SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1994
Commission File Number 001-11015
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THE DIAL CORP (Exact name of registrant as specified in its charter)
Delaware (State or Other Jurisdiction of Incorporation or
Organization)
36-1169950 (I.R.S. Employer Identification No.)
Dial Tower, Phoenix, Arizona (Address of principal executive offices)
85077 (Zip Code)
Registrant's telephone number, including area code: 602-207-4000
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Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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Common Stock, $1.50 par value New York Stock Exchange
Pacific Stock Exchange
$4.75 Preferred Stock (stated New York Stock Exchange
value $100 per share)
Securities registered pursuant to Section 12(g) of the Act: None
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, and (2) has been
subject to such filing requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. /X/
As of March 10, 1995, 92,850,923 shares of Common Stock ($1,50 par
value) were outstanding and the aggregate market value of the common
Stock (based on its closing price per share on such date) held by
nonaffiliates was approximately $2.39 billion.
DOCUMENTS INCORPORATED BY REFERENCE
Documents Where Incorporated
--------- ------------------
A portion of Proxy Statement for
Annual Meeting of Shareholders
to be held May 9, 1995 Part III
<PAGE>
PART I
ITEM 1. BUSINESS.
The Dial Corp ("Dial" or "Corporation"), conducts a consumer products
and services business focused on North American markets producing annual
revenues in excess of $3.5 billion.
Dial's CONSUMER PRODUCTS segment operates in four major categories, as
follows:
SKIN CARE, which manufactures and markets DIAL,
TONE, SPIRIT, PURE & NATURAL and LIQUID DIAL soaps, and
other soap and personal care products;
LAUNDRY, which manufactures and markets PUREX and
TREND dry and liquid detergents, PUREX TOSS 'N SOFT
sheet fabric softeners, PUREX RINSE 'N SOFT and PUREX
STA PUF liquid fabric softeners, and other laundry
products;
HOUSEHOLD, which manufactures and markets RENUZIT
air fresheners, DIAL dish detergents, BRILLO scouring
pads, SNO BOL toilet bowl cleaners, PARSONS and BO-PEEP
ammonia, BRUCE floor care products, CAMEO powdered
cleanser and other household items; and
FOOD, which processes and markets ARMOUR STAR
chili, beef stew, corned beef hash and Vienna sausage,
TREET luncheon meat, LUNCH BUCKET microwaveable meals,
and other shelf-stable canned and packaged foods.
Dial's SERVICES business operates in three principal business segments
through subsidiary corporations of Dial, as follows:
AIRLINE CATERING AND SERVICES, which engages in
airline catering operations, providing in-flight meals
to domestic and international airlines, and provides
airplane fueling and ground handling services;
CONVENTION SERVICES, which provides exhibit design
and construction and exhibition preparation,
installation, electrical, transportation and management
services to major trade shows, manufacturers, museums,
and exhibit halls and other customers; and
TRAVEL AND LEISURE AND PAYMENT SERVICES, which
engages in cruise line and hotel/resort operations,
recreation and travel services, Canadian intercity bus
transportation, and operation of duty-free shops on
cruise ships and at international airports; offers money
orders through a national network of retail agents and
provides official checks and negotiable instrument
clearing services to mid-size bank customers and credit
unions in the United States and Puerto Rico; and
operates restaurants, fast food outlets and contract
foodservice facilities and concessions ranging from
cafeterias in manufacturing plants to corporate
executive dining rooms to the food and beverage
facilities of the Phoenix, Arizona, America West Arena.
Dial subsidiaries operate service or production facilities and maintain
sales and service offices in the United States, Canada and Mexico. The
Corporation also conducts business in certain other foreign countries.
Dial had approximately 200 employees at its corporate center at
December 31, 1994, providing management, financial and accounting, tax,
administrative, legal and other services to its operating units and handling
residual matters pertaining to businesses previously discontinued or sold by
the Corporation. Dial is managed by a Board of Directors comprised of 9
nonemployee directors and one employee director and has an executive
management team consisting of six Dial officers and seven principal
executives of significant operating divisions or companies.
Dial's corporate headquarters and certain Consumer Products division
and subsidiary activities are located in Phoenix, Arizona, in a modern high-
rise building. A portion of the headquarters building is rented to
unaffiliated tenants.
A description of each of the Dial business segments and recent
developments in each follows.
CONSUMER PRODUCTS SEGMENT
CONSUMER PRODUCTS is a leading producer and marketer of skin care,
laundry, household and shelf-stable food products. This segment originated
as the grocery products division of Armour and Company, expanded in recent
years to include PUREX household and laundry products, BORAXO household and
industrial specialty products, BRECK hair care products and RENUZIT air
fresheners and other consumer products. The segment manufactures and
markets a variety of products, including bar and liquid soaps, liquid and
powdered detergents, antiperspirants, hairsprays, shampoos, hair
conditioners, bleaches, fabric softeners, soap pads, air fresheners, floor
care products, household cleaners, fabric sizing, laundry starch products,
borax and industrial specialties products, microwaveable food products, and
canned meat products, and packaged food products.
SKIN CARE
Skin Care products are marketed under a number of brand names,
including DIAL, MOISTURIZING DIAL PLUS, MOUNTAIN FRESH DIAL, TONE, PURE &
NATURAL, SPIRIT and FELS NAPTHA soaps, LIQUID DIAL antibacterial soap,
BORAXO powdered hand soap and DIAL antiperspirant. Skin Care also markets
the BRECK line of hair care products, including hairsprays, shampoos and
hair conditioners. DIAL bar soap is the nation's leading deodorant soap and
LIQUID DIAL soap is the nation's leading antibacterial liquid soap. SPIRIT
bar soap, a three-in-one combination bar that cleans, moisturizes and
provides deodorant protection, is distributed nationally, as is TONE, a
complexion and moisturizing bar with cocoa butter, and many of the
Corporation's other skin care products. In 1994, Skin Care began national
shipments of DIAL For Kids bar and liquid soaps and continued the national
expansion of MOISTURIZING DIAL PLUS soap.
Skin Care also markets hotel amenity products, including personal-size
bar soaps under the DIAL, TONE and PURE & NATURAL labels, and industrial
specialties products, including hand soaps sold under the BORAXO, 20 MULE
TEAM, LURON and LUROSEP trademarks, hand and body cleansers for the medical
market and hand cleaners for the automotive market.
LAUNDRY
Laundry products include brands such as PUREX liquid, powdered and
ultra laundry detergents, TREND and ULTRA TREND dry detergents, TREND liquid
detergent, DUTCH and INSTANT FELS dry detergents, PUREX TOSS 'N SOFT sheet
fabric softeners, RINSE 'N SOFT and STA PUF liquid fabric softeners, MAGIC
sizing and starch, PUREX bleaches, BORATEEM dry bleach, STA-FLO starch, 20
MULE TEAM BORAX laundry additive and other brands.
In 1994, Laundry launched a new product, GEM detergent, and expanded
and restaged several products, including PUREX Heavy Duty Liquid with bleach
alternative, PUREX Free and Clear liquid laundry detergent, ULTRA TREND with
bleach alternative and ULTRA TREND detergent.
HOUSEHOLD
Household products include brands such as RENUZIT air fresheners,
BRILLO soap pads, SNO BOL toilet bowl cleaners, CAMEO powdered cleanser,
PARSONS and BO-PEEP ammonia and BRUCE floor care products.
The RENUZIT air freshener brand was acquired in the second quarter of
1993. RENUZIT, a leading brand in the air freshener category, offers
products for the continuous-action and aerosol segments of the air freshener
market, including RENUZIT Adjustable, RENUZIT Aerosol, RENUZIT ROOMMATE
liquid air fresheners and RENUZIT LONGLAST ELECTRIC air freshener in the
electric subsegment of the air freshener category. RENUZIT LongLast Carpet
& Room Deodorizer, RENUZIT LongLast Mist Home Fragrance Spray and RENUZIT
LongLast InVent car air freshener were introduced in 1994.
During the fourth quarter of 1994, Household introduced a line of DIAL
dish detergents, consisting of DIAL dish powder and gel detergents for use
in automatic dishwashers and a liquid DIAL dish soap which also kills germs
on hands.
FOOD
In the shelf-stable food category, CONSUMER PRODUCTS processes and
markets ARMOUR STAR and TREET canned meats, LUNCH BUCKET microwaveable
meals, APPIAN WAY pizza mix, SUNRISE syrup and CREAM corn starch. ARMOUR
STAR products maintain a strong number two market position in the canned
meats category. ARMOUR STAR Vienna sausage, potted meat and sliced dried
beef lead their respective segments on a national basis, and ARMOUR STAR
canned meats now account for nearly one-fifth of all canned meat sales in
the United States.
During 1994, CONSUMER PRODUCTS introduced two line extensions, Low-Fat
TREET and Turkey Loaf luncheon loaves, to the ARMOUR STAR canned meat line
of products; and a new product, ARMOUR STAR BIG ONES meat sticks, is being
introduced to compete in the meat sticks category.
CUSTOMERS
CONSUMER PRODUCTS sells to thousands of customers, primarily in the
United States, including supermarkets, drug stores, wholesalers, mass
merchandisers, membership club stores and other outlets. These customers
are served by a national sales organization of approximately 370 employees
organized into 6 individual sales regions plus specialized sales operations
which sell to large mass merchandisers, membership club stores, chain drug
stores, vending and military customers.
RAW MATERIALS
Ample sources of raw materials are available with respect to all major
products of the CONSUMER PRODUCTS segment.
COMPETITION
CONSUMER PRODUCTS competes primarily on the basis of price, brand
advertising, customer service, product performance, and product identity and
quality. Its operations must compete with numerous well-established local,
regional and national companies, some of which are very large and act
aggressively in obtaining and defending their products' market shares and
brands. Principal competitors, in one or more categories, are Procter &
Gamble, Colgate-Palmolive, Lever Brothers Co., American Home Food Products,
G. A. Hormel & Co., The Clorox Company, Church & Dwight and S.C. Johnson &
Son, Inc.
SERVICES SEGMENTS
SERVICES is built around several company groups which are leading
competitors in their businesses, including companies engaged in airline
catering (Dobbs International Services), airplane fueling and ground
handling (Aircraft Service International), convention services (GES
Exposition Services, Exhibitgroup), payment services (Travelers Express),
contract foodservices (Restaura), Canadian intercity bus passenger and
package express service (Greyhound Lines of Canada), family cruises (Premier
Cruise Lines), airport and cruise ship duty-free businesses (Greyhound
Leisure Services), and travel services (Brewster Transport, Jetsave, Crystal
Holidays).
AIRLINE CATERING AND SERVICES
Airline catering, and aircraft fueling and other ground-handling
operations are conducted through the Dobbs International Services and
Aircraft Service International groups of companies. Dobbs International,
which has been conducting airline catering operations since 1941, became the
nation's largest domestic in-flight caterer as a result of its 1994
acquisitions from United Airlines of 15 in-flight catering kitchens at 12
domestic airports. Dobbs International is now United's exclusive in-flight
caterer at 12 locations where the kitchens are located. The company also
expanded its presence in the United Kingdom by the acquisition in February
1994 of 3 catering kitchens in England and one in Scotland. At the end of
1994, Dobbs International's in-flight catering operations provided in-flight
meals to more than 60 domestic and international airlines at 48 airports in
the United States and 5 airports in foreign countries. Dobbs International
has been involved in a "Quality Improvement Process" for many years and has
been recognized for its innovations by its customers and suppliers.
The Aircraft Service International group ("ASIG") of companies provides
aircraft ground-handling services such as aircraft fueling, aircraft
cleaning and baggage handling for major domestic and foreign airlines at 30
airports throughout the United States and in Freeport, Bahamas and London,
England. In 1994 ASIG won a 5-year contract to provide into-plane fueling
services to Delta Air Lines at Atlanta's Hartsfield Airport.
Dobbs International and ASIG are focused on meeting the outsourcing
needs of the airline industry, providing a lower-cost alternative to those
airlines which are committed to reduce costs and operate profitably.
CONVENTION SERVICES
Convention services are provided by the Corporation's GES Exposition
and Exhibitgroup companies. GES Exposition, the nation's leading supplier
of convention services, provides decorating, exhibit preparation,
installation, electrical, transportation and management services for
conventions and tradeshows. In early 1994, GES Exposition expanded its
electrical service activities with the purchase of Expo-Tech Electrical &
Plumbing Services, Inc., with operations in Detroit, Philadelphia, Texas,
Florida and the West Coast. GES Exposition, in December 1994 entered into a
long-term agreement to become the official contractor for the Interface
Group, the world's largest independent producer of tradeshows and
conferences, including COMDEX, the largest tradeshow in North America. In
January 1995, GES Exposition acquired 2 Canadian companies, Panex Show
Services Limited and Stampede Display and Convention Services Limited, that
provide tradeshow and exposition services in Canada. During 1993 GES
Exposition acquired United Exposition Services Co., Inc., Andrews, Bartlett
& Associates, Inc., and Gelco Convention Services, Inc., which broadened its
operations in the eastern and southeastern United States, including Chicago,
Cleveland, Orlando, New Orleans, Washington, D.C. and Atlanta. Exhibitgroup
is a leading designer and builder of convention exhibits and displays, with
manufacturing facilities in 7 U.S. cities.
TRAVEL AND LEISURE AND PAYMENT SERVICES
Travel and leisure services are provided by the Premier Cruise Lines,
Greyhound Leisure Services, Jetsave, Crystal Holidays, Greyhound Lines of
Canada and Brewster Transport business units.
Premier Cruise Lines provides three-day and four-day BIG RED BOAT
cruises from Port Canaveral, Florida, to the Bahamas and specializes in
seven-day vacations which combine a cruise with a three-day or four-day
Orlando theme park vacation at Walt Disney World or Universal Studios and
Sea World. Premier operates two cruise ships, the 38,772-ton Star/Ship
Oceanic and the 35,143-ton Star/Ship Atlantic. Cruise destinations offer
various underwater diving and snorkeling attractions, historical tours,
sandy beaches and shopping opportunities. Since April 1994 famous LOONEY
TUNES characters (Bugs Bunny and others) have provided entertainment on
board Premier Cruise Lines' ships, under a licensing agreement with Warner
Bros. In February 1995, Premier Cruise Lines exercised its option to
purchase the 17,042-ton Star/Ship Majestic, which had been used to offer
cruises from ports other than Port Canaveral, and leased it to a European
cruise company under a 4-year bareboat charter agreement.
Greyhound Leisure Services operates duty-free shopping concessions on
49 cruise ships and also operates duty-free shops at the Chicago, Miami and
Fort Lauderdale/Hollywood Florida international airports. Other recreation
and travel services are provided under the Jetsave and Crystal Holidays
names. Jetsave and Crystal Holidays are leading United Kingdom operators of
tour packages and specialty tours throughout Europe, and from Europe to the
United States, Canada and the Bahamas.
Greyhound Lines of Canada Ltd. ("GLOC"), a Canadian publicly traded
company, is a 69%-owned subsidiary which operates the largest intercity bus
transportation system for passengers, charter service and package express in
Canada. Routes connect with those of other intercity bus carriers,
providing interconnecting service to areas of the United States and Canada
not served directly by GLOC. GLOC owns and operates 446 intercity coaches.
Brewster Transport Company, Ltd., a subsidiary of GLOC, operates tour and
charter buses in the Canadian Rockies, engages in travel agency, hotel and
snocoach tour operations and holds a joint venture interest in the Mt.
Norquay ski facility in Banff, Alberta, Canada. Brewster owns and operates
79 intercity coaches, 16 buses, and 13 snocoaches which transport sightseers
on tours of the glaciers of the Columbia Icefield. In July 1994, Brewster
purchased the Cascade Inn, which it had been leasing and operating; the
Cascade Inn is located adjacent to Brewster's Mount Royal Hotel in Banff.
The Travelers Express group of companies engages in the sale of money
orders to the public through approximately 41,000 agent locations in the
United States and Puerto Rico. Travelers Express is the nation's leading
issuer of money orders, issuing over 251 million money orders in 1994.
Travelers Express also provides processing services for approximately 5,000
credit unions and other financial institutions which offer share drafts (the
credit union industry's version of a personal check) or official checks
(used by financial institutions in place of their own bank check or
cashier's check). Republic Money Order Company, a Travelers Express unit,
is a leader in the issuance of money orders through chain, convenience and
supermarket stores and in money order-issuance technology. In January 1995,
Travelers Express acquired an automated bill payment product and related
assets from BUYPASS Corporation, a leading point-of-sale processing company,
and entered into an operating relationship with that company to provide an
electronic processing service for in-person utility bill payment.
The Restaura group of companies' contract foodservice division serves
meals to workers at approximately 200 locations, including employees of
major companies such as General Motors, IBM and Ford, through cafeteria,
executive dining rooms and vending operations. Restaura also acts as the
prime concessionaire for all food and beverage services at the Phoenix,
Arizona, America West Arena and operates 7 historic lodges in and around
Glacier National Park in Montana and Canada.
COMPETITION
SERVICES companies generally compete on the basis of price, quality,
convenience and service, and encounter substantial competition from a large
number of providers of similar services, including numerous well-known
local, regional and national companies, cruise lines, private payment
service companies and the U.S. Postal Service (money orders), many of which
have greater resources than the Corporation. Dobbs International also
competes on the basis of reliability, condition of kitchen facilities and
truck fleet, and on-time record. Caterair International Corporation, Sky
Chefs, Inc./LSG, and Gate Gourmet (a SwissAir unit) are the principal
competitors of Dobbs International. Freeman Decorating Company is the
principal competitor of GES Exposition on a national basis.
GLOC competes primarily on the basis of price and service. Principal
competitors include airlines, private automobiles and other intercity bus
lines.
PATENTS AND TRADEMARKS
United States patents are currently granted for a term of 17 years from
the date of issue. The Dial companies own a number of patents which give
them competitive advantages in the marketplace, including a number of
patents owned by Travelers Express for automated money order dispensing
systems which provide significant marketplace advantage. These patents
cover security, automated reporting and control, and other features which
are important in the issuance of money orders. CONSUMER PRODUCTS also has
the right, pursuant to license agreements, to operate under certain third-
party patents covering specific technologies.
United States trademark registrations are for a term of 10 years,
renewable every 10 years so long as the trademarks are used in the regular
course of trade. The Dial companies maintain a portfolio of trademarks
representing substantial goodwill in the businesses using the marks.
Many trademarks used by CONSUMER PRODUCTS, including DIAL, PURE &
NATURAL, ARMOUR STAR, TONE, TREET, PARSONS, BRUCE, CAMEO, PUREX, DUTCH,
RENUZIT, BRILLO, SNO BOL, BRECK, TREND, PUREX TOSS N' SOFT, STA PUF, FLEECY
WHITE, 20 MULE TEAM, BORAXO, LUNCH BUCKET, and MAGIC, and by SERVICES,
including the DOBBS, PREMIER CRUISE LINES, BIG RED BOAT and TRAVELERS
EXPRESS service marks, have substantial importance and value. Use of the
ARMOUR and ARMOUR STAR trademarks by CONSUMER PRODUCTS is permitted by a
license expiring in 2043 granted by ConAgra, Inc. and use of the 20 MULE
TEAM trademark is permitted by a perpetual license granted by U.S. Borax,
Inc. In addition, in connection with their businesses, certain subsidiaries
within SERVICES use the Greyhound and the Image of the Running Dog marks,
which are owned by the Corporation.
GOVERNMENT REGULATION
Substantially all of the operations of CONSUMER PRODUCTS and many of
the operations of SERVICES are subject to various federal laws and agency
regulation, in particular, the Food, Drug and Cosmetic Act, the Food and
Drug Administration, the Department of Agriculture, the Federal Maritime
Commission, and various state laws and regulatory agencies. In addition,
other subsidiaries of Dial are subject to similar laws and regulations
imposed by foreign jurisdictions. Both rates and routes of GLOC are
regulated by federal and provincial authorities of Canada.
ENVIRONMENTAL
Dial is subject to various environmental laws and regulations of the
United States as well as of the states in whose jurisdictions Dial operates.
As is the case with many companies, Dial faces exposure to actual or
potential claims and lawsuits involving environmental matters. Although
Dial is a party to certain environmental disputes, Dial believes that any
liabilities resulting therefrom, after taking into consideration amounts
already provided for, but exclusive of any potential insurance recovery,
should not have a material adverse effect on Dial's financial position or
results of operations.
EMPLOYEES
EMPLOYMENT AT DECEMBER 31, 1994
EMPLOYEES COVERED BY
APPROXIMATE NUMBER OF COLLECTIVE BARGAINING
SEGMENT EMPLOYEES AGREEMENT
------- --------------------- ---------------------
Consumer Products 4,000 1,900
Airline Catering and
Services 14,600 8,600
Convention Services 2,700 1,200
Travel and Leisure and
Payment Services 7,600 3,400
Dial believes that relations with its employees are satisfactory and
that collective bargaining agreements expiring in 1995 will be renegotiated
in the ordinary course without adverse effect on Dial's operations.
SEASONALITY
The first quarter is normally the slowest quarter of the year for Dial.
Consumption patterns, marketing practices and competition cause CONSUMER
PRODUCTS' revenues and operating income to be highest in the second and
fourth quarters. Due to increased leisure travel during the summer and
year-end holidays, Dial's airline catering, cruise ship and intercity bus
travel operations experience peak activity at these times. Convention
service companies generally experience increased activity during the first
half of the year. As a result of these factors, 1994 quarterly earnings per
share of Dial as a percentage of the full year's earnings were approximately
12% (first quarter), 31% (second quarter), 32% (third quarter), and 24%
(fourth quarter).
RESTRUCTURING MATTERS
On August 5, 1993, Dial completed the initial public offering of of all
of the stock of Motor Coach Industries International, Inc., formerly its
transportation manufacturing and service parts segment. The sale followed
the March 1992 spin-off of all of the stock of GFC Financial Corporation
(now the FINOVA Group, Inc.), a corporation which had comprised
substantially all of the financial services and insurance businesses of
Dial, and was the final step in Dial's restructuring plan to focus its
financial and management resources on its consumer products and services
business.
See Note D of Notes to Consolidated Financial Statements for further
information concerning the 1993 sale of the Corporation's transportation
manufacturing and service parts segment and the 1992 spin-off of GFC
Financial Corporation.
SHELF REGISTRATION
In July 1994, the Corporation filed a shelf registration with the
Securities and Exchange Commission covering $500 million of debt and equity
securities. To date, no securities have been offered under the
registration.
BUSINESS SEGMENTS
Principal business segment information is set forth in Annex A attached
hereto and made a part hereof.
ITEM 2. PROPERTIES.
Dial's modern headquarters building, a 24-story, approximately 484,000
square foot building in Phoenix, Arizona, is owned by a joint venture
between two subsidiaries of Dial. Dial owns a 200,000 square foot facility
in Scottsdale, Arizona, which is used by the CONSUMER PRODUCTS segment to
conduct much of its research, technical, administrative and other
activities.
CONSUMER PRODUCTS operates 13 plants in the United States, 1 plant in
Mexico, and 4 offices in 4 foreign countries. All of the plants are owned;
3 of the offices are leased. Principal manufacturing plants are as follows:
LOCATION SQ. FEET PRODUCTS MANUFACTURED
-------- -------- ---------------------
Aurora, IL 425,000 Bar Soaps
Fort Madison, IA 453,000 Canned Meats, Microwaveable Meals
St. Louis, MO 475,000 Bleach, Ammonia, Fabric Softener, Laundry
Detergents
Bristol, PA 253,700 Dry Detergents and Cleansers
Hazelton, PA 232,000 Liquid Detergents, Ammonia, Scouring
Pads, Fabric Softener
Auburndale, FL 208,000 Bleach, Ammonia, Fabric Softener,
Dishwashing Detergents
Memphis, TN 130,000 Dial Liquid Soap, Shampoos and
Conditioners, Antiperspirants, Hotel
Amenities (shampoos, conditioners and
hand lotions)
AIRLINE CATERING AND SERVICES operates 37 offices (27 of which are also
airplane-fueling locations) and 67 catering kitchens. All of the properties
are in the United States, except for 2 office/airplane-fueling locations and
5 catering kitchens which are located in foreign countries. Twelve of the
catering kitchens are owned; all other properties are leased.
CONVENTION SERVICES operates 31 offices and 32 exhibit construction and
warehouse facilities. All of the properties are in the United States. One
of the offices and one of the warehouses are owned; all other properties are
leased.
TRAVEL AND LEISURE AND PAYMENT SERVICES operates 29 offices, 29
foodservice facilities, 5 retail stores, 161 duty-free shops, 2 cruise
ships, 8 warehouses and 9 hotels/lodges with ancillary foodservice and
recreational facilities, and an icefield tour facility. All of the
properties are in the United States, except for 8 offices, 1 foodservice
facility, the icefield tour facility and 2 hotels, which are located in
foreign countries; approximately 140 duty-free shops are operated in
international waters on board cruise ships. Travel and Leisure and Payment
Services owns 3 hotels and has a partial interest in one hotel for which it
is also the lessee and operator; five of the hotels are operated pursuant to
a concessionaire agreement. One of the cruise ships, 1 warehouse and 3 of
the foodservice facilities are owned; all other properties are leased.
Additionally, Travel and Leisure and Payment Services owns a cruise ship
which is leased to a European cruise company under a 4-year bareboat charter
agreement that expires in February 1999.
GLOC operates 10 terminals and 8 garages in Canada. Five terminals and
7 garages are owned; the other properties are leased. In addition, bus stop
facilities at approximately 580 locations in Canada are provided by
commission agents. Principal properties of GLOC are as follows:
LOCATION SQ. FEET FUNCTION
-------- -------- --------
Calgary, Alberta 179,000 Terminal and Headquarters Office
Edmonton, Alberta 63,000 Terminal
London, Ontario 12,000 Terminal
Vancouver, British
Columbia 23,000 Terminal
Winnipeg, Manitoba 21,000 Terminal
Edmonton, Alberta 23,000 Garage
Winnipeg, Manitoba 39,000 Garage
Toronto, Ontario 46,000 Garage
Vancouver, British
Columbia 16,000 Garage
Calgary, Alberta 135,000 Maintenance and Overhaul Center
Of the property owned by Dial, only the facility in Auburndale,
Florida, is subject to a mortgage, with $3,494,000 outstanding at December
31, 1994.
Management believes that Dial's facilities in the aggregate are
adequate and suitable for their purposes and that capacity is sufficient for
current needs.
ITEM 3. LEGAL PROCEEDINGS.
In 1994, the matter of Transportation Manufacturing Corporation ("TMC")
vs. the Chicago Transit Authority ("CTA"), which had been filed in the
United States District Court for the District of New Mexico, was settled by
Dial and TMC on favorable financial and other terms. The lawsuit arose from
a contract between TMC, a former subsidiary of Dial, and CTA for the
manufacture and delivery of 491 wheelchair-lift transit buses. TMC was
divested by Dial in connection with its sale of MCII in August 1993, but
Dial retained rights to certain damage claims, indemnified MCII against
certain potential costs and damages arising from counterclaims and continued
to direct the litigation pursuant to a Litigation Cooperation Agreement.
