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, 2009~~March 31, 2010


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number:001-11015

VIAD CORP

(Exact name of registrant as specified in its charter)


Delaware		36-1169950

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
~~incorporation or organization)~~

1850 North Central Avenue, Suite 800 Phoenix, Arizona
~~Phoenix, Arizona~~		85004-4545

(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. Yesþ Noo

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). Yeso Noo

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 filero	Accelerated filerþ	~~Accelerated~~Non-accelerated filero	~~Non-accelerated filer~~o	~~Small~~Smaller reporting companyo
		(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). Yeso Noþ

As of ~~October 31, 2009, 20,550,691~~April 30, 2010, 20,542,524 shares of common stock ($1.50 par value) were outstanding.

TABLE OF CONTENTS


PART I—FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II—OTHER INFORMATION
	Item 1A. Risk Factors
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	Item 6. Exhibits
SIGNATURES
~~EX-31.1~~Exhibit 31.1
~~EX-31.2~~Exhibit 31.2
~~EX-32.1~~Exhibit 32.1
~~EX-32.2~~Exhibit 32.2

PART I—FINANCIAL INFORMATION


~~Item 1.~~		~~Financial Statements.~~

Item 1. Financial Statements.

VIAD CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	September 30, 2009			December 31, 2008				March 31, 2010			December 31, 2009
	(in thousands, except share data)							(in thousands, except share data)
ASSETS							ASSETS
Current assets:
Cash and cash equivalents	$	128,543		$	148,040			$	131,033		$	116,342
Accounts receivable, net of allowance for doubtful accounts of $2,560 and $2,556, respectively		54,731			53,541
Accounts receivable, net of allowance for doubtful accounts of $2,506 and $3,892, respectively									55,534			44,767
Inventories		44,113			52,311				36,366			44,818
Deferred income taxes		16,809			19,695				17,331			20,150
Asset held for sale									—			13,982
Other current assets		24,555			14,453				23,210			21,476

Total current assets		268,751			288,040				263,474			261,535
Property and equipment, net		173,495			165,415				153,734			155,000
Other investments and assets		28,552			26,560				29,276			29,069
Deferred income taxes		24,799			18,996				32,672			35,951
Goodwill		123,767			212,461				126,036			124,931
Other intangible assets, net		5,608			17,932				2,448			2,700

Total Assets	$	624,972		$	729,404			$	607,640		$	609,186


LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable	$	49,745		$	57,702			$	48,585		$	41,509
Other current liabilities		87,795			109,059				81,298			85,077
Current portion of long-term debt and capital lease obligations		4,132			2,556				3,546			4,301

Total current liabilities		141,672			169,317				133,429			130,887
Long-term debt and capital lease obligations		9,504			10,087				8,085			8,487
Pension and postretirement benefits		25,473			25,121				32,832			32,767
Other deferred items and liabilities		48,750			57,790				49,719			52,414

Total liabilities		225,399			262,315				224,065			224,555

Commitments and contingencies (Note 16)
Commitments and contingencies (Note 14)
Stockholders’ equity:
Viad Corp stockholders’ equity:
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981 shares issued		37,402			37,402				37,402			37,402
Additional capital		605,523			623,781				606,063			606,038
Retained earnings (deficit)		(1,112	)		91,558
Retained deficit									(20,202	)		(16,405	)
Unearned employee benefits and other		(6,918	)		(7,881	)			(5,701	)		(5,954	)
Accumulated other comprehensive income (loss):
Unrealized gain (loss) on investments		145			(62	)
Unrealized gains on investments									213			154
Cumulative foreign currency translation adjustments		28,228			6,233				35,329			31,283
Unrecognized net actuarial loss and prior service credit		(4,042	)		(3,673	)			(10,059	)		(8,385	)
Common stock in treasury, at cost, 4,380,438 and 4,655,956 shares, respectively		(266,827	)		(286,803	)
Common stock in treasury, at cost, 4,393,882 and 4,379,125 shares, respectively									(266,465	)		(266,618	)

Total Viad Corp stockholders’ equity		392,399			460,555				376,580			377,515
Noncontrolling interest		7,174			6,534				6,995			7,116

Total stockholders’ equity		399,573			467,089				383,575			384,631

Total Liabilities and Stockholders’ Equity	$	624,972		$	729,404			$	607,640		$	609,186

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2009			2008			2009			2008			2010			2009
	(in thousands, except per share data)												(in thousands, except per share data)
Revenues:
Convention and event services	$	104,895		$	205,057		$	456,512		$	661,629		$	178,759		$	196,896
Exhibits and environments		29,761			46,791			109,565			173,196			38,181			39,166
Travel and recreation services		46,469			50,514			69,562			80,194			7,413			4,887

Total revenues		181,125			302,362			635,639			915,019			224,353			240,949


Costs and expenses:
Costs of services		147,035			227,136			498,302			663,228			180,839			189,283
Costs of products sold		36,780			49,164			123,552			176,070			43,315			44,999
Corporate activities		2,024			2,659			4,230			7,312			644			1,503
Interest income		(102	)		(809	)		(495	)		(2,562	)		(96	)		(261	)
Interest expense		378			430			1,223			1,308			493			420
Restructuring charges (recoveries)		3,867			(124	)		6,797			(124	)
Goodwill impairment losses		98,304			—			98,304			—
Intangible asset impairment losses		11,352			—			11,352			—
Other impairment losses		1,700			—			1,700			—
Restructuring charges														2,053			2,732

Total costs and expenses		301,338			278,456			744,965			845,232			227,248			238,676


Income (loss) from continuing operations before income taxes		(120,213	)		23,906			(109,326	)		69,787
Income tax expense (benefit)		(23,947	)		6,235			(19,735	)		22,532

Income (loss) from continuing operations		(96,266	)		17,671			(89,591	)		47,255
Loss from discontinued operations		—			—			—			(210	)
Income (loss) before income taxes														(2,895	)		2,273
Income tax expense														208			901

Net income (loss)		(96,266	)		17,671			(89,591	)		47,045			(3,103	)		1,372
Net income attributable to noncontrolling interest		(867	)		(913	)		(640	)		(669	)
Net loss attributable to noncontrolling interest														121			131

Net income (loss) attributable to Viad	$	(97,133	)	$	16,758		$	(90,231	)	$	46,376		$	(2,982	)	$	1,503


Diluted income (loss) per common share
Income (loss) from continuing operations attributable to Viad common stockholders	$	(4.86	)	$	0.81		$	(4.52	)	$	2.25
Loss from discontinued operations attributable to Viad common stockholders		—			—			—			(0.01	)

Net income (loss) attributable to Viad common stockholders	$	(4.86	)	$	0.81		$	(4.52	)	$	2.24		$	(0.15	)	$	0.07


Weighted-average outstanding and potentially dilutive common shares		19,981			20,650			19,950			20,662			20,051			20,139


Basic income (loss) per common share
Income (loss) from continuing operations attributable to Viad common stockholders	$	(4.86	)	$	0.81		$	(4.52	)	$	2.25
Loss from discontinued operations attributable to Viad common stockholders		—			—			—			(0.01	)
Net income (loss) attributable to Viad common stockholders													$	(0.15	)	$	0.07

Net income (loss) attributable to Viad common stockholders	$	(4.86	)	$	0.81		$	(4.52	)	$	2.24

Weighted-average outstanding common shares		19,981			20,294			19,950			20,253			20,051			19,893


Dividends declared per common share	$	0.04		$	0.04		$	0.12		$	0.12		$	0.04		$	0.04


Amounts attributable to Viad common stockholders
Income (loss) from continuing operations	$	(97,133	)	$	16,758		$	(90,231	)	$	46,586
Loss from discontinued operations		—			—			—			(210	)

Net income (loss)	$	(97,133	)	$	16,758		$	(90,231	)	$	46,376

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine months ended September 30,						Three months ended March 31,
	2009			2008			2010			2009
	(in thousands)						(in thousands)
Cash flows from operating activities:
Net income (loss)	$	(89,591	)	$	47,045		$	(3,103	)	$	1,372
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		21,380			21,388			6,804			6,365
Deferred income taxes		(6,353	)		7,562			3,141			4,815
Loss from discontinued operations		—			210
Restructuring charges (recoveries)		6,797			(124	)
Impairment charges		111,356			—
Gains on dispositions of property and other assets		(22	)		(88	)
Restructuring charges								2,053			2,732
Losses on dispositions of property and other assets								82			13
Share-based compensation expense		2,239			6,654			820			233
Tax benefit from share-based compensation arrangements		—			562
Excess tax benefit from share-based compensation arrangements		—			(361	)
Other non-cash items, net		4,023			3,449			959			948
Change in operating assets and liabilities:
Receivables		(2,706	)		(24,781	)		(10,918	)		(4,991	)
Inventories		8,198			1,819			8,452			6,696
Accounts payable		(6,123	)		11,506			8,183			2,713
Restructuring liabilities		(5,537	)		(1,646	)		(3,051	)		(1,610	)
Accrued compensation		(16,086	)		(4,753	)		2,594			(18,008	)
Customer deposits		(4,297	)		(4,453	)		(2,893	)		(9,835	)
Income taxes payable		(10,281	)		2,512			(5,237	)		(6,092	)
Other assets and liabilities, net		(11,354	)		(14,236	)		(138	)		(1,390	)

Net cash provided by operating activities		1,643			52,265
Net cash provided by (used in) operating activities								7,748			(16,039	)

Cash flows from investing activities:
Capital expenditures		(18,727	)		(32,049	)		(5,030	)		(10,604	)
Acquisition of business, net of cash acquired		—			(23,334	)
Proceeds from sale of short-term investments		—			3,980
Proceeds from dispositions of property and other assets		43			532			14,354			2

Net cash used in investing activities		(18,684	)		(50,871	)
Net cash provided by (used in) investing activities								9,324			(10,602	)

Cash flows from financing activities:
Payments on debt and capital lease obligations		(2,493	)		(2,108	)		(1,489	)		(729	)
Dividends paid on common stock		(2,470	)		(2,491	)		(822	)		(824	)
Common stock purchased for treasury		(1,167	)		(11,695	)		(573	)		(975	)
Excess tax benefit from share-based compensation arrangements		—			361
Proceeds from exercise of stock options		—			3,700

Net cash used in financing activities		(6,130	)		(12,233	)		(2,884	)		(2,528	)

Effect of exchange rate changes on cash and cash equivalents		3,674			(1,347	)		503			(709	)

Net decrease in cash and cash equivalents		(19,497	)		(12,186	)
Net increase (decrease) in cash and cash equivalents								14,691			(29,878	)
Cash and cash equivalents, beginning of year		148,040			165,069			116,342			148,040

Cash and cash equivalents, end of period	$	128,543		$	152,883		$	131,033		$	118,162

Supplemental disclosure of cash flow information
Cash paid during the period for:
Income taxes	$	8,642		$	15,692		$	1,634		$	5,033

Interest	$	673		$	903		$	216		$	194

Equipment acquired under capital leases	$	3,253		$	633		$	247		$	2,136

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 (refer to Note 3 for a discussion of impairment losses).~~included. Operating results for the three ~~and nine~~ months ended ~~September 30, 2009~~March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2009. Viad has performed an evaluation of subsequent events through November 5, 2009, and the financial statements were issued on November 6, 2009.~~2010.

For further information, refer to the consolidated financial statements and related footnotes for the year ended December 31, ~~2008,~~2009, included in the Company’s Form 10-K (File No. 001-11015), filed with the Securities and Exchange Commission on ~~February 27, 2009.~~March 8, 2010.

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 ~~GES Exposition Services, Inc. (“GES”)~~Marketing & Events U.S., ~~Experiential~~ Marketing ~~Services~~& Events International and Travel & Recreation Group. ~~The Experiential~~As discussed below, the Company changed its reporting segments related to the Marketing ~~Services segment consists~~& Events Group during the first quarter of ~~Exhibitgroup/Giltspur and The Becker Group, Ltd. (“Becker Group”).~~2010. The Travel & Recreation Group segment consists of Brewster Inc. (“Brewster”) and Glacier Park, Inc. (“Glacier Park”). Glacier Park is an 80 percent owned subsidiary of Viad.

In July 2009, Viad announced a strategic reorganization to align its brands and operations into two ~~business units:~~operating groups: the Marketing & Events Group ~~(which includes Viad’s GES and Experiential Marketing Services segments)~~ and the Travel & Recreation Group. The operating groups are supported by a Corporate Services Group ~~(which includes Brewster~~that centralizes responsibility for various corporate functions. Immediately following the close of business on December 31, 2009, substantially all of the domestic operations of the Marketing & Events Group were combined into one legal entity by transferring all of the assets and ~~Glacier Park)~~third party liabilities of Exhibitgroup/Giltspur, a division of Viad Corp, The Becker Group, Ltd. (“Becker Group”) and other related entities into GES Exposition Services, Inc. Furthermore, on February 2, 2010, GES Exposition Services, Inc. changed its name to Global Experience Specialists, Inc. (“GES”). The services that were previously provided under the Company’s brands of “Exhibitgroup/Giltspur” and “Becker Group” are now provided under the “Global Experience Specialists” brand.

In connection with the reorganization and consolidation of business units within the Marketing & Events Group, the Company changed its management structure and internal organization in a manner that caused a change to the composition of its reportable segments, which is effective for the first quarter of 2010. Accordingly, the Marketing & Events Group consists of two reporting segments based on geographical lines of responsibility; the U.S. segment and International segment as follows:

	1.		Marketing & Events U.S., which includes all domestic GES and affiliated operations, including those services formerly provided under the Exhibitgroup/Giltspur and Becker Group brands. The consolidation of the domestic Marketing & Events Group operations is aimed to provide a fully integrated service delivery network through a realigned sales organization, shared infrastructure and facilities, and a common operational platform.

	2.		Marketing & Events International, which includes all foreign operations of the Marketing & Events Group and consists of two operating segments; Canada and EMEA (Europe, Middle East, Asia). This reporting segment includes the operations of the following companies: GES Exposition Services (Canada) Limited, Giltspur Exhibits of Canada, Inc., Melville Exhibition and Event Services Limited and Corporate Technical Services Limited (collectively “Melville”) and affiliates, SDD Exhibitions Limited and Voblo Verwaltungs GmbH.

Beginning in the first quarter of 2010, the presentation of segment information for the Marketing & Events Group is based on the redefined segments, and comparable prior year information has been restated to reflect the revised segment structure.

