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~~June~~September 30, 2011


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 1900
Phoenix, Arizona		~~85004-4545~~85004-4565

(Address of principal executive offices)		(Zip Code)

(602) 207-4000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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). Yesoþ 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	Non-accelerated filero	Small 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 ~~July~~October 31, 2011, there were ~~20,373,132~~20,124,707 shares of common stock ($1.50 par value) outstanding.

TABLE OF CONTENTS


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

PART I—FINANCIAL INFORMATION


Item 1.		Financial Statements.

VIAD CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


		June 30, 2011			December 31, 2010				September 30, 2011			December 31, 2010
		(in thousands, except share data)							(in thousands, except share data)
ASSETS	ASSETS							ASSETS
Current assets:
Cash and cash equivalents		$	107,348		$	145,841			$	104,553		$	145,841
Accounts receivable, net of allowance for doubtful accounts of $1,332 and $1,172, respectively			89,889			47,187
Accounts receivable, net of allowance for doubtful accounts of $1,624 and $1,172, respectively										61,931			47,187
Inventories			30,946			38,670				40,410			38,670
Deferred income taxes			20,901			22,057				22,922			22,057
Other current assets			22,777			17,160				19,559			17,160

Total current assets			271,861			270,915				249,375			270,915
Property and equipment, net			170,651			149,346				174,022			149,346
Other investments and assets			32,576			31,363				31,911			31,363
Deferred income taxes			35,158			35,875				35,901			35,875
Goodwill			133,827			127,441				131,909			127,441
Other intangible assets, net			1,650			1,563				2,278			1,563

Total Assets		$	645,723		$	616,503			$	625,396		$	616,503


LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	60,183		$	47,933			$	58,089		$	47,933
Other current liabilities			96,158			96,749				96,256			96,749
Current portion of long-term debt and capital lease obligations			2,299			6,639				2,200			6,639

Total current liabilities			158,640			151,321				156,545			151,321
Long-term debt and capital lease obligations			1,950			2,438				1,420			2,438
Pension and postretirement benefits			33,186			33,008				32,603			33,008
Other deferred items and liabilities			45,390			43,025				43,558			43,025

Total liabilities			239,166			229,792				234,126			229,792

Commitments and contingencies (Note 15)
Stockholders’ equity:
Viad Corp stockholders’ equity:
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981 shares issued			37,402			37,402				37,402			37,402
Additional capital			598,638			606,902				599,347			606,902
Retained deficit			(6,583	)		(19,229	)			(6,145	)		(19,229	)
Unearned employee benefits and other			(3,813	)		(4,433	)			(3,520	)		(4,433	)
Accumulated other comprehensive income (loss):
Unrealized gains on investments			343			282				183			282
Cumulative foreign currency translation adjustments			44,591			38,979				31,519			38,979
Unrecognized net actuarial loss and prior service credit			(10,397	)		(10,410	)			(10,543	)		(10,410	)
Common stock in treasury, at cost, 4,561,649 and 4,710,988 shares, respectively			(261,013	)		(270,534	)
Common stock in treasury, at cost, 4,809,459 and 4,710,988 shares, respectively										(265,400	)		(270,534	)

Total Viad Corp stockholders’ equity			399,168			378,959				382,843			378,959
Noncontrolling interest			7,389			7,752				8,427			7,752

Total stockholders’ equity			406,557			386,711				391,270			386,711

Total Liabilities and Stockholders’ Equity		$	645,723		$	616,503			$	625,396		$	616,503

See Notes to Condensed Consolidated Financial Statements.

Page 2

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended June 30,						Six months ended June 30,						Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	(in thousands, except per share data)												(in thousands, except per share data)
Revenues:
Convention and event services	$	174,319		$	155,097		$	408,806		$	333,856		$	121,157		$	130,609		$	529,963		$	464,465
Exhibits and environments		40,416			40,813			90,267			78,994			30,540			32,550			120,807			111,544
Travel and recreation services		23,957			22,389			29,717			29,802			64,472			51,985			94,189			81,787

Total revenues		238,692			218,299			528,790			442,652			216,169			215,144			744,959			657,796


Costs and expenses:
Costs of services		190,238			166,712			415,037			347,551			180,517			170,354			595,554			517,905
Costs of products sold		38,592			43,862			86,632			87,177			30,240			34,871			116,872			122,048
Corporate activities		1,576			2,058			2,847			2,702			2,356			1,749			5,203			4,451
Interest income		(176	)		(88	)		(390	)		(184	)		(198	)		(174	)		(588	)		(358	)
Interest expense		380			473			792			966			373			472			1,165			1,438
Restructuring charges		1,206			559			1,475			2,612			75			183			1,550			2,795

Total costs and expenses		231,816			213,576			506,393			440,824			213,363			207,455			719,756			648,279


Income before income taxes		6,876			4,723			22,397			1,828			2,806			7,689			25,203			9,517
Income tax expense		2,588			1,790			8,488			1,998			523			1,911			9,011			3,909

Net income (loss)		4,288			2,933			13,909			(170	)
Net loss attributable to noncontrolling interest		197			95			363			216
Net income														2,283			5,778			16,192			5,608
Net income attributable to noncontrolling interest														(1,038	)		(982	)		(675	)		(766	)

Net income attributable to Viad	$	4,485		$	3,028		$	14,272		$	46		$	1,245		$	4,796		$	15,517		$	4,842


Diluted income per common share
Net income attributable to Viad common stockholders	$	0.22		$	0.15		$	0.70		$	—		$	0.06		$	0.23		$	0.76		$	0.24


Weighted-average outstanding and potentially dilutive common shares		20,121			20,375			20,102			20,338			20,033			20,309			20,089			20,332


Basic income per common share
Net income attributable to Viad common stockholders	$	0.22		$	0.15		$	0.70		$	—		$	0.06		$	0.23		$	0.76		$	0.24


Weighted-average outstanding common shares		19,816			20,059			19,797			20,055			19,711			20,001			19,768			20,037


Dividends declared per common share	$	0.04		$	0.04		$	0.08		$	0.08		$	0.04		$	0.04		$	0.12		$	0.12

See Notes to Condensed Consolidated Financial Statements.

Page 3

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three months ended June 30,						Six months ended June 30,						Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	(in thousands)												(in thousands)

Net income (loss)	$	4,288		$	2,933		$	13,909		$	(170	)
Net income													$	2,283		$	5,778		$	16,192		$	5,608

Other comprehensive income (loss):
Holding gains (losses) arising during the period, net of tax		3			(78	)		61			(19	)		(160	)		97			(99	)		78
Unrealized foreign currency translation adjustments, net of tax		2,059			(7,956	)		5,612			(3,910	)		(13,072	)		6,693			(7,460	)		2,783
Net actuarial loss, net of tax		204			183			408			(1,371	)		51			183			459			(1,188	)
Prior service credit, net of tax		(197	)		(175	)		(395	)		(295	)		(197	)		(175	)		(592	)		(470	)

Total other comprehensive income (loss)		2,069			(8,026	)		5,686			(5,595	)		(13,378	)		6,798			(7,692	)		1,203

Comprehensive income (loss)		6,357			(5,093	)		19,595			(5,765	)		(11,095	)		12,576			8,500			6,811
Comprehensive loss attributable to noncontrolling interest		197			95			363			216
Comprehensive income attributable to noncontrolling interest														(1,038	)		(982	)		(675	)		(766	)

Comprehensive income (loss) attributable to Viad	$	6,554		$	(4,998	)	$	19,958		$	(5,549	)	$	(12,133	)	$	11,594		$	7,825		$	6,045

See Notes to Condensed Consolidated Financial Statements.

Page 4

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended June 30,						Nine months ended September 30,
	2011			2010			2011			2010
	(in thousands)						(in thousands)
Cash flows from operating activities:
Net income (loss)	$	13,909		$	(170	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income							$	16,192		$	5,608
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		14,293			14,004			21,882			21,314
Deferred income taxes		1,808			4,295			548			(5,217	)
Restructuring charges		1,475			2,612			1,550			2,795
Losses (gains) on dispositions of property and other assets		(8	)		37			(64	)		51
Share-based compensation expense		2,293			1,800			3,284			2,748
Excess tax benefit from share-based compensation arrangements		(54	)		—			(54	)		—
Other non-cash items, net		2,411			1,852			3,532			3,281
Change in operating assets and liabilities:
Receivables		(43,590	)		(23,444	)		(16,154	)		(12,801	)
Inventories		8,538			6,902			(883	)		8,723
Accounts payable		14,334			14,415			12,665			12,536
Restructuring liabilities		(2,377	)		(5,016	)		(3,362	)		(5,866	)
Accrued compensation		7,267			9,342			3,536			7,018
Customer deposits		(7,390	)		(1,856	)		(3,975	)		2,670
Income taxes payable		3,141			(130	)		2,036			1,983
Other assets and liabilities, net		(10,083	)		(6,359	)		(5,665	)		429

Net cash provided by operating activities		5,967			18,284			35,068			45,272

Cash flows from investing activities:
Capital expenditures		(12,795	)		(8,404	)		(17,251	)		(11,609	)
Acquisition of businesses, net of cash acquired		(25,800	)		—			(41,105	)		—
Proceeds from dispositions of property and other assets		264			14,541			315			14,630

Net cash provided by (used in) investing activities		(38,331	)		6,137			(58,041	)		3,021

Cash flows from financing activities:
Payments on debt and capital lease obligations		(5,631	)		(2,869	)		(6,544	)		(3,944	)
Dividends paid on common stock		(1,630	)		(1,644	)		(2,435	)		(2,466	)
Common stock purchased for treasury		(679	)		(573	)		(5,230	)		(6,906	)
Debt issuance costs		(1,001	)		—			(1,001	)		—
Excess tax benefit from share-based compensation arrangements		54			—			54			—
Proceeds from exercise of stock options		163			38			163			38

Net cash used in financing activities		(8,724	)		(5,048	)		(14,993	)		(13,278	)

Effect of exchange rate changes on cash and cash equivalents		2,595			(1,744	)		(3,322	)		770

Net increase (decrease) in cash and cash equivalents		(38,493	)		17,629			(41,288	)		35,785
Cash and cash equivalents, beginning of year		145,841			116,342			145,841			116,342


Cash and cash equivalents, end of period	$	107,348		$	133,971		$	104,553		$	152,127

Supplemental disclosure of cash flow information
Income taxes							$	7,805		$	5,680

Supplemental disclosure of cash flow information
Cash paid for income taxes	$	5,541		$	3,855

Cash paid for interest	$	490		$	511
Interest							$	804		$	792

Equipment acquired under capital leases	$	897		$	390		$	1,097		$	590

See Notes to Condensed Consolidated Financial Statements.

Page 5

~~VIAD CORP~~

VIAD CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Preparation and Principles of Consolidation

The accompanying unaudited, condensed consolidated financial statements of Viad Corp (“Viad” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and ~~six~~nine months ended ~~June~~September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

For further information, refer to the consolidated financial statements and related footnotes for the year ended December 31, 2010, included in the Company’s Form 10-K (File No. 001-11015), filed with the Securities and Exchange Commission on March 4, 2011.

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

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

The Travel & Recreation Group segment consists of Brewster Inc. (“Brewster”) ~~and~~, Glacier Park, Inc. (“Glacier Park”) and Alaskan Park Properties, Inc. (“Denali”). Brewster provides tourism services in the Canadian Rockies in Alberta and in other parts of Western Canada. Brewster’s operations include the Banff Gondola, Columbia Icefield Glacier Adventure, motorcoach services, charter and sightseeing services, tour boat operations, inbound package tour operations and hotel operations. Glacier Park operates five lodges, three motor inns and one four-season resort hotel and provides food and beverage operations, retail operations and tour and transportation services in and around Glacier National Park in Montana and Waterton Lakes National Park in Alberta, Canada. Glacier Park is an 80 percent owned subsidiary of Viad. Denali operates the Denali Backcountry Lodge, which is the largest of three lodges located within Denali National Park and Preserve in Alaska, and the Denali Cabins, which are located near the entrance to Denali National Park. In addition to lodging, Denali also provides food and beverage operations, and packaged tour and transportation services in and around the park.

Note 2. Share-Based Compensation

The following table summarizes share-based compensation expense for the three and ~~six~~nine months ended ~~June~~September 30:


													Three months ended						Nine months ended
	Three months ended June 30,						Six months ended June 30,						September 30,						September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	(in thousands)												(in thousands)
Stock options	$	183		$	150		$	330		$	263		$	146		$	152		$	476		$	415
Restricted stock/performance-based restricted stock (“PBRS”)		937			804			1,615			1,479			794			736			2,409			2,211
Restricted stock units/PBRS units		46			26			89			61			(35	)		60			54			125
Performance unit incentive plan (“PUP”)		194			—			259			(3	)		86			—			345			(3	)

Total share-based compensation before income tax benefit		1,360			980			2,293			1,800			991			948			3,284			2,748
Income tax benefit		(480	)		(347	)		(801	)		(661	)		(358	)		(329	)		(1,163	)		(957	)

Total share-based compensation, net of income tax benefit	$	880		$	633		$	1,492		$	1,139		$	633		$	619		$	2,121		$	1,791

In addition, $124,000 and $509,000 of costs associated with share-based compensation (including $43,000 for the ~~six~~nine months ended ~~June~~September 30, 2010 of restricted stock units and PBRS units presented below) were included in restructuring charges during the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, respectively.

