liabilities and Stockholders’ Equity	 	$	625,396	 	 	$	616,503	 	
 	 	 	 	 	 	 	
See Notes to Condensed Consolidated Financial Statements.
 
 Page 2 

Table of Contents

VIAD CORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended September 30,	 	 	Nine months ended September 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands, except per share data)	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Convention and event services	 	$	121,157	 	 	$	130,609	 	 	$	529,963	 	 	$	464,465	 	
Exhibits and environments	 	 	30,540	 	 	 	32,550	 	 	 	120,807	 	 	 	111,544	 	
Travel and recreation services	 	 	64,472	 	 	 	51,985	 	 	 	94,189	 	 	 	81,787	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	 	 	216,169	 	 	 	215,144	 	 	 	744,959	 	 	 	657,796	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Costs of services	 	 	180,517	 	 	 	170,354	 	 	 	595,554	 	 	 	517,905	 	
Costs of products sold	 	 	30,240	 	 	 	34,871	 	 	 	116,872	 	 	 	122,048	 	
Corporate activities	 	 	2,356	 	 	 	1,749	 	 	 	5,203	 	 	 	4,451	 	
Interest income	 	 	(198	)	 	 	(174	)	 	 	(588	)	 	 	(358	)	
Interest expense	 	 	373	 	 	 	472	 	 	 	1,165	 	 	 	1,438	 	
Restructuring charges	 	 	75	 	 	 	183	 	 	 	1,550	 	 	 	2,795	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total costs and expenses	 	 	213,363	 	 	 	207,455	 	 	 	719,756	 	 	 	648,279	 	

Income before income taxes	 	 	2,806	 	 	 	7,689	 	 	 	25,203	 	 	 	9,517	 	
Income tax expense	 	 	523	 	 	 	1,911	 	 	 	9,011	 	 	 	3,909	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	2,283	 	 	 	5,778	 	 	 	16,192	 	 	 	5,608	 	
Net income attributable to noncontrolling interest	 	 	(1,038	)	 	 	(982	)	 	 	(675	)	 	 	(766	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Viad	 	$	1,245	 	 	$	4,796	 	 	$	15,517	 	 	$	4,842	 	

Diluted income per common share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Viad common stockholders	 	$	0.06	 	 	$	0.23	 	 	$	0.76	 	 	$	0.24	 	

Weighted-average outstanding and potentially dilutive common shares	 	 	20,033	 	 	 	20,309	 	 	 	20,089	 	 	 	20,332	 	

Basic income per common share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Viad common stockholders	 	$	0.06	 	 	$	0.23	 	 	$	0.76	 	 	$	0.24	 	

Weighted-average outstanding common shares	 	 	19,711	 	 	 	20,001	 	 	 	19,768	 	 	 	20,037	 	

Dividends declared per common share	 	$	0.04	 	 	$	0.04	 	 	$	0.12	 	 	$	0.12	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
See Notes to Condensed Consolidated Financial Statements.
 
 Page 3 

Table of Contents

VIAD CORP
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended September 30,	 	 	Nine months ended September 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	2,283	 	 	$	5,778	 	 	$	16,192	 	 	$	5,608	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive income (loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Holding gains (losses) arising during the period, net of tax	 	 	(160	)	 	 	97	 	 	 	(99	)	 	 	78	 	
Unrealized foreign currency translation adjustments, net of tax	 	 	(13,072	)	 	 	6,693	 	 	 	(7,460	)	 	 	2,783	 	
Net actuarial loss, net of tax	 	 	51	 	 	 	183	 	 	 	459	 	 	 	(1,188	)	
Prior service credit, net of tax	 	 	(197	)	 	 	(175	)	 	 	(592	)	 	 	(470	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other comprehensive income (loss)	 	 	(13,378	)	 	 	6,798	 	 	 	(7,692	)	 	 	1,203	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive income (loss)	 	 	(11,095	)	 	 	12,576	 	 	 	8,500	 	 	 	6,811	 	
Comprehensive income attributable to noncontrolling interest	 	 	(1,038	)	 	 	(982	)	 	 	(675	)	 	 	(766	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Comprehensive income (loss) attributable to Viad	 	$	(12,133	)	 	$	11,594	 	 	$	7,825	 	 	$	6,045	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
See Notes to Condensed Consolidated Financial Statements.
 
 Page 4 

Table of Contents

VIAD CORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 	 	 	 	 	 	 	 	 	
 	 	Nine months ended September 30,	 	
 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net income	 	$	16,192	 	 	$	5,608	 	
Adjustments to reconcile net income to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	21,882	 	 	 	21,314	 	
Deferred income taxes	 	 	548	 	 	 	(5,217	)	
Restructuring charges	 	 	1,550	 	 	 	2,795	 	
Losses (gains) on dispositions of property and other assets	 	 	(64	)	 	 	51	 	
Share-based compensation expense	 	 	3,284	 	 	 	2,748	 	
Excess tax benefit from share-based compensation arrangements	 	 	(54	)	 	 	—	 	
Other non-cash items, net	 	 	3,532	 	 	 	3,281	 	
Change in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Receivables	 	 	(16,154	)	 	 	(12,801	)	
Inventories	 	 	(883	)	 	 	8,723	 	
Accounts payable	 	 	12,665	 	 	 	12,536	 	
Restructuring liabilities	 	 	(3,362	)	 	 	(5,866	)	
Accrued compensation	 	 	3,536	 	 	 	7,018	 	
Customer deposits	 	 	(3,975	)	 	 	2,670	 	
Income taxes payable	 	 	2,036	 	 	 	1,983	 	
Other assets and liabilities, net	 	 	(5,665	)	 	 	429	 	
 	 	 	 	 	 	 	
Net cash provided by operating activities	 	 	35,068	 	 	 	45,272	 	
 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Capital expenditures	 	 	(17,251	)	 	 	(11,609	)	
Acquisition of businesses, net of cash acquired	 	 	(41,105	)	 	 	—	 	
Proceeds from dispositions of property and other assets	 	 	315	 	 	 	14,630	 	
 	 	 	 	 	 	 	
Net cash provided by (used in) investing activities	 	 	(58,041	)	 	 	3,021	 	
 	 	 	 	 	 	 	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Payments on debt and capital lease obligations	 	 	(6,544	)	 	 	(3,944	)	
Dividends paid on common stock	 	 	(2,435	)	 	 	(2,466	)	
Common stock purchased for treasury	 	 	(5,230	)	 	 	(6,906	)	
Debt issuance costs	 	 	(1,001	)	 	 	—	 	
Excess tax benefit from share-based compensation arrangements	 	 	54	 	 	 	—	 	
Proceeds from exercise of stock options	 	 	163	 	 	 	38	 	
 	 	 	 	 	 	 	
Net cash used in financing activities	 	 	(14,993	)	 	 	(13,278	)	
 	 	 	 	 	 	 	
Effect of exchange rate changes on cash and cash equivalents	 	 	(3,322	)	 	 	770	 	
 	 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents	 	 	(41,288	)	 	 	35,785	 	
Cash and cash equivalents, beginning of year	 	 	145,841	 	 	 	116,342	 	

Cash and cash equivalents, end of period	 	$	104,553	 	 	$	152,127	 	
 	 	 	 	 	 	 	
Supplemental disclosure of cash flow information	 	 	 	 	 	 	 	 	
Income taxes	 	$	7,805	 	 	$	5,680	 	
 	 	 	 	 	 	 	
Interest	 	$	804	 	 	$	792	 	
 	 	 	 	 	 	 	
Equipment acquired under capital leases	 	$	1,097	 	 	$	590	 	
 	 	 	 	 	 	 	
See Notes to Condensed Consolidated Financial Statements.
 
 Page 5 

Table of Contents
VIAD CORP
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 three and nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.
For further information, refer to the consolidated financial statements and related footnotes for the year ended December 31, 2010, included in the Company’s Form 10-K (File No. 001-11015), filed with the Securities and Exchange Commission on March 4, 2011.
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. (“Denali”). 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. Denali operates the Denali Backcountry Lodge, which is the largest of three lodges located within Denali National Park and Preserve in Alaska, and the Denali Cabins, which are located near the entrance to Denali National Park. In addition to lodging, Denali also provides food and beverage operations, and packaged tour and transportation services in and around the park.
Note 2. Share-Based Compensation
The following table summarizes share-based compensation expense for the three and nine months ended September 30:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended	 	 	Nine months ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Stock options	 	$	146	 	 	$	152	 	 	$	476	 	 	$	415	 	
Restricted stock/performance-based restricted stock (“PBRS”)	 	 	794	 	 	 	736	 	 	 	2,409	 	 	 	2,211	 	
Restricted stock units/PBRS units	 	 	(35	)	 	 	60	 	 	 	54	 	 	 	125	 	
Performance unit incentive plan (“PUP”)	 	 	86	 	 	 	—	 	 	 	345	 	 	 	(3	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total share-based compensation before income tax benefit	 	 	991	 	 	 	948	 	 	 	3,284	 	 	 	2,748	 	
Income tax benefit	 	 	(358	)	 	 	(329	)	 	 	(1,163	)	 	 	(957	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total share-based compensation, net of income tax benefit	 	$	633	 	 	$	619	 	 	$	2,121	 	 	$	1,791	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
In addition, $124,000 and $509,000 of costs associated with share-based compensation (including $43,000 for the nine months ended September 30, 2010 of restricted stock units and PBRS units presented below) were included in restructuring charges during the nine months ended September 30, 2011 and 2010, respectively.
 
 Page 6 

Table of Contents
The following table summarizes restricted stock and PBRS activity during the nine months ended September 30, 2011:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Restricted Stock	 	 	PBRS	 	
 	 	 	 	 	 	Weighted-Average	 	 	 	 	 	 	Weighted-Average	 	
 	 	 	 	 	 	Grant Date	 	 	 	 	 	 	Grant Date	 	
 	 	Shares	 	 	Fair Value	 	 	Shares	 	 	Fair Value	 	
Balance at January 1, 2011	 	 	478,499	 	 	$	21.51	 	 	 	18,830	 	 	$	33.02	 	
Granted	 	 	177,350	 	 	 	22.91	 	 	 	—	 	 	 	—	 	
Vested	 	 	(91,212	)	 	 	31.31	 	 	 	(18,414	)	 	 	33.42	 	
Forfeited	 	 	(4,400	)	 	 	21.19	 	 	 	—	 	 	 	—	 	

