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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




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FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13

OF THE SECURITIES EXCHANGE ACT OF 1934


For the Fiscal Year Ended December 31, 2000

Commission File Number 1-11793

THE DIAL CORPORATION

(Exact Name of Registrant as Specified in its
Charter)


|                                                                          |  |                                                  
|------------------------------------------------------------------------- |  | -------------------------------------------------
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Delaware
	(State or Other Jurisdiction of
	Incorporation or Organization) |  | 51-0374887
	(I.R.S. Employer
	Identification No.)

|                                                                                          |  |                       
|----------------------------------------------------------------------------------------- |  | ----------------------
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|15501 North Dial Boulevard
	Scottsdale, Arizona
	(Address of Principal Executive Offices) |  | 85260-1619
	(Zip Code)

Registrants Telephone Number, Including Area
Code:  (480) 754-3425

Securities Registered Pursuant to Section 12(b) of the
Act:

|                                |  |                                          
|------------------------------- |  | -----------------------------------------
|Title of Each Class             |  | Name of Each Exchange on Which Registered
|                                |  |                                          
|Common Stock, $.01 par value    |  | New York Stock Exchange                  
|Preferred Share Purchase Rights |  | New York Stock Exchange                  

Securities Registered Pursuant to Section 12(g) of
the Act:  NONE

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 
          No

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the
registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.

As of March 2, 2001, 94,904,907 shares of Dials
common stock were outstanding and the aggregate market value of
the common stock (based on its closing price on such date) held
by nonaffiliates was approximately $1.3 billion.

Documents Incorporated by Reference

Portions of Dials proxy statement relating to the 2001
annual meeting of stockholders to be held on June 7, 2001,
have been incorporated by reference into Part III,
Items 10, 11 and 12 of this Form 10-K.



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TABLE OF CONTENTS



|          |                                                                                              |  |  |  |  |  |  | 
|--------- | -------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I   
|          | Item 1. Business                                                                            
|          | Item 2. Properties                                                                          
|          | Item 3. Legal Proceedings                                                                   
|          | Item 4. Submission of Matters to a Vote of Security Holders                                 
|PART II  
|          | Item 5. Market for Registrants Common Equity and Related Stockholder Matters               
|          | Item 6. Selected Financial and Other Data                                                   
|          | Item 7A. Quantitative and Qualitative Disclosure About Market Risk                          
|          | Item 8. Financial Statements and Supplementary Data                                         
|          | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|          | Item 10. Directors and Executive Officers of the Registrant                                 
|          | Item 11. Executive Compensation                                                             
|          | Item 12. Security Ownership of Certain Beneficial Owners and Management                     
|          | Item 13. Certain Relationships and Related Transactions                                     
|PART IV  
|          | Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                    
|EX-10.(c)
|EX-10.(d)
|EX-10.(e)
|EX-10.(f)
|EX-10.(J)
|EX-10.(L)
|EX-10.(M)
|EX-10.(o)
|EX-21    
|EX-23    



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|         |  | PART I                                                                                 |  |      |    | 
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|Item  1  |  | Business                                                                               |  |      | 1  | 
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|Item  2  |  | Properties                                                                             |  |      | 8  | 
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|Item  3  |  | Legal Proceedings                                                                      |  |      | 9  | 
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|Item  4  |  | Submission of Matters to a Vote of Security Holders                                    |  |      | 9  | 
|         |  | PART II                                                                                |  |      |    | 
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|Item  5  |  | Market for Registrants Common Equity and Related
	Stockholder Matters                 |  |      | 10 | 
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|Item  6  |  | Selected Financial and Other Data                                                      |  |      | 10 | 
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|Item  7  |  | Managements Discussion and Analysis of Results of
	Operations and Financial Condition |  |      | 12 | 
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|Item  7A |  | Quantitative and Qualitative Disclosure About Market Risk                              |  |      | 24 | 
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|Item  8  |  | Financial Statements and Supplementary Data                                            |  |      | 26 | 
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|Item  9  |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosures |  |      | 54 | 
|         |  | PART III                                                                               |  |      |    | 
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|Item  10 |  | Directors and Executive Officers of the Registrant                                     |  |      | 54 | 
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|Item  11 |  | Executive Compensation                                                                 |  |      | 57 | 
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|Item  12 |  | Security Ownership of Certain Beneficial Owners and Management                         |  |      | 57 | 
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|Item  13 |  | Certain Relationships and Related Transactions                                         |  |      | 57 | 
|         |  | PART IV                                                                                |  |      |    | 
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|Item  14 |  | Exhibits, Financial Statement Schedules and Reports on
	Form  8-K                      |  |      | 58 | 



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PART I

Unless otherwise indicated the industry data contained herein
are derived from publicly available industry trade journals and
reports, including, with respect to market rank and market
share, reports published by Information Resources, Inc., and
other publicly available sources which we have not independently
verified but which we believe to be reliable. Unless otherwise
noted, all market share data as of any particular date are as of
the 52 weeks then ended and are based upon sales in the
U.S. market. Soap products are measured by ounces sold.
Detergent products are measured by standard cases sold. Air
fresheners and canned meats are measured by units sold.

This Annual Report on Form 10-K contains forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this
Form 10-K, the words anticipates,
intends, plans, believes,
estimates and similar expressions are intended to
identify forward-looking statements. Such forward-looking
statements included in this Form 10-K include our
expectations for accelerated debt repayment; the potential
write-down of assets in the estimated range of $150 to $170
million if we decide to divest the Specialty Personal Care
business; the adequacy of our reserves for environmental
matters; our anticipated costs to comply with environmental
laws; our belief that the EEOC litigation will not have a
material adverse effect on our operating results or financial
condition; our belief that we have ample resources for raw
materials; our intended efforts pursuant to our SFX01
initiative; our expected annual pre-tax operating benefits and
savings as a result of the special charges taken in the second,
third and fourth quarters of 2000; the adjustment to our list
prices and trade promotion spending in 2001 and the resulting
anticipated reduction in gross sales and trade spending of
$38.7 million; our expectation that earnings in the first
quarter of 2001 will be lower than the same period last year and
the factors believed to be primarily relating to this earnings
decrease; and our exposure to market risks contained in
Item 7A. Quantitative and Qualitative Disclosure About
Market Risk. These statements are based upon managements
beliefs, as well as on assumptions made by and information
currently available to management, and involve various risks and
uncertainties, which are beyond our control. Our actual results
could differ materially from those expressed in any
forward-looking statements made by, or on behalf of, us. Factors
that could cause actual results to differ include those factors
identified in Item 7. Managements Discussion
and Analysis of Results of Operations and Financial
Condition  Factors That May Affect Future Results and
Financial Condition in this Form 10-K.




Item 1.  Business

General

We manufacture and sell consumer products. We market our
products primarily under such well-known household brand names
as Dial® soaps, Purex®
detergents, Renuzit® air fresheners and
Armour® canned meats. We also market
specialty personal care products under the brand names
Freeman® and Sarah
Michaels®. We believe that our brand names have
contributed to our products achieving leading market positions.

For organizational, marketing and financial reporting purposes,
we have organized our business into four segments:



| |   |                              
| | - | -----------------------------
| |  | Domestic Branded,            
|
| |  | Specialty Personal Care,     
|
| |  | International, and           
|
| |  | Commercial Markets and Other.

Information concerning the net sales, operating income and
assets of each of our business segments is set forth in Note 17
to the Consolidated Financial Statements included in this
Form 10-K.

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Domestic Branded

Our Domestic Branded business segment is comprised of four
franchises:



| |   |                    
| | - | -------------------
| |  | Personal Cleansing,
|
| |  | Laundry Care,      
|
| |  | Air Fresheners, and
|
| |  | Food Products      

Within our Domestic Branded business segment, we have chosen to
focus our marketing and product development efforts on the
Dial, Purex, Renuzitand Armourbrands. Our
Domestic Branded business segment accounted for 77%, 78% and 80%
of our net sales in 2000, 1999 and 1998, respectively.

Sales to Wal-Mart, including its affiliate, Sams Club,
accounted for 24%, 22% and 19% of Domestic Branded net sales in
2000, 1999 and 1998, respectively. No other customer accounted
for more than 10% of Domestic Branded net sales in any of those
years. A discussion of our Domestic Branded franchises follows.

Personal Cleansing

Our Personal Cleansing franchise includes Dialand
Liquid Dial® soaps and body washes, and
Coast®, Tone® and
Pure & Natural® soaps. Our subsidiary,
ISC International, Ltd., a manufacturer of translucent soaps, is
also included in the Personal Cleansing franchise. Previously,
this business was included in our Specialty Personal Care
segment. Net sales for the Personal Cleansing franchise for
2000, 1999 and 1998 were 30%, 31%, and 32%, respectively, of the
Domestic Branded business segment. At December 31, 2000,
our Dialand other soap products had a 17% market share,
measured in ounces sold, in the $2.3 billion soap category.
Based on ounces sold, Dialwas Americas leading bar
soap and antibacterial bar soap and the second leading liquid
soap and antibacterial liquid soap as of December 31, 2000.

Laundry Care

Our Laundry Care franchise includes Purex detergents,
bleach and fabric softeners, Zout® stain
remover, Trend® detergent,
Borateem® bleach, Vano®
and Sta-Flo® starches,
Boraxo® soap and 20 Mule
Team® borax, Fels Naptha®
laundry soap and La France® brightener.
During 2000, we discontinued our Dutch® brand
laundry detergent and Rinse n Soft®
fabric softener. Net sales for the Laundry Care franchise for
2000, 1999 and 1998 were 37%, 35% and 34%, respectively, of the
Domestic Branded business segment. As of December 31, 2000,
Purexheld the number two market share position with an
11% share, measured by standard cases sold, in the $4.8 billion
domestic laundry detergent market.

In February 1998, we sold the Purex Toss N
Soft® brand to Church & Dwight for $5.3
million. Sales of these products in 1998 were insignificant as a
percentage of our total net sales.

Air Fresheners

Our Air Fresheners franchise includes a variety of air
fresheners and accessories that all bear the Renuzitname. Net sales for the Air Fresheners franchise for 2000,
1999 and 1998 were 17%, 16% and 15%, respectively, of the
Domestic Branded business segment. As of December 31, 2000,
Renuzitwas the second leading brand, measured by both
net sales and units sold, in the $908 million domestic air
freshener market.

Food Products

Our Food Products franchise includes Armourand
Armour Star® canned meats, chili, hashes and
meat spreads, Treet® canned meat and
Cream® corn starch. Our Armourbranded
products are concentrated in the profitable canned meat market
segment. Net sales for the Food Products franchise for 2000,
1999 and 1998 were 16%, 18% and 19%, respectively, of the
Domestic Branded business segment. As December 31, 2000,
Armourwas the number two national brand of canned meats,
based upon both net sales and units sold, and

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Specialty Personal Care

Our Specialty Personal Care business segment includes a variety
of skin, hair, bath, body and foot care products sold under the
Freeman, Sarah Michaelsand Natures
Accents® brand names. In the third quarter of 2000,
we discontinued our Natures Accents business and
reorganized the rest of our Specialty Personal Care business. A
detailed discussion of the special charges taken by Dial is
included in Note 3 to the Consolidated Financial Statements
included in this Form 10-K. Natures Accents products
were insignificant as a percentage of our total net sales in
each of 2000, 1999 and 1998. We acquired The Freeman Cosmetic
Corporation (Freeman) in July 1998. Freeman is
a manufacturer and marketer of skin, hair, bath, body and foot
care products all sold under the Freemanbrand name. We
acquired Sarah Michaels, Inc. (Sarah Michaels) in
September 1998. Sarah Michaels is a leading marketer of
premium specialty bath and body products, including body washes,
body mists, luxury soaps, hand and body lotions, loofahs,
sponges and brushes, which are distributed under the Sarah
Michaels brand name. Sarah Michaelsis the leading
brand, measured by net sales, in the gift pack segment of the
$560 million specialty personal care market.

Specialty Personal Care accounted for 7%, 8% and 5% of our net
sales in 2000, 1999 and 1998, respectively. Our Specialty
Personal Care business experiences seasonality with
approximately 40% of net sales occurring in the last quarter of
each year as a result of holiday sales.

The following table reflects customers who accounted for more
than 10% of Specialty Personal Care net sales in 2000 and 1999.

|         |  |      |     |      |  |  |     | 
|-------- |  | ---- | --- | ---- |  |  | --- | 
|         |  | 2000 |     | 1999
|         |  |      |     |     
|Wal-Mart |  |      | 37% |      |  |  | 36% | 
|        
|        
|        
|        
|K-Mart   |  |      | 13% |      |  |  | 12% | 
|        
|        
|        
|        
|Target   |  |      | 10% |      |  |  | 12% | 

We are reviewing strategic alternatives with respect to our
Specialty Personal Care business, while working aggressively to
improve the performance of this business. Preliminary
discussions with interested parties have taken place; however,
no decision concerning the possible sale of this business has
been made. At this time, we believe that if a decision is made
in the future to divest of this business, a write-down of assets
to their estimated market value would be required. Based on
current estimates, such a write-down would be in the range of
$150 to $170 million after tax. If this takes place, we would be
required to obtain our lenders waiver because an asset
write-down in this range would violate the minimum net worth
covenant in our credit facility.

International

We distribute products in more than 40 countries. We have
focused our international efforts in Argentina, Canada, Mexico,
Puerto Rico and the Caribbean. During 2000, 1999 and 1998
approximately 93%, 88% and 89% of international sales came from
these markets. Our International business segment accounted for
12%, 10% and 11% of our net sales in 2000, 1999 and 1998,
respectively.

In the second quarter of 2000, Nuevo Federal S.A., our wholly
owned subsidiary, acquired Plusbelle S.A., a manufacturer and
marketer of personal care products in Argentina, from Revlon,
Inc. We believe that this acquisition has further established
our position in one of Latin Americas largest consumer
markets in Mercosur, a regional trading block with more than 230
million consumers in Argentina and neighboring countries,
including Brazil, Paraguay, Uruguay and Chile.

In the Argentinean consumer products market, as of
December 31, 2000, Nuevo Federal held the number three
position in laundry detergents with the
Zorro®, Enzimax® and
Limzul® brands, the number two position in
laundry bars with the Gran Federal® and
Gran Llauro® brands, the number three
position in dish detergents with the Cristal®
and Zorrobrands and the number two position in bar soaps
with the Limol®and

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Campos Verdes® Plusbelle®


In Canada, Purexliquid is the number two liquid laundry
detergent overall, Liquid Dialis the number three
antibacterial liquid soap and Dial antibacterial soap products
have the strongest growth in the category. In Mexico, Liquid
Dialand the Breck® hair care products
enjoy strong brand recognition. In Puerto Rico, Purexliquid holds the number three market position in the liquid
laundry detergent category with 12% of the category.

Commercial Markets and Other

Our Commercial Markets business segment sells branded and
nonbranded products through the commercial channel to hotels,
hospitals, schools and other institutional customers. In
addition, this business segment includes sales of soap pellets
and chemicals, principally glycerin and fatty acids, that are
by-products of the soap making process. Dials Commercial
Markets and Other business segment accounted for 4% of our net
sales in each of 2000, 1999 and 1998.

Dial/ Henkel Joint Ventures

In April 1999, we founded Dial/ Henkel LLC, a joint venture
with Henkel KGaA of Düsseldorf, Germany. Dial and Henkel
each own 50% of this joint venture. This joint venture was
formed to develop and market a range of enhanced laundry
products in North America. In July 1999, this joint venture
acquired the Custom Cleaner® home dry
cleaning business. In December 1999, this joint venture
launched Purex Advanced®.

In March 2000, we formed another joint venture with Henkel
named Dial/Henkel Mexico S.A. de C.V. Henkel owned 51% and Dial
owned 49% of this joint venture. This joint venture was formed
primarily to develop and market consumer detergent and household
cleaning products in Mexico. In May 2000, this joint
venture acquired 80% of Fabrica de Jabon Mariano Salgado, S.A.
de C.V., a manufacturer and marketer of consumer detergents and
household cleaning products in Mexico.

In December 2000, we reorganized our joint ventures with
Henkel. As part of this reorganization, Dial/ Henkel LLC
discontinued the Purex Advanced laundry detergent
business. The only business continuing in this joint venture is
the Custom Cleaner home dry cleaning business. We also
sold our interest in Dial/ Henkel Mexico S.A. de C.V. to Henkel
for $18.9 million as part of the reorganization. In 2000, the
two Dial/ Henkel joint ventures resulted in net losses to Dial
of $7.1 million, excluding special charges, and $37.6 million
including special charges. A detailed discussion of the
financial impact of these joint ventures and related special
charges to Dial is included in Notes 3 and 5 to the
Consolidated Financial Statements included in this
Form 10-K.

Customers

Our products are sold throughout the United States primarily
through supermarkets, mass merchandisers, drug stores,
membership club stores and other outlets. Our top 10 customers
accounted for approximately 50%, 42% and 40% of net sales in
2000, 1999 and 1998, respectively. Wal-Mart, including its
affiliate, Sams Club, was our largest customer, accounting
for 21%, 18% and 17% of our net sales in 2000, 1999 and 1998,
respectively. No other customer accounted for more than 10% of
net sales in 2000, 1999 or 1998. Generally, our payment terms to
customers range from 30 to 60 days. Special holiday terms
for Specialty Personal Care can extend to 90 days.

Our products are also sold internationally through the same
outlets, principally in Argentina, Canada, Mexico, Puerto Rico
and the Caribbean.

Sales

Our customers are served by a national sales organization of
approximately 170 employees. The sales organization is divided
into regional divisions and account teams for grocery sales and
specialized sales

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Internationally, our customers are served by salespeople at two
foreign subsidiaries and two foreign sales offices, consisting
of approximately 60 employees. In addition, some regions are
also served by independent distributors.

Promotion and Advertising

A significant portion of our revenues are expended for trade
discounts, promotion and advertising of our products. We believe
that these expenditures are necessary to maintain and increase
market shares in an industry highly dependent on quality,
consumer trends and product image. We incurred trade discounts,
promotion and advertising expenses for these purposes of $447.5
million, $444.7 million and $373.3 million in 2000, 1999 and
1998, respectively. This represents 27%, 26% and 24%, of net
sales in those years. In 2001 we plan to adjust our list prices
and trade promotion spending on selected personal cleansing and
laundry care products to more closely align with our shelf
pricing strategies. The anticipated impact on our operating
results is described in Managements Discussion and
Analysis of Results of Operations and Financial Condition-Recent
Developments.

Distribution

We ship product from ten warehouses located at or near our
domestic manufacturing and assembly facilities and four domestic
regional distribution centers. The regional warehouses are
operated by third parties, except for one warehouse that we own
and operate. We use outside carriers to transport our products.

We have a just-in-time inventory management program of
continuous, automatic replenishment of certain of our trade
customers inventories. The primary objective of this
program is to improve service to our customers and reduce costs
by shortening the order-to-delivery pipeline. This occurs by
anticipating customer needs based on historical sales, shipping
the product just before those needs arise and eliminating
redundancy, errors and interruption throughout the replenishment
process. Sales under this program accounted for approximately
17%, 15% and 15% of our net sales in 2000, 1999 and 1998,
respectively.

Suppliers

We rely on a number of third parties for research and
development, manufacturing and packaging. Many of our
arrangements with respect to new products contain limited mutual
exclusivity provisions. This is designed to permit the supplier
and us to profit from the product enhancement or innovation
before we use an alternative supplier or the supplier sells to
one of our competitors. Most of our outsourcing arrangements can
be terminated without material penalties on an average of three
months notice.

Raw Materials

We believe that ample sources of raw materials are available
with respect to all of our major products. Paper, fats and oils,
detergent chemicals and meat have the most significant impact on
our costs. Generally, we purchase these raw materials from a
variety of suppliers in the United States. While we believe that
in some circumstances we may be able to respond to price
increases for certain raw materials by increasing sales prices,
rapid increases in the prices of certain raw materials could
materially impact our profit margins and financial results. For
example, tallow (a key ingredient in Dialbar soaps) has
experienced price fluctuations within the range of $0.09 to
$0.28 per pound from January 1, 1995, to December 31,
2000. Recently, the price of tallow has been trading at the
lower end of this historical range. If prices were to increase,
we may not be able to increase the prices of our Dialbar
soaps to offset these increases as readily as many competitors,
which tend to use less tallow in their products. In addition, we
depend on a single supplier for Triclosan, the antibacterial
agent that is the active ingredient used in Liquid Dialproducts. Although we have an adequate supply of Triclosan
for our current and foreseeable needs, a significant disruption
in this supply could have a material adverse impact on our
financial results.

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We attempt to reduce our risk by entering into contracts to
provide up to six- to twelve-month supplies of tallow, Triclosan
and packaging materials. During 1999, we began using financial
derivatives to mitigate price fluctuations on the raw material
component of the cardboard boxes and packaging used in our
business. Other long-term hedging opportunities against price
increases for these raw materials are generally not available.

Competition

We compete primarily on the basis of brand equity, brand
advertising, customer service, product performance and product
quality at competitive retail price points. We compete with
numerous, well-established local, regional, national and
international companies. Some of these companies have greater
financial resources than we do and may be willing to commit
significant resources to protect their own market shares or to
capture market share from us. Our principal competitors are as
follows:

|                                                                                                                                                                                                                                                                                                                                                                                        |  |                                                                                                                                                                                                                                                               
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                       
|Personal Cleansing The Procter & Gamble Company
	(P&G)
	 Lever Brothers Co., a division of Unilever PLC
	(Lever)
	 Colgate-Palmolive Company (Colgate)Air Fresheners S.C. Johnson & Son, Inc.
	 Reckitt & Benckiser, Inc.
	 Church & Dwight, Inc.
	 Global Household Brands
	 USA Detergents, Inc.Food Products Hormel Foods Corp.
	 Conagra (International Home Foods) |  | Laundry Care P&G
	 Lever
	 Colgate
	 Church & Dwight, Inc.
	 USA Detergents, Inc.
	 Armus LLC, a joint venture formed by Church &
	Dwight and USA DetergentsSpecialty Personal Care Reckitt & Benckiser, Inc.
	 Alberto-Culver Co.
	 Parfums de Coeur

Research and Development

We conduct research and development at our facility in
Scottsdale, Arizona. Our internal research and development
efforts are directed at improving existing products, developing
new products, and providing technical assistance and support to
our manufacturing activities. We also contract for general
research and development activities. Our internal and external
research and development expenditures were approximately $13.7
million, $11.7 million and $10.1 million in 2000, 1999 and 1998,
respectively.

Marketing Research

We rely on industry data, syndicated market share data and
various attitude and usage studies prepared by independent
marketing firms. We also obtain direct sales information from
our largest customers to identify consumer needs and anticipate
shifts in consumer preferences. This allows us to develop line
extensions and new products to meet changing demands.

Patents and Trademarks

Our trademarks include Dial, Purex, Renuzit, Coast, Zout,
Armour, Armour Star, Freeman, Sarah Michaels, Tone, Pure &
Natural, Breck, Plusbelle, Trend, Treet, 20 Mule Teamand
Boraxoand related trade names. We license the Armourand Armour Startrademarks from ConAgra, Inc. which
also sells non-canned food products under the Armourtrademark. We license the 20 Mule Teamtrademark from
U.S. Borax, Inc.

United States trademark registrations are for a term of
10 years, renewable every 10 years so long as the
trademarks are used in the regular course of trade. We maintain
a portfolio of trademarks representing substantial goodwill in
the businesses using these trademarks. We also have a
significant number of registered foreign trademarks and pending
foreign trademark applications.

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United States patents are currently granted for a term of
20 years from the date a patent application is filed. We
own a number of patents and believe that some of them provide
competitive advantages in the marketplace.

Government Regulation

Substantially all of our operations are, or may become, subject
to various federal laws and agency regulations. These include
the Food, Drug and Cosmetic Act, which is administered by the
Food and Drug Administration (the FDA). The FDA
regulates the manufacturing, labeling, and sale of our
over-the-counter drug and cosmetic products. The Insecticide,
Fungicide and Rodenticide Act and the Toxic Substances Control
Act are administered by the Environmental Protection Agency and
regulate our disinfectant products and certain of the substances
used in the manufacturing of our products. The Meat Inspection
Act is administered by the Department of Agriculture and
regulates our meat products. The Hazardous Substances Act is
administered by the Consumer Product Safety Commission and
regulates the labeling of our household products. The Fair
Packaging and Labeling Act is administered by the Federal Trade
Commission (the FTC) and regulates the packaging and
labeling of all of our products. Our products also are subject
to regulation by various state laws and various state regulatory
agencies. In addition, we are subject to similar laws and
regulations imposed by foreign jurisdictions.

Since the 1970s, the FDA has regulated antibacterial soaps and
hand washes under a proposed regulation. Although the proposed
regulation has not been finalized, the FDA ultimately could set
standards that result in limiting or even precluding soap
manufacturers from using some current antibacterial ingredients
or making antibacterial claims for some product forms, such as
bar soap. Dial, which uses the antibacterial ingredient
Triclosan in Liquid Dial and Triclocarban in Dialbar soap, emphasizes the antibacterial properties of its
soap products in its marketing campaigns and product labeling.
Any final FDA regulation that limits or precludes this type of
advertising could require Dial to develop new marketing
campaigns, develop new products or utilize different
antibacterial ingredients in its products, all of which could
materially adversely affect our business.

Environmental Matters

We are subject to a variety of environmental and health and
safety laws in each jurisdiction in which we operate. These laws
and regulations pertain to our present and past operations.
Since 1980, we have received notices or requests for information
with respect to Superfund sites under the federal
Comprehensive Environmental Response, Compensation and Liability
Act, four of which are currently active. As of December 31,
2000, we have accrued in our financial statements approximately
$1.2 million in reserves for expenses related to Superfund sites
and the clean-up of closed plant sites. We believe our reserves
are adequate, but these costs are difficult to predict with
certainty.

We do not currently anticipate that we will incur significant
capital expenditures in connection with matters relating to
environmental control or compliance in 2000. We do not
anticipate that the costs to comply with environmental laws and
regulations or the costs related to Superfund sites and the
clean-up of closed plant sites will have a material adverse
effect on our financial results or condition. However, there can
be no assurance that other developments, such as the emergence
of unforeseen claims or liabilities or the imposition of
increasingly stringent laws, regulations and enforcement
policies, will not result in material costs in the future.

Federal, state, local and foreign environmental compliance may
from time to time require changes in product formulation or
packaging. These changes have not had, and are not expected to
have, a material adverse effect on our financial results or
condition.

Employees

We employed approximately 3,351 individuals, of whom
approximately 1,086 were covered by collective bargaining
agreements, as of December 31, 2000.

7



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##### Table of Contents



Three of our seven plants in the United States are unionized.
Our contract with the International Brotherhood of Teamsters
(covering approximately 382 employees at our St. Louis, Missouri
plant and Madison County, Illinois distribution center), is
scheduled for renegotiation in July 2001. Our failure to
successfully negotiate this contract could result in us having
third parties manufacture our Laundry Care products which could
have a material adverse effect on our profitability and
operating results. In 1993 our St. Louis, Missouri plant
experienced a five-week work stoppage. No assurances can be
given that we will be able to successfully renegotiate this
contract in 2001. In 1999, we successfully renegotiated our
contract with the United Food and Commercial Workers Union
(covering approximately 286 employees at our Aurora,
Illinois plant), which now expires in August 2002. In
addition, we successfully renegotiated our contract with the
United Food and Commercial Workers Union (covering approximately
418 employees at our Ft. Madison, Iowa plant), which now
expires September 2003. Although we believe that our
relations with our employees are satisfactory, there can be no
assurance that we will not face labor disputes in the future or
that such disputes will not be material to us.