The Corporation and certain subsidiaries are parties either as
plaintiffs or defendants to various other actions, proceedings and pending
claims, certain of which are or purport to be class actions. The pending
cases range from claims for additional employment benefits to cases
involving accidents, injuries, product liability or business contract
disputes, certain of which involve claims for compensatory, punitive or
other damages in material amounts. Litigation is subject to many
uncertainties and it is possible that some of the legal actions, proceedings
or claims referred to above could be decided against Dial. Although the
amount of liability at December 31, 1994, with respect to matters where Dial
is defendant is not ascertainable, Dial believes that any resulting
liability should not materially affect Dial's financial position or results
of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.
No matters were submitted to a vote of securityholders during the
fourth quarter of 1994.
OPTIONAL ITEM. EXECUTIVE OFFICERS OF REGISTRANT.
The names, ages and positions of the executive officers of the
Corporation as of March 15, 1995, are listed below:
EXECUTIVE
POSITION
NAME AGE OFFICE HELD SINCE
---- --- ------ ----------
John W. Teets 61 Chairman, President and 1982
Chief Exeutive Officer
and Director and Chairman
of Executive Committee of
Registrant
Frederick G. 61 Vice President and 1977
Emerson Secretary of Registrant
Joan F. Ingalls 46 Vice President-Human 1991
Resources of Registrant
L. Gene Lemon 54 Vice President and 1979
General Counsel of
Registrant
Ronald G. Nelson 53 Vice President-Finance 1994
and Treasurer of
Registrant
Richard C. Stephan 55 Vice President- 1980
Controller of Registrant
William L. Anthony 52 Executive Vice 1987
President-Administration
and Controller, Consumer
Products Group of
Registrant
Robert H. Bohannon 50 President and Chief 1993
Executive Officer of
Travelers Express Company,
Inc., a subsidiary of
Registrant
John E. Greenwell 47 Senior Vice President- 1994
General Manager, Food
Division, Consumer Products
Group of Registrant
Frederick J. 60 President of Dobbs 1985
Martin International Services,
Inc., a subsidiary of
Registrant
Andrew S. Patti 54 President and Chief 1986
Operating Officer of the
Consumer Products Group
of Registrant
Norton D. 60 Chairman and Chief 1983
Rittmaster Executive Officer of GES
Exposition Services, Inc.,
a subsidiary of Registrant
Mark R. Shook 40 Executive Vice 1994
President-General Manager,
Soap and Detergent Division,
Consumer Products Group of
Registrant
Each of the foregoing officers, with the exceptions set forth below, has
served in the same, similar or other executive positions with Dial or its
subsidiaries for more than the past five (5) years.
Ms. Ingalls has served in her current, or a similar, position since
1990, and prior thereto as Executive Director of Compensation and Benefits
of the Registrant.
Prior to July 1994, Mr. Nelson was Vice President-Treasurer of the
Registrant.
Mr. Bohannon was elected as President and Chief Executive Officer of
Travelers Express Company, Inc. in 1993. Prior thereto, he was a senior
officer at Marine Midland Bank of Buffalo, New York.
Prior to May 1994, Mr. Greenwell was Vice President Marketing of the
Food Division in Registrant's Consumer Products Group, and prior to 1992 was
Director of Marketing of the Household and Laundry Division of Registrant's
Consumer Products Group.
Since 1991, Mr. Shook has been an Executive Vice President-General
Manager of one or more divisions in Registrant's Consumer Products Group,
and prior thereto was Vice President and General Manager of the commercial
markets business unit of Registrant's Consumer Products Group.
The term of office of the executive officers is until the next annual
organization meetings of the Boards of Directors of Dial or appropriate
subsidiaries, all of which are scheduled for April or May of this year.
The Directors of Dial are divided into three classes, with the terms
of one class of Directors to expire at each Annual Meeting of Stockholders.
The current term of office of John W. Teets is scheduled to expire at the
1997 Annual Meeting of Stockholders.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The principal market on which the common stock of Dial is traded is
the New York Stock Exchange. The common stock is also listed for trading on
the Pacific Exchange, and admitted for trading on the Midwest, Philadelphia
and Cincinnati Exchanges. The following tables summarize the high and low
market prices as reported on the New York Stock Exchange Composite Tape and
the cash dividends declared for the two years ended December 31, 1994:
Sales Price Range of Common Stock
---------------------------------
Calendar 1994(1) 1993(1)
Quarters High Low High Low
-------- ---- --- ---- ---
First $22.6875 $19.75 $22.25 $19.50
Second 24.00 20.25 21.9375 18.4375
Third 23.75 19.75 20.5625 17.9375
Fourth 23.25 19.25 21.125 18.375
Dividends Declared on Common Stock
----------------------------------
1994(1) 1993(1)
------- -------
February $ .14 $ .14
May .15 .14
August .15 .14
November .15 .14
----- -----
TOTAL $0.59 $0.56
(1) On May 10, 1994, the Corporation's Board of Directors declared a
2-for-1 stock split which was paid on July 1, 1994, to
stockholders of record as of June 1, 1994. All Dial common
stock sales price and dividend information has been restated to
reflect the stock split.
Regular quarterly dividends have been paid on the first business day
of January, April, July and October.
As of March 10, 1995, there were 54,947 holders of record of Dial's
common stock.
ITEM 6. SELECTED FINANCIAL DATA.
Applicable information is included in Annex A.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION.
Applicable information is included in Annex A.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
1. Financial Statements--See Item 14 hereof.
2. Supplementary Data--See Condensed Consolidated Quarterly Results
in Annex A.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information regarding Directors of the Registrant is included in
Dial's Proxy Statement for Annual Meeting of Shareholders to be held on May
9, 1995 ("Proxy Statement"), and is incorporated herein and made a part
hereof. The information regarding executive officers of the Registrant is
found as an Optional Item in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION.
The information is contained in the Proxy Statement and is
incorporated herein and made a part hereof.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information is contained in the Proxy Statement and is
incorporated herein and made a part hereof.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-
K.
(a) The following documents are filed as a part of the report:
FINANCIAL STATEMENTS. The following are included in Annex A:
Independent Auditors' Report and consolidated financial statements
(Balance Sheet, Income, Cash Flows, Common Stock and Other Equity,
and Notes to Financial Statements).
EXHIBITS.
3.A Copy of Restated Certificate of Incorporation of Dial, as
amended through March 3, 1992, filed as Exhibit (3)(A) to Dial's
1991 Form 10-K, is hereby incorporated by reference.
3.B Copy of Bylaws of Dial, as amended through February 21, 1992,
filed as Exhibit (3)(B) to Dial's 1991 Form 10-K, is hereby
incorporated by reference.
4.A Instruments with respect to issues of long-term debt have not
been filed as exhibits to this Annual Report on Form 10-K if the
authorized principal amount of any one of such issues does not
exceed 10% of total assets of the Corporation and its
subsidiaries on a consolidated basis. The Corporation agrees to
furnish a copy of each such instrument to the Securities and
Exchange Commission upon request.
4.B Copy of Amended and Restated Credit Agreement dated as of
December 15, 1993, among Dial, the Banks parties thereto, Bank
of America National Trust and Savings Association as Agent and
Reporting Agent and Citibank, N.A. as Agent and Funding Agent,
filed as Exhibit 4.B to Dial's 1993 Form 10-K, is hereby
incorporated by reference.
4.B1 Copy of First Amendment to Amended and Restated Credit Agreement
dated as of September 23, 1994.*
10.A Copy of Employment Agreement between Dial and John W. Teets
dated April 14, 1987, filed as Exhibit (10)(A) to Dial's 1989
Form 10-K, is hereby incorporated by reference.+
10.B Sample forms of Contingent Agreements relating to funding of
Supplemental Executive Pensions, filed as Exhibit (10)(T) to
Dial's 1989 Form 10-K, is hereby incorporated by reference.+
10.C Copy of Dial's Supplemental Pension Plan, amended and restated
as of January 1, 1987, filed as Exhibit (10)(F) to Dial's 1986
Form 10-K, is hereby incorporated by reference.+
10.C1 Copy of amendment dated February 21, 1991, to Dial's
Supplemental Pension Plan, filed as Exhibit (10)(G)(i) to Dial's
1990 Form 10-K, is hereby incorporated by reference.+
10.D Copy of Dial's Deferred Compensation Plan for Directors, adopted
November 20, 1980, as amended through February 21, 1991, filed
as Exhibit (10)(H) to Dial's 1990 Form 10-K, is hereby
incorporated by reference.+
10.E Copy of The Dial Corp Management Incentive Plan, filed as
Exhibit 10.E to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.F1 Copy of form of Executive Severance Agreement between Dial and
three executive officers, filed as Exhibit (10)(G)(i) to Dial's
1991 Form 10-K, is hereby incorporated by reference.+
10.F2 Copy of forms of The Dial Corp Executive Severance Plans
covering certain executive officers, filed as Exhibit
(10)(G)(ii) to Dial's 1992 Form 10-K, is hereby incorporated by
reference.+
10.G Copy of Travelers Express Company, Inc. Supplemental Pension
Plan, filed as Exhibit (10)(L) to Dial's 1984 Form 10-K, is
hereby incorporated by reference.+
10.H1 Copy of Dial's 1983 Stock Option and Incentive Plan, filed as
Exhibit (28) to Dial's Registration Statement on Form S-8
(Registration No. 33-23713), is hereby incorporated by
reference.+
10.H2 Copy of amendment, effective August 1, 1994, to Dial's 1983
Stock Option and Incentive Plan.*+
10.I1 Copy of The Dial Corp 1992 Stock Incentive Plan, filed as
Exhibit (10)(J) to Dial's 1991 Form 10-K, is hereby incorporated
by reference.+
10.I2 Copy of amendment, effective August 1, 1994, to The Dial Corp
1992 Stock Incentive Plan.*+
10.J Description of Spousal Income Continuation Plan, filed as
Exhibit 10(Q) to Dial's 1985 Form 10-K, is hereby incorporated
by reference.+
10.K Copy of Dial's Director's Retirement Benefit Plan, filed as
Exhibit (10)(R) to Dial's 1988 Form 10-K, is hereby incorporated
by reference.+
10.L Copy of The Dial Corp Performance Unit Incentive Plan, filed as
Exhibit 10.L to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.M Copy of The Dial Corp Supplemental TRIM Plan.*+
10.N Copy of Employment Agreement between GES Exposition Services and
Norton Rittmaster dated May 20, 1982, filed as Exhibit (10)(O)
to Dial's 1992 Form 10-K, is hereby incorporated by reference.+
10.O Copy of GES Exposition Services' Incentive Compensation Plan,
filed as Exhibit (10)(P) to Dial's 1992 Form 10-K, is hereby
incorporated by reference.+
10.P Copy of The Dial Corp Performance-Based Stock Plan, filed as
Exhibit 10.P to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.Q Copy of The Dial Corp Deferred Compensation Plan, filed as
Exhibit 10.Q to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.R Copy of form of The Dial Corp 1983 Stock Option and Incentive
Plan Amended and Restated Restricted Stock Agreements dated
August 12, 1994, between Dial and six executive officers.*+
10.S Copy of form of The Dial Corp 1992 Stock Incentive Plan
Restricted Stock Agreements dated August 12, 1994, between Dial
and six executive officers.*+
11 Statement Re Computation of Per Share Earnings.*
21 List of Subsidiaries of Dial.*
23 Consent of Independent Auditors to the incorporation by
reference into specified registration statements on Form S-3 or
on Form S-8 of their reports contained in or incorporated by
reference into this report.*
24 Power of Attorney signed by directors of Dial.*
27 Financial Data Schedule.*
*Filed herewith.
+Management contract or compensation plan or arrangement.
Note: The 1994 Annual Report to Securityholders will be furnished to the
Commission when, or before, it is sent to securityholders.
(b) REPORTS ON FORM 8-K.
The Corporation filed no reports on Form 8-K during the period for
which this report is filed.
SIGNATURES
Pursuant to the requirements of Section 13 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, in Phoenix, Arizona,
on the 27th day of March, 1995.
THE DIAL CORP
By: /s/ John W. Teets
John W. Teets
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
Principal Executive Officer
Date: March 27, 1995 By: /s/ John W. Teets
John W. Teets
Director; Chairman, President
and Chief Executive Officer
Principal Financial Officer
Date: March 27, 1995 By: /s/ Ronald G. Nelson
Ronald G. Nelson
Vice President-Finance
and Treasurer
Principal Accounting Officer
Date: March 27, 1995 By: /s/ Richard C. Stephan
Richard C. Stephan
Vice President-Controller
Directors
Joe T. Ford
Thomas L. Gossage
Donald E. Guinn
Jess Hay
Judith K. Hofer
Jack F. Reichert
Linda Johnson Rice
Dennis C. Stanfill
A. Thomas Young
Date: March 27, 1995 By: /s/ Richard C. Stephan
Richard C. Stephan
Attorney-in-Fact
ANNEX "A"
THE DIAL CORP
1994 FINANCIAL INFORMATION
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL AND OTHER DATA
Year ended December 31, 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATIONS (000 omitted)
Revenues $ 3,546,847 $ 3,000,342 $ 2,874,088 $ 2,827,849 $ 2,851,535
=========== =========== =========== =========== ===========
Income from continuing
operations (1) $ 140,311 $ 110,273 $ 74,351 $ 25,755 $ 75,418
Income (loss) from
discontinued operations (2) 32,120 (45,125) (83,363) (59,045)
----------- ----------- ----------- ----------- -----------
Income (loss) before
extraordinary charge
and cumulative effect
of change in
accounting principle 140,311 142,393 29,226 (57,608) 16,373
Extraordinary charge for
early retirement of debt (21,908)
Cumulative effect of
change in accounting
principle -- SFAS No. 106 (110,741)
----------- ----------- ----------- ----------- -----------
Net income (loss) $ 140,311 $ 120,485 $ (81,515) $ (57,608) $ 16,373
=========== =========== =========== =========== ===========
INCOME (LOSS) PER
COMMON SHARE (3) (dollars)
Continuing operations (1) $ 1.61 $ 1.28 $ 0.87 $ 0.31 $ 0.94
Discontinued operations (2) 0.38 (0.53) (1.05) (0.75)
----------- ----------- ----------- ----------- -----------
Income (loss) before
extraordinary charge
and cumulative effect
of change in
accounting principle 1.61 1.66 0.34 (0.74) 0.19
Extraordinary charge (0.26)
Cumulative effect of
change in
accounting principle (1.32)
----------- ----------- ----------- ----------- -----------
Net income (loss)
per common share $ 1.61 $ 1.40 $ (0.98) $ (0.74) $ 0.19
=========== =========== =========== =========== ===========
Dividends declared
per common share (3) (4) $ 0.59 $ 0.56 $ 0.60 $ 0.70 $ 0.68
=========== =========== =========== =========== ===========
Average outstanding
common and equivalent
shares(3)(000 omitted) 86,646 85,406 84,026 79,822 79,250
=========== =========== =========== =========== ===========
FINANCIAL POSITION
AT YEAR-END (000 omitted)
Total assets $ 3,780,896 $ 3,281,088 $ 3,156,998 $ 3,493,656 $ 3,417,956
Total debt 745,479 635,892 707,111 550,017 543,540
$4.75 Redeemable
preferred stock 6,590 6,586 6,586 6,610 6,606
Common stock and
other equity (4) 555,093 469,688 390,395 940,721 1,027,382
=========== =========== =========== =========== ===========
PEOPLE
Stockholders of record 55,241 51,300 50,688 56,358 59,623
Employees of continuing
businesses (average) 32,519 25,025 26,765 29,042 32,009
=========== =========== =========== =========== ===========
(1) After deducting restructuring and other charges of $19,800,000 (after-tax) or $0.24 per share in
1992 and $54,871,000 (after-tax) or $0.69 per share in 1991. Also after deducting $9,128,000
(after-tax), or $0.11 per share, in 1992 for increased ongoing expense following adoption of SFAS
No. 106 effective as of January 1, 1992. Years prior to 1992 do not include such expenses.
(2) See Note D of Notes to Consolidated Financial Statements.
(3) Restated to reflect the two-for-one stock split effected July 1,1994 to shareholders of record as of
June 1, 1994.
(4) Dial's quarterly dividend increased from $0.14 to $0.15 with the July 1, 1994 payment. The declines
in dividends declared per common share in 1993 and 1992 and in common stock and other equity in 1992
reflect the spin-off of GFC Financial as discussed further in Note D of Notes to Consolidated
Financial Statements. GFC Financial's initial dividend rate after the spin-off early in 1992
maintained the 1991 annual dividend rate for stockholders who retained their GFC Financial shares
following the spin-off.
/TABLE
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION OF THE DIAL CORP
Results of Operations:
Dial is focused on maintaining a balance between consumer
products and services and in remaining in businesses that are
growing and have high margins and a high return on investment.
Inflation has not materially affected operations in recent years.
Dial sold its Transportation Manufacturing and Service Parts
Group in 1993 and spun-off GFC Financial Corporation ("GFC
Financial") in 1992. The Transportation Manufacturing and Service
Parts Group and GFC Financial are presented as discontinued
operations for all periods. Such dispositions are discussed
further in Note D of Notes to Consolidated Financial Statements.
1994 VS. 1993:
Revenues for 1994 were $3.5 billion compared with $3 billion in
1993.
Net income and income from continuing operations for 1994 were
$140.3 million or $1.61 per share, compared with income from
continuing operations in 1993 of $110.2 million or $1.28 per
share.
Consumer Products. The Consumer Products segment's revenues of
$1.5 billion were up $91.2 million or 6 percent from those of
1993. Operating income of $160 million was up $20.8 million or 15
percent over 1993 amounts. Operating margins improved to 10.6
percent from 1993's 9.8 percent.
Skin Care division's revenues and operating income were down
$29.2 million and $2.5 million, respectively, as sales of bar and
liquid soaps to distributors were down from 1993 levels. However,
Dial's market share for bar soap was up from that of last year,
reflecting continuing high consumer acceptance of Dial products.
Lower raw material costs and marketing expenses partially offset
the effect of the volume declines.
Laundry division's revenues and operating income were up $57
million and $4.2 million compared to 1993 levels, led by strong
volume increases of liquid detergents which more than offset
volume decreases in dry detergents due to changing consumer
preferences. Lower raw material and other production costs
contributed to the operating income improvement.
Household division's revenues and operating income were up $54.5
million and $11.3 million, respectively, from 1993 levels. The
Renuzit product line, acquired in May of 1993, accounted for most
of the improvement. Other household product lines contributed to
the increased operating income with lower costs and expenses,
while ammonia products followed industry trends with lower sales
and operating income.
Food division's revenues and operating income were up $4.2
million and $2.4 million, respectively, from 1993 levels. Higher
revenue and operating income due to increased sales volume of
2most food categories more than offset reductions in the
microwaveable category. Lower raw material and other production
costs contributed to the increase in operating income.
International's revenues were up $4.7 million from 1993's, driven
by higher volume in Mexico, Canada and Germany. A $5.4 million
increase in operating results was due mostly to eliminating
unprofitable operations, plus contributions from the higher
revenue.
Services. For 1994, Dial's principal business segments have been
reclassified to include airplane fueling and ground handling
activities along with airline catering as the Airline Catering
and Services segment, in recognition of recent industry
developments and the fact that all of Dial's airline related
activities are now being jointly managed. The airplane fueling
and ground handling operations were previously part of the Travel
and Leisure and Payment Services segment, which now includes
other foodservice operations, previously classified with airline
catering as the Airline Catering and Other Food Service segment.
Combined Services revenues were $2 billion, up $455.3 million or
29 percent, while operating income of $170.2 million increased
$34.1 million or 25 percent, over 1993 amounts. Revenue and
operating income comparisons continue to be aided by the 1993
acquisitions of convention services businesses and the 1994 phase
in of flight kitchens acquired from United Airlines.
Airline Catering and Services. Revenues of the Airline Catering
and Services segment increased $260.9 million or 52 percent from
1993 to 1994, while operating income increased $20.1 million or
49 percent over the same period. Operating margins of the group
declined slightly to 8.1 percent from 1993's 8.2 percent, as the
newly acquired flight kitchens went through their start-up phase
in 1994. Airline catering revenues and operating income increased
$251.1 million and $18.3 million, respectively, primarily because
of the acquisition and integration of fifteen airline catering
kitchens from United Airlines in the U. S. and four airline
catering kitchens in England and Scotland acquired from a British
airline caterer. These acquisitions added to the airline catering
list of international and major U. S. airports with a large
number of longer domestic and international flights which require
more meal service than average. Revenues and operating income of
the airplane services companies increased $9.8 million and $1.8
million, respectively, due primarily to new contracts.
Convention Services. Convention Services segment revenues for
1994 increased $166.4 million or 47 percent over those of 1993,
while operating income increased $22.8 million or 82 percent.
These increases were due to the inclusion of businesses acquired
during 1993 for the full year of 1994 and the achievement of
planned operating efficiencies for the merged operations, as
indicated by the improvement in operating margins to 9.7 percent
in 1994 from 7.8 percent in 1993.
Travel and Leisure and Payment Services. Revenues of the Travel
and Leisure and Payment Services segment were up $28 million or 4
percent from those of 1993, while operating income was down $8.8
million or 13 percent from that of 1993. Dial's payment services
subsidiary is investing increasing amounts in tax exempt
securities. On a fully taxable equivalent basis, revenues
increased $31.9 million while the operating income decline was
$3.9 million less at $4.9 million. Operating margins, on a fully
taxable equivalent basis, declined to 8.7 percent in 1994 from
9.8 percent in 1993.
Transportation services companies' 1994 revenues and operating
income declined $3.5 million and $580,000, respectively, from
those of 1993, due mostly to the 5.2 percent decline in the
average Canadian-currency exchange rate over the same period. In
Canadian dollars, revenues increased $7.6 million as revenues
from newly purchased routes and higher Courier Express and
sightseeing, charter, and snowfield operations more than offset
decreases in passenger ridership. Passenger ridership continues
to be adversely affected by general economic uncertainties and
low airfares on medium and long haul destinations. Operating
income in Canadian dollars was up slightly from that of 1993.
Duty Free airport and shipboard concession operations achieved
increases of $13.8 million in revenue and $1.5 million in
operating income over 1993 levels, due mostly to new business and
higher passenger volumes, offset partially by the loss of a
contract at Dulles International Airport in the spring of 1994
and the reduction of international flights at two other airports.
Cruise revenues declined $7.6 million in 1994 compared with 1993
levels due to lower Florida tourism and increased competition,
while higher ship leasing costs due to higher interest rates
offset ongoing cost reductions and contributed to the $7.9
million decline in operating results. In February 1995, Dial
exercised its option to purchase the previously leased Star/Ship
Majestic and commenced a four-year charter arrangement to lease
the ship to a European operator, returning Premier Cruise Lines
to a two ship operation sailing from Port Canaveral to the
Bahamas.
The contract food service group's 1994 revenues increased $13.4
million due to increased production at auto manufacturing plants
and new business, offset somewhat by loss of revenue from the
closing of marginal locations. Excluding a $5 million one-time
gain from the curtailment of a postretirement benefit plan in
1993, operating income was up $700,000 from 1993 levels.
On a fully taxable equivalent basis, payment services' 1994
revenues were up $5.1 million from those of 1993, due to higher
interest income from higher funds on deposit and higher dispenser
fee and service charge revenue, offset somewhat by cancellation
of certain money order agents who presented undue credit risks.
Lower operating expenses also contributed to the increase in
operating income of $4.1 million on a fully taxable equivalent
basis.
Unallocated Corporate Expense and Other Items, Net. During the
fourth quarter of 1994, Dial reclassified expenses related to
certain interest rate swap agreements to interest expense from
unallocated corporate expense and other items, net. As a result,
interest expense was increased and unallocated corporate expense
was reduced by $5,983,000 and $7,327,000 for 1994 and 1993,
respectively. Unallocated corporate expense and other items, net,
increased $1.2 million or 3 percent from that of 1993.
Interest Expense. Interest expense in 1994, after giving effect
to the reclassification described above, was $3.9 million higher
than in 1993. Higher average debt levels related to expenditures
for acquisitions in the consumer products, airline catering and
convention services businesses and the effects of higher floating
interest rates, adjusted by the impact of interest rate swap
agreements as discussed in Note I of Notes to Consolidated
Financial Statements, combined to more than offset the reduction
resulting from the prepayment of high-coupon, fixed-rate debt
during the third quarter of 1993.
Income Taxes. The 1994 effective tax rate declined by 1.6
percentage points to 36.7 percent from last year's 38.3 percent
(excluding from 1993 the $4.4 million, or $0.05 per share,
favorable impact on deferred tax assets at January 1, 1993, from
accounting for the effects of a one percent increase in the U. S.
corporate income tax rate under the Omnibus Budget Reconciliation
Act of 1993, which was signed into law on August 10, 1993). This
reduction in the effective tax rate results primarily from the
increased use of tax-exempt investments by Dial's payment
services subsidiary.
1993 vs. 1992:
Revenues for 1993 were $3 billion compared with $2.9 billion in
1992.
Income from continuing operations was $110.3 million in 1993, or
$1.28 per share. Before restructuring and other charges, income
from continuing operations in 1992 was $94.2 million, or $1.11
per share. After restructuring and other charges of $19.8
million, or $0.24 per share, Dial had income from continuing
operations of $74.4 million, or $0.87 per share, in 1992.
Consumer Products. The Consumer Products segment's revenues were
up $144.7 million, or 11 percent from those in 1992. Operating
income was up $20.6 million, or 17 percent over 1992 amounts.
Operating margins improved to 9.8 percent from 9.3 percent in
1992.
Skin Care division's revenues declined $700,000 due primarily to
a decline in the sales of Breck hair care products. Offsetting
this decline were strong showings by all other personal care
products, especially the Dial label products. Skin Care
division's operating income increased by $6.4 million due
primarily to the increase in Dial product revenues and reduced
manufacturing costs. The Breck decline was substantially offset
by reduced marketing costs.
Laundry division's revenues increased $63.3 million from 1992,
led by strong performances in liquid detergents and liquid fabric
softeners. The addition of Rinse 'n Soft as a new product in the
liquid fabric softener category contributed to the favorable
comparison between periods. Operating income increased $5.0
million over 1992 amounts, reflecting higher revenue and improved
margins. Margins increased as a result of reduced marketing
expenses associated with a modified everyday low pricing
strategy.
The Household division's revenues and operating income increased
$66.7 million and $5.8 million, respectively, from those of 1992.
The acquisition of Renuzit during the 1993 second quarter
contributed a substantial portion of the increase.
Food division's revenues increased $11.6 million from those of
1992 due to increases in the canned meat line offset in part by a
decline in microwaveable product revenue. Operating income
increased by $2.3 million primarily due to the favorable sales
mix, the pricing of canned meats and reductions in manufacturing
costs of microwaveable products.
