<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1995
Commission file number 001-11015
THE DIAL CORP
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-1169950
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
DIAL TOWER, PHOENIX, ARIZONA 85077
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (602)207-4000
Indicate by check mark whether the registrant (1) has filed all
Exchange Act 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
--------- ---------
As of October 31, 1995, 94,067,962 shares of Common Stock ($1.50
par value) were outstanding.
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE DIAL CORP
CONSOLIDATED BALANCE SHEET
<CAPTION> September 30, December 31,
(000 omitted) 1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 17,479 $ 33,222
Receivables, less allowance of
$18,950 and $20,453 183,887 232,932
Inventories 225,098 229,273
Deferred income taxes 50,329 42,517
Other current assets 49,014 46,565
---------- ----------
525,807 584,509
Funds, agents' receivables and
current maturities of investments
restricted for payment service
obligations, after eliminating
$90,000 and $80,000 invested in
Dial commercial paper 601,540 659,708
---------- ----------
Total current assets 1,127,347 1,244,217
Investments restricted for
payment service obligations 812,813 692,818
Property and equipment 846,414 813,384
Other investments and assets 88,639 83,255
Deferred income taxes 163,489 126,787
Intangibles 803,011 820,435
---------- ----------
$ 3,841,713 $ 3,780,896
========== ==========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
September 30, December 31,
(000 omitted, except number of shares) 1995 1994
---------- ----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank loans $ 580 $ 931
Accounts payable 238,604 243,982
Accrued compensation 73,203 91,992
Other current liabilities 276,411 281,321
Current portion of long-term debt 77,822 22,830
---------- ----------
666,620 641,056
Payment service obligations 1,485,354 1,438,960
---------- ----------
Total current liabilities 2,151,974 2,080,016
Long-term debt 730,763 721,718
Pension and other benefits 321,735 319,519
Other deferred items and insurance reserves 56,967 73,269
Minority interests 26,690 24,691
$4.75 Redeemable preferred stock 6,596 6,590
Common stock and other equity:
Common stock, $1.50 par value,
200,000,000 shares authorized,
97,108,724 shares issued 145,663 145,663
Additional capital 330,540 308,350
Retained income 333,000 393,233
Cumulative translation adjustments (16,272) (20,910)
Unearned employee benefits (184,153) (176,201)
Unrealized loss on securities
available for sale (4,654) (21,742)
Common stock in treasury, at cost,
3,480,040 and 4,319,624 shares (57,136) (73,300)
---------- ----------
Total common stock and other equity 546,988 555,093
---------- ----------
$ 3,841,713 $ 3,780,896
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED INCOME
<CAPTION>
Quarter ended September 30, 1995 1994
(000 omitted, except per share data) ---------- ----------
<S> <C> <C>
Revenues $ 891,593 $ 912,523
---------- ----------
Costs and expenses:
Costs of sales and services 816,602 811,037
Restructuring charges and asset write-downs 191,100
Unallocated corporate expense
and other items, net 10,377 11,348
Interest expense 19,633 15,764
Minority interests 2,904 2,638
---------- ----------
1,040,616 840,787
---------- ----------
Income (loss) before income taxes (149,023) 71,736
Income taxes (benefit) (59,286) 26,308
---------- ----------
Net Income (Loss) $ (89,737) $ 45,428
========== ==========
Net Income (Loss) Per Common Share $ (1.02) $ 0.52
========== ==========
Dividends declared per common share $ 0.16 $ 0.15
========== ==========
Average outstanding common
and equivalent shares 88,760 86,888
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED INCOME
<CAPTION>
Nine months ended September 30, 1995 1994
(000 omitted, except per share data) ---------- ----------
<S> <C> <C>
Revenues $ 2,651,674 $ 2,629,373
---------- ----------
Costs and expenses:
Costs of sales and services 2,409,324 2,379,669
Restructuring charges and asset write-downs 191,100
Unallocated corporate expense
and other items, net 32,465 32,648
Interest expense 56,312 44,755
Minority interests 3,552 3,041
---------- ----------
2,692,753 2,460,113
---------- ----------
Income (loss) before income taxes (41,079) 169,260
Income taxes (benefit) (20,315) 63,229
---------- ----------
Net Income (Loss) $ (20,764) $ 106,031
========== ==========
Net Income (Loss) Per Common Share $ (0.24) $ 1.22
========== ==========
Dividends declared per common share $ 0.46 $ 0.44
========== ==========
Average outstanding common
and equivalent shares 88,394 86,488
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF RETAINED INCOME
<CAPTION>
Nine months ended September 30, 1995 1994
(000 omitted) ---------- ----------
<S> <C> <C>
Balance, beginning of year $ 393,233 $ 304,481
Net income (loss) (20,764) 106,031
Dividends on common and preferred shares (40,686) (38,246)
Other 1,217 422
---------- ----------
Balance, end of period $ 333,000 $ 372,688
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE DIAL CORP
STATEMENT OF CONSOLIDATED CASH FLOWS
<CAPTION>
Nine months ended September 30, 1995 1994
(000 omitted) ---------- ----------
<S> <C> <C>
CASH FLOWS PROVIDED (USED) BY
OPERATING ACTIVITIES:
Net income (loss) $ (20,764) $ 106,031
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 84,072 84,091
Deferred income taxes (55,594) 7,128
Restructuring charges and asset write-downs 191,100
Other noncash items, net 845 4,221
Change in operating assets
and liabilities:
Receivables and inventories 36,526 2,366
Payment service assets and
obligations, net 111,562 186,453
Accounts payable and accrued
compensation (29,576) (24,640)
Other assets and liabilities, net (73,185) (49,520)
---------- ----------
Net cash provided by operating activities 244,986 316,130
---------- ----------
CASH FLOWS PROVIDED (USED) BY
INVESTING ACTIVITIES:
Capital expenditures (69,638) (64,806)
Purchase of cruise ships previously leased (111,103)
Acquisitions of businesses and
other assets, net of cash acquired (48,292) (146,678)
Proceeds from sales of property 9,864 6,770
Proceeds from sales and maturities of securities
classified as available for sale 390,833 188,796
Purchases of securities classified as
available for sale (403,416) (253,086)
Proceeds from sales and maturities of securities
classified as held to maturity 12,201
Purchases of securities classified as
held to maturity (103,976) (107,897)
Other, net (1,369) (89)
---------- ----------
Net cash used by investing activities (324,896) (376,990)
---------- ----------
CASH FLOWS PROVIDED (USED) BY
FINANCING ACTIVITIES:
Proceeds from long-term borrowings 40,280 70,000
Payments on long-term borrowings (2,218) (2,163)
Net change in short-term borrowings 25,795 31,456
Dividends on common and preferred stock (40,686) (38,246)
Minority portion of subsidiary's special dividend (9,761)
Proceeds from sales of treasury stock 25,505 24,291
Net change in receivables sold 25,000
Cash payments on interest rate swaps (9,509) (9,317)
---------- ----------
Net cash provided by financing activities 64,167 66,260
---------- ----------
Net (decrease) increase in cash and cash equivalents (15,743) 5,400
Cash and cash equivalents, beginning of year 33,222 10,659
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 17,479 $ 16,059
========== ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<PAGE>
THE DIAL CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A--Basis of Preparation
This information should be read in conjunction with the financial
statements set forth in The Dial Corp Annual Report to
Stockholders for the year ended December 31, 1994.
