SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 30, 2001
Commission file number: 1-11793
A. | Full title of the Plan and address of the Plan, if different from that of the issuer named below: |
The Dial Corporation 401(k) Plan for Hourly Employees
B. | Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office: |
THE DIAL CORPORATION 15501 NORTH DIAL BOULEVARD SCOTTSDALE, ARIZONA 85260-1619 |
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, The Dial Corporation 401(k) Plan for Hourly Employees has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.
THE DIAL CORPORATION 401(k) PLAN FOR HOURLY EMPLOYEES |
||||
By | ||||
Conrad A. Conrad Executive Vice President and Chief Financial Officer of The Dial Corporation |
DATE: May 22, 2002
THE DIAL CORPORATION 401(k) PLAN
FOR HOURLY EMPLOYEES
Financial Statements
For the Years Ended November 30, 2001 and 2000,
Supplemental Schedules as of and for the Year Ended
November 30, 2001, and Independent Auditors Report
THE DIAL CORPORATION 401(k) PLAN FOR HOURLY EMPLOYEES
TABLE OF CONTENTS
Page | |||||
INDEPENDENT AUDITORS REPORT |
1 | ||||
FINANCIAL STATEMENTS AS OF NOVEMBER 30, 2001 AND 2000
AND FOR THE YEARS THEN ENDED: |
|||||
Net Assets Available for Benefits |
2 | ||||
Changes in Net Assets Available for Benefits |
3 | ||||
Notes to Financial Statements |
4-9 | ||||
SUPPLEMENTAL SCHEDULES AS OF NOVEMBER 30, 2001
AND FOR THE YEAR THEN ENDED: |
|||||
Assets Held for Investment Purposes at End of Year |
10 | ||||
Reportable Transactions |
11 | ||||
EXHIBIT 23 - INDEPENDENT AUDITORS CONSENT |
12 |
INDEPENDENT AUDITORS REPORT
To the Plan Administrator and Participants of
The Dial Corporation 401(k) Plan for Hourly Employees
Scottsdale, Arizona
We have audited the accompanying statements of net assets available for benefits of The Dial Corporation 401(k) Plan for Hourly Employees (the Plan), as of November 30, 2001 and 2000, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plans management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at November 30, 2001 and 2000, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules as of and for the year ended November 30, 2001 on pages 10 and 11 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plans management. Such supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic 2001 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.
\s\ Deloitte & Touche LLP
Deloitte & Touche LLP
Phoenix, Arizona
May 22, 2002
THE DIAL CORPORATION
401(k) PLAN FOR HOURLY EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
NOVEMBER 30, 2001 AND 2000
ASSETS | 2001 | 2000 | ||||||||
INVESTMENTS AT FAIR VALUE: |
||||||||||
Mutual Funds |
$ | 13,623,433 | $ | 13,325,331 | ||||||
Guaranteed Investment Contract Funds |
4,238,517 | 3,673,488 | ||||||||
Common Stock |
4,531,108 | 3,045,839 | ||||||||
Participant notes receivable |
730,538 | 548,098 | ||||||||
Total investments at fair value |
23,123,596 | 20,592,756 | ||||||||
RECEIVABLES |
||||||||||
Employer contributions |
11,474 | 12,010 | ||||||||
Participant contributions |
40,078 | 42,229 | ||||||||
Interest on loan repayments |
1,064 | 652 | ||||||||
Total receivables |
52,616 | 54,891 | ||||||||
NET ASSETS AVAILABLE FOR BENEFITS |
$ | 23,176,212 | $ | 20,647,647 | ||||||
See notes to financial statements.
