Acquisition of Businesses

9 Months Ended

Sep. 30, 2011

Acquisition of Businesses [Abstract]

Acquisition of Businesses

Note 3. Acquisition of Businesses

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

	(in thousands)
Other current assets	$	43
Property and equipment		11,090
Goodwill		3,482
Other intangible assets		818
Total assets acquired		15,433
Customer deposits		(38	)
Other current liabilities		(90	)
Total liabilities acquired		(128	)
Purchase price	$	15,305

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

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

	(in thousands)
Cash and cash equivalents	$	21
Other current assets		715
Property and equipment		13,058
Goodwill		2,583
Other intangible assets		60
Total assets acquired		16,437
Customer deposits		(684	)
Other current liabilities		(46	)
Other long-term liabilities		(382	)
Total liabilities acquired		(1,112	)
Purchase price	$	15,325

The Company recorded $2.6 million of goodwill in connection with the transaction, which is included in the Travel & Recreation Group. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The entire amount of the goodwill is expected to be deductible for tax purposes over a period of 15 years. The amount assigned to other intangible assets includes $60,000 related to a non-amortized business license. Transaction costs related to the acquisition were insignificant. The results of operations of St. Mary have been included in Viad’s consolidated financial statements from the date of acquisition.

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

	(in thousands)
Cash and cash equivalents	$	9
Other current assets		126
Property and equipment		8,750
Goodwill		1,331
Other intangible assets		400
Total assets acquired		10,616
Customer deposits		(99	)
Other current liabilities		(12	)
Total liabilities acquired		(111	)
Purchase price	$	10,505

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

The following table summarizes the unaudited pro forma results of operations of Viad for the three and nine months ended September 30, 2011 and 2010, assuming that the acquisitions of Denali, St. Mary and Grouse Mountain Lodge had each been completed at the beginning of each period:

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