International revenues and operating results improved $3.8
million and $1.1 million, respectively, from those of 1992.
Services. Excluding certain airport concession operations which
were sold in September 1992, and excluding the effects of $30
million of restructuring charges in 1992, combined 1993 Services
revenues and operating income increased $109.6 million, or 8
percent, and $11.3 million, or 9 percent, respectively.
Airline Catering and Services. Revenues of the Airline Catering
and Services segment declined $25.1 million from those of 1992,
while operating income increased $600,000. Operating margins were
8.2 percent, up from 7.7 percent in 1992. Airline catering
revenues decreased $21.4 million from those of 1992 due primarily
to service cutbacks by major airlines and the effects of the air
fare discounts which had boosted 1992 volume; however, operating
income was up $600,000 due to stringent cost controls. Revenues
for airplane fueling and other ground handling services declined
$3.7 million due primarily to lower foreign exchange rates.
Convention Services. Convention Services segment revenues and
operating income increased $117.6 million and $7.6 million,
respectively, from those in 1992. Growth in existing business and
the inclusion of operations of United Exposition Service Co.,
Inc. and Andrews, Bartlett and Associates, Incorporated, which
were acquired during the second and fourth quarters,
respectively, contributed to the increases. Operating margins
were 7.8 percent in 1993, down from 8.5 percent in 1992 as the
merged operations had not reached full efficiency.
Travel and Leisure and Payment Services. Revenues for the
Travel and Leisure and Payment Services segment declined $111
million, and, excluding the effects of $30 million of
restructuring charges in 1992, operating income declined $6.2
million from 1992 results. On a fully taxable equivalent basis,
revenues declined $108 million and the operating income decline
was $3 million less at $3.2 million, also excluding the effects
of 1992's restructuring charges. Operating margins calculated on
a fully taxable equivalent basis were 9.8 percent in 1993, up
from 8.9 percent in 1992. The sale, in late September 1992, of
most of Dial's food and merchandise airport terminal concession
operations resulted in declines in revenues and operating income
of $113.9 million and $6.8 million, respectively, from those in
1992, more than accounting for the segment declines on a fully
taxable equivalent basis.
Revenues and operating income of the transportation services
companies increased $5.5 million and $2.9 million, respectively,
from those of 1992. Continued emphasis on cost control programs,
the acquisition of a small transportation services company in
late 1992 and a gradually recovering Canadian economy contributed
to the improved operating results.
Duty Free and shipboard concession revenues were up $34.5 million
due primarily to new business. Operating income increased
$900,000 from that of 1992 despite start-up costs associated with
a major new contract.
Cruise revenues were down $20.4 million and operating results
decreased $8.3 million from those of 1992 due to lower passenger
counts, increased competition, the major dry-dock of the
Star/Ship Oceanic in the 1993 first quarter and the introduction
of a new itinerary for the Star/Ship Majestic during the second
quarter of 1993. Reductions in operating expenses from ongoing
cost reduction programs helped limit the decline in operating
results.
Travel tour service revenues and operating income decreased $5
million and $3.9 million, respectively, due to lower results from
the U.K. tour operation which is suffering from a slowly
recovering economy. In addition, passenger volume to Florida for
1993 was down 30 percent from the volume in 1992 due to publicity
surrounding violence against foreign visitors.
The contract food service companies' revenues were down $4.8
million, due primarily to closing marginal locations in 1992.
Operating income increased $5.5 million from 1992's results, due
primarily to a $5 million one-time gain from the curtailment of a
postretirement benefit plan in 1993.
Payment services' revenues decreased $3.9 million on a fully
taxable equivalent basis, due primarily to reduced money order
revenues from terminating unprofitable agents and to lower
investment income due to lower market interest rates. On a fully
taxable equivalent basis, operating income was $5.7 million ahead
of 1992's results due primarily to the termination of
unprofitable business even though investment income was lower as
stated above.
Unallocated Corporate Expense and Other Items, Net. During the
fourth quarter of 1994, Dial reclassified expenses related to
certain interest rate swap agreements to interest expense from
unallocated corporate expense and other items, net. As a result,
interest expense was increased and unallocated corporate expense
was reduced by $7,327,000 and $7,321,000 for 1993 and 1992,
respectively. Unallocated corporate expense and other items, net,
increased $6.5 million from that in 1992, due primarily to the
expiration in early 1993 of subleases of buses and related
amortization of deferred intercompany and sale-leaseback profit.
Interest Expense. Interest expense was down $6.1 million from
that in 1992, due primarily to lower floating interest rates on
short-term borrowings and the prepayment of certain high-coupon,
fixed-rate debt at the end of the third quarter of 1993.
Income Taxes. The provision for income taxes for 1993 includes
the $4.4 million, or $0.05 per share, favorable impact on
deferred tax assets at January 1, 1993, from accounting for the
effects of a one percent increase in the U. S. corporate income
tax rate previously discussed, offset partly by the added 1993
expense of approximately $1.3 million, or $0.02 per share, from
the U.S. rate increase.
LIQUIDITY AND CAPITAL RESOURCES:
Dial's total debt at December 31, 1994 increased to $745 million
from $636 million at December 31, 1993 due to borrowing for
acquisitions as mentioned herein. The debt to capital ratio was
0.56 to 1 and 0.55 to 1 at December 31, 1994 and December 31,
1993, respectively. Capital is defined as total debt plus
minority interests, preferred stock and common stock and other
equity.
In July 1994, a Shelf Registration filed with the Securities and
Exchange Commission became effective. Under the Shelf
Registration, Dial can issue up to an aggregate $500 million of
debt and equity securities. No debt has been issued under the
program and there is no intention to issue any equity securities
at the present time. The filing increases Dial's future financing
options.
During 1993, Dial filed a $300 million Senior Debt Securities
Shelf Registration with the Securities and Exchange Commission
under which Dial was able to issue senior notes for various
amounts and at various rates and maturities. During 1993, Dial
issued $230 million of debt under the program with maturities of
five to eleven years. In early 1994, Dial issued the remaining
$70 million of debt under the senior note program with maturities
of six to fifteen years.
During the third quarter of 1993, Dial utilized the proceeds from
the sale of its Transportation Manufacturing and Service Parts
segment to repurchase approximately 2,000,000 shares of common
stock on the open market and to reduce outstanding debt,
including prepaying $187 million principal amount of long-term,
fixed-rate debt having a weighted average interest rate of 10%.
These prepayments resulted in an extraordinary charge for early
extinguishment of debt of $21.9 million (net of tax benefit of
$11.8 million).
As discussed further in Note B of Notes to Consolidated Financial
Statements, during 1994 Dial completed the acquisition of the
United Airlines catering kitchens and acquired several small
companies. The combined purchase price for all 1994 acquisitions
was $152 million. Property and equipment and intangibles
increased as a result of these acquisitions which were financed
through cash flow from operations and additional long-term debt.
Dial's payment service operations generate funds from the sale of
money orders and other payment instruments (classified as
"Payment service obligations"). The proceeds of such sales are
invested by Dial's payment services subsidiary, in accordance
with applicable state laws, in highly liquid debt instruments
(classified, along with cash on hand and cash in transit from
agents, as "Funds and agents' receivables restricted for payment
service obligations"), which before consolidating eliminations,
included investment grade commercial paper issued by Dial and
supported along with the rest of Dial's outstanding commercial
paper by a credit commitment under a long-term revolving bank
credit agreement, as described in Note I of Notes to Consolidated
Financial Statements; and in a portfolio of high-quality
investments (more than 98 percent have ratings of A- or higher or
are collateralized by federal agency securities), including
federal, state and municipal obligations, asset-backed securities
and corporate debt securities (classified as "Investments
restricted for payment service obligations"). These investments
are restricted by state regulatory agencies for use by Dial's
payment services subsidiary to satisfy the liability to pay, upon
presentment, the face amount of such payment service obligations,
and accordingly such assets are not available to satisfy working
capital or other financing requirements of Dial. Fluctuations in
the balances of payment service assets and obligations result
from varying levels of sales of money orders and other payment
instruments, the timing of the collections of agents' receivables
and the timing of the presentment of such instruments.
With respect to working capital, in order to minimize the effects
of borrowing costs on earnings, Dial strives to maintain current
assets (principally cash, inventories and receivables) at the
lowest practicable levels while at the same time taking advantage
of the payment terms offered by trade creditors. These efforts
notwithstanding, working capital requirements will fluctuate
significantly from seasonal factors as well as changes in levels
of receivables and inventories caused by numerous business
factors.
Dial satisfies a portion of its working capital and other
financing requirements with short-term borrowings (through
commercial paper, bank note programs and bank lines of credit)
and the sale of receivables. As discussed in Note I of Notes to
Consolidated Financial Statements, short-term borrowings are
supported by a $500 million long-term revolving bank credit
agreement. In addition, Dial's subsidiaries have agreements to
sell $115 million (increased to $140 million in February 1995) of
accounts receivable under which the purchaser has agreed to
invest collected amounts in new purchases, providing a stable
level of purchased accounts. The commitments to purchase accounts
receivable, which were fully utilized at December 31, 1994,
mature in February of each year, but are expected to be extended
annually by mutual agreement. The agreements are currently
extended to February 1996.
As discussed in Note J of Notes to Consolidated Financial
Statements, in September 1992 Dial sold 10,491,800 shares of
treasury stock to The Dial Corp Employee Equity Trust (the
"Trust") at $19.06 per share. This Trust is being used to fund
certain existing employee compensation and benefit plans over the
scheduled 15-year term of the Trust. The Trust acquired the
shares of common stock from Dial for a $200 million promissory
note at the date of sale. The $200 million, representing unearned
employee benefits, was recorded as a deduction from common stock
and other equity, and is being reduced as employee benefits are
funded. At December 31, 1994, a total of 6,898,358 shares
remained in the Trust and are available to fund future benefit
obligations.
Capital spending has been reduced by obtaining, where
appropriate, equipment and other property under operating leases.
Dial's capital asset needs and working capital requirements are
expected to be financed primarily with internally generated
funds. Except as noted herein, cash flows from operations and the
proceeds from the sale of businesses during the past three years
along with proceeds from the exercise of stock options have been
sufficient to finance capital expenditures, the purchase of
businesses and cash dividends to shareholders. Dial expects these
trends to continue with operating cash flows and proceeds from
the sale of Trust shares and other treasury stock generally being
sufficient to finance its business. Should financing requirements
exceed such sources of funds, Dial believes it has adequate
external financing sources available, including Dial's $500
million Shelf Registration, to cover any such shortfall.
As indicated in Note M of Notes to Consolidated Financial
Statements, although Dial has paid the minimum funding required
by applicable regulations, certain pension plans remain
underfunded while others are overfunded. The deficiency in the
underfunded plans is expected to be reduced through the payment
of the minimum funding requirement over a period of several
years. Unfunded pension and other postretirement benefit plans
require payments over extended periods of time. Such payments are
not likely to materially affect Dial's liquidity.
As of December 31, 1994, Dial has recorded U.S. deferred income
tax benefits totaling $169 million, which Dial believes to be
fully realizable in future years. The realization of such
benefits will require average annual taxable income over the next
15 years (the current Federal loss carryforward period) of
approximately $30 million. Dial's average U.S. pretax income,
exclusive of nondeductible goodwill amortization but after
deducting restructuring and other charges, over the past three
years has been approximately $175 million. Furthermore,
approximately $109 million of the deferred income tax benefits
relate to pensions and other postretirement benefits which will
become deductible for income tax purposes as they are paid, which
will occur over many years.
Dial is subject to various environmental laws and regulations of
the United States as well as of the states in whose jurisdictions
Dial operates. As is the case with many companies, Dial faces
exposure to actual or potential claims and lawsuits involving
environmental matters. Dial believes that any liabilities
resulting therefrom, after taking into consideration amounts
already provided for, but exclusive of any potential insurance
recovery, should not have a material adverse effect on Dial's
financial position or results of operations.
BUSINESS OUTLOOK AND RECENT DEVELOPMENTS:
As discussed in Note B of Notes to Consolidated Financial
Statements, in February 1995 Dial purchased the previously leased
Star/Ship Majestic cruise ship and entered into a charter to
lease the ship to a European operator. In addition, Dial has
agreed to execute its option to purchase Dial's other leased
cruise ship in October 1995, when the current lease expires.
Management anticipates financing the acquisitions with debt.
The business outlook holds many uncertainties. Proposed
legislation, health care costs, interest rates, tax law changes,
environmental issues, competitive pressures from within the
marketplace and the unpredictable economic environment, will all
affect the growth and future of Dial. Dial remains aggressive in
its commitment to monitor and reduce costs and expenses,
positioning Dial to continue to produce positive results in the
years ahead.
<PAGE>
MANAGEMENT'S REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING
The management of The Dial Corp has the responsibility for
preparing and assuring the integrity and objectivity of the
accompanying financial statements and other financial information
in this report. The financial statements were developed using
generally accepted accounting principles and appropriate
policies, consistently applied except for the change in 1992 to
comply with new accounting requirements for postretirement
benefits other than pensions as discussed in Note M of Notes to
Consolidated Financial Statements. They reflect, where
applicable, management's best estimates and judgments and include
disclosures and explanations which are relevant to an
understanding of the financial affairs of the Company.
The Company's financial statements have been audited by Deloitte
& Touche LLP, independent auditors elected by the stockholders.
Management has made available to Deloitte & Touche LLP all of the
Company's financial records and related data, and has made
appropriate and complete written and oral representations and
disclosures in connection with the audit.
Management has established and maintains a system of internal
control that it believes provides reasonable assurance as to the
integrity and reliability of the financial statements, the
protection of assets and the prevention and detection of
fraudulent financial reporting. The system of internal control is
believed to provide for appropriate division of responsibilities
and is documented by written policies and procedures that are
utilized by employees involved in the financial reporting
process. Management also recognizes its responsibility for
fostering a strong ethical climate. This responsibility is
characterized and reflected in the Company's Code of Corporate
Conduct, which is communicated to all of the Company's executives
and managers.
The Company also maintains a comprehensive internal auditing
function which independently monitors compliance and assesses the
effectiveness of the internal controls and recommends potential
improvements thereto. In addition, as part of their audit of the
Company's financial statements, the independent auditors review
and evaluate selected internal accounting and other controls to
establish a basis for reliance thereon in determining the audit
tests to be applied. There is close coordination of audit
planning and coverage between the Company's internal auditing
function and the independent auditors. Management has considered
the recommendations of both internal auditing and the independent
auditors concerning the Company's system of internal control and
has taken actions believed to be cost-effective in the
circumstances to implement appropriate recommendations and
otherwise enhance controls. Management believes that the
Company's system of internal control accomplishes the objectives
discussed herein.
The Board of Directors oversees the Company's financial reporting
through its Audit Committee, which regularly meets with
management representatives and, jointly and separately, with the
independent auditors and internal auditing management to review
accounting, auditing and financial reporting matters.
/s/ Ermo S. Bartoletti
Ermo S. Bartoletti
Vice President -- Internal Auditing
/s/ Richard C. Stephan
Richard C. Stephan
Vice President -- Controller
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of The Dial Corp:
We have audited the accompanying consolidated balance sheets of
The Dial Corp as of December 31, 1994 and 1993, and the related
consolidated statements of income, common stock and other equity
and of cash flows for each of the three years in the period ended
December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of The
Dial Corp as of December 31, 1994 and 1993, and the results of
its operations and its cash flows for each of the three years in
the period ended December 31, 1994 in conformity with generally
accepted accounting principles.
As discussed in Note M of Notes to Consolidated Financial
Statements, the Company changed its method of accounting for
postretirement benefits other than pensions in 1992.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Phoenix, Arizona
February 24, 1995
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THE DIAL CORP CONSOLIDATED BALANCE SHEET
December 31, (000 omitted,
except share data) 1994 1993
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 33,222 $ 10,659
Receivables, less allowance
of $20,453 and $22,597 231,388 199,996
Inventories 229,273 216,837
Deferred income taxes 42,517 46,373
Other current assets 46,565 43,082
----------- -----------
582,965 516,947
Funds and agents' receivables
restricted for payment service
obligations, after eliminating
$80,000 and $65,000 invested in
Dial commercial paper 661,252 535,657
----------- -----------
Total current assets 1,244,217 1,052,604
Investments restricted for
payment service obligations 710,625 574,094
Property and equipment 813,384 740,724
Other investments and assets 65,448 59,757
Deferred income taxes 126,787 124,096
Intangibles 820,435 729,813
----------- -----------
$ 3,780,896 $ 3,281,088
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank loans $ 931 $ 8,935
Accounts payable 243,982 248,975
Accrued compensation 91,992 69,060
Other current liabilities 258,065 272,430
Current portion of long-term debt 22,830 2,295
----------- -----------
617,800 601,695
Payment service obligations 1,438,960 1,147,063
----------- -----------
Total current liabilities 2,056,760 1,748,758
Long-term debt 721,718 624,662
Pension and other benefits 319,519 295,656
Other deferred items and insurance reserves 96,525 99,834
Commitments and contingent
liabilities (Notes B, J, N, O and P)
Minority interests 24,691 35,904
$4.75 Redeemable preferred stock 6,590 6,586
Common stock and other equity:
Common stock, $1.50 par value,
200,000,000 shares authorized,
97,108,724 and 48,554,362
(pre-split) shares issued 145,663 72,832
Additional capital 308,350 378,814
Retained income 393,233 304,481
Cumulative translation adjustments (20,910) (9,889)
Unearned employee benefits (176,201) (189,940)
Unrealized loss on securities
available for sale, net of tax (21,742)
Common stock in treasury,
at cost, 4,319,624 and
2,536,354 (pre-split) shares (73,300) (86,610)
----------- -----------
Total common stock and other equity 555,093 469,688
----------- -----------
$ 3,780,896 $ 3,281,088
=========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THE DIAL CORP STATEMENT OF CONSOLIDATED INCOME
Year ended December 31, (000 omitted,
except per share data) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES $ 3,546,847 $ 3,000,342 $ 2,874,088
----------- ----------- -----------
Costs and expenses:
Costs of sales and services 3,216,627 2,725,049 2,621,372
Restructuring and
other charges 30,000
Unallocated corporate
expense and other items, net 43,938 42,734 36,198
Interest expense 61,195 57,292 63,370
Minority interests 3,392 3,618 2,814
----------- ----------- -----------
3,325,152 2,828,693 2,753,754
----------- ----------- -----------
Income before income taxes 221,695 171,649 120,334
Income taxes 81,384 61,376 45,983
----------- ----------- -----------
INCOME FROM CONTINUING
OPERATIONS 140,311 110,273 74,351
Income (loss) from
discontinued operations 32,120 (45,125)
----------- ----------- -----------
Income before extraordinary
charge and cumulative
effect of change in
accounting principle 140,311 142,393 29,226
Extraordinary charge for
early retirement of debt,
net of tax benefit of $11,833 (21,908)
Cumulative effect, net of
tax benefit of $63,542,
to January 1, 1992,
of initial application
of SFAS No. 106, "Employers'
Accounting for Postretirement
Benefits Other Than Pensions" (110,741)
----------- ----------- -----------
NET INCOME (LOSS) $ 140,311 $ 120,485 $ (81,515)
=========== =========== ===========
INCOME (LOSS) PER COMMON SHARE:
Continuing operations $ 1.61 $ 1.28 $ 0.87
Discontinued operations 0.38 (0.53)
----------- ----------- -----------
Income before extraordinary
charge and cumulative
effect of change
in accounting principle 1.61 1.66 0.34
Extraordinary charge (0.26)
Cumulative effect to
January 1, 1992,
of initial application
of SFAS No. 106 (1.32)
----------- ----------- -----------
NET INCOME (LOSS) PER
COMMON SHARE $ 1.61 $ 1.40 $ (0.98)
=========== =========== ===========
Dividends declared per
common share $ 0.59 $ 0.56 $ 0.60
=========== =========== ===========
Average outstanding common
and equivalent shares 86,646 85,406 84,026
=========== =========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THE DIAL CORP STATEMENT OF CONSOLIDATED CASH FLOWS
Year ended December 31, (000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS PROVIDED (USED)
BY OPERATING ACTIVITIES:
Net income (loss) $ 140,311 $ 120,485 $ (81,515)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and amortization 109,861 100,160 100,935
Deferred income taxes 19,391 35,943 18,915
Extraordinary charge for
early retirement of debt 21,908
Cumulative effect of change
in accounting principle 110,741
Restructuring and other
charges 30,000
(Income) loss from
discontinued operations (32,120) 45,125
Other noncash items, net 8,402 24,071 15,369
Change in operating assets
and liabilities:
Receivables and
inventories (44,884) (79,349) 14,905
Payment service assets
and obligations, net 218,994 98,791 67,537
Accounts payable and
accrued compensation 14,496 31,825 (22,692)
Other assets and
liabilities, net (39,075) (11,882) (101,591)
----------- ----------- -----------
Net cash provided by
operating activities 427,496 309,832 197,729
----------- ----------- -----------
CASH FLOWS PROVIDED (USED)
BY INVESTING ACTIVITIES:
Capital expenditures (108,592) (114,624) (109,131)
Acquisitions of businesses
and other assets, net of
cash acquired (152,271) (216,787) (7,192)
Proceeds from sales of
securities available for sale 225,523
Proceeds from maturities of
securities available for sale 12,449
Purchases of securities
available for sale (341,716)
Purchases of securities held
to maturity (108,123)
Proceeds from sales and
maturities of investments
restricted for payment
service obligations 626,527 320,425
Purchases of investments
restricted for payment
service obligations (767,035) (441,387)
Proceeds from sale of
shares of MCII 245,700
Proceeds from sale of
businesses and property 8,403 19,442 54,891
Investment in and advances from
discontinued operations, net 35,084 (138,563)
Other, net (190) (288) (347)
----------- ----------- -----------
Net cash used by
investing activities (464,517) (171,981) (321,304)
----------- ----------- -----------
CASH FLOWS PROVIDED (USED)
BY FINANCING ACTIVITIES:
Proceeds from long-term
borrowings 70,000 229,358
Payments on long-term borrowings (2,238) (196,611) (21,557)
Extraordinary charge for
early retirement of debt (21,908)
Net change in short-term
borrowings 42,233 (105,338) 178,255
Dividends on common and
preferred stock (51,401) (48,345) (50,180)
Minority portion of
subsidiary's special dividend (9,761)
Proceeds from sale of
treasury stock 28,546 43,286 57,949
Common stock purchased for
treasury (38,642) (417)
Net change in receivables sold 26,800
Cash payments on interest
rate swaps (17,795) (32,909) (37,027)
----------- ----------- -----------
Net cash provided (used) by
financing activities 59,584 (171,109) 153,823
----------- ----------- -----------
Net increase (decrease) in
cash and cash equivalents 22,563 (33,258) 30,248
Cash and cash equivalents,
beginning of year 10,659 43,917 13,669
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 33,222 $ 10,659 $ 43,917
=========== =========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
THE DIAL CORP STATEMENT OF CONSOLIDATED COMMON STOCK AND OTHER EQUITY
Year ended December 31, (000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCK:
Balance, beginning of year $ 72,832 $ 72,832 $ 72,832
Two-for-one stock split 72,831
----------- ----------- -----------
Balance, end of year $ 145,663 $ 72,832 $ 72,832
=========== =========== ===========
ADDITIONAL CAPITAL:
Balance, beginning of year $ 378,814 $ 390,790 $ 326,724
Two-for-one stock split (72,831)
Treasury shares issued in
connection with employee
benefit plans (1,588) (5,300) 2,294
Net change in unamortized
amount of performance-based
and restricted stock awards (4,456) 2,063 1,195
Treasury shares sold to
Employee Equity Trust and ESOP 39,708
Employee Equity Trust
adjustment to market value 8,635 (8,723) 19,020
Other, net (224) (16) 1,849
----------- ----------- -----------
Balance, end of year $ 308,350 $ 378,814 $ 390,790
=========== =========== ===========
RETAINED INCOME:
Balance, beginning of year $ 304,481 $ 234,655 $ 832,539
Net income (loss) 140,311 120,485 (81,515)
Dividends on common and
preferred stock (51,401) (48,345) (50,180)
Distribution of GFC Financial
to Dial stockholders (467,291)
Other, net (158) (2,314) 1,102
----------- ----------- -----------
Balance, end of year $ 393,233 $ 304,481 $ 234,655
=========== =========== ===========
CUMULATIVE TRANSLATION
ADJUSTMENTS:
Balance, beginning of year $ (9,889) $ (11,341) $ 2,083
Unrealized translation loss (11,021) (279) (20,226)
Distribution of GFC Financial
to Dial stockholders 6,802
Disposition of Transportation
Manufacturing and Service
Parts Group 1,731
----------- ----------- -----------
Balance, end of year $ (20,910) $ (9,889) $ (11,341)
=========== =========== ===========
UNEARNED EMPLOYEE BENEFITS:
Balance, beginning of year $ (189,940) $ (245,155) $ (35,414)
Treasury shares sold to
Employee Equity Trust (200,000)
Employee benefits earned 22,374 46,492 9,279
Adjustment of Employee Equity
Trust to market value (8,635) 8,723 (19,020)
----------- ----------- -----------
Balance, end of year $ (176,201) $ (189,940) $ (245,155)
=========== =========== ===========
UNREALIZED LOSS ON SECURITIES
AVAILABLE FOR SALE:
Unrealized loss on securities
available for sale at
January 1, 1994, due to
adoption of SFAS No. 115 $ (1,369) $ -- $ --
Net increase in unrealized loss (20,373)
----------- ----------- -----------
Balance, end of year $ (21,742) $ -- $ --
=========== =========== ===========
COMMON STOCK IN TREASURY:
Balance, beginning of year $ (86,610) $ (51,386) $ (258,043)
Purchase of shares (38,642) (417)
Shares issued in connection
with employee benefit plans 9,660 4,167 38,078
Shares sold to Employee Equity
Trust and ESOP 170,423
Other, net 3,650 (749) (1,427)
----------- ----------- -----------
Balance, end of year $ (73,300) $ (86,610) $ (51,386)
=========== =========== ===========
COMMON STOCK AND OTHER EQUITY $ 555,093 $ 469,688 $ 390,395
=========== =========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
THE DIAL CORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 1994, 1993 and 1992
A. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation. The
consolidated financial statements of The Dial Corp ("Dial")
include the accounts of Dial and all of its subsidiaries. Dial
sold its Transportation Manufacturing and Service Parts Group in
1993 and spun-off GFC Financial Corporation ("GFC Financial") in
1992. The Transportation Manufacturing and Service Parts Group
and GFC Financial are presented as discontinued operations for
all periods. Such dispositions are discussed further in Note D of
Notes to Consolidated Financial Statements.
The consolidated financial statements are prepared in accordance
with generally accepted accounting principles. Intercompany
accounts and transactions between Dial and its subsidiaries have
been eliminated in consolidation. Certain reclassifications have
been made to the prior years' financial statements to conform to
1994 classifications. Described below are those accounting
policies particularly significant to Dial, including those
selected from acceptable alternatives.