Note 2. Share-Based Compensation

Viad grants share-based compensation awards to officers, directors and certain key employees pursuant to the 2007 Viad Corp Omnibus Incentive Plan (the “2007 Plan”). The 2007 Plan has a ten-year life and provides for the following types of awards: (a) incentive and non-qualified stock options; (b) restricted stock and restricted stock units; (c) performance units or performance shares; (d) stock appreciation rights; (e) cash-based awards and (f) certain other stock-based awards. The number of shares of common stock available for grant under the 2007 Plan is limited to 1,700,000 shares plus shares awarded under the 1997 Viad Corp Omnibus Incentive Plan (which terminated in May 2007) that subsequently cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent the shares are exercised for, or settled in, vested and non-forfeited shares) up to an aggregate maximum of 1,500,000 shares. Viad issues shares related to its share-based compensation awards from shares held in treasury.

Page 6

~~Total share-based~~

Share-based compensation expense recognized in the consolidated financial statements during the three months ended ~~September 30,~~March 31, 2010 and 2009 was $820,000 and ~~2008~~$233,000, respectively. In addition, $466,000 of costs associated with share-based compensation was ~~$1.0 million and $2.8 million, respectively, and $2.2 million and $6.7 million~~included in restructuring expense during the ~~nine~~three months ended ~~September 30, 2009 and 2008, respectively. The~~March 31, 2010. Furthermore, the total tax benefits related to ~~such costs~~share-based compensation expense were ~~$381,000~~$287,000 and ~~$1.1 million~~$60,000 for the three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008, respectively, and $788,000 and $2.5 million for the nine months ended September 30, 2009 and 2008,~~ respectively. No share-based compensation costs were capitalized during the ~~nine~~three months ended ~~September 30, 2009~~March 31, 2010 or ~~2008.~~2009.

~~Restricted~~Share-based compensation expense of restricted stock and performance-based restricted stock (“PBRS”) awards were granted during the nine months ended September 30, 2009 and 2008. Restricted stock awards vest between three and five years from the date of grant and share-based compensation expense for all awards granted prior to 2009 is recognized using the straight-line method over the requisite service period. Shares of restricted stock granted in 2009 with a five year vesting period are subject to a graded vesting schedule whereby 40 percent of the shares vest on the third anniversary of the grant and the remaining shares vest in 30 percent increments over the subsequent two anniversary dates. Share-based compensation expense of these awards is recognized based on an accelerated multiple-award approach over the requisite service period, which is approximately five years. All other restricted stock awards granted in 2009 are recognized using the straight-line method over the requisite service period, which is approximately three years.

~~Page 6~~

PBRS awards vest based on the extent to which certain incentive performance targets established in the year of grant are achieved. PBRS is subject to a graded vesting schedule whereby one third of the earned shares vest after the first year and the remaining earned shares vest in one-third increments each year over the next two years on the first business day in January.

~~Share-based compensation expense of restricted stock and PBRS~~ for the three months ended ~~September 30,~~March 31, 2010 and 2009 was $675,000 and ~~2008 was $921,000 and $1.2~~$1.1 million, ~~respectively, and $2.9 million and $3.7 million during the nine months ended September 30, 2009 and 2008.~~respectively. Viad expects to recognize the unamortized cost of all outstanding restricted stock and PBRS awards in the consolidated financial statements over weighted-average periods of approximately 2.2 years and less than one year, respectively. During the ~~nine~~three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008,~~ the Company repurchased ~~68,988~~28,407 shares for ~~$1.2 million~~$573,000 and ~~50,061~~57,309 shares for ~~$1.6 million,~~$975,000, respectively, related to tax withholding requirements on vested share-based awards.

The following table summarizes restricted stock and PBRS activity during the ~~nine~~three months ended ~~September 30, 2009:~~March 31, 2010:


	Restricted Stock					PBRS					Restricted Stock					PBRS
				Weighted-Average					Weighted-Average					Weighted-Average					Weighted-Average
				Grant Date					Grant Date					Grant Date					Grant Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Balance at January 1, 2009		358,285		$	34.25		94,828		$	34.56
Balance at January 1, 2010												390,810		$	24.59		174,927		$	20.77
Granted		228,633			15.44		162,600			15.36		141,350			19.23		—			—
Vested		(176,962	)		31.05		(46,701	)		34.21		(65,961	)		34.42		(29,547	)		35.31
Forfeited		(12,346	)		27.81		(35,800	)		15.87		(1,150	)		24.38		(126,550	)		15.36

Balance at March 31, 2010												465,049			21.57		18,830			33.02

Balance at September 30, 2009		397,610			25.05		174,927			20.63

September 30, 2009, Viad had remaining goodwill of $123.8 million and other intangible assets of $5.6 million recorded in its consolidated balance sheets. Due to the substantial uncertainties in the current economic environment, further 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 impairment testing, which may result in additional impairment losses.

~~Note 4. Acquisition of Business~~

On January 4, 2008, Viad completed the acquisition of Becker Group. In connection with the acquisition, the Company paid $24.3 million in cash and incurred $325,000 of direct acquisition costs, which were capitalized in the purchase price. Viad’s consolidated financial statements include the results of operations of Becker Group from the date of acquisition. The Company initially recorded $11.6 million of goodwill in connection with the transaction, which was included in the Experiential Marketing Services reporting segment. Due to reduced revenue, operating income and cash flow forecasts, Viad recorded a goodwill impairment loss of $6.5 million during the three months ended December 31, 2008 and wrote off the remaining goodwill balance of $5.1 million during the three months ended September 30, 2009. The amounts initially assigned to other intangible assets included $3.7 million of non-amortizable trademarks and trade names and $11.3 million of intangible assets subject to amortization. During the three months ended December 31, 2008, Viad recorded other intangible asset impairment losses of $1.1 million and recorded additional impairment losses of $8.9 million during the three months ended September 30, 2009 related to Becker Group. In 2008, Viad recorded a long-lived asset impairment loss of $1.0 million and recorded additional long-lived asset impairment losses of $1.7 million during the three months ended September 30, 2009.

~~Note 5.~~ Inventories

The components of inventories were as follows:


	September 30,		December 31,		March 31,		December 31,
	2009		2008		2010		2009
	(in thousands)				(in thousands)
Raw materials	$	24,126	$	30,683	$	21,629	$	23,113
Work in process		19,987		21,628		14,737		21,705

Inventories	$	44,113	$	52,311	$	36,366	$	44,818

During the fourth quarter of 2009, Viad commenced a plan of sale related to a non-strategic real estate asset. The asset consisted of land, building and related improvements and as of December 31, 2009, was classified on Viad’s consolidated balance sheets under the caption “Asset held for sale.” In March 2010, Viad completed the sale for $14.3 million (net of selling costs).

Note 7.5. Goodwill and Other Intangible Assets

As discussed in Note 3 above, during the third quarter of 2009, Viad performed a preliminary interim impairment evaluation of goodwill and other intangible assets. In connection with this testing and as a result of the continued impact of the recession on its Marketing & Events Group, Viad recorded impairment losses of $98.3 million and $11.4 million related to goodwill and other intangible assets, respectively, at GES (including Melville) and Becker Group. The impairment losses discussed above were based on the Company’s preliminary impairment evaluation. Management intends to finalize the impairment evaluation during the fourth quarter of 2009, which could result in adjustments to the amounts initially recorded.

The changes in the carrying amount of goodwill for the ~~nine~~three months ended ~~September 30, 2009~~March 31, 2010 were as follows:

Experiential Travel and
GES Marketing Recreation Total
(in thousands)
Balance at January 1, 2009 $ 174,018 $ 5,063 $ 33,380 $ 212,461
Goodwill impairment losses (93,241 ) (5,063 ) — (98,304 )
Foreign currency translation adjustments 4,067 — 5,543 9,610

Balance at September 30, 2009 $ 84,844 $ — $ 38,923 $ 123,767


			Marketing &
	Marketing &		Events			Travel &
	Events U.S.		International			Recreation Group		Total
	(in thousands)
Balance at January 1, 2010	$	62,686	$	22,472		$	39,773	$	124,931
Foreign currency translation adjustments		—		(543	)		1,648		1,105

Balance at March 31, 2010	$	62,686	$	21,929		$	41,421	$	126,036

A summary of other intangible assets as of ~~September 30, 2009~~March 31, 2010 is presented below:


	Gross Carrying		Accumulated			Net Carrying		Gross Carrying		Accumulated			Net Carrying
	Value		Amortization			Value		Value		Amortization			Value
	(in thousands)							(in thousands)
Amortized intangible assets:
Customer contracts and relationships	$	2,494	$	(343	)	$	2,151	$	2,485	$	(657	)	$	1,828
Non-compete agreements									2,011		(1,949	)		62
Proprietary technology		523		(298	)		225		511		(350	)		161
Design libraries		175		—			175		175		(44	)		131
Non-compete agreements		1,922		(1,809	)		113
Other		495		(57	)		438		165		(79	)		86

		5,609		(2,507	)		3,102
									5,347		(3,079	)		2,268

Unamortized intangible assets:
Trademarks and trade names		2,476		—			2,476		180		—			180
Other		30		—			30

		2,506		—			2,506

Total	$	8,115	$	(2,507	)	$	5,608	$	5,527	$	(3,079	)	$	2,448

Note 9.7. Debt

As of ~~September 30, 2009,~~March 31, 2010, Viad’s total debt of ~~$13.6~~$11.6 million consisted of ~~$6.2~~$5.6 million of capital lease obligations and a ~~$7.4~~$6.0 million borrowing under the Company’s secured revolving credit agreement (the “Credit Facility”). The Credit Facility provides for a ~~$150~~$75 million revolving line of credit, which may be increased up to an additional ~~$75~~$50 million under certain circumstances. The term of the Credit Facility is five years (expiring on June 15, 2011) and borrowings are to be used for general corporate purposes (including permitted acquisitions) and to support up to ~~$75~~$25 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.

Borrowings under the Credit Facility (of which GES is a guarantor) are indexed to the prime rate or the London Interbank Offered Rate, plus appropriate spreads tied to Viad’s leverage ratio. Commitment fees and letters of credit fees are also tied to Viad’s leverage ratio. The fees on the unused portion of the Credit Facility are currently ~~0.15~~0.50 percent annually. As of ~~September 30, 2009,~~March 31, 2010, Viad had ~~$135.4~~$62.5 million of capacity remaining under its Credit Facility reflecting an outstanding borrowing of ~~$7.4~~$6.0 million and outstanding letters of credit of ~~$7.2~~$6.5 million. Financial covenants include a fixed-charge coverage ratio of not less than ~~1.25~~0.80 to 1 through the third quarter of 2010 and 1.00 to 1 thereafter and a leverage ratio of not greater than ~~2.75~~2.50 to ~~1 and~~1. Additionally, Viad must maintain a consolidated minimum ~~consolidated net worth requirement. Viad’s consolidated net worth must not be less than $344.6 million plus 50 percent~~cash balance of positive quarterly net income attributable to Viad earned in each fiscal quarter beginning with the quarter ended June 30, 2006, plus net cash proceeds from all issuances of capital stock minus the amount of capital stock repurchased ($357.9 million as of September 30, 2009).$50 million. As of ~~September 30, 2009,~~March 31, 2010, the fixed-charge coverage and leverage ratios were ~~1.44~~1.14 to 1 and ~~0.62~~1.56 to 1, ~~respectively, and Viad’s consolidated net worth was $399.6 million.~~respectively. Significant other covenants include limitations on: investments, common stock dividends, stock repurchases, additional indebtedness, sales/leases of assets, acquisitions, consolidations or mergers and liens on property. The terms of the Credit Facility restrict Viad from paying more than ~~$10~~$5 million in dividends in the aggregate in any calendar ~~year.~~year and also restrict the Company from repurchasing more than $10 million in the aggregate of the Company’s common stock during the remainder of the credit facility term. As of ~~September 30, 2009,~~March 31, 2010, Viad was in compliance with all covenants. Viad is in negotiations with its lenders to amend the Credit Facility, including the amendment of financial and other covenants to ensure that Viad continues to meet its obligations under the Credit Facility given the current economic environment, as well as a reduction of facility levels. Given the current credit market conditions and Viad’s business outlook, the lenders will be extending less favorable terms. Although the amended Credit Facility will provide greater limitations on the use of Viad’s capital and borrowings under the Credit Facility, such limitations are not expected to have a significant impact on the operations or business of Viad.

The estimated fair value of total debt was ~~$13.6~~$11.6 million and ~~$12.6~~$12.8 million as of ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, 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.

~~Page 12~~

~~During the nine months ended September 30, 2009 and 2008, Viad recorded tax benefits related~~

In addition to the favorable resolution of tax matters in continuing operations of $3.3 million and $3.2 million, respectively. These favorable tax resolutions represent the reversal of amounts accrued for tax and related interest and penalties in connection with uncertain tax positions which were effectively settled or for which there was a lapse of the applicable statute of limitations.

above, Viad ~~also~~ had accrued gross liabilities associated with uncertain tax positions for discontinued operations of $636,000 as of both ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008.~~2009. In addition, as of ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, Viad had accrued interest and penalties related to uncertain tax positions for discontinued operations of ~~$303,000~~$322,000 and ~~$273,000,~~$313,000, 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).

~~The following represents a reconciliation of the total amounts of liabilities associated with uncertain tax positions (excluding interest and penalties) for the nine months ended September 30, 2009:~~

Continuing Discontinued
Operations Operations Total
(in thousands)
Balance at January 1, 2009 $ 3,487 $ 636 $ 4,123
Reductions for tax positions taken in prior years (2,702 ) — (2,702 )
Reductions for tax settlements (174 ) — (174 )
Reductions for lapse of applicable statutes (365 ) — (365 )

Balance at September 30, 2009 $ 246 $ 636 $ 882

As of ~~September 30, 2009, the amount of~~March 31, 2010, Viad did not have any unrecognized tax benefits for continuing ~~operations~~operations; however, the Company had $419,000 of $160,000 (including federal income tax effects of $86,000) would favorably affect Viad’s effective tax rate, if recognized, as the related uncertain tax positions are permanent in nature. However, ifaccrued tax-related interest. If amounts accrued are less than amounts ultimately assessed by the taxing authorities, Viad would record additional income tax expense. To the extent that the Company ~~has favorable tax settlements, or~~ determines that accrued amounts are no longer needed due to a lapse in the applicable statute of limitations or other reasons, such liabilities would be reversed as a reduction of income tax expense (net of federal tax effects, if applicable) in the period such determination is made.

The Company had been subject to certain foreign tax audits in multiple Canadian jurisdictions related to the 2001 through 2005 tax years. As a result of such audits, certain issues had been raised regarding the tax treatment of specific intercompany debt transactions. These uncertain tax positions had been accrued as tax liabilities, as the Company had not previously recognized any tax benefits associated with those transactions in its income tax provision. During the fourth quarter of 2008, Viad reached a joint settlement agreement with the Canadian taxing jurisdictions pertaining to the 2001 through 2005 tax audits. The settlement agreement resulted in gross tax reassessments of $4.9 million (consisting of $3.5 million of tax due and $1.4 million of related interest). Viad paid the reassessments of $4.9 million during the nine months ended September 30, 2009. In addition, the joint settlement agreement also resulted in certain tax reassessments for which the Company would receive aggregate tax refunds of $1.9 million. The Company received these refunds during the nine months ended September 30, 2009.