Item 2.  Properties

Our corporate headquarters is located in a leased
130,000-square-foot, single-tenant building in Scottsdale,
Arizona, that is adjacent to the 200,000 square feet Dial Center
for Innovation (DCI), formerly known as the Dial
Technical and Administrative Center, which we sold in
June 2000. We still occupy the DCI building under a
multi-year lease. See Managements Discussion and
Analysis of Results of Operations and Financial
Condition  Liquidity and Capital Resources.

Our principal facilities include the following:

|                            |          |             |         |           |  |                                                            | 
|--------------------------- | -------- | ----------- | ------- | --------- |  | ---------------------------------------------------------- | 
|                            |          | Approximate |         |          
|Location                    |          | Sq. Feet    |         | Purpose  
|                            |          |             |         |          
|Manufacturing Facilities    |          |             |         |           |  |                                                           
|                           
|                           
|                           
|                           
|Aurora, Illinois            |          |             | 451,000 |           |  | Bar soaps                                                 
|                           
|                           
|                           
|                           
|Fort Madison, Iowa          |          |             | 447,000 |           |  | Canned meats                                              
|                           
|                           
|                           
|                           
|St. Louis, Missouri         |          |             | 272,400 |           |  | Dry and liquid laundry detergents, fabric softeners       
|                           
|                           
|                           
|                           
|Bristol, Pennsylvania       |          |             | 261,800 |           |  | Dry detergents  closed December 2000                     
|                           
|                           
|                           
|                           
|West Hazleton, Pennsylvania |          |             | 214,500 |           |  | Liquid detergents and liquid soaps                        
|                           
|                           
|                           
|                           
|Los Angeles, California     |          |             | 47,600  |           |  | Powdered soap, fabric softeners and liquid detergents     
|                           
|                           
|                           
|                           
|Compton, California         |          |             | 146,400 |           |  | Liquid soaps, bodywashes and shampoos                     
|                           
|                           
|                           
|                           
|Guatemala City, Guatemala   |          |             | 100,000 |           |  | Translucent and transparent bar soaps                     
|                           
|                           
|                           
|                           
|Mexico City, Mexico         |          |             | 83,800  |           |  | Shampoos, liquid soaps and hair care aerosols             
|                           
|                           
|                           
|                           
|Buenos Aires, Argentina     |          |             | 150,000 |           |  | Bar soaps and dry detergents                              
|                           
|                           
|                           
|                           
|Buenos Aires, Argentina     |          |             | 15,000  |           |  | Sulfonic acid                                             
|                           
|                           
|                           
|                           
|Buenos Aires, Argentina     |          |             | 79,700  |           |  | Shampoos and conditioners                                 
|                           
|                           
|                           
|                           
|San Juan, Argentina         |          |             | 70,000  |           |  | Dry detergents and bar soaps                              
|                           
|                           
|                           
|                           
|San Juan, Argentina         |          |             | 33,000  |           |  | Liquid detergents, cleaners, air fresheners and deodorants
|                            |          |             |         |           |  |                                                           
|                            | Subtotal |             |         | 2,372,200 |  |                                                            | 
|                           
|Distribution Centers        |          |             |         |           |  |                                                           
|                           
|                           
|                           
|                           
|Atlanta, Georgia            |          |             | 253,700 |           |  | Warehousing and distribution of finished goods            
|                           
|                           
|                           
|                           
|Allentown, Pennsylvania     |          |             | 800,000 |           |  | Warehousing and distribution of finished goods            
|                           
|                           
|                           
|                           
|Corona, California          |          |             | 325,700 |           |  | Warehousing and distribution of finished goods            

8



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##### Table of Contents



|                               |          |             |         |           |  |                                                | 
|------------------------------ | -------- | ----------- | ------- | --------- |  | ---------------------------------------------- | 
|                               |          | Approximate |         |          
|Location                       |          | Sq. Feet    |         | Purpose  
|                               |          |             |         |          
|Edwardsville, Illinois         |          |             | 812,000 |           |  | Warehousing and distribution of finished goods
|                               |          |             |         |           |  |                                               
|                               | Subtotal |             |         | 2,191,400 |  |                                                | 
|                              
|Dedicated Warehouse Facilities |          |             |         |           |  |                                               
|                              
|                              
|                              
|                              
|Dedham, Massachusetts          |          |             | 233,900 |           |  | Warehousing and gift set assembly             
|                              
|                              
|                              
|                              
|Stoughton, Massachusetts       |          |             | 75,000  |           |  | Warehousing                                   
|                              
|                              
|                              
|                              
|Holbrook, Massachusetts        |          |             | 71,900  |           |  | Warehousing                                   
|                               |          |             |         |           |  |                                               
|                               | Subtotal |             |         | 380,800   |  |                                                | 
|                               |          |             |         |           |  |                                               
|                               | Total    |             |         | 4,944,400 |  |                                                | 
|                               |          |             |         |           |  |                                               

In December 2000, we closed our dry detergent plant in
Bristol, Pennsylvania. A detailed discussion of the financial
impact of this closure is included in Note 3 to the
Consolidated Financial Statements included in this
Form 10-K. We have entered into a contract to sell this
facility for $2.0 million and the sale is expected to close in
the second quarter of 2001.

We believe that our facilities in the aggregate are adequate and
suitable for their purposes and that manufacturing capacity is
sufficient for current needs. We continue to seek ways to cut
costs and may close facilities as warranted.






Item 3.  Legal Proceedings


On May 21, 1999, we were served with a complaint filed by
the U.S. Equal Employment Opportunity Commission (the
EEOC) in the U.S. District Court for the Northern
District of Illinois, Eastern Division. This action is entitled
Equal Employment Opportunity Commission v. The Dial
Corporation, Civil Action No. 99 C 3356. The EEOC
alleges that Dial has engaged in a pattern and practice of
discrimination against a class of female employees by subjecting
them to sexual or sex-based harassment and failing to take
prompt remedial action after these employees complained about
this alleged harassment. The EEOC is seeking to enjoin Dial from
this alleged harassment, to require us to train our managerial
employees regarding the requirements of Title VII of the Civil
Rights Act of 1964 and to recover unspecified compensatory and
punitive damages. We have denied the EEOCs allegations.
Discovery has been completed and we have filed dispositive
motions. Based on our insurance coverage for this lawsuit, we
currently do not believe that this lawsuit will have a material
adverse effect on our operating results or financial condition.
However, assurances cannot be given regarding the ultimate
outcome of this matter.

As in the case with many companies, we also face exposure to
actual or potential claims and lawsuits involving our business
and assets. We are currently party to a number of lawsuits
consisting of ordinary, routine litigation incidental to our
business, including general and product liability and
workers compensation claims. We believe that any
liabilities resulting from these claims, after taking into
account amounts already accrued and exclusive of any potential
insurance recovery, should not have a material adverse effect on
our financial position, cash flows or results of operations.






Item 4.  Submission of Matters to a Vote of
Security Holders


We did not submit any matter to a vote of our stockholders
during the fourth quarter of 2000.

9



---



##### Table of Contents






PART II




Item 5.  Market for Registrants
Common Equity and Related Stockholder Matters

Our common stock is traded on the New York Stock Exchange under
the symbol DL. The following table sets forth the high and
low sale prices as reported on the NYSE for the periods
indicated. The sale price of the common stock on March 2,
2001, was $13.84 per share.

|            |                |             |  |     |       |  |  |    |      
|----------- | -------------- | ----------- |  | --- | ----- |  |  | -- | -----
|            |                |            
|            |                | Price Range
|            |                |            
|            |                | High        |  | Low
|            |                |             |  |    
|Fiscal 2000 |                |             |  |     |       |  |  |   
|           
|           
|           
|           
|            | First Quarter  |             |  | 24  | 1/16  |  |  | 10 | 1/4  
|           
|           
|           
|           
|            | Second Quarter |             |  | 15  | 1/8   |  |  | 10 |      
|           
|           
|           
|           
|            | Third Quarter  |             |  | 13  | 3/8   |  |  | 9  | 7/8  
|           
|           
|           
|           
|            | Fourth Quarter |             |  | 12  | 15/16 |  |  | 9  | 15/16
|           
|           
|           
|           
|Fiscal 1999 |                |             |  |     |       |  |  |   
|           
|           
|           
|           
|            | First Quarter  |             |  | 35  | 11/16 |  |  | 25 | 1/2  
|           
|           
|           
|           
|            | Second Quarter |             |  | 38  | 3/8   |  |  | 30 | 5/16 
|           
|           
|           
|           
|            | Third Quarter  |             |  | 36  | 7/8   |  |  | 25 |      
|           
|           
|           
|           
|            | Fourth Quarter |             |  | 28  | 1/2   |  |  | 19 | 1/2  

We declared dividends of $0.08 per share of common stock in the
first, second and third quarters of 2000 and each quarter of
1999 and 1998. We reduced our dividend to $0.04 per share of
common stock beginning in the fourth quarter of 2000 as part of
our efforts to accelerate repayment of our debt. The declaration
and payment of dividends is subject to the discretion of our
Board of Directors. Any future determination to pay dividends
will depend on our results of operations, financial condition,
capital requirements, contractual restrictions and other factors
deemed relevant at the time by the Board. As of March 2,
2001, there were 94,904,907 shares of common stock outstanding,
which were held by 32,644 stockholders of record.




Item 6.  Selected Financial and Other
Data

The following table presents selected financial information
derived from our consolidated financial statements. The selected
consolidated balance sheet data as of December 31, 2000,
and December 31, 1999, and the consolidated income
statement data for each of the three fiscal years in the period
ended December 31, 2000, have been derived from our audited
consolidated financial statements included in this
Form 10-K. The selected consolidated balance sheet data as
of December 31, 1998, January 3, 1998 and
December 28, 1996, and consolidated income statement data
for the fiscal years ended January 3, 1998 and
December 28, 1996 have been derived from the audited
consolidated financial statements of Dial, which are not
included in this Form 10-K.

Prior to August 1996, we operated as the consumer products
business of Viad Corp. Viad, our former parent, was then known
as The Dial Corp. In August 1996, our former parent
declared a dividend and distributed to its stockholders all the
outstanding common stock of The Dial Corporation causing us to
become a separate publicly traded company. This transaction is
known as the Spin-off. We have operated as The Dial Corporation
since the Spin-off.

The following data should be read in conjunction with our
consolidated financial statements and notes thereto,
Item 7.  Managements Discussion and
Analysis of Results of Operations and Financial Conditionand the other financial information included elsewhere or
incorporated by reference in this Form 10-K.

10



---



##### Table of Contents



SELECTED FINANCIAL AND OTHER DATA

(in thousands, except per share data, number of employees and
shareholders of record)


|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |         | 
|------------------------------------------------------ | ----------------- | ---------- | --------- | ------- | - | ------- | --------- | ------- |  | ---------- | --------- | ------- |  | - | --------- | ------- |  | - | --------- | ------- | 
|                                                       |                   |           
|                                                       |                   | Year ended
|                                                       |                   |           
|                                                       |                   | Dec. 31    |           | Dec. 31 |   | Dec. 31 |           | Jan. 3  |  | Dec. 28   
|                                                       |                   | 2000(1)    |           | 1999    |   | 1998    |           | 1998    |  | 1996(2)(3)
|                                                       |                   |            |           |         |   |         |           |         |  |           
|Operations Net sales                                   |                   | $          | 1,638,540 |         |   | $       | 1,721,566 |         |  | $          | 1,524,517 |         |  | $ | 1,362,606 |         |  | $ | 1,406,400 |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|Cost of products sold                                  |                   |            | 847,413   |         |   |         | 860,811   |         |  |            | 787,401   |         |  |   | 718,112   |         |  |   | 739,893   |        
|                                                      
|                                                      
|                                                      
|                                                      
|Asset write-downs and discontinued product inventories |                   |            | 49,174    |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   | 27,924    |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|Total cost of products sold                            |                   |            | 896,587   |         |   |         | 860,811   |         |  |            | 787,401   |         |  |   | 718,112   |         |  |   | 767,817   |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|                                                       | Gross profit      |            |           | 741,953 |   |         |           | 860,755 |  |            |           | 737,116 |  |   |           | 644,494 |  |   |           | 638,583 | 
|                                                      
|                                                      
|                                                      
|                                                      
|Selling, general and administrative expenses           |                   |            | 664,422   |         |   |         | 645,613   |         |  |            | 553,181   |         |  |   | 482,324   |         |  |   | 541,110   |        
|                                                      
|                                                      
|                                                      
|                                                      
|Special charges and other asset
	write-downs           |                   |            | 18,190    |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   | 27,076    |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|                                                       |                   |            | 682,612   |         |   |         | 645,613   |         |  |            | 553,181   |         |  |   | 482,324   |         |  |   | 568,186   |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|Operating income                                       |                   |            | 59,341    |         |   |         | 215,142   |         |  |            | 183,935   |         |  |   | 162,170   |         |  |   | 70,397    |        
|                                                      
|                                                      
|                                                      
|                                                      
|Spin-off transaction costs                             |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   | (5,000    | )      
|                                                      
|                                                      
|                                                      
|                                                      
|Interest and other expenses                            |                   |            | (50,306   | )       |   |         | (32,712   | )       |  |            | (23,358   | )       |  |   | (28,235   | )       |  |   | (22,974   | )      
|                                                      
|                                                      
|                                                      
|                                                      
|Net loss of joint ventures                             |                   |            | (37,615   | )       |   |         | (1,347    | )       |  |            |           |         |  |   |           |         |  |   |           |        
|                                                      
|                                                      
|                                                      
|                                                      
|Gain on special items                                  |                   |            | 9,243     |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|Income (loss) before income taxes                      |                   |            | (19,337   | )       |   |         | 181,083   |         |  |            | 160,577   |         |  |   | 133,935   |         |  |   | 42,423    |        
|                                                      
|                                                      
|                                                      
|                                                      
|Income taxes (benefit)                                 |                   |            | (8,329    | )       |   |         | 64,317    |         |  |            | 57,961    |         |  |   | 50,225    |         |  |   | 12,511    |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|Net income (loss)                                      |                   | $          | (11,008   | )       |   | $       | 116,766   |         |  | $          | 102,616   |         |  | $ | 83,710    |         |  | $ | 29,912    |        
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|Net income (loss) per share                            |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Basic             |            | $         | (0.12   | ) |         | $         | 1.19    |  |            | $         | 1.04    |  |   | $         | 0.91    |  |   | $         | 0.33    | 
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Diluted           |            | $         | (0.12   | ) |         | $         | 1.17    |  |            | $         | 1.02    |  |   | $         | 0.89    |  |   | $         | 0.33    | 
|                                                      
|                                                      
|                                                      
|                                                      
|Basic shares outstanding                               |                   |            | 92,237    |         |   |         | 98,255    |         |  |            | 98,294    |         |  |   | 91,918    |         |  |   | 89,705    |        
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Equivalent shares |            |           | 0       |   |         |           | 1,810   |  |            |           | 2,185   |  |   |           | 2,231   |  |   |           | 1,269   | 
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|                                                       | Diluted shares    |            |           | 92,237  |   |         |           | 100,065 |  |            |           | 100,479 |  |   |           | 94,149  |  |   |           | 90,974  | 
|                                                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|Balance Sheet Data (at year end)                       |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|                                                      
|                                                      
|                                                      
|                                                      
|Total assets                                           |                   | $          | 1,381,971 |         |   | $       | 1,269,686 |         |  | $          | 1,175,375 |         |  | $ | 883,852   |         |  | $ | 866,126   |        
|                                                      
|                                                      
|                                                      
|                                                      
|Working capital (deficit)                              |                   |            | (17,112   | )       |   |         | 14,390    |         |  |            | (11,535   | )       |  |   | (11,797   | )       |  |   | 41,107    |        
|                                                      
|                                                      
|                                                      
|                                                      
|Long-term debt                                         |                   |            | 469,271   |         |   |         | 300,851   |         |  |            | 280,223   |         |  |   | 84,399    |         |  |   | 269,515   |        
|                                                      
|                                                      
|                                                      
|                                                      
|Stockholders equity                                   |                   |            | 293,907   |         |   |         | 411,271   |         |  |            | 390,225   |         |  |   | 320,046   |         |  |   | 140,657   |        
|                                                      
|                                                      
|                                                      
|                                                      
|Other Data                                             |                   |            |           |         |   |         |           |         |  |            |           |         |  |   |           |         |  |   |           |        
|                                                      
|                                                      
|                                                      
|                                                      
|Depreciation and amortization                          |                   |            | 53,996    |         |   |         | 43,130    |         |  |            | 36,489    |         |  |   | 31,763    |         |  |   | 30,533    |        
|                                                      
|                                                      
|                                                      
|                                                      
|Capital expenditures                                   |                   |            | 45,885    |         |   |         | 62,495    |         |  |            | 50,330    |         |  |   | 46,715    |         |  |   | 49,468    |        
|                                                      
|                                                      
|                                                      
|                                                      
|Number of employees (end of
	year)                     |                   |            | 3,351     |         |   |         | 3,754     |         |  |            | 3,759     |         |  |   | 3,548     |         |  |   | 2,812     |        
|                                                      
|                                                      
|                                                      
|                                                      
|Number of employees (average)                          |                   |            | 3,559     |         |   |         | 3,757     |         |  |            | 3,654     |         |  |   | 3,180     |         |  |   | 3,125     |        
|                                                      
|                                                      
|                                                      
|                                                      
|Dividends on common shares                             |                   |            | 25,762    |         |   |         | 31,407    |         |  |            | 31,497    |         |  |   | 29,510    |         |  |   | 14,365    |        




|    |                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes restructuring and special charges of
	$97.8 million ($63.8 million after tax or $0.69 per share),
	partially offset by a gain on special items of $9.2 million
	($5.8 million after tax or $0.06 per share) in 2000. See Notes 3
	and 5 of the Consolidated Financial Statements.
|   
|(2) | Includes restructuring charges and asset
	write-downs and Spin-off transaction costs of $60 million ($35.3
	million after tax or $0.39 per share) in 1996.                                                                                                                                
|   
|(3) | Net income per share is presented for 1996
	because our common shares were issued on August 15, 1996.
	The calculation of income per share in 1996 assumes that the
	common shares and common share equivalents were outstanding for
	the entire year.                                    

11



---



##### Table of Contents



Item 7.  Managements Discussion and
Analysis of Results of Operations and Financial Condition

SFX01

As previously disclosed, management has outlined an initiative
labeled SFX01. This three step initiative can be
summarized as follows:

S  We intend to Stabilize our strong businesses.

F  We intend to Fix marginal businesses or jettison
them.

X  Once stabilized and fixed, we intend to eXplore our
options as a company, which include:



| |   |                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |  | Continuing as an independent company.                                                                                      
|
| |  | Merging with one or more companies to form a larger company to
	more effectively compete in the consumer products industry.
|
| |  | Selling our company, either in whole or in part.                                                                           

01 We expect to complete this initiative during 2001.

We currently are exploring, and will continue to explore,
strategic alternatives available to Dial. Decisions made in the
course of SFX01 could result in Dial recording additional
special or restructuring charges or additional asset writedowns.

Restructuring & Special Charges

Third Quarter 2000 Special Charge

On October 18, 2000, we announced a special charge related
to the Specialty Personal Care business, the Dial/ Henkel joint
ventures, and severance costs for prior management. We recorded
$73.9 million ($48.9 million after tax or $0.53 per share) of
this special charge during 2000. We do not anticipate that any
additional amounts will be recorded in 2001 with respect to this
special charge. The pre-tax charges consist of the following:

|                                                     |       |                |        |              |  |                 |        |             |   |   |         |         |   |   |       |        | 
|---------------------------------------------------- | ----- | -------------- | ------ | ------------ |  | --------------- | ------ | ----------- | - | - | ------- | ------- | - | - | ----- | ------ | 
|                                                     |       |                |        | Cash         |  | Amount          |        | Ending     
|                                                     |       | Total          |        | spent during |  | charged against |        | reserves at
|                                                     |       | charges        |        | period       |  | assets          |        | 12/31/00   
|                                                     |       |                |        |              |  |                 |        |            
|                                                     |       |               
|                                                     |       | (in thousands)
|                                                    
|                                                    
|                                                    
|                                                    
|Employee separations                                 |       | $              | 3,077  |              |  | $               | (1,014 | )           |   | $ |        |         |   | $ | 2,063 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Discontinued product inventories and related charges |       |                | 40,169 |              |  |                 | (1,625 | )           |   |   | (29,344 | )       |   |   | 9,200 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Other exit costs                                     |       |                | 200    |              |  |                 | (65    | )           |   |   |         |         |   |   | 135   |       
|                                                    
|                                                    
|                                                    
|                                                    
|Joint ventures  special charges                     |       |                | 30,471 |              |  |                 |       |             |   |   | (30,471 | )       |   |   |      |       
|                                                     |       |                |        |              |  |                 |        |             |   |   |         |         |   |   |       |       
|                                                     | Total |                | $      | 73,917       |  |                 | $      | (2,704      | ) |   | $       | (59,815 | ) |   | $     | 11,398 | 
|                                                     |       |                |        |              |  |                 |        |             |   |   |         |         |   |   |       |       

See the additional discussion of these charges in Notes 3 and 5
to the Consolidated Financial Statements included in this
Form 10-K.

For income statement purposes, $29.3 million of the special
charge is included in Asset writedowns and discontinued
product inventories as a result of restructuring and special
charges, $14.1 million is included in Special charges and
other asset writedowns, and $30.5 million is included in
Net loss of joint ventures. For segment reporting, $38.9
million of the charge is included in Specialty Personal Care,
$4.0 million is included in Domestic Branded, $0.4 million is
included in International and $0.1 million is included in
Commercial Markets & Other.

Cash requirements for the special charges were funded from
normal operations. As a result of the special charge, we
currently expect to realize projected annual pre-tax operating
benefits of approximately $10 million beginning in 2001. These
benefits consist of savings from the Dial/ Henkel joint ventures
of approximately $7

12



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##### Table of Contents



Selling, general and administrative
expenses Cost of products sold


The expected timing and estimated amount of costs and projected
savings are based on managements judgment in light of the
circumstances and estimates at the time the judgments were made.
Accordingly, such estimates may change as future events evolve.
Among other matters, unforeseen changes in operating
requirements and other factors referred to in
 Factors That May Affect Future Results and
Financial Conditioncould cause actual operating
benefits to differ materially from anticipated results.

Second Quarter 2000 Restructuring

On June 28, 2000, we announced a $26.0 million
restructuring charge ($17.0 million after tax or $.19 per share)
designed to improve profitability and operational efficiencies.
Specifically, the charge is to:



| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Close our Bristol, Pennsylvania, dry detergent plant. As a
	result, our dry detergent manufacturing was consolidated into
	our St. Louis plant in the first quarter of 2001.                                   
|
| |  | Consolidate each of the manufacturing and distribution functions
	of the Specialty Personal Care business, which resulted in
	discontinuation of certain formulations and inventory, and other
	one-time costs.
|
| |  | Restructure domestic and international organizations, including
	our sales organization, as a result of acquisitions and changes
	in the business environment.                                                 

We recorded charges totaling $23.9 million ($14.9 million after
tax or $0.16 per share) during 2000. We do not anticipate that
any additional amounts will be recorded in 2001 with respect to
this restructuring charge. The pre-tax charges consist of the
following:

|                                                      |       |                 |        |          |  |              |      |                 |   |             |        |        |   |   |         |         |   |   |     |       | 
|----------------------------------------------------- | ----- | --------------- | ------ | -------- |  | ------------ | ---- | --------------- | - | ----------- | ------ | ------ | - | - | ------- | ------- | - | - | --- | ----- | 
|                                                      |       |                 |        |          |  | Cash         |      | Amount          |   | Ending     
|                                                      |       | Total           |        | Charges  |  | spent during |      | charged against |   | reserves at
|                                                      |       | charges         |        | reversed |  | period       |      | assets          |   | 12/31/00   
|                                                      |       |                 |        |          |  |              |      |                 |   |            
|                                                      |       |                
|                                                      |       | (in thousands )
|                                                     
|                                                     
|                                                     
|                                                     
|Employee separations                                  |       | $               | 4,738  |          |  | $            | (253 | )               |   | $           | (3,657 | )      |   | $ |        |         |   | $ | 828 |      
|                                                     
|                                                     
|                                                     
|                                                     
|Asset writedowns and discontinued product inventories |       |                 | 18,729 |          |  |              | (614 | )               |   |             |       |        |   |   | (18,115 | )       |   |   |    |      
|                                                     
|                                                     
|                                                     
|                                                     
|Other exit costs                                      |       |                 | 1,818  |          |  |              | (500 | )               |   |             | (409   | )      |   |   | (50     | )       |   |   | 859 |      
|                                                      |       |                 |        |          |  |              |      |                 |   |             |        |        |   |   |         |         |   |   |     |      
|                                                      | Total |                 | $      | 25,285   |  |              | $    | (1,367          | ) |             | $      | (4,066 | ) |   | $       | (18,165 | ) |   | $   | 1,687 | 
|                                                      |       |                 |        |          |  |              |      |                 |   |             |        |        |   |   |         |         |   |   |     |      

See the additional discussion concerning this restructuring
charge in Note 3 to the Consolidated Financial Statements
included in this Form 10-K.

For income statement purposes, $19.8 million of the
restructuring charge is included in Asset writedowns and
discontinued product inventories as a result of restructure and
special chargesand $4.1 million is included in Special
charges and other asset writedowns. For segment reporting,
$11.3 million of the charge is included in Domestic Branded,
$10.7 million is included in Specialty Personal Care and $1.9
million is included in International.

Cash requirements for the restructuring were funded from normal
operations. As a result of the restructuring charge, we
currently expect to realize projected annual pretax operating
benefits of approximately $5.3 million beginning in 2001. These
benefits consist of reductions in Cost of products soldof approximately $3.3 million and in Selling, general and
administrative expensesof approximately $2.0 million.

The $1.4 million of reversed charges primarily represents an
estimate of the amounts recorded during the year that are no
longer anticipated due to a pending contract to sell our
Bristol, Pennsylvania dry detergent facility for $2.0 million.
We may be negatively impacted if this sale is not completed.

The expected timing and estimated amount of costs and projected
savings are based on managements judgment in light of the
circumstances and estimates at the time the judgements were
made. Accordingly, such estimates may change as future events
evolve. Among other matters, unforeseen changes in operating

13



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##### Table of Contents




Factors that May Affect Future Results and Financial
Condition


Recent Developments

In the fourth quarter of 2000, we announced that we reduced the
quarterly dividend on Dial stock from $.08 per share to $.04 per
share, as part of our efforts to accelerate repayment of our
debt. The declaration and payment of dividends are subject to
the discretion of Dials Board of Directors. Any future
determination to pay dividends will depend on our results of
operations, financial condition, capital requirements,
contractual restrictions and other factors deemed relevant at
the time by the Board.

In the fourth quarter of 2000, we amended our DCI lease
agreements with the new owner/ developer and opted not to commit
to constructing a new DCI building. We paid the developer $4.2
million and, in return, our obligation to construct a new
building was replaced with an exclusive option to construct a
new DCI building. This option expires on June 30, 2003. If
we elect to construct a new DCI building before this option
expires, a portion of the $4.2 million paid to the developer
will be credited to the construction costs of the new DCI
building. In addition, the lease on our existing DCI building
was extended to August 2007 and the annual rent was
increased to approximate a fair market rent. As a result of
these lease modifications, a $2.0 million charge was recognized
in the fourth quarter of 2000.

As previously disclosed, we are reviewing strategic alternatives
with respect to our Specialty Personal Care business, while
working aggressively to improve the performance of this
business. Preliminary discussions with interested parties have
taken place; however, no decision concerning the possible sale
of this business has been made. At this time, we believe that if
a decision is made in the future to divest of this business, a
write-down of assets to their estimated market value would be
required. Based on current estimates, such a write-down would be
in the range of $150 to $170 million after tax. If this takes
place, we would be required to obtain our lenders waiver
because an asset write-down in this range would violate the
minimum net worth covenant in our credit facility.