2
THE DIAL CORPORATION
401(k) PLAN FOR HOURLY EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED NOVEMBER 30, 2001 AND 2000
2001 | 2000 | |||||||||||
Contributions: |
||||||||||||
Employer |
$ | 557,886 | $ | 568,442 | ||||||||
Employee pre-tax |
1,936,690 | 2,080,203 | ||||||||||
Employee after-tax |
115,452 | 145,788 | ||||||||||
Total contributions |
2,610,028 | 2,794,433 | ||||||||||
Investment income/(loss): |
||||||||||||
Dividends |
829,060 | 1,529,900 | ||||||||||
Interest |
269,042 | 259,203 | ||||||||||
Net appreciation/(depreciation)
in fair value of investments |
298,276 | (4,697,181 | ) | |||||||||
Total investment income/(loss) |
1,396,378 | (2,908,078 | ) | |||||||||
Benefits paid to participants |
(1,477,841 | ) | (3,409,118 | ) | ||||||||
NET INCREASE/(DECREASE) |
2,528,565 | (3,522,763 | ) | |||||||||
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR |
20,647,647 | 24,170,410 | ||||||||||
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR |
$ | 23,176,212 | $ | 20,647,647 | ||||||||
See notes to financial statements.
3
THE DIAL CORPORATION
401(k) PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED NOVEMBER 30, 2001 AND 2000
1. | DESCRIPTION OF THE PLAN | |
The following brief description of The Dial Corporation 401(k) Plan for Hourly Employees (the Plan), is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information. | ||
The Plan, commonly known as the Planning Retirement Income Management Earnings Plan (PRIME), was established October 1, 1991. Employees of certain facilities of The Dial Corporation (the Company) who are covered by a collective bargaining agreement are eligible to participate in the Plan after completing at least 1,000 hours of service in a 12 consecutive month period. Employees are able to contribute to the Plan by reducing their wages on a pre-tax basis, and make after-tax contributions, subject to certain limitations. | ||
The Plan is subject to various regulations, particularly those under Internal Revenue Code Section 401(k) and the Employee Retirement Income Security Act of 1974 (ERISA). |
a. | Investment Programs - Contributions to the Plan are invested by the Plans trustee, T. Rowe Price (TRP), at the designation of the participants. The Plan has offered participants the following funds in which to invest pre-tax, after-tax and rollover deposits. |
1) | T. Rowe Price Blue Chip Growth Fund - This fund invests in stocks of large and medium-sized blue chip growth companies that are well established and have the potential for above-average growth. The fair value of the fund is dependent upon the market value of the stocks. | ||
2) | T. Rowe Price Equity Index Trust Fund - This fund invests in common stocks. The fair value of the fund is dependent upon the market value of the stocks. | ||
3) | T. Rowe Price Stable Value Fund - This fund invests in a diversified portfolio of Guaranteed Investment Contracts (GIC) issued by insurance companies, bank investment contracts issued by financial institutions, and strategic investment contracts issued by insurance companies, financial institutions and other entities. Income is earned based upon a blended interest rate determined by the various investments and is reinvested. The fair value of the fund approximates the aggregate contract values of the GIC portfolio and represents contributions made, plus interest at blended rates, less withdrawals by participants. Crediting interest rates for the funds underlying GICs ranged from approximately 4.85% to 7.83% for 2001 and 5.88% to 7.83% for 2000, resulting in a blended rate of return for the fund of 6.06% and 6.10%, for 2001 and 2000, respectively. |
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4) | T. Rowe Price Personal Strategy Income Fund - This fund seeks to provide income and, secondarily, long-term capital appreciation by investing approximately 40% in stocks, 40% in bonds and 20% in money market securities. The fair value of the fund is dependent upon the market value of the investments. | ||
5) | T. Rowe Price Personal Strategy Balanced Fund This fund seeks long-term capital appreciation and income by investing approximately 60% in stocks, 30% in bonds and 10% in money market securities. The fair value of the fund is dependent upon the market value of the investments. | ||
6) | T. Rowe Price Personal Strategy Growth Fund This fund seeks long-term capital appreciation and income by investing approximately 80% in stocks, and 20% in bonds and money market securities. The fair value of the fund is dependent upon the market value of the investments. | ||