The Company has uncertain tax positions in U.S. federal and various state jurisdictions for which the unrecognized tax benefits may decrease due to effective settlements or a lapse in the applicable statute of limitations. These tax positions primarily relate to the deductibility of certain expenses and the method of filing for combined and separate entities. Accordingly, the Company believes that it is reasonably possible that ~~approximately $246,000 (excluding federal income tax effects~~the entire amount of ~~$86,000) of its uncertain tax positions and approximately $122,000 of related~~accrued interest ~~and penalties (excluding federal income tax effects of $30,000)~~ could be resolved or settled within the next 12 months, which would reduce the amount of accrued income taxes payable. If such tax resolutions or settlements occur, they could result in cash payments, the

~~Page 16~~

recognition of additional income tax expense, or the reversal of accrued income taxes which may impact Viad’s effective tax rate in future periods.

In the three months ended March 31, 2009, Viad paid reassessments of $4.9 million and received aggregate tax refunds of $1.9 million related to a Canadian tax settlement agreement.

Viad’s 2006 through ~~2008~~2009 U.S. federal tax years and various state tax years from 2004 through ~~2008~~2009 remain subject to income tax examinations by tax authorities. In addition, tax years from 2005 through ~~2008~~2009 related to Viad’s foreign taxing jurisdictions also remain subject to examination.

Viad classifies liabilities associated with uncertain tax positions as non-current liabilities in its consolidated balance sheets unless they are expected to be paid within the next year. As of ~~September 30, 2009~~both March 31, 2010 and December 31, ~~2008,~~2009, liabilities associated with uncertain tax positions (including interest and penalties) of $1.4 million ~~and $6.4 million, respectively,~~ were classified as non-current liabilities.

Viad does not record deferred taxes on the undistributed earnings of its Canadian subsidiaries as management presently intends to reinvest the earnings of those operations. As of December 31, 2009, there was approximately $84.6 million of accumulated undistributed earnings related to Viad’s Canadian subsidiaries, the majority of which has been previously reinvested in the assets of those foreign operations. The incremental unrecognized tax liability (net of estimated foreign tax credits) related to those undistributed earnings was approximately $2.3 million. To the extent that circumstances change and it becomes apparent that some or all of the undistributed earnings will be remitted to the parent, Viad would accrue incremental U.S. income taxes and foreign withholding taxes attributable to such remittance. Furthermore, there have been certain legislative initiatives, which could potentially result in the reduction or elimination of the deferral of U.S. income taxes on unrepatriated foreign earnings. If such initiatives were to become enacted tax law, the Company may be required to record additional income tax expense, which could have a negative impact on Viad’s financial position and results of operations.

Note ~~14.~~12. Pension and Postretirement Benefits

The net periodic benefit cost of Viad’s pension and postretirement benefit plans for the three months ended ~~September 30~~March 31 included the following components:


	Domestic Plans																		Domestic Plans
							Postretirement						Foreign												Postretirement						Foreign
	Pension Plans						Benefit Plans						Pension Plans						Pension Plans						Benefit Plans						Pension Plans
	2009			2008			2009			2008			2009			2008			2010			2009			2010			2009			2010			2009
	(in thousands)																		(in thousands)
Service cost	$	50		$	55		$	19		$	16		$	65		$	93		$	53		$	44		$	27		$	16		$	75		$	58
Interest cost		327			353			301			269			198			166			311			324			265			271			193			175
Expected return on plan assets		(149	)		(245	)		(50	)		(99	)		(136	)		(180	)		(149	)		(161	)		(41	)		(52	)		(149	)		(121	)
Amortization of prior service cost (credit)		11			21			(323	)		(461	)		—			—			10			11			(293	)		(323	)		—			—
Recognized net actuarial loss		96			110			120			4			—			—			139			89			157			74			—			—

Net periodic benefit cost (credit)	$	335		$	294		$	67		$	(271	)	$	127		$	79		$	364		$	307		$	115		$	(14	)	$	119		$	112

Note ~~15.~~13. Restructuring Charges and Recoveries

During the ~~nine~~three months ended ~~September 30, 2009,~~March 31, 2010, Viad recorded aggregate restructuring charges of ~~$8.1~~$2.1 million ~~(including $5.2 million during~~as part of the ~~three months ended September 30, 2009). These charges related to a~~continued strategic reorganization activities in the Marketing & Events Group, which primarily ~~consisting~~consisted of the ~~consolidation of several facilities and other reorganization activities, the rationalization~~elimination of certain ~~positions in connection with the integration of Becker Group and Exhibitgroup/Giltspur and the consolidation of certain leased office space.~~positions. Previously, Viad has at times incurred charges attributable to headcount reductions and facility consolidations, and has recorded adjustments to restructuring liabilities in certain circumstances. As ~~such, during the nine months ended September 30, 2009 and 2008, Viad reversed $1.3 million and $124,000~~ of ~~restructuring reserves, respectively, primarily due to a revision in estimated sublease income associated with certain leased facilities. As of September 30, 2009,~~March 31, 2010, the remaining ~~liability~~aggregate restructuring liabilities primarily ~~relates~~relate to future lease payment obligations to be made over the remaining lease terms. The changes in the restructuring liability balances for the ~~nine~~three months ended ~~September 30, 2009~~March 31, 2010 are as follows:

2009 Other
Restructurings Restructurings Total
(in thousands)
Balance at January 1, 2009 $ — $ 6,544 $ 6,544
Restructuring charges (recoveries) 7,962 (1,165 ) 6,797
Cash payments (3,844 ) (1,693 ) (5,537 )
Adjustment to liability (651 ) (233 ) (884 )

Balance at September 30, 2009 $ 3,467 $ 3,453 $ 6,920


	Marketing &
	Events Group			Other
	Consolidation			Restructurings			Total

Balance at January 1, 2010	$	8,628		$	3,027		$	11,655
Restructuring charges		2,053			—			2,053
Cash payments		(2,690	)		(361	)		(3,051	)
Adjustment to liability		(791	)		(98	)		(889	)
Foreign currency translation adjustment		(48	)		—			(48	)

Balance at March 31, 2010	$	7,152		$	2,568		$	9,720

Note ~~16.~~14. Litigation, Claims and Other Contingencies

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, 2009,~~March 31, 2010, 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 impact on the Company’s financial position or results of operations. As of ~~September 30, 2009,~~March 31, 2010, there was a remaining environmental remediation liability of ~~$6.8~~$6.6 million related to previously sold operations of which ~~$1.7~~$1.1 million was included in the consolidated balance sheets under the caption “Other current liabilities” and ~~$5.1~~$5.5 million under the caption “Other deferred items and liabilities.”

As of ~~September 30, 2009,~~March 31, 2010, 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 primarily relate to leased facilities and credit or loan arrangements with banks, 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, 2009~~March 31, 2010 would be ~~$38.7~~$34.3 million. These guarantees primarily relate to leased facilities and certain equipment 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 March 31, 2010, the amount of additional funding, if any, that Viad would be required to make related to multi-employer pension plans is not ascertainable.

Page 16

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. If a new concessionaire is selected by the Park Service, Glacier Park’s remaining business would consist of the operations at Waterton Lakes National Park and East Glacier, Montana. In such a circumstance, Glacier Park would be entitled to an amount equal to its “possessory interest,” which is generally ~~based on~~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 concessions contract. Glacier Park generated approximately 2225 percent of Travel & Recreation Group’s full year ~~2008~~2009 segment operating income.

Note ~~17.~~15. 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 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 September 30, Nine months ended September 30,
2009 2008 2009 2008
(in thousands)
Revenues:
Marketing & Events Group:
GES $ 106,612 $ 203,278 $ 444,672 $ 676,598
Experiential Marketing Services 28,044 48,570 121,405 158,227
Travel & Recreation Group 46,469 50,514 69,562 80,194

$ 181,125 $ 302,362 $ 635,639 $ 915,019

Segment operating income (loss):
Marketing & Events Group:
GES $ (14,382 ) $ 7,941 $ 6,828 $ 57,745
Experiential Marketing Services (7,856 ) (3,594 ) (12,480 ) (5,770 )
Travel & Recreation Group 19,548 21,715 19,437 23,746

(2,690 ) 26,062 13,785 75,721
Corporate activities (2,024 ) (2,659 ) (4,230 ) (7,312 )

(4,714 ) 23,403 9,555 68,409
Interest income 102 809 495 2,562
Interest expense (378 ) (430 ) (1,223 ) (1,308 )
Restructuring recoveries (charges):
GES (3,151 ) 82 (3,437 ) 82
Experiential Marketing Services 58 — (2,586 ) —
Corporate (774 ) 42 (774 ) 42
Impairment losses:
GES (95,718 ) — (95,718 ) —
Experiential Marketing Services (15,638 ) — (15,638 ) —

Income (loss) from continuing operations before income taxes $ (120,213 ) $ 23,906 $ (109,326 ) $ 69,787


	Three months ended March 31,
	2010			2009
	(in thousands)
Revenues:
Marketing & Events Group:
U.S.	$	169,409		$	193,781
International		50,367			43,278
Intersegment eliminations		(2,836	)		(997	)

		216,940		$	236,062
Travel & Recreation Group		7,413			4,887

	$	224,353		$	240,949

Segment operating income (loss):
Marketing & Events Group
U.S.	$	(49	)	$	5,328
International		2,637			3,743

		2,588			9,071
Travel & Recreation Group		(2,389	)		(2,404	)

		199			6,667
Corporate activities		(644	)		(1,503	)

		(445	)		5,164
Interest income		96			261
Interest expense		(493	)		(420	)
Restructuring charges:
Marketing & Events U.S.		(2,053	)		(2,732	)

Income (loss) before income taxes	$	(2,895	)	$	2,273

September 30, December 31,
2009 2008
(in thousands)
Assets:
Marketing & Events Group
GES $ 263,824 $ 340,849
Experiential Marketing Services 84,886 102,361
Travel & Recreation Group 149,473 120,198
Corporate and other 126,789 165,996

$ 624,972 $ 729,404

Page 1917


	March 31,		December 31,
	2010		2009
	(in thousands)
Assets:
Marketing & Events U.S.	$	245,335	$	245,255
Marketing & Events International		83,851		78,450
Travel & Recreation Group		151,597		147,090
Corporate and other		126,857		138,391

	$	607,640	$	609,186

Note ~~18.~~16. Impact of Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (“FASB”) issued ~~SFAS No. 168, “The FASB~~new guidance related to accounting and reporting for transfers of financial assets, which is codified in Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162,” which replaced SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” and establishes the FASB Accounting Standards Codification (the “Codification” or “ASC”(“ASC”) as the source of authoritative accounting principles recognized by FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with GAAP. All existing accounting standard documents are superseded by the Codification and accounting literature not included in the Codification will not be authoritative. Rules and interpretive releases of the SEC issued under the authority of federal securities laws will continue to be sources of authoritative GAAP for SEC registrants. The Codification is topically based with topics organized by ASC number and updated with Accounting Standards Updates (“ASUs”). The Codification is effective for interim and annual reporting periods ending after September 15, 2009. Viad adopted SFAS No. 168 (codified in ASC Topic ~~105) on July 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.~~

In September 2006, the FASB issued SFAS No. 157 (codified in ASC Topic 820), which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 emphasizes that fair value is a market-based measurement and not an entity-specific measurement. Accordingly, fair value measurements should be determined based on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 generally applies under other accounting pronouncements that require or permit fair value measurements, except for share-based payment transactions and other limited exceptions. SFAS No. 157 was effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2, “Effective Date of FASB Statement No. 157,” which partially defers the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. Accordingly, Viad adopted the applicable provisions of SFAS No. 157 on January 1, 2008, which did not have a material impact on Viad’s financial position or results of operations. The nonfinancial assets and liabilities for which Viad had not applied the disclosure provisions of SFAS No. 157 included the fair value measurements related to goodwill impairment testing, indefinite lived intangible asset impairment testing and the nonfinancial assets and liabilities initially measured at fair value in a business combination, but not measured at fair value in subsequent periods. Viad adopted the remaining provisions of SFAS No. 157 on January 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (codified in ASC Topic 805). SFAS No. 141(R) replaces SFAS No. 141 and, although it retains certain requirements of that guidance, it is broader in scope. SFAS No. 141(R) establishes principles and requirements in the recognition and measurement of the assets acquired, the liabilities assumed and any noncontrolling interests related to a business combination. Among other requirements, direct acquisition costs and acquisition-related restructuring costs must be accounted for separately from the business combination. In addition, SFAS No. 141(R) provides guidance in accounting for step acquisitions, contingent liabilities, goodwill, contingent consideration and other aspects of business combinations. Viad adopted SFAS No. 141(R) on January 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (codified in ASC Topic 810). SFAS No. 160 requires that ownership interests in subsidiaries held by parties other than the parent be presented separately within equity in the consolidated balance sheet. SFAS No. 160 also requires that the consolidated net income attributable to the parent and to the noncontrolling interests be identified and displayed on the face of the consolidated income statement. Changes in ownership interests, deconsolidation and additional disclosures regarding noncontrolling interests are also addressed in the new guidance. Viad adopted SFAS No. 160 on January 1, 2009, and has presented the amounts related to its noncontrolling interest (20 percent noncontrolling interest in Glacier Park) on a retrospective basis for all periods presented. Accordingly, as of September 30, 2009 and December 31, 2008, Viad presented the noncontrolling interest of $7.2 million and $6.5 million, respectively, as a component of equity within the consolidated balance sheets. Furthermore, Viad’s consolidated statements of operations reflect a separate presentation of total consolidated net income (loss), net income (loss) attributable to Viad and net income attributable to the noncontrolling interest. During the nine months ended September 30, 2009 and 2008, the net income attributable to the noncontrolling interest was $640,000 and $669,000, respectively.

~~Page 20~~

~~Derivative Instruments and Hedging Activities.” Viad adopted SFAS No. 161 on January 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.~~

In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets” (codified in ASC Topic 350). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets.” The intent of this guidance is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), “Business Combinations,” and other GAAP. The guidance for determining the useful life of a recognized intangible asset is to be applied prospectively to intangible assets acquired after the effective date. However, the disclosure requirements are to be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. Viad adopted FSP FAS 142-3 on January 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.