Balance at September 30, 2011	 	 	560,237	 	 	 	20.36	 	 	 	416	 	 	 	15.36	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The unamortized cost of all outstanding restricted stock and PBRS awards as of September 30, 2011 was $4.4 million, which Viad expects to recognize in its consolidated financial statements over a weighted-average period of approximately 2.4 years. During the nine months ended September 30, 2011 and 2010, the Company repurchased 28,627 shares for $679,000 and 28,407 shares for $573,000, respectively, related to tax withholding requirements on vested share-based awards. As of September 30, 2011, there were 997,903 total shares available for future grant.
The following table summarizes the liability-based award activity during the nine months ended September 30, 2011:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Restricted Stock Units	 	 	PBRS Units	 	 	PUP Awards	 	
 	 	 	 	 	 	Weighted-Average	 	 	 	 	 	 	Weighted-Average	 	 	 	 	 	 	Weighted-Average	 	
 	 	 	 	 	 	Grant Date	 	 	 	 	 	 	Grant Date	 	 	 	 	 	 	Grant Date	 	
 	 	Units	 	 	Fair Value	 	 	Units	 	 	Fair Value	 	 	Units	 	 	Fair Value	 	
Balance at January 1, 2011	 	 	26,050	 	 	$	17.18	 	 	 	3,914	 	 	$	15.36	 	 	 	102,960	 	 	$	33.81	 	
Granted	 	 	12,550	 	 	 	23.01	 	 	 	—	 	 	 	—	 	 	 	95,500	 	 	 	23.02	 	
Vested	 	 	—	 	 	 	—	 	 	 	(1,958	)	 	 	15.36	 	 	 	—	 	 	 	—	 	
Cancelled	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(102,960	)	 	 	33.81	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2011	 	 	38,600	 	 	 	19.07	 	 	 	1,956	 	 	 	15.36	 	 	 	95,500	 	 	 	23.02	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of September 30, 2011 and December 31, 2010, Viad had liabilities recorded of $409,000 and $407,000, 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 $52,000 and $37,000 were distributed in January 2011 and March 2010, respectively.
As of September 30, 2011, Viad had a liability recorded of $345,000 related to PUP awards. The PUP awards for the 2007-2009 period vested effective December 31, 2009 and a cash payout of $19,000 was distributed in March 2010. No cash payouts of PUP awards were made during the nine months ended September 30, 2011. In March 2011, 102,960 PUP awards for the 2008-2010 period were cancelled as the performance conditions related to those awards were not achieved.
The following table summarizes stock option activity during the nine months ended September 30, 2011:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Weighted-	 	 	 	 	
 	 	 	 	 	 	Average	 	 	Options	 	
 	 	Shares	 	 	Exercise Price	 	 	Exercisable	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Options outstanding at January 1, 2011	 	 	763,794	 	 	$	23.38	 	 	 	451,194	 	
Exercised	 	 	(7,866	)	 	 	20.56	 	 	 	 	 	
Forfeited or expired	 	 	(147,911	)	 	 	24.42	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Options outstanding at September 30, 2011	 	 	608,017	 	 	 	23.17	 	 	 	401,438	 	
 	 	 	 	 	 	 	 	 	 	 	 	
The total unrecognized cost related to non-vested stock option awards was $812,000 as of September 30, 2011, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of approximately 1.7 years. No stock options were granted during the nine months ended September 30, 2011.
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 September 30, 2011, there were 10,864 of such options outstanding and exercisable, both with exercise prices ranging from $19.57 to $26.31. The weighted-average remaining contractual life of these options outstanding was less than one year. During the nine months ended September 30, 2011, 100 options were exercised by MoneyGram participants at an exercise price of $19.57.
 
 Page 7 

Table of Contents
Note 3. Acquisition of Businesses
On September 16, 2011, Viad acquired the Denali Backcountry Lodge and Denali Cabins for $15.3 million in cash. Denali Backcountry Lodge is the largest of three lodges located within Denali National Park and Preserve in Alaska and Denali Cabins consist of 46 guest cabins near the entrance to Denali National Park. Denali will operate as a separate business unit within the Travel & Recreation Group. The following information represents the preliminary amounts assigned to the assets and liabilities of Denali as of the date of acquisition:
 	 	 	 	 	
 	 	(in thousands)	 	
Other current assets	 	$	43	 	
Property and equipment	 	 	11,090	 	
Goodwill	 	 	3,482	 	
Other intangible assets	 	 	818	 	
 	 	 	 	
Total assets acquired	 	 	15,433	 	

Customer deposits	 	 	(38	)	
Other current liabilities	 	 	(90	)	
 	 	 	 	
Total liabilities acquired	 	 	(128	)	

Purchase price	 	$	15,305	 	
 	 	 	 	
The Company recorded $3.5 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 entire amount of the goodwill is expected to be deductible for tax purposes over a period of 15 years. The amount assigned to other intangible assets includes $633,000 related to non-amortized trade names, $100,000 related to customer relationships and $85,000 related to a non-compete agreement. Transaction costs related to the acquisition were insignificant. The results of operations of Denali 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-room hotel located outside of Glacier National Park’s east entrance and is operated by Glacier Park within the Travel & Recreation Group. The following information represents the preliminary amounts assigned to the assets and liabilities of St. Mary as of the date of acquisition:
 	 	 	 	 	
 	 	(in thousands)	 	
Cash and cash equivalents	 	$	21	 	
Other current assets	 	 	715	 	
Property and equipment	 	 	13,058	 	
Goodwill	 	 	2,583	 	
Other intangible assets	 	 	60	 	
 	 	 	 	
Total assets acquired	 	 	16,437	 	

Customer deposits	 	 	(684	)	
Other current liabilities	 	 	(46	)	
Other long-term liabilities	 	 	(382	)	
 	 	 	 	
Total liabilities acquired	 	 	(1,112	)	

Purchase price	 	$	15,325	 	

 Page 8 

Table of Contents
The Company recorded $2.6 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 entire amount of the goodwill is expected to be deductible for tax purposes over a period of 15 years. The amount assigned to other intangible assets includes $60,000 related to a non-amortized business license. 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-room hotel located in Whitefish, Montana, and is operated by Glacier Park within the Travel & Recreation Group. The following information represents the preliminary amounts assigned to the assets and liabilities of Grouse Mountain Lodge as of the date of acquisition:
 	 	 	 	 	
 	 	(in thousands)	 	
Cash and cash equivalents	 	$	9	 	
Other current assets	 	 	126	 	
Property and equipment	 	 	8,750	 	
Goodwill	 	 	1,331	 	
Other intangible assets	 	 	400	 	
 	 	 	 	
Total assets acquired	 	 	10,616	 	

Customer deposits	 	 	(99	)	
Other current liabilities	 	 	(12	)	
 	 	 	 	
Total liabilities acquired	 	 	(111	)	

Purchase price	 	$	10,505	 	
 	 	 	 	
The Company recorded $1.3 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 entire amount of the goodwill is expected to be deductible for tax purposes over a period of 15 years. The amount assigned to other intangible assets includes $400,000 related to a non-amortized business license. 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 of Viad for the three and nine months ended September 30, 2011 and 2010, assuming that the acquisitions of Denali, St. Mary and Grouse Mountain Lodge had each been completed at the beginning of each period:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended September 30,	 	 	Nine months ended September 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands, except per share data)	 	
Revenue	 	$	221,335	 	 	$	227,169	 	 	$	752,868	 	 	$	673,567	 	
Net income attributable to Viad	 	$	2,869	 	 	$	7,114	 	 	$	17,158	 	 	$	6,852	 	
Diluted net income per share	 	$	0.14	 	 	$	0.35	 	 	$	0.84	 	 	$	0.33	 	
Basic net income per share	 	$	0.14	 	 	$	0.35	 	 	$	0.84	 	 	$	0.33	 	
Note 4. Inventories
The components of inventories were as follows:
 	 	 	 	 	 	 	 	 	
 	 	September 30,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Raw materials	 	$	18,143	 	 	$	18,488	 	
Work in process	 	 	22,267	 	 	 	20,182	 	
 	 	 	 	 	 	 	
Inventories	 	$	40,410	 	 	$	38,670	 	

 Page 9 

Table of Contents
Note 5. Property and Equipment
Property and equipment consisted of the following:
 	 	 	 	 	 	 	 	 	
 	 	September 30,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Land	 	$	17,846	 	 	$	9,139	 	
Buildings and leasehold improvements	 	 	109,729	 	 	 	89,945	 	
Equipment and other	 	 	306,617	 	 	 	299,558	 	
 	 	 	 	 	 	 	
 	 	 	434,192	 	 	 	398,642	 	
Accumulated depreciation	 	 	(260,170	)	 	 	(249,296	)	
 	 	 	 	 	 	 	
Property and equipment, net	 	$	174,022	 	 	$	149,346	 	
 	 	 	 	 	 	 	
Depreciation expense for the three months ended September 30, 2011 and 2010 was $7.4 million and $7.1 million, respectively, and for the nine months ended September 30, 2011 and 2010 was $21.3 million and $20.6 million, respectively.
In March 2010, Viad completed the sale of a non-strategic real estate asset within the Travel & Recreation Group consisting of land, building and related improvements for $14.3 million (net of selling costs).
Note 6. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill for the nine months ended September 30, 2011 were as follows:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	Marketing &	 	 	 	 	 	 	 	
 	 	Marketing &	 	 	Events	 	 	Travel &	 	 	 	 	
 	 	Events U.S.	 	 	International	 	 	Recreation Group	 	 	Total	 	
 	 	(in thousands)	 	
Balance at January 1, 2011	 	$	62,686	 	 	$	22,455	 	 	$	42,300	 	 	$	127,441	 	
Business acquisitions	 	 	—	 	 	 	—	 	 	 	7,396	 	 	 	7,396	 	
Foreign currency translation adjustments	 	 	—	 	 	 	(465	)	 	 	(2,463	)	 	 	(2,928	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2011	 	$	62,686	 	 	$	21,990	 	 	$	47,233	 	 	$	131,909	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
A summary of other intangible assets as of September 30, 2011 is presented below:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Gross Carrying	 	 	Accumulated	 	 	Net Carrying	 	
 	 	Value	 	 	Amortization	 	 	Value	 	
 	 	(in thousands)	 	
Amortized intangible assets:	 	 	 	 	 	 	 	 	 	 	 	 	
Customer contracts and relationships	 	$	2,587	 	 	$	(1,540	)	 	$	1,047	 	
Non-compete agreement	 	 	85	 	 	 	—	 	 	 	85	 	
Proprietary technology	 	 	517	 	 	 	(505	)	 	 	12	 	
Other	 	 	67	 	 	 	(26	)	 	 	41	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	3,256	 	 	 	(2,071	)	 	 	1,185	 	

Unamortized intangible assets:	 	 	 	 	 	 	 	 	 	 	 	 	
Trade names	 	 	633	 	 	 	—	 	 	 	633	 	
Business licenses	 	 	460	 	 	 	—	 	 	 	460	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	1,093	 	 	 	—	 	 	 	1,093	 	

Total	 	$	4,349	 	 	$	(2,071	)	 	$	2,278	 	

 Page 10 

Table of Contents
A summary of amortized other intangible assets as of December 31, 2010 is presented below:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Gross Carrying	 	 	Accumulated	 	 	Net Carrying	 	
 	 	Value	 	 	Amortization	 	 	Value	 	
 	 	(in thousands)	 	
Customer contracts and relationships	 	$	2,506	 	 	$	(1,135	)	 	$	1,371	 	
Proprietary technology	 	 	517	 	 	 	(448	)	 	 	69	 	
Design libraries	 	 	175	 	 	 	(110	)	 	 	65	 	
Other	 	 	166	 	 	 	(108	)	 	 	58	 	
 	 	 	 	 	 	 	 	 	 	
 	 	$	3,364	 	 	$	(1,801	)	 	$	1,563	 	
 	 	 	 	 	 	 	 	 	 	
Intangible asset amortization expense for the three months ended September 30, 2011 and 2010 was $185,000 and $238,000, respectively, and $568,000 and $721,000 for the nine months ended September 30, 2011 and 2010, respectively. Estimated amortization expense related to amortized intangible assets for future periods is expected to be as follows:
 	 	 	 	 	