Accounting policies utilized in the preparation of the financial
information herein presented are the same as set forth in The
Dial Corp's annual financial statements except as modified for
interim accounting policies which are within the guidelines set
forth in Accounting Principles Board Opinion No. 28. The interim
consolidated financial information is unaudited. In the opinion
of management, all adjustments, consisting only of normal
recurring accruals, necessary to present fairly Dial's financial
position as of September 30, 1995, and the results of operations
for the quarters and nine months ended September 30, 1995 and
1994, and cash flows for the nine months ended September 30, 1995
and 1994 have been included. Interim results of operations are
not necessarily indicative of the results of operations for the
full year.
Certain reclassifications have been made to the prior year's
financial statements to conform to 1995 classifications.
NOTE B--Investments Restricted for Payment Service Obligations
Investments restricted for payment service obligations include
the following debt and equity securities:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
----------- -----------
(000 omitted)
<S> <C> <C>
Securities available for sale, at
fair value (amortized cost of
$480,850 and $468,307) $ 473,287 $ 433,150
Securities held to maturity, at
amortized cost (fair value of
$351,461 and $243,156) 355,602 264,861
----------- ----------
828,889 698,011
Less current maturities (16,076) (5,193)
----------- ----------
$ 812,813 $ 692,818
=========== ==========
</TABLE>
NOTE C--Debt
At September 30, 1995 and December 31, 1994, Dial classified as
long-term debt $302 million and $275 million, respectively, of
short-term borrowings supported by unused commitments under long-
term revolving credit agreements.
NOTE D--Income Taxes
A reconciliation of the provision for income taxes and the amount
that would be computed using statutory federal income tax rates
on income before income taxes for the nine months ended September
30, is as follows:
<TABLE>
<CAPTION>
1995 1994
(000 omitted) ------------ ------------
<S> <C> <C>
Computed income taxes at statutory
federal income tax rate of 35% $ (14,378) $ 59,241
Nondeductible goodwill amortization 2,885 3,189
Minority interests 1,243 1,064
State income taxes (676) 5,227
Tax-exempt income (7,476) (3,453)
Adjustment to estimated annual
effective rate (1,000)
Other, net (1,913) (1,039)
----------- -----------
Provision for income taxes $ (20,315) $ 63,229
=========== ===========
</TABLE>
Note E--Restructuring Charges and Asset Write-Downs
In the third quarter of 1995, Dial announced that it would take
restructuring and other one-time charges totaling approximately
$211.5 million ($130 million after-tax) to provide for a business-
based reorganization of its consumer products group through plant
closings, workforce reductions, and correction of certain product
lines. The consumer products group is closing six plants
(Clearing, Illinois; Burlington, Iowa; Auburndale, Florida; Omaha,
Nebraska; Memphis, Tennessee; and New Berlin, Wisconsin) and is
reducing its workforce by approximately 15 percent, or 700 people,
substantially all of whom are based in the affected plants. These
actions are expected to be completed by the end of 1996. Future
earnings are expected to benefit from efficiencies resulting from
streamlining/consolidating product lines for the remaining
facilities through increased volume and reduced costs. In addition
to the restructuring of the consumer products group, the announced
charges also provide for the write-down of certain Premier Cruise
Lines' assets and intangibles, in light of current and anticipated
conditions in its cruise market.
The final amount of charges recorded in the quarter ended September
30, 1995 was $211.5 million, of which $20.4 million was charged to
cost of sales and $191.1 million ($117.2 million after-tax) was
classified as restructuring charges and asset write-downs, as
follows:
<TABLE>
<CAPTION>
Premier
Consumer Cruise
Products Lines Total
(000 omitted) ----------- ----------- -----------
<S> <C> <C> <C>
Asset write-downs:
Intangibles $ 10,500 $ 28,000 $ 38,500
Other assets 87,000 27,500 114,500
Severance pay and benefits 14,800 14,800
Exit costs 23,300 23,300
----------- ----------- -----------
135,600 55,500 191,100
Tax benefit (53,500) (20,400) (73,900)
----------- ----------- -----------
$ 82,100 $ 35,100 $ 117,200
=========== =========== ===========
</TABLE>
In conjunction with the restructuring of its consumer products
group, the recoverability of intangibles was evaluated based on
current projections of the undiscounted operating income of the
related business unit. Based upon these evaluations, it was
determined that the carrying amount of certain consumer products
intangibles, primarily trademarks, were determined to be impaired
and were written off during the quarter.
Other asset write-downs of the consumer products group primarily
represent the excess of the net book value of plants and other
equipment to be disposed of over any estimated recovery. Severance
pay and benefits and exit costs (primarily facility closure costs)
have been recognized in accordance with Emerging Issues Task Force
Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." As of September 30,
1995, exit costs totaling $10.2 million had been paid and charged
against these reserves. Remaining severance and exit cost reserves
are included in the Consolidated Balance Sheet under the caption,
"Other Current Liabilities" and are believed to be adequate. These
remaining obligations are expected to be paid by utilizing existing
cash resources available to Dial.