In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (codified in ASC Topic 260). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing income per share under the two-class method pursuant to SFAS No. 128, “Earnings per Share.” This guidance establishes that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. During the nine months ended September 30, 2009 and 2008, Viad had certain nonvested restricted stock and nonvested performance-based restricted stock awards outstanding, which were subject to the provisions of FSP EITF 03-6-1 as such awards contain nonforfeitable dividend rights. Viad adopted FSP EITF 03-6-1 on January 1, 2009, and accordingly, applied the two-class method of calculating earnings per share on a retrospective basis for all periods presented. The adoption of FSP EITF 03-6-1 resulted in a reduction of basic income per share of $0.05 for the nine months ended September 30, 2008 and $0.02 for the three months ended September 30, 2008.

In December 2008, the FASB issued FSP FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (codified in ASC Topic 715). FSP FAS 132(R)-1 provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement benefit plan. The required disclosures include information regarding investment policies and strategies, categories of plan assets, fair value measurements of plan assets and concentrations of risk. FSP FAS 132(R)-1 is effective for fiscal years ending after December 15, 2009. Accordingly, Viad will adopt the provisions of FSP FAS 132(R)-1 in the Company’s annual 2009 disclosures. The adoption of FSP FAS 132(R)-1 is not expected to have a material impact on Viad’s financial position or results of operations.

In April 2009, the FASB issued a series of FASB Staff Positions, which provide guidance related to fair value disclosures and measurements, and other-than-temporary impairments (codified in ASC Topic 825). This new guidance includes FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” FSP FAS 107-1 and APB 28-1 require that public companies disclose the fair value of their financial instruments within the scope of SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” for interim reporting periods, and also require disclosure of the methods and significant assumptions used to estimate the fair value of their financial instruments. The FSP is effective for interim reporting periods ending after June 15, 2009. Viad adopted FSP FAS 107-1 and APB 28-1 in the second quarter of 2009, which did not have a material impact on Viad’s financial position or results of operations.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (codified in ASC Topic 855). SFAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS No. 165 is effective for interim reporting periods ending after June 15, 2009. Viad adopted SFAS No. 165 in the second quarter of 2009, which did not have a material impact on Viad’s financial position or results of operations.

~~In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets — an amendment of SFAS No. 140” (codified in ASC Topic 860).~~860. The objective of this ~~statement~~guidance is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial ~~assets;~~assets. Viad adopted the ~~effects~~provisions of ~~a transfer~~this guidance on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. This statement applies to Viad as of the first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The adoption of SFAS No. 166 isJanuary 1, 2010, which did not ~~expected to~~ have ~~a material~~an impact on Viad’s financial position or results of operations.

~~Page 21~~

In June 2009, the FASB issued ~~SFAS No. 167, “Amendments of FASB Interpretation No. 46(R)” (codified~~new guidance related to accounting and reporting for variable interest entities, which is codified in ASC Topic ~~810). The emphasis of this statement is to improve financial reporting by enterprises involved with variable interest entities. The statement also~~810. This guidance amends previously issued standards and addresses the effects ~~on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities,” as a result~~ of the elimination of the qualifying special-purpose entity concept contained in ~~SFAS No. 166 and~~those previous standards. Viad adopted the ~~application of certain key~~ provisions of FASB Interpretation No. 46(R). This statement is effective as of the beginning of the first annual reporting period after November 15, 2009 for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The adoption of SFAS No. 167 isthis guidance on January 1, 2010, which did not ~~expected to~~ have ~~a material~~an impact on Viad’s financial position or results of operations.

In August 2009, the FASB issued ASU 2009-05, “Measuring Liabilities at Fair Value,” to provide guidance on measuring the fair value of liabilities under ASC Topic 820. This ASU clarifies the fair value measurements for a liability in an active market and the valuation techniques in the absence of a Level 1 measurement. This ASU is effective for the first reporting period (including interim periods) beginning after issuance. The adoption of ASU 2009-05 is not expected to have a material impact on Viad’s financial position or results of operations.

Note ~~19.~~17. Common Stock Repurchases

Viad has announced its intent, under authorizations by its Board of Directors, to repurchase up to an aggregate of three million shares of the Company’s common stock from time to time at prevailing prices in the open market. ~~During the nine months ended September 30, 2008, Viad repurchased 328,000 common shares for $10.1 million.~~ No shares were repurchased during the ~~nine~~three months ended ~~September 30, 2009.~~March 31, 2010. The authorizations of the Board of Directors do not have expiration dates and 160,681 shares are available for repurchase as of ~~September 30, 2009.~~March 31, 2010. Additionally, during the ~~nine~~three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008,~~ the Company repurchased ~~68,988~~28,407 shares for ~~$1.2 million~~$573,000 and ~~50,061~~57,309 shares for ~~$1.6 million,~~$975,000, respectively, related to tax withholding requirements on share-based awards.

~~Note 20. Subsequent Event~~

In connection with the Company’s previously announced plan to consolidate the warehousing and production facility of GES in Las Vegas, Nevada, GES reduced its warehouse and production facility footprint by approximately 33 percent through the application of ‘Lean’ warehousing and inventory management practices. As a result, the Company will record a facility consolidation and downsizing charge of approximately $5 million during the 2009 fourth quarter coinciding with the date GES has ceased utilizing the affected space. This charge is based on the remaining contractual lease obligation (less estimated sublease income) related to the affected facility and will be recorded under the caption “Restructuring charges” on Viad’s consolidated statements of operations. Payments due under the lease obligations will continue to be made over the remaining term of the lease agreement, which expires January 15, 2015.

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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. As discussed below, the Company changed its reporting segments related to the Marketing & Events Group during the first quarter of 2010.

In July 2009, Viad announced a strategic reorganization to ~~enhance shareholder value by aligning~~align its brands and operations into two ~~business units:~~operating groups: the Marketing & Events Group ~~(which includes Viad’s GES and Experiential Marketing Services segments)~~ and the Travel & Recreation ~~Group (which includes Brewster and Glacier Park).~~Group. The ~~business units~~operating groups are supported by a Corporate Services Group that centralizes responsibility for various corporate functions. ~~Management anticipates future restructuring charges as a result~~Immediately following the close of ~~integration and consolidation activities associated with~~business on December 31, 2009, substantially all of the ~~reorganization.~~

~~Viad Corp (“Viad” or~~domestic operations of the ~~“Company”) operates in three reportable business segments as follows:~~

Marketing & Events ~~Group:~~

~~GES~~~~— GES Exposition Services, Inc. (“GES”)~~Group were combined into one legal entity by transferring all of the assets and its segment affiliates, including Melville, provide exhibition and event services throughout North America and the United Kingdom, and in the United Arab Emirates consisting of: show planning and production; floor plan design and layout; decorating, graphics and signage, and furniture, carpet and fixture procurement and rental. These services are provided to a variety of show organizers, including venues, trade associations and show management companies. GES’ customer base also includes exhibitors for which GES provides exhibit design, construction, refurbishment, storage and rental services, including related show services such as logistics and transportation, material handling, electrical, plumbing, rigging and cleaning, and exhibit installation and dismantling.

~~Experiential Marketing Services~~~~— This segment consists~~third party liabilities of Exhibitgroup/Giltspur, a division of Viad ~~and its affiliated companies, including SDD Exhibitions Limited and Voblo Verwaltungs GmbH (“Exhibitgroup/Giltspur”) and~~Corp, The Becker Group, Ltd. (“Becker Group”) and other related entities into GES Exposition Services, Inc. Furthermore, on February 2, 2010, GES Exposition Services, Inc. changed its name to Global Experience Specialists, Inc. (“GES”). ~~Exhibitgroup/Giltspur~~The services that were previously provided under the Company’s brands of “Exhibitgroup/Giltspur” and “Becker Group” are now provided under the “Global Experience Specialists” brand.

Marketing & Events Group— In connection with the reorganization and consolidation of business units within the Marketing & Events Group, the Company changed its management structure and internal organization in a manner that caused a change to the composition of its reportable segments, which is effective for the first quarter of 2010. Accordingly, the Marketing & Events Group consists of two reporting segments based on geographical lines of responsibility, the U.S. segment and International segment, as follows:

	1.		Marketing & Events U.S., which includes all domestic GES and affiliated operations, including those services formerly provided under the Exhibitgroup/Giltspur and Becker Group brands. The consolidation of the domestic Marketing & Events Group operations is aimed to provide a fully integrated service delivery network through a realigned sales organization, shared infrastructure and facilities, and a common operational platform.

	2.		Marketing & Events International, which includes all foreign operations of the Marketing & Events Group and consists of two operating segments: Canada and EMEA (Europe, Middle East, Asia). This reporting segment includes the operations of the following companies; GES Exposition Services (Canada) Limited, Giltspur Exhibits of Canada, Inc., Melville Exhibition and Event Services Limited and Corporate Technical Services Limited (collectively “Melville”) and affiliates, SDD Exhibitions Limited and Voblo Verwaltungs GmbH.

The Marketing & Events Group provides exhibition, event and retail marketing services through its operations in the U.S., Canada, the United Kingdom, Germany and the United Arab Emirates, as well as an ~~integrated experience~~international network of partners in various other countries. It competes principally within the exhibition, event and corporate meeting industry, which primarily consists of exhibitions, trade shows, conventions, and corporate and special events that facilitate face-to-face marketing ~~agency that~~of the goods and services being offered or displayed.

The Marketing & Event Groups specializes in ~~exhibits,~~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. Show organizers include for-profit and not-for-profit show owners as well as show management companies. Corporate brand marketers include exhibitors and other ~~face-to-face marketing opportunities. Exhibitgroup/Giltspur combines~~major domestic and international corporations. Retail shopping centers include major mall developers, owners and management companies.

Under its ~~core~~agreements with show organizers, the Marketing & Events Group serves as the official services contractor, providing services to the show organizer, and is designated as the exclusive provider of certain services to exhibitors participating in the exhibition or event. Show organizer services generally include: general event management; planning and consultation; concept design; exhibition layout and design; graphics and design; show traffic analysis; carpeting and flooring; decorating products and accessories; custom graphics; overhead rigging; cleaning; and electrical, lighting and plumbing distribution. Exclusive exhibitor services provide exhibitors with a single point of contact to facilitate a timely, safe and efficient move-in and move-out of the show. These services typically include: material handling services; overhead rigging; electrical distribution; and cleaning.

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In addition to exclusive exhibitor services, the Marketing & Events Group competes with other providers to sell non-exclusive services to exhibitors, including: custom exhibit design ~~construction~~ and ~~marketing expertise with an ability to provide complete event program management. It leverages its global network to efficiently manage client programs. Its services include:~~construction; portable and “modular” exhibits and design; integrated marketing, including pre- and ~~post event~~post-event communications and customer relationship management; multimedia services; event surveys; return on investment analysis; attendee and exhibit booth traffic analysis; staff training; ~~event surveys; program~~online management tools; logistics, storage and ~~planning; logistics management; maintenance~~refurbishment of exhibits; booth furnishings, carpeting and ~~warehousing;~~signage; in-house installation and dismantling; and various other show ~~services; online~~services. The Marketing & Events Group aims to provide these services, combined with complete event program management ~~tools~~ and ~~multimedia services. Exhibitgroup/Giltspur~~planning, to corporate brand marketer clients across all exhibitions and events in which they participate regardless of whether or not it is the official services contractor.

The Marketing & Events Group also provides portable and “modular” exhibits, kiosks for shopping malls and retail stores, and design, construction and installation services for permanent installations including museums, corporate lobbies, visitors’ centers, showrooms and retail interiors. Becker Group is an experiential marketing company specializing in creatinga 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. ~~Becker~~In addition, the Marketing & Events Group ~~is the leading provider~~offers retail clients complete turnkey services, including design, engineering, graphic production, fabrication, warehousing, shipping, and on-site installation of ~~large-scale, holiday-themed events~~retail merchandising units, kiosks and ~~experiences~~holiday environments for ~~regional~~ shopping ~~malls~~centers and lifestyle centers. The Marketing & Events Group also provides construction and installation services for permanent installations, including museums, corporate lobbies, visitors centers, ~~in North America.~~showrooms, and retail interiors.

Travel & Recreation Group— Brewster Inc. (“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 Ice Explorer Tours, motorcoach services, charter and sightseeing services, tour boat operations, inbound package tour operations and hotel operations. Glacier Park, Inc. (“Glacier Park”) operates four historic lodges and three motor inns 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.

The following are financial highlights of the ~~third~~first quarter of ~~2009~~2010 presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”):

Viad Corp (Consolidated)

	•		Total revenues of ~~$181.1~~$224.4 million compared to ~~$302.4~~$240.9 million in the ~~third~~first quarter of ~~2008~~2009

	•		Net loss attributable to Viad of ~~$97.1~~$3.0 million versus income of ~~$16.8~~$1.5 million in the ~~third~~first quarter of ~~2008~~2009

	•		Diluted loss per share of ~~$4.86~~$0.15 versus income per share of ~~$0.81~~$0.07 in the ~~third~~first quarter of ~~2008~~2009

	•		Restructuring charges of ~~$5.2~~$2.1 million ~~primarily~~ related to ~~facility consolidations and other~~ reorganization activities ~~and reversal~~in the Marketing & Events Group, primarily comprised of ~~restructuring reserves~~the elimination of ~~$1.3 million~~

	•		~~Impairment losses of $111.4 million pre-tax primarily related to the non-cash write-down of goodwill and other intangible assets at GES and Becker Group~~certain positions

	•		Cash and cash equivalents totaled ~~$128.5~~$131.0 million as of ~~September 30, 2009~~March 31, 2010

	•		Debt was ~~$13.6~~$11.6 million as of ~~September 30, 2009~~March 31, 2010

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Marketing & Events Group

~~GES:~~U.S.

	•		Revenues of ~~$106.6~~$169.4 million, a decrease of ~~47.6~~12.6 percent from the ~~third~~first quarter of ~~2008~~2009

	•		Segment operating loss of ~~$14.4 million,~~$49,000, as compared to income ~~of $7.9~~$5.3 million in the ~~third~~first quarter of ~~2008~~2009

~~Experiential Marketing Services:~~International

	•		Revenues of ~~$28.0~~$50.4 million, ~~a decrease~~an increase of ~~42.3~~16.4 percent from the ~~third~~first quarter of ~~2008~~2009

	•		Segment operating ~~loss~~income of ~~$7.9~~$2.6 million, as compared to ~~a loss of $3.6~~$3.7 million in the ~~third~~first quarter of ~~2008~~2009

Travel & Recreation Group

	•		Revenues of ~~$46.5~~$7.4 million, ~~a decrease of 8.0 percent from~~as compared to $4.9 million in the ~~third~~first quarter of ~~2008~~2009

	•		Segment operating ~~income~~loss of ~~$19.5~~$2.4 million, a decrease of ~~10.0~~0.6 percent from the ~~third~~first quarter of ~~2008~~2009

Non-GAAP ~~Measures:~~Measure:

The following discussion includes a presentation of Adjusted EBITDA, ~~and Income before impairment losses,~~ which ~~are~~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. “Income before impairment losses” is defined by Viad as income from continuing operations before the after-tax effect of impairment losses related to goodwill, other intangible assets and other long-lived assets. The presentation of Adjusted EBITDA ~~and Income before impairment losses~~ 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. ~~Income before impairment losses is utilized by management to review operating results of the business without the effects of noncash impairment losses. These~~This non-GAAP ~~measures~~measure should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.