 	 	(in thousands)	 	
 		
2011	 	$	265	 	
2012	 	$	434	 	
2013	 	$	349	 	
2014	 	$	119	 	
2015	 	$	18	 	
 
 Page 11 

Table of Contents
Note 7. Accrued Liabilities and Other
Other current liabilities consisted of the following:
 	 	 	 	 	 	 	 	 	
 	 	September 30,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Continuing operations:	 	 	 	 	 	 	 	 	
Customer deposits	 	$	40,257	 	 	$	43,411	 	
Accrued compensation	 	 	21,679	 	 	 	17,599	 	
Self-insured liability accrual	 	 	7,819	 	 	 	8,278	 	
Accrued foreign income taxes	 	 	5,004	 	 	 	2,852	 	
Accrued employee benefit costs	 	 	3,232	 	 	 	3,127	 	
Accrued restructuring	 	 	1,840	 	 	 	4,272	 	
Accrued sales and use taxes	 	 	1,454	 	 	 	2,990	 	
Accrued dividends	 	 	826	 	 	 	827	 	
Other	 	 	12,182	 	 	 	11,084	 	
 	 	 	 	 	 	 	
 	 	 	94,293	 	 	 	94,440	 	
 	 	 	 	 	 	 	
Discontinued operations:	 	 	 	 	 	 	 	 	
Environmental remediation liabilities	 	 	936	 	 	 	1,124	 	
Self-insured liability accrual	 	 	493	 	 	 	552	 	
Other	 	 	534	 	 	 	633	 	
 	 	 	 	 	 	 	
 	 	 	1,963	 	 	 	2,309	 	
 	 	 	 	 	 	 	
Total other current liabilities	 	$	96,256	 	 	$	96,749	 	
 	 	 	 	 	 	 	
Other deferred items and liabilities consisted of the following:
 	 	 	 	 	 	 	 	 	
 	 	September 30,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Continuing operations:	 	 	 	 	 	 	 	 	
Self-insured liability accrual	 	$	13,442	 	 	$	14,330	 	
Accrued compensation	 	 	4,984	 	 	 	5,129	 	
Accrued restructuring	 	 	3,972	 	 	 	3,724	 	
Foreign deferred tax liability	 	 	1,584	 	 	 	1,582	 	
Accrued income taxes	 	 	—	 	 	 	146	 	
Other	 	 	5,877	 	 	 	3,945	 	
 	 	 	 	 	 	 	
 	 	 	29,859	 	 	 	28,856	 	
 	 	 	 	 	 	 	
Discontinued operations:	 	 	 	 	 	 	 	 	
Self-insured liability accrual	 	 	6,607	 	 	 	6,898	 	
Environmental remediation liabilities	 	 	4,897	 	 	 	4,953	 	
Accrued income taxes	 	 	1,015	 	 	 	987	 	
Other	 	 	1,180	 	 	 	1,331	 	
 	 	 	 	 	 	 	
 	 	 	13,699	 	 	 	14,169	 	
 	 	 	 	 	 	 	
Total other deferred items and liabilities	 	$	43,558	 	 	$	43,025	 	

 Page 12 

Table of Contents
Note 8. 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. On April 28, 2011, Viad paid off its outstanding borrowing under the previous credit facility of $4.2 million and as of September 30, 2011, Viad’s total debt of $3.6 million consisted entirely of capital lease obligations. As of September 30, 2011, Viad had $125.4 million of capacity remaining under its 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 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 (and a ratio of not less than 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 September 30, 2011, the fixed-charge coverage and leverage ratios were 3.08 to 1 and 0.29 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 September 30, 2011, Viad was in compliance with all covenants.
The estimated fair value of total debt was $3.6 million and $9.2 million as of September 30, 2011 and December 31, 2010, 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.
Note 9. Stockholders’ Equity
The following represents a reconciliation of the carrying amounts of stockholders’ equity attributable to Viad and the noncontrolling interest for the nine months ended September 30, 2011:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Total Viad	 	 	 	 	 	 	Total	 	
 	 	Stockholders’	 	 	Noncontrolling	 	 	Stockholders’	 	
 	 	Equity	 	 	Interest	 	 	Equity	 	
 	 	(in thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at January 1, 2011	 	$	378,959	 	 	$	7,752	 	 	$	386,711	 	
Net income	 	 	15,517	 	 	 	675	 	 	 	16,192	 	
Dividends on common stock	 	 	(2,435	)	 	 	—	 	 	 	(2,435	)	
Common stock purchased for treasury	 	 	(5,230	)	 	 	—	 	 	 	(5,230	)	
Employee benefit plans	 	 	2,800	 	 	 	—	 	 	 	2,800	 	
Unrealized foreign currency translation adjustment	 	 	(7,460	)	 	 	—	 	 	 	(7,460	)	
Unrealized gain on investments	 	 	(99	)	 	 	—	 	 	 	(99	)	
Prior service credit and net actuarial loss	 	 	(133	)	 	 	—	 	 	 	(133	)	
ESOP allocation adjustment	 	 	920	 	 	 	—	 	 	 	920	 	
Other	 	 	4	 	 	 	—	 	 	 	4	 	
 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2011	 	$	382,843	 	 	$	8,427	 	 	$	391,270	 	

 Page 13 

Table of Contents
The following represents a reconciliation of the carrying amounts of stockholders’ equity attributable to Viad and the noncontrolling interest for the nine months ended September 30, 2010:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Total Viad	 	 	 	 	 	 	Total	 	
 	 	Stockholders’	 	 	Noncontrolling	 	 	Stockholders’	 	
 	 	Equity	 	 	Interest	 	 	Equity	 	
 	 	(in thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at January 1, 2010	 	$	377,515	 	 	$	7,116	 	 	$	384,631	 	
Net income	 	 	4,842	 	 	 	766	 	 	 	5,608	 	
Dividends on common stock	 	 	(2,466	)	 	 	—	 	 	 	(2,466	)	
Common stock purchased for treasury	 	 	(6,906	)	 	 	—	 	 	 	(6,906	)	
Employee benefit plans	 	 	2,621	 	 	 	—	 	 	 	2,621	 	
Unrealized foreign currency translation adjustment	 	 	2,783	 	 	 	—	 	 	 	2,783	 	
Unrealized loss on investments	 	 	78	 	 	 	—	 	 	 	78	 	
Prior service credit and net actuarial loss	 	 	(1,658	)	 	 	—	 	 	 	(1,658	)	
ESOP allocation adjustment	 	 	1,100	 	 	 	—	 	 	 	1,100	 	
Other	 	 	10	 	 	 	—	 	 	 	10	 	
 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2010	 	$	377,919	 	 	$	7,882	 	 	$	385,801	 	
 	 	 	 	 	 	 	 	 	 	
Viad has announced its intent to repurchase shares of the Company’s common stock from time to time at prevailing market prices. During the three months ended September 30, 2011 and 2010, Viad repurchased 250,760 shares for $4.6 million and 356,300 shares for $6.3 million, respectively. As of September 30, 2011, 53,621 shares remain available for repurchase from the announced authorization. Additionally, during the nine months ended September 30, 2011 and 2010, the Company repurchased 28,627 shares for $679,000 and 28,407 shares for $573,000, respectively, related to tax withholding requirements on share-based awards.
Note 10. 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 September 30, 2011 Using	 	
 	 	 	 	 	 	 	 	 	 	Significant	 	 	 	 	
 	 	 	 	 	 	Quoted Prices	 	 	Other	 	 	Significant	 	
 	 	 	 	 	 	in Active	 	 	Observable	 	 	Unobserved	 	
 	 	September 30,	 	 	Markets	 	 	Inputs	 	 	Inputs	 	
 	 	2011	 	 	(Level 1)	 	 	(Level 2)	 	 	(Level 3)	 	
 	 	(in thousands)	 	
Assets:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Money market funds	 	$	19,245	 	 	$	19,245	 	 	$	—	 	 	$	—	 	
Other mutual funds	 	 	1,331	 	 	 	1,331	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	20,576	 	 	$	20,576	 	 	$	—	 	 	$	—	 	

 Page 14 

Table of Contents
As of September 30, 2011 and December 31, 2010, Viad had investments in money market mutual funds of $19.2 million and $31.3 million, respectively, which were 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 September 30, 2011 and December 31, 2010, Viad had investments in other mutual funds of $1.3 million and $1.7 million, respectively, which were 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 September 30, 2011 and December 31, 2010, there were unrealized gains on the investments of $302,000 ($183,000 after-tax) and $462,000 ($282,000 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 8.
Note 11. 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	 	 	Nine months ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands, except per share data)	 	
Basic net income per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Numerator:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Viad	 	$	1,245	 	 	$	4,796	 	 	$	15,517	 	 	$	4,842	 	
Less: Allocation to non-vested shares	 	 	(34	)	 	 	(114	)	 	 	(412	)	 	 	(126	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income allocated to Viad common stockholders	 	$	1,211	 	 	$	4,682	 	 	$	15,105	 	 	$	4,716	 	

Denominator:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average outstanding common shares	 	 	19,711	 	 	 	20,001	 	 	 	19,768	 	 	 	20,037	 	

Net income attributable to Viad common stockholders	 	$	0.06	 	 	$	0.23	 	 	$	0.76	 	 	$	0.24	 	

Diluted net income per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Numerator:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Viad	 	$	1,245	 	 	$	4,796	 	 	$	15,517	 	 	$	4,842	 	

Denominator:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average outstanding shares	 	 	19,711	 	 	 	20,001	 	 	 	19,768	 	 	 	20,037	 	
Additional dilutive shares related to share- based compensation	 	 	322	 	 	 	308	 	 	 	321	 	 	 	295	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted-average outstanding and potentially dilutive shares	 	 	20,033	 	 	 	20,309	 	 	 	20,089	 	 	 	20,332	 	

Net income attributable to Viad common stockholders (1)	 	$	0.06	 	 	$	0.23	 	 	$	0.76	 	 	$	0.24	 	

(1)	 	Diluted income per share cannot exceed basic income per share.	
Options to purchase 313,000 and 474,000 shares of common stock were outstanding during the nine months ended September 30, 2011 and 2010, respectively, but were not included in the computation of dilutive shares outstanding because the effect would be anti-dilutive. Additionally, 322,000 and 308,000 share-based compensation awards were considered dilutive and included in the computation of diluted income per share during the three months ended September 30, 2011 and 2010, respectively. During the nine months ended September 30, 2011 and 2010, 321,000 and 295,000 share-based compensation awards were considered dilutive and included in the computation of diluted income per share, respectively.
 