Cash Equivalents. Dial considers all highly liquid investments
with original maturities of three months or less from date of
purchase as cash equivalents.
Inventories. Generally, inventories are stated at the lower of
cost (first-in, first-out and average cost methods) or market.
Property and Equipment. Property and equipment are stated at
cost.
Depreciation is provided principally by use of the straight-line
method at annual rates as follows:
Buildings 2% to 5%
Machinery and other equipment 5% to 33%
Leasehold improvements Lesser of lease term
or useful life
Funds and Agents' Receivables and Investments Restricted for
Payment Service Obligations. Dial's payment service operations
generate funds from the sale of money orders and other payment
instruments (classified as "Payment service obligations"). The
proceeds of such sales are invested by Dial's payment services
subsidiary, in accordance with applicable state laws, in highly
liquid debt instruments, (classified, along with cash on hand and
cash in transit from agents, as "Funds and agents' receivables
restricted for payment service obligations"), which before
consolidating eliminations, included investment grade commercial
paper issued by Dial and supported along with the rest of Dial's
outstanding commercial paper by a credit commitment under a
long-term revolving bank credit agreement, as described in Note I
of Notes to Consolidated Financial Statements; and in a portfolio
of high-quality investments (98 percent have ratings of A- or
higher or are collateralized by federal agency securities),
including federal, state and municipal obligations, asset-backed
securities and corporate debt securities (classified as
"Investments restricted for payment service obligations"). These
investments are restricted by state regulatory agencies for use
by Dial's payment services subsidiary to satisfy the liability to
pay, upon presentment, the face amount of such payment service
obligations and, accordingly such assets are not available to
satisfy working capital or other financing requirements of Dial.
Effective January 1, 1994, Dial adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." SFAS No. 115 requires
the classification of securities at acquisition into one of three
categories: available for sale, held to maturity or trading, with
different reporting requirements for each classification. See
Note F of Notes to Consolidated Financial Statements for a
discussion of the classification and reporting of these
securities at December 31, 1994.
Intangibles. Intangibles are carried at cost less accumulated
amortization. Intangibles which arose prior to November 1, 1970,
are not being amortized. Intangibles arising on or after November
1, 1970 are amortized on the straight-line method over the
estimated lives or periods of expected benefit, but not in excess
of 40 years. Dial evaluates the possible impairment of goodwill
and other intangible assets at each reporting period based on the
undiscounted projected operating income of the related business
unit.
Pension and Other Benefits. Trusteed, noncontributory pension
plans cover substantially all employees. Benefits are based
primarily on final average salary and years of service. Funding
policies provide that payments to pension trusts shall be at
least equal to the minimum funding required by applicable
regulations.
Dial has defined benefit postretirement plans that provide
medical and life insurance for eligible retirees and dependents.
Until 1992, the cost of these benefits was generally expensed as
claims were incurred.
Effective January 1, 1992, Dial adopted the method of accounting
for postretirement benefits other than pensions prescribed by
SFAS No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," which requires recognition of liabilities
for such benefits over the period that services are provided by
employees. Dial elected to record the cumulative effect of
initial application of SFAS No. 106 rather than amortizing such
amount over 20 years as permitted by the standard. See Note M of
Notes to Consolidated Financial Statements for further
information.
Effective January 1, 1994, Dial adopted SFAS No. 112, "Employers'
Accounting for Postemployment Benefits." The adoption of SFAS No.
112 had no material effect on the consolidated financial
statements.
Foreign Currency Translation. In accordance with SFAS No. 52, the
assets and liabilities of Dial's foreign subsidiaries are
translated into U.S. dollars at exchange rates in effect at the
balance sheet date, with resulting unrealized translation gains
and losses accumulated in a separate component of stockholders'
equity. Income and expense items are converted into U.S. dollars
at average rates of exchange prevailing during the year.
Derivatives. Amounts receivable or payable under interest rate
derivatives are recognized as interest income or expense. Gains
and losses from foreign exchange forward contracts which
hedge identifiable foreign currency commitments are deferred and
are recognized in income in the same period as the hedged
transaction.
Stock Split. On May 10, 1994, Dial's Board of Directors declared
a two-for-one stock split which was paid on July 1, 1994, to
stockholders of record as of June 1, 1994. Unless otherwise
noted, all references in the financial statements with regard to
number of shares of common stock and related dividends declared
and income per share amounts have been restated to reflect the
stock split.
Net Income (Loss) Per Common Share. Net income (loss) per common
share is based on net income (loss) after preferred stock
dividend requirements and the weighted average number of common
shares outstanding during each year after giving effect to stock
options considered to be dilutive common stock equivalents. Fully
diluted net income (loss) per common share is not materially
different from primary net income (loss) per common share. The
average outstanding common and equivalent shares does not include
shares held by the Employee Equity Trust (the "Trust"). Shares
held by the Trust are not considered outstanding for net income
(loss) per share calculations until the shares are released from
the Trust.
<PAGE>
<PAGE>
B. ACQUISITIONS OF BUSINESSES AND OTHER ASSETS
During 1994, Dial completed its acquisition of the final eleven
of fifteen airline catering kitchens from United Airlines
("UAL") and also acquired several small services companies. The
first four UAL flight catering kitchens were purchased by Dial
on December 30, 1993. Also in December 1993, Dial acquired the
remaining 49% interest in a joint venture which owns the office
building in Phoenix, Arizona, that serves as Dial's corporate
headquarters complex. During 1993, Dial also purchased a
consumer products line and three convention services companies.
Acquisitions in 1992 were not material.
Net cash paid, assets acquired and debt and other liabilities
assumed in all acquisitions for the years ended December 31 were
as follows:
<TABLE>
<CAPTION>
1994 1993 1992
----------------------------- --------------------------------------- --------
Head-
quarters Conven-
Building tion
UAL Joint Services
Catering Venture Companies
(000 omitted) Kitchens Other Total Interest (1) Other Total Total
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets acquired:
Property and
equipment $ 62,560 $ 10,934 $ 73,494 $ 63,086 $ 17,128 $ 13,722 $ 93,936 $ 9,488
Intangibles,
primarily
goodwill 59,147 16,029 75,176 95,646 77,450 173,096
Other assets 7,019 2,453 9,472 37,773 14,687 52,460
Debt and other
liabilities
assumed (5,871) (5,871) (85,155) (17,550) (102,705) (2,296)
-------- -------- -------- -------- -------- -------- -------- --------
Net cash paid $128,726 $ 23,545 $ 152,271 $ 63,086 $ 65,392 $ 88,309 $ 216,787 $ 7,192
======== ======== ======== ======== ======== ======== ======== ========
(1) During 1994, Convention Services amounts were revised to reflect final purchase accounting
adjustments for 1993 acquisitions. The impact of such adjustments was to increase goodwill, other
assets and liabilities by $30,372,000, $5,928,000 and $36,300,000, respectively. Amounts previously
reported for 1993 have been modified to reflect such adjustments.
</TABLE>
All acquisitions were accounted for as purchases. The purchase
prices, including acquisition costs, were allocated to the net
tangible and intangible assets acquired based on estimated fair
values at the dates of the acquisitions. The difference between
the purchase prices and the related fair values of net assets
acquired represents goodwill which is being amortized on a
straight-line basis over 40 years. The fair value of patents and
other intangible assets included in the acquisitions is amortized
over their estimated useful lives. The results of the acquired
operations have been included in the Statement of Consolidated
Income from the dates of acquisition. The results of operations
of the acquired companies from the beginning of the year to the
dates of acquisition are not material.
In February 1995, Dial exercised its option to purchase a cruise
ship, previously under a lease agreement, for $39,500,000. Dial
has entered into a four-year charter arrangement to lease the
ship to a European operator. In April 1994, Dial notified the
lessor of its intention to purchase Dial's other leased cruise
ship for $71,000,000 when the current lease agreement expires in
October 1995.
<PAGE>
C. RESTRUCTURING AND OTHER CHARGES--CONTINUING OPERATIONS
Dial recorded restructuring and other charges of $30,000,000
($19,800,000 after-tax, or $0.24 per share) in the fourth quarter
of 1992, attributable to the Travel and Leisure and Payment
Services Group primarily to provide for termination of an
unfavorable airport concession contract and related matters, and
to provide for costs to reposition the cruise line to compete
more effectively in the Caribbean market.
<PAGE>
D. DISCONTINUED OPERATIONS AND DISPOSITIONS
On August 12, 1993, Dial sold, through an initial public
offering, 20 million shares of common stock of Motor Coach
Industries International, Inc. ("MCII"), pursuant to an
underwriting agreement dated August 4, 1993. Transportation
Manufacturing Operations, Inc., Dial's Transportation
Manufacturing and Service Parts subsidiary, was transferred to
MCII in connection with the public offering of MCII shares. The
disposition of MCII, the sale of the Canadian transit bus
manufacturing business in June 1993, the sale of certain bus
installment sale receivables in early 1993 and the liquidation,
completed in early 1993, of a trailer manufacturing and transport
services company, concluded the disposal of the Transportation
Manufacturing and Service Parts Group.
At a special meeting on March 3, 1992, shareholders of Dial
approved the spin-off of GFC Financial, which comprised Dial's
commercial lending and mortgage insurance subsidiaries. As a
result of the spin-off, the holders of common stock of Dial
received a Distribution (the "Distribution") of one share of
common stock of GFC Financial for every two shares (pre-split) of
Dial common stock.
In connection with the dispositions, special charges to earnings
were made in 1992 to cover restructuring of certain operations
and other costs while, in 1993, these provisions related
primarily to previously discontinued businesses.
The caption "Income (loss) from discontinued operations" in the
Statement of Consolidated Income for the years ended December 31
includes the following:
<TABLE>
<CAPTION>
(000 omitted) 1993 1992
----------- -----------
<S> <C> <C>
Income (loss) from operations:
Transportation Manufacturing and
Service Parts Group, net of tax
provision (benefit) of $7,685 and
($17,666)(1) $ 10,193 $ (46,364)
GFC Financial, net of tax provision
of $1,798 5,498
Gain on sale of Transportation
Manufacturing and Service Parts Group,
net of tax provision of $42,040 40,151
Cumulative effect, net of tax benefit
of $2,458, to January 1, 1992 of initial
application of SFAS No. 106 (4,259)
Provisions related to previously
discontinued businesses, net of tax
benefit of $7,776 (18,224)
----------- -----------
$ 32,120 $ (45,125)
=========== ===========
(1) After deducting restructuring and other charges of $59,400,000
(after-tax) in 1992.
</TABLE>
In addition to those classified as discontinued operations and
described above, businesses with aggregate net assets of
$48,584,000 were sold in 1992.
<PAGE>
E. INVENTORIES
Inventories at December 31 consisted of the following:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993
----------- -----------
<S> <C> <C>
Raw materials $ 38,250 $ 42,056
Work in process 23,705 13,930
Finished goods and supplies 167,318 160,851
----------- -----------
Inventories $ 229,273 $ 216,837
=========== ===========
</TABLE>
<PAGE>
<PAGE>
F. INVESTMENTS IN DEBT AND EQUITY SECURITIES
Effective January 1, 1994, Dial adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities." SFAS No.
115 requires the classification of securities at acquisition into
one of three categories: available for sale, held to maturity or
trading. Dial has no securities classified in the trading
category. Securities are included in the Consolidated Balance
Sheet under the caption, "Investments restricted for payment
service obligations" except for those securities expected to be
sold or mature within one year which are included under the
caption, "Funds and agents' receivables restricted for payment
service obligations."
Although Dial's investment portfolio exposes Dial to certain
credit risks, Dial believes the high quality of its investments
(more than 98% of the investments at December 31, 1994 have
ratings of A- or higher or are collateralized by federal agency
securities) reduces this risk substantially. Dial regularly
monitors the credit and market risk (the possibility that market
changes may make financial instruments less valuable) and takes
steps to mitigate the likelihood of these exposures resulting in
actual loss.
Securities Available for Sale. Securities that are being held for
indefinite periods of time, including those securities which may
be sold in response to needs for liquidity or changes in interest
rates, are classified as securities available for sale and are
carried at fair value, with the net, after-tax, unrealized
holding gain or loss reported as a separate component of common
stock and other equity, with no effect on current results of
operations. At December 31, 1994, the unrealized loss of
$21,742,000 (net of tax benefit of $13,415,000) was included in
the Consolidated Balance Sheet as a separate component of
stockholders' equity under the caption, "Unrealized loss on
securities available for sale." The increase in the unrealized
loss during 1994 was principally due to increases in interest
rates.
A summary of securities available for sale at December 31, 1994
is as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
(000 omitted) Cost Gains Losses Value
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
U. S. Government
Agencies $ 5,174 $ -- $ 129 $ 5,045
Obligations of states
and political
subdivisions 283,112 278 20,597 262,793
Corporate debt
securities 63,263 6,325 56,938
Mortgage-backed and
other asset-backed
securities 100,630 7,469 93,161
Debt securities
issued by
foreign governments 16,007 915 15,092
Other securities 121 121
---------- ----------- ---------- ----------
Securities available
for sale $ 468,307 $ 278 $ 35,435 $ 433,150
========== =========== ========== ==========
</TABLE>
Maturities of securities available for sale at December 31, 1994
are as follows:
<TABLE>
<CAPTION>
Amortized Fair
(000 omitted) Cost Value
---------- -----------
<S> <C> <C>
Due in:
1996-1999 $ 163,184 $ 149,425
2000-2004 132,567 121,216
2005 and later 172,556 162,509
---------- -----------
$ 468,307 $ 433,150
========== ===========
</TABLE>
Actual maturities may differ from contractual maturities because
the borrowers have the right to call or prepay certain
obligations, sometimes without penalties. Mortgage-backed and
other asset-backed securities not due at a single maturity date
are included in the table above based on average maturity dates.
Gross realized gains and losses on sales were $2,500,000 and
$500,000, respectively, based on the specific identification
method of determining cost.
Securities Held to Maturity. Securities classified as held to
maturity consist of securities that management has the ability
and intent to hold to maturity, are carried at amortized cost,
and are summarized as follows at December 31, 1994:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
(000 omitted) Cost Gains Losses Value
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
U. S. Government
Agencies $ 59,637 $ -- $ 3,750 $ 55,887
Obligations of states
and political
subdivisions 54,545 4,545 50,000
Corporate debt
securities 128,145 12,310 115,835
Other securities 22,534 1,100 21,434
---------- ----------- ---------- ----------
Securities held
to maturity $ 264,861 $ -- $ 21,705 $ 243,156
========== =========== ========== ==========
</TABLE>
Maturities of securities held to maturity at December 31, 1994
are as follows:
<TABLE>
<CAPTION>
Amortized Fair
(000 omitted) Cost Value
---------- -----------
<S> <C> <C>
Due in:
1995 $ 5,193 $ 5,044
1996-1999 129,224 120,558
2000-2004 89,050 79,342
2005 and later 41,394 38,212
---------- -----------
$ 264,861 $ 243,156
========== ===========
</TABLE>
Actual maturities may differ from contractual maturities because
the borrowers have the right to call or prepay certain
obligations, sometimes without penalties. There were no sales or
transfers of securities held to maturity to another category of
securities during the year ended December 31, 1994.
<PAGE>
<PAGE>
G. PROPERTY AND EQUIPMENT
Property and equipment at December 31 consisted of the following:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993
----------- -----------
<S> <C> <C>
Land $ 83,751 $ 76,577
Buildings and leasehold improvements 401,743 333,761
Machinery and other equipment 948,892 897,391
----------- -----------
1,434,386 1,307,729
Less accumulated depreciation 621,002 567,005
----------- -----------
Property and equipment $ 813,384 $ 740,724
=========== ===========
</TABLE>
<PAGE>
H. INTANGIBLES
Intangibles at December 31 consisted of the following:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993
----------- -----------
<S> <C> <C>
Goodwill (1) $ 736,320 $ 633,831
Other intangibles 230,863 223,416
----------- -----------
967,183 857,247
Less accumulated amortization 146,748 127,434
----------- -----------
Intangibles $ 820,435 $ 729,813
=========== ===========
(1) Includes $166,688,000 of goodwill which arose prior to November 1,
1970, and is not being amortized.
</TABLE>
<PAGE>
I. DEBT
Long-term debt at December 31 was as follows:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993
----------- -----------
<S> <C> <C>
Senior debt:(1)
Short-term borrowings:
Commercial paper (net of $80,000 and
$65,000 issued to Dial's payment
services subsidiary), 6.3% and 3.6%
weighted average interest rate
at December 31 $ 94,903 $ 58,666
Promissory notes, 6.4% and 3.8% weighted
average interest rate at December 31 180,000 166,000
Senior notes, 6.1% and 5.8% weighted average
interest rate at December 31, due to 2009 349,454 279,390
Guarantee of ESOP debt, floating
rate indexed to LIBOR, 5.3% and 2.9% at
December 31, due to 2009 30,000 32,000
Real estate mortgages and other obligations,
4.3% and 4.8% weighted average interest
rate at December 31, due to 2014 13,274 13,984
----------- -----------
667,631 550,040
Subordinated debt, 10.5%
debentures, due 2006 76,917 76,917
----------- -----------
744,548 626,957
Less current portion 22,830 2,295
----------- -----------
Long-term debt $ 721,718 $ 624,662
=========== ===========
(1) Rates shown are exclusive of the effects of commitment fees and other
costs of long-term revolving bank credit used to support short-term
borrowings and the guarantee of ESOP debt, and exclusive of the
effects of interest rate swap agreements on certain short-term and
long-term borrowings.
</TABLE>
Interest paid in 1994, 1993 and 1992 was approximately
$47,695,000, $55,807,000 and $59,962,000, respectively.
In July 1994, a Shelf Registration filed with the Securities and
Exchange Commission became effective. Under the Shelf
Registration, Dial can issue up to an aggregate $500,000,000 of
debt and equity securities. No debt has been issued under the
program and there is no intention to issue any equity securities
at the present time. The filing increases Dial's future financing
options.
During 1993, Dial filed a $300,000,000 Senior Debt Securities
Shelf Registration with the Securities and Exchange Commission
under which Dial was able to issue senior notes for various
amounts and at various rates and maturities. During 1993, Dial
issued $230,000,000 of debt under the program with maturities of
five to eleven years with a weighted average interest rate of
6.2%. In early 1994, Dial issued the remaining $70,000,000 of
debt under the senior note program with maturities of six to
fifteen years with a weighted average interest rate of 6.1%.
During the third quarter of 1993, Dial utilized the proceeds from
the sale of MCII to repurchase approximately 2,000,000 shares of
Dial's common stock on the open market and to reduce outstanding
debt, including prepaying $187,250,000 principal amount of
long-term, fixed-rate debt, having a weighted average interest
rate of 10%. These prepayments resulted in an extraordinary
charge (after-tax) of $21,908,000.
As discussed further in Note O of Notes to Consolidated Financial
Statements, Dial has entered into a) interest rate swap
agreements ("pay-fixed swaps") which convert floating interest
rates on existing and anticipated short-term borrowings into
fixed interest rates and b) interest rate swap agreements
("receive-fixed swaps") which convert fixed interest rates on a
portion of the Senior notes and other debt into floating interest
rates. During the fourth quarter of 1994, Dial reclassified
expenses related to certain interest rate swap agreements to
interest expense from unallocated corporate expense and other
items, net. As a result, interest expense was increased and
unallocated corporate expense was reduced by $5,983,000,
$7,327,000 and $7,321,000 for 1994, 1993 and 1992, respectively.
Including this reclassification the net effect of interest rate
swap agreements was to increase interest expense by $2,863,000,
$6,112,000 and $7,321,000 for 1994, 1993 and 1992, respectively.
The weighted average interest rate on total debt, inclusive of
the effect of interest rate swap agreements, was 6.55%, 7.53% and
8.24% for 1994, 1993 and 1992, respectively.
Dial satisfies its short-term borrowing requirements with bank
lines of credit and by the issuance of commercial paper and
promissory notes. Outstanding commercial paper, promissory notes
and the guarantee of ESOP debt are supported by a $500,000,000
credit commitment available under a long-term revolving bank
credit agreement. Borrowings under the agreement were available
at December 31, 1994 on a revolving basis until June 30, 1999.
Annually, at Dial's request and with the participating banks'
consent, the terms of the agreement may be extended for a further
one-year period.
The interest rate applicable to borrowings under the agreement
is, at Dial's option, indexed to the bank prime rate or the
London Interbank Offering Rate ("LIBOR"), plus appropriate
spreads over such indices during the period of the credit
agreement. The agreement also provides for commitment fees. Such
spreads and fees will change moderately should Dial's debt
ratings change.
Dial, in the event that it becomes advisable, intends to exercise
its right under the agreement to borrow for the purpose of
refinancing short-term borrowings; accordingly, short-term
borrowings totaling $274,903,000 and $224,666,000 at December 31,
1994 and 1993, respectively, have been classified as long-term
debt.
<PAGE>
Annual maturities of long-term debt due in the next five years
will approximate $22,830,000 (1995), $32,729,000 (1996),
$2,639,000 (1997), $32,589,000 (1998) and $277,189,000 (1999).
Included in the 1999 amount is $274,903,000 which represents the
maturity of short-term borrowings assuming they had been
refinanced utilizing the revolving credit facility and the term
of the facility was not extended. However, Dial expects the term
of the facility to be extended.
Canadian revolving credit loans are available to a Canadian
Services subsidiary from banks under agreements which provide for
credit of $35,645,000 (stated in U. S. dollar equivalent).
Dial's long-term debt agreements include various restrictive
covenants and require the maintenance of certain defined
financial ratios with which Dial is in compliance.
<PAGE>
J. PREFERRED STOCK AND COMMON STOCK AND OTHER EQUITY
At December 31, 1994, there were 97,108,724 shares of common
stock issued and 92,789,100 shares outstanding. At December 31,
1994, a total of 6,898,358 of the outstanding shares were held by
The Dial Corp Employee Equity Trust.
Dial has 442,352 shares of $4.75 Preferred Stock authorized, of
which 382,352 shares are issued. The holders of the $4.75
Preferred Stock are entitled to a liquidation preference of $100
per share and to annual cumulative sinking fund redemptions of
6,000 shares. Dial presently holds 147,288 shares which will be
applied to this sinking fund requirement; therefore, the 235,064
shares held by others are scheduled to be redeemed in the years
2019 to 2058. In addition, Dial has authorized 5,000,000 and
2,000,000 shares of Preferred Stock and Junior Participating
Preferred Stock, respectively.
Dial has one Preferred Stock Purchase Right ("Right") outstanding
on each outstanding share of its common stock. The Rights contain
provisions to protect stockholders in the event of an unsolicited
attempt to acquire Dial which is not believed by the Board of
Directors to be in the best interest of stockholders. The Rights
are represented by the common share certificates and are not
exercisable or transferable apart from the common stock until
such a situation arises. The Rights may be redeemed by Dial at
$0.05 per Right prior to the time any person or group has
acquired 20% or more of Dial's shares. Dial has reserved
1,000,000 shares of Junior Participating Preferred Stock for
issuance in connection with the Rights.
During 1989, Dial arranged to fund its matching contributions to
employees' 401k plans through a leveraged Employee Stock
Ownership Plan ("ESOP"). All eligible employees of Dial and its
participating affiliates, other than certain employees covered by
collective bargaining agreements that do not expressly provide
for participation of such employees in an ESOP, may participate
in the ESOP.
In June 1989, Dial sold 2,277,582 shares of treasury stock to the
ESOP for $17.56 per share. In connection with the spin-off of GFC
Financial in March 1992, the ESOP received one share of common
stock of GFC Financial for every two shares (pre-split) of Dial
common stock held by the ESOP. The ESOP subsequently sold the
shares of GFC Financial on the open market and used the proceeds
to purchase 546,258 shares of Dial's common stock. ESOP shares
are treated as outstanding for net income (loss) per share
calculations.
The ESOP borrowed $40,000,000 to purchase the 2,277,582 shares of
treasury stock in 1989. The ESOP's obligation to repay this
borrowing is guaranteed by Dial; therefore, the unpaid balance of
the borrowing ($30,000,000 at December 31, 1994) has been
reflected in the accompanying balance sheet as long-term debt and
the amount representing unearned employee benefits has been
recorded as a deduction from common stock and other equity. The
liability is being reduced as the ESOP repays the borrowing, and
the amount in common stock and other equity is being reduced as
the employee benefits are charged to expense. The ESOP intends to
repay the loan (plus interest) using Dial contributions and
dividends received on the shares of common stock held by the
ESOP. Information regarding ESOP transactions for the years ended
December 31 is as follows:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Amounts paid by ESOP for:
Debt repayment $ 2,000 $ 2,000 $ 2,000
Interest 1,161 946 1,199
Amounts received from Dial as:
Dividends 1,218 1,244 1,295
Capital contributions 1,785 1,696 2,026
</TABLE>
Shares are released for allocation to participants based upon the
ratio of the year's principal and interest payments to the sum of
the total principal and interest payments over the life of the
plan. Expense of the ESOP is recognized based upon the greater of
cumulative cash payments to the plan or 80% of the cumulative
expense that would have been recognized under the shares
allocated method, in accordance with Statement of Position 76-3,
"Accounting for Certain Employee Stock Ownership Plans" and
Emerging Issues Task Force Abstract No. 89-8, "Expense
Recognition for Employee Stock Ownership Plans." Under this
method, Dial has recorded expense of $1,684,000, $1,782,000 and
$2,210,000 in 1994, 1993 and 1992, respectively.
ESOP shares at December 31 were as follows:
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Allocated shares 851,589 699,068
Shares not committed for allocation 1,972,251 2,124,772
----------- -----------
2,823,840 2,823,840
=========== ===========
</TABLE>
In September 1992, Dial sold 10,491,800 shares of treasury stock
to The Dial Corp Employee Equity Trust (the "Trust") for a
$200,000,000 ($19.06 per share) promissory note. The Trust is
being used to fund certain existing employee compensation and
benefit plans over the scheduled 15-year term. Through December
31, 1994, the Trust had sold 3,593,442 shares to fund such
benefits. The $200,000,000, representing unearned employee
benefits, was recorded as a deduction from common stock and other
equity, and is being reduced as employee benefits are funded.
At December 31, 1994, retained income of $86,259,000 was
unrestricted as to payment of dividends by Dial.
<PAGE>
<PAGE>
K. STOCK OPTIONS
The Board of Directors approved and on March 3, 1992, the
stockholders adopted the 1992 Stock Incentive Plan ("1992 Plan")
for the grant of options and restricted stock, including
performance-based stock, to officers, directors and certain key
employees. The Plan replaces the 1983 Stock Option and Incentive
Plan ("1983 Plan"). No new awards will be made under the 1983
Plan. In connection with the Distribution, each option, related
Limited Stock Appreciation Right ("LSAR") and related Stock
Appreciation Right ("SAR") held by an employee of Dial who
remained an employee of Dial after the Distribution was adjusted
so that the aggregate exercise price and the aggregate spread
before the Distribution were preserved at the time of the
Distribution. For each share of restricted stock held by a Dial
employee who remained an employee of Dial after the Distribution,
such employee received additional shares of restricted stock with
a market value which compensated for the Distribution.