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Management believes that the presentation of Adjusted EBITDA ~~and Income before impairment losses~~ 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 ~~and Income before impairment losses~~ primarily as a performance ~~measures~~measure and believes that the GAAP financial ~~measures~~measure most directly comparable to ~~these~~this non-GAAP ~~measures are~~measure is net income attributable to ~~Viad and income from continuing operations attributable to Viad, respectively.~~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. Similarly, although Income before impairment losses is used as a financial measure to assess the performance of the business, its use is limited because it does not consider non-cash goodwill, other intangible asset and other long-lived asset impairment losses. Because Adjusted EBITDA ~~and Income before impairment losses do~~does not consider the above items, a user of Viad’s financial information should consider net income attributable to Viad ~~and income from continuing operations attributable to Viad~~ as an important ~~measures~~measure of financial performance because ~~they provide~~it provides a more complete ~~measures~~measure of the Company’s performance.

~~Page 24~~

Marketing & Events Group.Revenues for ~~GES~~the Marketing & Events U.S. segment were ~~$106.6~~$169.4 million for the ~~third~~first quarter of ~~2009,~~2010, down ~~47.6~~12.6 percent from ~~$203.3~~$193.8 million in the ~~third~~first quarter of ~~2008. GES’ segment~~2009. Segment operating loss was ~~$14.4 million~~$49,000 in the ~~third~~first quarter of ~~2009,~~2010, compared to income of ~~$7.9~~$5.3 million in the ~~third~~first quarter of ~~2008.~~2009. These declines resulted primarily from ~~negative show rotation, which impacted GES’ revenue by $58 million versus the 2008 third quarter, as well as~~reductions in exhibition marketing spending and a ~~significant~~ reduction in ~~trade~~revenues of approximately $5 million due to show ~~marketing spending. GES’ base~~rotation. Base same-show revenues declined approximately 2510 percent in the ~~third~~first quarter of ~~2009.~~2010. 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 4155 percent of ~~GES’ revenue in~~2010 first quarter revenues for the ~~third~~Marketing & Events U.S. segment.

Revenues for the Marketing & Events International segment were $50.4 million for the first quarter of ~~2009.~~

~~Revenues for Viad’s Experiential Marketing Services segment were $28.0~~2010, up 16.4 percent from $43.3 million in the ~~third~~first quarter of ~~2009, down 42.3 percent from $48.6~~2009. Segment operating income was $2.6 million in the ~~third~~first quarter of ~~2008. Experiential Marketing Services segment operating loss for the third quarter of 2009 was $7.9 million~~2010, compared to ~~a loss of $3.6~~$3.7 million in the ~~third~~first quarter of ~~2008. These declines resulted~~

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2009. As discussed above, results in this segment were impacted by exchange rates during the 2010 first quarter resulting in increases of approximately $6.1 million and $293,000 in revenues and segment operating income, respectively, as compared to the first quarter of 2009. Excluding exchange rate variances, 2010 first quarter revenues increased by $1.0 million, or 2.4 percent, primarily ~~from negative~~due to a major project for the 2010 Winter Olympic Games in Canada, partially offset by a reduction in revenues of approximately $3 million due to show rotation ~~from the biennial Farnborough Air Show that occurred~~and general declines in ~~the 2008 third quarter, which impacted segment revenues by approximately $12 million, as well as reduced client~~exhibition marketing spending.

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 current recessionary environment is negatively impacting the exhibition and event industry, resulting in lower trade show attendance and exhibitor spending. Additionally, the pricing environment remains challenging. Although GES has long-term contracts for future shows, the prospects for individual shows tend to be driven by the success of the industry related to those shows. ~~For~~The current weak economy is negatively impacting the ~~2009 full year, management expects GES’ same-show revenues to decline by approximately 22 percent~~exhibition and ~~annual show rotation to negatively impact revenues by approximately $85 million due to~~event industry, resulting in lower exhibition attendance and exhibitor spending. Additionally, the occurrence of several major, non-annual shows during 2008. Management also expects lower revenues from its Experiential Marketing Services segment in 2009 due to reduced exhibitor spending as well as lower sales of holiday-themed events and experiences and retail merchandising units as shopping center clients reduce their spending in response to the recession.pricing environment remains challenging.

During the third quarter of 2009, Viad revised downward its forecast for future revenues and earnings in its Marketing & Events Group based on continued declines in trade show marketing spending by its customers and a sharper than expected decline in retail holiday décor demand. As a result, the Company has projected a more prolonged contraction in its trade show and retail marketing revenues than was previously anticipated. Due to these facts and circumstances, Viad performed an interim impairment evaluation of goodwill, other intangible assets, and certain other long-lived assets. As a result of the interim evaluation, Viad recorded aggregate goodwill impairment losses of $98.3 million related to its Marketing & Events Group. The aggregate goodwill impairment losses consisted of $93.2 million at the GES reporting segment (including Melville), and $5.1 million at Becker Group, which is included in the Experiential Marketing Services reporting segment. In addition, the Company recorded aggregate other intangible asset impairment losses of $11.4 million. Of this total amount, $8.9 million related to intangible assets at Becker Group, and $2.5 million related to Melville. Viad also recorded impairment losses of $1.7 million related to touring exhibit assets at Becker Group.

Additionally, management expects the stronger U.S. dollar to result in unfavorable currency translation of approximately $27 million in revenue for the 2009 full year as compared to 2008 (including approximately $19 million and $8 million for GES and Experiential Marketing Services, respectively).

In anticipation of revenue pressures, management began taking actions to reduce overhead costs during early 2008. ~~Through continued efforts in this area,~~In early 2009, management expects to reduce 2009 full year overhead costs by approximately $33 million at GES and by approximately $8 million in the Experiential Marketing Services segment as compared to 2008. GES is also in the process ofbegan implementing changes to its Marketing & Event Group service delivery processes based on ‘Lean’ principles in order to further increase efficiencies, decrease costs and enhance service levels. ~~Management expects~~Also in 2009, management commenced the integration of GES Exposition Services, Exhibitgroup/Giltspur and Becker Group to ~~realize additional~~form the new Global Experience Specialists organization. As a result of these efforts, management realized reduction in Marketing & Events Group overhead costs of approximately $41 million during 2009 and anticipates a further reduction in U.S. overhead costs of approximately $10 million during 2010. Additionally, management anticipates realizing approximately $10 million in variable cost ~~reductions~~savings from its Lean initiatives during 2010, offsetting general market pressures on margins.

As part of the business integration, the Marketing & Events U.S. sales force was combined and ~~revenue synergies~~aligned with its primary customer segments — exhibition sales, brand marketer sales (which primarily represents exhibitor sales) and retail sales. These sales forces are supported by an integrated service delivery network, shared infrastructure and facilities, and a common operational platform.

Primarily as a result of the ~~strategic reorganization announced in July~~business integration and cost-reduction efforts, Viad recorded restructuring charges of $2.1 million and $2.7 million during the first quarters of 2010 and 2009, ~~which included~~respectively, related to the ~~alignment~~operations of ~~GES and the Experiential Marketing Services segment into one business unit,~~ the Marketing & Events ~~Group.~~U.S. segment. Additional charges may be incurred as management continues to reduce its cost structure.

In 2010, management expects same-show revenues to decline by approximately 10 percent and show rotation to positively impact revenues by $20 million to $25 million due to a few major, non-annual shows that will occur in 2010. Management isalso expects continued weak demand from shopping center clients for holiday-themed events and experiences and retail merchandising units. Additionally, management anticipates that foreign currency exchange rate variances will not have a significant impact on full year 2010 results.

Management remains focused on improving the profitability of the Marketing & Events Group through continued integration and consolidation of operations to increase capacity utilization and reduce costs, as well as leveraging the collective strengths and capabilities of ~~GES~~the combined organization to increase productivity and ~~the Experiential Marketing Services segment to~~ win market share by delivering comprehensive, innovative, value-added solutions that enable clients to generate a higher return on their face-to-face marketing investments. Management is also focused on improving the sales pipeline and win rate to drive profitable revenue growth, as well as ongoing cost control, productivity enhancements and increased capacity utilization in order to improve profitability in future years.

Primarily as a result of the strategic reorganization, Viad recorded restructuring charges of $5.2 million during the 2009 third quarter. Also in the third quarter of 2009, Viad reversed $1.3 million of restructuring reserves due to a revision in estimated sublease income associated with certain leased facilities. Management expects to record additional restructuring charges of approximately $7 million in the 2009 fourth quarter as a result of continued reorganization activities, including the consolidation and downsizing of GES’ Las Vegas warehousing and production facility. In conjunction with the restructuring activities discussed above, the Company recorded an excess inventory write-down of $1.8 million during the third quarter of 2009 related to theViad’s Marketing & Events ~~Group.~~

~~GES and Exhibitgroup/Giltspur are~~Group is subject to multiple collective bargaining agreements that affect labor costs, about ~~one-fourth~~one-third of which expire each year. Although labor relations between the companies and labor are currently stable, disruptions during future contract negotiations could occur, with the possibility of an adverse impact on the operating results of ~~GES and/or Exhibitgroup/Giltspur.~~the Marketing & Events Group.

Page 22

and segment operating ~~income,~~loss, respectively, as compared to the ~~third~~first quarter of ~~2008. Results~~2009. Excluding exchange rate variances, 2010 first quarter revenues increased by $1.4 million, or 27.8 percent, primarily due to increased transportation revenues related to the 2010 Winter Olympic Games in ~~the 2009 third quarter were also negatively affected~~Canada, partially offset by reduced tourism demand.

The Travel & Recreation Group segment is affected by consumer discretionary spending on tourism activities. As a result of global economic weakness, management expects results from the Travel & Recreation Group segment to remain under pressure in 2010. Additionally, management anticipates that foreign currency exchange rate variances will not have a significant impact on full year 2010 results.

During ~~2008,~~2009, approximately 7572 percent of revenue and 8280 percent of segment operating income generated in the Travel & Recreation Group segment was 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, and, therefore, revenue and operating income from the Travel & Recreation Group segment.

The operating results related to Viad’s Canadian travel and recreation subsidiaries were translated into U.S. dollars at weighted-average exchange rates of 0.91 and 0.96 for the third quarters of 2009 and 2008, respectively. Accordingly, Viad’s consolidated third quarter results of operations were impacted by the weakening of the Canadian dollar relative to the U.S. dollar as it relates to the translation of its Canadian operations. 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.

Viad’s Travel & Recreation Group segment is affected by consumer discretionary spending on tourism activities. As a result of the global economic slowdown, management expects results from its Travel & Recreation Group segment to be impacted by tourism declines in 2009. Additionally, management expects the stronger U.S. dollar to result in unfavorable currency translation of approximately $4 million in revenue as compared to 2008.

Glacier Park operates the concession portion of its business under concession contracts with the U.S. National Park Service (the “Park Service”) for Glacier National Park and with the Canadian Government for Waterton Lakes National Park. Glacier ~~Park’s 42-year lease with~~Park has formally provided the Canadian Government ~~was~~with notice to ~~expire in 2010. However, Glacier~~renew the concessionaire agreement for the Waterton Lakes National Park ~~exercised a renewal option~~ for an additional 42-year lease term. The original 42-year agreement expires in 2010. Glacier Park’s original 25-year concession contract with the Park Service that was to expire on December 31, 2005, has been extended for five one-year periods and now expires on December 31, 2010. 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. If a new concessionaire is selected by the Park Service, Glacier Park’s remaining business would consist of the operations at Waterton Lakes National Park and East Glacier, Montana. In such a circumstance, Glacier Park would be entitled to an amount equal to its “possessory interest,” which is generally based on 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 concessions contract. Glacier Park generated approximately 2225 percent of the Travel & Recreation Group’s full year ~~2008~~2009 segment operating income.

Corporate Activities.Corporate activities totaled ~~$2.0~~$644,000 in the first quarter of 2010, compared to $1.5 million in the ~~third~~first quarter of ~~2009, compared to $2.7 million in the third quarter of 2008.~~2009. The decrease was primarily due to ~~higher incentive compensation expenses~~the timing of corporate costs in ~~the 2008 quarter, partially offset by~~2010 and higher corporate development expenses in the 2009 quarter, partially offset by lower share-based compensation expense in the 2009 quarter.

Interest Income.Interest income totaled ~~$102,000~~$96,000 in the ~~third~~first quarter of ~~2009,~~2010, compared to ~~$809,000~~$261,000 in the ~~third~~first quarter of ~~2008.~~2009. The decrease was primarily due to lower interest rates on invested cash balances, and to a lesser extent, a decline in the average cash balance from ~~2008.~~2009.

Restructuring Charges.Viad recorded a restructuring charge of $5.2 million in the third quarter of 2009 related to facility consolidations and other reorganization activities. Also in the third quarter of 2009, Viad reversed $1.3 million of restructuring reserves due to a revision in estimated sublease income associated with certain leased facilities. In the third quarter of 2008, Viad recorded restructuring recoveries of $42,000 relating to its corporate leased office space and $82,000 for reversed restructuring reserves.

~~Income Taxes.~~The effective tax rate in the third quarter of 2009 was 19.9 percent, compared to 26.1 percent in the third quarter of 2008. The lower rate in 2009 relative to 2008 was primarily due to the goodwill and intangible asset impairment losses of $111.4 million in 2009, as well as the favorable resolution of tax matters in 2009 and 2008 of $3.3 million and $2.3 million, respectively. Excluding these items, the effective tax rate in the third quarters of 2009 and 2008 would have been 39.2 percent and 35.8 percent, respectively.

~~Comparison of First Nine Months of 2009 to the First Nine Months of 2008~~

Revenues for the first nine months of 2009 decreased 30.5 percent to $635.6 million from $915.0 million in 2008. Loss from continuing operations before income taxes was $109.3 million for the first nine months of 2009 compared to income of $69.8 million for the comparable period in 2008. The loss from continuing operations attributable to Viad for the first nine months of 2009 was $90.2 million, or $4.52 per diluted share, compared to income of $46.6 million, or $2.25 per diluted share in the comparable period in 2008. These declines were largely the result of 2009 third quarter impairment losses

~~Page 27~~

of $94.2 million (after-tax), or $4.72 per diluted share, as well as negative show rotation revenue of approximately $100 million (including approximately $10 million from annual shows that shifted quarters from 2008 to 2009) as compared to the first nine months of 2008, and recessionary declines in trade show marketing spending and tourism. Income attributable to Viad before impairment losses for the first nine months of 2009 was $3.9 million, or $0.20 per diluted share. There were no impairment losses or recoveries for the comparable period in 2008.