7) | T. Rowe Price Value Fund This fund seeks long-term capital appreciation by investing in stocks in a variety of industries. The fair value of the fund is dependent upon the market value of the investments. | ||
8) | T. Rowe Price Mid-Cap Growth Fund This fund seeks long-term capital appreciation by investing in stocks of medium sized companies. The fair value of the fund is dependent upon the market value of the investments. | ||
9) | T. Rowe Price Small-Cap Stock Fund This fund seeks long-term capital appreciation by investing in stocks of small to medium sized companies. The fair value of the fund is dependent upon the market value of the investments. | ||
10) | T. Rowe Price International Stock Fund This fund seeks long-term capital appreciation by investing in stocks of established non-U.S. companies. The fair value of the fund is dependent upon the market value of the investments. | ||
11) | T. Rowe Price Spectrum Growth Fund This fund seeks long-term capital appreciation and income by investing in a diversified portfolio of T. Rowe Price mutual funds, which consist primarily of investments in the common stock of other companies.. The fair value of the fund is dependent upon the market value of the investments. | ||
12) | Pimco Total Return Fund This fund seeks income consistent with preservation of capital and daily liquidity. It invests primarily in a diversified portfolio of investment-grade bonds with duration ranging from three to six years. The fair value of the fund is dependent upon the market value of the investments. | ||
13) | The Dial Corporation (Dial) Common Stock Fund - This fund invests in the common stock of Dial, and any dividends paid on the stock are reinvested in the fund. The fair value of this fund is dependent upon the fluctuations in the market value of Dial stock. |
5
b. | Contributions - Voluntary wage reductions may be elected by the employee. These pre-tax reductions are contributed to the Plan and may range from 1% to 12% of compensation. For participants of the Plan at the Ft. Madison and Aurora plants, Company matching contributions are based on employee pre-tax wage reductions up to 100% of the first 3% of wage reduction. Company matching contributions for other Plan participants are 25% of wage reductions up to a certain maximum contribution per week. Each employee may elect an after-tax contribution of between 1% and 10% of compensation. No Company matching contributions are made based on after-tax contributions. All contributions are limited to the applicable amounts as prescribed by the Internal Revenue Code. Company matching contributions are invested by T. Rowe Price pursuant to the investment elections of the participant. | ||
c. | Payment of Benefits - Benefits are paid to participants upon termination from the Company, disablement, retirement or death. | ||
d. | Participant Loans and Hardship Withdrawals - Effective September 1, 1995, the Plan was amended to allow participants covered by the collective bargaining agreements at Fort Madison and Aurora to borrow against their 401(k) account balances in an amount not to exceed the lesser of 50% of their vested balance or $50,000. Effective August 19, 2000, the plan was further amended to allow participants covered by the collective bargaining agreement at Bristol the same loan provision. Effective September 1, 2001, the plan was further amended to allow participants covered by the collective bargaining agreement at St. Louis the same loan provision. The applicable interest rate is determined by the committee responsible for administering the Plan and shall be equal to the prime rate in effect at various times throughout the year. Loans shall be repaid in equal installments over a maximum of five years, except for loans for purchasing a home, which can be repaid over a maximum of 15 years. All loans are secured by the borrowing participants interest in the Plan. The loans are treated as an earmarked investment of the participants with interest repayments credited proportionately to the current investment elections of the participant. Withdrawals of employee wage reduction contributions and rollover deposits may be made by the participant in the event of a qualified financial hardship, subject to certain tax penalties. Such withdrawals will only be considered necessary to satisfy a financial hardship if all nontaxable loans and after-tax withdrawals available under the Plan have already been obtained. | ||
e. | Vesting - All contributions to the Plan are 100% vested and non-forfeitable at all times. | ||