 Page 15 

Table of Contents
Note 12. 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 nine months ended September 30:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Computed income tax expense at statutory federal income tax rate of 35%	 	$	8,821	 	 	 	35.0	%	 	$	3,331	 	 	 	35.0	%	
State income tax expense (benefit), net of federal benefit or provision	 	 	537	 	 	 	2.1	%	 	 	(279	)	 	 	(2.9	%)	
Tax resolutions, net	 	 	(103	)	 	 	(0.4	%)	 	 	(149	)	 	 	(1.6	%)	
Change in enacted tax law	 	 	—	 	 	 	0.0	%	 	 	1,279	 	 	 	13.5	%	
Other, net	 	 	(244	)	 	 	(0.9	%)	 	 	(273	)	 	 	(2.9	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income tax expense	 	$	9,011	 	 	 	35.8	%	 	$	3,909	 	 	 	41.1	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	
In March 2010, the Patient Protection and Affordable Care Act and a related measure, the Health Care and Education Reconciliation Act of 2010, were both enacted into law. As a result of this legislation, the tax deductions for the portion of the prescription drug costs for which Viad receives a Medicare Part D subsidy have been eliminated for tax years beginning after December 31, 2012. Accordingly, during the three months ended March 31, 2010, Viad reduced its deferred tax asset related to its postretirement benefit plan liability to reflect the change in the tax law. The reduction in the deferred tax asset resulted in an increase to income tax expense of $1.3 million during the three months ended March 31, 2010.
As of September 30, 2011 and December 31, 2010, Viad had gross deferred tax assets of $64.9 million and $67.1 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.
During 2010 and 2009, Viad recorded pre-tax losses from its operations in the United States. The Company considered the negative evidence of these domestic pre-tax operating losses on the future recoverability of its deferred tax assets. Viad also considered positive evidence regarding the realization of deferred tax assets including the Company’s historical and forecasted taxable income, taxpaying history and future reversals of deferred tax liabilities. Furthermore, Viad also considered the fact that goodwill impairment losses were not tax deductible and thus did not contribute to tax losses in 2009. As of both September 30, 2011 and December 31, 2010, Viad had a valuation allowance of $411,000 related to certain state deferred tax assets. With respect to all other deferred tax assets, management believes that recovery from future taxable income is more-likely-than-not.
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 are primarily dependent on Viad’s ability to generate sufficient taxable income in future periods. In light of the Company’s domestic operating losses in 2010 and 2009, and the continued uncertainties in the current economic environment, it is 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.
As of September 30, 2011 and December 31, 2010, Viad did not have any accrued gross liabilities associated with uncertain tax positions for continuing operations. Additionally, as of September 30, 2011, Viad did not have any accrued interest and penalties related to uncertain tax positions for continuing operations. As of December 31, 2010, Viad had accrued interest and penalties related to uncertain tax positions for continuing operations of $146,000. Viad classifies interest and penalties related to income tax liabilities as a component of income tax expense. During the three months ended September 30, 2011 and 2010, Viad recorded tax-related interest expense credits of $64,000 and $230,000, respectively. During the nine months ended September 30, 2011 and 2010, Viad recorded tax-related interest expense credits of $146,000 and $214,000, respectively.
In addition to the above, Viad had accrued gross liabilities associated with uncertain tax positions for discontinued operations of $636,000 as of both September 30, 2011 and December 31, 2010. In addition, as of September 30, 2011 and December 31, 2010, Viad had accrued interest and penalties related to uncertain tax positions for discontinued operations of $379,000 and $351,000, 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).
As of September 30, 2011 and December 31, 2010, liabilities associated with uncertain tax positions (including interest and penalties) of $1.0 million and $1.1 million, respectively, were classified as non-current liabilities.
 
 Page 16 

Table of Contents
Note 13. Pension and Postretirement Benefits
The net periodic benefit cost of Viad’s pension and postretirement benefit plans for the three months ended September 30 included the following components:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Domestic Plans	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Postretirement	 	 	Foreign	 	
 	 	Pension Plans	 	 	Benefit Plans	 	 	Pension Plans	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Service cost	 	$	17	 	 	$	53	 	 	$	22	 	 	$	27	 	 	$	92	 	 	$	75	 	
Interest cost	 	 	292	 	 	 	311	 	 	 	187	 	 	 	265	 	 	 	183	 	 	 	193	 	
Expected return on plan assets	 	 	(140	)	 	 	(149	)	 	 	(35	)	 	 	(41	)	 	 	(164	)	 	 	(149	)	
Amortization of prior service cost (credit)	 	 	—	 	 	 	10	 	 	 	(320	)	 	 	(293	)	 	 	—	 	 	 	—	 	
Recognized net actuarial loss	 	 	1	 	 	 	139	 	 	 	80	 	 	 	157	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net periodic benefit cost	 	$	170	 	 	$	364	 	 	$	(66	)	 	$	115	 	 	$	111	 	 	$	119	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
The net periodic benefit cost of Viad’s pension and postretirement benefit plans for the nine months ended September 30 included the following components:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Domestic Plans	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Postretirement	 	 	Foreign	 	
 	 	Pension Plans	 	 	Benefit Plans	 	 	Pension Plans	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Service cost	 	$	91	 	 	$	159	 	 	$	96	 	 	$	81	 	 	$	276	 	 	$	227	 	
Interest cost	 	 	892	 	 	 	933	 	 	 	651	 	 	 	795	 	 	 	551	 	 	 	581	 	
Expected return on plan assets	 	 	(422	)	 	 	(447	)	 	 	(101	)	 	 	(123	)	 	 	(493	)	 	 	(448	)	
Amortization of prior service cost (credit)	 	 	—	 	 	 	30	 	 	 	(958	)	 	 	(879	)	 	 	—	 	 	 	—	 	
Recognized net actuarial loss	 	 	342	 	 	 	416	 	 	 	400	 	 	 	470	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net periodic benefit cost	 	$	903	 	 	$	1,091	 	 	$	88	 	 	$	344	 	 	$	334	 	 	$	360	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Viad expects to contribute $1.7 million to its funded pension plans, $959,000 to its unfunded pension plans and $500,000 to its postretirement benefit plans in 2011. As of September 30, 2011, Viad had contributed $1.1 million to its funded pension plans, $648,000 to its unfunded pension plans and $52,000 to its postretirement benefit plans.
Note 14. Restructuring Charges
During the nine months ended September 30, 2011, Viad recorded aggregate restructuring charges of $1.6 million primarily related to reorganization activities in the Marketing & Events Group, comprised of the elimination of certain positions as well as facility consolidations. The restructuring liabilities at September 30, 2011 related to future lease payment obligations will be made over the remaining lease terms and severance and employee benefits are expected to be paid by the end of 2011.
 
 Page 17 

Table of Contents
The table below represents a reconciliation of beginning and ending liability balances by major restructuring activity for the nine months ended September 30, 2011:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Marketing & Events	 	 	 	 	 	 	 	
 	 	Group Consolidation	 	 	Other Restructurings	 	 	 	 	
 	 	Severance &	 	 	 	 	 	 	Severance &	 	 	 	 	 	 	 	
 	 	Employee	 	 	 	 	 	 	Employee	 	 	 	 	 	 	 	
 	 	Benefits	 	 	Facilities	 	 	Benefits	 	 	Facilities	 	 	Total	 	
 	 	(in thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at January 1, 2011	 	$	1,106	 	 	$	5,051	 	 	$	197	 	 	$	1,642	 	 	$	7,996	 	
Restructuring charges	 	 	514	 	 	 	1,036	 	 	 	—	 	 	 	—	 	 	 	1,550	 	
Cash payments	 	 	(1,509	)	 	 	(1,175	)	 	 	(197	)	 	 	(481	)	 	 	(3,362	)	
Adjustment to liability	 	 	(128	)	 	 	—	 	 	 	—	 	 	 	(263	)	 	 	(391	)	
Foreign currency translation adjustment	 	 	17	 	 	 	2	 	 	 	—	 	 	 	—	 	 	 	19	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 30, 2011	 	$	—	 	 	$	4,914	 	 	$	—	 	 	$	898	 	 	$	5,812	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Note 15. 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 September 30, 2011, 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 September 30, 2011, there was a remaining environmental remediation liability of $5.8 million related to previously sold operations of which $936,000 was included in the consolidated balance sheets under the caption “Other current liabilities” and $4.9 million under the caption “Other deferred items and liabilities.”
As of September 30, 2011, 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 September 30, 2011 would be $30.4 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 September 30, 2011, the amount of additional funding, if any, that Viad would be required to make related to multi-employer pension plans is not ascertainable.
 
 Page 18 

Table of Contents
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 six one-year periods and now expires on December 31, 2011. The Park Service, in its sole discretion, may continue extending Glacier Park’s concession contract in one-year increments. When this contract ultimately 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 70 percent of its 2010 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 its Glacier Park Lodge operations 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 25 percent of Travel & Recreation Group’s full year 2010 segment operating income.
Note 16. 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	 	 	Nine months ended	 	
 	 	September 30,	 	 	September 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S.	 	$	116,826	 	 	$	125,127	 	 	$	498,691	 	 	$	438,996	 	
International	 	 	38,516	 	 	 	38,133	 	 	 	159,443	 	 	 	144,559	 	
Intersegment eliminations	 	 	(3,645	)	 	 	(101	)	 	 	(7,364	)	 	 	(7,546	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	151,697	 	 	 	163,159	 	 	 	650,770	 	 	 	576,009	 	
Travel & Recreation Group	 	 	64,472	 	 	 	51,985	 	 	 	94,189	 	 	 	81,787	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	216,169	 	 	$	215,144	 	 	$	744,959	 	 	$	657,796	 	

Segment operating income (loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S.	 	$	(17,078	)	 	$	(9,544	)	 	$	1,061	 	 	$	(11,890	)	
International	 	 	(3,110	)	 	 	(2,038	)	 	 	7,325	 	 	 	7,131	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	(20,188	)	 	 	(11,582	)	 	 	8,386	 	 	 	(4,759	)	
Travel & Recreation Group	 	 	25,600	 	 	 	21,501	 	 	 	24,147	 	 	 	22,602	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	5,412	 	 	 	9,919	 	 	 	32,533	 	 	 	17,843	 	
Corporate activities	 	 	(2,356	)	 	 	(1,749	)	 	 	(5,203	)	 	 	(4,451	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	3,056	 	 	 	8,170	 	 	 	27,330	 	 	 	13,392	 	
Interest income	 	 	198	 	 	 	174	 	 	 	588	 	 	 	358	 	
Interest expense	 	 	(373	)	 	 	(472	)	 	 	(1,165	)	 	 	(1,438	)	
Restructuring charges:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events U.S.	 	 	(75	)	 	 	(183	)	 	 	(1,550	)	 	 	(2,508	)	
Travel & Recreation Group	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(235	)	
Corporate	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(52	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Income before income taxes	 	$	2,806	 	 	$	7,689	 	 	$	25,203	 	 	$	9,517	 	

 Page 19 

Table of Contents

 	 	September 30,	 	 	December 31,	 	
 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Assets:	 	 	 	 	 	 	 	 	
Marketing & Events U.S.	 	$	232,212	 	 	$	235,965	 	
Marketing & Events International	 	 	86,149	 	 	 	83,441	 	
Travel & Recreation Group	 	 	202,214	 	 	 	157,562	 	
Corporate and other	 	 	104,821	 	 	 	139,535	 	
 	 	 	 	 	 	 	
 	 	$	625,396	 	 	$	616,503	 	
 	 	 	 	 	 	 	
Note 17. Impact of Recent Accounting Pronouncements
In May 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance related to fair value measurement and disclosure requirements, which is codified in Accounting Standards Codification (“ASC”) Topic 820. The new guidance is intended to clarify the application of existing fair value measurement and disclosure requirements, and also changes certain principles and disclosures. The guidance is effective for fiscal years and interim periods 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.
In June 2011, the FASB issued new guidance related to the presentation of comprehensive income, which is codified in ASC Topic 220. The new guidance requires entities to present the total of comprehensive income, the components of net income and the components of other comprehensive income in one of two formats: 1) in a single continuous statement, or 2) in two separate but consecutive statements. The guidance also requires the presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. The guidance is effective for fiscal years and interim periods beginning after December 15, 2011, and will not have an impact on Viad’s financial condition or results of operations.
In September 2011, the FASB issued new guidance related to goodwill impairment testing, which is codified in 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.
In September 2011, the FASB issued new guidance related to disclosures regarding employer’s participation in multi-employer pension plans, which is codified in ASC Topic 715. The new guidance requires employers that participate in multi-employer pension plans to provide additional quantitative and qualitative information about their involvement in those plans. The guidance is effective for annual periods for fiscal years ending after December 15, 2011. The adoption of this disclosure-only guidance will not impact Viad’s financial condition or results of operations.
 