The recoverability of other assets and related goodwill associated
with Premier Cruise Lines was evaluated based on current
projections of the undiscounted operating income of the cruise
operations. Heightened competition in the three and four day
cruise segment and in the Port Canaveral/Caribbean market, along
with falling passenger counts industry-wide, caused management to
lower its projections of future operating income. As a result, all
goodwill was written off and the carrying value of the Star/Ship
Majestic was reduced to its net realizable value in the third
quarter.
<PAGE>
NOTE F--Supplementary Information--Revenues and Operating Income
<TABLE>
<CAPTION>
Quarter ended Nine months ended
September 30, September 30,
------------------------- ------------------------
1995 1994 1995 1994
(000 omitted) ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Consumer Products $ 308,110 $ 363,399 $ 1,009,865 $ 1,101,854
Services:
Airline Catering
and Services 212,951 211,486 603,916 565,174
Convention Services 130,302 124,097 416,287 387,504
Travel and Leisure and
Payment Services (1) 240,230 213,541 621,606 574,841
----------- ----------- ----------- -----------
Total Services (1) 583,483 549,124 1,641,809 1,527,519
----------- ----------- ----------- -----------
$ 891,593 $ 912,523 $ 2,651,674 $ 2,629,373
=========== =========== =========== ===========
Operating Income (Loss):
Consumer Products (2) $ (124,444) $ 40,427 $ (39,508) $ 120,557
Services:
Airline Catering
and Services 20,499 19,947 49,457 44,908
Convention Services (3) 9,896 11,539 41,526 38,888
Travel and Leisure and
Payment Services (1)(2) (22,060) 29,573 (225) 45,351
----------- ----------- ----------- -----------
Total Services (1)(2)(3) 8,335 61,059 90,758 129,147
----------- ----------- ----------- -----------
Total principal business
segments (116,109) 101,486 51,250 249,704
Unallocated corporate expense
and other items, net (10,377) (11,348) (32,465) (32,648)
----------- ----------- ----------- -----------
$ (126,486) $ 90,138 $ 18,785 $ 217,056
=========== =========== =========== ===========
<FN>
(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 $4,129,000 for the 1995 quarter and $2,376,000 for the 1994
quarter, and by $11,501,000 and $5,312,000, respectively, for the 1995 and 1994 nine
month periods.
(2) After deducting restructuring charges and asset write-downs of $135,600,000 for
Consumer Products and $55,500,000 for Travel and Leisure and Payment Services in the
quarter and nine months ended September 30, 1995 (see Note E of Notes to Consolidated
Financial Statements).
(3) Operating income for the nine months ended September 30, 1995 includes a one-
time gain of $3,477,000 (pre-tax) due to the curtailment of certain postretirement
medical benefits in a convention services subsidiary.
</TABLE>
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results:
There were no material changes in the nature of Dial's business, nor
were there any other changes in the general characteristics of its
operations as described and discussed in the first paragraph of the
results section of Management's Discussion and Analysis of Results
of Operations and Financial Condition presented in The Dial Corp
Annual Report to Stockholders for the year ended December 31, 1994.
Comparison of Third Quarter of 1995 with Third Quarter of 1994:
In the third quarter of 1995, revenues decreased 2 percent to $891.6
million, down from $912.5 million in the 1994 quarter.
Dial reported a net loss of $89.7 million, or $1.02 per share,
versus net income of $45.4 million, or $0.52 per share, last year.
Included in the third quarter loss is an after-tax charge of $117.2
million associated with restructuring charges and asset write-downs
described below. Excluding the after-tax charge of $117.2 million,
Dial would have reported net income of $27.5 million. The decrease
in net income, excluding the restructuring charges and asset write-
downs, was primarily due to Dial's previously announced consumer
products' program designed to effect reductions of trade customers'
inventories during 1995, which was completed on an accelerated basis
by September 30, 1995.
Restructuring Charges and Asset Write-Downs
In the third quarter of 1995, Dial announced that it would take
restructuring and other one-time charges totaling approximately
$211.5 million ($130 million after-tax) to provide for a business-
based reorganization of its consumer products group through plant
closings, workforce reductions, and correction of certain product
lines. The consumer products group is closing six plants (Clearing,
Illinois; Burlington, Iowa; Auburndale, Florida; Omaha, Nebraska;
Memphis, Tennessee; and New Berlin, Wisconsin) and is reducing its
workforce by approximately 15 percent, or 700 people, substantially
all of whom are based in the affected plants. These actions are
expected to be completed by the end of 1996. Future earnings are
expected to benefit from efficiencies resulting from
streamlining/consolidating product lines for the remaining
facilities through increased volume and reduced costs. In addition
to the restructuring of the consumer products group, the announced
charges also provide for the write-down of certain Premier Cruise
Lines' assets and intangibles, in light of current and anticipated
conditions in its cruise market. The final amount of charges
recorded in the quarter ended September 30, 1995 was $211.5 million,
of which $20.4 million was charged to cost of sales and $191.1
million ($117.2 million after-tax) was classified as restructuring
charges and asset write-downs, as described in Note E of Notes to
Consolidated Financial Statements.
In conjunction with the restructuring of its consumer products
group, the recoverability of intangibles was evaluated based on
current projections of the undiscounted operating income of the
related business unit. Based upon these evaluations, it was
determined that the carrying amounts of certain intangibles,
primarily trademarks, were determined to be impaired and were
written off during the third quarter.
Other asset write-downs of the consumer products group primarily
represent the excess of the net book value of plants and other
equipment to be disposed of over any estimated recovery. Severance
pay and benefits and exit costs, primarily facility closure costs,
have been recognized in accordance with Emerging Issues Task Force
Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." Remaining obligations
are expected to be paid utilizing existing cash resources available
to Dial.
The recoverability of other assets and related goodwill associated
with Premier Cruise Lines was evaluated based on current projections
of the undiscounted operating income of the cruise operations.
Heightened competition in the three and four day cruise segment and
in the Port Canaveral/Caribbean market, along with falling passenger
counts industry-wide, caused management to lower its projections of
future operating income. As a result, all goodwill was written off
and the carrying value of the Star/Ship Majestic was reduced to its
net realizable value in the third quarter.