In the third and fourth quarters of 2000, we reorganized our
joint venture arrangements with Henkel KGaA of Germany.
Specifically, Dial and Henkel will continue to own a limited
U.S. joint venture equally. The only business to be conducted by
this joint venture going forward will be the Custom Cleanerhome dry-cleaning business. In addition, Dial sold its 49%
interest in the Dial/ Henkel Mexico joint venture to Henkel for
$18.9 million and recorded a $5 million loss as part of the
special charges taken in the third quarter of 2000. In 2000, the
two Dial/ Henkel joint ventures resulted in net losses to Dial
of $7.1 million, excluding special charges, and $37.6 million
including special charges. A detailed discussion of the Dial/
Henkel joint ventures and related special charges is included in
Notes 3 and 5 of the Consolidated Financial Statements included
in this Form 10-K.

Beginning in the first quarter of 2001, we plan to adjust our
list prices and trade promotion spending on selected personal
cleansing and laundry care products to more closely align with
our shelf pricing strategies. For the fiscal year 2001, we
expect that this will result in a reduction in both gross sales
and trade spending of approximately $38.7 million.

We expect our earnings to be down for the first quarter of 2001
versus the same period a year ago. We believe that the factors
relating to the anticipated comparative first quarter 2001
earnings decrease are primarily:



| |   |                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An increase in marketing expenses, primarily to support consumer
	consumption in our core brands and to support two new product
	launches, Dial Complete® foaming soap and
	Renuzit One-Touch® electric scented oil air
	freshener;
|
| |  | An increase in interest expense as a result of borrowings to
	fund the Coast, Plusbelle and Zout acquisitions, our investment
	in the Dial/ Henkel joint ventures and prior stock repurchases;
	and                                
|
| |  | Higher energy costs.                                                                                                                                                                                                               

14



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##### Table of Contents



See additional discussion of matters that may impact our results
in  Factors That May Affect Future Results and
Financial Condition.

Fiscal 2000 Compared With Fiscal 1999

Net sales decreased 4.8% to $1,638.5 million in 2000 from
$1,721.6 million in 1999 primarily as a result of a 5.8%
decrease in our Domestic Branded segment and a 16.7% decrease in
our Specialty Personal Care segment, offset in part by an
increase in our International segment of 11.6%. Net sales in
2000 included $67.2 million from acquisitions of the Coast,
Plusbelleand Zout businesses.

Net sales in our Domestic Branded segment decreased 5.8% to
$1,269.1 million in 2000 from $1,346.6 million in 1999. Net
sales information for the businesses included in our Domestic
Branded segment is set forth below:

|                       |  |                    |         |                     |  |        |         |            |  |   |       |   |  |  |       |   
|---------------------- |  | ------------------ | ------- | ------------------- |  | ------ | ------- | ---------- |  | - | ----- | - |  |  | ----- | --
|                       |  |                    |         |                     |  |       
|                       |  | For the year ended |         |                    
|                       |  | December 31        |         | Increase/(Decrease)
|                       |  |                    |         |                    
|                       |  | 2000               |         | 1999                |  | Amount |         | Percentage
|                       |  |                    |         |                     |  |        |         |           
|                       |  |                   
|                       |  | (in millions)     
|                      
|                      
|                      
|                      
|Personal Cleansing     |  | $                  | 384.7   |                     |  | $      | 411.8   |            |  | $ | (27.1 | ) |  |  | (6.6  | )%
|                      
|                      
|                      
|                      
|Laundry Care           |  |                    | 472.9   |                     |  |        | 474.2   |            |  |   | (1.3  | ) |  |  | (0.3  | )%
|                      
|                      
|                      
|                      
|Air Fresheners         |  |                    | 215.3   |                     |  |        | 213.7   |            |  |   | 1.6   |   |  |  | 0.7   | % 
|                      
|                      
|                      
|                      
|Food Products          |  |                    | 196.2   |                     |  |        | 246.9   |            |  |   | (50.7 | ) |  |  | (20.5 | )%
|                       |  |                    |         |                     |  |        |         |            |  |   |       |   |  |  |       |   
|Total Domestic Branded |  | $                  | 1,269.1 |                     |  | $      | 1,346.6 |            |  | $ | (77.5 | ) |  |  | (5.8  | )%
|                       |  |                    |         |                     |  |        |         |            |  |   |       |   |  |  |       |   

The decline in Personal Cleansing resulted primarily from our
efforts to reduce end of quarter promotions and shipments, the
loss of sales in club stores, tough comparisons to last year due
to new product introductions, and the previously disclosed
Dialbar restage, offset in part by the inclusion of the
Coastacquisition. The decline in Food Products resulted
primarily from the previously disclosed Y2K trade inventory
build-up in 1999, our efforts to reduce end-of-quarter
promotions and shipments, increased competition and tough
comparisons to last year due to the heavy 1999 hurricane season.
There was also a slight year-over-year decline in Laundry Care
due to softness in our non-Purexbranded laundry
business, offset in part by an increase in the Purex
branded laundry business and the inclusion of the Zoutacquisition. The increase in Air Fresheners resulted
primarily from new product introductions.

Net sales in our Specialty Personal Care segment decreased 16.7%
to $109.0 million from $130.8 million in 1999. The decrease is
primarily a result of problems experienced in consolidating the
distribution and warehousing functions and resulting
distribution losses at some of our customers and the
discontinuance of the Natures Accent business and
some other unprofitable items as part of the special charge
taken in the third quarter of 2000.

Net sales of our International segment increased 11.6% to $194.9
million from $174.6 million in 1999. This was primarily a result
of the inclusion of the Plusbelleacquisition in
Argentina, partially offset by lower sales in Nuevo Federal due
to increased competition in Argentina and lower sales in our
Mexico business caused by difficulties encountered in
transferring our sales and administrative functions to the Dial/
Henkel Mexico joint venture.

Net sales in our Commercial Markets and Other segment declined
5.7% to $65.6 million in 2000 from $69.6 million in 1999
primarily as a result of the discontinuation of our merchant
surfactant business at the end of 1999 and a decline in soap
pellet sales, partially offset by an increase in glycerin sales.

Gross margin decreased 170 basis points to 48.3% from 50.0% in
1999, excluding the effect of the restructuring and special
charges. The restructuring and special charges decreased the
gross margin by an additional 300 basis points to 45.3%. Gross
margin was negatively impacted primarily by lower overhead
absorption in our manufacturing facilities associated with lower
sales, higher energy costs, and higher costs resulting from
consolidating the distribution and warehousing functions of our
Specialty Personal Care business.

15



---



##### Table of Contents



Selling, general and administrative expenses, excluding $18.2
million of expenses attributable to the restructuring and
special charges, are up 2.9% to $664.4 million from $645.6
million in 1999. Selling, general and administrative expenses,
excluding restructuring and special charges, increased as a
percentage of sales to 40.5% for 2000 compared to 37.5% for
1999. This increase resulted primarily from continued marketing
and promotional spending in 2000 compared to lower than expected
sales.

Interest and other expense increased 53.8% to $50.3 million for
2000 compared to $32.7 million in 1999. The increase was
primarily due to increased debt to fund the Coast,
Plusbelle, and Zoutacquisitions, our investment in
the Dial/ Henkel joint ventures and our stock repurchase program.

Our share of the loss in the Dial/ Henkel joint ventures was
$7.1 million in 2000, excluding the effect of the special charge
relating to the Dial/ Henkel LLC and Dial/ Henkel Mexico joint
ventures. The special charge of $30.5 million was to record the
discontinuation of Purex Advanced, asset impairment for
Custom Cleaner, and loss on sale of our interest in the
Dial/ Henkel Mexico joint venture. The special charge for the
joint venture is more fully discussed in Note 3 to the
Consolidated Financial Statements.

Our gain on special items consists of a pre-tax gain on sale of
facility of $4.7 million resulting from the sale of land in a
transaction where we sold our DCI building and accompanying 23
acre parcel in Scottsdale, Arizona to an unrelated third party.
In addition, we recorded a $4.6 million curtailment gain
resulting from changes to retiree medical plan benefits. The
anticipated annual savings of $1.0 million resulting from our
curtailment of these benefits are expected to be invested in
enhancements to other Dial employee benefit plans.

Our consolidated effective income tax rate for 2000, excluding
restructuring and special charges, was 32.1%, down from 35.5%
for 1999. The lower effective tax rate in 2000 was primarily due
to higher permanent items for tax purposes over a lower pre-tax
income. Our consolidated effective rate for 2000, including
restructuring and special charges, was a benefit of 43.1%.

Net income for 2000, excluding the special and restructuring
charges and gain on special items, was $47.0 million, or $0.51
per diluted share, versus $116.8 million, or $1.17 per diluted
share in 1999. Including the $97.8 million special and
restructuring charges and $9.2 million pre-tax one-time gains,
we reported a net loss of $11.0 million, or $0.12 per share
(diluted). This decrease in net income is primarily attributable
to the factors explained above.

Fiscal 1999 Compared With Fiscal 1998

Net sales increased 12.9%, to $1,721.6 million in 1999 from
$1,524.5 million in 1998. This increase resulted from strong
growth in Personal Cleansing, Laundry Care, Air Fresheners and
Food Products franchises which grew at 4%, 14%, 21% and 6%,
respectively. Sales from Freeman Cosmetic Corporation, acquired
in July of 1998, and Sarah Michaels, Inc., acquired in September
of 1998, also contributed to the increase. The Purexbrand instituted a price increase beginning in January of
1999. Sales net of the Purexprice increase improved 11%
for the year.

Domestic Branded net sales increased 10.2%, to $1,346.6 million
in 1999 from $1,222.0 million in 1998 partially due to
end-of-quarter promotions and shipments. Additional net sales
information for the businesses included in our Domestic Branded
segment is set forth below:

|                       |  |                    |         |                     |  |        |         |            |  |   |       |  |  |  |      |  
|---------------------- |  | ------------------ | ------- | ------------------- |  | ------ | ------- | ---------- |  | - | ----- |  |  |  | ---- | -
|                       |  |                    |         |                     |  |       
|                       |  | For the year ended |         |                    
|                       |  | December 31        |         | Increase/(Decrease)
|                       |  |                    |         |                    
|                       |  | 1999               |         | 1998                |  | Amount |         | Percentage
|                       |  |                    |         |                     |  |        |         |           
|                       |  |                   
|                       |  | (in millions)     
|                      
|                      
|                      
|                      
|Personal Cleansing     |  | $                  | 411.8   |                     |  | $      | 394.8   |            |  | $ | 17.0  |  |  |  | 4.3  | %
|                      
|                      
|                      
|                      
|Laundry Care           |  |                    | 474.2   |                     |  |        | 417.0   |            |  |   | 57.2  |  |  |  | 13.7 | %
|                      
|                      
|                      
|                      
|Air Fresheners         |  |                    | 213.7   |                     |  |        | 177.1   |            |  |   | 36.6  |  |  |  | 20.7 | %
|                      
|                      
|                      
|                      
|Food Products          |  |                    | 246.9   |                     |  |        | 233.1   |            |  |   | 13.8  |  |  |  | 5.9  | %
|                       |  |                    |         |                     |  |        |         |            |  |   |       |  |  |  |      |  
|Total Domestic Branded |  | $                  | 1,346.6 |                     |  | $      | 1,222.0 |            |  | $ | 124.6 |  |  |  | 10.2 | %
|                       |  |                    |         |                     |  |        |         |            |  |   |       |  |  |  |      |  

16



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##### Table of Contents



The increase in Personal Cleansing resulted primarily from new
product launches. The increase in Food Products resulted
primarily from Y2K trade inventory build-up and a heavy 1999
hurricane season. There was also an increase in Laundry Care
driven primarily by a price increase in Purexand the
introduction of a new Purex line extension. The increase in Air
Fresheners resulted primarily from having a full year of volume
on new product introductions from the prior year.

Net sales in our Specialty Personal Care segment increased 89.0%
to $130.8 million in 1999 from $69.2 million in 1998. The
increase resulted primarily from the inclusion of Sarah Michaels
and Freeman acquisitions.

Net sales in our International segment increased 6.4% to $174.6
million from $164.1 million in 1998, primarily as a result of
increased sales in Canada of 18% and Mexico of 5%. Sales in
Argentina were up 2% for the year but were slowed as a result of
new competition which led to a detergent price war and a
lingering recession.

Net sales in our Commercial Markets and Other segment remained
relatively flat at $69.6 million in 1999 compared to $69.1
million in 1998. In late 1999, we sold the rights to our
merchant surfactant business for an immaterial amount with the
intention of using internally all of our manufactured
surfactants.

Gross margin increased 160 basis points to 50.0% in 1999 from
48.4% in 1998 resulting primarily from the Purexprice
increase and continuing improvement in manufacturing
efficiencies in the manufacturing facilities. Gross margin net
of the Purexprice increase was 49.2% for 1999.

Selling, general and administrative expenses for 1999 increased
16.7% to $645.6 million from $553.2 million in 1998. The
increase was primarily due to higher marketing expense to
support core business merchandising initiatives including the
Purexprice increase, new product launches, and
amortization of goodwill and incremental administrative expense
associated with the acquisitions of Freeman and Sarah Michaels.

Interest and other expense increased 40.0% to $32.7 million for
1999 compared to $23.4 million in 1998. The increase was
primarily due to increased debt to fund the Freeman and Sarah
Michaels acquisitions and our stock repurchase program.

Our consolidated effective income tax rate for 1999 was 35.5%,
down from 36.1% for 1998. The lower effective tax rate in 1999
was primarily due to lower state and foreign taxes.

Net income increased 13.8% to $116.8 million in 1999 from $102.6
million in 1998. The increase was primarily due to increased
sales, gross margin improvements and a decrease in our effective
tax rate, offset in part by a loss in the Dial/ Henkel LLC joint
venture of $1.3 million.

Liquidity and Capital Resources

Total debt increased $233.9 million to $595.0 million from
$361.1 million at December 31, 1999. The increase is
primarily attributable to the acquisitions of the Coast,
Plusbelle and Zout businesses, our investments in the Dial/
Henkel joint ventures, the funding of our now discontinued stock
repurchase program and the elimination of our sale of
receivables program.

We generated cash from operations of $110.8 million during 2000
compared to cash generated of $121.8 million during the same
period in 1999. The decrease in cash provided from operations
was primarily attributable to a decline in net income, offset in
part by the non-cash portion of restructuring and special
charges and reduced working capital levels due to lower sales.

Capital expenditures for 2000 were $45.9 million versus $62.5
million for the comparable period in 1999. Capital spending in
2001 is expected to decrease to approximately $40.0 million.
These expenditures will be concentrated primarily on equipment
and information systems that provide opportunities to reduce
manufacturing, logistic and administrative costs. However, our
plans are dependent on the availability of funds, as well as
identification of projects with sufficient returns. As a result,
there can be no assurance as to the quantity and the type of
capital spending in the future.

17



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##### Table of Contents



During the second quarter of 2000, we sold the Dial Center for
Innovation (DCI), formerly known as the Dial
Technical and Administration Center, and accompanying 23 acre
parcel in Scottsdale, Arizona to an unrelated third party
developer for a purchase price of $15.3 million. At that time,
we entered into an operating lease with this third party for the
existing DCI building pending construction of a new DCI
building. We also entered into an operating lease with an
initial term of 15 years for a new DCI building that may be
constructed on an 11 acre portion of the 23 acre parcel. We have
accounted for the land portion of this transaction as a sale and
leaseback transaction in accordance with Statement of Accounting
Standards No. 98, Accounting for Leases. The land
and building have been removed from our consolidated balance
sheet and a gain of $6.7 million related to the sale of land was
recognized in the second quarter of 2000. In the fourth quarter
of 2000, we amended our agreements with the developer and opted
not to commit to constructing a new DCI building. We paid the
third party $4.2 million and, in return, our obligation to
construct a new building was replaced with an exclusive option
to construct a new DCI building. This option expires on
June 30, 2003. If we elect to construct a new DCI building
before this option expires, a portion of the $4.2 million paid
to the developer will be credited to the construction costs of
the new DCI building. In addition, the lease on our existing DCI
building was extended to August 2007 and the annual rent
was increased to approximate a fair market rent. As a result of
these lease modifications, a $2.0 million charge was recognized
in the fourth quarter of 2000.

In the second quarter of 2000 we entered into a new $450 million
credit facility that replaced our $350 million facility that was
established in July 1999. Our credit facility was intended to
serve as a backstop facility for our commercial paper program.
However, due to market conditions and the placement of our short
term debt rating on watch by Moodys Investors Service, we
have not been able to access the commercial paper market in the
first quarter of 2001. As a result, we have been making
borrowings under our credit facility. Borrowings under our
credit facility are on a revolving basis under commitments
available until July 2005 for up to $270 million and under
commitments available until July 2001 for up to $180
million. We will need to refinance approximately $100 million of
short term debt drawn under the $180 million commitment that
expires in July 2001 and are considering a variety of
financing options, including a securitization of our accounts
receivable. The interest rate applicable to borrowings under our
credit facility is, at our option, indexed to the bank prime
rate or the London Interbank Offering Rate (LIBOR),
plus appropriate spreads over such indices during the term of
the credit facility. Our credit facility also requires us to pay
commitment fees to the banks making commitments under the credit
facility. These spreads and fees are subject to adjustment if
our debt ratings change. At December 31, 2000 we had $381.7
million outstanding in commercial paper, bearing interest at
rates ranging from 7.05% to 8.60%.

The financial covenants of the credit agreement require us to
maintain minimum net worth of at least 80% of such net worth as
of the date of the agreement plus 25% of net income subsequent
thereto plus certain other additions to net worth. As mentioned
above, we will need our lenders waiver or amendment of the
covenant if we decide to divest our Specialty Personal Care
business because the estimated resulting write-down of assets of
$150 to $170 million would violate this covenant. The covenants
also require us to maintain a maximum ratio of three-to-one for
funded debt to earnings before interest, taxes, depreciation and
amortization (EBITDA). The following table reflects the maximum
ratio of funded debt to EBITDA permitted under Dials
credit facility:

|                  |  |               |              | 
|----------------- |  | ------------- | ------------ | 
|Date              |  | Maximum Ratio
|                  |  |              
|December 31, 2000 |  |               | 3.50 to 1.00 | 
|                 
|                 
|                 
|                 
|March 31, 2001    |  |               | 3.50 to 1.00 | 
|                 
|                 
|                 
|                 
|June 30, 2001     |  |               | 3.25 to 1.00 | 
|                 
|                 
|                 
|                 
|Thereafter        |  |               | 3.00 to 1.00 | 

Dial was in compliance with all covenants under the credit
facility at December 31, 2000.

In the fourth quarter of 2000, we announced that we reduced the
quarterly dividend on Dial stock from $.08 per share to $.04 per
share, beginning with the dividend to be paid in
January 2001. This action was taken to accelerate repayment
of debt. The declaration and payment of dividends are subject to
the discretion of Dials Board of Directors. Any future
determination to pay dividends will depend on our results of
operations,

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During the second quarter of 2000, Dial acquired three
businesses for $119.1 million in cash. The acquisitions included
the Coastbar soap business in the United States, the
Plusbellehair care business in Argentina and the Zoutstain remover business in the United States. The purchase
price for Zout may increase if a specified level of gross
sales of Zout products is achieved in each of the three
years following the acquisition date.

On September 14, 1998, we acquired Sarah Michaels for
$182.4 million in cash, which was financed through short-term
borrowings supported by our credit agreement. The acquisition
price reflects a $4.6 million reduction in the purchase price
for Sarah Michaels. These funds were paid out of an escrow
account in the third quarter of 2000 and were recorded as a
reduction of goodwill.

On July 1, 1998, we acquired Freeman for $78 million in
cash, which was financed through short-term borrowings supported
by our credit agreement. The acquisition price reflects a $6
million reduction in the purchase price for Freeman as a result
of a net worth adjustment received in January 1999.

On September 23, 1998, we completed a $200 million public
offering of 6.5% Senior Notes due in 2008. The proceeds of the
debt financing were used to repay outstanding bank borrowings
used for the acquisitions of Freeman and Sarah Michaels. The
Indenture governing these Senior Notes imposes restrictions on
us with respect to, among other things, our ability to redeem
the Senior Notes, to place liens on certain properties and to
enter into certain sale and leaseback transactions.

We received approximately $10.7 million from the disposition of
assets during 1998, the majority of which resulted from two
sales. The Purex Toss n Softbrand and related
inventories were sold for approximately $5.3 million and a
non-operating manufacturing property was sold for $4.0 million.
No gain or loss was realized on either of the transactions.

At December 31, 2000, and December 31, 1999, we held a
total of 10,772,046 and 4,887,176 shares, respectively, in
treasury. As of December 31, 2000, we had used $54.4
million of the $75.0 million authorized under our 2000 stock
repurchase program to repurchase shares. We have decided not to
purchase any additional shares under this stock repurchase
program.

New Accounting Pronouncements

In December 1999, the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 101 Revenue
Recognition in Financial Statements, which provides
guidance in applying generally accepted accounting principles to
revenue recognition in financial statements. Application of this
pronouncement did not have a material impact on our operating
results or financial condition.

In June 1998, the Financial Accounting Standards Board
issued Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. We were required to
adopt this new standard effective January 1, 2001. Our use
of financial instruments is limited to purposes other than
trading and primarily includes management of employee benefits
and commodity expense. We may use financial instruments for the
management of interest rate, foreign currency or other risks in
the future. The transitional accounting effect of this
pronouncement did not have a material impact on our operating
results or financial condition.

In May 2000, the Financial Accounting Standards
Boards Emerging Issues Task Force (EITF)
released Issue No. 00-14, Accounting for Certain
Sales Incentives. This issue addresses the recognition,
measurement, and income statement classification for certain
sales incentives, including coupons, rebates and free products.
The consensus on EITF 00-14 will be effective for Dial in
the second quarter of 2001. The implementation of this consensus
will require us to change the way we classify certain sales
incentives which are currently recorded as selling, general and
administrative expenses. The cost of coupons and rebates, which
was approximately $8.3 million in 2000, will be recorded as a
reduction of net sales. The cost of free products, which was
approximately $9.9 million in 2000, will be recorded as cost of
products sold.

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The EITF is currently discussing Open Issue No. 00-25,
Vendor Income Statement Characterization of Consideration
from a Vendor to a Retailer. Since the Task Force reached
a consensus on EITF Issue No. 00-14, Accounting for
Certain Sales Incentives, numerous questions have been
raised about the accounting and income statement classification
of costs, other than those directly addressed in
Issue 00-14, that are incurred by a vendor (typically a
manufacturer or distributor) to or on behalf of a customer
(typically a retailer) in connection with the customers
purchase or promotion of the vendors products. This Issue
would address the recognition and measurement of such costs and
whether a vendor should classify such costs in its income
statement when incurred as a reduction of revenues or as an
expense item.

We currently record all of the consideration we provide to our
customers to promote our products as trade promotion expense.
Such costs include consideration given to customers for space in
their stores (slotting fees), consideration given to obtain
favorable display positions in the retailers stores and
other promotional activity. For income statement purposes, we
currently record all trade promotion expense as Selling,
general and administrative expense.We expense these
promotional activities in the period during which the related
product ships. In 2000, we incurred approximately $390 million
of trade promotion expense.

The final EITF consensus could have a material effect on
Dials historical and future net sales amounts, gross
margins and operating margins if the consensus requires that
some or all of these types of trade promotion costs be recorded
by Dial as a reduction of sales rather than as selling, general
and administrative expenses.

The Financial Accounting Standards Board issued a Proposed
Statement of Accounting Standards, Business Combinations
and Intangible Assets  Accounting for Goodwill.
The proposed Statement would prohibit goodwill amortization and
establish a new method of testing goodwill for impairment. The
proposed statement would also prohibit the pooling of interest
method of accounting for business combinations and establish a
new accounting standard for goodwill acquired in a business
combination. The provisions of the proposed Statement would be
effective for fiscal quarters beginning after the issuance of a
final Statement. The impact of the Statement may be significant
if it is issued as currently proposed, as we would be required
to test our goodwill for impairment under new standards and
would no longer recognize goodwill amortization expense. In
2000, we incurred $9.6 million in goodwill amortization.

Factors That May Affect Future Results and Financial
Condition

Our future results and financial condition are dependent upon
our ability to successfully develop, manufacture and market
consumer products. Inherent in this process are a number of
factors that we must successfully manage to achieve favorable
future operating results and financial condition. Potential
risks and uncertainties that could affect our future operating
results and financial condition include, but are not limited to,
the factors discussed below.



| |   |                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We are taking a number of steps designed to improve our
	operations and financial results, including the restructuring
	and special charges taken in the second and third quarters of
	2000. We may not achieve the benefits that we expect from these
	measures.

We are taking a number of steps designed to improve our
operations and financial results. For example, in the second and
third quarters of 2000, we announced restructuring and special
charges totaling up to $98 million. These charges and changes to
our business operations are expected to produce cost savings
going forward. No assurances can be given that these charges or
any of the changes made to our business operations will achieve
the benefits that we expect. The expected timing, estimated
costs of restructuring and special charges and the projected
savings to result from these charges are based upon
managements judgement in light of the circumstances and
estimates at the time the judgements were made. Accordingly, the
expected timing, estimated costs and projected savings for these
charges may change as future events evolve, and the changes may
be material.

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| |   |                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We are considering various strategic alternatives for our
	company, including selling substantial assets or the entire
	company. There can be no assurance that we will undertake any
	strategic alternatives or, if undertaken, that they will prove
	successful.

As part of our SFX01 initiative, we currently are
exploring, and will continue to explore, strategic alternatives
available to Dial. These alternatives include selling
substantial assets or the entire company. Decisions made in the
course of SFX01 could result in Dial recording additional
special or restructuring charges or asset writedowns. No
assurances can be given that any transactions will occur or, if
transactions do occur, that they will improve our operating
results or financial condition, increase shareholder value or be
on terms favorable to Dial. Moreover, the uncertainty created by
this environment may adversely impact our ability to retain
employees and our relationships with customers, suppliers and
lenders.



| |   |                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The possible divestiture of our Specialty Personal Care
	business may lead to an asset writedown in the range of $150 to
	$170 million after tax. If this were to occur, we would be
	required to obtain our lenders waiver because an asset
	writedown in this range would violate the minimum net worth
	covenant in our credit facility.

As previously disclosed, we are reviewing strategic alternatives
with respect to our Specialty Personal Care business, while
working aggressively to improve the performance of this
business. Preliminary discussions with interested parties have
taken place; however, no decision concerning the possible sale
of this business has been made. At this time, we believe that if
a decision is made in the future to divest of this business, a
write-down of assets to their estimated market value would be
required. Based on current estimates, such a write-down would be
in the range of $150 to $170 million after tax. If this takes
place, we would be required to obtain our lenders waiver
because an asset write-down in this range would violate the
minimum net worth covenant in our credit facility.

No assurance can be given that we will sell our Specialty
Personal Care business or that any sale will be on terms
favorable to Dial. Further, no assurance can be given that our
lenders will waive compliance with any covenants that may be
violated as a result of any such sale, including agreeing to
waive compliance with the minimum net worth covenant.



| |   |                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We face intense competition in a mature industry that may
	require us to increase expenditures and lower profit margins to
	preserve or maintain our market share.

Currently, we depend primarily on sales generated in U.S.
markets (88% of sales in 2000). U.S. markets for consumer
products are mature and characterized by high household
penetration, particularly with respect to our most significant
product categories, including detergents and bar soaps. We may
not be able to succeed in implementing our strategies to
increase domestic revenues. Our unit sales growth in domestic
markets will depend on increasing usage by consumers, product
innovation and capturing market share from competitors.

The consumer products industry, particularly the detergent,
personal care and air freshener categories, is intensely
competitive. To protect our existing market share or to capture
increased market share, we may need to increase expenditures for
promotions and advertising and to introduce and establish new
products. These additional measures and increased expenditures
may not prove successful in maintaining or enhancing our market
share and could result in lower sales and profits as occurred in
2000.