 Page 20 

Table of Contents

Item 2.	 	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	
The following discussion should be read in conjunction with Viad Corp’s condensed consolidated financial statements and related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Viad Corp’s actual results could differ materially from those anticipated due to various factors discussed under “Forward-Looking Statements” and elsewhere in this quarterly report.
Overview:
Viad Corp (“Viad” or the “Company”) operates in three reportable business segments: Marketing & Events U.S., Marketing & Events International and 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. (“Denali”). 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. Denali operates the Denali Backcountry Lodge, which is the largest of three lodges located within Denali National Park and Preserve in Alaska, and the Denali Cabins, which are located near the park’s entrance. In addition to lodging, Denali also provides food and beverage operations, and packaged tour and transportation services in and around the park.
The following are financial highlights of the third quarter of 2011 presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”):
Viad Corp (Consolidated)

 	•	 	Total revenues of $216.2 million compared to $215.1 million in the third quarter of 2010	

 	•	 	Net income attributable to Viad of $1.2 million compared to $4.8 million in the third quarter of 2010	

 	•	 	Diluted income per share of $0.06 compared to $0.23 in the third quarter of 2010	

 	•	 	Purchase of Denali Backcountry Lodge and Denali Cabins for $15.3 million	

 	•	 	Cash and cash equivalents totaled $104.6 million as of September 30, 2011	

 	•	 	Debt was $3.6 million as of September 30, 2011	
Marketing & Events U.S.

 	•	 	Revenues of $116.8 million, a decrease of 6.6 percent from the third quarter of 2010	

 	•	 	Segment operating loss of $17.1 million, as compared to a loss of $9.5 million in the third quarter of 2010	
Marketing & Events International

 	•	 	Revenues of $38.5 million, an increase of 1.0 percent from the third quarter of 2010	

 	•	 	Segment operating loss of $3.1 million, as compared to a loss of $2.0 million in the third quarter of 2010	
Travel & Recreation Group

 	•	 	Revenues of $64.5 million, an increase of 24.0 percent from the third quarter of 2010	

 	•	 	Segment operating income of $25.6 million, an increase of 19.1 percent from the third quarter of 2010	
Non-GAAP Measure:
The following discussion includes a presentation of Adjusted EBITDA, which is utilized by management to measure the profit and performance of Viad’s operations and to facilitate period-to-period comparisons. “Adjusted EBITDA” is defined by Viad as net income attributable to Viad before interest expense, income taxes, depreciation and amortization, impairment losses and recoveries, changes in accounting principles and the effects of discontinued operations. The presentation of Adjusted EBITDA is supplemental to results presented under GAAP and may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA is considered a useful operating metric as potential variations arising from taxes, depreciation, debt service costs, impairment losses and recoveries, changes in accounting principles and the effects of discontinued operations are eliminated, thus resulting in an additional measure considered to be indicative of Viad’s ongoing operations. This non-GAAP measure should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.
 
 Page 21 

Table of Contents

Management believes that the presentation of Adjusted EBITDA provides useful information to investors regarding Viad’s results of operations for trending, analyzing and benchmarking the performance and value of Viad’s business. Management uses Adjusted EBITDA primarily as a performance measure and believes that the GAAP financial measure most directly comparable to this non-GAAP measure is net income attributable to Viad. Although Adjusted EBITDA is used as a financial measure to assess the performance of the business, the use of Adjusted EBITDA is limited because it does not consider material costs, expenses and other items necessary to operate the business. These items include debt service costs, non-cash depreciation and amortization expense associated with long-lived assets, expenses related to U.S. federal, state, local and foreign income taxes, impairment losses or recoveries and the effects of accounting changes and discontinued operations. Because Adjusted EBITDA does not consider the above items, a user of Viad’s financial information should consider net income attributable to Viad as an important measure of financial performance because it provides a more complete measure of the Company’s performance.
A reconciliation of Adjusted EBITDA to net income attributable to Viad is as follows:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three months ended September 30,	 	 	Nine months ended September 30,	 	
 	 	2011	 	 	2010	 	 	2011	 	 	2010	 	
 	 	(in thousands)	 	
Adjusted EBITDA	 	$	9,730	 	 	$	14,489	 	 	$	47,575	 	 	$	31,503	 	
Interest expense	 	 	(373	)	 	 	(472	)	 	 	(1,165	)	 	 	(1,438	)	
Income tax expense	 	 	(523	)	 	 	(1,911	)	 	 	(9,011	)	 	 	(3,909	)	
Depreciation and amortization	 	 	(7,589	)	 	 	(7,310	)	 	 	(21,882	)	 	 	(21,314	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Viad	 	$	1,245	 	 	$	4,796	 	 	$	15,517	 	 	$	4,842	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
The decrease in Adjusted EBITDA of $4.8 million for the third quarter of 2011 compared to the third quarter of 2010 was primarily driven by lower segment operating results at the Marketing & Events U.S. segment, partially offset by higher operating results at the Travel & Recreation Group segment. The increase in Adjusted EBITDA of $16.1 million for the first nine months of 2011 compared to 2010 was primarily due to higher segment operating results at the Marketing & Events U.S. and Travel & Recreation Group segments as well as from lower restructuring charges. See “Results of Operations” below for a discussion of fluctuations.
Results of Operations:
Comparison of Third quarter of 2011 to the Third quarter of 2010
Revenues for the third quarter of 2011 increased 0.5 percent to $216.2 million compared to $215.1 million in the third quarter of 2010. Viad’s income before income taxes was $2.8 million for the third quarter of 2011 compared to $7.7 million in the third quarter of 2010. Net income attributable to Viad for the third quarter of 2011 was $1.2 million, or $0.06 per diluted share, compared to $4.8 million, or $0.23 per diluted share, in the third quarter of 2010. The lower results were primarily due to reduced revenues from the Marketing & Events Group.
 
 Page 22 

Table of Contents

During the third quarter of 2011, foreign exchange rate variances resulted in increases of $4.2 million in revenues and $788,000 in segment operating income as compared to the third quarter of 2010. Viad conducts its foreign operations primarily in Canada and the United Kingdom and to a lesser extent in certain other countries. The following table summarizes the effect of foreign exchange rate variances on revenues and segment operating results from Viad’s significant international operations for the third quarter:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Revenues	 	 	Segment Operating Results	 	
 	 	Weighted-Average	 	 	Effect of Rate	 	 	Weighted-Average	 	 	Effect of Rate	 	
 	 	Exchange Rates	 	 	Variance	 	 	Exchange Rates	 	 	Variance	 	
 	 	2011	 	 	2010	 	 	(thousands)	 	 	2011	 	 	2010	 	 	(thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Canada	 	$	1.00	 	 	$	0.96	 	 	$	598	 	 	$	1.09	 	 	$	0.96	 	 	$	(175	)	
United Kingdom	 	$	1.60	 	 	$	1.54	 	 	$	747	 	 	$	1.71	 	 	$	1.65	 	 	$	(170	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Travel & Recreation Group:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Canada	 	$	1.02	 	 	$	0.96	 	 	$	2,519	 	 	$	1.03	 	 	$	0.96	 	 	$	1,161	 	
Accordingly, Viad’s third quarter results were impacted by the strengthening of the Canadian dollar and British pound relative to the U.S. dollar. Future changes in the exchange rates may impact overall expected profitability and historical period-to-period comparisons when operating results are translated into U.S. dollars.
Marketing & Events Group. Revenues for the Marketing & Events U.S. segment were $116.8 million for the third quarter of 2011, down 6.6 percent compared to $125.1 million in the third quarter of 2010. The decrease was primarily due to negative show rotation revenue of approximately $23 million, partially offset by base same-show revenue increases of 10.9 percent, higher revenues from retail merchandising unit sales and increased revenues from branded entertainment projects. Management defines base same-show revenue as revenue from exhibitions and events that occur in the same quarter and same city every year. Base same-shows represented 41.6 percent of 2011 third quarter Marketing & Events U.S. revenues. Segment operating loss was $17.1 million in the third quarter of 2011, compared to a loss of $9.5 million in the third quarter of 2010. The lower operating results were primarily due to decreases in revenues as well as a less favorable mix of revenues during the quarter, including margin pressures on three shows produced in higher-cost cities in the East. Operating results for the quarter also include higher accruals for performance-based incentives as compared to the 2010 third quarter, reflecting management’s outlook for higher full year profits and the timing of accruals. During the third quarter of 2011, the Company accrued $500,000 related to a multi-party settlement that will resolve a longstanding labor dispute in the city of Chicago.
Revenues for the Marketing & Events International segment were $38.5 million for the third quarter of 2011 compared to $38.1 million in the third quarter of 2010. Segment operating loss was $3.1 million in the third quarter of 2011, compared to a loss of $2.0 million in the third quarter of 2010. As discussed above, period-to-period comparisons for this segment were affected by exchange rate variances, which increased revenues by $1.7 million and segment operating loss by $373,000 as compared to the third quarter of 2010. Excluding exchange rate variances, 2011 third quarter revenues decreased by $1.3 million, or 3.4 percent, and operating results decreased by $700,000 primarily due to negative show rotation revenue of approximately $6 million. Operating results for the quarter also include higher compensation expenses, including merit increases and the reinstatement of temporary wage reductions.
Although the Marketing & Events Group has a diversified revenue base and long-term contracts for future shows, its revenues are affected by general economic and industry-specific conditions. The prospects for individual shows tend to be driven by the success of the industry related to those shows. In general, the exhibition and event industry is experiencing modest improvement. Following quarterly declines from the third quarter of 2008 through the first quarter of 2010, Marketing & Events U.S. base same-show revenues were essentially flat in the 2010 second quarter and have increased in each of the following five quarters.
For the 2011 full year, management expects U.S. same-show revenues to increase by approximately 10 percent and that show rotation will positively impact revenues by approximately $15 million as revenue from non-annual shows during 2011 is expected to exceed revenues from non-annual shows that took place during 2010. Additionally, management anticipates that foreign currency exchange rate variances versus 2010 will have a favorable impact on Marketing & Events Group 2011 full year revenues and operating income of approximately $9 million and $300,000, respectively. Management remains focused on improving the profitability of the U.S. segment through continued integration and consolidation of operations to increase capacity utilization and reduce costs. Additional restructuring charges may be incurred as further cost structure improvements are made.
 