Consumer Products
The Consumer Products Group's revenues were down $55.3 million or 15
percent from those of the 1994 third quarter. The revenue decrease
was due to the accelerated completion of the previously reported
program to effect reductions of trade customers' inventories. This
initiative, coupled with more rapid replenishment as consumers
purchase the products off the shelf, addresses the retailers'
increased emphasis on efficient consumer response. Consumer
Products reported an operating loss of $124.4 million for the
quarter, including the $135.6 million of restructuring charges and
asset write-downs, versus operating income of $40.4 million in the
1994 third quarter. Excluding these charges, operating income for
the 1995 third quarter was $11.2 million. Operating margins, on
that same basis, declined to 3.6 percent from 11.1 percent in the
1994 quarter, due primarily to the accelerated completion of the
inventory reduction program. The division comments below exclude
the effects of the restructuring charges and asset write-downs.
During the third quarter, Consumer Products reorganized its product
lines for reporting purposes. All non-detergent products have been
reclassified from the Laundry division to the Household division.
The remaining Laundry division has been renamed the Detergent
division. A small number of miscellaneous products were categorized
with Skin Care to form Personal Care. All prior years have been
restated to give effect to the reclassifications.
Personal Care division's revenues and operating income declined
$700,000 and $9.4 million, respectively, from those of 1994's third
quarter. Sales volumes were down as a result of the planned
inventory reduction program. Operating income decreased in
conjunction with the revenue decrease and the accelerated completion
of the inventory reduction program. In addition, consumer marketing
spending was increased to strengthen the Dial soap brand name.
The Food division's revenues declined $16.7 million from the 1994
quarter, due to a planned reduction of microwaveable meals and the
accelerated completion of the trade inventory reduction program.
Operating income decreased $5.0 million from that of last year's
quarter, due to lower sales and the inventory reduction program,
offset partially by lower manufacturing and administrative costs.
The Household division's 1995 third quarter revenues and operating
income decreased $8.7 and $9.7 million, respectively, due mainly to
the accelerated completion of the inventory reduction program. In
addition, heavy promotional expenditures were made for Renuzit and
Dial Dishwashing Detergent. Fabric softeners and other products
also faced intensive price and promotion competition.
Third quarter revenues of the Detergent division decreased $31.3
million, as the planned inventory reduction program was accelerated
for completion in the third quarter of 1995. Operating income
declined $6.6 million due to the reduced volume.
International division's revenues and operating income improved $2.1
million and $1.4 million, respectively, over those of the 1994 third
quarter. The increases are primarily due to an acquisition early in
the third quarter of 1995. In addition, there has been an increase
in Canadian exports, as Purex Heavy Duty Liquid Detergent is the
leading liquid laundry detergent in three Canadian provinces.
Services
Combined Services revenues were $583.5 million, $34.4 million (6
percent) greater than the 1994 third quarter's amounts. Combined
Services reported operating income of $8.3 million for the quarter,
including the $55.5 million write-down of Premier Cruise Lines'
assets described previously. Excluding the asset write-downs,
combined Services posted third quarter operating income of $63.8
million, a 5 percent increase.
Airline Catering and Services. The third quarter revenues of
the Airline Catering and Services Group were $213 million, a 1
percent increase from the 1994 quarter, with operating income
increasing $500,000, or 3 percent, as the contribution from new
contracts awarded in 1995 exceeded the effects of airline meal
service cutbacks on certain domestic flights of short duration.
Operating margins improved to 9.6 percent from 1994's 9.4 percent.
Convention Services. Convention Services revenues increased
$6.2 million (5 percent). Operating income declined 14 percent as
operating margins declined from 9.3 percent in the third quarter of
1994 to 7.6 percent in the 1995 quarter. Operating income and
margins were impacted by higher costs and less efficient operations
in some locales.
Travel and Leisure and Payment Services. Revenues of these
companies were up $26.7 million (13 percent) to $240.2 million. For
the quarter, these companies reported an operating loss of $22.1
million, including the previously described $55.5 million write-down
of Premier Cruise Lines' assets. Excluding the asset write-downs,
operating income for the third quarter would have been $33.4
million, or $3.9 million higher than the operating income in the
1994 period. Dial's payment services subsidiary continues to invest
increasing amounts in tax-exempt securities. On a fully taxable
equivalent basis, 1995 third quarter revenues and operating income
were higher by $4.1 million, while 1994's third quarter revenues and
operating income would have been $2.4 million higher. Operating
margins, on the fully taxable equivalent basis, increased to 15.4
percent from 14.8 percent.
Canadian transportation services companies' revenues and operating
income increased $20.7 million and $1.4 million, respectively,
during the third quarter. Revenue and operating income increases
are attributed to a tour operator acquired in the second quarter of
1995, strong growth in existing package tour operations, increases
in average hotel room rates, and higher sightseeing and snowfield
revenues, partially offset by a decrease in passenger and charter
revenues.
Duty Free and shipboard concession revenues declined $1.3 million
from the third quarter of 1994, due primarily to the loss of a major
shipboard concession in late 1994 and fewer passenger days for
continuing business. Operating income improved $100,000 as a result
of lower operating expenses and sales of higher gross margin
products.
Cruise revenues declined $100,000 from 1994's third quarter. Loss
of passenger revenues from the Star/Ship Majestic, which was taken
out of service as Dial commenced a four-year charter arrangement in
February 1995, were largely offset by revenue increases on the
Star/Ship Atlantic and the Star/Ship Oceanic. Excluding the $55.5
million of asset write-downs taken in the third quarter, operating
results improved $1.5 million due to cost reduction efforts,
operating one less vessel, and reduced lease expense following the
purchases of the Star/Ship Majestic in February 1995 and the
Star/Ship Atlantic in July 1995.
Travel tour service revenues and operating income improved $1.6
million and $700,000, respectively, over those of the 1994 third
quarter, driven by an increase in passenger volumes, improved
margins per passenger, and contributions from a tour service
acquired during the second quarter of 1995.
Revenues and operating income of the food service companies
increased $1,200,000 and $300,000, respectively, from those of the
1994 third quarter. The increase in revenues is attributable to new
dining service business and additional revenues at Glacier Park,
offset partially by lost revenues from the sale of a non-core
operation in the second quarter of 1995. Operating income increased
as a result of the increased revenues as well as reduced operational
overhead.