Many of our competitors are large companies, including The
Procter & Gamble Company, Lever Brothers Co.,
Colgate-Palmolive Company, and S.C. Johnson & Son,
Inc., which have greater financial resources than we do. They
could outspend us in an attempt to take market share from us.



| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | Price-cutting measures in response to competitive
	pressures could result in decreased profit margins.

Consumer products, particularly those that are value-priced, are
subject to significant price competition. From time to time, we
may need to reduce the prices for some of our products to
respond to competitive and consumer pressures and to maintain
market share. Any reduction in our prices to respond to these
pressures would have an adverse impact on our profit margins. In
addition, if our sales volumes fail to grow sufficiently to
offset any reduction in margins, our results of operations would
be materially adversely affected. In 2000, our sales volumes
declined, which reduced our margins and materially adversely
affected our results of

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| |   |                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Providing price concessions or trade terms that are
	acceptable to our trade customers, or our failure to do so,
	could adversely affect our sales and profitability. Reductions
	in inventory by our trade customers, including as a result of
	consolidations in the retail industry, could adversely affect
	our sales.

Because of the competitive environment facing retailers, we face
pricing pressure from these customers. Many of our trade
customers, particularly our high-volume retail store customers,
have increasingly sought to obtain pricing concessions or better
trade terms. These concessions or terms could adversely affect
our margins. Further, if we are unable to maintain price or
trade terms that are acceptable to our trade customers, they
could increase product purchases from our competitors, which
would adversely affect our sales and profitability. In 2000,
some of our retail customers reduced inventory levels of our
products and this inventory level reduction materially adversely
affected our results of operations. No assurances can be given
that our retail customers will not continue to reduce inventory
levels in managing their working capital requirements. Any
further reduction in inventory levels could continue to
materially adversely affect our results of operations. In this
regard, consolidation within the retail industry could
potentially reduce inventory levels maintained by our retail
customers, which could adversely impact our results of
operations. Our performance is also dependent upon the general
health of the economy and of the retail environment in
particular and could be materially affected by changes affecting
retailing and by the financial difficulties of retailers.



| |   |                                                                                           
| | - | ------------------------------------------------------------------------------------------
| |  | Loss of our principal customers could significantly
	decrease our sales and profitability.

Our top ten customers accounted for 50% of net sales in 2000.
Wal-Mart, including its affiliate Sams Club, was our
largest customer, accounting for 21% of net sales in 2000. The
loss of or a substantial decrease in the volume of purchases by
Wal-Mart or any of our other top customers could have a material
adverse effect on our sales and profitability.



| |   |                                                                                     
| | - | ------------------------------------------------------------------------------------
| |  | Price increases in certain raw materials could adversely
	affect our profit margins.

Rapid increases in the prices of certain raw materials could
materially impact our profit margins. For example, tallow (a key
ingredient in Dialbar soaps) has experienced price
fluctuations within the range of $0.09 and $0.28 per pound from
January 1, 1995, to December 31, 2000. Recently, the
price of tallow has been trading at the lower end of this
historical range. If prices were to increase, we may not be able
to increase the prices of our Dialbar soaps to offset
these increases as readily as many competitors, which tend to
use less tallow in their products. In addition, we depend on a
single supplier for Triclosan, the antibacterial agent that is
the active ingredient used in Liquid Dialproducts.
Although we have an adequate supply of Triclosan for our current
and foreseeable needs, a significant disruption in this supply
could have a short-term material adverse impact on our financial
results.



| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | We have made, and may continue to make, acquisitions that
	prove unsuccessful or strain or divert our resources.

Over the past three years, we have made several acquisitions and
entered into two joint ventures. We may make additional
acquisitions or substantial investments in complementary
businesses or products in the future. All of the acquisitions
and investments described above entailed, and any future
acquisitions or investments would entail, various risks,
including the difficulty of assimilating the operations and
personnel of the acquired businesses or products, the potential
disruption of our ongoing business and, generally, our potential
inability to obtain the desired financial and strategic benefits
from the acquisition or investment. These factors could have a
material adverse effect on our financial results. For example,
we have not obtained the desired financial benefits from our
acquisitions of Freeman and Sarah Michaels or from our Dial/
Henkel joint ventures, and this had a material adverse effect on
our financial results in 2000. The risks entailed in
acquisitions and investments are greater for Dial in light of
the number of acquisitions we have made in the last three years.

Any future acquisitions and investments also could result in
substantial cash expenditures, potentially dilutive issuances of
equity securities, the incurrence of additional debt and
contingent liabilities, and

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| |   |                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------
| |  | The FDA could impose standards that negatively impact our
	ability to market some of our products as antibacterial.

Since the 1970s, the Food and Drug Administration has regulated
antibacterial soaps and hand washes under a proposed regulation.
Although the proposed regulation has not been finalized, the FDA
ultimately could set standards that result in limiting or even
precluding soap manufacturers from using some current
antibacterial ingredients or making antibacterial claims for
some product forms, such as bar soap. Dial, which uses the
antibacterial ingredient Triclosan in Liquid Dialand
Triclocarban in Dialbar soap, emphasizes the
antibacterial properties of its soap products in its marketing
campaigns and product labeling. Any final FDA regulation that
limits or precludes this type of advertising could require Dial
to develop new marketing campaigns, develop new products or
utilize different antibacterial ingredients in its products, all
of which could materially adversely affect our business.



| |   |                                                             
| | - | ------------------------------------------------------------
| |  | Our international expansion efforts may prove
	unsuccessful.

In 2000, 88% of our sales were generated in U.S. markets. To
diversify, we have pursued a strategy to continue to penetrate
international markets to supplement our domestic revenues. To
date some of our international acquisitions and joint ventures
have not yielded the benefits we had anticipated. In
implementing an international expansion strategy, we face
barriers to entry and the risk of competition from local and
other companies that already have established global businesses,
risks generally associated with conducting business
internationally, including exposure to currency fluctuations,
limitations on foreign investment, import/export controls,
nationalization, unstable governments and legal systems, and the
additional expense and risks inherent in operating in
geographically and culturally diverse locations. Because we have
attempted to develop our international business through
acquisitions as well as joint ventures, co-packaging
arrangements and/or other alliances, we also are subject to
risks associated with such arrangements, including those
relating to the combining of different corporate cultures and
shared decision making. In addition, since our current
international distribution capabilities are extremely limited,
we also may need to acquire a distribution network or enter into
alliances with existing distributors before we can effectively
conduct operations in new markets.



| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| |  | We could become the subject of adverse publicity or
	product recalls that negatively impact our operations.

Adverse publicity regarding our products could impact the sales
of our products. Some news broadcasts by major U.S. television
and radio networks have focused on the use of antibacterial
agents to kill germs on various surfaces. Triclosan, the active
ingredient in Liquid Dial, also has been a focus of these
broadcasts. Although none of the broadcasts disputed that
Triclosan kills germs on the skin, some third party experts did
question whether it provides any additional protection beyond
that provided by nonantibacterial soap products. Although we
have test results that we believe prove that Triclosan provides
consumers with additional protection in limiting exposure to
bacteria-related diseases, there can be no assurance that our
Triclosan products, or other products, will not be the subject
of adverse publicity in the future.

From time to time, consumer product companies, including Dial,
have had to recall certain products for various reasons. The
costs of recall or other related liabilities could materially
lower our profit margins. Adverse publicity regarding any
product recalls also could materially affect our sales.

We share the use of the Armourtrademark for food
products with ConAgra Inc., the manufacturer of
Armour-branded non-canned meat products. Accordingly, we
face the added risk that consumer preferences and perceptions
with respect to any of our Armour products may be influenced by
adverse publicity affecting any of the Armour-branded
products of ConAgra, Inc.



| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | We may incur unexpected expenses due to environmental
	concerns regarding a detergent compound.

We have used nonlyphenol ethoxylate as an ingredient in our
liquid and powder detergent products. Certain environmental and
regulatory groups have raised concerns regarding the toxicity of
compounds

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| |   |                                                                
| | - | ---------------------------------------------------------------
| |  | We may incur unexpected expenses due to environmental
	matters.

We are subject to a variety of environmental and health and
safety laws in each jurisdiction in which we operate. These laws
and regulations pertain to our present and past operations.
Although we currently do not anticipate that the costs to comply
with environmental laws and regulations will have a material
adverse effect on our capital expenditures, earnings or
competitive position, the emergence of unforeseen claims or
liabilities or the imposition of increasingly stringent laws,
regulations and enforcement policies could result in material,
unreserved costs in the future. Since 1980, we have received
notices or requests for information with respect to
Superfund sites under the federal Comprehensive
Environmental Response, Compensation and Liability Act, four of
which are currently active. As of December 31, 2000, we
have accrued in our financial statements approximately $1.2
million in reserves for expenses related to Superfund sites and
the clean-up of closed plant sites. We believe our reserves are
adequate, but these costs are difficult to predict with
certainty.



| |   |                                                                          
| | - | -------------------------------------------------------------------------
| |  | Loss of key managerial personnel could negatively impact
	our operations.

Our operation requires managerial expertise. Of our current key
personnel, only the Chief Executive Officer has an employment
contract with us. There can be no assurance that any of our key
employees will remain in our employ. The loss of key personnel
could have a material adverse effect on our operations.




Item 7A.  Quantitative and Qualitative
Disclosure About Market Risk

The following discussion of our exposure to various market risks
contains forward looking statements that involve
risks and uncertainties. These projected results have been
prepared utilizing assumptions considered reasonable in light of
information currently available to us. Nevertheless, because of
the unpredictability of interest rates, foreign currency rates,
commodity prices and other factors, actual results could differ
materially from those projected in this forward looking
information.

Our use of financial instruments is limited to purposes other
than trading and primarily includes management of employee
benefits and commodity expense. We may use financial instruments
for the management of interest rate, foreign currency or other
risks in the future.

Interest Rate Risk

We have short-term debt, short-term bank borrowings and a
commercial paper program supported by a long-term revolving
credit agreement that subject us to the risk of loss associated
with movements in market interest rates.

At December 31, 2000, we had $125.8 million in short-term
borrowings outstanding including $14.0 million in borrowings by
our Argentinean subsidiary and $469.3 million in long-term debt
outstanding. Of the long-term debt outstanding, $198.4 million
is fixed-rate debt (6.5%) and, accordingly, does not expose us
to risk of earnings loss due to changes in market interest
rates. Both the short-term debt of $125.8 million and the
remaining $270.0 million of commercial paper issuances (which
are classified as long-term debt because they are supported by
the long-term credit agreement) have maturities of between one
and sixty days. Accordingly, the interest rates associated
with those borrowings reset as the borrowings mature and are
renewed.

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At December 31, 2000, the commercial paper issuances had a
weighted average interest rate of 7.48%. If the floating rates
were to change by 10% from December 31, 2000, levels,
annual interest expense associated with the floating-rate debt
would change by approximately $2.8 million before tax.

To manage our exposure to interest rate risk, we purchased a
7.125% interest rate cap option on 30 day LIBOR with a
notional amount of $100 million. The cap option expires on
June 20, 2001. Under the terms of the interest rate cap, if
30 day LIBOR exceeds 7.125% (the fixed rate) on
any of the twelve monthly measurement dates during the life of
the option, we will receive a payment equal to one twelfth of
the product of the difference between the fixed rate and
30 day LIBOR multiplied by the notional amount. At
December 31, 2000, 30 day LIBOR was 6.5%. A 10% change
in interest rates would have an immaterial effect on the fair
market value of the interest rate cap.

Foreign Currency

We are subject to exposure from fluctuations in foreign currency
exchange rates, primarily U.S. Dollar/ Canadian Dollar,
U.S. Dollar/ Mexican Peso and U.S. Dollar/ Argentinean
Peso.

The Argentinean Pesos value has been pegged by
the Argentinean government as equal to the U.S. Dollar. Through
December 31, 2000, this currency equivalency applied.
However, there can be no assurance in the future that the
Argentinean government will continue this policy or have the
ability to ensure that the value of the Argentinean Peso will
continue to equal the U.S. Dollar.

At December 31, 2000, one U.S. Dollar was worth 1.499
Canadian Dollars and 9.623 Mexican Pesos, respectively. For the
year ended December 31, 2000, the U.S. Dollar/
Canadian Dollar exchange rate fluctuated between a high of
$1.00/ C$1.557 to $1.00/ C$1.435 and the U.S. Dollar/
Mexican Peso exchange rate fluctuated between $1.00/ P$10.08 and
a low of $1.00/ P$9.172. If there were a 10% change in the
exchange rates for the U.S. Dollar to the Canadian Dollar,
the Mexican Peso and the Argentinean Peso from those at
December 31, 2000, we would have an annual currency
translation gain or loss of approximately $7 million before tax.

Commodity Price Risk

In the manufacture of our products we utilize a number of
commodities, such as tallow, coconut oil and meat. In addition,
we use a variety of products that are priced based on underlying
commodities, such as plastic bottles (resin). In the normal
course of business, we attempt to enter into supply agreements
that generally fix or set a range of prices of goods to be
purchased. These supply agreements can cover up to
12 months of supply for goods. Financial derivatives to
hedge or lock in the prices of these commodities over the long
term (greater than one year) generally are not available.

We do utilize financial derivatives to fix the price of the raw
material component of the cardboard boxes and packaging we use
in our business. Our purchase contracts with our cardboard box
suppliers have provisions that allow the raw material component
of the box price to reset based on movements in the price of
cardboard. This component is based on the Pulp & Paper
Week42 lb. linerboard price index. We have entered into a
series of contracts for 2001 covering a notional amount of
18,000 tons that allow us to pay a weighted average fixed price
per ton of cardboard of $470.00 and receive payments based on
the Pulp & Paper Weekindex. At December 31,
2000, the Pulp & Paper Weekindex price was $475/ton.
Open contracts had a fair market gain associated with them of
approximately $90,000.

Employee Benefit Plan Expense

We offer our directors and management deferred compensation
plans. Under these plans, participants can defer a portion of
their compensation into Dial stock units. For deferrals made in
1999 and 2000, deferred compensation due to participants is
included on the balance sheet in Stockholders Equity under
the caption Employee Benefits with no recognition of
any investment gains or losses. The deferred funds are placed in
a Rabbi Trust using shares of Dial common stock. The Trust is
also included on the balance sheet in Stockholders Equity
under the caption Employee Benefits.

25



---



##### Table of Contents



Deferrals made in 1998 were placed in a Rabbi Trust, which
purchases life insurance policies on the participants
lives, with Dial as the beneficiary. The policies have cash
surrender value that accrue tax-free earnings largely based on
the performance of the S&P 500. To the extent that the
return on Dial shares is different from that of the S&P 500,
income or expense is generated by the plans.

We have entered into a contract with a financial institution
that provides for an exchange of payments based on the relative
performance of our common shares and the S&P 500. The
contract has a notional amount of 244,000 Dial common shares and
5,200 S&P 500 futures contracts and is renewable
quarterly. At the time of renewal, the index price of Dial
shares and the S&P 500 resets to the current market
price. Any income or loss generated by the contract is
recognized in the income statement and offsets the income
statement impact of the deferred compensation plan. Because the
contract renews near the end of each quarter, its market value
at the end of each quarter (and accordingly, at
December 31, 2000) approximates zero.




Item 8.  Financial Statements and
Supplementary Data

Our consolidated balance sheets as of December 31, 2000,
December 31, 1999 and the related consolidated statements
of operations and comprehensive income (loss), cash flow and
stockholders equity for each of the fiscal years in the
three-year period ended December 31, 2000, together with
related notes and the report of Deloitte & Touche LLP are
set forth on the following pages.

26



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##### Table of Contents



MANAGEMENTS REPORT ON RESPONSIBILITY FOR FINANCIAL
REPORTING

The management of The Dial Corporation has the responsibility
for preparing and assuring the integrity and objectivity of the
accompanying financial statements and other financial
information in this report. The financial statements were
prepared using generally accepted accounting principles
consistently applied. The financial statements reflect, where
applicable, managements best estimates and judgments and
include disclosures and explanations that are relevant to an
understanding of our financial affairs.

Our financial statements have been audited by Deloitte &
Touche LLP. Management has made available to Deloitte &
Touche LLP all of our financial records and other relevant data
and has made appropriate and complete written and oral
representations and disclosures in connection with the audit.

Management has established and maintains a system of internal
control that is designed to provide reasonable assurance that
transactions are authorized and properly recorded, that assets
are protected and that materially inaccurate financial reporting
is prevented and detected. The appropriate segregation of
responsibilities and careful selection of employees are
components of the system of internal controls. The internal
control system is independently monitored and evaluated by an
extensive and comprehensive internal auditing program.

The Board of Directors, acting through its Audit Committee,
oversees the adequacy of the Companys internal control
environment. The Audit Committee meets regularly with management
representatives and, jointly and separately, with
representatives of Deloitte & Touche LLP and internal
auditing management to review accounting, auditing and financial
reporting matters.

|                                                               |  |                                                                     
|-------------------------------------------------------------- |  | --------------------------------------------------------------------
|/s/ HERBERT M. BAUM                                            |  | /s/ CONRAD A. CONRAD                                                
|                                                               |  |                                                                     
|                                                               |  |                                                                     
|Herbert M. Baum
	Chairman, President & Chief Executive Officer |  | Conrad A. Conrad
	Executive Vice President & Chief Financial Officer

27



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##### Table of Contents



INDEPENDENT AUDITORS REPORT

To the Stockholders and Board of



We have audited the accompanying consolidated balance sheets of
The Dial Corporation as of December 31, 2000, and 1999, and
the related consolidated statements of operations and
comprehensive income (loss), cash flows and stockholders
equity for each of the three fiscal years in the period ended
December 31, 2000. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with 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 consolidated financial statements present
fairly, in all material respects, the financial position of The
Dial Corporation as of December 31, 2000, and 1999, and the
results of its operations and its cash flows for each of the
three years in the period ended December 31, 2000, in
conformity with accounting principles generally accepted in the
United States of America.



| |                          
| | -------------------------
| | /s/ DELOITTE & TOUCHE LLP
| |                          
| | Deloitte & Touche LLP    

Phoenix, Arizona



28



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##### Table of Contents



THE DIAL CORPORATION

CONSOLIDATED BALANCE SHEET

(in thousands)


|                                                |                                                                                                         |                            |         |          |           |  |         |          |           | 
|----------------------------------------------- | ------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | -------- | --------- |  | ------- | -------- | --------- | 
|                                                |                                                                                                         |                           
|                                                |                                                                                                         | As of December 31         
|                                                |                                                                                                         |                           
|                                                |                                                                                                         | 2000                       |         | 1999    
|                                                |                                                                                                         |                            |         |         
|ASSETS                                         
|                                               
|                                               
|                                               
|                                               
|Current Assets:                                 |                                                                                                         |                            |         |          |           |  |         |         
|                                               
|                                               
|                                               
|                                               
|                                                | Cash and cash equivalents                                                                               |                            | $       | 6,844    |           |  | $       | 6,126    |          
|                                               
|                                               
|                                               
|                                               
|                                                | Receivables, less allowance of $5,983 and $7,994                                                        |                            |         | 168,170  |           |  |         | 107,413  |          
|                                               
|                                               
|                                               
|                                               
|                                                | Inventories                                                                                             |                            |         | 162,783  |           |  |         | 180,744  |          
|                                               
|                                               
|                                               
|                                               
|                                                | Deferred income taxes                                                                                   |                            |         | 18,910   |           |  |         | 17,852   |          
|                                               
|                                               
|                                               
|                                               
|                                                | Other current assets                                                                                    |                            |         | 21,036   |           |  |         | 20,369   |          
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|                                                |                                                                                                         | Total current assets       |         |          | 377,743   |  |         |          | 332,504   | 
|                                               
|                                               
|                                               
|                                               
|Property and equipment, net                     |                                                                                                         |                            | 301,027 |          |           |  | 306,585 |         
|                                               
|                                               
|                                               
|                                               
|Deferred income taxes                           |                                                                                                         |                            | 55,425  |          |           |  | 65,200  |         
|                                               
|                                               
|                                               
|                                               
|Intangibles, net                                |                                                                                                         |                            | 614,458 |          |           |  | 524,745 |         
|                                               
|                                               
|                                               
|                                               
|Other assets                                    |                                                                                                         |                            | 33,318  |          |           |  | 40,652  |         
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|                                                |                                                                                                         |                            |         | $        | 1,381,971 |  |         | $        | 1,269,686 | 
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|                                               
|                                               
|                                               
|                                               
|LIABILITIES AND STOCKHOLDERS EQUITY           
|                                               
|                                               
|                                               
|                                               
|Current Liabilities:                            |                                                                                                         |                            |         |          |           |  |         |         
|                                               
|                                               
|                                               
|                                               
|                                                | Trade accounts payable                                                                                  |                            | $       | 139,702  |           |  | $       | 128,320  |          
|                                               
|                                               
|                                               
|                                               
|                                                | Short-term borrowings                                                                                   |                            |         | 125,776  |           |  |         | 60,263   |          
|                                               
|                                               
|                                               
|                                               
|                                                | Income taxes payable                                                                                    |                            |         |         |           |  |         | 29,931   |          
|                                               
|                                               
|                                               
|                                               
|                                                | Other current liabilities                                                                               |                            |         | 129,377  |           |  |         | 99,600   |          
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|                                                |                                                                                                         | Total current liabilities  |         |          | 394,855   |  |         |          | 318,114   | 
|                                               
|                                               
|                                               
|                                               
|Long-term debt                                  |                                                                                                         |                            | 469,271 |          |           |  | 300,851 |         
|                                               
|                                               
|                                               
|                                               
|Pension and other benefits                      |                                                                                                         |                            | 217,035 |          |           |  | 232,586 |         
|                                               
|                                               
|                                               
|                                               
|Other liabilities                               |                                                                                                         |                            | 6,903   |          |           |  | 6,864   |         
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|                                                |                                                                                                         | Total liabilities          |         |          | 1,088,064 |  |         |          | 858,415   | 
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|Commitments and contingencies (Notes 15 and 19) |                                                                                                         |                            |        |          |           |  |        |         
|                                               
|                                               
|                                               
|                                               
|Stockholders Equity:                           |                                                                                                         |                            |         |          |           |  |         |         
|                                               
|                                               
|                                               
|                                               
|                                                | Preferred stock, $.01 par value, 10,000,000 shares authorized;
	no shares issued and outstanding        |                            |         |         |           |  |         |         |          
|                                               
|                                               
|                                               
|                                               
|                                                | Common stock, $.01 par value, 300,000,000 shares authorized;
	105,679,849 and 105,480,645 shares issued |                            |         | 1,057    |           |  |         | 1,055    |          
|                                               
|                                               
|                                               
|                                               
|                                                | Additional capital                                                                                      |                            |         | 402,024  |           |  |         | 448,977  |          
|                                               
|                                               
|                                               
|                                               
|                                                | Retained income                                                                                         |                            |         | 153,600  |           |  |         | 190,370  |          
|                                               
|                                               
|                                               
|                                               
|                                                | Accumulated other comprehensive income (loss)                                                           |                            |         | (3,465   | )         |  |         | (2,851   | )        
|                                               
|                                               
|                                               
|                                               
|                                                | Employee benefits                                                                                       |                            |         | (45,128  | )         |  |         | (95,802  | )        
|                                               
|                                               
|                                               
|                                               
|                                                | Treasury stock, 10,772,046 and 4,887,176 shares held                                                    |                            |         | (214,181 | )         |  |         | (130,478 | )        
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|                                                |                                                                                                         | Total stockholders equity |         |          | 293,907   |  |         |          | 411,271   | 
|                                                |                                                                                                         |                            |         |          |           |  |         |         
|                                                |                                                                                                         |                            |         | $        | 1,381,971 |  |         | $        | 1,269,686 | 
|                                                |                                                                                                         |                            |         |          |           |  |         |         

See Notes to Consolidated Financial Statements.

29



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##### Table of Contents



THE DIAL CORPORATION

STATEMENT OF CONSOLIDATED OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)

(in thousands, except per share data)


|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |           |  
|-------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | ---------------------- | --------- | --------- | - | ---- | --------- | --------- |  | - | --------- | --------- | -
|                                                                           |                                                                                                         |                       
|                                                                           |                                                                                                         | Year Ended December 31
|                                                                           |                                                                                                         |                       
|                                                                           |                                                                                                         | 2000                   |           | 1999      |   | 1998
|                                                                           |                                                                                                         |                        |           |           |   |     
|Net sales                                                                  |                                                                                                         | $                      | 1,638,540 |           |   | $    | 1,721,566 |           |  | $ | 1,524,517 |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|Costs and expenses:                                                        |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Cost of products sold                                                                                   |                        |           | 847,413   |   |      |           | 860,811   |  |   |           | 787,401   |  
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Asset writedowns and discontinued product inventories as a
	result of restructuring and special charges |                        |           | 49,174    |   |      |           |          |  |   |           |          |  
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|                                                                           | Total cost of products sold                                                                             |                        |           | 896,587   |   |      |           | 860,811   |  |   |           | 787,401   |  
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|                                                                           | Selling, general and administrative expenses                                                            |                        |           | 664,422   |   |      |           | 645,613   |  |   |           | 553,181   |  
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Special charges and other asset writedowns                                                              |                        |           | 18,190    |   |      |           |          |  |   |           |          |  
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|                                                                           |                                                                                                         |                        | 682,612   |           |   |      | 645,613   |           |  |   | 553,181   |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|                                                                           | Total costs and expenses                                                                                |                        |           | 1,579,199 |   |      |           | 1,506,424 |  |   |           | 1,340,582 |  
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|Operating income                                                           |                                                                                                         |                        | 59,341    |           |   |      | 215,142   |           |  |   | 183,935   |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|Interest and other expenses                                                |                                                                                                         |                        | (50,306   | )         |   |      | (32,712   | )         |  |   | (23,358   | )        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Net loss of joint ventures (including special charges of $30,471
	in 2000) |                                                                                                         |                        | (37,615   | )         |   |      | (1,347    | )         |  |   |          |          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Other income  gain on special items                                       |                                                                                                         |                        | 9,243     |           |   |      |          |           |  |   |          |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|Income (loss) before income taxes                                          |                                                                                                         |                        | (19,337   | )         |   |      | 181,083   |           |  |   | 160,577   |          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Income taxes (benefit)                                                     |                                                                                                         |                        | (8,329    | )         |   |      | 64,317    |           |  |   | 57,961    |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|NET INCOME (LOSS)                                                          |                                                                                                         | $                      | (11,008   | )         |   | $    | 116,766   |           |  | $ | 102,616   |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|NET INCOME (LOSS) PER SHARE  BASIC                                        |                                                                                                         | $                      | ( 0.12    | )         |   | $    | 1.19      |           |  | $ | 1.04      |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|NET INCOME (LOSS) PER SHARE  DILUTED                                      |                                                                                                         | $                      | (0.12     | )         |   | $    | 1.17      |           |  | $ | 1.02      |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|Weighted Average Basic shares outstanding                                  |                                                                                                         |                        | 92,237    |           |   |      | 98,255    |           |  |   | 98,294    |          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Weighted Average Equivalent shares                                         |                                                                                                         |                        | 0         |           |   |      | 1,810     |           |  |   | 2,185     |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|Weighted Average Diluted shares outstanding                                |                                                                                                         |                        | 92,237    |           |   |      | 100,065   |           |  |   | 100,479   |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|NET INCOME (LOSS)                                                          |                                                                                                         | $                      | (11,008   | )         |   | $    | 116,766   |           |  | $ | 102,616   |          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Other comprehensive income (loss) net of tax:                              |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Foreign currency translation adjustment                                                                 |                        |           | (370      | ) |      |           | 295       |  |   |           | (524      | )
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Minimum pension liability adjustment                                                                    |                        |           | (244      | ) |      |           | 5,803     |  |   |           | (6,625    | )
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|                                                                           | Other comprehensive income (loss)                                                                       |                        |           | (614      | ) |      |           | 6,098     |  |   |           | (7,149    | )
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          
|COMPREHENSIVE INCOME (LOSS)                                                |                                                                                                         | $                      | (11,622   | )         |   | $    | 122,864   |           |  | $ | 95,467    |          
|                                                                           |                                                                                                         |                        |           |           |   |      |           |           |  |   |           |          

See Notes to Consolidated Financial Statements.

