• Net income attributable to Viad of $1.5 million versus $16.7 million in the first quarter of 2008

• Diluted income per share of $0.07 versus $0.81 in the first quarter of 2008

• Restructuring charges of $2.7 million in 2009 related to the Experiential Marketing Services segment

• Cash and cash equivalents totaled $118.2 million as of March 31, 2009

• Debt was $14.0 million as of March 31, 2009

• Segment operating income of $16.4 million, a decrease of 54.3 percent from the first quarter of 2008

Experiential Marketing Services
• Revenues of $30.4 million, a decrease of 30.7 percent from the first quarter of 2008

• Segment operating loss of $7.3 million, compared to a loss of $4.1 million in the first quarter of 2008

Travel and Recreation Services
• Revenues of $4.9 million, a decrease of 16.5 percent from the first quarter of 2008

• Segment operating loss of $2.4 million, compared to a loss of $3.1 million in the first quarter of 2008

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 a substitute for, other measures of financial performance reported in accordance with GAAP.
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 March 31,
                                              2009                 2008
                                                    (in thousands)
        Adjusted EBITDA                   $       9,189       $        34,026
        Interest expense                           (420 )                (463 )
        Income tax expense                         (901 )             (10,190 )
        Depreciation and amortization            (6,365 )              (6,628 )

        Net income attributable to Viad   $       1,503       $        16,745

The decrease in Adjusted EBITDA of $24.8 million for the first quarter of 2009 compared to the first quarter of 2008 was primarily driven by lower segment operating results at GES and Experiential Marketing Services and the 2009 restructuring charges. See "Results of Operations" below for a discussion of fluctuations.

Results of Operations:
Comparison of First Quarter of 2009 to the First Quarter of 2008 Revenues for the first quarter of 2009 decreased 28.2 percent to $240.9 million from $335.4 million in the first quarter of 2008. Income before income taxes was $2.3 million for the first quarter of 2009 compared to $26.8 million in the first quarter of 2008. Net income attributable to Viad for the first quarter of 2009 was $1.5 million, or $0.07 per diluted share, compared to $16.7 million, or $0.81 per diluted share, in the first quarter of 2008. This decrease was largely the result of a significant reduction in trade show marketing spending, as well as negative show rotation at GES and unfavorable currency translation, which negatively impacted revenues by $31 million and $14.9 million, respectively.
GES. Revenues for GES were $205.6 million for the first quarter of 2009, down 28.0 percent from $285.7 million in the first quarter of 2008. The decrease in revenue resulted primarily from a significant reduction in trade show marketing spending, as well as negative show rotation and unfavorable currency translation, which negatively impacted GES' revenues by $31 million and $11.6 million, respectively. Base same-show revenue declined approximately 20 percent in the first quarter of 2009. Management defines base same-show revenue growth as growth in exhibitions and events that occur in the same quarter and same city every year. Base same-shows represented approximately 52 percent of GES' revenue in the first quarter of 2009.
Segment operating income was $16.4 million in the first quarter of 2009, compared to $35.8 million in the first quarter of 2008. The decrease was primarily due to the decrease in revenue, partially offset by cost-saving measures. In anticipation of revenue pressures, GES began taking actions to reduce overhead costs during early 2008. Through continued efforts in this area, management expects to reduce 2009 full year overhead costs by over $25 million as compared to 2008. Additionally, GES is in the process of implementing changes to its service delivery processes in order to further increase efficiencies, decrease costs and enhance service levels.
The current recessionary environment is negatively impacting the exhibition and event industry, resulting in lower trade show attendance and exhibitor spending. Additionally, the pricing environment remains challenging. The prospects for individual shows tend to be driven by the success of the industry related to those shows. Although GES has a diversified revenue base and long-term contracts for future shows, revenue growth is affected by general economic and industry-specific conditions. In 2009, management expects same-show revenues to decline by approximately 20 percent and annual show rotation to negatively impact revenues by approximately $85 million due to the occurrence of several major, non-annual shows during 2008. Additionally, management expects the stronger U.S. dollar to result in unfavorable currency translation of approximately $27 million in revenue as compared to 2008. Management remains focused on increasing productivity and controlling costs, including the implementation of cost reduction efforts.
GES and Exhibitgroup/Giltspur are subject to multiple collective bargaining agreements that affect labor costs, about one-fourth of which expire each year. Although labor relations between the companies and labor are currently stable, disruptions during future contract negotiations could occur, with the possibility of an adverse impact on the operating results of GES and/or Exhibitgroup/Giltspur.
Experiential Marketing Services. Revenues for Viad's Experiential Marketing Services segment were $30.4 million in the first quarter of 2009, down 30.7 percent from $43.9 million in the first quarter of 2008. Segment operating loss for the first quarter of 2009 was $7.3 million compared to an operating loss of $4.1 million in the first quarter of 2008. The declines were primarily due to client spending on non-annual shows that occurred during the 2008 first quarter and a general reduction in trade show marketing spending.
In response to a challenging exhibit construction market, management is focused on repositioning Exhibitgroup/Giltspur as an experience marketing agency to capture a greater share of clients' marketing budgets by delivering comprehensive, innovative, value-added solutions that enable clients to generate a higher return on their face-to-face marketing investments. Management is also focused on improving the sales pipeline and win rate to drive profitable revenue growth, as well as cost control, productivity enhancements and increased capacity utilization in order to improve profitability in future years.
Revenue growth is affected by general economic and industry-specific conditions and visibility over future revenues continues to be poor. Although the Experiential Marketing Services segment has a diversified revenue base, a portion of the segment's revenue is generated from sales to regional shopping malls and lifestyle centers, including sales of holiday-themed events and experiences and retail merchandising units. As a result of the economic slow-down, management is expecting both shopping center clients and exhibitors to reduce their spending in 2009. Additionally, management expects the stronger U.S. dollar to result in unfavorable currency translation of approximately $11 million in revenue as compared to 2008.