On a fully taxable equivalent basis, revenues of payment services
increased $8.5 million over the 1994 third quarter. The revenue
increase is attributed principally to new product lines and
increased investment income due to higher rates, greater funds
invested and increased realized securities gains. Operating income,
on a fully taxable equivalent basis, increased $5 million, including
the increased realized investment gains, moderated by higher
commission expense for official checks and other volume related
costs.
Interest Expense
Interest expense increased $3.9 million from 1994's third quarter,
primarily because both debt levels and interest rates on floating-
rate debt were higher in 1995 than in 1994. Increased debt levels
were principally due to the purchases of the Star/Ship Majestic in
February 1995 and the Star/Ship Atlantic in July 1995, both of
which had previously been leased.
Income Taxes
The effective tax rate in the 1995 third quarter was 39.8 percent.
Excluding the effects of the restructuring charges and asset write-
downs, the effective tax rate was 34.7 percent, down from 36.7
percent in 1994. On this basis, the reduction in the effective tax
rate results primarily from the increased use of tax-exempt
investments by Dial's payment services subsidiary.
Comparison of First Nine Months of 1995 to the
First Nine Months of 1994:
Revenues for the first nine months of 1995 increased 1 percent to
$2.7 billion from $2.6 billion in the same period of 1994.
For the first nine months of 1995, Dial reported a net loss of $20.8
million, or $0.24 per share. Included in the 1995 loss is the
after-tax charge of $117.2 million associated with restructuring and
asset write-downs described previously. Exclusive of the after-tax
charge, Dial would have reported net income of $96.4 million versus
net income of $106 million, or $1.22 per share, for the first nine
months of 1994. The decrease in net income, excluding the
restructuring charges and asset write-downs, was attributable
primarily to Dial's previously announced consumer products' program
designed to effect reductions of trade customers' inventories during
1995, which was completed on an accelerated basis by September 30,
1995.
Consumer Products
For the first nine months of 1995, the Consumer Products Group's
revenues of $1 billion were down $92 million or 8 percent from those
of the 1994 period. The revenue decrease was primarily due to the
accelerated completion of the previously reported program to effect
reductions of trade customers' inventories. For the first nine
months of 1995, Consumer Products reported an operating loss of
$39.5 million, including the $135.6 million of restructuring charges
and asset write-downs, versus operating income of $120.6 million in
the 1994 period. Excluding these charges, operating income for the
first nine months of 1995 was $96.1 million, down $24.5 million or
20 percent from the operating income of the 1994 period. Operating
margins decreased to 9.5 percent from 10.9 percent in the 1994
period due primarily to the acceleration of the inventory reduction
program. The division comments below exclude the effects of the
restructuring charges and asset write-downs.
Personal Care division's revenues declined $17.9 million while
operating income increased $2.1 million compared to the first nine
months of 1994. Sales volumes were down as a result of the
accelerated completion of the inventory reduction program.
Operating income increased as a result of reductions in trade
spending, marketing expenditures and other cost reduction programs.
The Food division's revenues declined $31.7 million from the first
nine months in 1994 due to a planned reduction of microwaveable
meals, lower sales of chili and stew, and the trade inventory
reduction program. Operating income decreased $4 million as a
result of the lower sales volumes and accelerated completion of the
inventory reduction program, offset partially by lower manufacturing
and administrative costs.
The Household division's first nine months' revenues and operating
income decreased $2.6 million and $9.2 million, respectively, over
the same period in 1994, due primarily to the accelerated completion
of the inventory reduction program. In addition, heavy promotional
expenditures were made for Renuzit and Dial Dish in the third
quarter of 1995. Fabric softeners and other products also faced
intensive price and promotion competition.
Revenues of the Detergent division for the first nine months of 1995
decreased $40.2 million due to high sales to trade customers in the
fourth quarter of 1994, volume softness in dry detergents, and a
planned inventory reduction program accelerated for completion in
the third quarter of 1995. Operating income declined $15.5 million
as a result of the reduced volume, higher raw material costs, and
increased marketing and distribution expenditures.
International division's revenues increased $400,000 compared to the
first nine months of 1994, due principally to an acquisition made
early in the third quarter of 1995 which was partially offset by the
devaluation of the Mexican peso in the first quarter of 1995.
Operating income increased $2.1 million due to a more profitable
sales mix.
Services
Combined Services revenues for the first nine months of 1995 were
$1.6 billion, $114.3 million (7 percent) greater than that of the
1994 period. Combined Services reported operating income of $90.8
million for the first nine months, after deducting the $55.5 million
write-down of Premier Cruise Lines' assets and including a $3.5
million gain on the curtailment of certain postretirement medical
benefits in the Convention Services segment. Excluding the asset
write-downs and the gain on curtailment of benefits, Combined
Services posted an 11 percent increase in operating income.
Airline Catering and Services. These companies' revenues and
operating income of $603.9 million and $49.5 million, respectively,
were up $38.7 million (7 percent) and $4.6 million (10 percent),
respectively, from those of 1994's first nine months. The increase
was due to having all United flight kitchens acquired during 1994
fully operational this year as the start-up of newly acquired flight
kitchens continued during the 1994 first half. Seven new aircraft
service locations and other new business from continuing locations
also contributed to the increase, partially offset by the effect of
further airline meal service cutbacks on certain domestic flights of
short duration. Operating margins improved to 8.2 percent from
1994's 8 percent, as the United flight kitchens reached normal
efficiency levels during 1995 versus the start-up and training
period in 1994.
Convention Services. Convention Services' nine month revenues
of $416.3 million were 7 percent greater than the 1994 period,
primarily due to new locations. Excluding the one-time curtailment
gain described above, operating income decreased 2 percent to $38
million. Operating margins decreased to 9.1 percent from 10 percent,
due largely to the effects of shows not repeated each year and by
higher costs of staging shows in certain locales.
Travel and Leisure and Payment Services. For the first nine
months of 1995, revenues of these companies were $621.6 million, up
$46.8 million (8 percent). For the first nine months, these
companies reported an operating loss of $200,000, including the
previously described $55.5 million write-down of Premier Cruise
Lines' assets. Excluding the asset write-downs, operating income
for the first nine months would have ben $55.3 million, up 22
percent from that in the 1994 period. Dial's payment services
subsidiary continues to invest increasing amounts in tax-exempt
securities. On a fully taxable equivalent basis, revenues and
operating income were higher by $11.5 million and $5.3 million,
respectively, for the 1995 and 1994 nine month periods. Operating
margins, on the fully taxable equivalent basis, increased to 10.6
percent from 8.7 percent in the 1994 nine month period.