30



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##### Table of Contents



THE DIAL CORPORATION

STATEMENT OF CONSOLIDATED CASH FLOWS

(in thousands)


|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |        |         |  
|---------------------------------------------------------------------------------- | ----------------------------------------------------------- | --------------------------------- | -------- | ------ | ------- | ---- | -------- | ------ | ------- | - | -------- | ------ | ------- | -
|                                                                                   |                                                             |                                  
|                                                                                   |                                                             | Year Ended December 31           
|                                                                                   |                                                             |                                  
|                                                                                   |                                                             | 2000                              |          | 1999   |         | 1998
|                                                                                   |                                                             |                                   |          |        |         |     
|CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:                                |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Net income (loss)                                                                  |                                                             | $                                 | (11,008  | )      |         | $    | 116,766  |        |         | $ | 102,616  |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Adjustments to reconcile net income to net cash provided by
	operating activities: |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Depreciation                                                |                                   |          | 40,457 |         |      |          | 31,455 |         |   |          | 27,980 |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Amortization                                                |                                   |          | 13,539 |         |      |          | 11,675 |         |   |          | 8,509  |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Deferred income taxes                                       |                                   |          | 7,955  |         |      |          | 10,321 |         |   |          | 33,235 |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Restructuring charges, special charges and asset writedowns |                                   |          | 97,835 |         |      |          |        |         |   |          |        |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Gain on special items                                       |                                   |          | (9,243 | )       |      |          |        |         |   |          |        |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   | Change in operating assets and liabilities:                 |                                   |          |        |         |      |          |        |         |   |          |        |        
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                             | Receivables                       |          |        | 14,029  |      |          |        | (34,111 | ) |          |        | (29,152 | )
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                             | Inventories                       |          |        | (18,437 | )    |          |        | (23,640 | ) |          |        | 8,651   |  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                             | Trade accounts payable            |          |        | 9,316   |      |          |        | 4,547   |   |          |        | 2,440   |  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                             | Income taxes payable              |          |        | (29,326 | )    |          |        | 20,446  |   |          |        | (5,896  | )
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                   |                                                             | Other assets and liabilities, net |          |        | (4,360  | )    |          |        | (15,692 | ) |          |        | (26,108 | )
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|Net cash provided by operating activities                                          |                                                             |                                   | 110,757  |        |         |      | 121,767  |        |         |   | 122,275  |       
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:                                |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Capital expenditures                                                               |                                                             |                                   | (45,885  | )      |         |      | (62,495  | )      |         |   | (50,330  | )     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Investment in and loans to joint ventures                                          |                                                             |                                   | (13,490  | )      |         |      | (11,811  | )      |         |   |          |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Acquisition of businesses, net of cash acquired and escrow
	refunds                |                                                             |                                   | (114,502 | )      |         |      | 6,046    |        |         |   | (271,043 | )     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Proceeds from sales of property and equipment                                      |                                                             |                                   | 11,114   |        |         |      |          |        |         |   | 10,662   |       
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|Net cash used by investing activities                                              |                                                             |                                   | (162,763 | )      |         |      | (68,260  | )      |         |   | (310,711 | )     
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:                                |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Net change in long-term borrowings                                                 |                                                             |                                   | 168,420  |        |         |      | 20,628   |        |         |   | 190,300  |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Common stock purchased for treasury                                                |                                                             |                                   | (83,144  | )      |         |      | (100,216 | )      |         |   | (26,166  | )     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Net change in short-term bank loans                                                |                                                             |                                   | 65,513   |        |         |      | 49,874   |        |         |   | 1,889    |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Dividends paid on common stock                                                     |                                                             |                                   | (25,762  | )      |         |      | (31,407  | )      |         |   | (31,497  | )     
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Cash proceeds from stock options                                                   |                                                             |                                   | 874      |        |         |      | 18,158   |        |         |   | 25,126   |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Net change in receivables sold                                                     |                                                             |                                   | (73,177  | )      |         |      | (16,823  | )      |         |   | 31,100   |       
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|Net cash provided (used) by financing activities                                   |                                                             |                                   | 52,724   |        |         |      | (59,786  | )      |         |   | 190,752  |       
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|Net increase (decrease) in cash and cash equivalents                               |                                                             |                                   | 718      |        |         |      | (6,279   | )      |         |   | 2,316    |       
|                                                                                  
|                                                                                  
|                                                                                  
|                                                                                  
|Cash and cash equivalents, beginning of year                                       |                                                             |                                   | 6,126    |        |         |      | 12,405   |        |         |   | 10,089   |       
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       
|CASH AND CASH EQUIVALENTS, END OF YEAR                                             |                                                             | $                                 | 6,844    |        |         | $    | 6,126    |        |         | $ | 12,405   |       
|                                                                                   |                                                             |                                   |          |        |         |      |          |        |         |   |          |       

See Notes to Consolidated Financial Statements.

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##### Table of Contents



THE DIAL CORPORATION

STATEMENT OF CONSOLIDATED STOCKHOLDERS EQUITY

(in thousands)


|                           |                                     |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        |        |   |   |         |          |  
|-------------------------- | ----------------------------------- | ------------ | ------- | ---------- |  | -------- | ----- | -------- |  | -------- | ------- | ------------- | - | ------------- | ------- | ------- | - | - | -------- | ------- | - | - | -------- | -------- | - | - | ------ | ------ | - | - | ------- | -------- | -
|                           |                                     |              |         |            |  |          |       |          |  |          |         | Accumulated   |   |              
|                           |                                     | Common Stock |         |            |  |          |       |          |  | Common   |         | Other         |   |              
|                           |                                     |              |         | Additional |  | Retained |       | Employee |  | Stock in |         | Comprehensive |   |              
|                           |                                     | Shares       |         | Amount     |  | Capital  |       | Income   |  | Benefits |         | Treasury      |   | Income (loss) |         | Total  
|                           |                                     |              |         |            |  |          |       |          |  |          |         |               |   |               |         |        
|Balance, January 3, 1998   |                                     |              | 102,725 |            |  | $        | 1,027 |          |  | $        | 393,947 |               |   | $             | 33,892  |         |   | $ | (105,572 | )       |   | $ | (1,448   | )        |   | $ | (1,800 | )      |   | $ | 320,046 |         
|                          
|                          
|                          
|                          
|                           | Exercise of stock options           |              |         | 1,630      |  |          |       | 17       |  |          |         | 18,963        |   |               |         |         |   |   |          | 13,158  |   |   |          | (923     | ) |   |        |        |   |   |         | 31,215   |  
|                          
|                          
|                          
|                          
|                           | Common stock purchased for treasury |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          | (26,166  | ) |   |        |        |   |   |         | (26,166  | )
|                          
|                          
|                          
|                          
|                           | Dividends on common stock           |              |         |            |  |          |       |          |  |          |         |               |   |               |         | (31,497 | ) |   |          |         |   |   |          |          |   |   |        |        |   |   |         | (31,497  | )
|                          
|                          
|                          
|                          
|                           | Change in employee benefits         |              |         |            |  |          |       |          |  |          |         | 37,857        |   |               |         |         |   |   |          | (36,697 | ) |   |          |          |   |   |        |        |   |   |         | 1,160    |  
|                          
|                          
|                          
|                          
|                           | Net income                          |              |         |            |  |          |       |          |  |          |         |               |   |               |         | 102,616 |   |   |          |         |   |   |          |          |   |   |        |        |   |   |         | 102,616  |  
|                          
|                          
|                          
|                          
|                           | Other comprehensive income (loss)   |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        | (7,149 | ) |   |         | (7,149   | )
|                           |                                     |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        |        |   |   |         |         
|Balance, December 31, 1998 |                                     |              | 104,355 |            |  |          | 1,044 |          |  |          | 450,767 |               |   |               | 105,011 |         |   |   | (129,111 | )       |   |   | (28,537  | )        |   |   | (8,949 | )      |   |   | 390,225 |         
|                          
|                          
|                          
|                          
|                           | Exercise of stock options           |              |         | 1,007      |  |          |       | 10       |  |          |         | 13,269        |   |               |         |         |   |   |          | 15,662  |   |   |          | (1,469   | ) |   |        |        |   |   |         | 27,472   |  
|                          
|                          
|                          
|                          
|                           | Common stock purchased for treasury |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          | (100,216 | ) |   |        |        |   |   |         | (100,216 | )
|                          
|                          
|                          
|                          
|                           | Dividends on common stock           |              |         |            |  |          |       |          |  |          |         |               |   |               |         | (31,407 | ) |   |          |         |   |   |          |          |   |   |        |        |   |   |         | (31,407  | )
|                          
|                          
|                          
|                          
|                           | Change in employee benefits         |              |         | 119        |  |          |       | 1        |  |          |         | (15,059       | ) |               |         |         |   |   |          | 17,647  |   |   |          | (256     | ) |   |        |        |   |   |         | 2,333    |  
|                          
|                          
|                          
|                          
|                           | Net income                          |              |         |            |  |          |       |          |  |          |         |               |   |               |         | 116,766 |   |   |          |         |   |   |          |          |   |   |        |        |   |   |         | 116,766  |  
|                          
|                          
|                          
|                          
|                           | Other comprehensive income          |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        | 6,098  |   |   |         | 6,098    |  
|                           |                                     |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        |        |   |   |         |         
|Balance, December 31, 1999 |                                     |              | 105,481 |            |  |          | 1,055 |          |  |          | 448,977 |               |   |               | 190,370 |         |   |   | (95,802  | )       |   |   | (130,478 | )        |   |   | (2,851 | )      |   |   | 411,271 |         
|                          
|                          
|                          
|                          
|                           | Exercise of stock options           |              |         | 57         |  |          |       | 1        |  |          |         | 359           |   |               |         |         |   |   |          | 630     |   |   |          | (116     | ) |   |        |        |   |   |         | 874      |  
|                          
|                          
|                          
|                          
|                           | Common stock purchased for treasury |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          | (83,144  | ) |   |        |        |   |   |         | (83,144  | )
|                          
|                          
|                          
|                          
|                           | Dividends on common stock           |              |         |            |  |          |       |          |  |          |         |               |   |               |         | (25,762 | ) |   |          |         |   |   |          |          |   |   |        |        |   |   |         | (25,762  | )
|                          
|                          
|                          
|                          
|                           | Change in employee benefits         |              |         | 142        |  |          |       | 1        |  |          |         | (47,312       | ) |               |         |         |   |   |          | 50,044  |   |   |          | (443     | ) |   |        |        |   |   |         | 2,290    |  
|                          
|                          
|                          
|                          
|                           | Net income (loss)                   |              |         |            |  |          |       |          |  |          |         |               |   |               |         | (11,008 | ) |   |          |         |   |   |          |          |   |   |        |        |   |   |         | (11,008  | )
|                          
|                          
|                          
|                          
|                           | Other comprehensive income (loss)   |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        | (614   | ) |   |         | (614     | )
|                           |                                     |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        |        |   |   |         |         
|Balance, December 31, 2000 |                                     |              | 105,680 |            |  | $        | 1,057 |          |  | $        | 402,024 |               |   | $             | 153,600 |         |   | $ | (45,128  | )       |   | $ | (214,181 | )        |   | $ | (3,465 | )      |   | $ | 293,907 |         
|                           |                                     |              |         |            |  |          |       |          |  |          |         |               |   |               |         |         |   |   |          |         |   |   |          |          |   |   |        |        |   |   |         |         

See Notes to Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Nature of Business

We manufacture and sell consumer products. We market our
products primarily under such well-known household brand names
as Dial® soaps, Purex®
detergents, Renuzit® air fresheners and
Armour® canned meats. We also market
specialty personal care products under the brand names
Freeman® and Sarah
Michaels®. These products are sold to consumers
primarily though supermarkets, mass merchandisers, drug stores,
membership club stores and other outlets. We do approximately
88% of our business in the United States.

Prior to August 1996, we operated as the consumer products
business of Viad Corp. Viad, our former parent, was then known
as The Dial Corp. In August 1996, our former parent
declared a dividend and distributed to its stockholders all the
outstanding common stock of The Dial Corporation causing us to
become a separately publicly traded company. This transaction is
known as the Spin-off. We have operated as The Dial Corporation
since the Spin-off.

Note 2.  Significant Accounting Policies

Principles of Consolidation. The accompanying
consolidated financial statements include the accounts of The
Dial Corporation and all majority-owned subsidiaries. We account
for our investment in the Dial/ Henkel LLC joint venture and our
prior investment in the Dial/ Henkel Mexico joint venture under
the equity method of accounting. Intercompany transactions and
profits have been eliminated in consolidation.

Use of Estimates.The Consolidated Financial
Statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which
require management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.
Significant estimates include estimated cash flows used to
measure long-lived assets for impairment and estimated net
realizable value of discontinued inventories. Actual results
could differ from those estimates.

Revenue Recognition.Sales are recorded at the
time products are shipped to customers.

Major Customers.Major customers are
defined as those that individually accounted for more than 10%
of our net sales. Sales to Wal-Mart, including its affiliate
Sams Club, accounted for 21%, 18% and 17% of our net sales
in 2000, 1999 and 1998.

Marketing and Research and Development Costs.All
expenditures for marketing and research and development are
charged against earnings in the period incurred and are reported
in the Statement of Consolidated Operations under the caption
Selling, general and administrative expenses. Our
internal and external research and development expenditures
totaled approximately $13.7 million, $11.7 million, and $10.1
million in 2000, 1999, and 1998. Marketing costs include the
costs of advertising and various sales promotional programs.

Cash and Cash Equivalents.We consider all highly
liquid investments with original maturities of three months or
less from the date of purchase to be cash equivalents.

Inventories.Inventories are stated at the lower
of cost (first in, first out and average cost methods) or market.

Long-Lived Assets.We evaluate the recoverability
of property and equipment and intangibles not held for sale by
comparing the carrying amount of the asset or group of assets
against the estimated undiscounted future net cash flows
expected to result from the use of the asset or group of assets.
Goodwill from acquisitions related to a group of assets being
evaluated for impairment is included in the evaluation. If the
undiscounted estimated cash flows are less than the carrying
value of the asset or group of assets being reviewed, an
impairment loss would be recorded. The loss would be measured
based on the estimated fair value of the asset or group of
assets compared to cost. The estimated fair value would be based
on the best information available under the circumstances,
including prices for similar assets and the results of valuation
techniques, including

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Property and Equipment.Property and equipment are
stated at cost, net of accumulated depreciation. Depreciation is
provided principally by use of the straight-line method at
annual rates as follows:

|                              |  |  |                                     | 
|----------------------------- |  |  | ----------------------------------- | 
|                             
|                             
|                             
|                             
|Buildings                     |  |  | 2% to 5%                            | 
|                             
|                             
|                             
|                             
|Machinery and other equipment |  |  | 5% to 33%                           | 
|                             
|                             
|                             
|                             
|Leasehold improvements        |  |  | Lesser of lease term or useful life | 

Intangibles.Intangibles are carried at cost less
accumulated amortization. Intangibles that arose prior to
November 1, 1970, are not being amortized. Goodwill arising
on or after November 1, 1970, is amortized on the
straight-line method over the periods of expected benefit but
not in excess of 40 years. Other intangible assets,
including trademarks, patents and customer lists, are amortized
over useful lives ranging from 10 to 40 years.

Net Income (Loss) Per Common Share.Basic
net income (loss) per common share is computed by dividing
net income (loss) by the weighted average number of common
shares outstanding during the year before giving effect to stock
options considered to be dilutive common stock equivalents.
Diluted net income (loss) per common share is computed by
dividing net income (loss) by the weighted average number
of common shares outstanding during the year after giving effect
to stock options considered to be dilutive common stock
equivalents. Shares held by the Employee Equity Trust are not
considered outstanding for net income (loss) per share
calculations until the shares are released from the Trust and
transferred to an employee or transferred on behalf of an
employee.

At December 31, 2000, there were 105,679,849 shares of
common stock issued and 94,907,803 shares outstanding. At
December 31, 2000, and December 31, 1999, a total of
3,654,344 and 3,939,671, respectively, of the issued shares were
held by the Employee Equity Trust. At December 31, 2000,
and December 31, 1999, a total of 10,772,046 and 4,887,176
shares of common stock, respectively, were held in treasury.

In addition to common stock, we are authorized to issue
10,000,000 shares of preferred stock, par value of $.01 per
share, none of which has been issued.

New Accounting Pronouncements.In
December 1999, the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 101 Revenue
Recognition in Financial Statements, which provides
guidance in applying generally accepted accounting principles to
revenue recognition in financial statements. Application of this
pronouncement did not have an impact on our operating results or
financial condition.

In June 1998, the Financial Accounting Standards Board
issued Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities. We were required to
adopt this new standard effective January 1, 2001. Our use
of financial instruments is limited to purposes other than
trading and primarily includes management of employee benefits
and commodity expense. We may use financial instruments for the
management of interest rate, foreign currency or other risks in
the future. The transitional accounting effect of this
pronouncement did not have a material impact on our operating
results or financial condition.

In May 2000, the Financial Accounting Standards
Boards Emerging Issues Task Force (EITF)
released Issue No. 00-14, Accounting for Certain
Sales Incentives. This issue addresses the recognition,
measurement, and income statement classification for certain
sales incentives, including coupons, rebates and free products.
The consensus on EITF 00-14 will be effective for Dial in the
second quarter of 2001. The implementation of this consensus
will require us to change the way we classify certain sales
incentives which are currently recorded as selling, general and
administrative expenses. The cost of coupons and rebates, which
was approximately $8.3 million in 2000, will be recorded as a
reduction of net sales. The cost of free products, which was
approximately $9.9 million in 2000, will be recorded as cost of
products sold.

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The EITF is currently discussing Open Issue No. 00-25,
Vendor Income Statement Characterization of Consideration
from a Vendor to a Retailer. Since the Task Force reached
a consensus on EITF Issue No. 00-14, Accounting for
Certain Sales Incentives, numerous questions have been
raised about the accounting and income statement classification
of costs, other than those directly addressed in Issue 00-14,
that are incurred by a vendor (typically a manufacturer or
distributor) to or on behalf of a customer (typically a
retailer) in connection with the customers purchase or
promotion of the vendors products. This Issue would
address the recognition and measurement of such costs and
whether a vendor should classify such costs in its income
statement when incurred as a reduction of revenues or as an
expense item.

We currently record all of the consideration we provide to our
customers to promote our products as trade promotion expense.
Such costs include consideration given to retailers for space in
their stores (slotting fees), consideration given to obtain
favorable display positions in the retailers stores and
other promotional activity. For income statement purposes, we
currently record all trade promotion expense as Selling,
general and administrative expense.We expense these
promotional activities in the period during which the related
product ships. In 2000, we incurred approximately $390 million
of trade promotion expense.

The final EITF consensus could have a material effect on
Dials historical and future net sales amounts, gross
margins and operating margins if the consensus requires that
some or all of these types of trade promotion costs be recorded
by Dial as a reduction of sales rather than as selling, general
and administrative expenses.

The Financial Accounting Standards Board issued a Proposed
Statement of Accounting Standards, Business Combinations
and Intangible Assets  Accounting for Goodwill.
The proposed Statement would prohibit goodwill amortization and
establish a new method of testing goodwill for impairment. The
proposed statement would also prohibit the pooling of interest
method of accounting for business combinations and establish a
new accounting standard for goodwill acquired in a business
combination. The provisions of the proposed Statement would be
effective for fiscal quarters beginning after the issuance of a
final Statement. The impact of the Statement may be significant
if it is issued as currently proposed, as we would be required
to test our goodwill for impairment under new standards and
would no longer recognize goodwill amortization expense. In
2000, we incurred $9.6 million in goodwill amortization.

Derivative Financial Instruments.Our use of
financial instruments is limited to purposes other than trading
and primarily includes management of employee benefits and
commodity expense. These instruments qualify for hedge
accounting. The financial impacts of these hedging instruments
are offset in part or in whole by corresponding changes in the
underlying exposures being hedged. We may use financial
instruments for the management of interest rate, foreign
currency or other risks in the future

Reclassifications.Certain reclassifications of
prior years amounts have been made to conform with the
current year presentation.

Note 3. Restructuring and Special Charges

Third Quarter 2000 Special Charges

On October 18, 2000, we announced a special charge related
to the Specialty Personal Care business, the Dial/ Henkel joint
ventures, and severance costs for prior management. We recorded
$73.9 million ($48.9 million after tax or $0.53 per share)
related to this special charge during 2000. We do not anticipate
that any

35



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|                                                     |       |                |        |               |  |                |        |             |   |   |         |         |   |   |       |        | 
|---------------------------------------------------- | ----- | -------------- | ------ | ------------- |  | -------------- | ------ | ----------- | - | - | ------- | ------- | - | - | ----- | ------ | 
|                                                     |       |                |        |               |  |                |        | Ending     
|                                                     |       |                |        | Cash spent    |  | Amount charged |        | reserves at
|                                                     |       | Total charges  |        | during period |  | against assets |        | 12/31/00   
|                                                     |       |                |        |               |  |                |        |            
|                                                     |       |               
|                                                     |       | (in thousands)
|                                                    
|                                                    
|                                                    
|                                                    
|Employee separations                                 |       | $              | 3,077  |               |  | $              | (1,014 | )           |   | $ |        |         |   | $ | 2,063 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Discontinued product inventories and related charges |       |                | 40,169 |               |  |                | (1,625 | )           |   |   | (29,344 | )       |   |   | 9,200 |       
|                                                    
|                                                    
|                                                    
|                                                    
|Other exit costs                                     |       |                | 200    |               |  |                | (65    | )           |   |   |         |         |   |   | 135   |       
|                                                    
|                                                    
|                                                    
|                                                    
|Joint ventures  special charges                     |       |                | 30,471 |               |  |                |       |             |   |   | (30,471 | )       |   |   |      |       
|                                                     |       |                |        |               |  |                |        |             |   |   |         |         |   |   |       |       
|                                                     | Total |                | $      | 73,917        |  |                | $      | (2,704      | ) |   | $       | (59,815 | ) |   | $     | 11,398 | 
|                                                     |       |                |        |               |  |                |        |             |   |   |         |         |   |   |       |       

For income statement purposes, $29.3 million of the special
charge is included in Asset writedowns and discontinued
product inventories as a result of restructuring and special
charges, $14.1 million is included in Special charges and
other asset writedowns, and $30.5 million is included in
Net loss of joint ventures. For segment reporting, $38.9
million of the charge is included in Specialty Personal Care,
$4.0 million is included in Domestic Branded, $0.4 million is
included in International and $0.1 million is included in
Commercial Markets & Other.

The employee separation charges relate primarily to severance
packages for three prior executive officers who left Dial in the
third quarter. The charges were recorded based either on
contractual agreements or were in accordance with Dial policies.
These costs have been allocated to our various business segments
based upon net sales of the respective segments.

The discontinued product inventories relate to exiting the
Natures Accents and ISC private label soap businesses and
rationalizing the SKUs within our Sarah Michaels and
Freeman businesses. The charge consists of recording finished
goods and raw material inventories at net realizable value. We
have sold or disposed of a portion of this inventory and expect
to sell or dispose of the remainder in 2001. In addition,
reserves were established to fund promotional activity for our
customers to discontinue SKUs currently in our
customers inventories and for expected returns and
deductions from our customers. This charge was calculated based
on the difference between the original suggested retail price
and the suggested discontinuation price multiplied by the
estimated related inventories held by our customers. These
reserves are expected to be utilized in 2001. Cash requirements
for the special charges currently are expected to be funded from
normal operations.

The expected timing and estimated amount of costs and projected
savings are based on managements judgment in light of the
circumstances and estimates at the time the judgments were made.
Accordingly, such estimates may change as future events evolve.
Among other matters, unforeseen changes in operating
requirements and other factors referred to in
Managements Discussion and Analysis of Results of
Operations and Financial Condition  Factors that May
Affect Future Results and Financial Conditioncould
cause actual operating benefits to differ materially from
anticipated results.

Second Quarter 2000 Restructuring

On June 28, 2000, we announced a $26.0 million
restructuring charge ($17.0 million after tax or $.19 per share)
designed to improve profitability and operational efficiencies.
Specifically, the charge is to:



| |   |                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Close our Bristol, Pennsylvania, dry detergent plant. As a
	result, our dry detergent manufacturing is expected to be
	consolidated into our St. Louis plant by the first quarter of
	2001;                        
|
| |  | Consolidate each of the manufacturing and distribution functions
	of the Specialty Personal Care business, which resulted in
	discontinuation of certain formulations and inventory, and other
	one-time costs; and

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| |   |                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Restructure domestic and international organizations, including
	our sales organization, as a result of acquisitions and changes
	in the business environment.

We recorded charges totaling $23.9 million ($14.9 million after
tax or $0.16 per share) during 2000. We do not anticipate that
any additional amounts will be recorded in 2001 with respect to
this restructuring charge. The pre-tax charges consist of the
following:

|                                                      |       |                |        |          |  |               |      |                |   |             |        |        |   |   |         |         |   |   |     |       | 
|----------------------------------------------------- | ----- | -------------- | ------ | -------- |  | ------------- | ---- | -------------- | - | ----------- | ------ | ------ | - | - | ------- | ------- | - | - | --- | ----- | 
|                                                      |       |                |        |          |  |               |      | Amount         |   | Ending     
|                                                      |       | Total          |        | Charges  |  | Cash spent    |      | charged        |   | reserves at
|                                                      |       | charges        |        | reversed |  | during period |      | against assets |   | 12/31/00   
|                                                      |       |                |        |          |  |               |      |                |   |            
|                                                      |       |               
|                                                      |       | (in thousands)
|                                                     
|                                                     
|                                                     
|                                                     
|Employee separations                                  |       | $              | 4,738  |          |  | $             | (253 | )              |   | $           | (3,657 | )      |   | $ |        |         |   | $ | 828 |      
|                                                     
|                                                     
|                                                     
|                                                     
|Asset writedowns and discontinued product inventories |       |                | 18,729 |          |  |               | (614 | )              |   |             |       |        |   |   | (18,115 | )       |   |   |    |      
|                                                     
|                                                     
|                                                     
|                                                     
|Other exit costs                                      |       |                | 1,818  |          |  |               | (500 | )              |   |             | (409   | )      |   |   | (50     | )       |   |   | 859 |      
|                                                      |       |                |        |          |  |               |      |                |   |             |        |        |   |   |         |         |   |   |     |      
|                                                      | Total |                | $      | 25,285   |  |               | $    | (1,367         | ) |             | $      | (4,066 | ) |   | $       | (18,165 | ) |   | $   | 1,687 | 
|                                                      |       |                |        |          |  |               |      |                |   |             |        |        |   |   |         |         |   |   |     |      

For income statement purposes, $19.8 million of the
restructuring charge is included in Asset writedowns and
discontinued product inventories as a result of restructure and
special chargesand $4.1 million is included in Special
charges and other asset writedowns. For segment reporting,
$11.3 million of the charge is included in Domestic Branded,
$10.7 million is included in Specialty Personal Care and $1.9
million is included in International.

The employee separation charges relate to severance packages for
89 manufacturing employees in the United States, 5 sales
employees located in Argentina and 164 others, primarily selling
and administrative employees in the United States, Mexico and
Argentina. The predominately involuntary packages are based on
salary levels and past service and were recorded upon acceptance
of the package.