 Page 23 

Table of Contents

The Marketing & Events Group is subject to multiple collective bargaining agreements that affect labor costs, about one-fourth of which expire each year. Although labor relations between the Company and labor are currently stable, disruptions during future contract negotiations could occur, with the possibility of an adverse impact on the operating results of the Marketing & Events Group.
Travel & Recreation Group. Revenues for the Travel & Recreation Group segment were $64.5 million for the third quarter of 2011, up 24.0 percent compared to third quarter 2010 revenues of $52.0 million. Segment operating income was $25.6 million, up 19.1 percent compared to $21.5 million in the third quarter of 2010. As discussed above, foreign exchange rate variances had a favorable impact on segment revenues and operating income of $2.5 million and $1.2 million, respectively, as compared to the 2010 third quarter. Excluding exchange rate variances, 2011 third quarter revenues increased by $10.0 million, or 19.2 percent, and operating income increased by $2.9 million. The growth was primarily due to the additions of St. Mary Lodge & Resort and Grouse Mountain Lodge and higher revenues across all of Brewster’s lines of business. These improvements were partially offset by lower revenues from Many Glacier Hotel, a property operated by Glacier Park, resulting from planned construction that reduced the number of rooms available during 2011 as compared to 2010, as well as lower visitation to Glacier National Park during July and August.
The Travel & Recreation Group segment is affected by consumer discretionary spending on tourism activities. Additionally, management anticipates that foreign currency exchange rate variances versus 2010 will have a favorable impact on Travel & Recreation Group segment 2011 full year revenues and operating income of approximately $4.3 million and $1.4 million, respectively.
The acquisitions of Grouse Mountain Lodge and St. Mary Lodge & Resort (“St. Mary”), which are located near Glacier National Park, have more than offset lower revenues at Many Glacier Hotel due to the planned construction discussed above. The Company acquired the 145-room Grouse Mountain Lodge on January 5, 2011 for $10.5 million in cash and the 115-room St. Mary Lodge & Resort on June 29, 2011 for $15.3 million in cash. Management expects the acquisition of Denali Backcountry Lodge and Denali Cabins for $15.3 million in cash on September 16, 2011 to be slightly dilutive to 2011 earnings as a result of seasonal fourth quarter operating losses from these properties. As a result of Denali’s seasonal fourth quarter operating loss and lower revenues at Many Glacier Hotel (which have a high flow through to operating income), management expects segment operating margins to approximate 20 percent for the 2011 full year as compared to 22.5 percent in 2010.
During 2010, approximately 73 percent of revenue and 79 percent of segment operating income generated in the Travel & Recreation Group segment were derived through its Canadian operations. These operations are largely affected by foreign customer visitation, and, accordingly, increases in the value of the Canadian dollar compared to other currencies could adversely affect customer volumes, revenue and segment operating income for the Travel & Recreation Group.
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 six one-year periods and now expires on December 31, 2011. The Park Service, in its sole discretion, may continue extending Glacier Park’s concession contract in one-year increments. When this contract ultimately 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 70 percent of its 2010 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 its Glacier Park Lodge operations 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 25 percent of Travel & Recreation Group’s full year 2010 segment operating income.
Corporate Activities. Corporate activities totaled $2.4 million in the third quarter of 2011, compared to $1.7 million in the third quarter of 2010. The increase was primarily due to higher legal fees related to employee benefit and other matters.
Income Taxes. The effective tax rate in the third quarter of 2011 was 18.6 percent, compared to 24.9 percent in the third quarter of 2010. The relatively low effective rates compared to the statutory rates were primarily due to the favorable resolution of tax matters and the realization of certain foreign tax credits.
 
 Page 24 

Table of Contents

Comparison of First Nine months of 2011 to the First Nine months of 2010
Revenues for the first nine months of 2011 increased 13.3 percent to $745.0 million from $657.8 million during the first nine months of 2010. Viad’s income before income taxes was $25.2 million compared to $9.5 million in 2010. Net income attributable to Viad for the first nine months of 2011 was $15.5 million, or $0.76 per diluted share, compared to $4.8 million, or $0.24 per diluted share, during the first nine months of 2010. These increases were primarily due to higher revenues from the Marketing & Events Group. Net restructuring charges in the first nine months of 2011 were $1.6 million compared to $2.8 million in the first nine months of 2010, both primarily related to reorganization activities in the Marketing & Events Group, including the elimination of certain positions as well as facility consolidations. During the first nine months of 2011, foreign exchange rate variances resulted in increases of $14.0 million and $1.7 million in revenues and segment operating income, respectively, as compared to the first nine months of 2010.
Viad conducts its foreign operations primarily in Canada and the United Kingdom and to a lesser extent in certain other countries. The following table summarizes the effect of foreign exchange rate variances on revenues and segment operating results from Viad’s significant international operations for the first nine months of the year:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Revenues	 	 	Segment Operating Results	 	
 	 	Weighted-Average	 	 	Effect of Rate	 	 	Weighted-Average	 	 	Effect of Rate	 	
 	 	Exchange Rates	 	 	Variance	 	 	Exchange Rates	 	 	Variance	 	
 	 	2011	 	 	2010	 	 	(thousands)	 	 	2011	 	 	2010	 	 	(thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Canada	 	$	1.03	 	 	$	0.96	 	 	$	3,074	 	 	$	1.02	 	 	$	0.99	 	 	$	(49	)	
United Kingdom	 	$	1.62	 	 	$	1.53	 	 	$	5,628	 	 	$	1.61	 	 	$	1.51	 	 	$	451	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Travel & Recreation Group:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Canada	 	$	1.03	 	 	$	0.96	 	 	$	4,296	 	 	$	1.03	 	 	$	0.95	 	 	$	1,354	 	
Accordingly, Viad’s nine-month results were impacted by the strengthening of the Canadian dollar and the British pound relative to the U.S. dollar. Future decreases in the exchange rates may adversely impact overall expected profitability and historical period to period comparisons when operating results are translated into U.S. dollars.
Marketing & Events Group. Revenues for the Marketing & Events U.S. segment were $498.7 million for the first nine months of 2011, up 13.6 percent from $439.0 million in 2010. Segment operating income was $1.1 million in the first nine months of 2011, compared to an operating loss of $11.9 million in 2010. These increases were primarily due to base same-show revenue increases of 11.1 percent, increased exhibitor spending and positive show rotation of approximately $15 million. Management defines base same-show revenue as revenue from exhibitions and events that occur in the same quarter and same city every year. Base same-shows represented approximately 38.8 percent of revenues for the first nine months of 2011 for the Marketing & Events U.S. segment.
Revenues for the Marketing & Events International segment were $159.4 million for the first nine months of 2011, up 10.3 percent from $144.6 million in 2010. Segment operating income was $7.3 million in the first nine months of 2011 compared to $7.1 million in 2010. As discussed above, results in this segment were impacted by exchange rates during the first nine months of 2011 resulting in increases of $9.7 million and $363,000 in revenues and segment operating income, respectively, as compared to 2010. Excluding exchange rate variances, revenues for the first nine months of 2011 increased by $5.2 million, or 3.6 percent, and segment operating income decreased by $169,000. The increase in revenues was primarily due to positive show rotation of approximately $4 million and new show wins, which more than offset 2010 first quarter revenues from a major project for the 2010 Winter Olympic Games in Canada. Operating results for the first nine months of 2011 also reflect higher compensation expenses, including merit increases and the reinstatement of temporary wage reductions, as compared to the first nine months of 2010.
Travel & Recreation Group. Revenues from the Travel & Recreation Group segment were $94.2 million for the first nine months of 2011, up 15.2 percent compared to 2010 revenues of $81.8 million. Segment operating income was $24.1 million compared to $22.6 million in 2010. As discussed above, results in this segment were impacted by exchange rate variances during the first nine months of 2011 resulting in increases of $4.3 million and $1.4 million in revenues and segment operating income, respectively, as compared to 2010. Excluding exchange rate variances, revenues for the first nine months of 2011 increased by $8.1 million, or 9.9 percent, and operating results increased by $191,000. The growth was primarily due to the additions of St. Mary Lodge & Resort and Grouse Mountain Lodge, as well as higher revenues across all of Brewster’s lines of business with the exception of its transportation business, which had higher 2010 revenues resulting from charter contracts related to the Winter Olympic and Paralympic Games. These improvements were partially offset by lower revenues from Many Glacier Hotel (which have a high flow through to operating income), as well as lower visitation to Glacier National Park during July and August.
 
 Page 25 

Table of Contents

Corporate Activities. Corporate activities totaled $5.2 million in the first nine months of 2011, compared to $4.5 million in the comparable period in 2010. The increase was primarily due to higher legal fees related to employee benefit and other matters.
Restructuring Charges. Viad recorded restructuring charges of $1.6 million in the first nine months of 2011, compared to $2.8 million in the 2010 period. The charges both primarily related to reorganization activities in the Marketing & Events Group, comprised of the elimination of certain positions as well as facility consolidations.
Income Taxes. The effective tax rate in the first nine months of 2011 on income before income taxes was 35.8 percent, compared to 41.1 percent in the comparable period in 2010. The relatively high rate in 2010 was primarily due to the charge in 2010 of $1.3 million related to healthcare legislation.
Liquidity and Capital Resources:
Cash and cash equivalents were $104.6 million as of September 30, 2011 as compared to $145.8 million as of December 31, 2010, with the decrease primarily due to business acquisitions and capital expenditures. During the nine months ended September 30, 2011, the Company generated net cash flows from operating activities of $35.1 million primarily driven by operating results, partially offset by changes in working capital. Management believes that Viad’s existing sources of liquidity will be sufficient to fund operations and capital commitments for at least the next 12 months.
Viad’s total debt as of September 30, 2011 was $3.6 million compared to $9.1 million as of December 31, 2010. The debt-to-capital ratio was 0.009 to 1 as of September 30, 2011 compared with 0.023 to 1 as of December 31, 2010. Capital is defined as total debt and capital lease obligations plus total stockholders’ equity.
On May 18, 2011, Viad entered into an amended and restated secured revolving credit agreement (the “Credit Facility”). The Credit Facility provides for a $130 million revolving line of credit and may be increased up to an additional $50 million under certain circumstances. The Credit Facility expires 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. On April 28, 2011, Viad paid off its outstanding borrowing under the previous credit facility of $4.2 million. As of September 30, 2011, Viad had $125.4 million of capacity remaining under its Credit Facility reflecting issued letters of credit of $4.6 million.
Borrowings under the Credit Facility (of which GES is a guarantor) are indexed to the London Interbank Offered Rate (“LIBOR”), 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.
Viad’s financial covenants include a fixed-charge coverage ratio of not less than 2.25 to 1 (and a ratio of not less than 2.50 to 1 after the fiscal quarter ending September 30, 2012) and a leverage ratio (defined as total debt to Adjusted EBITDA) 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 September 30, 2011, the fixed-charge coverage and leverage ratios were 3.08 to 1 and 0.29 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 September 30, 2011, Viad was in compliance with all covenants.
As of September 30, 2011, 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 September 30, 2011 would be $30.4 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.
Capital expenditures for the first nine months of 2011 totaled $17.3 million and primarily related to the purchase of rental inventory, equipment and computer hardware primarily at the Marketing & Events U.S. segment. For the first nine months of 2010, capital expenditures totaled $11.6 million and primarily related to the purchase of rental inventory, equipment and computer hardware primarily at the Marketing & Events U.S. segment and building improvements and equipment at the Travel & Recreation Group.
 