Canadian transportation services companies' revenues increased $34.4
million over the 1994 nine month period while operating income
increased $3.1 million. Revenue increases from the acquisition of a
tour operator in the second quarter of 1995, strong growth in
existing package tour operations, improved hotel occupancy and
average room rates, and higher Courier Express, sightseeing and
snowfield revenues were partially offset by a decrease in charter
revenues as a result of redeployment of the bus fleet to passenger
route acquisitions in mid-1994. Operating income increases are
attributed to the revenue increases as well as cost reduction
programs, which more than offset the expense of terminating a small
joint venture in the second quarter of 1995.
Duty Free airport and shipboard concession revenues declined $8.2
million from the first nine months of 1994, due primarily to the
loss of a major shipboard concession in 1994 and fewer passenger
days for continuing business. Operating income improved $300,000,
due mostly to lower operating expenses and the effect of higher
passenger per day revenue.
Cruise revenues were down $2.6 million from 1994's first nine months
due to having two ships in drydock for repairs for a total of 44
ship days during the first quarter of 1995. In addition, the
Star/Ship Majestic was taken out of service in February as Dial
commenced a four-year charter arrangement to lease the ship to a
European operator. Excluding the $55.5 million of asset write-downs
taken in the third quarter, operating results improved $4.3 million
due to lower expenses resulting from cost reduction efforts and
operating one less vessel.
Travel tour service revenues and operating income improved $3.9
million and $1.5 million, respectively, over the first nine months
of 1994, due primarily to improved passenger volumes, favorable
foreign exchange rates, and the acquisition of a new tour operator
in Ireland in June 1995.
Food service revenues improved $700,000 over the first nine months
of 1994. Increased business at General Motors and at America West
Arena was offset by closed fast food outlets and the sale of a non-
core operation in the second quarter of 1995. Operating income of
the food service companies declined $300,000 from the same period in
1994. Operating income generated from higher revenues was offset by
certain one-time costs associated with the sale of the non-core
operation.
On a fully taxable equivalent basis, revenues of payment services
increased $26.5 million over those of 1994's first nine months, due
principally to increased investment income, revenues from new
product lines and increased realized investment gains. Investment
income increased due to higher rates and greater funds invested than
in 1994. On a fully taxable equivalent basis, operating income
increased $11.9 million, including the increased realized investment
gains, moderated principally by higher commission expense for
official checks and other volume related costs.
Interest Expense
Interest expense for the first nine months of 1995 increased $11.6
million over the first nine months of 1994, as both debt levels and
interest rates on floating-rate debt were higher than in 1994. Debt
level increases are primarily due to the purchase of the Star/Ship
Majestic in February 1995 and the Star/Ship Atlantic in July 1995.
Income Taxes
The effective tax rate for the first nine months of 1995 was 49.5
percent. Excluding the effects of the restructuring charges and
asset write-downs, the effective tax rate was 35.7 percent, down
from 37.4 percent in the comparable period of 1994. On this basis,
the reduction in the effective tax rate results primarily from the
increased use of tax-exempt investments by Dial's payment services
subsidiary.
Liquidity and Capital Resources:
The Dial Corp's total debt at September 30, 1995 was $809.2 million
compared with $745.5 million at December 31, 1994. The debt-to-
capital ratios at September 30, 1995 and December 31, 1994 were 0.58
to 1 and 0.56 to 1, respectively. The increase in the debt-to-
capital ratio was due primarily to higher debt and the impact of
restructuring charges and asset write-downs. The increase in debt
was attributable primarily to the purchases of two cruise ships
which were previously leased: the Star/Ship Majestic in February
1995 and the Star/Ship Atlantic in July 1995.
There were no other material changes in The Dial Corp's financial
condition nor were there any substantive changes relative to matters
discussed in the Liquidity and Capital Resources section of
Management's Discussion and Analysis of Results of Operations and
Financial Condition as presented in The Dial Corp Annual Report to
Stockholders for the year ended December 31, 1994.
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There were no material developments in the lawsuits described in
Item 1, "Legal Proceedings," of Dial's Form 10-Q for the quarterly
period ended June 30, 1995.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
third quarter of 1995.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. 10.G - Copy of Travelers Express
Company, Inc. Supplemental Pension Plan amended
and restated on June 12, 1995.