Net loss attributable to Viad for the first nine months of 2009 was $90.2 million, or $4.52 per diluted share, as compared to $46.4 million, or $2.24 per diluted share, for the comparable period in 2008. The 2008 period included a loss from discontinued operations of $210,000, or $0.01 per diluted share, related to certain obligations associated with previously sold operations.

~~Marketing & Events Group.~~Revenues for GES were $444.7 million for the first nine months of 2009, down 34.3 percent from $676.6 million in the first nine months of 2008. The decrease was primarily due to negative show rotation revenue of approximately $100 million (including approximately $10 million from annual shows that shifted quarters from 2008 to 2009), a significant reduction in trade show marketing spending, and a $20.5 million reduction due to unfavorable currency translation as compared to the first nine months of 2008. Base same-show revenues declined 22.8 percent in the first nine months of 2009. Base same-shows represented approximately 42 percent of GES’ revenue in the first nine months of 2009.

GES’ segment operating income was $6.8 million in the first nine months of 2009, down 88.2 percent from $57.7 million in the 2008 period. Segment operating margins were 1.5 percent in the first nine months of 2009, compared to 8.5 percent in the 2008 period. The decline in segment operating margins was primarily due to the revenue decline, partially offset by overhead cost reductions of approximately $30 million as compared to the comparable period in 2008.

Revenues for Viad’s Experiential Marketing Services segment were $121.4 million in the first nine months of 2009, down 23.3 percent from $158.2 million in the comparable period in 2008. The decline was primarily due to reduced client spending as well as unfavorable currency translation, which negatively impacted segment revenues by approximately $7.2 million. Segment operating loss in the first nine months of 2009 was $12.5 million, compared to a loss of $5.8 million in the 2008 period. The decline in operating results was primarily due to the revenue decline, partially offset by overhead cost reductions of approximately $6 million as compared to the comparable period in 2008.

~~Travel & Recreation Group.~~Revenues of the Travel & Recreation Group segment were $69.6 million in the first nine months of 2009, down 13.3 percent from $80.2 million in the comparable period in 2008. Segment operating income was $19.4 million in the first nine months of 2009, compared with $23.7 million in the first nine months of 2008. As discussed below, results in this segment were impacted by exchange rates during the first nine months of 2009, resulting in reductions of approximately $4.5 million and $761,000 in revenues and segment operating income, respectively, as compared to the same period in 2008. Results in the 2009 period were also negatively affected by reduced tourism demand.

The operating results related to Viad’s Canadian subsidiaries were translated into U.S. dollars at weighted-average exchange rates of 0.91 and 0.97 for the first nine months of 2009 and 2008, respectively. Accordingly, Viad’s consolidated results of operations have been unfavorably impacted by the weakening of the Canadian dollar relative to the U.S. dollar as it relates to the translation of its Canadian operations. 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.

~~Corporate Activities.~~Corporate activities totaled $4.2 million in the first nine months of 2009, compared to $7.3 million in the comparable period in 2008. The decrease was primarily due to higher incentive compensation expenses in the 2008 period, partially offset by higher corporate development expenses in the 2009 period.

~~Interest Income.~~Interest income totaled $495,000 in the first nine months of 2009, compared to $2.6 million for the comparable period in 2008. The decrease was primarily due to lower interest rates on invested cash balances, and to a lesser extent, a decline in the average cash balance from 2008.

~~Restructuring Charges.~~~~In the first nine months of 2009,~~ Viad recorded restructuring charges of ~~$2.9~~$2.1 million in the first quarter of 2010, compared to $2.7 million in the first quarter of 2009. The charges related to reorganization activities in the ~~rationalization~~Marketing & Events Group, primarily comprised of the elimination of certain positions in connection with the integration of Becker Group and Exhibitgroup/Giltspur, the consolidation of certain leased office space and headcount reductions and a charge of $5.2 million related to facility consolidations and other reorganization activities. Additionally, during the first nine months of 2009, Viad reversed $1.3 million of restructuring reserves due to a revision in estimated sublease income associated with certain leased facilities compared to restructuring recoveries of $42,000 relating to its corporate leased office space and $82,000 for reversed restructuring reserves for the comparable period in 2008.positions.

Income Taxes.The effective tax rate in the first ~~nine months~~quarter of ~~2009~~2010 was ~~18.1~~a negative 7.2 percent, compared to ~~32.3~~39.6 percent in the ~~comparable period in 2008.~~first quarter of 2009. The lower rate in ~~2009~~2010 relative to ~~2008~~2009 was primarily due to the ~~goodwill and intangible asset~~

~~Page 28~~

~~impairment losses~~charge in 2010 of ~~$111.4~~$1.3 million ~~in 2009.~~related to healthcare legislation. Excluding ~~these items,~~this item, the effective tax rate in the first ~~nine months~~quarter of ~~2009 and 2008~~2010 would have been ~~36.5 percent and 36.8 percent, respectively.~~37.0 percent.

Liquidity and Capital Resources:

Cash and cash equivalents were ~~$128.5~~$131.0 million as of ~~September 30, 2009~~March 31, 2010 as compared to ~~$148.0~~$116.3 million as of December 31, ~~2008,~~2009, with the ~~decrease~~increase primarily due to cash flow from operations and proceeds from the sale of certain assets, partially offset by capital expenditures. 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, 2009~~March 31, 2010 was ~~$13.6~~$11.6 million compared to ~~$12.6~~$12.8 million as of December 31, ~~2008.~~2009. The debt-to-capital ratio was ~~0.033~~0.029 to 1 as of ~~September 30, 2009~~March 31, 2010 compared with ~~0.026~~0.032 to 1 as of December 31, ~~2008.~~2009. Capital is defined as total debt and capital lease obligations plus total stockholders’ equity.

Effective ~~June 15, 2006,~~November 20, 2009, Viad amended ~~and restated~~ its ~~$150 million~~ secured ~~revolving credit agreement dated June 30, 2004. The term of the amended and restated~~ revolving credit agreement (the “Credit Facility”) ~~is five years (expiring~~to ensure that the Company continued to meet its obligations under the Credit Facility given the current economic environment. The amended Credit Facility provides for a $75 million revolving line of credit, and may be increased up to an additional $50 million under certain circumstances. The Credit Facility expires on June 15, ~~2011)~~2011 and borrowings are to be used for general corporate purposes (including permitted acquisitions) and to support up to ~~$75~~$25 million of letters of credit. ~~The Credit Facility may be increased up to an additional $75 million under certain circumstances.~~ 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.

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Borrowings under the Credit Facility (of which GES is a guarantor) are indexed to the prime rate or 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 ~~0.15~~0.50 percent annually. As of ~~September 30, 2009,~~March 31, 2010, Viad had ~~$135.4~~$62.5 million of capacity remaining under its Credit Facility reflecting an outstanding borrowing of ~~$7.4~~$6.0 million and issued letters of credit of ~~$7.2~~$6.5 million. ~~Financial~~As part of the amendment, Viad’s financial covenants were amended and include a fixed-charge coverage ratio of not less than ~~1.25~~0.80 to 1 through the third quarter of 2010 and 1.00 to 1 thereafter and a leverage ratio (defined as total debt to Adjusted EBITDA) of not greater than ~~2.75~~2.50 to ~~1 and~~1. Additionally, Viad must maintain a consolidated minimum ~~consolidated net worth requirement. Viad’s consolidated net worth must not be less than $344.6 million plus 50 percent~~cash balance of positive quarterly consolidated net income attributable to Viad earned in each fiscal quarter beginning with the quarter ended June 30, 2006, plus net cash proceeds from all issuances of capital stock minus the amount of capital stock repurchased ($357.9 million as of September 30, 2009).$50 million. As of ~~September 30, 2009,~~March 31, 2010, the fixed-charge coverage and leverage ratios were ~~1.44~~1.14 to 1 and ~~0.62~~1.56 to 1, ~~respectively, and Viad’s consolidated net worth was $399.6 million.~~respectively. Significant other covenants include limitations on: investments, common stock dividends, stock repurchases, additional indebtedness, sales/leases of assets, acquisitions, consolidations or mergers and liens on property. The terms of the Credit Facility restrict Viad from paying more than $5 million in dividends in the aggregate in any calendar year and also restrict the Company from repurchasing more than $10 million in the aggregate of the Company’s common stock during the remainder of the Credit Facility term. As of ~~September 30, 2009,~~March 31, 2010, Viad was in compliance with all covenants. Viad is in negotiations with its lenders to amend the Credit Facility, including the amendment of financial and other covenants to ensure that Viad continues to meet its obligations under the Credit Facility given the current economic environment, as well as a reduction of facility levels. Given the current credit market conditions and Viad’s business outlook, the lenders will be extending less favorable terms. Although the amended Credit Facility will provide greater limitations on the use of Viad’s capital and borrowings under the Credit Facility, such limitations are not expected to have a significant impact on the operations or business of Viad.

Capital expenditures for the first ~~nine~~three months of 2010 totaled $5.0 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 the purchase of equipment at the Travel & Recreation Group. For the first three months of 2009, capital expenditures totaled ~~$18.7~~$10.6 million and primarily related to the purchase of equipment and information systems and related costs at ~~GES and exhibit costs at Becker Group. For~~ the ~~first nine months of 2008, capital expenditures totaled $32.0 million and primarily related to the purchase of equipment and information systems and related costs at GES~~Marketing & Events U.S. segment and new buses at ~~Brewster.~~the Travel & Recreation Group.

~~On January 4, 2008,~~During the first quarter of 2010, Viad completed the ~~acquisition~~sale of ~~Becker~~a non-strategic real estate asset for $14.3 million (net of selling costs). The asset was previously held in the Travel & Recreation Group and was classified on Viad’s consolidated balance sheets under the caption “Asset held for ~~$24.3 million in cash and incurred $325,000~~sale” as of ~~direct acquisition costs for a total purchase price of $24.6 million.~~December 31, 2009.

Viad ~~has~~ announced its intent, under authorizations by its Board of Directors, to repurchase up to an aggregate of three million shares of the Company’s common stock from time to time at prevailing prices in the open market. ~~During the nine months ended September 30, 2008, Viad~~Shares repurchased ~~328,000 common shares~~to date under these programs totaled 2,839,319 for ~~$10.1~~$93.3 million. No shares were repurchased during the first ~~nine~~three months of ~~2009.~~2010. The authorizations of the Board of Directors do not have

~~Page 29~~

expiration dates and 160,681 shares are available for repurchase as of ~~September 30, 2009.~~March 31, 2010. Additionally, during the first ~~nine months~~quarters of ~~2009~~2010 and ~~2008,~~2009, the Company repurchased ~~68,988~~28,407 shares for ~~$1.2 million~~$573,000 and ~~50,061~~57,309 shares for ~~$1.6 million,~~$975,000, respectively, related to tax withholding requirements on vested share-based awards.

Viad exercises significant judgment in determining its income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain. Accordingly, Viad has recorded ~~significant~~ accrued liabilities associated with uncertain tax positions. The final resolution or settlement of uncertain tax positions could result in future cash payments. During the first ~~nine months~~quarter of 2009, Viad paid certain foreign income tax reassessments of $4.9 million and received tax refunds of $1.9 million pursuant to a joint settlement agreement with certain Canadian taxing jurisdictions. ~~See “Critical Accounting Policies and Estimates” for further discussion.~~

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, 2009~~March 31, 2010 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.

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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 impact on the Company’s financial position, results of operations or liquidity. As of ~~September 30, 2009,~~March 31, 2010, there was a remaining environmental remediation liability of ~~$6.8~~$6.6 million related to previously sold operations of which ~~$1.7~~$1.1 million was included in the consolidated balance sheets under the caption “Other current liabilities” and ~~$5.1~~$5.5 million under the caption “Other deferred items and liabilities.”

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.

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 and other intangible assets —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. ~~During 2009,~~

As of March 31, 2010, Viad had goodwill of $84.6 million related to its ~~GES, Becker~~Marketing & Events Group, which consisted of $62.7 million related to the Marketing & Events U.S. segment, and ~~Brewster operating segments.~~$21.9 million related to the Marketing & Events International segment. For goodwill impairment testing purposes, ~~GES’~~this goodwill is assigned to and tested at the ~~GES~~ component level ~~based on its~~within the respective segment’s geographical operations. As of March 31, 2010, the amount of goodwill assigned to each of the discrete ~~geographical operations~~reporting units in the United States, the United Kingdom (Melville) and ~~Canada. Both~~Canada was $62.7 million, $13.0 million and $8.9 million, respectively. Also, as of March 31, 2010, the ~~Becker Group and~~ Brewster operating ~~segments are~~segment (within the Travel & Recreation Group) had goodwill of $41.4 million. Brewster is considered a reporting ~~units~~unit for goodwill impairment testing purposes.

~~Page 30~~

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, 2009,~~March 31, 2010, Viad had ~~remaining~~aggregate goodwill of ~~$123.8~~$126.0 million recorded in its consolidated balance sheets. As noted above, the amount of goodwill assigned to each of the Marketing & Events-related reporting units in the United States, the United Kingdom (Melville) and Canada was $62.7 million, $13.0 million and $8.9 million, respectively, as of March 31, 2010. The amount of goodwill assigned to the Brewster reporting unit as of March 31, 2010 was $41.4 million. Furthermore, as a result of the Company’s most recent impairment analysis performed in the fourth quarter of 2009, 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 35 percent, 52 percent and 54 percent, respectively, for each of the Marketing & Events 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 46 percent as of the most recent impairment test. Due to ~~the substantial~~continued uncertainties in the current economic environment, ~~further~~ 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 ~~additional~~ impairment losses. Furthermore, management continues to monitor the market capitalization of the Company as declines in market capitalization could be indicative of possible goodwill impairment. During the first nine months of 2009, the Company has experienced declines in its market capitalization which management will continue to evaluate with respect to its assessment of goodwill and other intangible assets.

~~assets at Becker Group,~~ and $2.5 million related to a trade name at Melville (GES’ United Kingdom reporting unit). The assumptions used to complete the evaluation of other intangible assets were consistent with those used in the goodwill impairment testing described above. To the extent that goodwill and another asset of the same reporting unit were tested at the same time, the other asset was tested for impairment before goodwill.design libraries.

As of ~~September 30, 2009,~~March 31, 2010, the Company had aggregate intangible assets not subject to amortization of ~~$2.5 million,~~$180,000, and aggregate intangible assets subject to amortization of ~~$3.1~~$2.3 million. ~~As noted above, due~~Due to ~~the substantial~~continued uncertainties in the current economic environment, ~~further~~ reductions in the Company’s expected revenue, operating income or cash flow forecasts and projections could trigger additional impairment testing for these intangible assets, which may result in ~~additional~~ impairment losses.