Page 6

The following table summarizes restricted stock and PBRS activity during the ~~six~~nine months ended ~~June~~September 30, 2011:


	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, 2011		478,499		$	21.51		18,830		$	33.02		478,499		$	21.51		18,830		$	33.02
Granted		172,200			23.01		—			—		177,350			22.91		—			—
Vested		(91,212	)		31.31		(18,414	)		33.42		(91,212	)		31.31		(18,414	)		33.42
Forfeited		(2,200	)		20.64		—			—		(4,400	)		21.19		—			—

Balance at June 30, 2011		557,287			20.37		416			15.36

Balance at September 30, 2011												560,237			20.36		416			15.36

The unamortized cost of all outstanding restricted stock and PBRS awards as of ~~June~~September 30, 2011 was ~~$5.2~~$4.4 million, which Viad expects to recognize in its consolidated financial statements over a weighted-average period of approximately 2.4 years. During the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, the Company repurchased 28,627 shares for $679,000 and 28,407 shares for $573,000, respectively, related to tax withholding requirements on vested share-based awards. As of ~~June~~September 30, 2011, there were ~~1,000,853~~997,903 total shares available for future grant.

The following table summarizes the liability-based award activity during the ~~six~~nine months ended ~~June~~September 30, 2011:


	Restricted Stock Units				PBRS Units					PUP Awards					Restricted Stock Units				PBRS Units					PUP Awards
			Weighted-Average					Weighted-Average					Weighted-Average				Weighted-Average					Weighted-Average					Weighted-Average
			Grant Date					Grant Date					Grant Date				Grant Date					Grant Date					Grant Date
	Units		Fair Value		Units			Fair Value		Units			Fair Value		Units		Fair Value		Units			Fair Value		Units			Fair Value
Balance at January 1, 2011		26,050	$	17.18		3,914		$	15.36		102,960		$	33.81		26,050	$	17.18		3,914		$	15.36		102,960		$	33.81
Granted		12,550		23.01		—			—		95,500			23.02		12,550		23.01		—			—		95,500			23.02
Vested		—		—		(1,958	)		15.36		—			—		—		—		(1,958	)		15.36		—			—
Cancelled		—		—		—			—		(102,960	)		33.81		—		—		—			—		(102,960	)		33.81

Balance at June 30, 2011		38,600		19.07		1,956			15.36		95,500			23.02
Balance at September 30, 2011																38,600		19.07		1,956			15.36		95,500			23.02

As of ~~June~~September 30, 2011 and December 31, 2010, Viad had liabilities recorded of ~~$444,000~~$409,000 and $407,000, respectively, related to restricted stock unit and PBRS unit liability awards. A portion of the 2009 PBRS unit ~~award~~awards vested effective December 31, 2009 and cash payouts of $52,000 and $37,000 were distributed in January 2011 and March 2010, respectively.

As of ~~June~~September 30, 2011, Viad had a liability recorded of ~~$259,000~~$345,000 related to PUP awards. The PUP awards for the 2007-2009 period vested effective December 31, 2009 and a cash payout of $19,000 was distributed in March 2010. No cash payouts of PUP awards were made during the ~~six~~nine months ended ~~June~~September 30, 2011. In March 2011, 102,960 PUP awards for the 2008-2010 period were cancelled as the performance conditions related to those awards ~~for the 2008-2010 period~~ were not achieved.

The following table summarizes stock option activity during the ~~six~~nine months ended ~~June~~September 30, 2011:


											Weighted-
				Weighted-							Average		Options
				Average		Options		Shares			Exercise Price		Exercisable
	Shares			Exercise Price		Exercisable
Options outstanding at January 1, 2011		763,794		$	23.38		451,194		763,794		$	23.38		451,194
Exercised		(7,866	)		20.56				(7,866	)		20.56
Forfeited or expired		(132,231	)		24.17				(147,911	)		24.42

Options outstanding at June 30, 2011		623,697			23.25		417,118
Options outstanding at September 30, 2011									608,017			23.17		401,438

The total unrecognized cost related to non-vested stock option awards was ~~$957,000~~$812,000 as of ~~June~~September 30, 2011, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of approximately ~~1.9~~1.7 years. No stock options were granted during the ~~six~~nine months ended ~~June~~September 30, 2011.

In addition to the above, Viad had stock options outstanding which were granted to employees of MoneyGram International, Inc. (“MoneyGram”) prior to the spin-off of that company in 2004. As of ~~June~~September 30, 2011, there were 10,864 of such options outstanding and exercisable, both with exercise prices ranging from $19.57 to $26.31. The weighted-average remaining contractual life of these options outstanding was less than one year. During the ~~six~~nine months ended ~~June~~September 30, 2011, 100 options were exercised by MoneyGram participants at an exercise price of $19.57.

Page 7

Note 3. Acquisition of Businesses

On September 16, 2011, Viad acquired the Denali Backcountry Lodge and Denali Cabins for $15.3 million in cash. Denali Backcountry Lodge is the largest of three lodges located within Denali National Park and Preserve in Alaska and Denali Cabins consist of 46 guest cabins near the entrance to Denali National Park. Denali will operate as a separate business unit within the Travel & Recreation Group. The following information represents the preliminary amounts assigned to the assets and liabilities of Denali as of the date of acquisition:


	(in thousands)
Other current assets	$	43
Property and equipment		11,090
Goodwill		3,482
Other intangible assets		818

Total assets acquired		15,433


Customer deposits		(38	)
Other current liabilities		(90	)

Total liabilities acquired		(128	)


Purchase price	$	15,305

The Company recorded $3.5 million of goodwill in connection with the transaction, which is included in the Travel & Recreation Group. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The entire amount of the goodwill is expected to be deductible for tax purposes over a period of 15 years. The amount assigned to other intangible assets includes $633,000 related to non-amortized trade names, $100,000 related to customer relationships and $85,000 related to a non-compete agreement. Transaction costs related to the acquisition were insignificant. The results of operations of Denali have been included in Viad’s consolidated financial statements from the date of acquisition.

On June 29, 2011, Viad acquired St. Mary Lodge & Resort (“St. Mary”) for $15.3 million in cash. St. Mary is a 115-room hotel located outside of Glacier National Park’s east ~~entrance. It~~entrance and is ~~now~~ operated by Glacier Park within the Travel & Recreation Group. The following information represents the preliminary amounts assigned to the assets and liabilities of St. Mary as of the date of acquisition:


	(in thousands)
Cash and cash equivalents	$	21
Other current assets		715
Property and equipment		13,058
Goodwill		2,583
Other intangible assets		60

Total assets acquired		16,437


Customer deposits		(684	)
Other current liabilities		(46	)
Other long-term liabilities		(382	)

Total liabilities acquired		(1,112	)


Purchase price	$	15,325

Page 8

The Company recorded $2.6 million of goodwill in connection with the transaction, which is included in the Travel & Recreation Group. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The entire amount of the goodwill is expected to be deductible for tax purposes over a period of 15 years. The amount assigned to other intangible assets includes $60,000 related to a non-amortized business license. Transaction costs related to the acquisition were insignificant. The results of operations of St. Mary have been included in Viad’s consolidated financial statements from the date of acquisition. ~~Supplemental pro forma information for St. Mary was not material to Viad’s financial results for the three and six months ended June 30, 2011 and 2010.~~

On January 5, 2011, Viad acquired Grouse Mountain Lodge for $10.5 million in cash. Grouse Mountain Lodge is a 145-room hotel located in Whitefish, Montana, and is operated by Glacier Park within the Travel & Recreation Group. The following information represents the preliminary amounts assigned to the assets and liabilities of Grouse Mountain Lodge as of the date of acquisition:


	(in thousands)
Cash and cash equivalents	$	9
Other current assets		126
Property and equipment		8,750
Goodwill		1,331
Other intangible assets		400

Total assets acquired		10,616


Customer deposits		(99	)
Other current liabilities		(12	)

Total liabilities acquired		(111	)


Purchase price	$	10,505

The Company recorded $1.3 million of goodwill in connection with the transaction, which is included in the Travel & Recreation Group. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The entire amount of the goodwill is expected to be deductible for tax purposes over a period of 15 years. The amount assigned to other intangible assets includes $400,000 related to a non-amortized business license. Transaction costs related to the acquisition were insignificant. The results of operations of Grouse Mountain Lodge have been included in Viad’s consolidated financial statements from the date of acquisition. ~~Supplemental~~

The following table summarizes the unaudited pro forma ~~information for Grouse Mountain Lodge was not material to Viad’s financial~~ results of operations of Viad for the three and ~~six~~nine months ended ~~June~~September 30, ~~2010.~~2011 and 2010, assuming that the acquisitions of Denali, St. Mary and Grouse Mountain Lodge had each been completed at the beginning of each period:

~~Page 8~~


	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
	(in thousands, except per share data)
Revenue	$	221,335	$	227,169	$	752,868	$	673,567
Net income attributable to Viad	$	2,869	$	7,114	$	17,158	$	6,852
Diluted net income per share	$	0.14	$	0.35	$	0.84	$	0.33
Basic net income per share	$	0.14	$	0.35	$	0.84	$	0.33

Note 4. Inventories

The components of inventories were as follows:


	June 30,		December 31,		September 30,		December 31,
	2011		2010		2011		2010
	(in thousands)				(in thousands)
Raw materials	$	19,617	$	18,488	$	18,143	$	18,488
Work in process		11,329		20,182		22,267		20,182

Inventories	$	30,946	$	38,670	$	40,410	$	38,670

Page 9

Note 5. Property and Equipment

Property and equipment consisted of the following:


	June 30,			December 31,			September 30,			December 31,
	2011			2010			2011			2010
	(in thousands)						(in thousands)
Land	$	15,022		$	9,139		$	17,846		$	9,139
Buildings and leasehold improvements		107,733			89,945			109,729			89,945
Equipment and other		311,781			299,558			306,617			299,558

		434,536			398,642			434,192			398,642
Accumulated depreciation		(263,885	)		(249,296	)		(260,170	)		(249,296	)

Property and equipment, net	$	170,651		$	149,346		$	174,022		$	149,346

Depreciation expense for the three months ended ~~June~~September 30, 2011 and 2010 was ~~$7.1~~$7.4 million and ~~$7.0~~$7.1 million, respectively, and for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010 was ~~$13.9~~$21.3 million and ~~$13.5~~$20.6 million, respectively.

In March 2010, Viad completed the sale of a non-strategic real estate asset within the Travel & Recreation Group consisting of land, building and related improvements for $14.3 million (net of selling costs).

Note 6. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the ~~six~~nine months ended ~~June~~September 30, 2011 were as follows:


			Marketing &								Marketing &
	Marketing &		Events		Travel &				Marketing &		Events			Travel &
	Events U.S.		International		Recreation Group		Total		Events U.S.		International			Recreation Group			Total
	(in thousands)								(in thousands)
Balance at January 1, 2011	$	62,686	$	22,455	$	42,300	$	127,441	$	62,686	$	22,455		$	42,300		$	127,441
Business acquisitions		—		—		3,914		3,914		—		—			7,396			7,396
Foreign currency translation adjustments		—		711		1,761		2,472		—		(465	)		(2,463	)		(2,928	)

Balance at June 30, 2011	$	62,686	$	23,166	$	47,975	$	133,827
Balance at September 30, 2011									$	62,686	$	21,990		$	47,233		$	131,909

A summary of other intangible assets as of ~~June~~September 30, 2011 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		$	2,535	$	(1,443	)	$	1,092	$	2,587	$	(1,540	)	$	1,047
Non-compete agreement										85		—			85
Proprietary technology			524		(495	)		29		517		(505	)		12
Design libraries			175		(153	)		22
Other			71		(24	)		47		67		(26	)		41

			3,305		(2,115	)		1,190		3,256		(2,071	)		1,185


Unamortized intangible assets:
Trade names										633		—			633
Business licenses			460		—			460		460		—			460

										1,093		—			1,093


Total		$	3,765	$	(2,115	)	$	1,650	$	4,349	$	(2,071	)	$	2,278

Page 910

A summary of amortized other intangible assets as of December 31, 2010 is presented below:


	Gross Carrying		Accumulated			Net Carrying
	Value		Amortization			Value
	(in thousands)
Customer contracts and relationships	$	2,506	$	(1,135	)	$	1,371
Proprietary technology		517		(448	)		69
Design libraries		175		(110	)		65
Other		166		(108	)		58

	$	3,364	$	(1,801	)	$	1,563

Intangible asset amortization expense for the three months ended ~~June~~September 30, 2011 and 2010 was ~~$188,000~~$185,000 and ~~$240,000,~~$238,000, respectively, and ~~$383,000~~$568,000 and ~~$483,000~~$721,000 for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, respectively. Estimated amortization expense related to amortized intangible assets for future periods is expected to be as follows:


			(in thousands)
	(in thousands)
2011	$	344	$	265
2012	$	360	$	434
2013	$	350	$	349
2014	$	119	$	119
2015	$	17	$	18

Page 11

Note 7. Accrued Liabilities and Other

Other current liabilities consisted of the following:


	June 30,		December 31,		September 30,		December 31,
	2011		2010		2011		2010
	(in thousands)				(in thousands)
Continuing operations:
Customer deposits	$	36,804	$	43,411	$	40,257	$	43,411
Accrued compensation		25,451		17,599		21,679		17,599
Self-insured liability accrual		8,113		8,278		7,819		8,278
Accrued income taxes		3,289		—
Accrued foreign income taxes						5,004		2,852
Accrued employee benefit costs		3,025		3,127		3,232		3,127
Accrued foreign income taxes		2,892		2,852
Accrued restructuring		2,000		4,272		1,840		4,272
Accrued sales and use taxes		1,185		2,990		1,454		2,990
Accrued dividends		835		827		826		827
Other		10,553		11,084		12,182		11,084

		94,147		94,440		94,293		94,440

Discontinued operations:
Environmental remediation liabilities		1,025		1,124		936		1,124
Self-insured liability accrual		469		552		493		552
Other		517		633		534		633

		2,011		2,309		1,963		2,309

Total other current liabilities	$	96,158	$	96,749	$	96,256	$	96,749

~~Page 10~~

Other deferred items and liabilities consisted of the following:


	June 30,		December 31,		September 30,		December 31,
	2011		2010		2011		2010
	(in thousands)				(in thousands)
Continuing operations:
Self-insured liability accrual	$	14,581	$	14,330	$	13,442	$	14,330
Accrued compensation		4,892		5,129		4,984		5,129
Accrued restructuring		4,816		3,724		3,972		3,724
Foreign deferred tax liability		1,459		1,582		1,584		1,582
Accrued income taxes		64		146		—		146
Other		5,544		3,945		5,877		3,945

		31,356		28,856		29,859		28,856

Discontinued operations:
Self-insured liability accrual		6,826		6,898		6,607		6,898
Environmental remediation liabilities		4,925		4,953		4,897		4,953
Accrued income taxes		1,004		987		1,015		987
Other		1,279		1,331		1,180		1,331

		14,034		14,169		13,699		14,169

Total other deferred items and liabilities	$	45,390	$	43,025	$	43,558	$	43,025

Page 12

Note 8. Debt

On May 18, 2011, Viad entered into an amended and restated revolving credit agreement (the “Credit Facility”). The Credit Facility provides for a $130 million revolving line of credit, which may be increased up to an additional $50 million under certain circumstances. The term of the Credit Facility is five years (expiring on May 18, 2016) and borrowings are to be used for general corporate purposes (including permitted acquisitions) and to support up to $50 million of letters of credit. The lenders have a first perfected security interest in all of the personal property of Viad and GES, including 65 percent of the capital stock of top-tier foreign subsidiaries. On April 28, 2011, Viad paid off its outstanding borrowing under the previous credit facility of $4.2 million and as of ~~June~~September 30, 2011, Viad’s total debt of ~~$4.2~~$3.6 million consisted entirely of capital lease obligations. As of ~~June~~September 30, 2011, Viad had $125.4 million of capacity remaining under its Credit Facility reflecting ~~the~~ outstanding letters of credit of $4.6 million.

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

Financial covenants include a fixed-charge coverage ratio of not less than 2.25 to 1 (and a ratio of not less than 2.50 to 1 after the fiscal quarter ending September 30, 2012) and a leverage ratio of not greater than 2.50 to 1. Additionally, Viad must maintain a consolidated minimum cash and cash equivalents balance of $50 million. As of ~~June~~September 30, 2011, the fixed-charge coverage and leverage ratios were ~~3.16~~3.08 to 1 and ~~0.25~~0.29 to 1, respectively. The terms of the Credit Facility allow Viad to pay up to $10 million in dividends in the aggregate in any calendar year and also allow the Company to purchase up to $10 million in any calendar year of the Company’s common stock. Significant other covenants include limitations on: investments, additional indebtedness, sales/leases of assets, acquisitions, consolidations or mergers and liens on property. As of ~~June~~September 30, 2011, Viad was in compliance with all covenants.

The estimated fair value of total debt was ~~$4.2~~$3.6 million and $9.2 million as of ~~June~~September 30, 2011 and December 31, 2010, respectively. The fair value of debt was estimated by discounting the future cash flows using rates currently available for debt of similar terms and maturity.

~~Page 11~~

Note 9. Stockholders’ Equity

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


	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, 2011	$	378,959		$	7,752		$	386,711		$	378,959		$	7,752	$	386,711
Net income (loss)		14,272			(363	)		13,909
Net income											15,517			675		16,192
Dividends on common stock		(1,630	)		—			(1,630	)		(2,435	)		—		(2,435	)
Common stock purchased for treasury		(679	)		—			(679	)		(5,230	)		—		(5,230	)
Employee benefit plans		1,931			—			1,931			2,800			—		2,800
Unrealized foreign currency translation adjustment		5,612			—			5,612			(7,460	)		—		(7,460	)
Unrealized gain on investments		61			—			61			(99	)		—		(99	)
Prior service credit and net actuarial loss		13			—			13			(133	)		—		(133	)
ESOP allocation adjustment		620			—			620			920			—		920
Other		9			—			9			4			—		4

Balance at June 30, 2011	$	399,168		$	7,389		$	406,557
Balance at September 30, 2011										$	382,843		$	8,427	$	391,270

Page 13


	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, 2010	$	377,515		$	7,116		$	384,631		$	377,515		$	7,116	$	384,631
Net income (loss)		46			(216	)		(170	)
Net income											4,842			766		5,608
Dividends on common stock		(1,644	)		—			(1,644	)		(2,466	)		—		(2,466	)
Common stock purchased for treasury		(573	)		—			(573	)		(6,906	)		—		(6,906	)
Employee benefit plans		1,708			—			1,708			2,621			—		2,621
Unrealized foreign currency translation adjustment		(3,910	)		—			(3,910	)		2,783			—		2,783
Unrealized loss on investments		(19	)		—			(19	)		78			—		78
Prior service credit and net actuarial loss		(1,666	)		—			(1,666	)		(1,658	)		—		(1,658	)
ESOP allocation adjustment		750			—			750			1,100			—		1,100
Other		6			—			6			10			—		10

Balance at June 30, 2010	$	372,213		$	6,900		$	379,113
Balance at September 30, 2010										$	377,919		$	7,882	$	385,801

Viad has announced its intent to repurchase shares of the Company’s common stock from time to time at prevailing market prices. ~~No shares were repurchased during~~During the ~~six~~three months ended ~~June~~September 30, 2011 ~~or 2010.~~and 2010, Viad repurchased 250,760 shares for $4.6 million and 356,300 shares for $6.3 million, respectively. As of ~~June~~September 30, 2011, ~~304,381~~53,621 shares remain available for ~~repurchase. Subsequent to June 30, 2011 and prior to~~repurchase from the ~~filing of this quarterly report, during the period from August 5, 2011 through August 8, 2011, Viad repurchased an additional 28,900 shares for $528,000.~~announced authorization. Additionally, during the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, the Company repurchased 28,627 shares for $679,000 and 28,407 shares for $573,000, respectively, related to tax withholding requirements on share-based awards.

Note 10. Fair Value Measurements

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


Level 1 —		Quoted prices in active markets for identical assets or liabilities.


Level 2 —		Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

~~Page 12~~


Level 3 —		Unobservable inputs to the valuation methodology that are significant to the measurement of fair value.

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


			Fair Value Measurements at June 30, 2011 Using								Fair Value Measurements at September 30, 2011 Using
					Significant								Significant
			Quoted Prices		Other		Significant				Quoted Prices		Other		Significant
			in Active		Observable		Unobserved				in Active		Observable		Unobserved
	June 30,		Markets		Inputs		Inputs		September 30,		Markets		Inputs		Inputs
	2011		(Level 1)		(Level 2)		(Level 3)		2011		(Level 1)		(Level 2)		(Level 3)
	(in thousands)								(in thousands)
Assets:
Money market funds	$	1,245	$	1,245	$	—	$	—	$	19,245	$	19,245	$	—	$	—
Other mutual funds		1,670		1,670		—		—		1,331		1,331		—		—

Total	$	2,915	$	2,915	$	—	$	—	$	20,576	$	20,576	$	—	$	—

Page 14

As of ~~June~~September 30, 2011 and December 31, 2010, Viad had investments in money market mutual funds of ~~$1.2~~$19.2 million and $31.3 million, respectively, which were included in the consolidated balance sheets under the caption “Cash and cash equivalents.” These investments were classified as available-for-sale and were recorded at fair value. There have been no realized or unrealized gains or losses related to these investments and the Company has not experienced any redemption restrictions with respect to any of the money market mutual funds.

As of ~~both June~~September 30, 2011 and December 31, 2010, Viad had investments in other mutual funds of $1.3 million and $1.7 million, respectively, which were classified in the consolidated balance sheets under the caption “Other investments and assets.” These investments were classified as available-for-sale and were recorded at fair value. As of ~~June~~September 30, 2011 and December 31, 2010, there were unrealized gains on the investments of ~~$562,000~~$302,000 ($~~343,000~~183,000 after-tax) and $462,000 ($282,000 after-tax), respectively, which were included in the consolidated balance sheets under the caption “Accumulated other comprehensive income (loss).”

The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term maturities of these instruments. The estimated fair value of debt obligations is disclosed in Note 8.

~~Page 13~~

Note 11. Income Per Share

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


													Three months ended						Nine months ended
	Three months ended June 30,						Six months ended June 30,						September 30,						September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	(in thousands, except per share data)												(in thousands, except per share data)
Basic net income per share
Numerator:
Net income attributable to Viad	$	4,485		$	3,028		$	14,272		$	46		$	1,245		$	4,796		$	15,517		$	4,842
Less: Allocation to non-vested shares		(111	)		(71	)		(370	)		(1	)		(34	)		(114	)		(412	)		(126	)

Net income allocated to Viad common stockholders	$	4,374		$	2,957		$	13,902		$	45		$	1,211		$	4,682		$	15,105		$	4,716


Denominator:
Weighted-average outstanding common shares		19,816			20,059			19,797			20,055			19,711			20,001			19,768			20,037


Net income attributable to Viad common stockholders	$	0.22		$	0.15		$	0.70		$	—		$	0.06		$	0.23		$	0.76		$	0.24


Diluted net income per share
Numerator:
Net income attributable to Viad	$	4,485		$	3,028		$	14,272		$	46		$	1,245		$	4,796		$	15,517		$	4,842


Denominator:
Weighted-average outstanding shares		19,816			20,059			19,797			20,055			19,711			20,001			19,768			20,037
Additional dilutive shares related to share-based compensation		305			316			305			283
Additional dilutive shares related to share- based compensation														322			308			321			295

Weighted-average outstanding and potentially dilutive shares		20,121			20,375			20,102			20,338			20,033			20,309			20,089			20,332


Net income attributable to Viad common stockholders⁽¹⁾	$	0.22		$	0.15		$	0.70		$	—		$	0.06		$	0.23		$	0.76		$	0.24


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

Options to purchase ~~330,000~~313,000 and ~~480,000~~474,000 shares of common stock were outstanding during the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, respectively, but were not included in the computation of dilutive shares outstanding because the effect would be anti-dilutive. Additionally, ~~305,000~~322,000 and ~~316,000~~308,000 share-based compensation awards were considered dilutive and included in the computation of diluted income per share during the three months ended ~~June~~September 30, 2011 and 2010, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, ~~305,000~~321,000 and ~~283,000~~295,000 share-based compensation awards were considered dilutive and included in the computation of diluted income per share, respectively.

Page 15

Note 12. Income Taxes

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


	2011				2010					2011					2010
	(in thousands)									(in thousands)
Computed income tax expense at statutory federal income tax rate of 35%	$	7,839	35.0	%	$	640		35.0	%	$	8,821		35.0	%	$	3,331		35.0	%
State income tax expense (benefit), net of federal benefit or provision		563	2.5	%		(34	)	(1.9	%)		537		2.1	%		(279	)	(2.9	%)
Tax resolutions, net											(103	)	(0.4	%)		(149	)	(1.6	%)
Change in enacted tax law		—	0.0	%		1,279		70.0	%		—		0.0	%		1,279		13.5	%
Other, net		86	0.4	%		113		6.2	%		(244	)	(0.9	%)		(273	)	(2.9	%)

Income tax expense	$	8,488	37.9	%	$	1,998		109.3	%	$	9,011		35.8	%	$	3,909		41.1	%

~~Page 14~~

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 Viad receives a Medicare Part D subsidy have been eliminated for tax years beginning after December 31, 2012. Accordingly, during the three months ended March 31, 2010, Viad reduced its deferred tax asset related to its postretirement benefit plan liability to reflect the change in the tax law. The reduction in the deferred tax asset resulted in an increase to income tax expense of $1.3 million during the three months ended March 31, 2010.

As of ~~June~~September 30, 2011 and December 31, 2010, Viad had gross deferred tax assets of ~~$63.5~~$64.9 million and $67.1 million, respectively. These deferred tax assets reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences, and the utilization of net operating loss and tax credit carryforwards.

During 2010 and 2009, Viad recorded pre-tax losses from its operations in the United States. The Company considered the negative evidence of these domestic pre-tax operating losses on the future recoverability of its deferred tax assets. Viad also considered positive evidence regarding the realization of deferred tax assets including the Company’s historical and forecasted taxable income, taxpaying history and future reversals of deferred tax liabilities. Furthermore, Viad also considered the fact that goodwill impairment losses were not tax deductible and thus did not contribute to tax losses in 2009. As of both ~~June~~September 30, 2011 and December 31, 2010, Viad had a valuation allowance of $411,000 related to certain state deferred tax assets. With respect to all other deferred tax assets, management believes that recovery from future taxable income is more-likely-than-not.