Exhibit No. 11 - Statement Re Computation of Per Share
Earnings
Exhibit No. 27 - Financial Data Schedule
(b) A Report on Form 8-K dated September 26, 1995
was filed by the registrant during the quarter
for which this report is filed. The Form 8-K
reported under Item 5 a plan to take
restructuring and other one-time charges of
approximately $130 million after-tax in the
third quarter of 1995. The related Dial Press
Release was filed as Exhibit 20 in Item 7 of
the Form 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
THE DIAL CORP
(Registrant)
November 14, 1995 By /s/ Richard C. Stephan
-------------------------
Richard C. Stephan
Vice President-Controller
(Chief Accounting Officer
and Authorized Officer)
<PAGE>
<TABLE>
Exhibit 11
Page 1 of 2
THE DIAL CORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(000 omitted)
<CAPTION>
Quarter ended September 30,
----------------------------
Primary: 1995 1994
------------ ------------
<S> <C> <C>
Net income (loss) $ (89,737) $ 45,428
Less: Preferred stock dividends (281) (281)
Subsidiary dilutive securities (17)
------------ ------------
$ (90,018) $ 45,130
============ ============
Average common shares outstanding
before common equivalents 87,030 85,275
Common equivalent stock options 1,730 1,613
------------ ------------
88,760 86,888
============ ============
Net income (loss) per share (dollars) $ (1.02) $ 0.52
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Quarter ended September 30,
-------------------------------------------------------
1995 1994
-------------------------- ----------------------------
Common Income Common
Fully Diluted: Shares (Loss) Shares Income
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Average common and
equivalent shares
and net income
(loss) per above 88,760 $ (90,018) 86,888 $ 45,130
Common equivalent
stock options 129
------------ ------------ ------------ ------------
88,889 $ (90,018) 86,888 $ 45,130
============ ============ ============ ============
Net income (loss)
per share (dollars) $ (1.02) $ 0.52
============ ============
</TABLE>
<PAGE>
<TABLE>
Exhibit 11
Page 2 of 2
THE DIAL CORP
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(000 omitted)
<CAPTION>
Nine months ended
September 30,
----------------------------
Primary: 1995 1994
------------ ------------
<S> <C> <C>
Net income (loss) $ (20,764) $ 106,031
Less: Preferred stock dividends (843) (842)
Subsidiary dilutive securities (17)
------------ ------------
$ (21,607) $ 105,172
============ ============
Average common shares outstanding
before common equivalents 86,567 84,833
Common equivalent stock options 1,827 1,655
------------ ------------
88,394 86,488
============ ============
Net income (loss) per share (dollars) $ (0.24) $ 1.22
============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------------------------------
1995 1994
-------------------------- ----------------------------
Common Income Common
Fully Diluted: Shares (Loss) Shares Income
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Average common and
equivalent shares
and net income
(loss) per above 88,394 $ (21,607) 86,488 $ 105,172
Common equivalent
stock options 99
------------ ------------ ------------ ------------
88,493 $ (21,607) 86,488 $ 105,172
============ ============ ============ ============
Net income (loss)
per share (dollars) $ (0.24) $ 1.22
============ ============
</TABLE>
<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, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
<MULTIPLIER> 1,000
<CAPTION>
Exhibit 27
Page 1 of 2
THE DIAL CORP
FINANCIAL DATA SCHEDULE
<S> <C>
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<PERIOD-TYPE> 9-MOS
<CASH> 17,479
<SECURITIES> 0
<RECEIVABLES> 202,837
<ALLOWANCES> 18,950
<INVENTORY> 225,098
<CURRENT-ASSETS> 1,127,347
<PP&E> 1,477,974
<DEPRECIATION> 631,560
<TOTAL-ASSETS> 3,841,713
<PAGE>
<CAPTION>
Exhibit 27
Page 2 of 2
<S> <C>
<CURRENT-LIABILITIES> 2,151,974
<BONDS> 730,763
<COMMON> 145,663
6,596
0
<OTHER-SE> 401,325
<TOTAL-LIABILITY-AND-EQUITY> 3,841,713
<SALES> 1,009,865
<TOTAL-REVENUES> 2,651,674
<CGS> 1,049,373
<TOTAL-COSTS> 2,600,424
<OTHER-EXPENSES> 32,465
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 56,312
<INCOME-PRETAX> (41,079)
<INCOME-TAX> (20,315)
<INCOME-CONTINUING> (20,764)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,764)
<EPS-PRIMARY> (0.24)
<EPS-DILUTED> (0.24)
</TABLE>
TRAVELERS EXPRESS COMPANY, INC.
SUPPLEMENTAL PENSION PLAN
1. PURPOSE.
The purpose of the Travelers Express Company, Inc.
Supplemental Pension Plan (hereinafter referred to as the "Plan")
is to provide deferred compensation to Eligible Employees (as
defined in paragraph 2) on and after January 1, 1994.
Participants and former Participants who terminated employment
prior to January 1, 1994 remain subject to the terms of the prior
Plan in which they participated at the time of their termination,
but any benefits remaining to be paid under the prior Plan shall
be paid from this Plan. It is the intention of the Travelers
Express Company, Inc. (hereinafter called the "Company") that
Eligible Employees are those employees designated by the Board of
Directors of the Company, from a select group of management or
highly compensated employees of the Company, and that the Plan
continue to be eligible for exemptions under Parts 1, 2, 3 and 4
of Title 1 of ERISA and U.S. Department of Labor regulations. It
also is the intention of the Company that the plan be unfunded,
that no trust be created, that any Eligible Employee's rights
under the plan are those of a general creditor only, that there
be no elections with respect to any benefits under the Plan by
Eligible Employees, and that the amounts deferred and any
earnings thereon shall remain the unrestricted assets of the
Company. Subject to rights and benefits expressly fixed by the
terms hereof, the Company also intends that the Plan may be
amended or terminated and that benefits may be reduced or
eliminated as the Board of Directors of the Company determines
from time to time and that individuals' rights may be altered.
The terms used in the Plan shall have the same meaning as set
forth in the Travelers Express Company, Inc. appendix to The Dial
Companies Retirement Income Plan, unless the context clearly
requires otherwise.
2. PARTICIPATION.
An employee of the Company or a subsidiary of the Company
(hereinafter a "Subsidiary") may become eligible to participate
in the Plan (referred to herein as "Eligible Employee") when
approved by the Board of Directors of the Company. A list of
Eligible Employees is attached as Exhibit A to the plan, and such
Exhibit shall be periodically updated.
3. FUNDING.
No fund shall be established to provide for the payment of
benefits under the Plan. No trust shall be created. Any rights
of an Eligible Employee or any other person claiming by or
through him shall be those of a general creditor of the Company
only. The Company may create book reserves or take such other
steps as it deems appropriate to provide for its expected
liabilities under the Plan. Any funds, and the proceeds
therefrom, utilized by the Company to provide for its expected
liabilities under the Plan shall remain the unrestricted assets
of the Company.
4. RETIREMENT BENEFITS.
(a) The Company shall provide, subject to all the terms and
conditions of the Plan, a monthly benefit as of the Eligible
Employs 65th birthdate (the "Normal Retirement Date") payable in
the manner set forth in paragraph 5 of the Plan in an amount
equal to:
(1) the product of (A) and (B) less the product of (b) and
(C) plus the "special benefit", if any, provided in
subparagraph (B) of this paragraph where:
(A) is 2% of the Eligible Employee's actual Average
Monthly Compensation under the Travelers Express
Company, Inc. appendix to the Dial Companies
Retirement Income Plan;
(B) is the number of full years of actual Credited
Service under the Travelers Express Company, Inc.
appendix to the Dial Companies Retirement Income
Plan, but not to exceed 25 years; and
(C) is 2% of the Primary Social Security entitlement
of the Eligible Employee (as such term is defined
in the Dial Companies Retirement Income Plan);
reduced by
(2) the amount of monthly pension benefits actually paid or
payable to the Eligible Employee from the Travelers
Express Company, Inc. appendix to the Dial Companies
Retirement Income Plan or any other qualified pension
plan, which DOES NOT INCLUDE contributions described in
Internal Revenue Code 401(k) or 401(m), sponsored by
the Company or a Subsidiary (hereinafter "Qualified
Pension Plan"). In addition, when an Eligible Employee
is a participant in more than one Qualified Pension
Plan and benefits under any one of such Qualified
Pension Plans are not available immediately on account
of early retirement eligibility or other provisions,
then, for the purposes of the Plan, such benefits shall
be taken into account as though payable immediately on
an actuarially equivalent basis, as reasonably
determined by the Company in its sole discretion.
