UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: June 13, 1996
THE DIAL CORP
(Exact name of registrant as specified in its charter)
DELAWARE 001-11015 36-1169950
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
DIAL TOWER, PHOENIX, ARIZONA 85077
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 207-4000
Item 2. Acquisition or Disposition of Assets.
On February 15, 1996, The Dial Corp ("Dial") announced that
its Board of Directors had approved a proposal for a strategic
restructuring which would separate Dial's consumer products
and services businesses into two publicly traded companies.
Common stockholders of Dial are expected to receive a special
dividend of one share of the consumer products company for
each Dial common share owned on the record date (the
"Distribution"). Concurrently with the Distribution, the name
of The Dial Corp will be changed to "Viad Corp" and the
consumer products business will become an independent,
publicly traded company under the name, "The Dial
Corporation."
The Distribution is subject to final approval by the Dial
Board of Directors and to certain conditions, including the
receipt of a ruling from the Internal Revenue Service that the
proposed transaction is tax-free and confirmation that each of
the two separate companies will retain investment-grade credit
ratings. The Distribution is expected to be completed later
in 1996.
On May 29, 1996, shareholders of Greyhound Lines of Canada
("GLOC") voted to separate its intercity bus transportation
business and its tourism business into two independent
companies. GLOC minority shareholders also approved an
automatic share exchange proposal whereby their ownership
interests in the tourism business, aggregating 31.5 percent,
were exchanged for Dial's 68.5 percent ownership interest in
the intercity bus transportation business such that Dial
became the owner of 100 percent of the tourism business in
exchange for its ownership in the intercity bus transportation
business (the "Disposition"). The separation and exchange of
shares was effective May 31, 1996.
Item 7. Financial Statements and Exhibits.
(b) Pro forma financial information.
The accompanying Pro Forma Consolidated Balance Sheet of Dial
as of March 31, 1996 and Pro Forma Statements of Consolidated
Income for the three months ended March 31, 1996 and 1995 and
for the year ended December 31, 1995, have been prepared to
reflect the historical financial position and results of
continuing operations as adjusted for (1) reclassification of
the consumer products and Canadian intercity bus transportation
businesses as discontinued operations in light of the
transactions described in Item 2 above and (2) to give effect
to the Distribution of Dial's consumer products business and
the Disposition of its Canadian intercity bus transportation
business. The historical results of operations of the consumer
products and the Canadian intercity bus transportation
businesses up to their respective disposition dates and the
loss (primarily transaction costs and recognition of previously
unrealized foreign currency translation adjustments) on the
disposition of the Canadian intercity bus transportation
business will be reported as discontinued operations in Dial's
subsequent financial statements.
In the opinion of management, all adjustments necessary to
present fairly such pro forma financial statements have been
made.
The Pro Forma Consolidated Balance Sheet has been prepared as
if the Distribution and Disposition occurred on March 31, 1996;
the Pro Forma Statements of Consolidated Income have been
prepared as if the Distribution and Disposition occurred on the
first day of the respective periods presented. The pro forma
financial information is unaudited and is not necessarily
indicative of the results that would have occurred if the
transactions had been consummated as of March 31, 1996, or at
the beginning of the respective periods presented.
The pro forma consolidated financial information should be read
in conjunction with the accompanying Notes to Pro Forma
Consolidated Financial Statements and the historical
consolidated financial statements of The Dial Corp and the
notes thereto.