We recorded accelerated depreciation on the Bristol,
Pennsylvania plant during the year for assets that have recently
been taken out of service prior to the end of their normal
service life. Accordingly, we changed the estimated useful lives
of such assets, resulting in accelerated depreciation. We also
wrote down the carrying value of this plant and certain other
assets by approximately $5.4 million.

As a result of our consolidation of each of the manufacturing
and distribution functions and the discontinuance of certain
formulations and SKUs in our Specialty Personal Care business,
certain inventories, primarily raw materials, became unusable.
Accordingly, a charge was recorded in the second quarter to
Asset writedowns and discontinued product inventories as a
result of restructure and special chargesfor the difference
between cost and net realizable value. We have disposed of a
portion of this inventory and expect to dispose of the remainder
in 2001.

Cash requirements for the restructuring currently are expected
to be funded from normal operations.

The $1.4 million of reversed charges primarily represent an
estimate of the amounts recorded during the year that are no
longer anticipated due to a pending contract to sell our
Bristol, Pennsylvania dry detergent facility. We may be
negatively impacted if this sale is not completed.

The expected timing and estimated amount of costs and projected
savings are based on managements judgment in light of the
circumstances and estimates at the time the judgements were
made. Accordingly, such estimates may change as future events
evolve. Among other matters, unforeseen changes in operating
requirements and other factors referred to in
Managements Discussion and Analysis of Results of
Operations and Financial Condition  Factors that May
Affect Future Results and Financial Conditioncould
cause actual operating benefits to differ materially from
anticipated results.

Note 4.  Acquisition of Businesses

During the second quarter of 2000, Dial acquired three
businesses for $119.1 million in cash. The acquisitions included
the Coastbar soap business in the United States, the
Plusbellehair care business in Argentina and the Zoutstain remover business in the United States. The purchase
price for Zout may increase

37



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Zout


The Coast, Plusbelleand Zoutacquisitions were
accounted for using the purchase method of accounting. A portion
of the purchase prices have been allocated to assets acquired of
$13.1 million and liabilities assumed of $1.3 million based on
estimated fair values at the date of acquisition while the
balance of $107.3 million was recorded as goodwill. We continue
to gather and analyze certain information required to complete
the allocation of the purchase price of these acquisitions.
Further adjustments to the allocation of the purchase price may
arise as a result of the finalization of the ongoing study.

The results of operations of the acquired businesses were
included in Dials consolidated results of operations from
their respective acquisition dates. The total combined net sales
of these acquisitions, from their respective acquisition dates
through the end of the 2000, was $67.2 million.

On July 1, 1998, we acquired The Freeman Cosmetic
Corporation (Freeman), a manufacturer and marketer
of natural skin care, hair care, bath, body and foot care
products, for a cash purchase price of approximately $78.0
million. The cash purchase price for Freeman reflects a $6.0
million reduction as a result of a net worth adjustment received
by the Company in January 1999. The Freeman acquisition has
been accounted for under the purchase method of accounting. The
purchase price has been allocated based on estimated fair value
of assets and liabilities at date of acquisition. This
allocation added $9.0 million to current assets, $25.3 million
to current liabilities and has resulted in acquired goodwill of
$87.2 million. The results of Freeman have been included in the
consolidated financial statements since the acquisition date.

On September 14, 1998, we acquired Sarah Michaels, Inc.
(Sarah Michaels), a manufacturer and marketer of
specialty bath and body care products for a cash purchase price
of $182.4 million. The Sarah Michaels acquisition has been
accounted for under the purchase method of accounting. The
purchase price has been allocated based on estimated fair value
of assets and liabilities at date of acquisition. The
acquisition price reflects a $4.6 million reduction in the
purchase price for Sarah Michaels. These funds were paid out of
an escrow account in the third quarter of 2000 and were recorded
as a reduction of goodwill. This allocation added $42.9 million
to current assets, $15.8 million to current liabilities and has
resulted in acquired goodwill of approximately $117.9 million.
The results of Sarah Michaels have been included in the
consolidated financial statements since the acquisition date.

The following unaudited pro forma combined condensed financial
information for 1998 includes our results of operations and
assumes the acquisition of Sarah Michaels and Freeman were
consummated at the beginning of 1998, along with adjustments
which give effect to events that are directly attributable to
the transaction and are expected to have a continuing impact.
The unaudited pro forma combined condensed financial information
does not give any effect to any potential cost savings which may
arise from the consolidation of the acquisitions with our
results.

The unaudited pro forma combined condensed financial information
does not purport to represent the results of operations that
would have actually resulted had the purchases occurred on the
indicated dates, nor should it be taken as indicative of future
results of operations.

|                             |  |                       |           | 
|---------------------------- |  | --------------------- | --------- | 
|                             |  | Year Ended           
|                             |  | December 31, 1998    
|                             |  |                      
|                             |  | (in thousands, except
|                             |  | per share data)      
|                            
|                            
|                            
|                            
|Net sales                    |  | $                     | 1,580,286 | 
|                            
|                            
|                            
|                            
|Operating income             |  |                       | 181,534   | 
|                            
|                            
|                            
|                            
|Net income                   |  |                       | 94,474    | 
|                            
|                            
|                            
|                            
|Earnings per share  diluted |  | $                     | 0.94      | 

Note 5.  Dial/ Henkel Joint Ventures

In April 1999, we formed Dial/ Henkel LLC, a joint venture
with Henkel KGaA of Düsseldorf, Germany
(Henkel). Dial and Henkel each own 50% of this joint
venture. The joint venture was formed to develop

38



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In March 2000, we formed another joint venture with Henkel
named Dial/ Henkel Mexico, S.A. de C.V. We owned 49% of this
joint venture and Henkel owned 51%. This joint venture was
formed primarily to develop and market consumer detergent and
household cleaning products in Mexico. In May 2000, this joint
venture acquired 80% of Fabrica de Jabon Mariano Salgado S.A. de
C.V. (FJMS). Our portion of the investment in the
joint venture, which in turn was invested in FJMS by the joint
venture, was $18.4 million. Our portion of the net loss of the
joint venture has been included in Dials consolidated
results since the joint venture formation date.

During the third quarter of 2000, the Dial/ Henkel LLC joint
venture decided to discontinue operations of Purex
Advanced. As a result, Purex Advancedhas been
reflected as a discontinued operation within the joint venture
financial statements with all current year operating losses
prior to the measurement date, which was September 29,
2000, reflected as Loss from operations of Purex Advancedand additional disposal costs recorded as Loss on
disposal of Purex Advanced. Dials portion of the
Loss on disposal of Purex Advancedis $12.6 million and
is included in the special charge portion of the Net loss of
joint ventureson Dials books. This charge consisted
of recording inventory at net realizable value and recording
reserves for expected returns and deductions by joint venture
customers. In addition, Dial recorded a charge of $5.4 million
to write down the fixed assets used in the manufacture of
Purex Advancedto net realizable value and record
estimated disposal costs. This charge is also included in the
special charge portion of the Net loss of joint ventureson Dials books.

During the fourth quarter of 2000, the Dial/ Henkel LLC joint
venture recorded a $15 million special charge relating to the
Custom Cleanerbusiness and consisted of recording
inventory at net realizable value, writing down impaired
goodwill and deferred tax assets. Our share of this charge is
$7.5 million and is included in the special charge portion of
the Net loss of joint ventures.

In December 2000, we reorganized our joint venture
arrangements with Henkel. Specifically, Dial and Henkel continue
to own a limited U.S. joint venture equally; however, the only
business conducted by this joint venture going forward will be
the Custom Cleanerhome dry-cleaning business. In
addition, we sold our interest in the Dial/ Henkel Mexico joint
venture to Henkel for $18.9 million, and recorded a $5.0 million
loss as part of the previously announced special charges. The
Dial/ Henkel Mexico joint venture had $32.7 million in sales.
Our share of the operating loss in 2000 was $0.5 million. We do
not anticipate recording additional charges in 2001 regarding
the reorganization of the Dial/ Henkel joint ventures.

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##### Table of Contents



We account for our investments in the joint ventures under the
equity method of accounting. The joint ventures results of
operations and our portion of the net losses of the joint
ventures are as follows:

|                                                                                    |                                                  |                        |         |         |   |   |        |        |  
|----------------------------------------------------------------------------------- | ------------------------------------------------ | ---------------------- | ------- | ------- | - | - | ------ | ------ | -
|                                                                                    |                                                  |                       
|                                                                                    |                                                  | Year ended December 31
|                                                                                    |                                                  |                       
|                                                                                    |                                                  | 2000                   |         | 1999   
|                                                                                    |                                                  |                        |         |        
|                                                                                    |                                                  |                       
|                                                                                    |                                                  | (in thousands)        
|Joint Ventures                                                                      |                                                  |                        |         |         |   |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Net sales from continuing operations                                                |                                                  | $                      | 12,326  |         |   | $ | 4,132  |       
|                                                                                    |                                                  |                        |         |         |   |   |        |       
|Loss from continuing operations, before taxes                                       |                                                  |                        | (22,428 | )       |   |   | (1,905 | )     
|                                                                                    |                                                  |                        |         |         |   |   |        |       
|Net loss from continuing operations                                                 |                                                  |                        | (22,428 | )       |   |   | (1,462 | )     
|Discontinued operations                                                             |                                                  |                        |         |         |   |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Loss from operations from Dial/ Henkel Mexico JV |                        |         | (1,714  | ) |   |        |        |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Loss from operations of Purex Advanced           |                        |         | (27,258 | ) |   |        | (3,187 | )
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Loss on disposal of Purex Advanced               |                        |         | (12,566 | ) |   |        |        |  
|                                                                                    |                                                  |                        |         |         |   |   |        |       
|Net loss of Joint Ventures                                                          |                                                  | $                      | (63,966 | )       |   | $ | (4,649 | )     
|                                                                                    |                                                  |                        |         |         |   |   |        |       
|Dial                                                                                |                                                  |                        |         |         |   |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Net loss from continuing operations                                                 |                                                  |                        | (4,239  | )       |   |   | (731   | )     
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Special charge on Custom Cleaner                                                    |                                                  |                        | (7,501  | )       |   |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Loss on dissolution of Dial/ Henkel Mexico joint venture                            |                                                  |                        | (4,989  | )       |   |   |        |       
|Discontinued operations                                                             |                                                  |                        |         |         |   |   |        |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Loss from operations from Dial/ Henkel Mexico JV |                        |         | (519    | ) |   |        |        |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Loss from operations of Purex Advanced           |                        |         | (2,386  | ) |   |        | (616   | )
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Loss on disposal of Purex Advanced               |                        |         | (12,566 | ) |   |        |        |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Write-down of fixed assets                       |                        |         | (5,415  | ) |   |        |        |  
|                                                                                    |                                                  |                        |         |         |   |   |        |       
|Net loss of joint ventures (including special charges of $30,471
	recorded in 2000) |                                                  | $                      | (37,615 | )       |   | $ | (1,347 | )     
|                                                                                    |                                                  |                        |         |         |   |   |        |       

The joint venture agreement provided for a monthly marketing,
sales and administrative fee, a trademark fee and a tolling fee
to be paid to us. A monthly technology fee was paid to Henkel.
All fees, except the marketing, sales and administrative fee
paid to Dial, have been terminated. The monthly sales and
administrative fee is paid to us based on net sales of the joint
venture. In addition, during 2000, Henkel paid a
disproportionate share of the marketing expenses of Purex
Advanced incurred by the joint venture.

Condensed balance sheet information for Dial follows:

|                                                 |  |                |         |      |  |   |        | 
|------------------------------------------------ |  | -------------- | ------- | ---- |  | - | ------ | 
|                                                 |  |               
|                                                 |  | December 31   
|                                                 |  |               
|                                                 |  | 2000           |         | 1999
|                                                 |  |                |         |     
|                                                 |  |               
|                                                 |  | (in thousands)
|Dial                                             |  |                |         |      |  |   |        | 
|                                                
|                                                
|                                                
|                                                
|Investment in and (amounts due) to joint venture |  | $              | (15,715 | )    |  | $ | 2,964  | 
|                                                
|                                                
|                                                
|                                                
|Note receivable from joint venture               |  |                | 8,244   |      |  |   | 7,500  | 
|                                                
|                                                
|                                                
|                                                
|Amount due from joint venture                    |  |                | 1,503   |      |  |   | 10,855 | 

The note receivable is due August 2004 and bears interest
at 7.0%, per annum. The note is included in Other assets.
As of December 31, 2000, Dial retained liabilities of
approximately $12.5 million relating to the discontinuation of
Purex Advanced. Dial will pay these liabilites as they
become due. Dial incurred the cost to manufacture Purex
Advanced and billed the joint venture monthly for the costs
incurred. As of December 31, 1999, this is labeled as
Amount due from joint ventureand is included in Other
current assets.

40



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Note 6.  Income and Expense Items

During the second quarter of 2000, we sold the Dial Center for
Innovation (DCI), formerly known as the Dial
Technical and Administration Center, and accompanying 23 acre
parcel in Scottsdale, Arizona to an unrelated third party
developer for a purchase price of $15.3 million. At that time,
we entered into an operating lease with this third party for the
existing DCI building pending construction of a new DCI
building. We also entered into an operating lease with an
initial term of 15 years for a new DCI building that may be
constructed on an 11 acre portion of the 23 acre parcel. We have
accounted for the land portion of this transaction as a sale and
leaseback transaction in accordance with Statement of Accounting
Standards No. 98, Accounting for Leases. The land
and building have been removed from our consolidated balance
sheet and a gain of $6.7 million related to the sale of land was
recognized in the second quarter of 2000. In the fourth quarter
of 2000, we amended our agreements with the developer and opted
not to commit to constructing a new DCI building. We paid the
third party $4.2 million and, in return, our obligation to
construct a new building was replaced with an exclusive option
to construct a new DCI building. This option expires on
June 30, 2003. If we elect to construct a new DCI building
before this option expires, a portion of the $4.2 million paid
to the developer will be credited to the construction costs of
the new DCI building. In addition, the lease on our existing DCI
building was extended to August 2007 and the annual rent
was increased to approximate a fair market rent. As a result of
these lease modifications, a $2.0 million charge was recognized
in the fourth quarter of 2000.

During 2000, we recorded a $4.6 million curtailment gain
resulting from changes to retiree medical plan benefits.

During 1998, the Purex Toss n Softbrand and
related inventories were sold to Church & Dwight Co.,
Inc., for approximately $5.3 million. In addition, a
nonoperating manufacturing property was sold for $4.0 million to
a third party. No gain or loss was realized on these
transactions.

Note 7.  Inventories

Inventories consisted of the following at December 31, in
thousands:

|                           |  |      |         |      |  |   |         | 
|-------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                           |  | 2000 |         | 1999
|                           |  |      |         |     
|Raw materials and supplies |  | $    | 48,484  |      |  | $ | 51,127  | 
|                          
|                          
|                          
|                          
|Work in process            |  |      | 8,387   |      |  |   | 9,712   | 
|                          
|                          
|                          
|                          
|Finished goods             |  |      | 105,912 |      |  |   | 119,905 | 
|                           |  |      |         |      |  |   |         | 
|                           |  | $    | 162,783 |      |  | $ | 180,744 | 
|                           |  |      |         |      |  |   |         | 

Note 8.  Property and Equipment

Property and equipment consisted of the following at
December 31, in thousands:

|                                     |  |      |          |      |  |   |          |  
|------------------------------------ |  | ---- | -------- | ---- |  | - | -------- | -
|                                     |  | 2000 |          | 1999
|                                     |  |      |          |     
|Land                                 |  | $    | 11,038   |      |  | $ | 10,060   |  
|                                    
|                                    
|                                    
|                                    
|Buildings and leasehold improvements |  |      | 106,913  |      |  |   | 110,220  |  
|                                    
|                                    
|                                    
|                                    
|Machinery and other equipment        |  |      | 453,216  |      |  |   | 434,369  |  
|                                    
|                                    
|                                    
|                                    
|Construction in progress             |  |      | 39,084   |      |  |   | 38,192   |  
|                                     |  |      |          |      |  |   |          |  
|                                     |  |      | 610,251  |      |  |   | 592,841  |  
|                                    
|                                    
|                                    
|                                    
|Less accumulated depreciation        |  |      | (309,224 | )    |  |   | (286,256 | )
|                                     |  |      |          |      |  |   |          |  
|                                     |  | $    | 301,027  |      |  | $ | 306,585  |  
|                                     |  |      |          |      |  |   |          |  

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##### Table of Contents



Note 9.  Intangibles

Intangibles consisted of the following at December 31, in
thousands:

|                                    |  |      |         |      |  |   |         |  
|----------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                    |  | 2000 |         | 1999
|                                    |  |      |         |     
|Goodwill(1)                         |  | $    | 578,118 |      |  | $ | 475,517 |  
|                                   
|                                   
|                                   
|                                   
|Trademarks and patents              |  |      | 58,839  |      |  |   | 57,882  |  
|                                   
|                                   
|                                   
|                                   
|Customer list and other intangibles |  |      | 76,581  |      |  |   | 76,792  |  
|                                    |  |      |         |      |  |   |         |  
|                                    |  |      | 713,538 |      |  |   | 610,191 |  
|                                   
|                                   
|                                   
|                                   
|Less accumulated amortization       |  |      | (99,080 | )    |  |   | (85,446 | )
|                                    |  |      |         |      |  |   |         |  
|                                    |  | $    | 614,458 |      |  | $ | 524,745 |  
|                                    |  |      |         |      |  |   |         |  




|    |                                                                                                   
|--- | --------------------------------------------------------------------------------------------------
|(1) | Includes $155,259,000 of goodwill arising prior to
	November 1, 1970, that is not being amortized.

Note 10.  Other Current Liabilities

Other current liabilities consisted of the following at
December 31, in thousands:

|                             |  |      |         |      |  |   |        | 
|---------------------------- |  | ---- | ------- | ---- |  | - | ------ | 
|                             |  | 2000 |         | 1999
|                             |  |      |         |     
|Accrued compensation         |  | $    | 19,376  |      |  | $ | 23,335 | 
|                            
|                            
|                            
|                            
|Accrued trade promotions     |  |      | 40,888  |      |  |   | 24,197 | 
|                            
|                            
|                            
|                            
|Employee benefit liabilities |  |      | 26,233  |      |  |   | 23,341 | 
|                            
|                            
|                            
|                            
|Dividends payable            |  |      | 3,396   |      |  |   | 7,771  | 
|                            
|                            
|                            
|                            
|Other                        |  |      | 39,484  |      |  |   | 20,956 | 
|                             |  |      |         |      |  |   |        | 
|                             |  | $    | 129,377 |      |  | $ | 99,600 | 
|                             |  |      |         |      |  |   |        | 

Note 11.  Debt

Short-term debt consisted of the following at December 31,
in thousands:

|                                                                                                                                                                                                                                                                                                 |  |      |         |      |  |   |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ------- | ---- |  | - | ------ | 
|                                                                                                                                                                                                                                                                                                 |  | 2000 |         | 1999
|                                                                                                                                                                                                                                                                                                 |  |      |         |     
|Short-term bank borrowings                                                                                                                                                                                                                                                                       |  | $    |        |      |  | $ | 43,851 | 
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|Bank loans to our Argentinean subsidiary, Nuevo Federal. The
	loan is denominated in Argentinean Pesos, bears interest at the
	banks short-term rate (ranging from 10.75% to 22% at
	December 31, 2000) and reprices monthly. The loan is
	subject to call by the bank at the end of each month |  |      | 14,009  |      |  |   | 16,312 | 
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|Current portion of State of Arizona Economic Development Loan,
	due beginning July of 2000 over 10 years                                                                                                                                                                                         |  |      | 70      |      |  |   | 100    | 
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                
|Commercial paper issuances supported by the short-term revolving
	Credit Agreement, interest rates from 7.05% to 8.60% at
	December 31, 2000                                                                                                                                                     |  |      | 111,697 |      |  |   |       | 
|                                                                                                                                                                                                                                                                                                 |  |      |         |      |  |   |        | 
|Total short-term debt                                                                                                                                                                                                                                                                            |  | $    | 125,776 |      |  | $ | 60,263 | 
|                                                                                                                                                                                                                                                                                                 |  |      |         |      |  |   |        | 

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Long-term debt consisted of the following at December 31,
in thousands:

|                                                                                                                                                          |  |      |         |      |  |   |         | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | 
|                                                                                                                                                          |  | 2000 |         | 1999
|                                                                                                                                                          |  |      |         |     
|State of Arizona Economic Development Loan, due beginning July
	of 2000 in equal installments over 10 years                                               |  | $    | 910     |      |  | $ | 900     | 
|                                                                                                                                                         
|                                                                                                                                                         
|                                                                                                                                                         
|                                                                                                                                                         
|$200 million 6.5% Senior Notes due 2008, net of issue discount                                                                                            |  |      | 198,361 |      |  |   | 198,142 | 
|                                                                                                                                                         
|                                                                                                                                                         
|                                                                                                                                                         
|                                                                                                                                                         
|Commercial paper issuances, supported by the long-term revolving
	Credit Agreement, with interest rates at December 31, 2000,
	ranging from 7.05 to 8.60% |  |      | 270,000 |      |  |   | 101,809 | 
|                                                                                                                                                          |  |      |         |      |  |   |         | 
|Total long-term debt                                                                                                                                      |  | $    | 469,271 |      |  | $ | 300,851 | 
|                                                                                                                                                          |  |      |         |      |  |   |         | 

On September 23, 1998, we issued $200 million of 6.5%
Senior Notes due 2008. The Indenture governing these Senior
Notes imposes restrictions on us with respect to, among other
things, our ability to redeem the Senior Notes, place liens on
certain properties and enter into certain sale and leaseback
transactions.

In July 1999, we initiated a $350 million commercial paper
program. The program allows us to issue unsecured short-term
notes of between one and 270 days to investors. As is customary
with commercial paper programs, we are required by credit rating
agencies to maintain our revolving long-term credit agreement as
a condition of receiving and upholding appropriate credit
ratings for the program.

In the second quarter of 2000 we entered into a new $450 million
credit facility that replaced our $350 million facility that was
established in July 1999. Our credit facility was intended to
serve as a backstop facility for our commercial paper program.
However, due to market conditions and the placement of our short
term debt rating on watch by Moodys Investors Service, we
have not been able to access the commercial paper market in the
first quarter of 2001. As a result, we have been making
borrowings under our credit facility. Borrowings under our
credit facility, are on a revolving basis under commitments
available until July 2005 for up to $270 million and under
commitments available until July 2001 for up to $180
million. We will need to refinance approximately $100 million of
short term debt drawn under the $180 million commitment that
expires in July 2001 and are considering a variety of
financing options, including a securitization of our accounts
receivable. The interest rate applicable to borrowings under our
credit facility is, at our option, indexed to the bank prime
rate or the London Interbank Offering Rate (LIBOR),
plus appropriate spreads over such indices during the term of
the credit facility. Our credit facility also requires us to pay
commitment fees to the banks making commitments under the credit
facility. These spreads and fees are subject to adjustment if
our debt ratings change. At December 31, 2000 we had $381.7
million outstanding in commercial paper, bearing interest at
rates ranging from 7.05% to 8.60%.

The financial covenants of the credit agreement require us to
maintain minimum net worth of at least 80% of such net worth as
of the date of the agreement plus 25% of net income subsequent
thereto plus certain other additions to net worth. The covenants
also require us to maintain a maximum ratio of three-to-one for
funded debt to earnings before interest, taxes, depreciation and
amortization (EBITDA). The following table reflects the maximum
ratio of funded debt to EBITDA permitted under Dials
credit facility:

|                  |  |               |              | 
|----------------- |  | ------------- | ------------ | 
|Date              |  | Maximum Ratio
|                  |  |              
|December 31, 2000 |  |               | 3.50 to 1.00 | 
|                 
|                 
|                 
|                 
|March 31, 2001    |  |               | 3.50 to 1.00 | 
|                 
|                 
|                 
|                 
|June 30, 2001     |  |               | 3.25 to 1.00 | 
|                 
|                 
|                 
|                 
|Thereafter        |  |               | 3.00 to 1.00 | 

Dial was in compliance with all covenants under the credit
facility at December 31, 2000. As previously disclosed, we
are reviewing strategic alternatives with respect to our
Specialty Personal Care business, while working aggressively to
improve the performance of this business. At this time, we
believe that if a decision is made in the future to divest of
this business, a write-down of assets to their estimated market
value would be required. If this takes place, we will need our
lenders waiver or amendment of our minimum net worth
covenant because the estimated resulting write-down of assets
would violate this covenant.

43



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Interest expense incurred in 2000, 1999 and 1998 was, in
thousands, $42,387, $22,053 and $10,526, respectively. Interest
paid to lenders in 2000, 1999 and 1998 was, in thousands,
$41,058, $21,079 and $9,575, respectively.

The fair value of the Senior Notes was, in thousands, $190,960
and $183,286 at December 31, 2000 and 1999, respectively.

Note 12.  Income Taxes

The deferred income tax assets (liabilities) included in the
Consolidated Balance Sheet at December 31 are related to
the following, in thousands:

|                                    |  |      |         |      |  |   |         |  
|----------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                    |  | 2000 |         | 1999
|                                    |  |      |         |     
|Property, plant and equipment       |  | $    | (36,325 | )    |  | $ | (31,275 | )
|                                   
|                                   
|                                   
|                                   
|Pension and other employee benefits |  |      | 77,259  |      |  |   | 82,405  |  
|                                   
|                                   
|                                   
|                                   
|Reserves, accruals and other        |  |      | 28,040  |      |  |   | 22,885  |  
|                                   
|                                   
|                                   
|                                   
|Deferred state income taxes         |  |      | 5,361   |      |  |   | 9,037   |  
|                                    |  |      |         |      |  |   |         |  
|                                    |  | $    | 74,335  |      |  | $ | 83,052  |  
|                                    |  |      |         |      |  |   |         |  

The combined provision (benefit) for income taxes consisted of
the following, in thousands:

|                                     |                |         |         |        |         |      |        |     |        |   |        |       |        | 
|------------------------------------ | -------------- | ------- | ------- | ------ | ------- | ---- | ------ | --- | ------ | - | ------ | ----- | ------ | 
|                                     |                | 2000    |         | 1999   |         | 1998
|                                     |                |         |         |        |         |     
|Current:                             |                |         |         |        |         |      |        |     |        |   |        |      
|                                    
|                                    
|                                    
|                                    
|                                     | United States: |         |         |        |         |      |        |     |        |   |        |       |       
|                                    
|                                    
|                                    
|                                    
|                                     |                | Federal |         | $      | (11,065 | )    |        | $   | 53,455 |   |        | $     | 21,898 | 
|                                    
|                                    
|                                    
|                                    
|                                     |                | State   |         |        | (5,068  | )    |        |     | 4,762  |   |        |       | 1,677  | 
|                                    
|                                    
|                                    
|                                    
|                                     | Foreign        |         |         | (1,674 | )       |      |        | 165 |        |   |        | 1,151 |       
|                                     |                |         |         |        |         |      |        |     |        |   |        |      
|                                     |                |         | (17,807 | )      |         |      | 58,382 |     |        |   | 24,726 |      
|                                     |                |         |         |        |         |      |        |     |        |   |        |      
|Deferred:                            |                |         |         |        |         |      |        |     |        |   |        |      
|                                    
|                                    
|                                    
|                                    
|                                     | United States: |         |         |        |         |      |        |     |        |   |        |       |       
|                                    
|                                    
|                                    
|                                    
|                                     |                | Federal |         |        | 6,710   |      |        |     | 2,333  |   |        |       | 31,266 | 
|                                    
|                                    
|                                    
|                                    
|                                     |                | State   |         |        | 2,768   |      |        |     | 3,602  |   |        |       | 1,969  | 
|                                     |                |         |         |        |         |      |        |     |        |   |        |      
|                                     |                |         | 9,478   |        |         |      | 5,935  |     |        |   | 33,235 |      
|                                     |                |         |         |        |         |      |        |     |        |   |        |      
|Provision (benefit) for income taxes |                | $       | (8,329  | )      |         | $    | 64,317 |     |        | $ | 57,961 |      
|                                     |                |         |         |        |         |      |        |     |        |   |        |      

Income taxes paid in 2000, 1999 and 1998 amounted to, in
thousands, $27,419, $18,706, and $23,110, respectively.