Viad uses considerable judgment in forming a conclusion regarding the recoverability of its deferred tax assets. As a result, there are inherent uncertainties regarding the ultimate realization of these assets, which are primarily dependent on Viad’s ability to generate sufficient taxable income in future periods. In light of the Company’s domestic operating losses in 2010 and 2009, and the continued uncertainties in the current economic environment, it is possible that the relative weight of positive and negative evidence regarding the recoverability of Viad’s deferred tax assets may change, which could result in a material increase in the Company’s valuation allowance. If such an increase in the valuation allowance were to occur, it would result in increased income tax expense in the period the assessment was made.

As of ~~June~~September 30, 2011 and December 31, 2010, Viad did not have any accrued gross liabilities associated with uncertain tax positions for continuing operations. ~~However,~~Additionally, as of ~~June~~September 30, 2011, Viad did not have any accrued interest and penalties related to uncertain tax positions for continuing operations. As of December 31, 2010, Viad had accrued interest and penalties related to uncertain tax positions for continuing operations of ~~$64,000 and $146,000, respectively.~~$146,000. Viad classifies interest and penalties related to income tax liabilities as a component of income tax expense. During the three months ended ~~June~~September 30, 2011 and 2010, Viad recorded a tax-related interest expense ~~credit~~credits of ~~$47,000~~$64,000 and ~~expense of $4,000,~~$230,000, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2011 and 2010, Viad recorded a tax-related interest expense ~~credit~~credits of ~~$82,000~~$146,000 and ~~expense of $16,000,~~$214,000, respectively.

In addition to the above, Viad had accrued gross liabilities associated with uncertain tax positions for discontinued operations of $636,000 as of both ~~June~~September 30, 2011 and December 31, 2010. In addition, as of ~~June~~September 30, 2011 and December 31, 2010, Viad had accrued interest and penalties related to uncertain tax positions for discontinued operations of ~~$369,000~~$379,000 and $351,000, respectively. Future tax resolutions or settlements that may occur related to these uncertain tax positions would be recorded through discontinued operations (net of federal tax effects, if applicable).

As of ~~both June~~September 30, 2011 and December 31, 2010, liabilities associated with uncertain tax positions (including interest and penalties) of $1.0 million and $1.1 million, respectively, were classified as non-current ~~liabilities, respectively.~~liabilities.

Page 16

Note 13. Pension and Postretirement Benefits

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


	Domestic Plans																		Domestic Plans
							Postretirement						Foreign												Postretirement						Foreign
	Pension Plans						Benefit Plans						Pension Plans						Pension Plans						Benefit Plans						Pension Plans
	2011			2010			2011			2010			2011			2010			2011			2010			2011			2010			2011			2010
	(in thousands)																		(in thousands)
Service cost	$	37		$	53		$	37		$	27		$	94		$	76		$	17		$	53		$	22		$	27		$	92		$	75
Interest cost		300			311			232			265			186			195			292			311			187			265			183			193
Expected return on plan assets		(141	)		(149	)		(33	)		(41	)		(171	)		(151	)		(140	)		(149	)		(35	)		(41	)		(164	)		(149	)
Amortization of prior service cost (credit)		—			10			(319	)		(293	)		—			—			—			10			(320	)		(293	)		—			—
Recognized net actuarial loss		171			138			160			156			—			—			1			139			80			157			—			—

Net periodic benefit cost	$	367		$	363		$	77		$	114		$	109		$	120		$	170		$	364		$	(66	)	$	115		$	111		$	119

~~Page 15~~

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


	Domestic Plans																		Domestic Plans
							Postretirement						Foreign												Postretirement						Foreign
	Pension Plans						Benefit Plans						Pension Plans						Pension Plans						Benefit Plans						Pension Plans
	2011			2010			2011			2010			2011			2010			2011			2010			2011			2010			2011			2010
	(in thousands)																		(in thousands)
Service cost	$	74		$	106		$	74		$	54		$	185		$	151		$	91		$	159		$	96		$	81		$	276		$	227
Interest cost		600			622			464			530			369			387			892			933			651			795			551			581
Expected return on plan assets		(282	)		(298	)		(66	)		(82	)		(337	)		(299	)		(422	)		(447	)		(101	)		(123	)		(493	)		(448	)
Amortization of prior service cost (credit)		—			20			(638	)		(586	)		—			—			—			30			(958	)		(879	)		—			—
Recognized net actuarial loss		341			277			320			313			—			—			342			416			400			470			—			—

Net periodic benefit cost	$	733		$	727		$	154		$	229		$	217		$	239		$	903		$	1,091		$	88		$	344		$	334		$	360

Viad expects to contribute $1.7 million to its funded pension plans, $959,000 to its unfunded pension plans and $500,000 to its postretirement benefit plans in 2011. As of ~~June~~September 30, 2011, Viad had contributed ~~$524,000~~$1.1 million to its funded pension plans, ~~$476,000~~$648,000 to its unfunded pension plans and ~~$71,000~~$52,000 to its postretirement benefit plans.

Note 14. Restructuring Charges

During the ~~six~~nine months ended ~~June~~September 30, 2011, Viad recorded aggregate restructuring charges of ~~$1.5~~$1.6 million primarily related to reorganization activities in the Marketing & Events Group, comprised of the elimination of certain positions as well as facility consolidations. The restructuring liabilities at ~~June~~September 30, 2011 related to future lease payment obligations will be made over the remaining lease terms and severance and employee benefits are expected to be paid by the end of 2011.

Page 17

The table below represents a reconciliation of beginning and ending liability balances by major restructuring activity for the ~~six~~nine months ended ~~June~~September 30, 2011:


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

Balance at January 1, 2011	$	1,106		$	5,051		$	197		$	1,642		$	7,996		$	1,106		$	5,051		$	197		$	1,642		$	7,996
Restructuring charges		439			1,036			—			—			1,475			514			1,036			—			—			1,550
Cash payments		(1,190	)		(849	)		(197	)		(141	)		(2,377	)		(1,509	)		(1,175	)		(197	)		(481	)		(3,362	)
Adjustment to liability		(128	)		—			—			(192	)		(320	)		(128	)		—			—			(263	)		(391	)
Foreign currency translation adjustment		33			9			—			—			42			17			2			—			—			19

Balance at June 30, 2011	$	260		$	5,247		$	—		$	1,309		$	6,816
Balance at September 30, 2011																$	—		$	4,914		$	—		$	898		$	5,812

Note 15. Litigation, Claims, Contingencies and Other

Viad and certain of its subsidiaries are plaintiffs or defendants to various actions, proceedings and pending claims, some of which involve, or may involve, compensatory, punitive or other damages. Litigation is subject to many uncertainties and it is possible that some of the legal actions, proceedings or claims could be decided against Viad. Although the amount of liability as of ~~June~~September 30, 2011, with respect to certain of these matters is not ascertainable, Viad believes that any resulting liability, after taking into consideration amounts already provided for, including insurance coverage, will not have a material impact on the Company’s business, financial position or results of operations.

Viad is subject to various U.S. federal, state and foreign laws and regulations governing the prevention of pollution and the protection of the environment in the jurisdictions in which Viad has or had operations. If the Company has failed to comply with these environmental laws and regulations, civil and criminal penalties could be imposed and Viad could become subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. As is the case with many companies, Viad also faces exposure to actual or potential claims and lawsuits involving environmental matters relating to its past operations. Although it is a party to certain environmental disputes, Viad believes that any resulting liabilities, after taking into consideration amounts already provided for, including insurance coverage, will not have a material effect on the Company’s financial position or results of operations. As of ~~June~~September 30, 2011, there was a remaining environmental remediation liability of ~~$6.0~~$5.8 million related to previously sold operations of which ~~$1.1 million~~$936,000 was included in the consolidated balance sheets under the caption “Other current liabilities” and $4.9 million under the caption “Other deferred items and liabilities.”

~~Page 16~~

As of ~~June~~September 30, 2011, Viad had certain obligations under guarantees to third parties on behalf of its subsidiaries. These guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities entered into by Viad’s subsidiary operations. The Company would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that Viad would be required to make under all guarantees existing as of ~~June~~September 30, 2011 would be ~~$32.4~~$30.4 million. These guarantees relate to leased facilities expiring through October 2017. There are no recourse provisions that would enable Viad to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements whereby Viad could recover payments.

Viad’s businesses contribute to various multi-employer pension plans based on obligations arising under collective bargaining agreements covering its union-represented employees. Based upon the information available to Viad from plan administrators, management believes that several of these multi-employer plans are underfunded. The Pension Protection Act of 2006 requires pension plans underfunded at certain levels to reduce, over defined time periods, the underfunded status. In addition, under current laws, the termination of a plan, or a voluntary withdrawal from a plan by Viad, or a shrinking contribution base to a plan as a result of the insolvency or withdrawal of other contributing employers to such plan, would require Viad to make payments to such plan for its proportionate share of the plan’s unfunded vested liabilities. As of ~~June~~September 30, 2011, the amount of additional funding, if any, that Viad would be required to make related to multi-employer pension plans is not ascertainable.

Page 18

Glacier Park operates the concession portion of its business under a concession contract with the U.S. National Park Service (the “Park Service”) for Glacier National Park. Glacier Park’s original 25-year concession contract with the Park Service that was to expire on December 31, 2005, has been extended for six one-year periods and now expires on December 31, 2011. The Park Service, in its sole discretion, may continue extending Glacier Park’s concession contract in one-year increments. When this contract ultimately expires, Glacier Park will have the opportunity to bid on a new concession contract. If Glacier Park does secure a new contract, possible terms would be for 10, 15 or 20 years. Glacier Park generated approximately 70 percent of its 2010 revenue through its concession contract for services provided within Glacier National Park. If a new concessionaire is selected by the Park Service, Glacier Park’s remaining business would consist of its operations at Waterton Lakes National Park, Alberta, Canada; East Glacier, Montana; Whitefish, Montana and St. Mary, Montana. In such a circumstance, Glacier Park would be entitled to an amount equal to its “possessory interest,” which generally means the value of the structures acquired or constructed, fixtures installed and improvements made to the concession property at Glacier National Park during the term of the concession contract. Glacier Park owns its Glacier Park Lodge operations in East Glacier, Montana, Grouse Mountain Lodge in Whitefish, Montana and St. Mary Lodge & Resort in St. Mary, Montana. Glacier Park also owns the Prince of Wales Hotel in Waterton Lakes National Park, which is operated under a 42-year ground lease with the Canadian government running through January 31, 2052. Glacier Park generated 25 percent of Travel & Recreation Group’s full year 2010 segment operating income.

~~Page 17~~

Note 16. Segment Information

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

Three months ended June 30, Six months ended June 30,
2011 2010 2011 2010
(in thousands)
Revenues:
Marketing & Events Group:
U.S. $ 150,170 $ 144,460 $ 381,865 $ 313,869
International 66,973 56,059 120,927 106,426
Intersegment eliminations (2,408 ) (4,609 ) (3,719 ) (7,445 )

214,735 195,910 499,073 412,850
Travel & Recreation Group 23,957 22,389 29,717 29,802

$ 238,692 $ 218,299 $ 528,790 $ 442,652

Segment operating income (loss):
Marketing & Events Group:
U.S. $ 205 $ (2,297 ) $ 18,139 $ (2,346 )
International 6,650 6,532 10,435 9,169

6,855 4,235 28,574 6,823
Travel & Recreation Group 3,007 3,490 (1,453 ) 1,101

9,862 7,725 27,121 7,924
Corporate activities (1,576 ) (2,058 ) (2,847 ) (2,702 )

8,286 5,667 24,274 5,222
Interest income 176 88 390 184
Interest expense (380 ) (473 ) (792 ) (966 )
Restructuring charges:
Marketing & Events U.S. (1,206 ) (272 ) (1,475 ) (2,325 )
Travel & Recreation Group — (235 ) — (235 )
Corporate — (52 ) — (52 )

Income before income taxes $ 6,876 $ 4,723 $ 22,397 $ 1,828

June 30, December 31,
2011 2010
(in thousands)
Assets:
Marketing & Events U.S. $ 256,626 $ 235,965
Marketing & Events International 83,823 83,441
Travel & Recreation Group 202,314 157,562
Corporate and other 102,960 139,535

$ 645,723 $ 616,503


	Three months ended						Nine months ended
	September 30,						September 30,
	2011			2010			2011			2010
	(in thousands)
Revenues:
Marketing & Events Group:
U.S.	$	116,826		$	125,127		$	498,691		$	438,996
International		38,516			38,133			159,443			144,559
Intersegment eliminations		(3,645	)		(101	)		(7,364	)		(7,546	)

		151,697			163,159			650,770			576,009
Travel & Recreation Group		64,472			51,985			94,189			81,787

	$	216,169		$	215,144		$	744,959		$	657,796


Segment operating income (loss):
Marketing & Events Group:
U.S.	$	(17,078	)	$	(9,544	)	$	1,061		$	(11,890	)
International		(3,110	)		(2,038	)		7,325			7,131

		(20,188	)		(11,582	)		8,386			(4,759	)
Travel & Recreation Group		25,600			21,501			24,147			22,602

		5,412			9,919			32,533			17,843
Corporate activities		(2,356	)		(1,749	)		(5,203	)		(4,451	)

		3,056			8,170			27,330			13,392
Interest income		198			174			588			358
Interest expense		(373	)		(472	)		(1,165	)		(1,438	)
Restructuring charges:
Marketing & Events U.S.		(75	)		(183	)		(1,550	)		(2,508	)
Travel & Recreation Group		—			—			—			(235	)
Corporate		—			—			—			(52	)

Income before income taxes	$	2,806		$	7,689		$	25,203		$	9,517

Page 1819


	September 30,		December 31,
	2011		2010
	(in thousands)
Assets:
Marketing & Events U.S.	$	232,212	$	235,965
Marketing & Events International		86,149		83,441
Travel & Recreation Group		202,214		157,562
Corporate and other		104,821		139,535

	$	625,396	$	616,503

Note 17. Impact of Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance related to fair value measurement and disclosure requirements, which is codified in Accounting Standards Codification (“ASC”) Topic 820. The new guidance is intended to clarify the application of existing fair value measurement and disclosure requirements, and also changes certain principles and disclosures. The guidance is effective for fiscal years and interim periods beginning after December 15, ~~2011, and Viad is currently evaluating whether or not the~~2011. The adoption of this new guidance ~~will~~is not expected to have a material impact on ~~its~~Viad’s financial condition ~~and~~or results of operations.