Income taxes— Viad is required to estimate and record provisions for income taxes in each of the jurisdictions in which the Company operates. Accordingly, the Company must estimate its actual current income tax liability, and assess temporary differences arising from the treatment of items for tax purposes as compared to the treatment for accounting purposes. These differences result in deferred tax assets and liabilities which are included in Viad’s consolidated balance sheets. The Company must assess the likelihood that deferred tax assets will be recovered from future taxable income and to the extent that recovery is not likely, a valuation allowance must be established. The Company uses significant judgment in forming a conclusion regarding the recoverability of its deferred tax assets and evaluates the available positive and negative evidence to determine whether it is more likely-than-not that its deferred tax assets will be realized in the future. As of ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, Viad had gross deferred tax assets of ~~$46.1~~$55.1 million and ~~$51.4~~$61.2 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.

For the cumulative three-year period ending December 31, 2009, Viad had a pre-tax operating loss, which was primarily the result of the goodwill and other impairment losses recorded during 2009. The Company considered the negative evidence of this cumulative pre-tax operating loss position 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 the goodwill impairment losses are not tax deductible, and thus do not contribute to tax losses. As of both ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, Viad had a valuation allowance ~~recorded~~ of $162,000 related to certain state deferred tax ~~assets at Exhibitgroup/Giltspur.~~assets. With respect to all other deferred tax assets, management believes that recovery from future taxable income is more-likely-than-not.

Page 26

As noted above, Viad uses considerable judgment in forming a conclusion regarding the recoverability of its deferred tax assets. As a result, there are inherent uncertainties regarding the ultimate realization of these assets, which is primarily dependent on Viad’s ability to generate sufficient taxable income in future periods. In light of the Company’s recent operating losses, and the risks and 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.

In March 2010, the Patient Protection and Affordable Care Act and a related measure, the Health Care and Education Affordability 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 the employer receives a Medicare Part D subsidy have been eliminated for tax years beginning after December 31, 2012. Accordingly, during the first quarter of 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 first quarter of 2010.

Viad is subject to regular and recurring audits by the taxing authorities in the jurisdictions in which the Company conducts or had previously conducted operations. These include U.S. federal and most state jurisdictions, and certain foreign jurisdictions including Canada, the United Kingdom and Germany.

Viad exercises judgment in determining its income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain. As of ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, Viad ~~had~~did not have any accrued gross liabilities associated with uncertain tax positions for continuing ~~operations of $246,000 and $3.5 million, respectively. In addition,~~operations. However, as of ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, Viad had accrued interest and penalties related to uncertain tax positions for continuing operations of ~~$516,000~~$419,000 and ~~$2.2 million,~~$407,000, respectively. Viad classifies interest and penalties related to income tax liabilities as a component of income tax expense. During the three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008,~~ Viad recorded tax-related interest expense of ~~$9,000~~$12,000 and ~~$117,000, respectively. During the nine months ended September 30, 2009 and 2008, Viad recorded tax-related interest expense of $125,000 and $722,000,~~$64,000, respectively.

During the nine months ended September 30, 2009 and 2008, Viad recorded tax benefits related to the favorable resolution of tax matters in continuing operations of $3.3 million and $3.2 million, respectively. These favorable tax resolutions represent the reversal of amounts accrued for tax and related interest and penalties in connection with uncertain tax positions which were effectively settled or for which there was a lapse of the applicable statute of limitations.

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, 2009~~March 31, 2010 and December 31, ~~2008.~~2009. In addition, as of ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, Viad had accrued interest and penalties related to uncertain tax positions for discontinued operations of ~~$303,000~~$322,000 and ~~$273,000,~~$313,000, 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).

The Company had been subject to certain foreign tax audits in multiple Canadian jurisdictions related to the 2001 through 2005 tax years. As a result of such audits, certain issues had been raised regarding the tax treatment of specific intercompany debt transactions. These uncertain tax positions had been accrued as tax liabilities, as the Company had not previously recognized any tax benefits associated with those transactions in its income tax provision. During the fourth quarter of 2008, Viad reached a joint settlement agreement with the Canadian taxing jurisdictions pertaining to the 2001 through 2005 tax audits. The settlement agreement resulted in gross tax reassessments of $4.9 million (consisting of $3.5 million of tax due, and $1.4 million of related interest). Viad paid the reassessments of $4.9 million during the first nine months of 2009. In addition, the joint settlement agreement also resulted in certain tax reassessments for which the Company would receive aggregate tax refunds of $1.9 million. The Company received these refunds during the first nine months of 2009.

~~Page 32~~

The Company has uncertain tax positions in U.S. federal and various state jurisdictions for which the unrecognized tax benefits may significantly decrease due to effective settlements or a lapse in the applicable statute of limitations. These tax positions primarily relate to the deductibility of certain expenses and the method of filing for combined and separate entities. Accordingly, the Company believes that it is reasonably possible that ~~approximately $246,000 (excluding federal income tax effects~~the entire amount of ~~$86,000) of its uncertain tax positions and approximately $122,000 of related~~accrued interest ~~and penalties (excluding federal income tax effects of $30,000)~~ could be resolved or settled within the next 12 months, which would reduce the amount of accrued income taxes payable. If such tax resolutions or settlements occur, they could result in cash payments, the recognition of additional income tax expense, or the reversal of accrued income taxes which may impact Viad’s effective tax rate in future periods.

In the first quarter 2009, Viad paid reassessments of $4.9 million and received aggregate tax refunds of $1.9 million related to a Canadian tax settlement agreement.

Viad does not record deferred taxes on the undistributed earnings of its Canadian subsidiaries as management presently intends to reinvest the earnings of those operations. As of December 31, 2009, there was approximately $84.6 million of accumulated undistributed earnings related to Viad’s Canadian subsidiaries, the majority of which have been previously reinvested in the assets of those foreign operations. The incremental unrecognized tax liability (net of estimated foreign tax credits) related to those undistributed earnings was approximately $2.3 million. To the extent that circumstances change and it becomes apparent that some or all of the undistributed earnings will be remitted to the parent, Viad would accrue incremental U.S. income taxes and foreign withholding taxes attributable to such remittance. Furthermore, there have been certain legislative initiatives, which could potentially result in the reduction or elimination of the deferral of U.S. income taxes on unrepatriated foreign earnings. If such initiatives were to become enacted tax law, the Company may be required to record additional income tax expense, which could have a negative impact Viad’s financial position and results of operations.

Page 27

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 ~~$22.3~~$22.5 million as of ~~September 30, 2009.~~March 31, 2010. Of this total, ~~$16.3~~$16.4 million related to workers’ compensation liabilities and the remaining ~~$6.0~~$6.1 million related to general/auto liability claims. Viad has also retained and provided for certain insurance liabilities in conjunction with previously sold businesses totaling ~~$9.6~~$8.3 million as of ~~September 30, 2009,~~March 31, 2010, 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 ~~$6.2~~$1.2 million and ~~$6.4~~$2.1 million for the first ~~nine months~~quarters of ~~September 30,~~March 31, 2010 and 2009, ~~and 2008,~~ 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 ~~$521,000~~$832,000 to its funded pension plans and ~~$793,000~~$807,000 to its unfunded pension plans in ~~2009,~~2010, of which the Company has contributed ~~$413,000~~$41,000 and ~~$593,000~~$145,000 as of ~~September 30, 2009,~~March 31, 2010, 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 ~~$535,000~~$553,000 to the plans in ~~2009,~~2010, of which ~~$385,000~~$156,000 has been contributed as of ~~September 30, 2009.~~March 31, 2010.

The assumed health care cost trend rate used in measuring the ~~2008~~December 31, 2009 accumulated postretirement benefit obligation was ~~nine~~ten percent, ~~in the year 2008,~~ declining one-half percent each year to the ultimate rate of five percent by the year ~~2016~~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, ~~2008~~2009 by approximately ~~$1.2~~$1.5 million and the total of service and interest cost components by approximately ~~$88,000.~~$102,000. 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, ~~2008~~2009 by approximately ~~$1.1~~$1.3 million and the total of service and interest cost components by approximately ~~$78,000.~~$88,000.

The weighted-average discount rates used to determine the domestic funded pension, domestic unfunded pension and postretirement benefit obligations as of December 31, ~~2008~~2009 were ~~both 6.90 percent.~~5.90 percent, 5.70 percent and 5.60 percent, respectively. The weighted-average discount rate used to determine the foreign pension benefit obligations as of December 31, ~~2008~~2009 was ~~7.00~~5.60 percent. The weighted-average discount rates used to determine the 2009 net periodic benefit cost for the domestic and foreign pension plans were ~~6.40~~6.90 percent and ~~5.75~~7.00 percent, respectively. 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.

The expected return on plan assets used to determine net periodic benefit cost for the Company’s domestic and foreign pension plans for ~~2008~~2009 was ~~7.75~~6.35 percent and 6.50 percent, respectively. The expected return on plan assets used to determine net periodic benefit cost for postretirement benefit plans for ~~2008~~2009 was ~~7.50~~6.10 percent.

Share-based compensation— Viad grants share-based compensation awards to officers, directors and certain key employees pursuant to the 2007 Viad Corp Omnibus Incentive Plan (the “2007 Plan”). The 2007 Plan has a ten-year life and provides for the following types of awards: (a) incentive and non-qualified stock options; (b) restricted stock and restricted stock units; (c) performance units or performance shares; (d) stock appreciation rights; (e) cash-based awards and (f) certain

~~Page 33~~

other stock-based awards. The number of shares of common stock available for grant under the 2007 Plan is limited to 1,700,000 shares plus shares awarded under the 1997 Viad Corp Omnibus Incentive Plan (which terminated in May 2007) that subsequently cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent the shares are exercised for, or settled in, vested and non-forfeited shares) up to an aggregate maximum of 1,500,000 shares. Viad issues shares related to its share-based compensation awards from shares held in treasury.

~~Total share-based~~Share-based compensation expense recognized in the consolidated financial statements during the ~~three months ended September 30,~~first quarters of 2010 and 2009 was $820,000 and ~~2008~~$233,000, respectively. In addition, $466,000 of costs associated with share-based compensation was ~~$1.0 million and $2.8 million, respectively, and $2.2 million and $6.7 million during~~included in restructuring expense in the ~~nine months ended September 30, 2009 and 2008, respectively.~~first quarter of 2010. Furthermore, the total tax benefits related to ~~such costs~~share-based compensation expense were ~~$381,000~~$287,000 and ~~$1.1 million for~~$60,000 during the ~~three months ended September 30,~~first quarters of 2010 and 2009, ~~and 2008, respectively, and $788,000 and $2.5 million for the nine months ended September 30, 2009 and 2008,~~ respectively. No share-based compensation costs were capitalized during the ~~nine months ended September 30, 2009~~first quarters of 2010 or ~~2008.~~2009.

Page 28

The fair value 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:

In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157 (codified in ASC Topic 820), “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 emphasizes that fair value is a market-based measurement and not an entity-specific measurement. Accordingly, fair value measurements should be determined based on the assumptions that market participants would use in pricing an asset or liability. SFAS No. 157 generally applies under other accounting pronouncements that require or permit fair value measurements, except for share-based payment transactions and other limited exceptions. SFAS No. 157 was effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. In February 2008, the FASB issued FASB Staff Position (“FSP”) FAS 157-2, “Effective Date of FASB Statement No. 157,” which partially defers the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008 for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. Accordingly, Viad adopted the applicable provisions of SFAS No. 157 on January 1, 2008, which did not have a material impact on Viad’s financial position or results of operations. The nonfinancial assets and liabilities for which Viad had not applied the disclosure provisions of SFAS No. 157 included the fair value measurements related to goodwill impairment testing, indefinite lived intangible asset impairment testing and the nonfinancial assets and liabilities initially measured at fair value in a business combination, but not measured at fair value in subsequent periods. Viad adopted the remaining provisions of SFAS No. 157 on January 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.

~~Page 34~~

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (codified in ASC Topic 815). SFAS No. 161 requires enhanced disclosures related to an entity’s derivative and hedging activities to improve financial reporting and enhance the current disclosure framework in SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” Viad adopted SFAS No. 161 on January 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.

In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets” (codified in ASC Topic 350). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets.” The intent of this guidance is to improve the consistency between the useful life of a recognized intangible asset under SFAS No. 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141(R), and other GAAP. The guidance for determining the useful life of a recognized intangible asset is to be applied prospectively to intangible assets acquired after the effective date. However, the disclosure requirements are to be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. Viad adopted FSP FAS 142-3 on January 1, 2009, which did not have a material impact on Viad’s financial position or results of operations.

In April 2009, the FASB issued a series of FASB Staff Positions, which provide guidance related to fair value disclosures and measurements, and other-than-temporary impairments (codified in ASC Topic 825). This new guidance includes FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” FSP FAS 107-1 and APB 28-1 requires that public companies disclose the fair value of their financial instruments within the scope of SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” for interim reporting periods, and also requires disclosure of the methods and significant assumptions used to estimate the fair value of their financial instruments. The FSP is effective

~~Page 35~~

for interim reporting periods ending after June 15, 2009. Viad adopted FSP FAS 107-1 and APB 28-1 in the second quarter of 2009, which did not have a material impact on Viad’s financial position or results of operations.

In June 2009, the FASB issued ~~SFAS No. 167, “Amendments of FASB Interpretation No. 46(R) (codified~~new guidance related to accounting and reporting for variable interest entities, which is codified in ASC Topic ~~810). The emphasis of this statement is to improve financial reporting by enterprises involved with variable interest entities. The statement also~~810. This guidance amends previously issued standards and addresses the effects ~~on certain provisions of FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities,” as a result~~ of the elimination of the qualifying special-purpose entity concept contained in ~~SFAS No. 166 and~~those previous standards. Viad adopted the ~~application of certain key~~ provisions of FASB Interpretation No. 46(R). This statement is effective as of the beginning of the first annual reporting period after November 15, 2009 for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The adoption of SFAS No. 167 is not expected to have a material impact on Viad’s financial position or results of operations.

~~In August 2009, the FASB issued ASU 2009-05, “Measuring Liabilities at Fair Value,” to provide~~this guidance on ~~measuring the fair value of liabilities under ASC Topic 820. This ASU clarifies the fair value measurements for a liability in~~January 1, 2010, which did not have an active market and the valuation techniques in the absence of a Level 1 measurement. This ASU is effective for the first reporting period (including interim periods) beginning after issuance. The adoption of ASU 2009-05 is not expected to have a material impact on Viad’s financial position or results of operations.

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 further terrorist activities or war, a pandemic 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 ~~2008~~2009 Annual Report.

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.