Travel and Recreation Services. Revenues of the travel and recreation services segment were $4.9 million, down 16.5 percent compared to first quarter of 2008 revenues of $5.9 million. Segment operating loss was $2.4 million for the first quarter of 2009, compared to a loss of $3.1 million in the 2008 quarter. As discussed below, results in this segment were impacted by exchange rates during the 2009 first quarter resulting in reductions of approximately $1.2 million and $319,000 in revenues and segment operating loss, respectively, as compared to the first quarter of 2008.
During 2008, approximately 75 percent of revenue and 82 percent of operating income generated in the Travel and Recreation Services segment was derived through its Canadian operations. These operations are largely affected by foreign customer visitation, and, accordingly, increases in the value of the Canadian dollar compared to other currencies could adversely affect customer volumes, and, therefore, revenue and operating income in the Travel and Recreation Services segment.
The operating results related to Viad's Canadian travel and recreation subsidiaries were translated into U.S. dollars at weighted-average exchange rates of 0.80 and 1.00 for the first quarters of 2009 and 2008, respectively. Accordingly, Viad's consolidated first quarter results of operations were impacted by the weakening of the Canadian dollar relative to the U.S. dollar as it relates to the translation of its Canadian operations. Future decreases in the exchange rates may adversely impact overall expected profitability and historical period to period comparisons when operating results are translated into U.S. dollars.
Viad's Travel and Recreations Services segment is affected by consumer discretionary spending on tourism activities. As a result of the global economic slowdown, management expects results in its Travel and Recreation Services segment to be impacted by tourism declines in 2009. Additionally, management expects the stronger U.S. dollar to result in unfavorable currency translation of approximately $8 million in revenue as compared to 2008.
Glacier Park operates the concession portion of its business under concession contracts with the U.S. National Park Service (the "Park Service") for Glacier National Park and with the Canadian Government for Waterton Lakes National Park. Glacier Park's 42-year lease with the Canadian Government expires in 2010 with Glacier Park having an option to renew for two additional terms of 42 years each. Glacier Park's original 25-year concession contract with the Park Service that was to expire on December 31, 2005, has been extended for four one-year periods and now expires on December 31, 2009. The Park Service, in its sole discretion, may continue extending Glacier Park's concession contract in one-year increments. When this contract ultimately expires, Glacier Park will have the opportunity to bid on a new concession contract. If Glacier Park does secure a new contract, possible terms would be for 10, 15 or 20 years. If a new concessionaire is selected by the Park Service, Glacier Park's remaining business would consist of the operations at Waterton Lakes National Park and East Glacier, Montana. In such a circumstance, Glacier Park would be entitled to an amount equal to its "possessory interest," which 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 concessions contract. This value would be based on the reconstruction cost of a new unit of like kind, less physical depreciation, but not to exceed fair market value. Glacier Park generated approximately 22 percent of Travel and Recreation Services' full year 2008 segment operating income.
Corporate Activities. Corporate activities totaled $1.5 million in the first quarter of 2009, compared to $2.4 million in the first quarter of 2008. The decrease was primarily due to lower share-based compensation expense.
Interest Income. Interest income totaled $261,000 in the first quarter of 2009, compared to $1.1 million in the first quarter of 2008. The decrease was primarily due to lower interest rates on invested cash balances.
Restructuring Charges. Viad recorded restructuring charges of $2.7 million related to the rationalization of certain positions in connection with the integration of Becker Group and Exhibitgroup/Giltspur and the consolidation of certain leased office space.
Income Taxes. The effective tax rate in the first quarter of 2009 on income before taxes was 39.6 percent, compared to 38.0 percent in the first quarter of 2008.
Liquidity and Capital Resources:
Cash and cash equivalents were $118.2 million as of March 31, 2009 as compared to $148.0 million as of December 31, 2008, with the decrease primarily due to unfavorable working capital and capital expenditures. Management believes that Viad's existing sources of liquidity will be sufficient to fund operations and capital commitments for at least the next 12 months.
Viad's total debt as of March 31, 2009 was $14.0 million compared to $12.6 million as of December 31, 2008. The debt-to-capital ratio was 0.029 to 1 as of March 31, 2009 compared with 0.026 to 1 as of December 31, 2008. Capital is defined as total debt and capital lease obligations plus total stockholders' equity.