In June 2011, the FASB issued new guidance related to the presentation of comprehensive income, which is codified in ASC Topic 220. The new guidance requires entities to present the total of comprehensive income, the components of net income and the components of other comprehensive income in one of two formats: 1) in a single continuous statement, or 2) in two separate but consecutive statements. The guidance also requires the presentation of reclassification adjustments from other comprehensive income to net income on the face of the financial statements. The guidance is effective for fiscal years and interim periods beginning after December 15, 2011, and will not have an impact on Viad’s financial condition or results of operations.

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

In September 2011, the FASB issued new guidance related to disclosures regarding employer’s participation in multi-employer pension plans, which is codified in ASC Topic 715. The new guidance requires employers that participate in multi-employer pension plans to provide additional quantitative and qualitative information about their involvement in those plans. The guidance is effective for annual periods for fiscal years ending after December 15, 2011. The adoption of this disclosure-only guidance will not impact Viad’s financial condition or results of operations.

Page 1920


Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with Viad Corp’s condensed consolidated financial statements and related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Viad Corp’s actual results could differ materially from those anticipated due to various factors discussed under “Forward-Looking Statements” and elsewhere in this quarterly report.

Overview:

Viad Corp (“Viad” or the “Company”) operates in three reportable business segments: Marketing & Events U.S., Marketing & Events International and Travel & Recreation Group.

The Travel & Recreation Group segment consists of Brewster Inc. (“Brewster”) ~~and~~, Glacier Park, Inc. (“Glacier Park”) and Alaskan Park Properties, Inc. (“Denali”). Brewster provides tourism services in the Canadian Rockies in Alberta and in other parts of Western Canada. Brewster’s operations include the Banff Gondola, Columbia Icefield Glacier Adventure, motorcoach services, charter and sightseeing services, tour boat operations, inbound package tour operations and hotel operations. Glacier Park operates five lodges, three motor inns and one four-season resort hotel and provides food and beverage operations, retail operations and tour and transportation services in and around Glacier National Park in Montana and Waterton Lakes National Park in Alberta, Canada. Glacier Park is an 80 percent owned subsidiary of Viad. Denali operates the Denali Backcountry Lodge, which is the largest of three lodges located within Denali National Park and Preserve in Alaska, and the Denali Cabins, which are located near the park’s entrance. In addition to lodging, Denali also provides food and beverage operations, and packaged tour and transportation services in and around the park.

The following are financial highlights of the ~~second~~third quarter of 2011 presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”):

Viad Corp (Consolidated)

Total revenues of ~~$238.7~~$216.2 million compared to ~~$218.3~~$215.1 million in the ~~second~~third quarter of 2010

Net income attributable to Viad of ~~$4.5~~$1.2 million compared to ~~$3.0~~$4.8 million in the ~~second~~third quarter of 2010

Diluted income per share of ~~$0.22~~$0.06 compared to ~~$0.15~~$0.23 in the ~~second~~third quarter of 2010

Purchase of ~~St. Mary~~Denali Backcountry Lodge ~~& Resort~~and Denali Cabins for $15.3 million

Restructuring charges of $1.2 million primarily related to reorganization activities in the Marketing & Events Group, comprised of the elimination of certain positions as well as facility consolidations

Cash and cash equivalents totaled ~~$107.3~~$104.6 million as of ~~June~~September 30, 2011

Debt was ~~$4.2~~$3.6 million as of ~~June~~September 30, 2011

Marketing & Events U.S.

Revenues of ~~$150.2~~$116.8 million, ~~an increase~~a decrease of ~~4.0~~6.6 percent from the ~~second~~third quarter of 2010

Segment operating ~~income~~loss of ~~$205,000,~~$17.1 million, as compared to a loss of ~~$2.3~~$9.5 million in the ~~second~~third quarter of 2010

Marketing & Events International

Revenues of ~~$67.0~~$38.5 million, an increase of ~~19.5~~1.0 percent from the ~~second~~third quarter of 2010

Segment operating ~~income~~loss of ~~$6.7~~$3.1 million, ~~an increase~~as compared to a loss of ~~1.8 percent from~~$2.0 million in the ~~second~~third quarter of 2010

Travel & Recreation Group

Revenues of ~~$24.0~~$64.5 million, an increase of ~~7.0~~24.0 percent from the ~~second~~third quarter of 2010

Segment operating income of ~~$3.0~~$25.6 million, ~~a decrease~~an increase of ~~13.8~~19.1 percent from the ~~second~~third quarter of 2010

Non-GAAP Measure:

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

Page 2021

Management believes that the presentation of Adjusted EBITDA provides useful information to investors regarding Viad’s results of operations for trending, analyzing and benchmarking the performance and value of Viad’s business. Management uses Adjusted EBITDA primarily as a performance measure and believes that the GAAP financial measure most directly comparable to this non-GAAP measure is net income attributable to Viad. Although Adjusted EBITDA is used as a financial measure to assess the performance of the business, the use of Adjusted EBITDA is limited because it does not consider material costs, expenses and other items necessary to operate the business. These items include debt service costs, non-cash depreciation and amortization expense associated with long-lived assets, expenses related to U.S. federal, state, local and foreign income taxes, impairment losses or recoveries and the effects of accounting changes and discontinued operations. Because Adjusted EBITDA does not consider the above items, a user of Viad’s financial information should consider net income attributable to Viad as an important measure of financial performance because it provides a more complete measure of the Company’s performance.

A reconciliation of Adjusted EBITDA to net income attributable to Viad is as follows:


	Three months ended June 30,						Six months ended June 30,						Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	(in thousands)												(in thousands)
Adjusted EBITDA	$	14,775		$	12,491		$	37,845		$	17,014		$	9,730		$	14,489		$	47,575		$	31,503
Interest expense		(380	)		(473	)		(792	)		(966	)		(373	)		(472	)		(1,165	)		(1,438	)
Income tax expense		(2,588	)		(1,790	)		(8,488	)		(1,998	)		(523	)		(1,911	)		(9,011	)		(3,909	)
Depreciation and amortization		(7,322	)		(7,200	)		(14,293	)		(14,004	)		(7,589	)		(7,310	)		(21,882	)		(21,314	)

Net income attributable to Viad	$	4,485		$	3,028		$	14,272		$	46		$	1,245		$	4,796		$	15,517		$	4,842

The ~~increase~~decrease in Adjusted EBITDA of ~~$2.3~~$4.8 million for the ~~second~~third quarter of 2011 compared to the ~~second~~third quarter of 2010 was primarily driven by ~~higher~~lower segment operating results at the Marketing & Events U.S. segment, partially offset by higher operating results at the Travel & Recreation Group segment. The increase in Adjusted EBITDA of ~~$20.8~~$16.1 million for the first ~~six~~nine months of 2011 compared to 2010 was primarily due to higher segment operating results at the Marketing & Events U.S. ~~segment~~ and ~~lower restructuring charges, partially offset by lower segment operating results at the~~ Travel & Recreation ~~Group.~~Group segments as well as from lower restructuring charges. See “Results of Operations” below for a discussion of fluctuations.

Results of Operations:

Comparison of ~~Second Quarter~~Third quarter of 2011 to the ~~Second Quarter~~Third quarter of 2010

Revenues for the ~~second~~third quarter of 2011 increased ~~9.3~~0.5 percent to ~~$238.7~~$216.2 million compared to ~~$218.3~~$215.1 million in the ~~second~~third quarter of 2010. Viad’s income before income taxes was ~~$6.9~~$2.8 million for the ~~second~~third quarter of 2011 compared to ~~$4.7~~$7.7 million in the ~~second~~third quarter of 2010. Net income attributable to Viad for the ~~second~~third quarter of 2011 was ~~$4.5~~$1.2 million, or ~~$0.22~~$0.06 per diluted share, compared to ~~$3.0~~$4.8 million, or ~~$0.15~~$0.23 per diluted share, in the ~~second~~third quarter of 2010. The ~~improved~~lower results were primarily due to ~~higher~~reduced revenues from the Marketing & Events Group. Restructuring charges in the second quarter of 2011 were $1.2 million compared to $559,000 in the 2010 second quarter, both primarily related to reorganization activities in the Marketing & Events Group, including the elimination of certain positions as well as facility consolidations.

Page 2122

During the ~~second~~third quarter of 2011, foreign exchange rate variances resulted in increases of ~~$7.2~~$4.2 million in revenues and ~~$916,000~~$788,000 in segment operating income as compared to the ~~second~~third quarter of 2010. Viad conducts its foreign operations primarily in Canada and the United Kingdom and to a lesser extent in certain other countries. The following table summarizes the effect of foreign exchange rate variances on revenues and segment operating results from Viad’s significant international operations for the ~~second~~third quarter:


													Revenues						Segment Operating Results
	Revenues						Segment Operating Results						Weighted-Average				Effect of Rate		Weighted-Average				Effect of Rate
	Weighted-Average				Effect of Rate		Weighted-Average				Effect of Rate		Exchange Rates				Variance		Exchange Rates				Variance
	Exchange Rates				Variance		Exchange Rates				Variance		2011		2010		(thousands)		2011		2010		(thousands)
	2011		2010		(thousands)		2011		2010		(thousands)
Marketing & Events Group:
Canada	$	1.04	$	0.97	$	1,355	$	1.05	$	0.97	$	102	$	1.00	$	0.96	$	598	$	1.09	$	0.96	$	(175	)
United Kingdom	$	1.64	$	1.50	$	3,831	$	1.64	$	1.50	$	467	$	1.60	$	1.54	$	747	$	1.71	$	1.65	$	(170	)

Travel & Recreation Group:
Canada	$	1.04	$	0.96	$	1,448	$	1.04	$	0.95	$	377	$	1.02	$	0.96	$	2,519	$	1.03	$	0.96	$	1,161

Accordingly, Viad’s ~~second~~third quarter results were impacted by the strengthening of the Canadian dollar and British pound relative to the U.S. dollar. Future changes in the exchange rates may impact overall expected profitability and historical period-to-period comparisons when operating results are translated into U.S. dollars.

Marketing & Events Group.Revenues for the Marketing & Events U.S. segment were ~~$150.2~~$116.8 million for the ~~second~~third quarter of 2011, ~~up 4.0~~down 6.6 percent compared to ~~$144.5~~$125.1 million in the ~~second~~third quarter of 2010. The ~~increase~~decrease was primarily due to ~~base same-show revenue increases of 5.8 percent and increased exhibitor spending, partially offset by~~ negative show rotation revenue of approximately ~~$2 million.~~$23 million, partially offset by base same-show revenue increases of 10.9 percent, higher revenues from retail merchandising unit sales and increased revenues from branded entertainment projects. Management defines base same-show revenue as revenue from exhibitions and events that occur in the same quarter and same city every year. Base same-shows represented ~~29.4~~41.6 percent of 2011 ~~second~~third quarter Marketing & Events U.S. revenues. Segment operating ~~income~~loss was ~~$205,000~~$17.1 million in the ~~second~~third quarter of 2011, compared to a loss of ~~$2.3~~$9.5 million in the ~~second~~third quarter of 2010. The ~~improved~~lower operating results were primarily due to ~~increases~~decreases in revenues as well as a less favorable mix of revenues during the quarter, including margin pressures on three shows produced in higher-cost cities in the East. Operating results for the quarter also include higher accruals for performance-based incentives as compared to the 2010 third quarter, reflecting management’s outlook for higher full year profits and ~~continued cost control.~~the timing of accruals. During the third quarter of 2011, the Company accrued $500,000 related to a multi-party settlement that will resolve a longstanding labor dispute in the city of Chicago.