A reconciliation between the statutory federal income tax rate
and the Companys consolidated effective income tax rate
for each of the years ended December 31, is as follows:

|                                 |  |      |       |      |  |      |      |   |  |  |      |  
|-------------------------------- |  | ---- | ----- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                 |  | 2000 |       | 1999 |  | 1998
|                                 |  |      |       |      |  |     
|Federal statutory rate           |  |      | 35.0  | %    |  |      | 35.0 | % |  |  | 35.0 | %
|                                
|                                
|                                
|                                
|Goodwill amortization            |  |      | (9.4  | )    |  |      | 0.5  |   |  |  | 0.5  |  
|                                
|                                
|                                
|                                
|Foreign Sales Corp. benefit      |  |      | 14.4  |      |  |      | (0.5 | ) |  |  | (0.6 | )
|                                
|                                
|                                
|                                
|State income taxes               |  |      | 7.7   |      |  |      | 3.0  |   |  |  | 3.2  |  
|                                
|                                
|                                
|                                
|Impact of lower foreign tax rate |  |      | 10.5  |      |  |      | (1.9 | ) |  |  | (1.5 | )
|                                
|                                
|                                
|                                
|Joint venture losses             |  |      | (21.2 | )    |  |      | 0.3  |   |  |  | 0.0  |  
|                                
|                                
|                                
|                                
|Other, net                       |  |      | 6.1   |      |  |      | (0.9 | ) |  |  | (.5  | )
|                                 |  |      |       |      |  |      |      |   |  |  |      |  
|Effective income tax rate        |  |      | 43.1  | %    |  |      | 35.5 | % |  |  | 36.1 | %
|                                 |  |      |       |      |  |      |      |   |  |  |      |  

44



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##### Table of Contents



Note 13.  Pension and Other Benefits

Pension Plans.Trusteed, noncontributory pension
plans cover substantially all employees, with benefit levels
supplemented in most cases by defined matching contributions to
employees 401(k) plans. Defined benefits are based
primarily on final average salary and years of service. Funding
policies provide that payments to defined benefit pension trusts
shall be at least equal to the minimum funding required by
applicable regulations.

The following table provides information on the status of the
plans at December 31, in thousands:

|                                                      |  |      |         |      |  |   |         |  
|----------------------------------------------------- |  | ---- | ------- | ---- |  | - | ------- | -
|                                                      |  | 2000 |         | 1999
|                                                      |  |      |         |     
|Change in Projected Benefit Obligation:               |  |      |         |      |  |   |         |  
|                                                     
|                                                     
|                                                     
|                                                     
|Projected benefit obligation at beginning of year     |  | $    | 176,671 |      |  | $ | 189,692 |  
|                                                     
|                                                     
|                                                     
|                                                     
|Service cost                                          |  |      | 4,567   |      |  |   | 5,306   |  
|                                                     
|                                                     
|                                                     
|                                                     
|Interest cost                                         |  |      | 14,766  |      |  |   | 12,964  |  
|                                                     
|                                                     
|                                                     
|                                                     
|Plan amendments                                       |  |      | 5,739   |      |  |   | 193     |  
|                                                     
|                                                     
|                                                     
|                                                     
|Actuarial loss/(gain)                                 |  |      | 2,164   |      |  |   | (20,967 | )
|                                                     
|                                                     
|                                                     
|                                                     
|Other (adjustments to past service costs)             |  |      |        |      |  |   | (576    | )
|                                                     
|                                                     
|                                                     
|                                                     
|Benefits paid                                         |  |      | (10,912 | )    |  |   | (9,941  | )
|                                                      |  |      |         |      |  |   |         |  
|Projected benefit obligation at end of year           |  | $    | 192,995 |      |  | $ | 176,671 |  
|                                                      |  |      |         |      |  |   |         |  
|Change in Plan Assets:                                |  |      |         |      |  |   |         |  
|                                                     
|                                                     
|                                                     
|                                                     
|Fair value of plan assets at beginning of year        |  | $    | 176,165 |      |  | $ | 156,074 |  
|                                                     
|                                                     
|                                                     
|                                                     
|Actual return on plan assets                          |  |      | 30,372  |      |  |   | 28,666  |  
|                                                     
|                                                     
|                                                     
|                                                     
|Company contributions                                 |  |      | 4,268   |      |  |   | 1,366   |  
|                                                     
|                                                     
|                                                     
|                                                     
|Benefits paid                                         |  |      | (10,912 | )    |  |   | (9,941  | )
|                                                      |  |      |         |      |  |   |         |  
|Fair value of plan assets                             |  | $    | 199,893 |      |  | $ | 176,165 |  
|                                                      |  |      |         |      |  |   |         |  
|Reconciliation of Funded Status:                      |  |      |         |      |  |   |         |  
|                                                     
|                                                     
|                                                     
|                                                     
|Funded status                                         |  | $    | 6,898   |      |  | $ | (506    | )
|                                                     
|                                                     
|                                                     
|                                                     
|Unrecognized transition obligation                    |  |      | (53     | )    |  |   | 274     |  
|                                                     
|                                                     
|                                                     
|                                                     
|Unrecognized prior service cost                       |  |      | 9,015   |      |  |   | 4,370   |  
|                                                     
|                                                     
|                                                     
|                                                     
|Unrecognized actuarial gain                           |  |      | (41,437 | )    |  |   | (29,383 | )
|                                                      |  |      |         |      |  |   |         |  
|Accrued pension cost                                  |  | $    | (25,577 | )    |  | $ | (25,245 | )
|                                                      |  |      |         |      |  |   |         |  
|Amounts Recognized in the Consolidated Balance Sheet: |  |      |         |      |  |   |         |  
|                                                     
|                                                     
|                                                     
|                                                     
|Prepaid pension cost                                  |  | $    | 6,000   |      |  | $ | 5,066   |  
|                                                     
|                                                     
|                                                     
|                                                     
|Accrued benefit liability                             |  |      | (31,577 | )    |  |   | (30,311 | )
|                                                     
|                                                     
|                                                     
|                                                     
|Additional minimum liability                          |  |      |        |      |  |   | 0       |  
|                                                      |  |      |         |      |  |   |         |  
|Net amount recognized                                 |  | $    | (25,577 | )    |  | $ | (25,245 | )
|                                                      |  |      |         |      |  |   |         |  

At December 31, 2000 and 1999, the plans held 84,367 shares
of common stock of the Company.

The projected benefit obligation, accumulated benefit obligation
and fair value of plan assets for the pension plans with
accumulated benefit obligations in excess of plan assets were,
in thousands, $9,832, $8,853 and $0, as of December 31,
2000, and $8,124, $6,202 and $0, as of December 31, 1999.

45



---



##### Table of Contents



Components of the net periodic pension cost is summarized in the
following table, in thousands:

|                                          |                                |      |         |       |   |      |         |     |  |   |         |     | 
|----------------------------------------- | ------------------------------ | ---- | ------- | ----- | - | ---- | ------- | --- |  | - | ------- | --- | 
|                                          |                                | 2000 |         | 1999  |   | 1998
|                                          |                                |      |         |       |   |     
|Calculation of Net Periodic Pension Cost: |                                |      |         |       |   |      |         |     |  |   |         |    
|                                         
|                                         
|                                         
|                                         
|Service cost                              |                                | $    | 4,567   |       |   | $    | 5,306   |     |  | $ | 4,230   |    
|                                         
|                                         
|                                         
|                                         
|Interest cost                             |                                |      | 14,766  |       |   |      | 12,964  |     |  |   | 12,239  |    
|                                         
|                                         
|                                         
|                                         
|Expected return on plan assets            |                                |      | (15,683 | )     |   |      | (14,623 | )   |  |   | (13,439 | )  
|                                         
|                                         
|                                         
|                                         
|Amortization of:                          |                                |      |         |       |   |      |         |     |  |   |         |    
|                                         
|                                         
|                                         
|                                         
|                                          | Net transition obligation      |      |         | 327   |   |      |         | 327 |  |   |         | 327 | 
|                                         
|                                         
|                                         
|                                         
|                                          | Unrecognized past service cost |      |         | 1,094 |   |      |         | 515 |  |   |         | 450 | 
|                                         
|                                         
|                                         
|                                         
|                                          | Actuarial (gain) loss          |      |         | (471  | ) |      |         | 434 |  |   |         | 238 | 
|                                          |                                |      |         |       |   |      |         |     |  |   |         |    
|Net periodic pension cost                 |                                | $    | 4,600   |       |   | $    | 4,923   |     |  | $ | 4,045   |    
|                                          |                                |      |         |       |   |      |         |     |  |   |         |    
|Other Comprehensive (Income)/ Loss        |                                | $    | 375     |       |   | $    | (8,981  | )   |  | $ | 9,730   |    
|                                          |                                |      |         |       |   |      |         |     |  |   |         |    
|Discount rate for obligation              |                                |      | 8.00    | %     |   |      | 8.00    | %   |  |   | 7.00    | %  
|                                         
|                                         
|                                         
|                                         
|Long-term rate of investment return       |                                |      | 10.00   | %     |   |      | 10.00   | %   |  |   | 10.00   | %  
|                                         
|                                         
|                                         
|                                         
|Salary increase rate                      |                                |      | 4.00    | %     |   |      | 4.00    | %   |  |   | 4.00    | %  

Defined Contribution Plans.We maintain various
401(K) defined contribution plans whereby employees can
contribute up to 12% of their salary. We contribute to these
plans throughout the year. For the years ended December 31,
2000, December 31, 1999, and December 31, 1998,
defined contribution plan expense was, in thousands, $2,645,
$2,321 and $2,026, respectively.

Multi-Employer Pension Plans.We participate in
two multi-employer pension plans. For the years ended
December 31, 2000, December 31, 1999, and
December 31, 1998, our costs were, in thousands, $1,704,
$1,519 and $1,259, respectively.

Post-Retirement Benefits Other Than Pensions.We
have defined benefit post retirement plans that provide medical
and life insurance for eligible employees, retirees and
dependents. In addition, we retained the obligations for such
benefits for eligible retirees of Armour and Company (sold in
1983).

46



---



##### Table of Contents



We accrue post-retirement benefits other than pensions during
the years the employees provide services. The status of the
plans are as follows as of December 31, in thousands:

|                                                     |  |      |          |      |  |   |          |  
|---------------------------------------------------- |  | ---- | -------- | ---- |  | - | -------- | -
|                                                     |  | 2000 |          | 1999
|                                                     |  |      |          |     
|Change in Benefit Obligation:                        |  |      |          |      |  |   |          |  
|                                                    
|                                                    
|                                                    
|                                                    
|Benefit obligation at beginning of year              |  | $    | 162,143  |      |  | $ | 198,688  |  
|                                                    
|                                                    
|                                                    
|                                                    
|Service cost                                         |  |      | 1,332    |      |  |   | 1,835    |  
|                                                    
|                                                    
|                                                    
|                                                    
|Interest cost                                        |  |      | 13,110   |      |  |   | 12,506   |  
|                                                    
|                                                    
|                                                    
|                                                    
|Plan participants contributions                     |  |      | 968      |      |  |   | 1,022    |  
|                                                    
|                                                    
|                                                    
|                                                    
|Amendments                                           |  |      | (4,868   | )    |  |   | (9,255   | )
|                                                    
|                                                    
|                                                    
|                                                    
|Actuarial loss/(gain)                                |  |      | 9,885    |      |  |   | (24,299  | )
|                                                    
|                                                    
|                                                    
|                                                    
|Benefits paid                                        |  |      | (20,558  | )    |  |   | (18,354  | )
|                                                     |  |      |          |      |  |   |          |  
|Benefit obligation at end of year                    |  | $    | 162,012  |      |  | $ | 162,143  |  
|                                                     |  |      |          |      |  |   |          |  
|Change in Plan Assets:                               |  |      |          |      |  |   |          |  
|                                                    
|                                                    
|                                                    
|                                                    
|Fair value of plan assets at beginning of year       |  | $    |         |      |  | $ |         |  
|                                                    
|                                                    
|                                                    
|                                                    
|Employer contribution                                |  |      | 19,590   |      |  |   | 17,332   |  
|                                                    
|                                                    
|                                                    
|                                                    
|Plan participants contribution                      |  |      | 968      |      |  |   | 1,022    |  
|                                                    
|                                                    
|                                                    
|                                                    
|Benefits paid                                        |  |      | (20,558  | )    |  |   | (18,354  | )
|                                                     |  |      |          |      |  |   |          |  
|Fair value of plan assets at end of year             |  | $    |         |      |  | $ |         |  
|                                                     |  |      |          |      |  |   |          |  
|Funded status                                        |  | $    | (162,012 | )    |  | $ | (162,143 | )
|                                                    
|                                                    
|                                                    
|                                                    
|Unrecognized net gain                                |  |      | (24,221  | )    |  |   | (34,421  | )
|                                                    
|                                                    
|                                                    
|                                                    
|Unrecognized prior service cost                      |  |      | (18,685  | )    |  |   | (20,842  | )
|                                                     |  |      |          |      |  |   |          |  
|Accrued benefit cost                                 |  | $    | (204,918 | )    |  | $ | (217,406 | )
|                                                     |  |      |          |      |  |   |          |  
|Amounts Recognized in the Consolidated Balance Sheet |  | $    | (204,918 | )    |  | $ | (217,406 | )
|                                                     |  |      |          |      |  |   |          |  

|                              |               |                          |  |      |   |      |  |      |   |  |  |      |  
|----------------------------- | ------------- | ------------------------ |  | ---- | - | ---- |  | ---- | - |  |  | ---- | -
|                              |               |                         
|                              |               | Years ended December 31,
|                              |               |                         
|                              |               | 2000                     |  | 1999 |   | 1998
|                              |               |                          |  |      |   |     
|Weighted-average assumptions: |               |                          |  |      |   |      |  |      |   |  |  |     
|                             
|                             
|                             
|                             
|                              | Discount rate |                          |  | 8.00 | % |      |  | 8.00 | % |  |  | 7.00 | %

The assumed health care cost trend rate used to measure the
accumulated post-retirement benefit obligation for retirees
below the age of 65 for 2000 is 7.0%, and for retirees above age
65 for 2000 is 6.0%, both gradually declining to an ultimate
rate of 5% in 2002.

|                          |                                 |                          |        |        |   |      |        |        |   |   |        |        |  
|------------------------- | ------------------------------- | ------------------------ | ------ | ------ | - | ---- | ------ | ------ | - | - | ------ | ------ | -
|                          |                                 |                         
|                          |                                 | Years ended December 31,
|                          |                                 |                         
|                          |                                 | 2000                     |        | 1999   |   | 1998
|                          |                                 |                          |        |        |   |     
|                          |                                 |                         
|                          |                                 | (in thousands)          
|                         
|                         
|                         
|                         
|Service cost              |                                 | $                        | 1,332  |        |   | $    | 1,835  |        |   | $ | 2,005  |       
|                         
|                         
|                         
|                         
|Interest cost             |                                 |                          | 13,110 |        |   |      | 12,506 |        |   |   | 13,994 |       
|                         
|                         
|                         
|                         
|Amortization of:          |                                 |                          |        |        |   |      |        |        |   |   |        |       
|                         
|                         
|                         
|                         
|                          | Unrecognized prior service cost |                          |        | (2,442 | ) |      |        | (1,727 | ) |   |        | (1,172 | )
|                         
|                         
|                         
|                         
|                          | Actuarial gain                  |                          |        | (1,042 | ) |      |        | (1,751 | ) |   |        | (1,670 | )
|                          |                                 |                          |        |        |   |      |        |        |   |   |        |       
|Net periodic benefit cost |                                 | $                        | 10,958 |        |   | $    | 10,863 |        |   | $ | 13,157 |       
|                          |                                 |                          |        |        |   |      |        |        |   |   |        |       
|Curtailment Gain          |                                 | $                        | (4,583 | )      |   | $    |       |        |   | $ |       |       
|                          |                                 |                          |        |        |   |      |        |        |   |   |        |       

The 2000, 1999 and 1998 components of net periodic post
retirement benefit cost reflect expense of approximately $7.9
million, $5.7 million and $6.8 million, respectively, incurred
on the Armour employee benefit liabilities, which are included
in Interest and Other Expenses in the Statement of
Consolidated Operations.

47



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##### Table of Contents



Effect of one-percentage-point change in assumed health care
cost trend rates:

|                                                            |  |          |        |            |  |   |         |  
|----------------------------------------------------------- |  | -------- | ------ | ---------- |  | - | ------- | -
|                                                            |  | Increase |        | (Decrease)
|                                                            |  |          |        |           
|Effect on the total of service and interest cost components |  | $        | 1,132  |            |  | $ | (1,075  | )
|                                                           
|                                                           
|                                                           
|                                                           
|Effect on accumulated post-retirement benefit obligation    |  | $        | 11,858 |            |  | $ | (10,863 | )

Note 14.  Stock Options

On August 15, 1996, we were spun-off from our former
parent. Options granted between 1990 and 1996 to certain
officers and employees to acquire our common stock were granted
under our former parents stock option plans. These options
have been adjusted for stock splits and the Spin-off. These
options were granted at the market prices on the dates of grant,
became exercisable 50% after one year and 100% after two years
and expire after 10 years. No additional options will be
granted under these plans.

We adopted The Dial Corporation Stock Incentive Plan in 1996
(1996 Plan) which is administered by the Executive
Compensation Committee of the Board of Directors. Under the 1996
Plan, the aggregate number of shares of common and preferred
stock covered by awards to any one individual cannot exceed
1,000,000 shares for any three-year period and no more than
9,600,000 shares are cumulatively available for options intended
to qualify as incentive stock options under the
Internal Revenue Code. The term of the options is 10 years.
The Plan provides that options are generally to be granted at
the market price on the date of grant; however, the Executive
Compensation Committee may grant options at less than such
market price. The 1996 Plan also authorizes the issuance of
stock appreciation rights and restricted stock. There were
150,986 shares of restricted stock awarded during the year ended
December 31, 2000. The vesting period for these restricted
stock awards ranges from 2 to 5 years.

Under the 1996 Plan, options to purchase 2,881,915 shares were
granted at the market price on the dates of grant during 2000.
These options become one-third exercisable after one year,
two-thirds exercisable after two years, and 100% exercisable
after three years. The options expire after 10 years.

During 2000, options to purchase 67,500 shares were granted at
prices, which were either equal to or above the market price on
the dates of grant. After one year, one-third of the options
become exercisable when the average closing market price over 20
consecutive days equals or exceeds 120% of the option price.
After two years, two-thirds of the options become exercisable
when such price equals or exceeds 140% of the option price. The
options become 100% exercisable after three years and when such
price equals or exceeds 160% of the option price. All such
options become exercisable, in any event, after 5 years
from the date of grant.

Additionally during 2000, options to purchase 50,000 shares were
granted at the market price on the date of grant. These options
are 100% exercisable 6 months after the date of grant. The
options expire after 2.5 years.

During 2000, options to purchase 104,600 shares were also
granted to non-employee members of the Board of Directors at the
market price on the date of grant. Of these options issued,
74,100 are exercisable 50% after one year and 100% after two
years, while the balance of 30,500 shares, which were issued in
exchange for Director fees, are 100% exercisable on the date of
grant. The options expire after 10 years.

48



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##### Table of Contents



A summary of the status of our stock option plans as of
December 31, 2000, and changes during the fiscal years
1998, 1999 and 2000, are presented below:

|                                   |           |        |           |                  |   |   |       |       | 
|---------------------------------- | --------- | ------ | --------- | ---------------- | - | - | ----- | ----- | 
|                                   |           |        |           | Weighted Average
|                                   |           | Shares |           | Exercise Price  
|                                   |           |        |           |                 
|Outstanding at January 3, 1998     |           |        | 8,980,921 |                  |   | $ | 12.60 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Granted   |        |           | 328,106          |   |   |       | 23.78 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Exercised |        |           | (2,253,436       | ) |   |       | 11.62 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Canceled  |        |           | (701,845         | ) |   |       | 14.29 | 
|                                   |           |        |           |                  |   |   |       |      
|Outstanding at December 31,1998    |           |        | 6,353,746 |                  |   |   | 13.34 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Granted   |        |           | 1,834,782        |   |   |       | 29.19 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Exercised |        |           | (1,591,332       | ) |   |       | 12.39 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Canceled  |        |           | (90,142          | ) |   |       | 21.83 | 
|                                   |           |        |           |                  |   |   |       |      
|Outstanding at December 31, 1999   |           |        | 6,507,054 |                  |   |   | 17.90 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Granted   |        |           | 3,104,015        |   |   |       | 19.85 | 
|                                  
|                                  
|                                  
|                                  
|                                   | Exercised |        |           | (100,620         | ) |   |       | 7.90  | 
|                                  
|                                  
|                                  
|                                  
|                                   | Canceled  |        |           | (1,263,061       | ) |   |       | 19.92 | 
|                                   |           |        |           |                  |   |   |       |      
|Outstanding at December 31, 2000   |           |        | 8,247,388 |                  |   |   | 16.29 |      
|                                   |           |        |           |                  |   |   |       |      
|Options exercisable at end of year |           |        | 4,025,973 |                  |   | $ | 13.01 |      
|                                   |           |        |           |                  |   |   |       |      

The following table summarizes information about stock options
outstanding and exercisable at December 31, 2000:

|                |               |             |  |             |           |          |  |             |     |          |  |   |       |  |  |  |           |  |  |   |       | 
|--------------- | ------------- | ----------- |  | ----------- | --------- | -------- |  | ----------- | --- | -------- |  | - | ----- |  |  |  | --------- |  |  | - | ----- | 
|                |               |             |  | Weighted    |           |          |  |             |     |         
|                |               |             |  | Average     |           |          |  |             |     |         
|                |               |             |  | Remaining   |           | Weighted |  |             |     | Weighted
|                |               |             |  | Contractual |           | Average  |  |             |     | Average 
|Range of        |               | Options     |  | Life        |           | Exercise |  | Options     |     | Exercise
|Exercise Prices |               | Outstanding |  | (in years)  |           | Price    |  | Exercisable |     | Price   
|                |               |             |  |             |           |          |  |             |     |         
|                | $ 5.62-$ 7.31 |             |  |             | 102,988   |          |  |             | .6  |          |  | $ | 6.88  |  |  |  | 102,988   |  |  | $ | 6.88  | 
|                | $ 7.32-$10.96 |             |  |             | 748,284   |          |  |             | 5.2 |          |  |   | 9.94  |  |  |  | 418,884   |  |  |   | 9.30  | 
|                | $10.97-$14.61 |             |  |             | 3,564,394 |          |  |             | 5.6 |          |  |   | 12.86 |  |  |  | 3,113,194 |  |  |   | 13.00 | 
|                | $14.62-$18.27 |             |  |             | 2,065,500 |          |  |             | 8.4 |          |  |   | 15.07 |  |  |  | 252,961   |  |  |   | 16.49 | 
|                | $18.28-$21.92 |             |  |             | 145,230   |          |  |             | 7.5 |          |  |   | 21.34 |  |  |  | 62,786    |  |  |   | 21.09 | 
|                | $21.93-$25.57 |             |  |             | 217,854   |          |  |             | 8.2 |          |  |   | 23.54 |  |  |  | 52,401    |  |  |   | 23.35 | 
|                | $25.58-$29.23 |             |  |             | 154,138   |          |  |             | 8.0 |          |  |   | 27.39 |  |  |  | 22,759    |  |  |   | 26.53 | 
|                | $29.24-$32.88 |             |  |             | 1,240,000 |          |  |             | 8.2 |          |  |   | 29.73 |  |  |  |           |  |  |   |       | 
|                | $32.89-$36.53 |             |  |             | 9,000     |          |  |             | 7.9 |          |  |   | 35.36 |  |  |  |           |  |  |   |       | 
|                |               |             |  |             |           |          |  |             |     |          |  |   |       |  |  |  |           |  |  |   |       | 
|                |               |             |  |             | 8,247,388 |          |  |             | 6.7 |          |  | $ | 16.29 |  |  |  | 4,025,973 |  |  | $ | 13.01 | 
|                |               |             |  |             |           |          |  |             |     |          |  |   |       |  |  |  |           |  |  |   |       | 

The Company applies Accounting Principles Board Opinion
No. 25 and related Interpretations in accounting for its
stock option plans. The Company has adopted the disclosure-only
provisions of Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based
Compensation. Accordingly, no compensation cost has been
recognized for the stock option plans. Had compensation cost for
the Companys stock option plans been determined based on
the fair value at the grant date consistent with the provisions
of SFAS No. 123, the Companys net income (loss) and
net income (loss) per share would have been reduced to the pro
forma amounts indicated below.

Average assumptions used in determining the estimated fair value
of stock options under the Black-Scholes valuation model, and
the estimated fair values are as follows.

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##### Table of Contents



|                                           |  |      |      |      |  |      |       |   |  |   |      |  
|------------------------------------------ |  | ---- | ---- | ---- |  | ---- | ----- | - |  | - | ---- | -
|                                           |  | 2000 |      | 1999 |  | 1998
|                                           |  |      |      |      |  |     
|Estimated fair value of options, per share |  | $    | 4.16 |      |  | $    | 10.27 |   |  | $ | 6.63 |  
|                                          
|                                          
|                                          
|                                          
|Expected average risk-free interest rate   |  |      | 6.4  | %    |  |      | 5.8   | % |  |   | 4.9  | %
|                                          
|                                          
|                                          
|                                          
|Expected life in years                     |  |      | 3.1  |      |  |      | 5.0   |   |  |   | 4.6  |  
|                                          
|                                          
|                                          
|                                          
|Expected volatility                        |  |      | 35.0 | %    |  |      | 30.0  | % |  |   | 27.5 | %
|                                          
|                                          
|                                          
|                                          
|Expected dividend rate                     |  |      | 1.2  | %    |  |      | 1.1   | % |  |   | 1.4  | %

|                                                     |  |                |         |      |  |      |         |  |  |   |         | 
|---------------------------------------------------- |  | -------------- | ------- | ---- |  | ---- | ------- |  |  | - | ------- | 
|                                                     |  | 2000           |         | 1999 |  | 1998
|                                                     |  |                |         |      |  |     
|                                                     |  |               
|                                                     |  | (in thousands)
|                                                    
|                                                    
|                                                    
|                                                    
|Net income (loss) as reported                        |  | $              | (11,008 | )    |  | $    | 116,766 |  |  | $ | 102,616 | 
|                                                     |  |                |         |      |  |      |         |  |  |   |         | 
|Pro forma net income (loss)                          |  | $              | (12,938 | )    |  | $    | 115,073 |  |  | $ | 96,912  | 
|                                                     |  |                |         |      |  |      |         |  |  |   |         | 
|Net income (loss) per share  basic 
	as reported   |  | $              | (.12    | )    |  | $    | 1.19    |  |  | $ | 1.04    | 
|                                                     |  |                |         |      |  |      |         |  |  |   |         | 
|Pro forma net income (loss) per share  basic        |  | $              | (.14    | )    |  | $    | 1.17    |  |  | $ | 0.99    | 
|                                                     |  |                |         |      |  |      |         |  |  |   |         | 
|Net income (loss) per share  diluted 
	as reported |  | $              | (.12    | )    |  | $    | 1.17    |  |  | $ | 1.02    | 
|                                                     |  |                |         |      |  |      |         |  |  |   |         | 
|Pro forma net income (loss) per share  diluted      |  | $              | (.14    | )    |  | $    | 1.15    |  |  | $ | 0.96    | 
|                                                     |  |                |         |      |  |      |         |  |  |   |         | 

We adopted the Dial Corporation Employee Stock Purchase Plan
(ESPP) in 2000. Under this plan, up to 650,000
shares of common stock may be purchased by eligible Dial
employees through payroll deductions of up to 15% of their
eligible compensation, not to exceed $25,000. The purchase price
is equal to the lesser of (a) 85% of the fair market value
of the stock on first day of the offering period or (b) 85%
of the fair market value of the stock on the last day of the
offering period. During 2000, employees purchased approximately
33,075 shares under the ESPP.