Effective June 15, 2006, Viad amended and restated its $150 million secured revolving credit agreement dated June 30, 2004. The term of the amended and restated revolving credit agreement (the "Credit Facility") is five years (expiring on June 15, 2011) and borrowings are to be used for general corporate purposes (including permitted acquisitions) and to support up to $75 million of letters of credit. The Credit Facility may be increased up to an additional $75 million under certain circumstances. The lenders have a first perfected security interest in all of the personal property of Viad and GES, including 65 percent of the capital stock of top-tier foreign subsidiaries.
Borrowings under the Credit Facility (of which GES is a guarantor) are indexed to the prime rate or the London Interbank Offered Rate ("LIBOR"), plus appropriate spreads tied to Viad's leverage ratio. Commitment fees and letters of credit fees are also tied to Viad's leverage ratio. The fees on the unused portion of the Credit Facility are currently 0.15 percent annually. As of March 31, 2009, Viad had $135.6 million of capacity remaining under its Credit Facility reflecting an outstanding borrowing of $7.9 million and issued letters of credit of $6.5 million. Financial covenants include a fixed-charge coverage ratio of not less than 1.25 to 1, a leverage ratio (defined as total debt to Adjusted EBITDA) of not greater than 2.75 to 1 and a minimum consolidated net worth requirement. Viad's consolidated net worth must not be less than $344.6 million plus 50 percent of positive quarterly consolidated net income attributable to Viad earned in each fiscal quarter beginning with the quarter ended June 30, 2006, plus net cash proceeds from all issuances of capital stock minus the amount of capital stock repurchased. Significant other covenants include limitations on: investments, common stock dividends, stock repurchases, additional indebtedness, sales/leases of assets, acquisitions, consolidations or mergers and liens on property. As of March 31, 2009, Viad was in compliance with all covenants.
As of March 31, 2009, Viad had certain obligations under guarantees to third parties on behalf of its subsidiaries. These guarantees are not subject to liability recognition in the consolidated financial statements and primarily relate to leased facilities and credit or loan arrangements with banks, entered into by Viad's subsidiary operations. The Company would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that Viad would be required to make under all guarantees existing as of March 31, 2009 would be $40.8 million. These guarantees primarily relate to leased facilities and certain equipment expiring through October 2017. There are no recourse provisions that would enable Viad to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements whereby Viad could recover payments.
Capital expenditures for the first quarter of 2009 totaled $10.6 million and primarily related to the purchase of equipment and information systems and related costs at GES and exhibit costs at Becker Group. For the first quarter of 2008, capital expenditures totaled $12.0 million and primarily related to the purchase of equipment and information systems and related costs at GES and new buses at Brewster.
On January 4, 2008, Viad completed the acquisition of Becker Group for $24.3 million in cash and incurred $325,000 of direct acquisition costs for a total purchase price of $24.6 million.
Viad has announced its intent, under authorizations by its Board of Directors, to repurchase up to an aggregate of three million shares of the Company's common stock from time to time at prevailing prices in the open market. No shares were repurchased during the first quarters of 2009 or 2008. The authorizations of the Board of Directors do not have expiration dates and 160,681 shares are available for repurchase as of March 31, 2009. Additionally, during the first quarters of 2009 and 2008, the Company repurchased 57,309 shares for $975,000 and 50,061 shares for $1.6 million, respectively, related to tax withholding requirements on vested share-based awards.
Viad exercises significant judgment in determining its income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain. Accordingly, Viad has recorded significant accrued liabilities associated with uncertain tax positions. The final resolution or settlement of uncertain tax positions could result in future cash payments. During the first quarter of 2009, Viad paid certain foreign income tax reassessments of $4.9 million and received tax refunds of $1.9 million pursuant to a joint settlement agreement with certain Canadian taxing jurisdictions. See "Critical Accounting Policies and Estimates" for further discussion.
Viad and certain of its subsidiaries are plaintiffs or defendants to various actions, proceedings and pending claims, some of which involve, or may involve, compensatory, punitive or other damages. Litigation is subject to many uncertainties and it is possible that some of the legal actions, proceedings or claims could be decided against Viad. Although the amount of liability as of March 31, 2009 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 impact on the Company's financial position, results of operations or liquidity. As of March 31, 2009, there was a remaining environmental remediation liability of $7.0 million related to previously sold operations of which $1.7 million was included in the consolidated balance sheets under the caption "Other current liabilities" and $5.3 million under the caption "Other deferred items and liabilities."
Off-Balance Sheet Arrangements:
Viad does not have any "off-balance sheet" arrangements with unconsolidated special-purpose or other entities that would materially affect the Company's financial position, results of operations, liquidity or capital resources. Furthermore, Viad does not have any relationships with special-purpose or other entities that provide off-balance sheet financing; liquidity, market risk or credit risk support; or engage in leasing or other services that expose the Company to liability or risks of loss that are not reflected in Viad's consolidated financial statements.
Critical Accounting Policies and Estimates:
The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements. The SEC has defined a company's most critical accounting policies as those that are most important to the portrayal of a company's financial position and results of operations, and . . .