f. | Participant Accounts - For each participant, various accounts are maintained to record wage reduction contributions, Company matching contributions, after-tax contributions, participant rollover deposits transferred to the Plan, dividend and interest income and the net appreciation or depreciation in the fair value of Plan investments. The benefit to which a participant is entitled is the total benefit which can be provided from the combined amount of these participant accounts less participant loans. | ||
g. | Plan Administration - The Plan is administered by the Retirement Committee comprised of at least three persons appointed by the Companys Board of Directors. Expenses incidental to |
6
the operation of the Plan may be paid by the Plan or directly by the Company. For the years ended November 30, 2001 and 2000, Plan expenses were paid directly by the Company. | |||
h. | Plan Termination - While it is the Companys intention to continue the Plan, the Company has the right to terminate the Plan provided all employer contributions due at the termination date have been paid. |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Significant accounting policies are as follows: |
a. | Basis of Accounting - The financial statements of the Plan are prepared under the accrual method of accounting, in accordance with accounting principles generally accepted in the United States of America. | ||
b. | Investment Valuation and Income Recognition - The Plans investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices. Common stock is valued at its quoted market price. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. | ||
c. | Payment of Benefits - Benefits are recorded when paid. | ||
d. | Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein. Actual results could differ from those estimates. The Plan utilizes various investment instruments. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits. |
7
3. | INVESTMENTS |
The following table presents the net assets of the Plan by fund as of November 30, 2001 and 2000:
November 30 | ||||||||||
2001 | 2000 | |||||||||
Mutual Funds: |
||||||||||
Pimco Total Return Fund |
$ | 412,361 | $ | 223,674 | ||||||
TRP Blue Chip Growth Fund |
3,163,688 | 3,514,479 | ||||||||
TRP International Stock Fund |
407,349 | 496,689 | ||||||||
TRP Mid-Cap Growth Fund |
1,970,478 | 1,804,539 | ||||||||
TRP Personal Strategy Balanced Fund |
458,405 | 407,836 | ||||||||
TRP Personal Strategy Growth Fund |
489,204 | 465,367 | ||||||||
TRP Personal Strategy Income Fund |
4,664,615 | 4,533,526 | ||||||||
TRP Small-Cap Stock Fund |
595,711 | 527,238 | ||||||||
TRP Spectrum Growth Fund |
440,984 | 427,279 | ||||||||
TRP Value Fund |
300,471 | 146,127 | ||||||||
TRP Equity Index Trust Fund |
720,167 | 778,577 | ||||||||
Guaranteed Investment Contract Funds: |
||||||||||
TRP Stable Value Fund |
4,238,517 | 3,673,488 | ||||||||
Common stock: |
||||||||||
The Dial Corporation |
4,531,108 | 3,045,209 | ||||||||
FINOVA Group Inc. |
630 | |||||||||
Contributions receivable |
51,552 | 54,239 | ||||||||
Participant notes receivable |
730,538 | 548,098 | ||||||||
Interest receivable on loan repayments |
1,064 | 652 | ||||||||
NET ASSETS AVAILABLE
FOR BENEFITS |
$ | 23,176,212 | $ | 20,647,647 | ||||||
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4. | RELATED PARTY TRANSACTIONS |
Plan investments include shares of mutual funds managed by T. Rowe Price. T. Rowe Price is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest.
5. | SUBSEQUENT EVENT |
Effective December 31, 2001, with the approval of the Board of Directors of the Dial Corporation and the trustees of The Dial Corporation Taxsaver Investment Plan (TIP), the account balances in the TIP Plan were merged into The Dial Corporation 401(k) Plan for Hourly Employees. All liabilities and obligations incurred under the TIP Plan prior to December 31, 2001 in respect of employees who became active participants in this Plan in connection with a Participation Transfer, shall be assumed by this Plan effective December 31, 2001. Immediately after the merger, each participant in the Plan will have an account balance equal to the sum of the account balances the participant had in the TIP Plan (together with the account balances in this Plan, if applicable) immediately prior to the plan merger. Combined participant account balances totalling $497,780 were transferred from the TIP Plan into this Plan on December 31, 2001. It is the intention of the Board of Directors of the Company that any rights and features of the TIP Plan prior to the plan merger required to be preserved by applicable law be so preserved, and this Plan shall be construed and administered to effectuate this intent.