~~Page 36~~

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. ~~Accordingly,~~The following table summarizes the effect of foreign exchange rate variances on segment operating results ~~related to its~~from Viad’s Canadian ~~operations were translated into U.S. dollars at weighted-average exchange rates of 0.91~~ and ~~0.96~~United Kingdom operations for the ~~third quarters of 2009 and 2008, respectively. As the Canadian operations generated aggregate operating income in the third~~first quarter of 2009, Viad’s segment operating income has been unfavorably impacted by approximately $613,000 from the weakening of the Canadian dollar relative to the U.S. dollar. The weighted-average exchange rates used to translate into U.S. dollars the operating results for the nine months ended September 30, 2009 and 2008 were 0.91 and 0.97, respectively. 2010:


	Weighted Average				Effect of Rate
	Exchange Rates				Variance
	2010		2009		(thousands)
Canadian Operations:
Marketing & Events Group	$	0.97	$	0.76	$	225
Travel & Recreation Group	$	0.96	$	0.80	$	(159	)

United Kingdom Operations:
Marketing & Events Group	$	1.53	$	1.44	$	103

As the Canadian operations generated aggregate operating income in the first nine months of 2009, Viad’s segment operating income has been unfavorably impacted by approximately $1.0 million from the weakening of the Canadian dollar relative to the U.S. dollar. The operating results related to its United Kingdom operations were translated into U.S. dollars at weighted-average exchange rates of 1.71 and 1.89 for the third quarters of 2009 and 2008, respectively. As the United Kingdom operations generated aggregate operating losses in the third quarter of ~~2009,~~2010, Viad’s segment operating income has been favorably impacted by approximately ~~$398,000~~$66,000 from the ~~weakening~~strengthening of the ~~British pound~~Canadian dollar relative to the U.S. dollar. ~~The weighted-average exchange rates used to translate into U.S. dollars the operating results for the nine months ended September 30, 2009 and 2008 were 1.47 and 1.96, respectively.~~ As the United Kingdom operations generated aggregate operating income in the first ~~nine months~~quarter of ~~2009,~~2010, Viad’s segment operating income has been ~~unfavorably~~favorably impacted by approximately ~~$2.2 million~~$103,000 from the ~~weakening~~strengthening of the British pound relative to the U.S. dollar.

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. As of ~~September 30, 2009,~~March 31, 2010, Viad had variable rate debt outstanding of ~~$7.4~~$6.0 million under the Credit Facility. Interest payments related to Viad’s variable rate debt outstanding are indexed to ~~LIBOR. Viad’s subsidiaries also have exposure to changing fuel prices. Periodically, Brewster enters into futures contracts with an oil company to purchase two types of fuel and specifies~~ the monthly total volume, by fuel product, to be purchased over the agreed upon term of the contract, which is generally no longer than one year. The main objective of Viad’s risk policy related to changing fuel prices is to reduce transaction exposure in order to mitigate the cash flow risk and protect profit margins. As of September 30, 2009, Viad had a fuel contract outstanding to purchase 47,000 gallons of diesel fuel at approximately $2.75 per gallon (plus applicable taxes), expiring October 2009.prime rate or LIBOR.

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, 2009,~~March 31, 2010, 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, 2009.~~March 31, 2010. 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.

~~Page 37~~

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, ~~2008, as well as the updated risk factors discussed in “Item 1A. Risk Factors” of Part II of Viad’s Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2009, 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~~first quarter of ~~2009~~2010 by Viad from employees and former employees surrendering previously owned Viad common stock (outstanding shares) ~~to pay for a portion of the exercise price in connection with the exercise of stock options, or~~ to pay the taxes in connection with the vesting of share-based awards. The table also reflects that no shares of Viad common stock were repurchased by Viad on the open market as part of a repurchase program.

ISSUER PURCHASES OF EQUITY SECURITIES

Total Number of Maximum Number (or
Shares Purchased as Approximate Dollar Value)
Total Number of Average Price Paid Part of Publicly of Shares that May Yet Be
Shares Purchased Per Share Announced Plans or Purchased Under the Plans
Period (#) ($) Programs or Programs (1)
July 2009 273 17.41 — 160,681

Total 273 17.41 — 160,681

Total Number of

Maximum Number (or

Purchased as

Approximate Dollar

Part of Publicly

Value) of Shares that

Total Number of

Average Price

Announced

May Yet Be Purchased

Paid Per Share

Plans or

Under the Plans or

Period

Purchased (#)

($)

Programs

Programs (1)

January 2010

14,821

21.04

—

160,681

February 2010

13,586

19.24

—

160,681

Total

28,407

20.18

—

160,681


⁽¹⁾		Viad ~~has~~ announced its intent, under authorizations by its Board of Directors, to repurchase up to an aggregate of three million shares of the Company’s common stock from time to time at prevailing prices in the open market. No shares were purchased during the ~~third~~first quarter of ~~2009.~~2010. Shares repurchased to date under these programs totaled 2,839,319. The authorizations of the Board of Directors do not have expiration dates. The terms of Viad’s $75 million secured revolving credit facility, as amended as of November 20, 2009, restrict the Company from paying more than $5 million in dividends in the aggregate in any calendar year and also restrict the Company from repurchasing more than $10 million in the aggregate of the Company’s common stock during the remainder of the credit facility term, which expires in June 2011.

Page 3931


													Three months ended March 31,
	Three months ended September 30,						Nine months ended September 30,						2010			2009
	2009			2008			2009			2008			(in thousands)
	(in thousands)
Net income (loss)	$	(96,266	)	$	17,671		$	(89,591	)	$	47,045		$	(3,103	)	$	1,372

Other comprehensive income (loss):
Unrealized gains (losses) on investments:
Holding gains (losses) arising during the period, net of tax		146			(153	)		207			(297	)		59			(57	)
Unrealized foreign currency translation adjustments		11,571			(11,639	)		21,995			(14,581	)		4,046			(5,080	)
Pension and postretirement benefit plans:
Amortization of net actuarial loss, net of tax		106			21			201			164
Amortization of prior service credit, net of tax		(190	)		(270	)		(570	)		(681	)
Net actuarial loss, net of tax														(1,554	)		73
Prior service credit, net of tax														(120	)		(190	)

Total other comprehensive income (loss)		11,633			(12,041	)		21,833			(15,395	)		2,431			(5,254	)

Comprehensive income (loss)		(84,633	)		5,630			(67,758	)		31,650
Comprehensive income attributable to noncontrolling interest		(867	)		(913	)		(640	)		(669	)
Comprehensive loss														(672	)		(3,882	)
Comprehensive loss attributable to noncontrolling interest														121			131

Comprehensive income (loss) attributable to Viad	$	(85,500	)	$	4,717		$	(68,398	)	$	30,981
Comprehensive loss attributable to Viad													$	(551	)	$	(3,751	)


				Weighted-
				Average		Options
	Shares			Exercise Price		Exercisable
Options outstanding at January 1, 2009		606,660		$	25.86		459,612
Forfeited		(48,811	)		27.72

Options outstanding at September 30, 2009		557,849			25.70		476,089


				Weighted-
				Average		Options
	Shares			Exercise Price		Exercisable
Options outstanding at January 1, 2010		541,718		$	25.74		462,683
Granted		280,900			19.20
Forfeited or expired		(20,299	)		23.47

Options outstanding at March 31, 2010		802,319			23.51		483,834


	Options Outstanding					Options Exercisable				Options Outstanding					Options Exercisable
			Weighted-Average	Weighted-				Weighted-				Weighted-Average	Weighted-				Weighted-
			Remaining	Average				Average				Remaining	Average				Average
Range of Exercise Prices	Shares		Contractual Life	Exercise Price		Shares		Exercise Price		Shares		Contractual Life	Exercise Price		Shares		Exercise Price
$18.40 to $20.77		74,795	3.1 years	$	19.58		74,795	$	19.58
$22.29 to $24.05		100,677	1.2 years		23.88		100,677		23.88
$18.40 to $19.20											282,150	9.9 years	$	19.20		1,250	$	18.40
$19.57 to $24.05											149,454	1.7 years		21.92		149,454		21.92
$24.22 to $26.07		161,582	2.2 years		25.13		151,582		25.14		153,940	1.7 years		25.13		145,940		25.14
$26.31 to $26.49		147,970	2.3 years		26.34		120,260		26.35		143,950	1.8 years		26.34		143,850		26.34
$30.82 to $38.44		72,825	4.4 years		34.48		28,775		34.13		72,825	3.9 years		34.48		43,340		34.25


$18.40 to $38.44		557,849	2.5 years		25.70		476,089		24.85		802,319	4.8 years		23.51		483,834		25.30


	September 30,			December 31,			March 31,			December 31,
	2009			2008			2010			2009
	(in thousands)						(in thousands)
Land	$	25,976		$	23,623		$	9,091		$	8,997
Buildings and leasehold improvements		94,154			88,999			85,832			84,242
Equipment and other		287,975			267,175			295,380			291,108

		408,105			379,797			390,303			384,347
Accumulated depreciation		(234,610	)		(214,382	)		(236,569	)		(229,347	)

Property and equipment, net	$	173,495		$	165,415		$	153,734		$	155,000


				Experiential			Travel and
	GES			Marketing			Recreation		Total
	(in thousands)
Balance at January 1, 2009	$	174,018		$	5,063		$	33,380	$	212,461
Goodwill impairment losses		(93,241	)		(5,063	)		—		(98,304	)
Foreign currency translation adjustments		4,067			—			5,543		9,610

Balance at September 30, 2009	$	84,844		$	—		$	38,923	$	123,767


	Total Viad					Total			Total Viad						Total
	Stockholders’			Noncontrolling		Stockholders’			Stockholders’			Noncontrolling			Stockholders’
	Equity			Interest		Equity			Equity			Interest			Equity
	(in thousands)											(in thousands)
Balance at January 1, 2009	$	460,555		$	6,534	$	467,089
Net income (loss)		(90,231	)		640		(89,591	)

Balance at January 1, 2010									$	377,515		$	7,116		$	384,631
Net loss										(2,982	)		(121	)		(3,103	)
Dividends on common stock		(2,470	)		—		(2,470	)		(822	)		—			(822	)
Common stock purchased for treasury		(1,167	)		—		(1,167	)		(573	)		—			(573	)
Employee benefit plans		2,837			—		2,837			752			—			752
Unrealized foreign currency translation adjustment		21,995			—		21,995			4,046			—			4,046
Unrealized gain on investments		207			—		207			59			—			59
Amortization of prior service cost and net actuarial loss		(369	)		—		(369	)
Prior service cost and net actuarial loss										(1,674	)		—			(1,674	)
ESOP allocation adjustment		1,000			—		1,000			250			—			250
Other		42			—		42			9			—			9

Balance at September 30, 2009	$	392,399		$	7,174	$	399,573
Balance at March 31, 2010									$	376,580		$	6,995		$	383,575


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.


			Fair Value Measurements at September 30, 2009 Using								Fair Value Measurements at March 31, 2010 Using
			Quoted Prices		Significant								Significant
			in Active		Other		Significant				Quoted Prices		Other		Significant
			Markets for		Observable		Unobserved				in Active		Observable		Unobserved
	September 30,		Identical Assets		Inputs		Inputs		March 31,		Markets		Inputs		Inputs
	2009		(Level 1)		(Level 2)		(Level 3)		2010		(Level 1)		(Level 2)		(Level 3)
	(in thousands)								(in thousands)
Assets:
Money market funds	$	38,381	$	38,381	$	—	$	—	$	20,653	$	20,653	$	—	$	—
Other mutual funds		1,870		1,870		—		—		1,824		1,824		—		—

Total	$	40,251	$	40,251	$	—	$	—	$	22,477	$	22,477	$	—	$	—


⁽¹⁾		~~Diluted income per share amount cannot exceed basic income per share.~~


	Continuing			Discontinued
	Operations			Operations		Total
	(in thousands)
Balance at January 1, 2009	$	3,487		$	636	$	4,123
Reductions for tax positions taken in prior years		(2,702	)		—		(2,702	)
Reductions for tax settlements		(174	)		—		(174	)
Reductions for lapse of applicable statutes		(365	)		—		(365	)

Balance at September 30, 2009	$	246		$	636	$	882


	Three months ended					Nine months ended
	September 30,					September 30,
	2009			2008		2009			2008
	(in thousands)
Income (loss) before impairment losses attributable to Viad	$	(2,955	)	$	16,758	$	3,947		$	46,586
Impairment losses, net of tax		(94,178	)		—		(94,178	)		—

Income (loss) from continuing operations attributable to Viad	$	(97,133	)	$	16,758	$	(90,231	)	$	46,586


	Revenues						Segment Operating Results
	Weighted Average				Effect of Rate		Weighted Average				Effect of Rate
	Exchange Rates				Variance		Exchange Rates				Variance
	2010		2009		(thousands)		2010		2009		(thousands)
Marketing & Events Group:
Canada	$	0.96	$	0.80	$	4,160	$	0.97	$	0.76	$	225
U.K.	$	1.56	$	1.44	$	1,758	$	1.53	$	1.44	$	103

Travel & Recreation Group:
Canada	$	0.95	$	0.80	$	1,165	$	0.96	$	0.80	$	(159	)


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*


		VIAD CORP ~~(Registrant)~~

		(Registrant)

~~November 6, 2009~~ ~~(Date)~~May 7, 2010		By /s/ G. Michael Latta ~~G. Michael Latta~~ ~~Vice President — Controller~~ ~~(Chief Accounting Officer~~ ~~and Authorized Officer)~~

(Date)		G. Michael Latta
		Vice President — Controller
		(Chief Accounting Officer
		and Authorized Officer)


	(in thousands)		(in thousands)
2009	$	293
2010	$	1,132	$	709
2011	$	844	$	713
2012	$	349	$	360
2013 and thereafter	$	484
2013			$	350
2014 and thereafter			$	136


	September 30,		December 31,		March 31,		December 31,
	2009		2008		2010		2009
	(in thousands)				(in thousands)
Continuing operations:
Customer deposits	$	38,714	$	43,011	$	38,518	$	41,411
Accrued compensation		13,270		29,048		13,481		10,533
Self-insured liability accrual		9,072		8,258		7,832		8,078
Accrued restructuring		4,085		2,337		4,773		5,684
Accrued sales and use taxes		2,155		3,473		3,022		3,325
Accrued dividends		849		840		840		845
Accrued income taxes		250		5,199
Other		16,454		13,427		11,153		13,330

		84,849		105,593
						79,619		83,206

Discontinued operations:
Environmental remediation liabilities		1,750		2,208		1,075		1,075
Self-insured liability accrual		712		461		339		395
Other		484		797		265		401

		2,946		3,466		1,679		1,871

Total other current liabilities	$	87,795	$	109,059	$	81,298	$	85,077