Revenues for the Marketing & Events International segment were ~~$67.0~~$38.5 million for the ~~second~~third quarter of 2011 ~~up 19.5 percent~~ compared to ~~$56.1~~$38.1 million in the ~~second~~third quarter of 2010. Segment operating ~~income~~loss was ~~$6.7~~$3.1 million in the ~~second~~third quarter of 2011, compared to ~~$6.5~~a loss of $2.0 million in the ~~second~~third quarter of 2010. As discussed above, period-to-period comparisons for this segment were affected by exchange rate variances, which ~~resulted in increases of $5.7~~increased revenues by $1.7 million ~~in revenue~~ and ~~$540,000 in~~ segment operating ~~income,~~loss by $373,000 as compared to the ~~second~~third quarter of 2010. Excluding exchange rate variances, 2011 ~~second~~third quarter revenues ~~increased~~decreased by ~~$5.2~~$1.3 million, or ~~9.2~~3.4 percent, and operating results decreased by $700,000 primarily due to ~~positive~~negative show rotation revenue of ~~about $8 million, and operating income decreased by $422,000 primarily due to a less favorable mix of revenues and~~approximately $6 million. Operating results for the quarter also include higher compensation expenses, including merit increases and the reinstatement of temporary wage reductions.

Although the Marketing & Events Group has a diversified revenue base and long-term contracts for future shows, its revenues are affected by general economic and industry-specific conditions. The prospects for individual shows tend to be driven by the success of the industry related to those shows. In general, the exhibition and event industry is experiencing modest improvement. Following quarterly declines from the third quarter of 2008 through the first quarter of 2010, Marketing & Events U.S. base same-show revenues were essentially flat in the 2010 second quarter and have increased in each of the following ~~four~~five quarters.

For the 2011 full year, management expects U.S. same-show revenues to increase ~~at a mid to high single-digit rate~~by approximately 10 percent and that show rotation will positively impact revenues by approximately $15 million as revenue from non-annual shows during 2011 is expected to exceed revenues from non-annual shows that took place during 2010. Additionally, management anticipates that foreign currency exchange rate variances versus 2010 will have a favorable impact on Marketing & Events Group 2011 full year revenues and operating income of approximately ~~$12~~$9 million and ~~$700,000,~~$300,000, respectively. Management remains focused on improving the profitability of the U.S. segment through continued integration and consolidation of operations to increase capacity utilization and reduce costs. Additional restructuring charges may be incurred as further cost structure improvements are made.

Page 23

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

~~Page 22~~

Travel & Recreation Group.Revenues for the Travel & Recreation Group segment were ~~$24.0~~$64.5 million for the ~~second~~third quarter of 2011, up ~~7.0~~24.0 percent compared to ~~second~~third quarter 2010 revenues of ~~$22.4~~$52.0 million. Segment operating income was ~~$3.0~~$25.6 million, asup 19.1 percent compared to ~~$3.5~~$21.5 million in the ~~second~~third quarter of 2010. As discussed above, foreign exchange rate variances had a favorable impact on segment revenues and operating income of ~~$1.4~~$2.5 million and ~~$377,000,~~$1.2 million, respectively, as compared to the 2010 ~~second~~third quarter. Excluding exchange rate variances, 2011 ~~second~~third quarter revenues increased by ~~$120,000,~~$10.0 million, or ~~0.5~~19.2 percent, and operating income ~~decreased~~increased by ~~$860,000.~~$2.9 million. The ~~revenue~~ growth was primarily due to the ~~addition~~additions of St. Mary Lodge & Resort and Grouse Mountain Lodge and ~~stronger demand for~~higher revenues across all of Brewster’s ~~packaged tours and attractions.~~lines of business. These improvements were ~~largely~~partially offset by lower revenues from Many Glacier Hotel, a property operated by Glacier Park, resulting from planned construction that reduced the number of rooms available during 2011 as compared to 2010, as well as ~~poor weather conditions in~~lower visitation to Glacier National ~~Park. The decrease in segment operating income versus the 2010 second quarter was primarily due to lower revenues at Many Glacier Hotel (which has a high flow through to operating income)~~Park during July and ~~a seasonal operating loss at Grouse Mountain Lodge.~~August.

The Travel & Recreation Group segment is affected by consumer discretionary spending on tourism activities. ~~Management expects 2011 results from the~~Additionally, management anticipates that foreign currency exchange rate variances versus 2010 will have a favorable impact on Travel & Recreation Group segment ~~to benefit from improved tourism demand versus 2010. Management anticipates lower~~2011 full year revenues ~~at Many Glacier Hotel due to the planned construction discussed above. However, management expects the~~and operating income of approximately $4.3 million and $1.4 million, respectively.

The acquisitions of Grouse Mountain Lodge and St. Mary Lodge & Resort (“St. Mary”), which are located near Glacier National Park, tohave more than offset ~~the revenue decline~~lower revenues at Many Glacier ~~Hotel.~~Hotel due to the planned construction discussed above. The Company acquired the 145-room Grouse Mountain Lodge on January 5, 2011 for $10.5 million in cash and the 115-room St. Mary Lodge & Resort on June 29, 2011 for $15.3 million in cash. ~~Additionally, management anticipates that foreign currency exchange rate variances versus 2010 will~~Management expects the acquisition of Denali Backcountry Lodge and Denali Cabins for $15.3 million in cash on September 16, 2011 to be slightly dilutive to 2011 earnings as a result of seasonal fourth quarter operating losses from these properties. As a result of Denali’s seasonal fourth quarter operating loss and lower revenues at Many Glacier Hotel (which have a ~~favorable impact on Travel & Recreation Group~~high flow through to operating income), management expects segment operating margins to approximate 20 percent for the 2011 full year ~~revenues and operating income of approximately $4.7 million and $1.3 million, respectively.~~as compared to 22.5 percent in 2010.

During 2010, approximately 73 percent of revenue and 79 percent of segment operating income generated in the Travel & Recreation Group segment ~~was~~were derived through its Canadian operations. These operations are largely affected by foreign customer visitation, and, accordingly, increases in the value of the Canadian dollar compared to other currencies could adversely affect customer volumes, revenue and segment operating income for the Travel & Recreation Group.

~~Restructuring Charges.~~Corporate Activities.~~Viad recorded restructuring charges of $1.2~~Corporate activities totaled $2.4 million in the ~~second~~third quarter of 2011, compared to ~~$559,000~~$1.7 million in the ~~second~~third quarter of 2010. ~~Both charges~~The increase was primarily due to higher legal fees related to ~~reorganization activities, comprised of the elimination of certain positions as well as facility consolidations.~~employee benefit and other matters.

Income Taxes.The effective tax rate in the ~~second~~third quarter of 2011 was ~~37.6~~18.6 percent, compared to ~~37.9~~24.9 percent in the ~~second~~third quarter of 2010. The relatively low effective rates compared to the statutory rates were primarily due to the favorable resolution of tax matters and the realization of certain foreign tax credits.

Page 24

Comparison of First ~~Six Months~~Nine months of 2011 to the First ~~Six Months~~Nine months of 2010

Revenues for the first ~~six~~nine months of 2011 increased ~~19.5~~13.3 percent to ~~$528.8~~$745.0 million from ~~$442.7~~$657.8 million during the first ~~six~~nine months of 2010. Viad’s income before income taxes was ~~$22.4~~$25.2 million compared to ~~$1.8~~$9.5 million in 2010. Net income attributable to Viad for the first ~~six~~nine months of 2011 was ~~$14.3~~$15.5 million, or ~~$0.70~~$0.76 per diluted share, compared to ~~$46,000~~$4.8 million, or $0.24 per diluted share, during the first ~~six~~nine months of 2010. These increases were primarily due to higher revenues from the Marketing & Events Group. Net restructuring charges in the first ~~six~~nine months of 2011 were ~~$1.5~~$1.6 million compared to ~~$2.6~~$2.8 million in the first ~~six~~nine months of 2010, both primarily related to reorganization activities in the Marketing & Events Group, including the elimination of certain positions as well as facility consolidations. During the first ~~six~~nine months of 2011, foreign exchange rate variances resulted in increases of ~~$9.7~~$14.0 million and ~~$929,000~~$1.7 million in revenues and segment operating income, respectively, as compared to the first ~~six~~nine months of 2010.

~~Page 23~~

Viad conducts its foreign operations primarily in Canada and the United Kingdom and to a lesser extent in certain other countries. The following table summarizes the effect of foreign exchange rate variances on revenues and segment operating results from Viad’s significant international operations for the first ~~six~~nine months of the year:


													Revenues						Segment Operating Results
	Revenues						Segment Operating Results						Weighted-Average				Effect of Rate		Weighted-Average				Effect of Rate
	Weighted-Average				Effect of Rate		Weighted-Average				Effect of Rate		Exchange Rates				Variance		Exchange Rates				Variance
	Exchange Rates				Variance		Exchange Rates				Variance		2011		2010		(thousands)		2011		2010		(thousands)
	2011		2010		(thousands)		2011		2010		(thousands)
Marketing & Events Group:
Canada	$	1.03	$	0.96	$	2,476	$	1.06	$	0.97	$	125	$	1.03	$	0.96	$	3,074	$	1.02	$	0.99	$	(49	)
United Kingdom	$	1.62	$	1.52	$	4,882	$	1.63	$	1.51	$	621	$	1.62	$	1.53	$	5,628	$	1.61	$	1.51	$	451

Travel & Recreation Group:
Canada	$	1.03	$	0.96	$	1,777	$	1.09	$	0.95	$	193	$	1.03	$	0.96	$	4,296	$	1.03	$	0.95	$	1,354

Accordingly, Viad’s ~~six-month~~nine-month results were impacted by the strengthening of the Canadian dollar and the British pound relative to the U.S. dollar. Future decreases in the exchange rates may adversely impact overall expected profitability and historical period to period comparisons when operating results are translated into U.S. dollars.

Marketing & Events Group.Revenues for the Marketing & Events U.S. segment were ~~$381.9~~$498.7 million for the first ~~six~~nine months of 2011, up ~~21.7~~13.6 percent from ~~$313.9~~$439.0 million in 2010. Segment operating income was ~~$18.1~~$1.1 million in the first ~~six~~nine months of 2011, compared to an operating loss of ~~$2.3~~$11.9 million in 2010. These increases were primarily due to ~~positive show rotation of about $38 million,~~ base same-show revenue increases of 11.1 percent, ~~and~~ increased exhibitor ~~spending.~~spending and positive show rotation of approximately $15 million. Management defines base same-show revenue as revenue from exhibitions and events that occur in the same quarter and same city every year. Base same-shows represented approximately 3838.8 percent of revenues for the first ~~six~~nine months of 2011 for the Marketing & Events U.S. segment.

Revenues for the Marketing & Events International segment were ~~$120.9~~$159.4 million for the first ~~six~~nine months of 2011, up ~~13.6~~10.3 percent from ~~$106.4~~$144.6 million in 2010. Segment operating income was ~~$10.4~~$7.3 million in the first ~~six~~nine months of 2011 compared to ~~$9.2~~$7.1 million in 2010. As discussed above, results in this segment were impacted by exchange rates during the first ~~six~~nine months of 2011 resulting in increases of ~~$8.0~~$9.7 million and ~~$736,000~~$363,000 in revenues and segment operating income, respectively, as compared to 2010. Excluding exchange rate variances, revenues for the first ~~six~~nine months of 2011 increased by ~~$6.5~~$5.2 million, or ~~6.1~~3.6 percent, and segment operating income ~~increased~~decreased by ~~$530,000. These increases were~~$169,000. The increase in revenues was primarily due to positive show rotation ~~revenue~~ of ~~about $10~~approximately $4 million and new show wins, which more than offset 2010 first quarter revenues from a major project for the 2010 Winter Olympic Games in Canada. Operating results for the first ~~six~~nine months of 2011 also reflect higher compensation expenses, including merit increases and the reinstatement of temporary wage reductions, as compared to the first ~~six~~nine months of 2010.

Travel & Recreation Group.Revenues from the Travel & Recreation Group segment were ~~$29.7~~$94.2 million for the first ~~six~~nine months of 2011, ~~down 0.3~~up 15.2 percent compared to 2010 revenues of ~~$29.8~~$81.8 million. Segment operating ~~loss~~income was ~~$1.5~~$24.1 million compared to ~~operating income of $1.1~~$22.6 million in 2010. As discussed above, results in this segment were impacted by exchange rate variances during the first ~~six~~nine months of 2011 resulting in increases of ~~$1.8~~$4.3 million and ~~$193,000~~$1.4 million in revenues and segment operating income, respectively, as compared to 2010. Excluding exchange rate variances, revenues for the first ~~six~~nine months of 2011 ~~decreased~~increased by ~~$1.9~~$8.1 million, or ~~6.2~~9.9 percent, and operating results ~~decreased~~increased by ~~$2.7 million. Results for~~$191,000. The growth was primarily due to the ~~first six months~~additions of ~~2010 included~~St. Mary Lodge & Resort and Grouse Mountain Lodge, as well as higher ~~revenue from~~revenues across all of Brewster’s lines of business with the exception of its transportation business, which had higher 2010 revenues resulting from charter contracts related to the ~~2010~~ Winter Olympic and Paralympic ~~Games and higher~~Games. These improvements were partially offset by lower revenues from Many Glacier Hotel ~~which had fewer rooms available~~(which have a high flow through to operating income), as well as lower visitation to Glacier National Park during ~~the 2011 period due to planned construction. Results for~~July and August.

Page 25

Corporate Activities.Corporate activities totaled $5.2 million in the first ~~six~~nine months of 2011, ~~included~~compared to $4.5 million in the ~~year-round Grouse Mountain Lodge, acquired on January 5, 2011, which provided incremental revenues with a seasonal operating loss.~~comparable period in 2010. The increase was primarily due to higher legal fees related to employee benefit and other matters.