The 1992 Plan provides for the following types of awards: (a)
stock options (both incentive stock options and nonqualified
stock options), (b) SARs, and (c) restricted stock, including
performance-based stock. The Plan authorizes the issuance of
options for up to 2 1/2% of the total number of shares of common
stock outstanding as of the first day of each year; provided that
any shares available for grant in a particular calendar year
which are not, in fact, granted in such year shall not be added
to shares available for grant in any subsequent calendar year. In
addition to the limitation set forth above with respect to number
of shares available for grant in any single calendar year, no
more than 10,000,000 shares of common stock shall be cumulatively
available for grant of incentive options over the life of the
Plan. In addition, 1,000,000 shares of Preferred Stock are
reserved for distribution under the 1992 Plan.
The stock options, SARs and LSARs outstanding at December 31,
1994 are granted for terms of ten years; 50% become exercisable
after one year and the balance become exercisable after two years
from the date of grant. Stock options and appreciation rights are
exercisable based on the market value at the date of grant. LSARs
vest fully at date of grant and are exercisable only for a
limited period (in the event of certain tenders or exchange
offers for Dial's common stock). SARs and/or LSARs are issued in
tandem with certain stock options and the exercise of one
reduces, to the extent exercised, the number of shares
represented by the other.
Information with respect to options granted and exercised for the
years ended December 31 is as follows:
<TABLE>
<CAPTION>
Average
Option
Price Per
Shares Share
----------- --------
<S> <C> <C>
Options outstanding at December 31, 1991 7,785,750 $ 16.38
Pre spin-off of GFC Financial:
Exercised (1,247,778) 15.91
Cancelled (1) (75,522) 16.92
Additional options
due to the Distribution, net (2) 987,558 N/A
Post spin-off of GFC Financial:
Granted 1,971,800 18.45
Exercised (1,554,946) 12.91
Cancelled (1) (558,660) 12.61
-----------
Options outstanding at December 31, 1992 7,308,202 14.76
Granted 1,941,400 19.85
Exercised (631,958) 13.34
Cancelled (3) (850,904) 17.70
-----------
Options outstanding at December 31, 1993 7,766,740 15.83
Granted 1,449,800 22.98
Exercised (839,124) 14.31
Cancelled (1) (205,728) 19.59
-----------
Options outstanding at December 31, 1994 8,171,688 17.18
===========
(1) Includes stock options which ceased to be exercisable due to the
exercise of related SARs during 1994 and 1992 (at average exercise
prices indicated) with respect to 28,852 shares ($13.60) and 269,780
shares ($11.71), respectively. Stock appreciation rights expense,
equivalent to the difference between the option price and the average
market price of Dial's stock on the date a right is exercised
(included in the Statement of Consolidated Income under the caption
"Unallocated corporate expense and other items, net"), totaled
$240,000 and $2,293,000 in 1994 and 1992, respectively. There were no
SARs exercised in 1993.
(2) Net of options surrendered by employees of Dial who became employees
of GFC Financial after the Distribution.
(3) Includes options cancelled upon disposition of Transportation
Manufacturing and Service Parts Group.
</TABLE>
At December 31, 1994, stock options with respect to 6,004,118
shares are exercisable at an average price of $15.49 per share.
Performance-based stock awards (184,100 and 151,800 shares
awarded in 1994 and 1993, respectively) vest over a three-year
period from the date of grant. The stock awarded vests only if
performance targets relative to the S & P 500 stock index and
Dial's proxy comparator group are achieved. Restricted stock
awards (266,352 shares awarded in 1994) vest over periods not
exceeding five years from the date of grant. There were no
restricted stock awards in 1993 and 1992. However, 170,322 shares
of restricted stock were allocated to employees of Dial in 1992
to compensate for the effect of the Distribution. A holder of the
performance-based and restricted stock has the right to receive
dividends and vote the shares but may not sell, assign, transfer,
pledge or otherwise encumber the stock.
<PAGE>
<PAGE>
L. INCOME TAXES
Deferred income tax assets (liabilities) included in the
Consolidated Balance Sheet at December 31 related to the
following:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993
----------- -----------
<S> <C> <C>
Property and equipment $ (62,209) $ (55,954)
Pension and other employee benefits 108,736 111,797
Provisions for losses 53,287 51,872
Amortization of intangibles 4,016 4,114
Unrealized loss on securities
available for sale 13,415
Advertising and promotion costs
capitalized for tax 11,423 14,729
Foreign loss carryforward 2,973 3,551
Deferred state income taxes 8,529 11,405
Other deferred income tax assets 39,538 33,460
Other deferred income tax liabilities (27,404) (20,505)
----------- -----------
152,304 154,469
Foreign deferred tax liabilities included above 17,000 16,000
----------- -----------
United States deferred tax assets $ 169,304 $ 170,469
=========== ===========
</TABLE>
The consolidated provision for income taxes on income from
continuing operations for the years ended December 31 consisted
of the following:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Current:
United States:
Federal $ 48,550 $ 13,730 $ 13,644
State 8,000 7,855 8,289
Foreign 5,443 3,848 5,135
----------- ----------- -----------
61,993 25,433 27,068
----------- ----------- -----------
Deferred:
United States 17,179 33,271 16,997
Foreign 2,212 2,672 1,918
----------- ----------- -----------
19,391 35,943 18,915
----------- ----------- -----------
Provision for income taxes $ 81,384 $ 61,376 $ 45,983
=========== =========== ===========
</TABLE>
Income taxes paid in 1994, 1993 and 1992 amounted to $62,127,000,
$12,206,000 and $35,160,000, respectively.
Certain tax benefits related primarily to stock options and
dividends paid to the ESOP are credited to common stock and other
equity and amounted to $1,939,000, $1,913,000 and $5,382,000 in
1994, 1993 and 1992, respectively.
Eligible subsidiaries (including MCII and GFC Financial and
certain of their subsidiaries up to the sale and Distribution
date, respectively) are included in the consolidated federal and
other applicable income tax returns of Dial.
Certain benefits of tax losses and credits, which would not have
been currently available to certain subsidiaries, or MCII and GFC
Financial, on a separate return basis, have been credited to
those subsidiaries, or MCII and GFC Financial, by Dial. These
benefits are included in the determination of the income taxes of
those subsidiaries and MCII and GFC Financial and this policy has
been documented by written agreements.
A reconciliation of the provision for income taxes on income from
continuing operations and the amount that would be computed using
statutory federal income tax rates on income before income taxes
for the years ended December 31 is as follows:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Computed income taxes
at statutory federal income
tax rate of 35% (1994 and 1993)
and 34% (1992) $ 77,593 $ 60,077 $ 40,914
Nondeductible
goodwill amortization 4,094 3,122 3,140
Minority interests 1,187 1,266 957
State income taxes 6,191 4,328 5,231
Tax-exempt income (5,133) (2,579) (379)
Restructuring and other charges (1,649)
Adjustment of deferred tax
assets at January 1, 1993 for
enacted change in tax rate (4,386)
Other, net (2,548) (452) (2,231)
----------- ----------- -----------
Provision for income taxes $ 81,384 $ 61,376 $ 45,983
=========== =========== ===========
</TABLE>
United States and foreign income before income taxes from
continuing operations for the years ended December 31 was as
follows:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
United States $ 198,836 $ 155,346 $ 101,214
Foreign 22,859 16,303 19,120
----------- ----------- -----------
Income before income taxes $ 221,695 $ 171,649 $ 120,334
=========== =========== ===========
</TABLE>
<PAGE>
<PAGE>
M. PENSION AND OTHER BENEFITS
Pension Benefits. Net periodic pension cost for the years ended
December 31 included the following components:
<TABLE>
<CAPTION>
United States Foreign
-------------------------------------- -------------------------------------
(000 omitted) 1994 1993 1992 1994 1993 1992
----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Service cost
benefits
earned during
the period $ 11,632 $ 9,560 $ 9,238 $ 2,052 $ 2,097 $ 2,343
Interest cost on
projected benefit
obligation 20,434 19,323 17,647 6,147 6,106 6,238
Actual return on
plan assets (1,388) (20,405) (19,675) (6,849) (6,390) (6,453)
Net amortization
and deferral (18,708) 4,415 4,869 97 122 205
Other items,
primarily defined
contribution
and multiemployer
plans 8,601 8,706 7,372 1,830 1,503 2,550
---------- ---------- ----------- ---------- ---------- ----------
Net pension cost $ 20,571 $ 21,599 $ 19,451 $ 3,277 $ 3,438 $ 4,883
========== ========== =========== ========== ========== ==========
</TABLE>
Weighted average assumptions used were:
<TABLE>
<CAPTION>
United States Foreign
-------------------------------------- -------------------------------------
December 31, 1994 1993 1992 1994 1993 1992
----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Discount rate
for obligation 8.5% 7.75% 9.0% 9.0% 9.0% 9.0%
Rate of increase
in compensation levels 5.0% 5.0% 6.0% 7.0% 7.0% 7.0-8.0%
Long-term rate of
return on assets 9.5% 9.5% 9.5% 9.0% 9.0% 9.0%
</TABLE>
The following table indicates the plans' funded status and
amounts recognized in Dial's consolidated balance sheet at
December 31:
<TABLE>
<CAPTION>
United States Foreign
--------------------------------------------------- ------------------------
Underfunded and
Overfunded Plans Unfunded Plans Overfunded Plans
------------------------ ------------------------ ------------------------
(000 omitted) 1994 1993 1994 1993 1994 1993
----------- ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Actuarial present
value of benefit
obligations:
Vested benefit
obligation $ 127,574 $ 124,833 $ 79,029 $ 80,767 $ 50,156 $ 49,007
=========== ========== ========== ========== ========== ==========
Accumulated
benefit
obligation $ 138,803 $ 136,544 $ 83,990 $ 85,700 $ 52,424 $ 50,900
=========== ========== ========== ========== ========== ==========
Projected benefit
obligation $ 172,148 $ 175,389 $ 90,153 $ 91,658 $ 67,610 $ 69,174
Market value of plan
assets, primarily
equity and fixed
income securities 171,334 177,902 58,014 60,837 79,968 70,684
----------- ---------- ---------- ---------- ---------- ----------
Plan assets over
(under) projected
benefit obligation (814) 2,513 (32,139) (30,821) 12,358 1,510
Unrecognized
transition (asset)
obligation (5,820) (6,609) 4,374 4,987 (4,294) (5,073)
Unrecognized prior
service cost
(reduction) (601) 1,448 7,670 7,799 6,512 7,296
Unrecognized net
(gain) loss 11,520 13,861 6,123 6,951 (3,422) 4,674
Additional minimum
liability (13,010) (14,451)
----------- ---------- ---------- ---------- ---------- ----------
Prepaid (accrued)
pension cost $ 4,285 $ 11,213 $ (26,982) $ (25,535) $ 11,154 $ 8,407
=========== ========== ========== ========== ========== ==========
/TABLE
<PAGE>
Dial recorded an additional minimum liability for pensions of
$13,010,000, an intangible asset of $6,084,000, a deferred tax
asset of $2,424,000 and a reduction of retained income of
$4,502,000 at December 31, 1994; and, an additional minimum
liability for pensions of $14,451,000, an intangible asset of
$8,587,000, a deferred tax asset of $2,053,000 and a reduction of
retained income of $3,811,000 at December 31, 1993. There are
restrictions on the use of excess pension plan assets in the
event of a defined change in control of Dial.
Postretirement Benefits Other Than Pensions. Dial and its
subsidiaries have defined benefit postretirement plans that
provide medical and life insurance for eligible employees,
retirees and dependents. In addition, Dial retained the
obligations for such benefits for eligible retirees of Greyhound
Lines, Inc. (sold in 1987) and Armour and Company (sold in 1983).
Effective January 1, 1992, Dial and its U.S. subsidiaries adopted
the provisions of SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("OPEB") which
requires that estimated OPEB benefits be accrued during the years
the employees provide services. Dial elected to recognize the
accumulated postretirement benefit obligation as a one-time
charge to income. The accumulated postretirement benefit
obligation recognized was the aggregate amount that would have
been accrued for OPEB benefits in the years prior to adoption of
SFAS No. 106 had the new standard been in effect for those years.
The adoption of SFAS No. 106 has no cash impact because the plans
are not funded and the pattern of benefit payments did not
change. Dial expects to adopt SFAS No. 106 for its foreign
subsidiaries in 1995, and anticipates that the effect of such
adoption will not be material to the consolidated financial
statements.
The status of the plans as of December 31, was as follows:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993
----------- -----------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 199,609 $ 221,847
Fully eligible active plan participants 22,245 25,107
Other active plan participants 50,343 54,369
----------- -----------
Accumulated postretirement benefit obligation 272,197 301,323
Unrecognized prior service (cost) reduction (43) 133
Unrecognized net gain (loss) 18,750 (17,634)
----------- -----------
Accrued postretirement benefit cost $ 290,904 $ 283,822
=========== ===========
Discount rate for obligation 8.5% 7.75%
</TABLE>
The assumed health care cost trend rate used in measuring the
accumulated postretirement benefit obligation was 13.5% in 1994
and 14.5% in 1993 gradually declining to 5.5% by the year 2002
and remaining at that level thereafter for retirees below age 65,
and 10% in 1994 and 11% in 1993 gradually declining to 5.5% by
the year 2002 and remaining at that level thereafter for retirees
above age 65.
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, 1994 by
approximately 10% and the ongoing annual expense by approximately
13%.
The net periodic postretirement benefit cost for the years ended
December 31 includes the following components:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Service cost--benefits
attributed to service
during the period $ 5,416 $ 4,233 $ 4,624
Interest cost on the accumulated
postretirement benefit
obligation 21,537 23,413 23,658
Net amortization and deferral 3 (10)
----------- ----------- -----------
Net periodic postretirement
benefit cost (1) $ 26,956 $ 27,636 $ 28,282
=========== =========== ===========
Curtailment gains due to
termination of certain
benefits $ (500) $ (5,475)
=========== ===========
(1) Includes benefit costs applicable to retirees of sold businesses,
which are classified in the Statement of Consolidated Income under
the caption, "Unallocated corporate expense and other items, net,"
totaling $12,800,000, $15,000,000 and $14,700,000 for 1994, 1993 and
1992, respectively.
</TABLE>
<PAGE>
N. LEASES
Certain retail facilities, plants, offices and equipment are
leased. The leases expire in periods ranging generally from one
to 27 years and some provide for renewal options ranging from one
to 37 years. Leases which expire are generally renewed or
replaced by similar leases.
At December 31, 1994, Dial's future minimum rental payments and
related sublease rentals receivable with respect to
noncancellable operating leases with terms in excess of one year
were as follows:
<TABLE>
<CAPTION>
Rentals
Receivable
Rental Under
(000 omitted) Payments Subleases
----------- -----------
<S> <C> <C>
1995 $ 62,442 $ 3,402
1996 47,716 3,319
1997 36,331 3,025
1998 31,547 1,809
1999 26,422 1,243
Thereafter 182,461 847
----------- -----------
Total $ 386,919 $ 13,645
=========== ===========
</TABLE>
Excluding the cruise ships discussed below, at the end of the
lease terms Dial has options to purchase certain leased assets
for an aggregate purchase price of $26,100,000. If the purchase
options are not exercised, Dial will make residual guarantee
payments aggregating $18,500,000 which are refundable to the
extent that the lessors' subsequent sales prices exceed certain
levels.
As discussed in Note B of Notes to Consolidated Financial
Statements, in February 1995 Dial purchased a cruise ship
previously under a lease agreement and has entered into a
four-year charter arrangement to lease the ship to a European
operator. In addition, in April 1994 Dial notified the lessor of
its intention to purchase Dial's other leased cruise ship when
the current lease agreement expires in October 1995. The table
above includes $10,200,000 of rental payments due in 1995 related
to these cruise ships.
Information regarding net operating lease rentals for the years
ended December 31 is as follows:
<TABLE>
<CAPTION>
(000 omitted) 1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Minimum rentals $ 104,113 $ 113,324 $ 143,863
Contingent rentals 7,463 4,297 12,530
Sublease rentals (2,010) (23,204) (43,630)
----------- ----------- -----------
Total rentals, net (1) $ 109,566 $ 94,417 $ 112,763
=========== =========== ===========
(1) Includes rentals of $10,800,000, $9,200,000 and $10,300,000 for 1994,
1993 and 1992, respectively, for the two cruise ships being purchased
in 1995. Also includes net rentals of $7,700,000 and $9,419,000, for
1993 and 1992, respectively, for Dial's corporate headquarters
building which was leased from a joint venture up to December 1993,
when Dial acquired the remaining interest in the joint venture.
</TABLE>
Contingent rentals on operating leases are based primarily on
sales and revenues for buildings and leasehold improvements and
usage for other equipment.
Dial is a 50% partner in an unconsolidated joint venture which
owns a resort and conference hotel in Oakbrook, Illinois. Dial
has leased the hotel through September 1, 2002, and the future
rental payments are included in the table of future minimum
rental payments. In addition, Dial and a third party have agreed
to lend the joint venture $10,000,000 and $5,000,000,
respectively, at 8 3/4% on July 1, 1997 to be secured by a second
mortgage on the property to prepay $15,000,000 of the joint
venture's nonrecourse first mortgage obligation. If the joint
venture is unable to repay or refinance the first mortgage note,
Dial has an option to purchase the note from the lender on
September 30, 2002, its due date, at its then unpaid principal
amount which is expected to be approximately $24,650,000. If the
purchase option is not exercised, Dial will make residual
guarantee payments equal to the greater of $5,000,000 or 150% of
any shortfall in fair market value of the hotel compared to the
unpaid principal amount of the note on such date. Dial accounts
for its interest in the joint venture using the equity method.
<PAGE>
O. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND FAIR
VALUE OF FINANCIAL INSTRUMENTS
Financial Instruments with Off-Balance-Sheet Risk. Dial is a
party to financial instruments with off-balance-sheet risk which
are entered into in the normal course of business to meet its
financing needs and to manage its exposure to fluctuations in
interest rates and foreign exchange rates. These financial
instruments include revolving sale of receivable agreements,
interest rate swap agreements and foreign exchange forward
contracts. The instruments involve, to a varying degree, elements
of credit, market, interest rate and exchange rate risk in
addition to amounts recognized in the financial statements. Dial
does not hold or issue financial instruments for trading
purposes.
At December 31, 1994, Dial has agreements to sell undivided
participating interests in a defined pool of trade accounts
receivable from customers of Dial's consumer products and airline
catering and services subsidiaries in an amount not to exceed
$115,000,000 (increased to $140,000,000 in February 1995) as a
means of accelerating cash flow. As collections reduce accounts
receivable included in the pool, Dial sells participating
interests in new receivables, providing a stable level of
purchased accounts. Dial's expense of selling receivables
amounted to approximately $4,900,000, $4,000,000 and $3,800,000
in 1994, 1993 and 1992, respectively. Such amounts are deducted
in arriving at operating income. Under the terms of the agreement
Dial has retained substantially the same risk of credit loss as
if the receivables had not been sold as Dial is obligated to
repurchase uncollectible receivables sold and replace those
receivables with new accounts receivable. The agreements to sell
accounts receivable, which were fully utilized at December 31,
1994 and December 31, 1993, mature in February of each year, but
are expected to be extended annually by mutual agreement. They
are currently extended to February 1996. The average balance of
proceeds from the sale of accounts receivable was $101,700,000,
$103,700,000 and $91,200,000 during 1994, 1993 and 1992,
respectively.
Dial enters into interest rate swap agreements as a means of
managing its interest rate expense. The agreements are contracts
to exchange fixed and floating interest rate payments
periodically over the life of the agreements without the exchange
of the underlying notional amounts. The notional amounts of such
agreements are used to measure interest to be paid or received
and do not represent the amount of exposure to credit loss. The
amounts to be paid or received under the interest rate swap
agreements are accrued consistent with the terms of the
agreements and market interest rates. Dial maintains formal
procedures for entering into interest rate swap transactions and
management regularly monitors and reports to the Board of
Directors on interest rate swap activity. The agreements are with
major financial institutions which are expected to fully perform
under the terms of the agreements, thereby mitigating the credit
risk from the transactions in the event of nonperformance by the
counterparties. In addition, Dial continuously monitors the
credit ratings of the counterparties and the likelihood of
default is considered remote.
The following table indicates the types of swaps used and their
weighted average interest rates in effect at December 31. The
floating rate portion of the interest rate swaps is based on
LIBOR. Changes in the LIBOR interest rates could significantly
affect the floating rate information and future cash flows.
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Pay-fixed swaps: (1)
Notional amount (000 omitted) $ 205,000 $ 140,000
Average pay rate 8.7% 9.3%
Average receive rate 6.0% 3.4%
Receive-fixed swaps: (1)
Notional amount (000 omitted) $ 295,000 $ 250,000
Average pay rate 6.1% 3.4%
Average receive rate 5.4% 5.6%
(1) The pay-fixed swap agreements expire as follows: $100,000,000 (1995),
$65,000,000 (1997) and $40,000,000 (1998). The receive-fixed swap
agreements expire as follows: $50,000,000 (1995), $15,000,000 (1997),
$30,000,000 (2002) and $200,000,000 (2003).
</TABLE>
Dial has also entered into certain interest rate swap agreements
in which Dial agreed to pay a fixed rate which exceeded the
current market interest rate for identical instruments. The
discounted present value of this rate "premium" was paid to Dial
in cash at inception of the agreements. Dial has been amortizing
these cash proceeds over the term of the swaps. Dial entered into
such agreements to provide for an alternative cash source and for
income tax planning purposes. In every case, Dial simultaneously
entered into an exactly paired (with identical notional amount
and term) agreement in which it agreed to receive a fixed rate.
The result in each case was a pair of offsetting swaps which
fixed, at a market discount rate, the future net payments to be
made by Dial. The use of these paired swaps has not created any
unusual risk to Dial.
At December 31, 1994, Dial had $267,600,000 notional amount of
such paired interest rate swap agreements which fixed the future
net payments owed by Dial against the cash proceeds received by
Dial when the swap agreements were entered, at discount rates
ranging from 7.1% to 10.2% over the original terms of the paired
agreements which expire as follows: $67,600,000 (1995), and
$200,000,000 (1996). The terms of certain of these agreements
have been extended which will result in additional pay-fixed
swaps of $67,600,000 commencing in 1995 and $100,000,000
commencing in 1996, all of which will expire in 2000. These swaps
will have a weighted average pay rate of 8.6% and a weighted
average receive rate, based on LIBOR at December 31, 1994, of
7.0%.
Cash consideration received on the paired swaps is amortized as
an offset to expense from net swap payments over the life of the
related swap. Net expense related to these paired swaps of
$7,500,000, $6,700,000 and $11,500,000 for 1994, 1993 and 1992,
respectively, is included in the Statement of Consolidated Income
under the caption, "Unallocated corporate expense and other
items, net." The unamortized balance of the cash consideration
received on the paired swaps ($22,300,000 and $35,200,000 at
December 31, 1994 and 1993, respectively) is included in the
Consolidated Balance Sheet under the caption, "Other deferred
items and insurance reserves."
Dial also enters into foreign exchange forward contracts to hedge
identifiable foreign currency commitments including intercompany
transactions with Dial's foreign subsidiaries. These contracts
are purchased to reduce the impact of foreign currency
fluctuations on operating results. Dial does not engage in
foreign currency speculation. While the hedging instruments are
subject to the risk of loss from changes in exchange rates, these
losses would generally be offset by gains on the exposures being
hedged. Gains and losses on those hedging instruments that are
designated and effective as hedges of firmly committed foreign
currency transactions are deferred and recognized in income in
the same period as the hedged transaction. Dial's theoretical
risk in these transactions is the cost of replacing, at current
market rates, these contracts in the event of default by the
other party. Management believes the risk of incurring such
losses is remote as the contracts are entered into with major
financial institutions.
The table below summarizes by major currency the contractual
amounts (stated in U.S. dollar equivalent) to purchase foreign
currencies at December 31, 1994. The contracts mature through
January 1996, with 40% of such contracts expiring in January
1995. Contracts to sell foreign currencies are not material.
<TABLE>
<CAPTION>
(000 omitted)
<S> <C>
Canadian dollar $ 29,096
Austrian schilling 17,943
British pound 16,349
Italian lira 14,923
French franc 12,361
Other 3,621
-----------
$ 94,293
===========
</TABLE>
Fair Value of Financial Instruments. The following disclosure of
the estimated fair value of financial instruments is made in
accordance with the requirements of SFAS No. 107, "Disclosures
About Fair Value of Financial Instruments." The estimated fair
value amounts have been determined by Dial using available market
information and valuation methodologies described below. However,
considerable judgment is required in interpreting market data to
develop the estimates of fair value. Accordingly, the estimates
presented herein may not be indicative of the amounts that Dial
could realize in a current market exchange. The use of different
market assumptions or valuation methodologies may have a material
effect on the estimated fair value amounts.
The carrying values of cash and cash equivalents, receivables,
accounts payable and payment service obligations approximate fair
values due to the short-term maturities of these instruments. The
amortized cost and fair value of investments in debt and equity
securities are disclosed in Note F of Notes to Consolidated
Financial Statements. The carrying amounts and estimated fair
values of Dial's other financial instruments at December 31 are
as follows:
<TABLE>
<CAPTION>
1994 1993
--------------------- ---------------------
Carrying Fair Carrying Fair
(000 omitted) Amount Value Amount Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Total debt $ (745,479) $ (716,631) $ (635,892) $(654,971)
Interest rate swaps (1) (24,561) (63,392) (37,780) (71,362)
Foreign exchange
forward contracts -- (1,094) -- (1,436)
(1) Carrying amount represents accrued interest and the unamortized cash
proceeds related to certain interest rate swap agreements.
</TABLE>
The methods and assumptions used to estimate the fair values of
the financial instruments are summarized as follows:
Debt--The fair value of debt was estimated by discounting the
future cash flows using rates currently available for debt of
similar terms and maturity. The carrying values of short-term
bank loans, commercial paper and promissory notes were assumed to
approximate fair values due to their short-term maturities.
Interest rate swaps--The fair values were estimated by
discounting the expected cash flows using rates currently
available for interest rate swaps of similar terms and
maturities. The fair value represents the estimated amount that
Dial would pay to the dealer to terminate the swap agreement at
December 31, 1994.
Foreign exchange forward contracts--The fair value is estimated
using quoted exchange rates of these or similar instruments.