 Page 26 

Table of Contents

On January 5, 2011, Viad completed the acquisition of Grouse Mountain Lodge for $10.5 million in cash. On June 29, 2011, Viad completed the acquisition of St. Mary for $15.3 million in cash. On September 16, 2011, Viad completed the acquisition of Denali for $15.3 million in cash.
In March 2010, Viad completed the sale of a non-strategic real estate asset for $14.3 million (net of selling costs). The asset was previously held for sale at the Travel & Recreation Group.
Viad has announced its intent to repurchase shares of the Company’s common stock from time to time at prevailing market prices. During the third quarters of 2011 and 2010, Viad repurchased 250,760 shares for $4.6 million and 356,300 shares for $6.3 million, respectively. As of September 30, 2011, 53,621 shares remain available for repurchase from the announced authorization. Additionally, during the first nine months of 2011 and 2010, the Company repurchased 28,627 shares for $679,000 and 28,407 shares for $573,000, respectively, related to tax withholding requirements on share-based awards.
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 September 30, 2011 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 Viad’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, results of operations or liquidity. As of September 30, 2011, there was a remaining environmental remediation liability of $5.8 million related to previously sold operations of which $936,000 was included in the consolidated balance sheets under the caption “Other current liabilities” and $4.9 million under the caption “Other deferred items and liabilities.”
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 September 30, 2011, the amount of additional funding, if any, that Viad would be required to make related to multi-employer pension plans is not ascertainable.
Off-Balance Sheet Arrangements:
Viad does not have any “off-balance sheet” arrangements with unconsolidated special-purpose or other entities that would materially affect the Company’s financial position, results of operations, liquidity or capital resources. Furthermore, Viad does not have any relationships with special-purpose or other entities that provide off-balance sheet financing; liquidity, market risk or credit risk support; or engage in leasing or other services that expose the Company to liability or risks of loss that are not reflected in Viad’s consolidated financial statements.
 
 Page 27 

Table of Contents

Critical Accounting Policies and Estimates:
The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements. The SEC has defined a company’s most critical accounting policies as those that are most important to the portrayal of a company’s financial position and results of operations, and that require a company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on these criteria, Viad has identified and discussed with its audit committee the following critical accounting policies and estimates pertaining to Viad, and the methodology and disclosures related to those estimates:
Goodwill — Goodwill is not amortized, but tested for impairment at the reporting unit level on an annual basis on October 31 of each year. Goodwill is also tested for impairment between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Viad’s reporting units are defined, and goodwill is tested, at either an operating segment level, or at the component level of an operating segment, depending on various factors including the internal reporting structure of the operating segment, the level of integration among components, the sharing of assets among components, and the benefits and likely recoverability of goodwill by the component’s operations.
As of September 30, 2011, Viad had total goodwill of $131.9 million consisting of $84.7 million related to the Marketing & Events Group and $47.2 million related to the Travel & Recreation Group. Within the Marketing & Events Group, goodwill of $62.7 million relates to the Marketing & Events U.S. segment and $22.0 million relates to the Marketing & Events International segment. For impairment testing purposes, the goodwill related to the Marketing & Events U.S. segment is assigned to and tested at the operating segment level, which represents all domestic operations of GES. Furthermore, the goodwill related to the Marketing & Events International segment is assigned to and tested at the component level within the segment’s geographical operations. As of September 30, 2011, the amount of goodwill assigned to the reporting units in the United Kingdom (Melville) and Canada was $13.3 million and $8.7 million, respectively. Also, as of September 30, 2011, the Brewster, Glacier Park and Denali operating segments (within the Travel & Recreation Group) had goodwill of $39.8 million, $3.9 million and $3.5 million, respectively. The goodwill related to Glacier Park and Denali was acquired in the first nine months of 2011. Brewster, Glacier Park and Denali are considered reporting units for goodwill impairment testing purposes.
Viad uses a discounted expected future cash flow methodology (income approach) in order to estimate the fair value of its reporting units for purposes of goodwill impairment testing. The estimates and assumptions regarding expected future cash flows, discount rates and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends and historical experience.
The most critical assumptions and estimates in determining the estimated fair value of its reporting units relate to the amounts and timing of expected future cash flows for each reporting unit and the reporting unit cost of capital (discount rate) applied to those cash flows. Furthermore, the assumed reporting unit cost of capital rates (discount rates) are estimated using a build-up method based on the perceived risk associated with the cash flows pertaining to the specific reporting unit. In order to assess the reasonableness of its fair value estimates, the Company performs a reconciliation of the aggregate fair values of its reporting units to Viad’s market capitalization.
As noted above, the estimates and assumptions regarding expected future cash flows, discount rates and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends and historical experience. These estimates, however, have inherent uncertainties and different assumptions could lead to materially different results. As of September 30, 2011, Viad had aggregate goodwill of $131.9 million recorded in the consolidated balance sheets. Furthermore, as a result of the Company’s most recent impairment analysis performed in the fourth quarter of 2010, the excess of the estimated fair values over the carrying values (expressed as a percentage of the carrying amounts) under step one of the impairment test were 80 percent, 69 percent and 69 percent, respectively, for each of the Marketing & Events Group reporting units in the United States, the United Kingdom (Melville) and Canada. For the Brewster reporting unit, the excess of the estimated fair value over the carrying value was 50 percent as of the most recent impairment test. Due to continued uncertainties in the current economic environment, reductions in the Company’s expected future revenue, operating income or cash flow forecasts and projections, or an increase in reporting unit cost of capital, could trigger additional goodwill impairment testing, which may result in impairment losses. Furthermore, management continues to monitor the market capitalization of the Company as ongoing declines in market capitalization could be indicative of possible goodwill impairment.
Income taxes — As of September 30, 2011 and December 31, 2010, Viad had gross deferred tax assets of $64.9 million and $67.1 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.
During 2010 and 2009, Viad recorded pre-tax losses from its operations in the United States. The Company considered the negative evidence of these domestic pre-tax operating losses on the future recoverability of its deferred tax assets. Viad also considered positive evidence regarding the realization of deferred tax assets including the Company’s historical and forecasted taxable income, taxpaying history and future reversals of deferred tax liabilities. Furthermore, Viad also considered the fact that goodwill impairment losses were not tax deductible and thus did not contribute to tax losses in 2009. As of both September 30, 2011 and December 31, 2010, Viad had a valuation allowance of $411,000 related to certain state deferred tax assets. With respect to all other deferred tax assets, management believes that recovery from future taxable income is more-likely-than-not.
 
 Page 28 

Table of Contents

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 on Viad’s ability to generate sufficient taxable income in future periods. In light of the Company’s domestic operating losses in 2010 and 2009, and the continued uncertainties in the current economic environment, it is 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.
As of September 30, 2011 and December 31, 2010, Viad did not have any accrued gross liabilities associated with uncertain tax positions for continuing operations. Additionally, as of September 30, 2011, Viad did not have any accrued interest and penalties related to uncertain tax positions for continuing operations. As of December 31, 2010, Viad had accrued interest and penalties related to uncertain tax positions for continuing operations of $146,000.
In addition to the above, Viad had accrued gross liabilities associated with uncertain tax positions for discontinued operations of $636,000 as of both September 30, 2011 and December 31, 2010. In addition, as of September 30, 2011 and December 31, 2010, Viad had accrued interest and penalties related to uncertain tax positions for discontinued operations of $379,000 and $351,000, 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).
Insurance liabilities — Viad is self-insured up to certain limits for workers’ compensation, automobile, product and general liability and property loss claims. The aggregate amount of insurance liabilities related to Viad’s continuing operations was $21.3 million as of September 30, 2011. Of this total, $14.1 million related to workers’ compensation liabilities and the remaining $7.2 million related to general/auto liability claims. Viad has also retained and provided for certain insurance liabilities in conjunction with previously sold businesses totaling $7.1 million as of September 30, 2011, primarily related to workers’ compensation liabilities. Provisions for losses for claims incurred, including estimated claims incurred but not yet reported, are made based on Viad’s historical experience, claims frequency and other factors. A change in the assumptions used could result in an adjustment to recorded liabilities. Viad has purchased insurance for amounts in excess of the self-insured levels, which generally range from $200,000 to $500,000 on a per claim basis. Viad does not maintain a self-insured retention pool fund as claims are paid from current cash resources at the time of settlement. Viad’s net cash payments in connection with these insurance liabilities were $6.0 million and $4.8 million for the first nine months of 2011 and 2010, respectively.
Pension and postretirement benefits — Viad’s pension plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations. The Company presently anticipates contributing $1.7 million to its funded pension plans and $959,000 to its unfunded pension plans in 2011, of which the Company has contributed $1.1 million and $648,000 as of September 30, 2011, respectively.
Viad and certain of its subsidiaries have defined benefit postretirement plans that provide medical and life insurance for certain eligible employees, retirees and dependents. The related postretirement benefit liabilities are recognized over the period that services are provided by employees. In addition, Viad retained the obligations for these benefits for retirees of certain sold businesses. While the plans have no funding requirements, Viad expects to contribute $500,000 to the plans in 2011, of which $52,000 has been contributed as of September 30, 2011.
The assumed health care cost trend rate used in measuring the December 31, 2010 accumulated postretirement benefit obligation was nine and one-half percent, declining one-half percent each year to the ultimate rate of five percent by the year 2019 and remaining at that level thereafter.
A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement benefit obligation as of December 31, 2010 by approximately $1.6 million and the total of service and interest cost components by approximately $124,000. A one-percentage-point decrease in the assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of December 31, 2010 by approximately $1.4 million and the total of service and interest cost components by approximately $104,000.
 
 Page 29 

Table of Contents

The weighted-average assumptions used to determine the pension and postretirement benefit obligations as of December 31, 2010 were as follows:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Domestic Plans	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Postretirement	 	 	 	 	
 	 	Funded Plans	 	 	Unfunded Plans	 	 	Benefit Plans	 	 	Foreign Plans	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discount rate	 	 	5.45	%	 	 	5.10	%	 	 	5.10	%	 	 	5.10	%	
The weighted-average assumptions used to determine the 2010 net periodic benefit cost were as follows:
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Domestic Plans	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Postretirement	 	 	 	 	
 	 	Funded Plans	 	 	Unfunded Plans	 	 	Benefit Plans	 	 	Foreign Plans	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discount rate	 	 	5.90	%	 	 	5.70	%	 	 	5.60	%	 	 	5.60	%	
Expected return on plan assets	 	 	6.35	%	 	 	N/A	 	 	 	6.10	%	 	 	5.75	%	
The discount rates used in determining future pension and postretirement benefit obligations are based on rates determined by actuarial analysis and management review, and reflect the estimated rates of return on a high-quality, hypothetical bond portfolio whose cash flows match the timing and amounts of expected benefit payments.
Share-based compensation — The fair values of restricted stock and performance-based restricted stock awards are based on Viad’s stock price on the date of grant. Liability-based awards are recorded at estimated fair value, based on the number of units expected to vest and the level of achievement of predefined performance goals (where applicable) and are remeasured on each balance sheet date based on Viad’s stock price until the time of settlement. Viad uses the Black-Scholes option pricing model for purposes of determining the fair value of each stock option grant for which key assumptions are necessary. These assumptions include Viad’s expected stock price volatility; the expected period of time the stock option will remain outstanding; the expected dividend yield on Viad common stock, and the risk-free interest rate. Changes in the assumptions could result in different estimates of the fair value of stock option grants, and consequently impact Viad’s results of operations.
Impact of Recent Accounting Pronouncements:
For a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on Viad’s consolidated financial statements, see Note 17 of notes to consolidated financial statements.
Forward-Looking Statements:
As provided by the safe harbor provision under the Private Securities Litigation Reform Act of 1995, Viad cautions readers that, in addition to historical information contained herein, this quarterly report includes certain information, assumptions and discussions that may constitute forward-looking statements. These forward-looking statements are not historical facts, but reflect current estimates, projections, expectations, or trends concerning future growth, operating cash flows, availability of short-term borrowings, consumer demand, new business, investment policies, productivity improvements, ongoing cost reduction efforts, efficiency, competitiveness, legal expenses, tax rates and other tax matters, foreign exchange rates and the realization of restructuring cost savings. Actual results could differ materially from those discussed in the forward-looking statements. Viad’s businesses can be affected by a host of risks and uncertainties. Among other things, natural disasters, gains and losses of customers, consumer demand patterns, labor relations, purchasing decisions related to customer demand for exhibition and event services, existing and new competition, industry alliances, consolidation and growth patterns within the industries in which Viad competes, acquisitions, adverse developments in liabilities associated with discontinued operations, and any deterioration in the economy, may individually or in combination impact future results. In addition to factors mentioned elsewhere, economic, competitive, governmental, technological, capital marketplace and other factors, including terrorist activities or war, a pandemic or other health crisis and international conditions, could affect the forward-looking statements in this quarterly report. Additional information concerning business and other risk factors that could cause actual results to materially differ from those in the forward looking statements are discussed in “Risk Factors” in the risk factors sections included in Viad’s 2010 Annual Report.
 