6. | FEDERAL INCOME TAX STATUS |
The Plan obtained its latest determination letter on March 12, 1996, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plans counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plans financial statements.
On December 28, 2001, the Company filed Form 5300 with the IRS, which is an application for a letter of favorable determination.
9
THE DIAL CORPORATION
401 (k) PLAN FOR HOURLY EMPLOYEES
SUPPLEMENTAL SCHEDULE
NOVEMBER 30, 2001
Form 5500, Schedule H, Part IV
Schedule of Assets Held for Investment Purposes at End of Year
Column B | Column C | Column E | ||||
Description of Investment | ||||||
Identity of Issuer, | Including Collateral, Rate of | |||||
Borrower, Lessor or | Interest, Maturity Date, | Current | ||||
Similar Party | Par or Maturity Value | Value | ||||
TRP Stable Value Fund | GIC Fund (4,238,517 shares) | $ | 4,238,517 | |||
TRP Equity Index Trust Fund | ||||||
Pimco Total Return Fund | Mutual Fund (23,566 shares) | 720,167 | ||||
TRP Personal Strategy Income Fund |
Mutual Fund (38,006 shares) Mutual Fund (362,723 shares) |
412,361 4,664,615 | ||||
TRP Personal Strategy Balanced Fund | Mutual Fund (30,459 shares) | 458,405 | ||||
TRP Personal Strategy Growth Fund | Mutual Fund (27,859 shares) | 489,204 | ||||
TRP International Stock Fund | Mutual Fund (36,698 shares) | 407,349 | ||||
TRP Mid-Cap Growth Fund | Mutual Fund (52,588 shares) | 1,970,478 | ||||
TRP Value Fund | Mutual Fund (15,756 shares) | 300,471 | ||||
TRP Small-Cap Stock Fund | Mutual Fund (24,946 shares) | 595,711 | ||||
TRP Spectrum Growth Fund | Mutual Fund (31,409 shares) | 440,984 | ||||
TRP Blue Chip Growth Fund | Mutual Fund (110,735 shares) | 3,163,688 | ||||
The Dial Corporation | Common Stock (258,773 shares) | 4,531,108 | ||||
Participant notes receivable | Participant loans (Interest at 6.50% to 9.50%, maturing from 2001 to 2014) | 730,538 | ||||
Total assets held for investment purposes |
$ | 23,123,596 | ||||
10
THE DIAL CORPORATION
401 (k) PLAN FOR HOURLY EMPLOYEES
SUPPLEMENTAL SCHEDULE
YEAR ENDED NOVEMBER 30, 2001
Form 5500, Schedule H,
Part IV
Schedule of Reportable Transactions
Column H | ||||||||||||||||||||||||
Column A | Current | Column I | ||||||||||||||||||||||
Identity | Column B | Value of | Net | |||||||||||||||||||||
Of | Description | Column C | Column D | Column G | Asset on | Gain | ||||||||||||||||||
Party | of | Purchase | Selling | Cost of | Transaction | Or | ||||||||||||||||||
Involved | Asset | Price | Price | Asset | Date | (Loss) | ||||||||||||||||||
Single Transactions |
||||||||||||||||||||||||
Series of Transactions
|
||||||||||||||||||||||||
TRP Stable Value Fund |
GIC Fund | $ | 1,052,105 | $ | 1,052,105 | $ | 1,052,105 |
NOTE: | Reportable transactions are those transactions which either singularly or in series of combined purchases and sales during the year exceed 5% of the fair value of the Plans assets at the beginning of the year |
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EXHIBIT 23
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference in Registration Statement Nos. 333-10157, 333-80775 and 333-46512 of The Dial Corporation on Form S-8 of our report dated May 22, 2002, appearing in this Annual Report on Form 11-K of The Dial Corporation 401(k) Plan for Hourly Employees for the year ended November 30, 2001.
\s\ Deloitte & Touche LLP
Deloitte & Touche LLP
Phoenix, Arizona
May 29, 2002
12