<PAGE>
<PAGE>
P. LITIGATION AND CLAIMS
Dial and certain subsidiaries are plaintiffs or defendants to
various actions, proceedings and pending claims. Certain of these
pending legal actions are or purport to be class actions. Some of
the foregoing involve, or may involve, compensatory, punitive or
other damages in material amounts. Litigation is subject to many
uncertainties and it is possible that some of the legal actions,
proceedings or claims referred to above could be decided against
Dial. Although the amount of liability at December 31, 1994, with
respect to these matters is not ascertainable, Dial believes that
any resulting liability should not materially affect Dial's
financial position or results of operations.
Dial is subject to various environmental laws and regulations of
the United States as well as of the states in whose jurisdictions
Dial operates. As is the case with many companies, Dial faces
exposure to actual or potential claims and lawsuits involving
environmental matters. Although Dial is a party to certain
environmental disputes, Dial believes that any liabilities
resulting therefrom, after taking into consideration amounts
already provided for, but exclusive of any potential insurance
recovery, should not have a material adverse effect on Dial's
financial position or results of operations.
<PAGE>
<PAGE>
Q. PRINCIPAL BUSINESS SEGMENTS
For 1994, Dial's principal business segments have been
reclassified to include airplane fueling and ground handling
activities along with airline catering as the Airline Catering
and Services segment, in recognition of recent industry
developments and the fact that all of Dial's airline related
activities are now being jointly managed. The airplane fueling
and ground handling operations were previously part of the
Travel and Leisure and Payment Services segment, which now
includes other foodservice operations, previously classified
with airline catering as the Airline Catering and Other Food
Services segment. Prior year data have been restated to reflect
this change. The business activities included in each segment
are set forth elsewhere in this Annual Report.
Operating income by segment represents revenues less costs of
sales and services. Unallocated corporate and other items, net,
are then deducted from total operating income of principal
business segments to arrive at total operating income.
<TABLE>
<CAPTION>
Year ended December 31, (000 omitted)
1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues:
Consumer Products $ 1,511,362 $ 1,420,173 $ 1,275,447 $ 1,196,499 $ 1,122,726
----------- ----------- ----------- ----------- -----------
Services:
Airline Catering
and Services 763,658 502,775 527,832 492,151 481,081
Convention Services 522,683 356,267 238,694 212,828 208,408
Travel and Leisure
and Payment Services (1) 749,144 721,127 832,115 926,371 1,039,320
----------- ----------- ----------- ----------- -----------
Total Services (1) 2,035,485 1,580,169 1,598,641 1,631,350 1,728,809
----------- ----------- ----------- ----------- -----------
$ 3,546,847 $ 3,000,342 $ 2,874,088 $ 2,827,849 $ 2,851,535
=========== =========== =========== =========== ===========
Operating Income: (3)
Consumer Products $ 160,008 $ 139,213 $ 118,616 $ 110,605 $ 96,554
----------- ----------- ----------- ----------- -----------
Services:
Airline Catering
and Services 61,533 41,385 40,783 34,444 27,663
Convention Services 50,614 27,849 20,281 16,795 18,786
Travel and Leisure
and Payment Services (1) 58,065 66,846 43,036 34,434 96,706
----------- ----------- ----------- ----------- -----------
Total Services (1) 170,212 136,080 104,100 85,673 143,155
----------- ----------- ----------- ----------- -----------
Total principal
business segments 330,220 275,293 222,716 196,278 239,709
Unallocated corporate
expense and other items,
net (2) (43,938) (42,734) (36,198) (60,412) (41,568)
----------- ----------- ----------- ----------- -----------
$ 286,282 $ 232,559 $ 186,518 $ 135,866 $ 198,141
=========== =========== =========== =========== ===========
(1) Dial's payment services subsidiary is investing increasing amounts in tax exempt securities. On a
fully taxable equivalent basis, revenues and operating income would be higher by $7,897,000,
$3,967,000 and $982,000, for 1994, 1993 and 1992, respectively.
(2) Expenses related to certain interest rate swap agreements have been reclassified to interest
expense from unallocated corporate expense and other items, net. As a result, interest expense was
increased and unallocated corporate expense was reduced by $5,983,000, $7,327,000, $7,321,000,
$3,175,000 and $348,000 for 1994, 1993, 1992, 1991 and 1990, respectively.
(3) After deducting restructuring and other charges of $30,000,000 and $40,000,000 for Travel and
Leisure and Payment Services in 1992 and 1991, respectively, and $24,000,000 charged to unallocated
corporate expense in 1991. Also after deducting a total of $14,400,000 comprised of $6,800,000,
$965,000, $749,000, $1,486,000 and $4,400,000 in 1992 for Consumer Products, Airline Catering and
Services, Convention Services, Travel and Leisure and Payment Services and Unallocated corporate
expense, respectively, for increased ongoing expense following the adoption of SFAS No. 106
effective as of January 1, 1992. Years prior to 1992 do not include such expenses.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Services
-------------------------------------------------
Airline Travel and
Catering Leisure and
Consumer and Convention Payment Total
(000 omitted) Products Services Services Services Services Corporate Total
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1994:
Assets at year end:
Before intangibles and
restricted assets $ 550,013 $ 231,417 $ 127,191 $ 383,646 $ 742,254 $ 296,317 $ 1,588,584
Assets restricted
for payment
service obligations 1,371,877 1,371,877 1,371,877
Intangibles 337,360 291,337 112,870 74,102 478,309 4,766 820,435
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 887,373 $ 522,754 $ 240,061 $ 1,829,625 $ 2,592,440 $ 301,083 $ 3,780,896
========== ========== ========== ========== ========== ========== ==========
Capital expenditures $ 37,471 $ 22,214 $ 11,415 $ 34,613 $ 68,242 $ 2,879 $ 108,592
========== ========== ========== ========== ========== ========== ==========
Depreciation and
amortization:
Depreciation $ 29,192 $ 20,125 $ 8,370 $ 27,878 $ 56,373 $ 4,982 $ 90,547
Amortization of
intangibles 5,718 8,362 2,748 2,486 13,596 19,314
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 34,910 $ 28,487 $ 11,118 $ 30,364 $ 69,969 $ 4,982 $ 109,861
========== ========== ========== ========== ========== ========== ==========
<PAGE>
1993:
Assets at year end:
Before intangibles and
restricted assets $ 513,293 $ 143,085 $ 118,467 $ 359,828 $ 621,380 $ 306,851 $ 1,441,524
Assets restricted
for payment
service obligations 1,109,751 1,109,751 1,109,751
Intangibles 340,713 240,684 79,928 62,338 382,950 6,150 729,813
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 854,006 $ 383,769 $ 198,395 $ 1,531,917 $ 2,114,081 $ 313,001 $ 3,281,088
========== ========== ========== ========== ========== ========== ==========
Capital expenditures $ 40,605 $ 16,125 $ 11,838 $ 44,419 $ 72,382 $ 1,637 $ 114,624
========== ========== ========== ========== ========== ========== ==========
Depreciation and
amortization:
Depreciation $ 28,071 $ 14,222 $ 8,181 $ 28,241 $ 50,644 $ 3,785 $ 82,500
Amortization of
intangibles 5,512 7,041 743 4,364 12,148 17,660
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 33,583 $ 21,263 $ 8,924 $ 32,605 $ 62,792 $ 3,785 $ 100,160
========== ========== ========== ========== ========== ========== ==========
<PAGE>
1992:
Assets at year end:
Before intangibles,
restricted assets
and discontinued
operations $ 413,224 $ 141,508 $ 58,639 $ 354,666 $ 554,813 $ 312,210 $ 1,280,247
Assets restricted
for payment
service obligations 1,029,180 1,029,180 1,029,180
Investment in
discontinued
operations 248,664 248,664
Intangibles 265,163 247,563 15,076 66,470 329,109 4,635 598,907
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 678,387 $ 389,071 $ 73,715 $ 1,450,316 $ 1,913,102 $ 565,509 $ 3,156,998
========== ========== ========== ========== ========== ========== ==========
Capital expenditures $ 45,508 $ 14,509 $ 7,336 $ 41,024 $ 62,869 $ 754 $ 109,131
========== ========== ========== ========== ========== ========== ==========
Depreciation and
amortization:
Depreciation $ 25,036 $ 14,069 $ 4,466 $ 34,830 $ 53,365 $ 4,189 $ 82,590
Amortization of
intangibles 6,506 7,004 241 4,594 11,839 18,345
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 31,542 $ 21,073 $ 4,707 $ 39,424 $ 65,204 $ 4,189 $ 100,935
========== ========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
<PAGE>
R. CONDENSED CONSOLIDATED QUARTERLY RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
First Quarter Second Quarter Third Quarter Fourth Quarter
--------------------- ------------------- ------------------- -------------------
(000 omitted) 1994 1993 1994 1993 1994 1993 1994 1993
--------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Consumer Products $ 330,340 $ 293,183 $ 408,115 $ 385,140 $ 363,399 $ 345,260 $ 409,508 $ 396,590
--------- --------- --------- --------- --------- --------- --------- ---------
Services:
Airline Catering
and Services 151,463 126,823 202,225 124,781 211,486 127,696 198,484 123,475
Convention
Services 127,671 68,112 135,736 81,583 124,097 89,944 135,179 116,628
Travel and Leisure
and Payment
Services 175,428 149,938 185,872 182,491 213,541 207,501 174,303 181,197
--------- --------- --------- --------- --------- --------- --------- ---------
Total Services 454,562 344,873 523,833 388,855 549,124 425,141 507,966 421,300
--------- --------- --------- --------- --------- --------- --------- ---------
$ 784,902 $ 638,056 $ 931,948 $ 773,995 $ 912,523 $ 770,401 $ 917,474 $ 817,890
========= ========= ========= ========= ========= ========= ========= =========
Operating Income:
Consumer Products $ 30,152 $ 25,659 $ 49,978 $ 43,443 $ 40,427 $ 35,442 $ 39,451 $ 34,669
--------- --------- --------- --------- --------- --------- --------- ---------
Services:
Airline Catering
and Services 8,421 7,856 16,540 11,565 19,947 11,918 16,625 10,046
Convention
Services 12,392 5,988 14,957 7,419 11,539 4,972 11,726 9,470
Travel and Leisure
and Payment
Services 1,974 3,465 13,804 17,032 29,573 31,041 12,714 15,308
--------- --------- --------- --------- --------- --------- --------- ---------
Total Services 22,787 17,309 45,301 36,016 61,059 47,931 41,065 34,824
--------- --------- --------- --------- --------- --------- --------- ---------
Total principal
business segments 52,939 42,968 95,279 79,459 101,486 83,373 80,516 69,493
Unallocated
corporate expense
and other items,
net (1) (10,748) (10,549) (10,552) (11,075) (11,348) (10,775) (11,290) (10,335)
--------- --------- --------- --------- --------- --------- --------- ---------
$ 42,191 $ 32,419 $ 84,727 $ 68,384 $ 90,138 $ 72,598 $ 69,226 $ 59,158
========= ========= ========= ========= ========= ========= ========= =========
Income (Loss):
Continuing
operations $ 17,210 $ 11,159 $ 43,393 $ 33,379 $ 45,428 $ 37,184 $ 34,280 $ 28,551
Discontinued
operations (2) 3,472 6,294 22,354
Extraordinary charge (21,908)
--------- --------- --------- --------- --------- --------- --------- ---------
Net income $ 17,210 $ 14,631 $ 43,393 $ 39,673 $ 45,428 $ 37,630 $ 34,280 $ 28,551
========= ========= ========= ========= ========= ========= ========= =========
Income (Loss) per
Common Share
(dollars):
Continuing
operations $ 0.20 $ 0.13 $ 0.50 $ 0.38 $ 0.52 $ 0.44 $ 0.39 $ 0.33
Discontinued
operations (2) 0.04 0.08 0.26
Extraordinary
charge (0.26)
--------- --------- --------- --------- --------- --------- --------- ---------
Net income per
common share $ 0.20 $ 0.17 $ 0.50 $ 0.46 $ 0.52 $ 0.44 $ 0.39 $ 0.33
========= ========= ========= ========= ========= ========= ========= =========
(1) Expenses related to certain interest rate swap agreements have been reclassified to interest expense
from unallocated corporate expense and other items, net. As a result, interest expense was increased and
unallocated corporate expense was reduced by $1,838,000, $1,711,000, $1,493,000 and $941,000 for the
1994 first, second, third and fourth quarters, respectively, and by $1,931,000, $1,907,000, $1,626,000
and $1,863,000 for the 1993 first, second, third and fourth quarters, respectively.
(2) The third quarter of 1993 includes income from operations of the Transportation Manufacturing and
Service Parts Group of $427,000, less than $0.01 per share, and a gain of $40,151,000, or $0.47 per
share, attributable to the sale of the Transportation Manufacturing and Service Parts Group, and is
after deducting $18,224,000, or $0.21 per share, for provisions related to previously discontinued
businesses.
</TABLE>
<PAGE>
EXHIBIT INDEX
3.A Copy of Restated Certificate of Incorporation of Dial, as amended
through March 3, 1992, filed as Exhibit (3)(A) to Dial's 1991 Form
10-K, is hereby incorporated by reference.
3.B Copy of Bylaws of Dial, as amended through February 21, 1992,
filed as Exhibit (3)(B) to Dial's 1991 Form 10-K, is hereby
incorporated by reference.
4.A Instruments with respect to issues of long-term debt have not been
filed as exhibits to this Annual Report on Form 10-K if the
authorized principal amount of any one of such issues does not
exceed 10% of total assets of the Corporation and its subsidiaries
on a consolidated basis. The Corporation agrees to furnish a copy
of each such instrument to the Securities and Exchange Commission
upon request.
4.B Copy of Amended and Restated Credit Agreement dated as of December
15, 1993, among Dial, the Banks parties thereto, Bank of America
National Trust and Savings Association as Agent and Reporting
Agent and Citibank, N.A. as Agent and Funding Agent, filed as
Exhibit 4.B to Dial's 1993 Form 10-K, is hereby incorporated by
reference.
4.B1 Copy of First Amendment to Amended and Restated Credit Agreement
dated as of September 23, 1994.*
10.A Copy of Employment Agreement between Dial and John W. Teets dated
April 14, 1987, filed as Exhibit (10)(A) to Dial's 1989 Form 10-K,
is hereby incorporated by reference.+
10.B Sample forms of Contingent Agreements relating to funding of
Supplemental Executive Pensions, filed as Exhibit (10)(T) to
Dial's 1989 Form 10-K, is hereby incorporated by reference.+
10.C Copy of Dial's Supplemental Pension Plan, amended and restated as
of January 1, 1987, filed as Exhibit (10)(F) to Dial's 1986 Form
10-K, is hereby incorporated by reference.+
10.C1 Copy of amendment dated February 21, 1991, to Dial's
Supplemental Pension Plan, filed as Exhibit (10)(G)(i) to
Dial's 1990 Form 10-K, is hereby incorporated by reference.+
10.D Copy of Dial's Deferred Compensation Plan for Directors, adopted
November 20, 1980, as amended through February 21, 1991, filed as
Exhibit (10)(H) to Dial's 1990 Form 10-K, is hereby incorporated
by reference.+
10.E Copy of The Dial Corp Management Incentive Plan, filed as Exhibit
10.E to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.F1 Copy of form of Executive Severance Agreement between Dial
and three executive officers, filed as Exhibit (10)(G)(i) to
Dial's 1991 Form 10-K, is hereby incorporated by reference.+
10.F2 Copy of forms of The Dial Corp Executive Severance Plans
covering certain executive officers, filed as Exhibit
(10)(G)(ii) to Dial's 1992 Form 10-K, is hereby incorporated
by reference.+
10.G Copy of Travelers Express Company, Inc. Supplemental Pension Plan,
filed as Exhibit (10)(L) to Dial's 1984 Form 10-K, is hereby
incorporated by reference.+
10.H1 Copy of Dial's 1983 Stock Option and Incentive Plan, filed as
Exhibit (28) to Dial's Registration Statement on Form S-8
(Registration No. 33-23713), is hereby incorporated by
reference.+
10.H2 Copy of amendment, effective August 1, 1994, to Dial's 1983
Stock Option and Incentive Plan.*+
10.I1 Copy of The Dial Corp 1992 Stock Incentive Plan, filed as
Exhibit (10)(J) to Dial's 1991 Form 10-K, is hereby
incorporated by reference.+
10.I2 Copy of amendment, effective August 1, 1994, to The Dial Corp
1992 Stock Incentive Plan.*+
10.J Description of Spousal Income Continuation Plan, filed as Exhibit
10(Q) to Dial's 1985 Form 10-K, is hereby incorporated by
reference.+
10.K Copy of Dial's Director's Retirement Benefit Plan, filed as
Exhibit (10)(R) to Dial's 1988 Form 10-K, is hereby incorporated
by reference.+
10.L Copy of The Dial Corp Performance Unit Incentive Plan, filed as
Exhibit 10.L to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.M Copy of The Dial Corp Supplemental TRIM Plan.*+
10.N Copy of Employment Agreement between GES Exposition Services and
Norton Rittmaster dated May 20, 1982, filed as Exhibit (10)(O) to
Dial's 1992 Form 10-K, is hereby incorporated by reference.+
10.O Copy of GES Exposition Services' Incentive Compensation Plan,
filed as Exhibit (10)(P) to Dial's 1992 Form 10-K, is hereby
incorporated by reference.+
10.P Copy of The Dial Corp Performance-Based Stock Plan, filed as
Exhibit 10.P to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.Q Copy of The Dial Corp Deferred Compensation Plan, filed as Exhibit
10.Q to Dial's 1993 Form 10-K, is hereby incorporated by
reference.+
10.R Copy of form of The Dial Corp 1983 Stock Option and Incentive Plan
Amended and Restated Restricted Stock Agreements dated August 12,
1994, between Dial and six executive officers.*+
10.S Copy of form of The Dial Corp 1992 Stock Incentive Plan Restricted
Stock Agreements dated August 12, 1994, between Dial and six
executive officers.*+
11 Statement Re Computation of Per Share Earnings.*
21 List of Subsidiaries of Dial.*
23 Consent of Independent Auditors to the incorporation by reference
into specified registration statements on Form S-3 or on Form S-8
of their reports contained in or incorporated by reference into
this report.*
24 Power of Attorney signed by directors of Dial.*
27 Financial Data Schedule.*
* Filed herewith.
+ Management contract or compensation plan or arrangement.
Note: The 1994 Annual Report to Securityholders will be furnished to the
Commission when, or before, it is sent to securityholders.
<PAGE>
EXHIBIT 4.B1
FIRST AMENDMENT
TO
AMENDED AND RESTATED
CREDIT AGREEMENT
This First Amendment to Amended and Restated Credit
Agreement is dated as of September 23, 1994 (the "Amendment") and
is entered into by and among The Dial Corp, a Delaware
corporation (the "Borrower"), the Banks listed on the signature
pages hereof (the "Banks"), Bank of America National Trust and
Savings Association and Citibank, N.A., as agents (the "Agents")
for the Banks, Citibank, as the funding agent for the Banks, and
Bank of America National Trust and Savings Association, as
reporting agent for the Banks, and is made with reference to that
certain Amended and Restated Credit Agreement dated as of
December 15, 1993 (the "Agreement"). Capitalized terms used
herein without definitions have the respective meanings assigned
to them in the Agreement.
PRELIMINARY STATEMENT
The Borrower has requested, and the Banks and the Agents are
willing, to amend the Agreement on the terms and conditions set
forth in this Amendment.
AGREEMENT
IN CONSIDERATION of the mutual covenants and agreements
contained herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the
Borrower, the Banks and the Agents hereby agree as follows:
SECTION 1. AMENDMENT TO THE AGREEMENT.
1.1 AMENDMENT TO SECTION 1.01.
A. Section 1.01 of the Agreement is hereby amended by
deleting the table appearing in the definition of "Daily Margin"
in its entirety and substituting the following therefor:
Daily Margin When
Daily Margin When Utilization Ratio
Utilization Ratio Is Greater Than Or
Is Less Than 0.50:1.00 Equal to 0.50:1.00
TYPE OF ADVANCE TYPE OF ADVANCE
Base Rate Eurodollar Base Rate Eurodollar
Advance Rate Advance Advance Rate Advance
Level 1 0% 0.3750% 0% 0.4250%
Level 2 0% 0.4500% 0% 0.5000%
Level 3 0% 0.5000% 0% 0.6000%
Level 4 0.25% 0.7500% 0.25% 0.8500%
B. Section 1.01 of the Agreement is hereby further
amended by deleting the reference to "1997" in the definition of
"Commitment Termination Date" and substituting "1999" therefor.
1.2 AMENDMENT TO SECTION 2.03(a).
Section 2.03(a) of the Agreement is hereby amended by
deleting the text appearing after the colon and before the period
of the first sentence contained therein and substituting the
following therefor:
"(a) a rate of 0.10% per annum with respect to each day
during such period that the ratings with respect to
Long-Term Debt were at Level 1, (b) a rate of 0.125%
per annum with respect to each day during such period
that such ratings were at Level 2, (c) a rate of 0.20%
per annum with respect to each day during such period
that such ratings were at Level 3, and (d) a rate of
0.350% per annum with respect to each day during such
period that such ratings were at Level 4."
1.3 MODIFICATION OF SCHEDULE 1: LIST OF APPLICABLE LENDING
OFFICES.
Schedule 1 to the Agreement is hereby amended by
deleting therefrom the references to Marine Midland Bank, N.A.
and Credit Suisse and the corresponding lending office
information.
SECTION 2. DELETION OF MARINE MIDLAND BANK, N.A. AND
CREDIT SUISSE AS A BANK; COMMITMENTS.
The Agreement is hereby amended to delete each of
Marine Midland Bank, N.A. ("Marine Midland") and Credit Suisse as
a Bank thereunder to the extent set forth in the Acknowledgement
executed by Marine Midland and Credit Suisse, as applicable, in
the form of Annex A to this Amendment (the "Acknowledgement").
Accordingly, the Commitments set forth on the signature pages to
the Agreement are hereby deleted and the Commitments set forth on
the signature pages to this Amendment substituted therefor.
SECTION 3. CONDITIONS TO EFFECTIVENESS.
Section 1 of this Amendment shall become effective only
upon the satisfaction of all of the following conditions
precedent (the date of satisfaction or waiver of such conditions
being referred to herein as the "First Amendment Effective Date")
and the Agents receiving all of the following (with sufficient
originally executed copies, where appropriate, for each Bank and
the Agents), in form and substance satisfactory to the Agents and
their counsel and, unless otherwise noted, dated the First
Amendment Effective Date: (i) resolutions of the Borrower's
board of directors approving and authorizing the execution,
delivery, and performance of this Amendment, certified as of the
First Amendment Effective Date by its corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment, (ii) executed copies of this
Amendment, (iii) signature and incumbency certificates of the
Borrower's officers executing this Amendment, (iv) such other
evidence as the Agents may reasonably request to establish the
consummation of the transactions contemplated hereby, the taking
of all corporate proceedings in connection with this Amendment
and the compliance with the conditions set forth herein, and (v)
the Borrower shall have paid to the Funding Agent, for
distribution to the Banks, an amount equal to 0.025% multiplied
by each Lender's Commitment.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agents and
the Banks that the following statements are true, correct and
complete:
(a) ORGANIZATION AND POWERS. The Borrower has all
requisite corporate power and authority to enter into this
Amendment and to carry out the transactions contemplated by,
and perform its obligations under, the Agreement, as amended
hereby (the "Amended Agreement").
(b) AUTHORIZATION OF AGREEMENT. The execution and
delivery of this Amendment have been duly authorized by all
necessary corporate actions by the Borrower. This Amendment
has been duly executed and delivered by the Borrower.
(c) NO CONFLICT. The execution and delivery by the
Borrower of this Amendment and the performance by the
Borrower of the Amended Agreement do not and will not (i)
violate any provision of any law, rule or regulation
applicable to the Borrower, the charter or bylaws of the
Borrower or any order, judgment or decree of any court or
other agency of government binding on the Borrower, (ii)
conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any
indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Borrower is a
party or by which it is or its properties may be bound or
affected, (iii) result in or require the creation or
imposition of any Lien upon any of its properties or assets,
or (iv) require any approval of stockholders or any approval
or consent of any natural person, corporation, partnership,
association, trust, bank or other organization, whether or
not a legal entity, that is a party to any indenture or loan
or credit agreement or any other agreement, lease or
instrument to which the Borrower is a party or by which it
or any of its properties may be bound or affected.
(d) GOVERNMENTAL CONSENTS. The execution and delivery
by the Borrower of this Amendment and the performance by the
Borrower of the Amended Agreement do not and will not
require any registration with, consent or approval of, or
notice to, or other action of, with or by, any federal,
state or other governmental authority or regulatory body.
(e) BINDING OBLIGATION. This Amendment and the
Amended Agreement are the legally valid and binding
obligations of the Borrower, enforceable against it in
accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
or limiting creditors' rights generally or by equitable
principles relating to enforceability.
(f) INCORPORATION OF REPRESENTATIONS AND WARRANTIES
FROM AGREEMENT. The representations and warranties
contained in Section 4.01 of the Amended Agreement are and
will be true, correct and complete in all material respects
on and as of the First Amendment Effective Date to the same
extent as though made on and as of that date, except to the
extent such representations and warranties specifically
relate to an earlier date, in which case such
representations and warranties were true, correct and
complete in all material respects on and as of such earlier
date.
(g) ABSENCE OF DEFAULT. No event has occurred and is
continuing or will result from the consummation of the
transactions contemplated by this Amendment which constitute
an Event of Default or that would constitute an Event of
Default but for the requirement that notice be given or time
elapse or both.
SECTION 5. MISCELLANEOUS.
(a) REFERENCE TO AND EFFECT ON THE AGREEMENT.
(i) On and after the First Amendment Effective
Date, each reference in the Agreement to "this
Agreement", "hereunder", "hereof", "herein" or words of
like import, shall mean and be a reference to the
Agreement, as amended hereby.
(ii) Except as specifically amended hereby, the
terms, conditions and provisions of the Agreement shall
remain in full force and effect and are hereby ratified
and confirmed.
(iii) The execution, delivery and performance of
this Amendment shall not, except as expressly provided
herein, (x) constitute a waiver or modification of any
provisions of, or operate as a waiver of any right,
power or remedy of the Banks or the Agents under, the
Agreement or (y) prejudice any right or remedy that the
Banks or the Agents may now have or may have in the
future under or in connection with the Agreement or any
instrument or agreement referred to herein.
(b) EXECUTION IN COUNTERPARTS; EFFECTIVENESS. This
Amendment may be executed in any number of counterparts and
by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed
to be an original and all of which taken together shall
constitute but one and the same instrument. This Amendment
shall become effective upon the execution hereof by Majority
Banks, the Agents and the Borrower and receipt by the
Borrower and the Agents of written notification of such
execution and authorization of delivery thereof and upon
satisfaction of the conditions set forth in Section 3
hereof.
(c) COSTS, EXPENSES AND TAXES. The Borrower
acknowledges that all costs, fees, and expenses as described
in subsection 8.04 of the Agreement incurred by the Agents
and their counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for
the account of the Borrower.