 Page 30 

Table of Contents

Item 3.	 	Quantitative and Qualitative Disclosures About Market Risk.	
Viad’s market risk exposures relate to fluctuations in foreign exchange rates, interest rates and certain commodity prices. Foreign exchange risk is the risk that fluctuating exchange rates will adversely affect Viad’s financial condition or results of operations. Interest rate risk is the risk that changing interest rates will adversely affect the earnings of Viad. Commodity risk is the risk that changing prices will adversely affect results of operations.
Viad conducts its foreign operations primarily in Canada and the United Kingdom and to a lesser extent in certain other countries. The functional currency of Viad’s foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, Viad translates the assets and liabilities of its foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of accumulated other comprehensive income in Viad’s consolidated balance sheets. As a result, significant fluctuations in foreign exchange rates relative to the U.S. dollar may result in material changes to Viad’s net equity position reported in its consolidated balance sheets. Viad does not currently hedge its equity risk arising from the translation of foreign denominated assets and liabilities. Viad had cumulative unrealized foreign currency translation gains recorded in equity of $31.5 million and $39.0 million as of September 30, 2011 and December 31, 2010, respectively. During the three and nine months ended September 30, 2011, unrealized foreign currency translation losses of $13.1 million and $7.5 million, respectively, were recorded in other comprehensive income.
In addition, for purposes of consolidation, the revenues, expenses, gains and losses related to Viad’s foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period. As a result, Viad’s consolidated results of operations are exposed to fluctuations in foreign exchange rates as the operating results of its foreign operations, when translated, may vary from period-to-period, even when the functional currency amounts have not changed. Such fluctuations may adversely impact overall expected profitability and historical period-to-period comparisons. Viad does not currently hedge its net earnings exposure arising from the translation of its foreign operating results. As noted above, Viad primarily conducts its foreign operations in Canada and the United Kingdom.
The following table summarizes the effect of foreign exchange rate variances on segment operating income from Viad’s Canadian and United Kingdom operations for the three months ended September 30:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Weighted-Average	 	 	Effect of Rate	 	
 	 	Exchange Rates	 	 	Variance	 	
 	 	2011	 	 	2010	 	 	(thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Canadian Operations:	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group	 	$	1.09	 	 	$	0.96	 	 	$	(175	)	
Travel & Recreation Group	 	$	1.03	 	 	$	0.96	 	 	$	1,161	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
United Kingdom Operations:	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group	 	$	1.71	 	 	$	1.65	 	 	$	(170	)	
The following table summarizes the effect of foreign exchange rate variances on segment operating income from Viad’s Canadian and United Kingdom operations for the nine months ended September 30:
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Weighted-Average	 	 	Effect of Rate	 	
 	 	Exchange Rates	 	 	Variance	 	
 	 	2011	 	 	2010	 	 	(thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Canadian Operations:	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group	 	$	1.02	 	 	$	0.99	 	 	$	(49	)	
Travel & Recreation Group	 	$	1.03	 	 	$	0.95	 	 	$	1,354	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
United Kingdom Operations:	 	 	 	 	 	 	 	 	 	 	 	 	
Marketing & Events Group	 	$	1.61	 	 	$	1.51	 	 	$	451	 	
 
 Page 31 

Table of Contents

As the Canadian operations generated aggregate operating income for the third quarter of 2011, Viad’s segment operating income has been favorably impacted by $986,000 from the strengthening of the Canadian dollar relative to the U.S. dollar compared to 2010. As the United Kingdom operations generated an aggregate operating loss in the third quarter of 2011, Viad’s segment operating income has been unfavorably impacted by $170,000 from the strengthening of the British pound relative to the U.S. dollar compared to 2010. As the Canadian operations generated aggregate operating income for the first nine months of 2011, Viad’s segment operating income has been favorably impacted by $1.3 million from the strengthening of the Canadian dollar relative to the U.S. dollar compared to 2010. As the United Kingdom operations generated aggregate operating income in the first nine months of 2011, Viad’s segment operating income has been favorably impacted by $451,000 from the strengthening of the British pound relative to the U.S. dollar compared to 2010.
Viad is exposed to short-term interest rate risk on certain of its debt obligations. Viad currently does not use derivative financial instruments to hedge cash flows for such obligations. On April 28, 2011, Viad paid off its outstanding borrowing under the previous credit facility of $4.2 million. As of September 30, 2011, Viad did not have any variable rate debt outstanding under the Credit Facility.

Item 4.	 	Controls and Procedures.	
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of Viad, the effectiveness of the design and operation of disclosure controls and procedures has been evaluated as of September 30, 2011, and, based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of September 30, 2011. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in such reports is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
There were no changes in the Company’s internal control over financial reporting during the third quarter of 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
 Page 32 

Table of Contents
PART II—OTHER INFORMATION

Item 1A.	 	Risk Factors.	
In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Item 1A. Risk Factors” of Part 1 and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of Viad’s Annual Report on Form 10-K for the year ended December 31, 2010, which could materially affect the Company’s business, financial condition and/or future results.

Item 2.	 	Unregistered Sales of Equity Securities and Use of Proceeds.	
Set forth below is a table showing the total number of shares of Viad common stock repurchased during the third quarter of 2011 by Viad.
ISSUER PURCHASES OF EQUITY SECURITIES
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Total Number of	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	Shares	 	 	Maximum Number (or	 	
 	 	 	 	 	 	 	 	 	 	Purchased as	 	 	Approximate Dollar	 	
 	 	 	 	 	 	 	 	 	 	Part of Publicly	 	 	Value) of Shares that	 	
 	 	Total Number of	 	 	Average Price	 	 	Announced	 	 	May Yet Be Purchased	 	
 	 	Shares	 	 	Paid Per Share	 	 	Plans or	 	 	Under the Plans or	 	
Period	 	Purchased (#)	 	 	($)	 	 	Programs	 	 	Programs (1)	 	
August 2011	 	 	190,440	 	 	 	17.94	 	 	 	190,440	 	 	 	113,941	 	
September 2011	 	 	60,320	 	 	 	18.80	 	 	 	60,320	 	 	 	53,621	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	 	250,760	 	 	 	18.15	 	 	 	250,760	 	 	 	53,621	 	

(1)	 	Viad has announced its intent to repurchase shares of the Company’s common stock from time to time at prevailing market prices. During the third quarter of 2011, Viad repurchased 250,760 shares for $4.6 million. As of September 30, 2011, 53,621 shares remain available for repurchase from the announced authorization. The authorization of the Board of Directors does not have an expiration date.	
 
 Page 33 

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*	
 	 	 	
Exhibit No. 101.INS	 	XBRL Instance Document**	
 	 	 	
Exhibit No. 101.SCH	 	XBRL Taxonomy Extension Schema Document**	
 	 	 	
Exhibit No. 101.CAL	 	XBRL Taxonomy Extension Calculation Linkbase Document**	
 	 	 	
Exhibit No. 101.LAB	 	XBRL Taxonomy Extension Label Linkbase Document**	
 	 	 	
Exhibit No. 101.PRE	 	XBRL Taxonomy Extension Presentation Linkbase Document**	
 	 	 	
*	 	Filed herewith.	
 		
**	 	Furnished herewith. In accordance with Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any registration statement or other document filed under Sections 11 or 12 of the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filings, and are not otherwise subject to liability under those sections.	
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 	 	 	 	VIAD CORP
 	 	 	
 	 	 	 	(Registrant)	 	 	
 	 	 	 	 	 	 	 	 	
November 8, 2011	 	 	 	By:	 	/s/ G. Michael Latta	 	 	
 
(Date)	 	 	 	 	 	 
G. Michael Latta	 	 	
 	 	 	 	 	 	Chief Accounting Officer — Controller	 	 	
 	 	 	 	 	 	(Chief Accounting Officer	 	 	
 	 	 	 	 	 	and Authorized Officer)	 	 	
 
 Page 34 

Exhibit 31.1
CERTIFICATION
I, Paul B. Dykstra, certify that:

1.	 	I have reviewed this quarterly report on Form 10-Q of Viad Corp;	

2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

 	b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

 	c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

 	d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):	

 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 	 	 	 	 	
Date: November 8, 2011 	By:  	/s/ Paul B. Dykstra  	 	
 	 	Paul B. Dykstra 	 	
 	 	President and Chief Executive Officer 	 	

Exhibit 31.2
CERTIFICATION
I, Ellen M. Ingersoll, certify that:

1.	 	I have reviewed this quarterly report on Form 10-Q of Viad Corp;	

2.	 	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	 	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	 	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

 	a)	 	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

 	b)	 	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

 	c)	 	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

 	d)	 	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	 	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):	

 	a)	 	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

 	b)	 	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
 	 	 	 	 	
Date: November 8, 2011 	By:  	/s/ Ellen M. Ingersoll  	 	
 	 	Ellen M. Ingersoll 	 	
 	 	Chief Financial Officer 	 	

Exhibit 32.1
Certification Pursuant To
18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002
I, Paul B. Dykstra, Chief Executive Officer of Viad Corp, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	 	the report on Form 10-Q of Viad Corp for the fiscal quarter ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and	

2.	 	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Viad Corp.	
 	 	 	 	 	
Date: November 8, 2011 	 	By:  	/s/ Paul B. Dykstra  	 	
 	 	 	Paul B. Dykstra 	 	
 	 	 	Chief Executive Officer 	 	

Exhibit 32.2
Certification Pursuant To
18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002
I, Ellen M. Ingersoll, Chief Financial Officer of Viad Corp, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	 	the report on Form 10-Q of Viad Corp for the fiscal quarter ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and	

2.	 	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Viad Corp.	
 	 	 	 	 	
Date: November 8, 2011 	 	By:  	/s/ Ellen M. Ingersoll  	 	
 	 	 	Ellen M. Ingersoll 	 	
 	 	 	Chief Financial Officer