THE DIAL CORP
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(000 omitted)
Pro Forma Adjustments
---------------------------------
Reclassification Recording of
to Discontinued Disposition and
Historical Operations Distribution Pro Forma
----------- ----------- ----------- -----------
ASSETS
Current assets:
Cash and cash
equivalents $ 26,219 $ (5,377) (a) $ $ 20,842
Receivables 234,338 (47,832) (a) 186,506
Inventories 252,721 (162,621) (a) 90,100
Deferred income taxes 65,006 (31,585) (a) 32,848
(573) (b)
Other current assets 44,411 (6,248) (a) 38,163
----------- ----------- ----------- -----------
622,695 (254,236) 368,459
Funds, agents'
receivables and
current maturities
of investments
restricted for
payment service
obligations, after
eliminating $90,000
invested in Dial
commercial paper 556,750 556,750
----------- ----------- ----------- -----------
Total current assets 1,179,445 (254,236) 925,209
----------- ----------- ----------- -----------
Investments restricted
for payment service
obligations 877,655 877,655
Property and equipment 855,569 (262,419) (a) 593,150
Other investments and
assets 103,118 (5,505) (a) 12,938 (g) 110,551
Investments in
discontinued operations:
Consumer products
business 499,244 (a) (279,691) (c) ---
(81,788) (b) (3,750) (d)
(134,015) (e)
Canadian intercity
bus transportation
business 55,369 (a) (1,130) (f) ---
(54,239) (g)
Deferred income taxes 149,509 (27,860) (a) 58,007
(63,642) (b)
Intangibles 857,730 (341,828) (a) 14,681 (g) 530,583
----------- ----------- ----------- -----------
$ 4,023,026 $ (482,665) $ (445,206) $ 3,095,155
=========== =========== =========== ===========
Pro Forma Adjustments
---------------------------------
Reclassification Recording of
to Discontinued Disposition and
Historical Operations Distribution Pro Forma
----------- ----------- ----------- -----------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank
loans $ 309 $ (309) (a) $ $ ---
Accounts payable 248,935 (116,228) (a) 131,664
(1,043) (b)
Accrued compensation 66,049 (18,652) (a) 47,397
Other current
liabilities 303,395 (73,393) (a) 11,250 (e) 239,738
(2,705) (b) 1,191 (f)
Current portion of
long-term debt 77,338 77,338
----------- ----------- ----------- -----------
696,026 (212,330) 12,441 496,137
Payment service
obligations 1,528,140 1,528,140
----------- ----------- ----------- -----------
Total current
liabilities 2,224,166 (212,330) 12,441 2,024,277
Long-term debt 822,733 (280,000) (c) 529,401
309 (c)
(13,641) (g)
Pension and other
benefits 325,592 (105,024) (a) 78,313
(142,255) (b)
Other deferred items and
insurance reserves 48,011 (12,492) (a) 35,519
Minority interests 30,220 (10,564) (a) (742) (f) 7,956
(10,958) (g)
$4.75 Redeemable
preferred stock 6,599 6,599
Common stock and
other equity 565,705 (15,000) (d) 413,090
(134,015) (e)
(1,579) (f)
(2,021) (g)
(11,559) (g)
11,559 (g)
----------- ----------- ----------- -----------
$ 4,023,026 $ (482,665) $ (445,206) $ 3,095,155
========== =========== =========== ===========
<FN>
See notes to pro forma consolidated financial information.
/TABLE
THE DIAL CORP
PRO FORMA STATEMENT OF CONSOLIDATED INCOME
YEAR ENDED DECEMBER 31, 1995
(000 omitted, except per share data)
Pro Forma Adjustments
---------------------------------
Reclassification Recording of
to Discontinued Disposition and
Historical Operations Distribution Pro Forma
----------- ----------- ----------- -----------
REVENUES $ 3,575,070 $ (1,503,019) (a) $ 2,072,051
----------- ----------- ----------- -----------
Costs and expenses:
Costs of sales and
services 3,271,151 (1,379,607) (a) 367 (h) 1,891,911
Restructuring charges
and asset write-downs 191,100 (135,600) (a) 55,500
Unallocated corporate
expense and other
items, net 43,194 (11,997) (b) (1,083) (h) 30,114
Interest expense 75,994 (21,243) (a) 54,751
Minority interests 4,346 (1,717) (a) (1,169) (h) 1,460
----------- ----------- ----------- -----------
3,585,785 (1,550,164) (1,885) 2,033,736
----------- ----------- ----------- -----------
Income (loss) before
income taxes (10,715) 47,145 1,885 38,315
Income taxes (benefit) (11,852) 13,448 (a) 483 (i) 6,630
4,551 (b)
----------- ----------- ----------- -----------
Income from continuing
operations (1) $ 1,137 $ 29,146 $ 1,402 $ 31,685
=========== =========== =========== ===========
Income from continuing
operations per
common share (1) $ 0.00 $ 0.34
=========== ===========
Average outstanding
common and equivalent
shares 88,707 88,707
=========== ===========
<FN>
(1) Pro forma income from continuing operations and income from continuing operations per common
share is after deducting restructuring charges and asset write-downs of $35,100,000 (after-tax) or
$0.40 per share.
See notes to pro forma consolidated financial information.