(d) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
(e) HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference
only and shall not constitute a part of this Amendment for
any other purpose or be given any substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto
duly authorized as of the date first above written.
THE DIAL CORP
By /s/ R. G. Nelson
Title: Vice President-Finance
and Treasurer
By /s/ Richard C. Stephan
Title: Vice President-Controller
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
and Reporting Agent
By /s/ Kay S. Warren
Title: Vice President
CITIBANK, N.A.,
as Agent and Funding Agent
By /s/Barbara A. Cohen
Title: Vice President
Commitment Bank:
$36,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Robert Troutman
Title:Vice President
$41,000,000 CITIBANK, N.A.
By /s/ Barbara A. Cohen
Title: Vice President
$24,000,000 BANK OF MONTREAL
By /s/ J. Donald Higgins
Title: Managing Director
$24,000,000 THE CHASE MANHATTAN BANK, N.A.
By /s/ Richard A. Barrow
Title: Vice President
$29,000,000 CHEMICAL BANK
By /s/ Jeffry Howe
Title: Vice President
$29,000,000 CIBC, INC.
By /s/ R. A. Mendoza
Title: Vice President
$24,000,000 BANK OF AMERICA ILLINOIS
By /s/ Robert Troutman
Title: Vice President
29,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/ Frank M. Johnson
Title: Vice President
$24,000,000 ROYAL BANK OF CANADA
By /s/ Tom Oberaigner
Title: Manager
$20,000,000 BANK ONE, ARIZONA, N.A.
By /s/ Clifford Payson
Title: Vice President
$24,000,000 FIRST INTERSTATE BANK OF ARIZONA,
N.A.
By /s/ Gary Frandson
Title: Vice President
$24,000,000 THE FIRST NATIONAL BANK OF
CHICAGO
By /s/ J. C. Wellings
Title: Vice President
$20,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, LOS ANGELES AGENCY
By /s/ Steven Savoldelli
Title: Senior Vice President
$20,000,000 THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY
By /s/ Y. Kamisawa
Title: Deputy General Manager
By /s/ T. Morgan Edwards II
Title: Vice President
$20,000,000 MELLON BANK, N.A.
By /s/ M. Wuit
Title: First Vice President
$24,000,000 THE MITSUI TRUST & BANKING CO.,
LTD. LOS ANGELES AGENCY
By /s/ Ken Takahashi
Title: General Manager & Agent
$24,000,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By /s/ Diana H. Imhof
Title: Associate
$24,000,000 NBD BANK, N.A.
By /s/ James R. Frye
Title: First Vice President
$20,000,000 THE NORTHERN TRUST COMPANY
By /s/ Martin G. Alston
Title: Vice President
$20,000,000 UNION BANK
By /s/ Ali Moghaddan
Title: Vice President
ANNEX A
[FORM OF ACKNOWLEDGEMENT]
[Insert name of Bank] agrees to the terms of this Amendment
and acknowledges that, from and after the effective date of this
Amendment, [insert name of Bank] is no longer a Bank for purposes
of the Agreement and, other than as set forth in Section 2.11 and
8.04(c) of the Agreement, the rights and obligations of [insert
name of Bank] under the Agreement are terminated.
This acknowledgement is conditioned on the payment to
[insert name of Bank] of the principal, accrued interest, fees
and other costs due to it under the Agreement, all as set forth
on Schedule 1 hereto.
[BANK], as a Bank
By:__________________________
Title:_______________________
<PAGE>
EXHIBIT 10.H2
RESOLUTION ADOPTED BY THE
BOARD OF DIRECTORS OF
THE DIAL CORP
AUGUST 18, 1994
RESOLVED, that the 1983 Stock Option and Incentive Plan of
the Corporation is amended as follows, effective August 1, 1994:
Section 3 shall be amended to read in its entirety as
follows:
3. ADMINISTRATION. The Plan shall be administered by
the Executive Compensation Committee (the "Committee")
of the Board or such other committee of the Board,
composed of not less than two disinterested persons (as
defined in Rule 16b-3 (c) (2), as promulgated by the
Securities and Exchange Commission (the "Commission"
under the Securities Exchange Act of 1934 (the
"Exchange Act" or any successor definition adopted by
the Commission). Except as limited by the express
provisions of the Plan, the Committee shall have sole
and complete authority and discretion to: (i) select
Participants and grant Awards; (ii) determine the
number of shares to be subject to types of Awards
generally, as well as to individual Awards granted
under the Plan; (iii) determine the terms and
conditions upon which Awards shall be granted under the
Plan; (iv) prescribe the form and terms of instruments
evidencing such grants; and (v) establish from time to
time regulations for the administration of the Plan,
interpret the Plan, and make all determinations deemed
necessary or advisable for the administration of the
Plan.
Sections 4, 6, 7, 9 and 11, regarding the grant and
terms of awards shall be amended to substitute the word
"Committee" for "Board" wherever it appears.
The first clause in Section 11(c) shall be replaced
with the following clause:
Each certificate issued in respect of shares of
Restricted Stock awarded under the Plan shall be
registered in the name of the Participant and deposited
by the Participant except as otherwise set forth in the
agreement referred to in paragraph (d) of this Section
11,
The following sentence shall be added to Section 15:
Notwithstanding the above provisions of this Section
15, a Participant holding a Nonqualified Stock Option
and a related Limited Stock Appreciation Right and/or a
related Stock Appreciation Right may designate as the
transferee of any such Option or Right, at the
discretion of the Committee, any member of such
Participant's "Immediate Family" (as defined in Rule
16a, as promulgated by the Commission under the
Exchange Act) or a trust whose beneficiaries are
members of such Participant's Immediate Family, without
payment of consideration, to have the power to exercise
such Option or Right, and be subject to all the
conditions of such Option or Right prior to such
designation, such power to exercise to become effective
only in the event that such Participant shall die prior
to exercising such Option or Right.
<PAGE>
EXHIBIT 10.I2
RESOLUTION ADOPTED BY THE
BOARD OF DIRECTORS OF
THE DIAL CORP
AUGUST 18, 1994
RESOLVED, that the 1992 Stock Incentive Plan of the
Corporation is amended as follows, effective August 1, 1994:
The following sentence shall be added to Section 5(e):
Notwithstanding the above provisions of this Section
5(e), an optionee holding a Non-Qualified Stock Option
may designate as the transferee of any such Option, at
the discretion of the Committee, any member of such
optionee's "Immediate Family" (as defined in Rule 16a,
as promulgated by the Commission under the Exchange
Act) or a trust whose beneficiaries are members of such
optionee's Immediate Family, without payment of
consideration, to have the power to exercise such
Option and be subject to all the conditions of such
Option prior to such designation, such power to
exercise to become effective only in the event that
such optionee shall die prior to exercising such
Option.
The first clause in the second sentence of the first
paragraph of Section 7(b) shall be replaced with the
following clause:
Except as otherwise set forth in a Restricted Stock
Agreement any certificate issued in respect of shares
of Restricted Stock shall be registered in the name of
such participant and shall bear an appropriate legend
referring to the terms, conditions, and restrictions
applicable to such Award,
<PAGE>
EXHIBIT 10.M
THE DIAL CORP
SUPPLEMENTAL TRIM PLAN
(Amended and Restated effective January 1, 1994)
1. PURPOSE OF THE PLAN
The purpose of the Supplemental TRIM Plan (the Plan) is to
provide a select group of management or highly compensated
employees who are officers and key employees of The Dial Corp
(the Company) and its subsidiaries with an opportunity to
accumulate pre-tax savings for retirement.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Advisory
Committee (the Committee) the members of which shall be appointed
by the Chief Executive Officer of The Dial Corp. Subject to the
express provisions of the Plan, the Committee shall have the
authority to adopt, amend and rescind such rules and regulations,
and to make such determinations and interpretations relating to
the Plan, which it deems necessary or advisable for the
administration of the Plan, but it shall not have the power to
amend, suspend or terminate the Plan. All such rules,
regulations, determinations and interpretations shall be
conclusive and binding on all parties.
3. PARTICIPATION IN THE PLAN
(a) Participation in the plan shall be restricted to
those officers and key employees of the Company and its
subsidiaries whose pre-tax, elective deferrals to The Dial
Companies Capital Accumulation Plan ("TRIM") are actually limited
by the elective deferral limitations contained in Section 402 of
the Internal Revenue Code to the extent such deferrals do not
reach the maximum employer-matchable percentage of their base
salary under the TRIM plan and whose timely written requests to
defer the receipt of compensation, which may be owed to them for
services rendered, are honored in whole or in part by the
Committee, in its sole discretion. The Committee may, in its
discretion, offer to any employee who is part of the select group
of management or highly compensated employees who does not meet
the requirements of the preceding sentence, the opportunity to
participate in the Plan. A written request for deferral under
paragraph 4 shall not be timely in any event unless it is duly
submitted to the Committee before the services to which the base
salary to be deferred is related have been rendered. No deferral
of compensation need be made by a participant in the Plan as a
condition to entitlement to the benefit described in paragraph
6(a)(iii).
(b) If a participant in the Plan shall (1) sever his or
her employment with the Company or one of its subsidiaries during
or following such employment, (2) engage in any activity in
competition with the Company or any of its subsidiaries during or
following such employment, or (3) remain in the employ of a
corporation which for any reason ceases to be a subsidiary of the
Company, his or her participation in the Plan shall automatically
terminate, and the Committee may direct, in its sole discretion,
that he or she be paid in a lump sum the aggregate amount
credited to his or her deferred compensation account as of the
date his or her employment is severed or the Committee determines
that he or she has engaged in such competitive activity or that
his or her employer is no longer a subsidiary of the Company.
4. REQUESTS FOR DEFERRAL
All requests for deferral of compensation must be made in
writing 30 days prior to the beginning of each quarter and shall
be in such form and shall contain such terms and conditions as
the Committee may determine. Each such request shall specify the
percentage or dollar amount of base salary if any, but in no
event shall the amount to be deferred in a Plan year be greater
than the lesser of (i) $30,000 less the total amount of all
contributions of whatever nature, to the Participant's TRIM
account during the same time period, and (ii) 12% of the
participant's base salary in the Plan year. Each such request
shall also specify (1) the date when payment of the aggregate
amount credited to the deferred compensation account is to
commence (which shall not be earlier than age 55 nor later than
the actual retirement date) and (2) whether such payment is then
to be made in a lump sum or in quarterly or annual installments,
and the period of time (not in excess of ten years) over which
the installments are to be paid. The Committee shall not, under
any circumstances, accept any request for deferral greater than
the limits defined above, or any request which is not in writing
or which is not timely submitted.
5. DEFERRAL OF COMPENSATION
The Committee shall notify each individual who has
submitted a request for deferral of compensation whether or not
such request has been accepted and honored. If the request has
been honored in whole or in part, the Committee shall advise the
participant of the percentage of his or her compensation which
the Committee has determined to be deferred. The Committee shall
further advise the participant of its determination as to the
date when payment of the aggregate amount credited to the
participant's deferred compensation account is to commence,
whether payment of the amount so credited as of that date will
then be made in a lump sum or in quarterly or annual
installments, and if payment is to be made in installments, the
period of time over which the installments will be paid. Upon
subsequently being advised of the existence of special
circumstances which are beyond the participant's control and
which impose a severe financial hardship on the participant or
his or her beneficiary, the Committee may, in its sole and
exclusive discretion, modify the deferral arrangement established
for that participant to the extent necessary to remedy such
financial hardship.
6. DEFERRED COMPENSATION ACCOUNT
(a) A deferred compensation account shall be maintained
for each participant of this Plan by his or her employer. The
employer shall credit to each participant's account the following
amounts, as appropriate:
(i) The deferral duly elected under this Plan
on the date the participant would have received
such deferral as base salary;
(ii) Based on the provision of the TRIM Plan in
effect at the time, an amount with respect to the
deferrals in (i), above, calculated on the same basis
as the employer's then current matching contribution
on elective deferrals under the TRIM Plan on the
first day of each quarter. In no event shall this
amount exceed the maximum amount of matching
contributions which would be available, assuming
the participant elects the maximum deferrals allowed
under TRIM and the limitations on elective deferrals
contained in Code Section 402 do not apply, less the
amount of actual matching contributions made by the
employer to the participant's TRIM account, if any,
for the same period;
(iii) Based on the provisions of the TRIM Plan in
effect at the time, and not withstanding the amount,
if any, of deferrals in (i) above, an amount equal to
the employer matching contributions which would have
been made to the participant's TRIM Plan account
based on the amount of elective deferrals actually
made by said participant to the TRIM Plan, but for
the application of Code Section 401(a)(17) or any
other similar law on the first day of each quarter;
and
(iv) Interest on the participant account balance
at a per annum rate equal to the yield as of January
1, April 1, July 1, and October 1 on Merrill Lynch
Taxable Bond Index--Long Term Medium Quality (A3)
Industrial Bonds or such other rate the Committee may
determine in its sole discretion, credited quarterly
prior to the termination of the participant's
deferral period, or if the deferred compensation
account is to be paid in installments, prior to the
termination of such installment period.
(b) The Company or employer, as the case may be, shall
not be required to physically segregate any amounts of money or
property or otherwise provide for funding of any amounts credited
to the deferred compensation accounts of participants in the
Plan. Participants have no claim, interest or right to any
particular funds or property that the Company or any employer may
choose to reserve or otherwise use to provide for its liabilities
under this Plan and the participants of this Plan shall have the
rights of general creditor only with respect to their interests
in the Plan.
7. DESIGNATION OF BENEFICIARY
Each participant in the plan shall deliver to the Committee
a written instrument, in the form provided by the Committee,
designating one or more beneficiaries to whom payment of the
amount credited to his or her deferred compensation account shall
be made in the event of his or her death. Unless the Committee
shall otherwise determine, such payments shall be made in such
amounts and at such times as they would otherwise have been paid
to the participant if he had survived.
8. NONASSIGNABILITY OF PARTICIPANT RIGHTS
No right, interest or benefit under the Plan shall be
assignable or transferable under any circumstances other than to
a participant's designated beneficiary in the event of his or her
death, nor shall any such right, interest or benefit be subject
to or liable for any debt, obligation, liability or default of
any participant. In the event of any attempt to assign or
transfer any right, interest or benefit under the Plan, or to
subject any such right, interest or benefit to a debt,
obligation, liability or default of a participant, his or her
participation in the Plan shall terminate on the date such an
attempt is made, and he or she shall be paid in a lump sum the
aggregate amount credited to his or her deferred compensation
account as of that date.
9. RIGHTS OF PARTICIPANTS
A participant in the Plan shall have only those rights,
interest or benefits as are expressly provided in the Plan. This
Plan does not create for any employee or participant any right to
be retained in service by any Company nor affect the right of any
such Company to discharge any employee or participant from
employment.
10. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
(a) The Board of Directors of the Company (the Board) may
from time to time amend, suspend or terminate the Plan, in whole
or in part, and if the Plan is suspended or terminated, the Board
may reinstate any or all provisions of the Plan, except that no
amendment, suspension or termination of the Plan shall, without
consent of a participant, adversely affect such participant's
right to receive payment of the entire amount credited to his or
her deferred compensation account on the date of such Board
action. In the event the Plan is suspended or terminated, the
Board may, in its discretion, direct the Committee to pay to each
participant the amount credited to his or her account either in a
lump sum or in accordance with the Committee's prior
determination regarding the method of payment.
(b) Any action by The Dial Corp under the Plan may be by
resolution of its Board of Directors, or by any person or persons
duly authorized by resolution of said Board to take such action.
11. EFFECTIVE DATE
The Plan shall become effective on the date of its approval
by the Board or on such other date as the Board by direct. The
Plan year is January 1, to December 31.
<PAGE>
EXHIBIT 10.R
THE DIAL CORP
1983 STOCK OPTION AND INCENTIVE PLAN
AMENDED AND RESTATED
RESTRICTED STOCK AGREEMENT
AUGUST 12, 1994
WHEREAS, ________ shares of Restricted Stock have previously
been awarded by The Dial Corp (the "Corporation"), a Delaware
corporation, to ________________ (the "Employee") pursuant to the
1983 Stock Option and Incentive Plan of The Dial Corp (the
"Plan") and upon the restrictions, terms and conditions set forth
in Restricted Stock Agreements dated as of November 15, 1990 and
August 15, 1991 (together, the "Original Agreement");
WHEREAS, each of the Employee and the Corporation desires to
amend and restate the Original Agreement to read in its entirety
as set forth herein;
NOW, THEREFORE, the Original Agreement is amended and
restated to read in its entirety as set forth herein (as amended
and restated, this "Agreement"):
1. SHARE AWARD. The Corporation hereby affirms the awards
made in 1990 and 1991 to the Employee of an aggregate of ________
shares (the "Restricted Shares") (as adjusted pursuant to a stock
split) of Common Stock, par value $1.50 per share (the "Common
Stock") of the Corporation pursuant to the Plan, upon the terms
and conditions and subject to the restrictions set forth in the
Plan and hereinafter.
2. SHARES TO BE HELD IN TRUST. All of the Restricted
Shares shall be contributed to a trust account (the "Restricted
Shares Account") established pursuant to The Dial Corp Restricted
Stock Trust (the "Trust"). The Restricted Shares shall be held
in the Trust until the termination of the "Trust Restriction
Period," as set forth herein. The Restriction set forth in this
Section shall be referred to herein as the "Trust Restriction".
Except as provided in Paragraph 3 below, the Corporation shall
have no further obligation hereunder to make contributions to the
Trust for the benefit of the Employee. Except pursuant to
paragraph 5 hereof, the Employee shall have no right to direct
the investment of any assets held in the Restricted Shares
Account.
3. DIVIDEND ACCOUNT. In addition to the Restricted Shares
Account, the Corporation shall cause the Trustee to establish and
maintain a dividend account under the Trust for the Employee (the
"Dividend Account"). The Dividend Account shall be credited with
cash equal to the regular cash dividends, and stock representing
any stock dividends, paid from time to time by the Corporation
attributable to the Restricted Shares credited to the Restricted
Shares Account. The cash held in the Dividend Account will be
invested by the Trustee in its discretion unless the Corporation
directs the investment of the Dividend Account or, after the
Termination Date (as defined herein) unless the Employee directs
such investment pursuant to Paragraph 5. Except pursuant to
paragraph 5 hereof, the Employee shall have no right to direct
the investment of any assets held in the Dividend Account.
4. SERVICE RESTRICTION PERIOD.
(a) SERVICE RESTRICTION PERIOD. During the period
(the "Service Restriction Period") commencing on the date hereof
(the "Commencement Date") and terminating on the date determined
in accordance with the following schedule, the Restricted Shares
credited to the Employee's Restricted Shares Account shall be
subject to forfeiture. The Service Restriction Period shall
lapse at the expiration of the Service Restriction Period with
respect thereto, in accordance with the following schedule:
DATE AMOUNT NONFORFEITABLE
March 1, 1995 ________ shares
August 15, 1995 ________ shares
November 15, 1995 ________ shares
August 15, 1996 ________ shares
Subject to Section 11 of the Plan, the Executive
Compensation Committee of the Board of Directors (the
"Committee") shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall
lapse with respect to any Restricted Shares, prior to the
expiration of the Service Restriction Period or the Trust
Restriction Period with respect thereto, or to remove any or all
of such restrictions, whenever the Committee may determine that
such action is appropriate.
Subject to Section 18 hereof, all assets credited to
the Employee's Dividend Account pursuant to Paragraph 3 shall be
nonforfeitable as of the date credited to the Dividend Account.
(b) CHANGE IN CONTROL. Notwithstanding the above, in
the event that there occurs a Change in Control (as defined in
the Trust), all Restricted Shares credited to the Employee's
Restricted Shares Account shall automatically vest and become
nonforfeitable as of the date of the Change in Control, to the
full extent of the original grant, and shall be distributed in
accordance with the Trust.
5. ELECTION TO DIVERSIFY.
(a) GENERAL. From and after (but not prior to) the
Employee's Termination Date (as defined herein), the Employee
shall have the right to direct the Trustee of the Trust to
diversify the nonforfeitable amount (determined pursuant to
Paragraph 4 and paragraph 6(a)) of the Restricted Shares credited
to his Restricted Shares Account by selling all or a portion of
said Restricted Shares and purchasing any other investment or
investments that the Trustee of the Trust (the "Trustee") is
permitted to make pursuant to the Trust. From and after (but not
prior to) such Termination Date the Employee also shall have the
right to direct the Trustee (subject to the terms of the Trust)
concerning the investment of any amounts allocated to his
Dividend Account. The Employee may change his directions, once
made, in accordance with any policies or procedures adopted
pursuant to Paragraph 5(d). Any direction by the Employee to
purchase or sell Common Stock or any other security of the
Corporation will be honored only if the Trustee has received an
opinion acceptable to it that such purchase or sale does not
contravene any applicable federal or state laws, rules or
regulations, including, but not limited to, an opinion that such
purchase or sale would not cause liability under Section 16 of
the Securities and Exchange Act of 1934 and any rules or
regulations relating thereto.
(b) CHARGES. The Trustee is authorized to charge each
of the Employee's Accounts for the reasonable expenses of
carrying out investment instructions that are directly related to
such Account.
(c) RELIANCE ON DIRECTIONS. The Trustee and the
Corporation shall not be liable for acting in accordance with the
directions of the Employee pursuant to this Paragraph 5, or for
failing to act in the absence of any such direction. Neither the
Trustee nor the Corporation shall be responsible for any loss
resulting from any direction made by the Employee and shall have
no duty to review any direction made by the Employee. The
Trustee shall have no obligation to consult with the Employee
regarding the propriety or advisability of any directions made by
the Employee.
(d) POLICIES AND PROCEDURES. Subject to the terms of
the Trust, the Trustee may, in its discretion, establish rules,
policies, and procedures concerning the making of investment
directions under this Paragraph 5.
6. TERMINATION OF EMPLOYMENT.
(a) VESTING AND FORFEITURE. Subject to paragraph 4(b)
hereof, if the Employee ceases to be an employee of the
Corporation or any Affiliate of the Corporation for any reason
(other than death, total or partial disability, or normal or
early retirement), all Restricted Shares which at the time of
such termination of employment are subject to the restrictions
imposed by paragraph 4 above shall upon such termination of
employment be forfeited and returned to the Corporation. If the
Employee ceases to be an employee of the Corporation or any
Affiliate of the Corporation by reason of death, total or partial
disability, or normal or early retirement, the Service
Restriction Period shall, immediately upon such termination,
lapse with respect to all Restricted Shares credited to the
Employee's Restricted Shares Account, and no such Restricted
Shares shall hereafter be subject to forfeiture.
(b) ENTITLEMENT TO DISTRIBUTION. Upon the Employee's
termination of employment from the Corporation for any reason
(the "Termination Date"), the Trust Restriction Period shall
terminate, and the Employee shall be entitled to receive the
nonforfeitable amount (determined pursuant to Paragraph 4 and
paragraph 6(a)) of the Restricted Shares credited to his
Restricted Shares Account and all of the amount credited to his
Dividend Account under the Trust. For purposes of the preceding
sentence, the Employee's nonforfeitable amount shall be
determined as of the Termination Date.
(c) COMMENCEMENT OF DISTRIBUTION. Any distribution to
which the Employee may be entitled under this Agreement shall
commence as of the first business day of the year following the
year in which the Employee's Termination Date occurred.
(d) IN-KIND DISTRIBUTION ONLY. Any distribution from
the Trust to the Employee under this Agreement shall be made "in
kind" and shall consist entirely of (i) shares of Common Stock,
(ii) other investments made by the Trustee pursuant to paragraph
2 hereof or directed by the Employee pursuant to Paragraph 5
hereof, or (iii) a combination of such Common Stock and other
investments.
(e) FORM OF PAYMENT. The Employee irrevocably elects
to receive the benefits to which he is entitled to under this
Agreement in a single lump sum.
7. DESIGNATION OF BENEFICIARY. The Employee shall deliver
to the Corporation a written instrument, in the form provided by
the Corporation, designating one or more beneficiaries to whom
payment of the amounts credited to his Restricted Shares Account
and his Dividend Account shall be made in the event of the
Employee's death. In the absence of a beneficiary designation,
the amounts credited to the Employee's Accounts will be payable
to the Employee's surviving spouse, or if the Employee does not
leave a surviving spouse, to his estate.
8. CERTIFICATES FOR THE RESTRICTED SHARES. The
Corporation shall deliver to the Trustee a certificate or
certificates in respect of the Restricted Shares in the name of
the Trust, the aggregate number of Restricted Shares of which
shall equal the amount of the awards affirmed herein and the
Trust shall hold each such certificate on deposit for the account
of the Employee until delivery as contemplated by Section 6
above. Each such certificate shall bear the following legend:
The transferability of this certificate and
the shares of stock represented hereby are
subject to the terms and conditions
(including forfeiture) contained in the 1983
Stock Option and Incentive Plan of The Dial
Corp and an Agreement entered into between a
participant under such Plan and The Dial
Corp. Copies of such Plan and Agreement are
on file at the offices of The Dial Corp, Dial
Tower, Phoenix, Arizona 85077.
The Employee further agrees that simultaneously with his
acceptance of this Agreement, he (or the Trust on his behalf)
shall execute a stock power covering such award endorsed in blank
and that he (or the Trust on his behalf) shall promptly deliver
such stock power to the Corporation.
9. EMPLOYEE'S RIGHTS. Except as otherwise provided
herein, the Employee, with respect to the Restricted Shares,
shall have all rights of a stockholder, including, but not
limited to, the right to vote the shares and receive (in the
manner set forth in paragraph 3) any dividends.
10. EXPIRATION OF VESTING RESTRICTION PERIOD. Upon the
lapse of the Service Restriction Period with respect to any
Restricted Shares, the Corporation shall deliver to the Trust the
stock power held by the Corporation in respect of such Restricted
Shares pursuant to paragraph 8 above. The Restricted Shares as
to which the Service Restriction Period shall have lapsed shall
be free of the restrictions referred to in paragraph 8 above.
To the extent permissible under applicable tax, securities,
and other laws, the Corporation may, in its sole discretion,
permit the Employee to satisfy a tax withholding requirement by
directing the Corporation to apply Restricted Shares to which the
Employee is entitled as a result of termination of the Service
Restriction Period with respect to any Restricted Shares, in such
manner as the Corporation shall choose in its discretion to
satisfy such requirement.
11. NONASSIGNABILITY OF EMPLOYEE'S RIGHTS. No benefit
which shall be payable under the Agreement to the Employee or his
beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, charge, or otherwise dispose of the
same shall be void. No benefit shall in any manner be subject to
the debts, contracts, liabilities, engagements, or torts of the
Employee or his beneficiary, nor shall it be subject to
attachment or legal process for or against the Employee or his
beneficiary, except to the extent as may be required by law.