Restructuring Charges.Viad recorded restructuring charges of ~~$1.5~~$1.6 million in the first ~~six~~nine months of 2011, compared to ~~$2.6~~$2.8 million in the 2010 period. The charges both primarily related to reorganization activities in the Marketing & Events Group, comprised of the elimination of certain positions as well as facility consolidations.

~~Page 24~~

Income Taxes.The effective tax rate in the first ~~six~~nine months of 2011 on income before income taxes was ~~37.9~~35.8 percent, compared to ~~109.3~~41.1 percent in the comparable period in 2010. The relatively high rate in 2010 was primarily due to the charge in 2010 of $1.3 million related to healthcare legislation. ~~Excluding this item, the effective tax rate in the first six months of 2010 would have been 39.3 percent.~~

Liquidity and Capital Resources:

Cash and cash equivalents were ~~$107.3~~$104.6 million as of ~~June~~September 30, 2011 as compared to $145.8 million as of December 31, 2010, with the decrease primarily due to business acquisitions and capital expenditures. During the ~~six~~nine months ended ~~June~~September 30, 2011, the Company generated net cash flows from operating activities of ~~$6.0~~$35.1 million primarily driven by operating results, ~~mostly~~partially offset by changes in working ~~capital (primarily an increase in accounts receivable of $43.6 million).~~capital. Management believes that Viad’s existing sources of liquidity will be sufficient to fund operations and capital commitments for at least the next 12 months.

Viad’s total debt as of ~~June~~September 30, 2011 was ~~$4.2~~$3.6 million compared to $9.1 million as of December 31, 2010. The debt-to-capital ratio was ~~0.010~~0.009 to 1 as of ~~June~~September 30, 2011 compared with 0.023 to 1 as of December 31, 2010. Capital is defined as total debt and capital lease obligations plus total stockholders’ equity.

On May 18, 2011, Viad entered into an amended and restated secured revolving credit agreement (the “Credit Facility”). The Credit Facility provides for a $130 million revolving line of credit and may be increased up to an additional $50 million under certain circumstances. The Credit Facility expires on May 18, 2016 and borrowings are to be used for general corporate purposes (including permitted acquisitions) and to support up to $50 million of letters of credit. The lenders have a first perfected security interest in all of the personal property of Viad and GES, including 65 percent of the capital stock of top-tier foreign subsidiaries. On April 28, 2011, Viad paid off its outstanding borrowing under the previous credit facility of $4.2 million. As of ~~June~~September 30, 2011, Viad had $125.4 million of capacity remaining under its Credit Facility reflecting issued letters of credit of $4.6 million.

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

Viad’s financial covenants include a fixed-charge coverage ratio of not less than 2.25 to 1 (and a ratio of not less than 2.50 to 1 after the fiscal quarter ending September 30, 2012) and a leverage ratio (defined as total debt to Adjusted EBITDA) of not greater than 2.50 to 1. Additionally, Viad must maintain a consolidated minimum cash and cash equivalents balance of $50 million. As of ~~June~~September 30, 2011, the fixed-charge coverage and leverage ratios were ~~3.16~~3.08 to 1 and ~~0.25~~0.29 to 1, respectively. The terms of the Credit Facility allow Viad to pay up to $10 million in dividends in the aggregate in any calendar year and also allow the Company to purchase up to $10 million in any calendar year of the Company’s common stock. Significant other covenants include limitations on: investments, additional indebtedness, sales/leases of assets, acquisitions, consolidations or mergers and liens on property. As of ~~June~~September 30, 2011, Viad was in compliance with all covenants.

Capital expenditures for the first ~~six~~nine months of 2011 totaled ~~$12.8~~$17.3 million and primarily related to the purchase of rental inventory, equipment and computer hardware primarily at the Marketing & Events U.S. segment. For the first ~~six~~nine months of 2010, capital expenditures totaled ~~$8.4~~$11.6 million and primarily related to the purchase of rental inventory, equipment and computer hardware primarily at the Marketing & Events U.S. segment and building improvements and equipment at the Travel & Recreation Group.

Page 26

On January 5, 2011, Viad completed the acquisition of Grouse Mountain Lodge for $10.5 million in cash. On June 29, 2011, Viad completed the acquisition of St. Mary for $15.3 million in cash. On September 16, 2011, Viad completed the acquisition of Denali for $15.3 million in cash.

In March 2010, Viad completed the sale of a non-strategic real estate asset for $14.3 million (net of selling costs). The asset was previously held for sale at the Travel & Recreation Group.

~~Page 25~~

Viad has announced its intent to repurchase shares of the Company’s common stock from time to time at prevailing market prices. ~~No shares were repurchased during~~During the ~~first six months~~third quarters of 2011 ~~or 2010.~~and 2010, Viad repurchased 250,760 shares for $4.6 million and 356,300 shares for $6.3 million, respectively. As of ~~June~~September 30, 2011, ~~304,381~~53,621 shares remain available for ~~repurchase. Subsequent to June 30, 2011 and prior to~~repurchase from the ~~filing of this quarterly report, during the period from August 5, 2011 through August 8, 2011, Viad repurchased an additional 28,900 shares for $528,000.~~announced authorization. Additionally, during the first ~~six~~nine months of 2011 and 2010, the Company repurchased 28,627 shares for $679,000 and 28,407 shares for $573,000, respectively, related to tax withholding requirements on share-based awards.

Viad and certain of its subsidiaries are plaintiffs or defendants to various actions, proceedings and pending claims, some of which involve, or may involve, compensatory, punitive or other damages. Litigation is subject to many uncertainties and it is possible that some of the legal actions, proceedings or claims could be decided against Viad. Although the amount of liability as of ~~June~~September 30, 2011 with respect to certain of these matters is not ascertainable, Viad believes that any resulting liability, after taking into consideration amounts already provided for, including insurance coverage, will not have a material impact on Viad’s business, financial position or results of operations.

Viad is subject to various U.S. federal, state and foreign laws and regulations governing the prevention of pollution and the protection of the environment in the jurisdictions in which Viad has or had operations. If the Company has failed to comply with these environmental laws and regulations, civil and criminal penalties could be imposed and Viad could become subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. As is the case with many companies, Viad also faces exposure to actual or potential claims and lawsuits involving environmental matters relating to its past operations. Although it is a party to certain environmental disputes, Viad believes that any resulting liabilities, after taking into consideration amounts already provided for, including insurance coverage, will not have a material effect on the Company’s financial position, results of operations or liquidity. As of ~~June~~September 30, 2011, there was a remaining environmental remediation liability of ~~$6.0~~$5.8 million related to previously sold operations of which ~~$1.1 million~~$936,000 was included in the consolidated balance sheets under the caption “Other current liabilities” and $4.9 million under the caption “Other deferred items and liabilities.”

Off-Balance Sheet Arrangements:

Viad does not have any “off-balance sheet” arrangements with unconsolidated special-purpose or other entities that would materially affect the Company’s financial position, results of operations, liquidity or capital resources. Furthermore, Viad does not have any relationships with special-purpose or other entities that provide off-balance sheet financing; liquidity, market risk or credit risk support; or engage in leasing or other services that expose the Company to liability or risks of loss that are not reflected in Viad’s consolidated financial statements.

Page 27

Critical Accounting Policies and Estimates:

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements. The SEC has defined a company’s most critical accounting policies as those that are most important to the portrayal of a company’s financial position and results of operations, and that require a company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on these criteria, Viad has identified and discussed with its audit committee the following critical accounting policies and estimates pertaining to Viad, and the methodology and disclosures related to those estimates:

Goodwill —Goodwill is not amortized, but tested for impairment at the reporting unit level on an annual basis on October 31 of each year. Goodwill is also tested for impairment between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount. Viad’s reporting units are defined, and goodwill is tested, at either an operating segment level, or at the component level of an operating segment, depending on various factors including the internal reporting structure of the operating segment, the level of integration among components, the sharing of assets among components, and the benefits and likely recoverability of goodwill by the component’s operations.

~~Page 26~~

As of ~~June~~September 30, 2011, Viad had total goodwill of ~~$133.8~~$131.9 million consisting of ~~$85.8~~$84.7 million related to the Marketing & Events Group and ~~$48.0~~$47.2 million related to the Travel & Recreation Group. Within the Marketing & Events Group, goodwill of $62.7 million relates to the Marketing & Events U.S. segment and ~~$23.1~~$22.0 million relates to the Marketing & Events International segment. For impairment testing purposes, the goodwill related to the Marketing & Events U.S. segment is assigned to and tested at the operating segment level, which represents all domestic operations of GES. Furthermore, the goodwill related to the Marketing & Events International segment is assigned to and tested at the component level within the segment’s geographical operations. As of ~~June~~September 30, 2011, the amount of goodwill assigned to the reporting units in the United Kingdom (Melville) and Canada was ~~$13.7~~$13.3 million and ~~$9.4~~$8.7 million, respectively. Also, as of ~~June~~September 30, 2011, the Brewster, ~~and~~ Glacier Park and Denali operating segments (within the Travel & Recreation Group) had goodwill of ~~$44.1~~$39.8 million, $3.9 million and ~~$3.9~~$3.5 million, ~~(acquired~~respectively. The goodwill related to Glacier Park and Denali was acquired in the first ~~six~~nine months of ~~2011), respectively.~~2011. Brewster, ~~and~~ Glacier Park and Denali are considered reporting units for goodwill impairment testing purposes.

Viad uses a discounted expected future cash flow methodology (income approach) in order to estimate the fair value of its reporting units for purposes of goodwill impairment testing. The estimates and assumptions regarding expected future cash flows, discount rates and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends and historical experience.

The most critical assumptions and estimates in determining the estimated fair value of its reporting units relate to the amounts and timing of expected future cash flows for each reporting unit and the reporting unit cost of capital (discount rate) applied to those cash flows. Furthermore, the assumed reporting unit cost of capital rates (discount rates) are estimated using a build-up method based on the perceived risk associated with the cash flows pertaining to the specific reporting unit. In order to assess the reasonableness of its fair value estimates, the Company performs a reconciliation of the aggregate fair values of its reporting units to Viad’s market capitalization.

As noted above, the estimates and assumptions regarding expected future cash flows, discount rates and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends and historical experience. These estimates, however, have inherent uncertainties and different assumptions could lead to materially different results. As of ~~June~~September 30, 2011, Viad had aggregate goodwill of ~~$133.8~~$131.9 million recorded in the consolidated balance sheets. Furthermore, as a result of the Company’s most recent impairment analysis performed in the fourth quarter of 2010, the excess of the estimated fair values over the carrying values (expressed as a percentage of the carrying amounts) under step one of the impairment test were 80 percent, 69 percent and 69 percent, respectively, for each of the Marketing & Events Group reporting units in the United States, the United Kingdom (Melville) and Canada. For the Brewster reporting unit, the excess of the estimated fair value over the carrying value was 50 percent as of the most recent impairment test. Due to continued uncertainties in the current economic environment, reductions in the Company’s expected future revenue, operating income or cash flow forecasts and projections, or an increase in reporting unit cost of capital, could trigger additional goodwill impairment testing, which may result in impairment losses. Furthermore, management continues to monitor the market capitalization of the Company as ongoing declines in market capitalization could be indicative of possible goodwill impairment.

Income taxes— As of ~~June~~September 30, 2011 and December 31, 2010, Viad had gross deferred tax assets of ~~$63.5~~$64.9 million and $67.1 million, respectively. These deferred tax assets reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences, and the utilization of net operating loss and tax credit carryforwards.

Page 28

Viad uses considerable judgment in forming a conclusion regarding the recoverability of its deferred tax assets. As a result, there are inherent uncertainties regarding the ultimate realization of these assets, which is primarily dependent on Viad’s ability to generate sufficient taxable income in future periods. In light of the Company’s domestic operating losses in 2010 and 2009, and the continued uncertainties in the current economic environment, it is possible that the relative weight of positive and negative evidence regarding the recoverability of Viad’s deferred tax assets may change, which could result in a material increase in the Company’s valuation allowance. If such an increase in the valuation allowance were to occur, it would result in increased income tax expense in the period the assessment was made.

~~Page 27~~

~~Viad exercises judgment in determining its income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain.~~ As of ~~June~~September 30, 2011 and December 31, 2010, Viad did not have any accrued gross liabilities associated with uncertain tax positions for continuing operations. ~~However,~~Additionally, as of ~~June~~September 30, 2011, Viad did not have any accrued interest and penalties related to uncertain tax positions for continuing operations. As of December 31, 2010, Viad had accrued interest and penalties related to uncertain tax positions for continuing operations of ~~$64,000 and $146,000, respectively.~~$146,000.

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 ~~$22.7~~$21.3 million as of ~~June~~September 30, 2011. Of this total, ~~$15.4~~$14.1 million related to workers’ compensation liabilities and the remaining ~~$7.3~~$7.2 million related to general/auto liability claims. Viad has also retained and provided for certain insurance liabilities in conjunction with previously sold businesses totaling ~~$7.3~~$7.1 million as of ~~June~~September 30, 2011, primarily related to workers’ compensation liabilities. Provisions for losses for claims incurred, including estimated claims incurred but not yet reported, are made based on Viad’s historical experience, claims frequency and other factors. A change in the assumptions used could result in an adjustment to recorded liabilities. Viad has purchased insurance for amounts in excess of the self-insured levels, which generally range from $200,000 to $500,000 on a per claim basis. Viad does not maintain a self-insured retention pool fund as claims are paid from current cash resources at the time of settlement. Viad’s net cash payments in connection with these insurance liabilities were ~~$3.4~~$6.0 million and ~~$2.7~~$4.8 million for the first ~~six~~nine months of 2011 and 2010, respectively.