/TABLE
THE DIAL CORP
PRO FORMA STATEMENT OF CONSOLIDATED INCOME
THREE MONTHS ENDED MARCH 31, 1996
(000 omitted, except per share data)
Pro Forma Adjustments
---------------------------------
Reclassification Recording of
to Discontinued Disposition and
Historical Operations Distribution Pro Forma
----------- ----------- ----------- -----------
REVENUES $ 936,413 $ (381,551) (a) $ $ 554,862
----------- ----------- ----------- -----------
Costs and expenses:
Costs of sales and
services 866,591 (345,328) (a) 92 (h) 521,355
Unallocated corporate
expense and other
items, net 11,640 (2,613) (b) (271) (h) 8,756
Interest expense 19,955 (5,628) (a) 14,327
Minority interests 31 123 (a) 252 (h) 406
----------- ----------- ----------- -----------
898,217 (353,446) 73 544,844
----------- ----------- ----------- -----------
Income before
income taxes 38,196 (28,105) (73) 10,018
Income taxes 13,702 (11,716) (a) 121 (i) 3,098
991 (b)
----------- ----------- ----------- -----------
Income from continuing
operations $ 24,494 $ (17,380) $ (194) $ 6,920
=========== =========== =========== ===========
Income from continuing
operations per
common share $ 0.27 $ 0.07
=========== ===========
Average outstanding
common and equivalent
shares 90,783 90,783
=========== ===========
<FN>
See notes to pro forma consolidated financial information.
/TABLE
THE DIAL CORP
PRO FORMA STATEMENT OF CONSOLIDATED INCOME
THREE MONTHS ENDED MARCH 31, 1995
(000 omitted, except per share data)
Pro Forma Adjustments
---------------------------------
Reclassification Recording of
to Discontinued Disposition and
Historical Operations Distribution Pro Forma
----------- ----------- ----------- -----------
REVENUES $ 858,197 $ (366,891) (a) $ $ 491,306
----------- ----------- ----------- -----------
Costs and expenses:
Costs of sales and
services 794,337 (333,475) (a) 92 (h) 460,954
Unallocated corporate
expense and other
items, net 11,149 (2,270) (b) (271) (h) 8,608
Interest expense 18,427 (5,012) (a) 13,415
Minority interests 63 141 (a) 199 (h) 403
----------- ----------- ----------- -----------
823,976 (340,616) 20 483,380
----------- ----------- ----------- -----------
Income before
income taxes 34,221 (26,275) (20) 7,926
Income taxes 12,714 (10,853) (a) 121 (i) 2,843
861 (b)
----------- ----------- ----------- -----------
Income from continuing
operations $ 21,507 $ (16,283) $ (141) $ 5,083
=========== =========== =========== ===========
Income from continuing
operations per
common share $ 0.24 $ 0.05
=========== ===========
Average outstanding
common and equivalent
shares 87,956 87,956
=========== ===========
<FN>
See notes to pro forma consolidated financial information.
/TABLE
THE DIAL CORP
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Pro Forma Adjustments:
Reclassification to Discontinued Operations:
(a) To reclassify to investment in discontinued operations
the assets and liabilities of the consumer products and
Canadian intercity bus transportation businesses and to
eliminate the operating accounts of such businesses
from continuing operations.
(b) To reclassify to investment in discontinued operations
the assumption by the consumer products business of
certain Dial liabilities and related deferred income
tax assets along with the related expenses arising from
such items.
Recording of Disposition and Distribution:
(c) To record the effective transfer of approximately $280
million of Dial's outstanding indebtedness to the consumer
products business as follows: In conjunction with the
Distribution, Dial will borrow approximately $280 million
under a new $350 million bank credit facility and will use
the proceeds to repay outstanding indebtedness of Dial. The
credit facility and the related liability will then be
assumed by the consumer products business.
(d) To record estimated transaction costs of the Distribution of
the consumer products business.
(e) To record the Distribution of the consumer products business
to Dial shareholders.
(f) To record the transaction costs associated with the
Disposition of the Canadian intercity bus transportation
business.
(g) To record the assumption of approximately $13.6 million of
Dial's outstanding indebtedness by the Canadian intercity
bus transportation business, the receipt by Dial of notes
totaling approximately $13 million from the Canadian
intercity bus transportation business, and the exchange of
Dial's shares of the Canadian intercity bus transportation
business for the minority shares in the Canadian tourism
business coincident with the separation of the Canadian
intercity bus transportation business from the Canadian
tourism business, resulting in a loss on Disposition of
approximately $2.0 million, and the recognition of
previously unrealized foreign currency translation losses of
approximately $11.5 million.
(h) To record the ongoing income statement impact of the
exchange described in (g).
(i) To record the income tax impact of the pro forma income
statement adjustments.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
THE DIAL CORP
By: s/ Richard C. Stephan
-------------------------
Richard C. Stephan
Vice President-Controller
DATE: June 13, 1996