12. STATUS OF EMPLOYEE AS UNSECURED CREDITOR. All benefits
under this Agreement shall be the unsecured obligations of the
Corporation and, except for those assets which will be placed in
the Trust established in connection with this Agreement, no
assets will be placed in trust or otherwise segregated from the
general assets of the Corporation, as applicable, for the payment
of obligations hereunder. To the extent that the Employee or his
beneficiary acquires a right to receive payments hereunder, such
right shall be no greater than the right of any unsecured general
creditor of the Corporation. The Employee shall have no
preferred claim on, or any beneficial ownership interest in, any
assets of the Trust.
13. FEDERAL AND STATE TAXES. The Corporation or, if
required by the Trust, the Trustee shall make provision for the
reporting and withholding of any federal, state, or local taxes
that may be required to be withheld with respect to the payment
of benefits pursuant to the terms of this Agreement. To the
extent permissible under applicable tax, securities, and other
Stock or other securities received, as a result of the foregoing,
by the Employee with respect to Restricted Shares subject to the
restrictions contained in paragraph 2 or paragraph 4 above also
shall be subject to such restrictions, as the case may be, and if
required by the Committee the certificate(s) or other instruments
representing or evidencing such shares or securities shall be
legended and deposited with the Corporation, along with an
executed stock power, in the manner provided in paragraph 8
above.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be duly executed by its officers thereunto duly
authorized, and the Employee has hereunto set his hand as of the
day and year first above written.
THE DIAL CORP
By: /s/ F.E. Emerson
Its: V.P. Secretary
/s/ Employee
<PAGE>
EXHIBIT 10.S
THE DIAL CORP
1992 STOCK INCENTIVE PLAN
RESTRICTED STOCK AGREEMENT
August 12, 1994
1. SHARE AWARD. The Dial Corp (the "Corporation") hereby
awards to _______________ (the "Employee") ________ shares (the
"Restricted Shares") of Common Stock, par value $1.50 per share
(the "Common Stock") of the Corporation pursuant to The Dial Corp
1992 Stock Incentive Plan (the "Plan"), upon the terms and
conditions and subject to the restrictions set forth in the Plan
and in this Agreement (the "Agreement").
2. SHARES TO BE HELD IN TRUST. All of the Restricted
Shares shall be contributed by the Corporation to a trust account
(the "Restricted Shares Account") established pursuant to The
Dial Corp Restricted Stock Trust (the "Trust"). The Restricted
Shares shall be held in the Trust until the termination of the
"Trust Restriction Period," as set forth herein. The Restriction
set forth in this Section shall be referred to herein as the
"Trust Restriction". Except as provided in Paragraph 3 below,
the Corporation shall have no further obligation hereunder to
make contributions to the Trust for the benefit of the Employee.
Except pursuant to paragraph 5 hereof, the Employee shall have no
right to direct the investment of any assets held in the
Restricted Shares Account.
3. DIVIDEND ACCOUNT. In addition to the Restricted Shares
Account, the Corporation shall cause the Trustee to establish and
maintain a dividend account under the Trust for the Employee (the
"Dividend Account"). The Dividend Account shall be credited with
cash equal to the regular cash dividends, and stock representing
any stock dividends, paid from time to time by the Corporation
attributable to the Restricted Shares credited to the Restricted
Shares Account. The cash held in the Dividend Account will be
invested by the Trustee in its discretion unless the Corporation
directs the investment of the Dividend Account or, after the
Termination Date (as defined herein) unless the Employee directs
such investment pursuant to Paragraph 5. Except pursuant to
paragraph 5 hereof, the Employee shall have no right to direct
the investment of any assets held in the Dividend Account.
4. SERVICE RESTRICTION PERIOD.
(a) SERVICE RESTRICTION PERIOD. During the period
(the "Service Restriction Period") commencing on the date hereof
(the "Commencement Date") and terminating on the date determined
in accordance with the following schedule, the Restricted Shares
credited to the Employee's Restricted Shares Account shall be
subject to forfeiture. The Service Restriction Period shall
lapse at the expiration of the Service Restriction Period with
respect thereto, in accordance with the following schedule:
DATE AMOUNT NONFORFEITABLE
March 1, 1995 ________ shares
August 15, 1995 ________ shares
November 15, 1995 ________ shares
August 15, 1996 ________ shares
Subject to Section 7 of the Plan, the Executive
Compensation Committee of the Board of Directors (the
"Committee") shall have the authority, in its discretion, to
accelerate the time at which any or all of the restrictions shall
lapse with respect to any Restricted Shares, prior to the
expiration of the Service Restriction Period or the Trust
Restriction Period with respect thereto, or to remove any or all
of such restrictions, whenever the Committee may determine that
such action is appropriate.
Subject to Section 18 hereof, all assets credited to
the Employee's Dividend Account pursuant to Paragraph 3 shall be
nonforfeitable as of the date credited to the Dividend Account.
(b) CHANGE IN CONTROL. Notwithstanding the above, in
the event that there occurs a Change in Control (as defined in
the Trust), all Restricted Shares credited to the Employee's
Restricted Shares Account shall automatically vest and become
nonforfeitable as of the date of the Change in Control, to the
full extent of the original grant, and shall be distributed in
accordance with the Trust.
5. ELECTION TO DIVERSIFY.
(a) GENERAL. From and after (but not prior to)
the Employee's Termination Date (as defined herein), the Employee
shall have the right to direct the Trustee of the Trust to
diversify the nonforfeitable amount (determined pursuant to
Paragraph 4 and paragraph 6(a)) of the Restricted Shares credited
to his Restricted Shares Account by selling all or a portion of
said Restricted Shares and purchasing any other investment or
investments that the Trustee of the Trust (the "Trustee") is
permitted to make under the Plan. From and after (but not prior
to) such Termination Date the Employee also shall have the right
to direct the Trustee (subject to the terms of the Trust)
concerning the investment of any amounts allocated to his
Dividend Account. The Employee may change his directions, once
made, in accordance with any policies or procedures adopted
pursuant to Paragraph 5(d). Any direction by the Employee to
purchase or sell Common Stock or any other security of the
Corporation will be honored only if the Trustee has received an
opinion acceptable to it that such purchase or sale does not
contravene any applicable federal or state laws, rules or
regulations, including, but not limited to, an opinion that such
purchase or sale would not cause liability under Section 16 of
the Securities and Exchange Act of 1934 and any rules or
regulations relating thereto.
(b) CHARGES. The Trustee is authorized to charge each
of the Employee's Accounts for the reasonable expenses of
carrying out investment instructions that are directly related to
such Account.
(c) RELIANCE ON DIRECTIONS. The Trustee and the
Corporation shall not be liable for acting in accordance with the
directions of the Employee pursuant to this Paragraph 5, or for
failing to act in the absence of any such direction. Neither the
Trustee nor the Corporation shall be responsible for any loss
resulting from any direction made by the Employee and shall have
no duty to review any direction made by the Employee. The
Trustee shall have no obligation to consult with the Employee
regarding the propriety or advisability of any directions made by
the Employee.
(d) POLICIES AND PROCEDURES. Subject to the terms of
the Trust, the Trustee may, in its discretion, establish rules,
policies, and procedures concerning the making of investment
directions under this Paragraph 5.
6. TERMINATION OF EMPLOYMENT.
(a) VESTING AND FORFEITURE. Subject to paragraph 4(b)
hereof, if the Employee ceases to be an employee of the
Corporation or any Affiliate of the Corporation for any reason
(other than death, total or partial disability, or normal or
early retirement), all Restricted Shares which at the time of
such termination of employment are subject to the restrictions
imposed by paragraph 4 above shall upon such termination of
employment be forfeited and returned to the Corporation. If the
Employee ceases to be an employee of the Corporation or any
Affiliate of the Corporation by reason of death, total or partial
disability, or normal or early retirement, the Service
Restriction Period shall, immediately upon such termination,
lapse with respect to all Restricted Shares credited to the
Employee's Restricted Shares Account and no such Restricted
Shares shall thereafter be subject to forfeiture.
(b) ENTITLEMENT TO DISTRIBUTION. Upon the Employee's
termination of employment from the Corporation for any reason
(the "Termination Date"), the Trust Restriction Period shall
terminate, and the Employee shall be entitled to receive the
nonforfeitable amount (determined pursuant to Paragraph 4 and
paragraph 6(a)) of the Restricted Shares credited to his
Restricted Shares Account and all of the amount credited to his
Dividend Account under the Trust. For purposes of the preceding
sentence, the Employee's nonforfeitable amount shall be
determined as of the Termination Date.
(c) COMMENCEMENT OF DISTRIBUTION. Any distribution to
which the Employee may be entitled under this Agreement shall
commence as of the first business day of the year following the
year in which the Employee's Termination Date occurred.
(d) IN-KIND DISTRIBUTION ONLY. Any distribution from
the Trust to the Employee under this Agreement shall be made "in
kind" and shall consist entirely of (i) shares of Common Stock,
(ii) other investments made by the Trustee pursuant to Paragraph
2 hereof or directed by the Employee pursuant to Paragraph 5
hereof, or (iii) a combination of such Common Stock and other
investments.
(e) FORM OF PAYMENT. The Employee irrevocably elects
to receive the benefits to which he is entitled to under this
Agreement in a single lump sum.
7. DESIGNATION OF BENEFICIARY. The Employee shall deliver
to the Corporation a written instrument, in the form provided by
the Corporation, designating one or more beneficiaries to whom
payment of the amounts credited to his Restricted Shares Account
and his Dividend Account shall be made in the event of the
Employee's death. In the absence of a beneficiary designation,
the amounts credited to the Employee's Accounts will be payable
to the Employee's surviving spouse, or if the Employee does not
leave a surviving spouse, to his estate.
8. CERTIFICATES FOR THE RESTRICTED SHARES. The
Corporation shall deliver to the Trustee a certificate or
certificates in respect of the Restricted Shares in the name of
the Trust, the aggregate number of Restricted Shares of which
shall equal the amount of the award granted herein and the Trust
shall hold each such certificate on deposit for the account of
the Employee until delivery as contemplated by Section 6 hereof.
Each such certificate shall bear the following legend:
The transferability of this certificate and
the shares of stock represented hereby are
subject to the terms and conditions
(including forfeiture) contained in The Dial
Corp 1992 Stock Incentive Plan and an
Agreement entered into between a participant
under such Plan and The Dial Corp. Copies of
such Plan and Agreement are on file at the
offices of The Dial Corp, Dial Tower,
Phoenix, Arizona 85077.
The Employee further agrees that simultaneously with his
acceptance of this Agreement, he (or the Trust on his behalf)
shall execute a stock power covering such award endorsed in blank
and that he (or the Trust on his behalf) shall promptly deliver
such stock power to the Corporation.
9. EMPLOYEE'S RIGHTS. Except as otherwise provided
herein, the Employee, with respect to the Restricted Shares,
shall have all rights of a stockholder, including, but not
limited to, the right to vote the shares and receive (in the
manner set forth in paragraph 3) any dividends.
10. EXPIRATION OF VESTING RESTRICTION PERIOD. Upon the
lapse of the Service Restriction Period with respect to any
Restricted Shares, the Corporation shall deliver to the Trust the
stock power held by the Corporation in respect of such Restricted
Shares pursuant to paragraph 8 above. The Restricted Shares as
to which the Service Restriction Period shall have lapsed shall
be free of the restrictions referred to in paragraph 4 above.
To the extent permissible under applicable tax, securities,
and other laws, the Corporation may, in its sole discretion,
permit the Employee to satisfy a tax withholding requirement by
directing the Corporation to apply Restricted Shares to which the
Employee is entitled as a result of termination of the Service
Restriction Period with respect to any Restricted Shares, in such
manner as the Corporation shall choose in its discretion to
satisfy such requirement.
11. NONASSIGNABILITY OF EMPLOYEE'S RIGHTS. No benefit
which shall be payable under the Agreement to the Employee or his
beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, charge, or otherwise dispose of the
same shall be void. No benefit shall in any manner be subject to
the debts, contracts, liabilities, engagements, or torts of the
Employee or his beneficiary, nor shall it be subject to
attachment or legal process for or against the Employee or his
beneficiary, except to the extent as may be required by law.
12. STATUS OF EMPLOYEE AS UNSECURED CREDITOR. All benefits
under this Agreement shall be the unsecured obligations of the
Corporation and, except for those assets which will be placed in
the Trust established in connection with this Agreement, no
assets will be placed in trust or otherwise segregated from the
general assets of the Corporation, as applicable, for the payment
of obligations hereunder. To the extent that the Employee or his
beneficiary acquires a right to receive payments hereunder, such
right shall be no greater than the right of any unsecured general
creditor of the Corporation. The Employee shall have no
preferred claim on, or any beneficial ownership interest in, any
assets of the Trust.
13. FEDERAL AND STATE TAXES. The Corporation or, if
required by the Trust, the Trustee shall make provision for the
reporting and withholding of any federal, state, or local taxes
that may be required to be withheld with respect to the payment
of benefits pursuant to the terms of this Agreement. To the
extent permissible under applicable tax, securities, and other
laws, the Corporation may, in its sole discretion, permit the
Employee to satisfy a tax withholding requirement by directing
the Corporation to apply Restricted Shares to which the Employee
is entitled as a result of termination of the Restricted Period
with respect to any Restricted Shares, in such manner as the
Corporation shall choose in its discretion to satisfy such
requirement.
14. NO "GROSS-UP". The Employee understands and agrees
that the Employee will not be entitled to any compensation from
the Corporation for the amount of any income and employment taxes
that the Executive may be required to pay as any restrictions on
the Restricted Shares lapse.
15. GOVERNING LAW. This Agreement shall be interpreted and
administered under the laws of the State of Delaware.
16. AMENDMENT, SUSPENSION, OR TERMINATION. This Agreement
may be amended, suspended, or terminated by a written agreement
executed by the Corporation and the Employee. Any such
amendment, suspension, or termination shall be made only upon the
mutual consent of the parties.
17. COMPLIANCE WITH LAWS. The obligation of the
Corporation and the Trustee to undertake any act under this
Agreement (including but not limited to, purchasing and selling
shares of Common Stock) shall be subject to all applicable laws,
rules, and regulations, and to such approvals by government
agencies as may be required. The Corporation shall be under no
obligation to register under the Securities Act of 1933 (the
"Act") any of the shares of Common Stock payable under this
Agreement. If the shares of Common Stock paid under this
Agreement may in certain circumstances be exempt from
registration under the Act, the Corporation may restrict the
transfer of such shares in such manner as it deems advisable to
ensure the availability of any such exemption.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the
event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary
distribution with respect to the Common Stock or other change in
corporate structure affecting the Common Stock, subsequent to the
date hereof, during the Trust Restriction Period, the number of
shares of Common Stock subject to restrictions as set forth
herein shall be appropriately adjusted and the determination of
the Board of Directors of the Corporation, or the Committee, as
the case may be, as to any such adjustments shall be final,
conclusive and binding upon the Employee. Any shares of Common
Stock or other securities received, as a result of the foregoing,
by the Employee with respect to Restricted Shares subject to the
restrictions contained in paragraph 2 or paragraph 4 above also
shall be subject to such restrictions, as the case may be, and if
required by the Committee the certificate(s) or other instruments
representing or evidencing such shares or securities shall be
legended and deposited with the Corporation, along with an
executed stock power, in the manner provided in paragraph 8
above.
IN WITNESS WHEREOF, the Corporation has caused this
Agreement to be duly executed by its officers thereunto duly
authorized, and the Employee has hereunto set his hand as of
the day and year first above written.
THE DIAL CORP
By: /s/ F.E. Emerson
Its: V.P. Secretary
/s/ Employee
<PAGE>
<TABLE>
Exhibit 11
THE DIAL CORP
STATEMENT RE COMPUTATION OF NET INCOME (LOSS)
PER COMMON SHARE
(000 omitted)
<CAPTION>
Year ended December 31,
------------------------------------------
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
PRIMARY:
Net income (loss) $ 140,311 $ 120,485 $ (81,515)
Less: Preferred stock dividends (1,123) (1,122) (1,122)
Dilution due to outstanding
options of subsidiaries
considered common stock
equivalents (9)
----------- ----------- -----------
$ 139,179 $ 119,363 $ (82,637)
=========== =========== ===========
Weighted average common shares
outstanding before common
equivalents 85,069 84,004 82,326
Common equivalent stock options 1,577 1,402 1,700
----------- ----------- -----------
86,646 85,406 84,026
=========== =========== ===========
Net income (loss) per share
(dollars) $ 1.61 $ 1.40 $ (0.98)
=========== =========== ============
FULLY DILUTED:
Adjusted net income (loss) per above $ 139,179 $ 119,363 $ (82,637)
Less: Additional dilution due to
outstanding options of
subsidiaries considered
common stock equivalents (9)
----------- ----------- -----------
$ 139,179 $ 119,354 $ (82,637)
=========== =========== ===========
Average common and equivalent shares
per above 86,646 85,406 84,026
Common equivalent stock options 84
----------- ----------- -----------
86,646 85,490 84,026
=========== =========== ===========
Net income (loss) per share
(dollars) $ 1.61 $ 1.40 $ (0.98)
=========== =========== ============
</TABLE>
<PAGE>
EXHIBIT 21
THE DIAL CORP
SUBSIDIARIES AND AFFILIATES*
AS OF MARCH 15, 1995
AIRLINE CATERING & SERVICES GROUP
Faber Enterprises, Inc. (Delaware)
Faber Drug Co., Inc. (Illinois) (70%)
Franklin Ventures, Inc. (Illinois)
Greyhound-Dobbs Incorporated (Delaware)
Carson International Inc. (Delaware)+
Dobbs Houses, Inc. (Delaware)+
Dobbs-Paschal Midfield Corporation (Georgia) (75%)+
DOBBS INTERNATIONAL SERVICES, INC. (Delaware)
Dobbs Houses International, Inc. (Delaware)
Greyhound Support Services, Inc. (Delaware) (Inactive)
Greyhound Maintenance, Inc. (Arizona)
RESTAURA, INC. (Michigan)
Glacier Park, Inc. (Arizona) (80%)
Waterton Transport Company, Limited (Alberta)
CONSUMER PRODUCTS GROUP
Andora, S.A. (Mexico)
Ardison Properties, Inc. (Delaware)
ARMOUR INTERNATIONAL COMPANY (Arizona)
AIC Foreign Sales Corporation (Virgin Islands)
Armour-Dial del Ecuador, S.A. (Ecuador)
Armour Foods (Benelux) N.V. (Belgium)
Armour Foods (Deutschland) GmbH (Germany)
The Dial Corp. (Deutschland) mbH (Germany)
The Dial Corporation (Panama), S.A. (Panama)
The Dial Corp (International) (Arizona)
The Dial Corporation (Hong Kong) Limited (Hong Kong)
The Dial Corporation Mexico, S.A. de C.V. (Mexico)
The Dial Corporation (Puerto Rico), Inc. (Arizona)
The Dial Corporation (Thailand) Limited (Thailand)
The Dial Corp. (Korea) Ltd. (Korea)
Ft. Madison Dial, Inc. (Iowa)
Purex de Panama, S.A. (Panama)
CONVENTION SERVICES GROUP
EXHIBITGROUP INC. (Delaware)
Exhibitgroup (Canada) Ltd. (Canada)
Exhibitgroup Portland Inc. (Oregon)
David H. Gibson Company, Inc. (Texas)
Longchamp International, Inc. (Nevada)
GES (Canada) Limited (Ontario)
Panex Show Services Ltd. (Canada)
Stampede Display and Convention Services Ltd. (Alberta)
GES EXPOSITION SERVICES, INC. (Nevada)
Expo-Tech Electrical & Plumbing Services, Inc. (California)
United Exposition Service Redevelopment Corporation (Missouri)
Las Vegas Convention Service Co. (Nevada)
CORPORATE AND OTHER
Dialcor Realty Inc. (Arizona)
Greyhound Realty of Texas Inc. (Texas)
Essex Place Inc. (Arizona)
GCMC Inc. (Arizona)
Grey Gateway Realty Corporation (Arizona)
GRT Inc. (Arizona)
TRAVEL & LEISURE & PAYMENT SERVICES GROUP
Air Agency, Inc. (Florida)
AIRCRAFT SERVICE INTERNATIONAL, INC. (Delaware)
ASII Holding GmbH (Germany)
Bahamas Airport Services Limited (Bahama)
Freeport Flight Services Limited (Bahama)
Crystal Holidays, Inc. (Colorado)
Dial Service Companies Limited (United Kingdom)
Aircraft Service Limited (United Kingdom)
Crystal Holidays, Limited (United Kingdom)
Dial Consumer Products (UK) Limited (United Kingdom)@
Armour International Limited (United Kingdom)@
Dobbs International (U.K.) Limited (United Kingdom) #
Charles Grimsey Associates Limited (United Kingdom)
Greyhound World Travel Limited (United Kingdom)
Jetsave Limited (United Kingdom)
Jetsave Transatlantic Limited (United Kingdom)
Dispatch Services, Inc. (Florida)
Florida Aviation Fueling Company, Inc. (Florida)
GREYHOUND LEISURE SERVICES, INC. (Florida)
European Cruise Shops Limited (Cayman Islands) (51%)
Greyhound-ANA Venture Company (Florida) (51%)
International Cruise Shops, Ltd. (Cayman Islands)
Greyhound World Travel GmbH (Germany)
JETSAVE INC. (Florida)
PREMIER CRUISE LINES, LTD. (Cayman Islands)
TRANSPORTATION LEASING CO. (California)~~
GCCP, Inc. (Delaware)~~
Greyhound Canada Holdings, Inc. (Alberta)~~
The Dial Corporation (Canada) Ltd. (Alberta)@
GREYHOUND LINES OF CANADA LTD. (Canada) (69%)
A-1 Bus Line Pick-Up Ltd. (British Columbia)
BREWSTER TRANSPORT COMPANY LIMITED (Alberta)
Cascade Holdings (Banff) Inc. (Alberta)
Gray Coach Lines Inc. (Ontario)
Greyhound Courier Express Ltd. (British Columbia)
TRAVELERS EXPRESS COMPANY, INC. (Minnesota)
CAG Inc. (Nevada)
RM/BS GP Inc. (Minnesota)
Travelers Express Co. (P.R.) Inc. (Puerto Rico)
* Parent-subsidiary or affiliate relationships are shown by
marginal indentation. State, province or country of
incorporation and ownership percentage are shown in
parentheses following name, except that no ownership
percentage appears for subsidiaries owned 100% (in the
aggregate) by The Dial Corp. List does not include
companies in which the aggregate direct and indirect
interest of The Dial Corp is 50% or less.
# Indicates an Airline Catering & Services Group Subsidiary
@ Indicates a Consumer Products Group Subsidiary
~~ Indicates a Corporate and Other Subsidiary
+ Indicates a Travel & Leisure & Payment Services Group
Subsidiary
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors of
The Dial Corp:
We consent to the incorporation by reference in The Dial Corp's
Registration Statements No.'s 33-41870, 33-57630, 33-65420, 33-
65422, 33-65424 and 33-56531 on Form S-8 and No.'s 33-54465, 33-
56841 and 33-55360 on Form S-3 of our report dated February 24,
1995, appearing in this Annual Report on Form 10-K of The
Dial Corp for the year ended December 31, 1994.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Phoenix, Arizona
March 23, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each director whose
signature appears below constitutes and appoints Richard C.
Stephan and John W. Teets, and each of them severally, his or her
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign the
Form 10-K Annual Report of The Dial Corp for the fiscal year
ended December 31, 1994, and any and all amendments thereto, and
to file the same, with all exhibits thereto, and other documents
in connection herewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and
about the premises, as fully to all intents and purposes as he or
she might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or either of them, or
their or his or her substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.
/s/ Joe T. Ford February 16, 1995
/s/ Thomas L. Gossage February 16, 1995
/s/ Donald E. Guinn February 16, 1995
/s/ Jess Hay February 16, 1995
/s/ Judith K. Hofer February 16, 1995
/s/ Jack F. Reichert February 16, 1995
/s/ Linda Johnson Rice February 16, 1995
/s/ Dennis C. Stanfill February 16, 1995
/s/ A. Thomas Young February 16, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM
THE DIAL CORP'S FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 30,
1994 AND FROM THE DIAL CORP'S FORM 10-K
FOR THE FISCAL YEARS ENDED DECEMBER 31,
1994 AND 1993 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
THE SUMMARY FINANCIAL INFORMATION FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER
30, 1994 AND FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1993 HAVE BEEN AMENDED TO
REFLECT THE RECLASSIFICATION OF
EXPENSES RELATED TO CERTAIN INTEREST
RATE SWAP AGREEMENTS TO INTEREST
EXPENSE FROM UNALLOCATED CORPORATE
EXPENSE AND OTHER ITEMS, NET.
<MULTIPLIER> 1,000
<CAPTION>
Exhibit 27
Page 1 of 3
THE DIAL CORP
FINANCIAL DATA SCHEDULE
<S> <C> <C> <C>
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1994 SEP-30-1994 DEC-31-1993
<PERIOD-TYPE> YEAR 9-MOS YEAR
<CASH> 33,222 16,059 10,659
<SECURITIES> 0 0 0
<RECEIVABLES> 231,388 197,726 199,996
<ALLOWANCES> 20,453 21,668 22,597
<INVENTORY> 229,273 217,989 216,837
<PAGE>
<CAPTION>
Exhibit 27
Page 2 of 3
<S> <C> <C> <C>
<CURRENT-ASSETS> 1,244,217 992,300 1,052,604
<PP&E> 1,434,386 1,420,718 1,307,729
<DEPRECIATION> 621,002 616,595 567,005
<TOTAL-ASSETS> 3,780,896 3,528,441 3,281,088
<CURRENT-LIABILITIES> 2,056,760 1,808,819 1,748,758
<BONDS> 721,718 732,027 624,662
<COMMON> 145,663 145,663 72,832
6,590 6,589 6,624
0 0 0
<OTHER-SE> 409,430 398,135 396,856
<TOTAL-LIABILITY-AND-EQUITY> 3,780,896 3,528,441 3,281,088
<SALES> 1,511,362 1,101,854 1,420,173
<TOTAL-REVENUES> 3,546,847 2,629,373 3,000,342
<CGS> 1,351,354 981,297 1,280,960
<TOTAL-COSTS> 3,216,627 2,379,669 2,725,049
<OTHER-EXPENSES> 43,938 32,648 42,734
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 61,195 44,755 57,291
<INCOME-PRETAX> 221,695 169,260 171,649
<INCOME-TAX> 81,384 63,229 61,376
<INCOME-CONTINUING> 140,311 106,031 110,273
<DISCONTINUED> 0 0 32,120
<PAGE>
<CAPTION>
Exhibit 27
Page 3 of 3
<S> <C> <C> <C>
<EXTRAORDINARY> 0 0 (21,908)
<CHANGES> 0 0 0
<NET-INCOME> 140,311 106,031 120,485
<EPS-PRIMARY> 1.61 1.22 1.40
<EPS-DILUTED> 1.61 1.22 1.40
</TABLE>