Pension and postretirement benefits— Viad’s pension plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations. The Company presently anticipates contributing $1.7 million to its funded pension plans and $959,000 to its unfunded pension plans in 2011, of which the Company has contributed ~~$524,000~~$1.1 million and ~~$476,000~~$648,000 as of ~~June~~September 30, 2011, respectively.

Viad and certain of its subsidiaries have defined benefit postretirement plans that provide medical and life insurance for certain eligible employees, retirees and dependents. The related postretirement benefit liabilities are recognized over the period that services are provided by employees. In addition, Viad retained the obligations for these benefits for retirees of certain sold businesses. While the plans have no funding requirements, Viad expects to contribute $500,000 to the plans in 2011, of which ~~$71,000~~$52,000 has been contributed as of ~~June~~September 30, 2011.

The assumed health care cost trend rate used in measuring the December 31, 2010 accumulated postretirement benefit obligation was nine and one-half percent, declining one-half percent each year to the ultimate rate of five percent by the year 2019 and remaining at that level thereafter.

A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement benefit obligation as of December 31, 2010 by approximately $1.6 million and the total of service and interest cost components by approximately $124,000. A one-percentage-point decrease in the assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of December 31, 2010 by approximately $1.4 million and the total of service and interest cost components by approximately $104,000.

Page 29

The weighted-average assumptions used to determine the pension and postretirement benefit ~~obligation~~obligations as of December 31, 2010 were as follows:


	Domestic Plans
							Postretirement
	Funded Plans			Unfunded Plans			Benefit Plans			Foreign Plans

Discount rate		5.45	%		5.10	%		5.10	%		5.10	%

The weighted-average assumptions used to determine the 2010 net periodic benefit cost were as follows:


	Domestic Plans
							Postretirement
	Funded Plans			Unfunded Plans			Benefit Plans			Foreign Plans

Discount rate		5.90	%		5.70	%		5.60	%		5.60	%
Expected return on plan assets		6.35	%		N/A			6.10	%		5.75	%

~~Page 28~~

The discount rates used in determining future pension and postretirement benefit obligations are based on rates determined by actuarial analysis and management review, and reflect the estimated rates of return on a high-quality, hypothetical bond portfolio whose cash flows match the timing and amounts of expected benefit payments.

Share-based compensation— The fair values of restricted stock and performance-based restricted stock awards are based on Viad’s stock price on the date of grant. Liability-based awards are recorded at estimated fair value, based on the number of units expected to vest and the level of achievement of predefined performance goals (where applicable) and are remeasured on each balance sheet date based on Viad’s stock price until the time of settlement. Viad uses the Black-Scholes option pricing model for purposes of determining the fair value of each stock option grant for which key assumptions are necessary. These assumptions include Viad’s expected stock price volatility; the expected period of time the stock option will remain outstanding; the expected dividend yield on Viad common stock, and the risk-free interest rate. Changes in the assumptions could result in different estimates of the fair value of stock option grants, and consequently impact Viad’s results of operations.

Impact of Recent Accounting Pronouncements:

For a description of recently issued accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on Viad’s consolidated financial statements, see Note 17 of notes to consolidated financial statements.

Forward-Looking Statements:

As provided by the safe harbor provision under the Private Securities Litigation Reform Act of 1995, Viad cautions readers that, in addition to historical information contained herein, this quarterly report includes certain information, assumptions and discussions that may constitute forward-looking statements. These forward-looking statements are not historical facts, but reflect current estimates, projections, expectations, or trends concerning future growth, operating cash flows, availability of short-term borrowings, consumer demand, new business, investment policies, productivity improvements, ongoing cost reduction efforts, efficiency, competitiveness, legal expenses, tax rates and other tax matters, foreign exchange rates and the realization of restructuring cost savings. Actual results could differ materially from those discussed in the forward-looking statements. Viad’s businesses can be affected by a host of risks and uncertainties. Among other things, natural disasters, gains and losses of customers, consumer demand patterns, labor relations, purchasing decisions related to customer demand for exhibition and event services, existing and new competition, industry alliances, consolidation and growth patterns within the industries in which Viad competes, acquisitions, adverse developments in liabilities associated with discontinued operations, and any deterioration in the economy, may individually or in combination impact future results. In addition to factors mentioned elsewhere, economic, competitive, governmental, technological, capital marketplace and other factors, including terrorist activities or war, a pandemic or other health crisis and international conditions, could affect the forward-looking statements in this quarterly report. Additional information concerning business and other risk factors that could cause actual results to materially differ from those in the forward looking statements are discussed in “Risk Factors” in the risk factors sections included in Viad’s 2010 Annual Report.

Page 30


Item 3.		Quantitative and Qualitative Disclosures About Market Risk.

Viad’s market risk exposures relate to fluctuations in foreign exchange rates, interest rates and certain commodity prices. Foreign exchange risk is the risk that fluctuating exchange rates will adversely affect Viad’s financial condition or results of operations. Interest rate risk is the risk that changing interest rates will adversely affect the earnings of Viad. Commodity risk is the risk that changing prices will adversely affect results of operations.

Viad conducts its foreign operations primarily in Canada and the United Kingdom and to a lesser extent in certain other countries. The functional currency of Viad’s foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, Viad translates the assets and liabilities of its foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of accumulated other comprehensive income in Viad’s consolidated balance sheets. As a result, significant fluctuations in foreign exchange rates relative to the U.S. dollar may result in material changes to Viad’s net equity position reported in its consolidated balance sheets. Viad does not currently hedge its equity risk arising from the translation of foreign denominated assets and liabilities. Viad had cumulative unrealized foreign currency translation gains recorded in equity of ~~$44.6~~$31.5 million and $39.0 million as of ~~June~~September 30, 2011 and December 31, 2010, respectively. During the three and ~~six~~nine months ended ~~June~~September 30, 2011, unrealized foreign currency translation ~~gains~~losses of ~~$2.1~~$13.1 million and ~~$5.6~~$7.5 million, respectively, were recorded in other comprehensive income.

~~Page 29~~

In addition, for purposes of consolidation, the revenues, expenses, gains and losses related to Viad’s foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period. As a result, Viad’s consolidated results of operations are exposed to fluctuations in foreign exchange rates as the operating results of its foreign operations, when translated, may vary from period-to-period, even when the functional currency amounts have not changed. Such fluctuations may adversely impact overall expected profitability and historical period-to-period comparisons. Viad does not currently hedge its net earnings exposure arising from the translation of its foreign operating results. As noted above, Viad primarily conducts its foreign operations in Canada and the United Kingdom.

The following table summarizes the effect of foreign exchange rate variances on segment operating income from Viad’s Canadian and United Kingdom operations for the three months ended ~~June~~September 30:


							Weighted-Average				Effect of Rate
	Weighted-Average				Effect of Rate		Exchange Rates				Variance
	Exchange Rates				Variance		2011		2010		(thousands)
	2011		2010		(thousands)
Canadian Operations:
Marketing & Events Group	$	1.05	$	0.97	$	102	$	1.09	$	0.96	$	(175	)
Travel & Recreation Group	$	1.04	$	0.95	$	377	$	1.03	$	0.96	$	1,161

United Kingdom Operations:
Marketing & Events Group	$	1.64	$	1.50	$	467	$	1.71	$	1.65	$	(170	)

The following table summarizes the effect of foreign exchange rate variances on segment operating income from Viad’s Canadian and United Kingdom operations for the ~~six~~nine months ended ~~June~~September 30:


							Weighted-Average				Effect of Rate
	Weighted Average				Effect of Rate		Exchange Rates				Variance
	Exchange Rates				Variance		2011		2010		(thousands)
	2011		2010		(thousands)
Canadian Operations:
Marketing & Events Group	$	1.06	$	0.97	$	125	$	1.02	$	0.99	$	(49	)
Travel & Recreation Group	$	1.09	$	0.95	$	193	$	1.03	$	0.95	$	1,354

United Kingdom Operations:
Marketing & Events Group	$	1.63	$	1.51	$	621	$	1.61	$	1.51	$	451

Page 31

As the Canadian operations generated aggregate operating income for the ~~second~~third quarter of 2011, Viad’s segment operating income has been favorably impacted by ~~$479,000~~$986,000 from the strengthening of the Canadian dollar relative to the U.S. ~~dollar.~~dollar compared to 2010. As the United Kingdom operations generated an aggregate operating ~~income~~loss in the ~~second~~third quarter of 2011, Viad’s segment operating income has been ~~favorably~~unfavorably impacted by ~~$467,000~~$170,000 from the strengthening of the British pound relative to the U.S. ~~dollar.~~dollar compared to 2010. As the Canadian operations generated aggregate operating income for the first ~~six~~nine months of 2011, Viad’s segment operating income has been favorably impacted by ~~$318,000~~$1.3 million from the strengthening of the Canadian dollar relative to the U.S. ~~dollar.~~dollar compared to 2010. As the United Kingdom operations generated aggregate operating income in the first ~~six~~nine months of 2011, Viad’s segment operating income has been favorably impacted by ~~$621,000~~$451,000 from the strengthening of the British pound relative to the U.S. ~~dollar.~~dollar compared to 2010.

Viad is exposed to short-term interest rate risk on certain of its debt obligations. Viad currently does not use derivative financial instruments to hedge cash flows for such obligations. On April 28, 2011, Viad paid off its outstanding borrowing under the previous credit facility of $4.2 million. As of ~~June~~September 30, 2011, Viad did not have any variable rate debt outstanding under the Credit Facility.


Item 4.		Controls and Procedures.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of Viad, the effectiveness of the design and operation of disclosure controls and procedures has been evaluated as of ~~June~~September 30, 2011, and, based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of ~~June~~September 30, 2011. Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in such reports is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

~~Page 30~~

~~During the second quarter of 2011, there~~There were no changes in the Company’s internal control over financial reporting during the third quarter of 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. In particular, for the Marketing & Events U.S. segment, the Company consolidated its Roselle, Illinois accounting office into the existing accounting operation in Las Vegas, Nevada. The consolidated accounting function continues to utilize the Oracle financial application; however, additional functionality was added to Oracle to accommodate the Marketing & Events U.S. segment’s billing process for a portion of the business. The consolidation of these accounting functions was part of a planned business upgrade and was not made in response to any deficiency in the Company’s internal control over financial reporting.

Page 32

PART II—OTHER INFORMATION


Item 1A.		Risk Factors.

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


Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds.

Set forth below is a table showing the total number of shares of Viad common stock repurchased during the ~~second~~third quarter of 2011 by Viad from certain individuals surrendering previously owned Viad common stock (outstanding shares) 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.Viad.

ISSUER PURCHASES OF EQUITY SECURITIES

Total Number of

Maximum Number (or

Purchased as

Approximate Dollar

Purchased as

Approximate Dollar

Part of Publicly

Value) of Shares that

Part of Publicly

Value) of Shares that

Total Number of

Average Price

Announced

May Yet Be Purchased

Total Number of

Average Price

Announced

May Yet Be Purchased

Paid Per Share

Plans or

Under the Plans or

Paid Per Share

Plans or

Under the Plans or

Period

Purchased (#)

($)

Programs

Programs (1)

Purchased (#)

($)

Programs

Programs⁽¹⁾

May 2011

475

22.09

—

304,381

August 2011

190,440

17.94

190,440

113,941

September��2011

60,320

18.80

60,320

53,621

Total

475

22.09

—

304,381

250,760

18.15

250,760

53,621


⁽¹⁾		Viad has announced its intent to repurchase shares of the Company’s common stock from time to time at prevailing market prices. ~~No shares were repurchased during~~During the ~~second~~third quarter of ~~2011.~~2011, Viad repurchased 250,760 shares for $4.6 million. As of ~~June~~September 30, 2011, ~~304,381~~53,621 shares remain available for ~~repurchase.~~repurchase from the announced authorization. The authorization of the Board of Directors does not have an expiration date.

Page 3133


Item 6.		Exhibits.


Exhibit No. 31.1		Certification of Chief Executive Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

Exhibit No. 31.2		Certification of Chief Financial Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

Exhibit No. 32.1		Certification of Chief Executive Officer of Viad Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

Exhibit No. 32.2		Certification of Chief Financial Officer of Viad Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

Exhibit No. 101.INS		XBRL Instance Document**

Exhibit No. 101.SCH		XBRL Taxonomy Extension Schema Document**

Exhibit No. 101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document**

Exhibit No. 101.LAB		XBRL Taxonomy Extension Label Linkbase Document**

Exhibit No. 101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document**


*		Filed herewith.

**		Furnished herewith. In accordance with Rule 406T of Regulation S-T, the Interactive Data Files in Exhibit 101 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any registration statement or other document filed under Sections 11 or 12 of the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filings, and are not otherwise subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			VIAD CORP ~~(Registrant)~~
			(Registrant)

~~August 9,~~November 8, 2011		By	By:	/s/ G. Michael Latta
(Date)
~~(Date)~~ G. Michael Latta
	~~G. Michael Latta~~
			Chief Accounting Officer — Controller
				(Chief Accounting Officer
				and Authorized Officer)

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