(b) For the purposes of determining the monthly benefit set
forth in subparagraph (a) of this paragraph 4, the following
rules shall apply. First, the compensation taken into account
and the benefit calculated under the formula in subparagraph (a)
above shall not be limited as provided in Internal Revenue Code
section 401(a)(17) or 415. Second, Eligible Employees who have
25 or more full years of actual Credited Service under the
Travelers Express appendix to the Dial Companies Retirement
Income Plan (without regard to the 25 year Credited Service
limitation in that appendix) shall include in the determination
of their benefit a "special benefit" equal to 1/2 of 1% of their
Average Monthly Compensation under the Travelers Express Company,
Inc. appendix to the Dial Companies Retirement Income Plan for
each such additional full year of such Credited Service earned
after such 25 years up to 30 full years of Credited Service. In
no event shall this "special benefit" exceed 2 1/2% of Average
Monthly Compensation.
5. FORM OF PAYMENT.
The benefit derived from the formula contained in paragraph
4 and 6 of the Plan shall be payable at the same time and in the
same form or forms as available and actually elected by the
eligible employee under the Travelers Express Company, Inc.
appendix to the Dial Companies Retirement Income Plan or any
other Qualified Pension Plan. If benefits under two or more
Qualified Pension Plans are payable, then the options selected
for the Qualified Pension Plan generating the largest monthly
pension payment (including the beneficiary designation in
connection with such option and benefits, if applicable) shall
prevail for the purposes of the plan. Notwithstanding the
foregoing, no lump sum distributions shall occur or be permitted
hereunder.
6. EARLY RETIREMENT BENEFIT.
In the event benefits under the Plan are to commence as of a
date prior to the Eligible Employee's Normal Retirement Date, the
monthly benefit described in paragraph 4 of the Plan shall be
reduced by 1/2 of 1% of such benefit for each month that the
actual retirement date precedes the Eligible Employee's 65th
birthdate; except that if the Eligible Employee has 30 full years
or more of actual Credited Service under the Travelers Express
Company, Inc. appendix to the Dial Companies Retirement Income
Plan (without regard to the 25 year Credited Service limitation
in that appendix) and benefits under the Plan are to commence on
or after the Eligible Employee's 60th birthdate, there shall be
no such reduction.
7. SURVIVOR'S BENEFIT.
A survivor's benefit equal to 1/2 of the amount the Eligible
Employee would have been entitled to receive under the Plan had
he or she retired on the date of his or her death, determined in
accordance with paragraphs 4, 5 and 6 of the Plan, shall be
payable to the Eligible Employee's surviving spouse, or minor
child or children, but only if upon the Eligible Employee's death
any such spouse or child is actually entitled to or is deemed by
the Company to be entitled to a pre-retirement Death Benefit
described in the Travelers Express Company, Inc. appendix to the
Dial Companies Retirement Income Plan. If the spouse is the
beneficiary, the survivor's benefit shall be further reduced by
1/2 of 1% for each month in excess of 60 that the spouse's
birthdate follows that of the deceased Eligible Employee.
8. VESTING.
An Eligible employee who has accumulated 10 years of
service, in the aggregate, with the Company, a Subsidiary or The
Dial Corp or its subsidiaries, shall, subject to all other terms
and conditions set forth in the Plan, be vested and entitled to a
benefit hereunder. Prior to vesting in accordance with this
paragraph 8, no benefit shall be payable under the Plan to the
Eligible Employee or any person claiming a benefit by or through
him or her.
9. ADMINISTRATION, AMENDMENT, MODIFICATION, AND
TERMINATION OF THE PLAN.
The Board of Directors of the Company may terminate the Plan
at any time. Any amounts vested under the Plan and based on the
actual Credited Service under the Travelers Express Company, Inc.
prior to any such termination shall continue to be subject to the
terms, conditions, and elections in effect under the plan when
the Plan is terminated. The Plan may be amended at any time or
from time to time by the Board of Directors of the Company. The
Company shall have full power and authority to interpret and
administer the Plan, to promulgate rules of Plan administration,
to adopt a claims procedure, to conclusively settle any disputes
as to rights or benefits arising from the plan, and to make such
decisions or take such actions as the Company, in its sole
discretion, reasonably deems necessary or advisable to aid in the
proper administration and maintenance of the Plan. The Company
may, in its sole discretion, appoint a committee (the
"Committee") to carry out some or all of the administrative
activities set forth in the preceding sentence on its behalf.
10. MISCELLANEOUS.
The Plan, and any determination made by the Company or the
Committee in connection therewith, shall be binding upon each
Eligible Employee, his or her beneficiary or beneficiaries,
heirs, executors, administrators, successors and assignees.
Notwithstanding the foregoing sentence, no benefit under the Plan
may be sold, assigned, transferred, conveyed, hypothecated,
encumbered, anticipated or otherwise disposed of, and any attempt
to do so shall be void. No such benefit payment shall, prior to
actual receipt thereof by the Eligible Employee, or his or her
beneficiary or beneficiaries, as the case may be, be in any
manner subject to the debts, contracts, liabilities or
engagements of such Eligible Employee or beneficiary(ies). The
Plan shall not constitute, nor be deemed to constitute, a
contract of employment between the Company, or any of its
subsidiaries, and any Eligible Employee, nor shall any provision
hereof restrict the right of the Company or any of its
subsidiaries to discharge any Eligible Employee from his or her
employment, with or without cause.
/s/ Robert H. Bohannon 5/26/95
Robert H. Bohannon Date
President and CEO
/s/ Shirley Kerfoot 5/26/95
Shirley Kerfoot Date
V.P. Human Resources/
Corp Services