Note 15.  Leases

Certain sales and administration offices and equipment are
leased. The leases expire in periods ranging generally from one
to five years, and some provide for renewal options ranging from
one to eight years. Leases that expire are generally renewed or
replaced by similar leases, depending on business needs at that
time. Net rent expense paid in 2000, 1999 and 1998 totaled, in
thousands, $12,129, $10,299 and $8,989.

At December 31, 2000, the Companys future minimum
rental payments with respect to noncancelable operating leases
with terms in excess of one year were as follows, in thousands:,
$10,110 (2001), $8,447 (2002), $6,144 (2003), $5,976 (2004),
$5,509 (2005), and $14,317 thereafter.

Note 16.  Financial Instruments with Off-Balance-Sheet
Risk and Fair Value of Financial Instruments

Financial Instruments with Off-Balance-Sheet Risk

Sale of Receivables

At December 31, 1999, we had an agreement to sell undivided
participating interests in a defined pool of trade accounts
receivable in an amount not to exceed $115 million as a means of
accelerating cash flow. From time to time, as collections reduce
accounts receivable in the pool, we sold participating interests
in new receivables. During 2000, we discontinued this program.
Our expense of selling receivables amounted to approximately, in
thousands, $4,993 and $4,295 in 1999 and 1998, respectively, and
are included in the Statement of Consolidated Operations under
the caption Interest and Other Expenses. Under the
terms of the agreement, we retained substantially the same risk
of credit loss as if the receivables had not been sold, as we
were obligated to replace uncollectible receivables with new
accounts receivable. Our accounts receivable sold totaled, in
thousands, $73,177 and $90,000 at December 31, 1999, and
1998, respectively. Our average accounts receivable sold
approximated, in thousands, $90,300 and $82,144 during 1999 and
1998.

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##### Table of Contents



Commodity Price Management

In the manufacture of our products we utilize a number of
commodities, such as tallow, coconut oil and meat. In addition,
we use a variety of products that are priced based on underlying
commodities, such as plastic bottles (resin). In the normal
course of business, we attempt to enter into supply agreements
that generally fix or set a range of prices of goods to be
purchased. These supply agreements can cover up to
12 months of supply for goods. Financial derivatives to
hedge or lock in the prices of these commodities over the long
term (greater than one year) generally are not available.

We do utilize financial derivatives to fix the price of the raw
material component of the cardboard boxes and packaging we use
in our business. Our purchase contracts with our cardboard box
suppliers have provisions that allow the raw material component
of the box price to reset based on movements in the price of
cardboard. This component is based on the Pulp & Paper
Week42 lb. linerboard price index. We have entered into a
series of contracts for 2001 covering a notional amount of
18,000 tons that allow us to pay a weighted average fixed price
per ton of cardboard of $470.00 and receive payments based on
the Pulp & Paper Week index. At December 31, 2000, the
Pulp & Paper Week index price was $475/ton. Open contracts
had a fair market gain associated with them of approximately
$90,000.

Employee Benefit Plan Expense

We offer our directors and management deferred compensation
plans. Under these plans, participants can defer a portion of
their compensation into Dial stock units. For deferrals made in
1999 and 2000, deferred compensation due to participants is
included on the balance sheet in Stockholders Equity under
the caption Employee Benefits with no recognition of
any investment gains or losses. The deferred funds are placed in
a Rabbi Trust using shares of Dial common stock. The Trust is
also included on the balance sheet in Stockholders Equity
under the caption Employee Benefits.

Deferrals made in 1998 were placed in a Rabbi Trust, which
purchases life insurance policies on the participants
lives, with Dial as the beneficiary. The policies have cash
surrender value that accrue tax-free earnings largely based on
the performance of the S&P 500. To the extent that the
return on Dial shares is different from that of the S&P 500,
income or expense is generated by the plans.

We have entered into a contract with a financial institution
that provides for an exchange of payments based on the relative
performance of our common shares and the S&P 500. The
contract has a notional amount of 244,000 Dial common shares and
5,200 S&P 500 futures contracts and is renewable
quarterly. At the time of renewal, the index price of Dial
shares and the S&P 500 resets to the current market price.
Any income or loss generated by the contract is recognized in
the income statement and offsets the income statement impact of
the deferred compensation plan. Because the contract renews near
the end of each quarter, its market value at the end of each
quarter (and accordingly, at December 31, 2000)
approximates zero.

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, receivables,
accounts payable and short-term bank borrowings approximate fair
values due to the short-term maturities of these instruments.

Note 17.  Segments of an Enterprise

For organizational, marketing and financial reporting purposes,
we have organized into four business segments: (i) Domestic
Branded, (ii) Specialty Personal Care,
(iii) International, and (iv) Commercial Markets and
Other. The segments were identified based on the types of
products sold, the customer base, economic characteristics and
method of distribution.

The Domestic Branded business segment consists of four
aggregated operating segments that manufacture and market
nondurable consumer packaged goods through grocery store, drug
store and mass merchandiser retail outlets. It is comprised of
the Personal Cleansing, Laundry Care, Air Fresheners and Food
Products operating segments. Our subsidiary, ISC International,
Ltd., a manufacturer of translucent soaps, is

51



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##### Table of Contents





During the third quarter of 2000, we began reflecting our
Specialty Personal Care business as a separate reportable
segment. Prior to the third quarter of 2000, this business was
included with our Domestic Branded segment. This change occurred
as a result of recurring differences in economic characteristics
between Dials Specialty Personal Care and Domestic Branded
businesses. Our previous segment disclosures have been restated
to reflect this presentation.

The Specialty Personal Care business segment includes the
following three brands: Freeman, Sarah Michaels, and
Natures Accents. We acquired Freeman, a leading
manufacturer and marketer of skin, hair, bath, body and foot
care products utilizing natural ingredients all sold under the
Freemanbrand name, on July 1, 1998. We also
acquired Sarah Michaels, a leading marketer of premium specialty
bath and body products, including body washes, body mists,
luxury soaps, hand and body lotions, loofahs, sponges and
brushes distributed under the Sarah Michaelsbrand name,
on September 14, 1998. These two acquisitions were combined
with our Natures Accentsline of translucent soaps
and specialty care products to create the Specialty Personal
Care franchise. The Natures Accents product line was
discontinued in the third quarter of 2000.

The International business segment consists of our sale of
consumer products outside of the United States, principally in
Argentina, Canada, Mexico, Puerto Rico and the Caribbean.

Our Commercial Markets and Other business sells our products,
both branded and nonbranded, through the commercial channel to
end users such as hotels, hospitals and schools. In addition,
Commercial Markets includes sales of chemicals (principally
glycerin, soap pellets and fatty acids) that are by-products of
the soap making process.

Information as to our operations in different business segments
is set forth below. The calculation of Operating Income for each
segment includes an allocation of general and administrative
expenses based on each segments share of consolidated net
sales. The accounting policies of the business segments are the
same as those described in the summary of significant accounting
policies (Note 2).

|                           |      |          |   |           |  |            |   |          |   |               |   |        |  |  |   |           |   |  |   |         |  |  |   |           |  
|-------------------------- | ---- | -------- | - | --------- |  | ---------- | - | -------- | - | ------------- | - | ------ |  |  | - | --------- | - |  | - | ------- |  |  | - | --------- | -
|                           |      |          |   | Specialty |  | Commercial |   |          |   |               |   |       
|                           |      | Domestic |   | Personal  |  | Markets    |   | Total    |   |               |   |       
|(1999 and 1998 restated)   |      | Branded  |   | Care      |  | and Other  |   | Domestic |   | International |   | Total 
|                           |      |          |   |           |  |            |   |          |   |               |   |       
|Net Sales:                 |      |          |   |           |  |            |   |          |   |               |   |        |  |  |   |           |   |  |   |         |  |  |   |          
|                          
|                          
|                          
|                          
|                           | 2000 |          | $ | 1,269,068 |  |            | $ | 109,003  |   |               | $ | 65,613 |  |  | $ | 1,443,684 |   |  | $ | 194,856 |  |  | $ | 1,638,540 |  
|                          
|                          
|                          
|                          
|                           | 1999 |          |   | 1,346,589 |  |            |   | 130,795  |   |               |   | 69,583 |  |  |   | 1,546,967 |   |  |   | 174,599 |  |  |   | 1,721,566 |  
|                          
|                          
|                          
|                          
|                           | 1998 |          |   | 1,222,031 |  |            |   | 69,241   |   |               |   | 69,102 |  |  |   | 1,360,374 |   |  |   | 164,143 |  |  |   | 1,524,517 |  
|                          
|                          
|                          
|                          
|Operating Income:          |      |          |   |           |  |            |   |          |   |               |   |        |  |  |   |           |   |  |   |         |  |  |   |          
|                          
|                          
|                          
|                          
|                           | 2000 |          |   | 101,432   |  |            |   | (62,154  | ) |               |   | 11,897 |  |  |   | 51,175    |   |  |   | 8,166   |  |  |   | 59,341    |  
|                          
|                          
|                          
|                          
|                           | 1999 |          |   | 188,445   |  |            |   | (198     | ) |               |   | 9,185  |  |  |   | 197,432   |   |  |   | 17,710  |  |  |   | 215,142   |  
|                          
|                          
|                          
|                          
|                           | 1998 |          |   | 155,255   |  |            |   | 6,431    |   |               |   | 9,081  |  |  |   | 170,767   |   |  |   | 13,168  |  |  |   | 183,935   |  
|                          
|                          
|                          
|                          
|Capital Expenditures:      |      |          |   |           |  |            |   |          |   |               |   |        |  |  |   |           |   |  |   |         |  |  |   |          
|                          
|                          
|                          
|                          
|                           | 2000 |          |   | 33,850    |  |            |   | 3,696    |   |               |   | 880    |  |  |   | 38,426    |   |  |   | 7,459   |  |  |   | 45,885    |  
|                          
|                          
|                          
|                          
|                           | 1999 |          |   | 54,410    |  |            |   | 973      |   |               |   | 63     |  |  |   | 55,446    |   |  |   | 7,049   |  |  |   | 62,495    |  
|                          
|                          
|                          
|                          
|                           | 1998 |          |   | 38,315    |  |            |   | 724      |   |               |   | 198    |  |  |   | 39,237    |   |  |   | 11,093  |  |  |   | 50,330    |  
|                          
|                          
|                          
|                          
|Acquisition of Businesses: |      |          |   |           |  |            |   |          |   |               |   |        |  |  |   |           |   |  |   |         |  |  |   |          
|                          
|                          
|                          
|                          
|                           | 2000 |          |   | 72,173    |  |            |   | (4,600   | ) |               |   |        |  |  |   | 67,573    |   |  |   | 46,929  |  |  |   | 114,502   |  
|                          
|                          
|                          
|                          
|                           | 1999 |          |   |           |  |            |   | (6,046   | ) |               |   |        |  |  |   | (6,046    | ) |  |   |         |  |  |   | (6,046    | )
|                          
|                          
|                          
|                          
|                           | 1998 |          |   |           |  |            |   | 271,043  |   |               |   |        |  |  |   | 271,043   |   |  |   |         |  |  |   | 271,043   |  
|                          
|                          
|                          
|                          
|Assets at year end:        |      |          |   |           |  |            |   |          |   |               |   |        |  |  |   |           |   |  |   |         |  |  |   |          
|                          
|                          
|                          
|                          
|                           | 2000 |          |   | 912,193   |  |            |   | 259,026  |   |               |   | 12,237 |  |  |   | 1,183,456 |   |  |   | 198,515 |  |  |   | 1,381,971 |  
|                          
|                          
|                          
|                          
|                           | 1999 |          |   | 794,210   |  |            |   | 285,512  |   |               |   | 10,058 |  |  |   | 1,089,780 |   |  |   | 179,906 |  |  |   | 1,269,686 |  
|                          
|                          
|                          
|                          
|                           | 1998 |          |   | 743,284   |  |            |   | 291,141  |   |               |   | 10,005 |  |  |   | 1,044,430 |   |  |   | 130,945 |  |  |   | 1,175,375 |  

52



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Wal-Mart, including its affiliate Sams Club, was our
largest customer in 2000, 1999 and 1998, accounting for
approximately 21%, 18%, and 17%, respectively, of net sales. No
other customer accounted for more than 10% of net sales in 2000,
1999 or 1998. Net sales in Argentina were $119.6 million, $87.0
million and $85.1 million in 2000, 1999 and 1998, respectively.

Note 18.  Condensed Consolidated Quarterly Results
(Unaudited)

|                            |           |                                          |         |                |  |               |         |                |  |         |         |      |  |         |         |      |  |   |         |       |   |   |         |      |  |   |         |       |   |   |         |      | 
|--------------------------- | --------- | ---------------------------------------- | ------- | -------------- |  | ------------- | ------- | -------------- |  | ------- | ------- | ---- |  | ------- | ------- | ---- |  | - | ------- | ----- | - | - | ------- | ---- |  | - | ------- | ----- | - | - | ------- | ---- | 
|                            |           |                                          |         |                |  |               |         |               
|                            |           | First Quarter                            |         | Second Quarter |  | Third Quarter |         | Fourth Quarter
|                            |           |                                          |         |                |  |               |         |               
|                            |           | 2000                                     |         | 1999           |  | 2000(1)       |         | 1999           |  | 2000(1) |         | 1999 |  | 2000(1) |         | 1999
|                            |           |                                          |         |                |  |               |         |                |  |         |         |      |  |         |         |     
|                            |           |                                         
|                            |           | (000 omitted, except for per share data)
|                           
|                           
|                           
|                           
|Net sales                   |           | $                                        | 373,124 |                |  | $             | 398,948 |                |  | $       | 408,741 |      |  | $       | 430,312 |      |  | $ | 411,149 |       |   | $ | 437,055 |      |  | $ | 445,526 |       |   | $ | 455,251 |     
|                           
|                           
|                           
|                           
|Gross profit                |           | $                                        | 184,613 |                |  | $             | 196,565 |                |  | $       | 182,607 |      |  | $       | 219,061 |      |  | $ | 165,096 |       |   | $ | 216,961 |      |  | $ | 209,637 |       |   | $ | 228,168 |     
|                           
|                           
|                           
|                           
|Operating income (loss)     |           | $                                        | 43,182  |                |  | $             | 48,995  |                |  | $       | 9,430   |      |  | $       | 54,498  |      |  | $ | (17,021 | )     |   | $ | 55,615  |      |  | $ | 23,750  |       |   | $ | 56,034  |     
|                           
|                           
|                           
|                           
|Net income (loss)           |           | $                                        | 21,498  |                |  | $             | 25,886  |                |  | $       | 1,129   |      |  | $       | 29,433  |      |  | $ | (26,166 | )     |   | $ | 30,749  |      |  | $ | (7,469  | )     |   | $ | 30,698  |     
|Net income (loss) per share |           |                                          |         |                |  |               |         |                |  |         |         |      |  |         |         |      |  |   |         |       |   |   |         |      |  |   |         |       |   |   |         |     
|                           
|                           
|                           
|                           
|                            |  Basic   |                                          | $       | 0.23           |  |               | $       | 0.26           |  |         | $       | 0.01 |  |         | $       | 0.30 |  |   | $       | (0.29 | ) |   | $       | 0.31 |  |   | $       | (0.08 | ) |   | $       | 0.32 | 
|                           
|                           
|                           
|                           
|                            |  Diluted |                                          | $       | 0.23           |  |               | $       | 0.26           |  |         | $       | 0.01 |  |         | $       | 0.29 |  |   | $       | (0.29 | ) |   | $       | 0.31 |  |   | $       | (0.08 | ) |   | $       | 0.31 | 




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes restructuring and special charges of $13.8 million,
	$33.6 million and $16.4 million, all net of tax, in the second,
	third and fourth quarters respectively. These charges are
	partially offset by special gains (net of tax) of $4.1 million
	in the second quarter and $ 2.9 million in the third quarter.
	The fourth quarter also includes a charge of $1.2 million net of
	tax recognized as a result of our DCI lease modification.

Note 19.  Litigation and Claims

On May 21, 1999, we were served with a complaint filed by
the U.S. Equal Employment Opportunity Commission (the
EEOC) in the U.S. District Court for the Northern
District of Illinois, Eastern Division. This action is entitled
Equal Employment Opportunity Commission v. The Dial
Corporation, Civil Action No. 99 C 3356. The
EEOC alleges that Dial has engaged in a pattern and practice of
discrimination against a class of female employees by subjecting
them to sexual or sex-based harassment and failing to take
prompt remedial action after these employees complained about
this alleged harassment. The EEOC is seeking to enjoin Dial from
this alleged harassment, to require us to train our managerial
employees regarding the requirements of Title VII of the
Civil Rights Act of 1964 and to recover unspecified compensatory
and punitive damages. We have denied the EEOCs
allegations. Discovery has been completed and we have filed
dispositive motions. Based upon our insurance coverage for this
lawsuit, we currently do not believe that this lawsuit will have
a material adverse effect on our operating results or financial
condition. However, assurances cannot be given regarding the
ultimate outcome of this matter.

We are party to various legal actions, proceedings and pending
claims. Some of the foregoing involve, or may involve,
compensatory, punitive or other damages in material amounts.
Litigation is subject to many uncertainties, and it is possible
that some of the legal actions, proceedings and claims referred
to above could be decided against us. Although the amount of
liability at December 31, 2000, with respect to these
matters is not ascertainable, we believe that any resulting
liability will not materially affect the Companys
financial position or results of operations.

We are subject to various environmental laws and regulations of
the United States, as well as states and other countries in
whose jurisdictions we have or had operations and are subject to
certain international agreements. As is the case with many
companies, we face exposure to actual or potential claims and
lawsuits involving environmental matters. Although we are party
to certain environmental disputes, we believe that any
liabilities resulting therefrom, after taking into consideration
amounts already provided for, but exclusive of any potential
insurance recoveries, will not have a material adverse effect on
our financial position or results of operations. As of
December 31, 2000, we had accrued in our financial
statements approximately $1.2 million in reserves for
expenses related to Superfund and clean-up of closed plant sites.

53



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##### Table of Contents






Item 9.  Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure

We have never filed a Current Report on Form 8-K to report
a change in accountants.




Item 10.  Directors and Executive Officers
of the Registrant

Information concerning Dials Directors and Executive
Officers is set forth below and under the caption
Section 16(a) Beneficial Ownership Reporting
Compliance in our Proxy Statement relating to the 2001
Annual Meeting of Stockholders to be held on June 7, 2001
(the Proxy Statement), which is incorporated by
reference into this Form 10-K. With the exception of this
foregoing information and other information specifically
incorporated by reference into this Form 10-K, the Proxy
Statement is not being filed as a part hereof.

|                               |  |     |    |          |  |                                                                
|------------------------------ |  | --- | -- | -------- |  | ---------------------------------------------------------------
|Name                           |  | Age |    | Position
|                               |  |     |    |         
|Herbert M. Baum(1)             |  |     | 64 |          |  | Chairman of the Board, President and Chief Executive Officer   
|                              
|                              
|                              
|                              
|Conrad A. Conrad               |  |     | 55 |          |  | Executive Vice President and Chief Financial Officer           
|                              
|                              
|                              
|                              
|Mark R. Shook                  |  |     | 46 |          |  | Executive Vice President-International and Business Development
|                              
|                              
|                              
|                              
|Bernhard J. Welle              |  |     | 52 |          |  | Executive Vice President-Shared Services                       
|                              
|                              
|                              
|                              
|Arthur E. Hanke                |  |     | 53 |          |  | Senior Vice President-Sales                                    
|                              
|                              
|                              
|                              
|Christopher J. Littlefield     |  |     | 34 |          |  | Senior Vice President, General Counsel and Secretary           
|                              
|                              
|                              
|                              
|John F. Tierney                |  |     | 48 |          |  | Senior Vice President and Controller                           
|                              
|                              
|                              
|                              
|Mark L. Whitehouse             |  |     | 44 |          |  | Senior Vice President-Specialty Personal Care                  
|                              
|                              
|                              
|                              
|Mark J. Preston                |  |     | 47 |          |  | Vice President and General Manager-Air Fresheners              
|                              
|                              
|                              
|                              
|Brian T. Shook                 |  |     | 38 |          |  | Vice President and General Manager-Food Products               
|                              
|                              
|                              
|                              
|Greg A. Tipsord                |  |     | 35 |          |  | Vice President and General Manager-Personal Cleansing          
|                              
|                              
|                              
|                              
|Stephen L. Tooker              |  |     | 41 |          |  | Vice President and General Manager-Laundry Care                
|                              
|                              
|                              
|                              
|Joy A. Amundson(3)(5)          |  |     | 46 |          |  | Director                                                       
|                              
|                              
|                              
|                              
|Joe T. Ford(1)(2)(5)           |  |     | 63 |          |  | Director                                                       
|                              
|                              
|                              
|                              
|Thomas L. Gossage(4)(5)        |  |     | 66 |          |  | Director                                                       
|                              
|                              
|                              
|                              
|Donald E. Guinn(1)(2)(4)       |  |     | 68 |          |  | Director                                                       
|                              
|                              
|                              
|                              
|James E. Oesterreicher(2)(4)   |  |     | 59 |          |  | Director                                                       
|                              
|                              
|                              
|                              
|Michael T. Riordan(1)(3)(4)    |  |     | 50 |          |  | Director                                                       
|                              
|                              
|                              
|                              
|Barbara S. Thomas(3)(5)        |  |     | 51 |          |  | Director                                                       
|                              
|                              
|                              
|                              
|Salvador M. Villar(1)(2)(3)(5) |  |     | 50 |          |  | Director                                                       




|    |                                               
|--- | ----------------------------------------------
|(1) | Member of the Executive Committee             
|   
|(2) | Member of the Audit Committee                 
|   
|(3) | Member of the Executive Compensation Committee
|   
|(4) | Member of the Finance Committee               
|   
|(5) | Member of the Governance Committee            

Herbert M. Baum. Mr. Baum has been Chairman of the
Board, President and Chief Executive Officer of Dial since
August 2000 and a Director since 1997. From
January 1999 to August 2000, Mr. Baum served as
President and Chief Operating Officer of Hasbro, Inc., a
manufacturer and marketer of toys. Mr. Baum also served as
Chairman and Chief Executive Officer of Quaker State Corporation
from 1993 to 1999. From 1978 to 1992, Mr. Baum was employed
by Campbell Soup Company and, in 1992, was named President of
Campbell  North and South America. Mr. Baum also
is a Director of Meredith Corporation, PepsiAmericas, Inc.,
Fleming Companies, Inc., Midas, Inc. and Action Performance
Companies, Inc.

Conrad A. Conrad.Mr. Conrad has served as Executive
Vice President and Chief Financial Officer of Dial since
January 2001. From August 2000 to January 2001,
Mr. Conrad served as Senior Vice President and

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Mark R. Shook. Mr. Shook has served as Executive
Vice President-International and Business Development of Dial
since August 2000. From January 1998 to
August 2000, Mr. Shook served as Senior Vice
President-International and Commercial Markets of Dial. From
September 1996 to January 1998, Mr. Shook served as
Senior Vice President-International of Dial. From the 1996
Spin-off of the Consumer Products business of The Dial Corp, the
predecessor company to Dial (the Predecessor
Company), until September 1996, he was an Executive
Vice President and General Manager, Personal Care, of Dial. From
September 1990 to the Spin-off, Mr. Shook was an
Executive Vice President of the Predecessor Company, serving as
General Manager-Food, from September 1990 to
September 1993; General Manager-Food and International,
from September 1993 to April 1994; General
Manager-Laundry and International, from April to
September 1994; General Manager-Soaps and Detergents, from
September 1994 to July 1995; and General
Manager-Personal Care, from July 1995 to the Spin-off.

Bernhard J. Welle.Mr. Welle has served as Executive
Vice President-Shared Services of Dial since August 2000.
From August 1996 to August 2000, he served as Senior
Vice President-Human Resources of Dial. From 1987 to
August 1996, Mr. Welle served as Vice President, Human
Resources of the Consumer Products Business of the Predecessor
Company.

Arthur E. Hanke.Mr. Hanke has served as Senior Vice
President-Sales of Dial since January 1999. From
September 1998 to January 1999, he served as Vice
President-Corporate Sales of Dial, and from the Spin-off to
September 1998, he served as Vice President-Customer
Management of Dial. From 1991 to the Spin-off, Mr. Hanke
served in various capacities for the Consumer Products Business
of the Predecessor Company, including Vice President-Western
Division Grocery Sales, from 1991 to 1993; Vice President-Broker
Sales, from 1993 to 1994; Vice President-Marketing, Detergents,
from 1994 to 1995; and Senior Vice President-Sales, Household
Products Division, from 1995 to the Spin-off.

Christopher J. Littlefield.Mr. Littlefield has
served as Senior Vice President, General Counsel and Secretary
of Dial since September 2000. From August 1999 to
September 2000, Mr. Littlefield served as Vice
President and Associate General Counsel of Dial. From
January 1998 to August 1999, he served as Corporate
Counsel of Dial. From 1992 to 1998, Mr. Littlefield was a
corporate and securities attorney with the law firm of Snell
& Wilmer, L.L.P.

John F. Tierney.Mr. Tierney has served as Senior
Vice President and Controller of Dial since September 2000.
From February 1999 to August 2000, Mr. Tierney
served as Vice President and Controller of Dial. From 1997 to
1999, Mr. Tierney served as Senior Vice President and Chief
Financial Officer of Global Passenger Services, LLC, a provider
and consolidator of entertainment and student transportation
services. From 1996 to 1997, he served as Senior Vice President
and Chief Financial Officer of Brother International, Inc., a
manufacturer of business and consumer electronics. From 1993 to
1996, Mr. Tierney served as Corporate Controller of Perdue
Farms, Inc., a poultry producer.

Mark L. Whitehouse.Mr. Whitehouse has served as
Senior Vice President and General Manager-Specialty Personal
Care of Dial since August 2000. From July 1997 to
August 2000, Mr. Whitehouse served as Vice
President-Marketing and from May 1999 to
September 2000, he served as President-Dial/ Henkel LLC,
the joint venture between Dial and Henkel KGaA. From
March 1995 to September 1997, Mr. Whitehouse
served as a Marketing Manager of both the Consumer Products
business of the Predecessor Company as well as Dial, serving as
Marketing Manager-Cleaning Products, Household Division, from
March 1995 to February 1996; and as Marketing
Manager-Renuzit, Household Division, from February 1996,
through the Spin-off, to July 1997.

Mark J. Preston.Mr. Preston has served as Vice
President and General Manager-Air Fresheners of Dial since
August 2000. From July 1996 to August 2000, he
served as Director of Marketing-Renuzit of Dial. From
August 1995 to the Spin-off, Mr. Preston served as
Senior Brand Manager-Renuzit of the Predecessor Company.

55



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##### Table of Contents



Brian T. Shook. Mr. Shook has served as Vice
President and General Manager-Food Products of Dial since
August 2000. From 1999 to 2000, he served as Vice
President-Fabric Care Marketing. From 1998 to 1999,
Mr. Shook served as Director-Marketing, Armour. From 1996
to 1998, Mr. Shook served as Region Business Manager
(Sales) and, from 1994 to the Spin-off, Mr. Shook served as
Senior Account Business Manager (Sales) of the Predecessor
Company.

Greg A. Tipsord.Mr. Tipsord has served as Vice
President and General Manager-Personal Cleansing of Dial since
August 2000. From April 2000 to August 2000,
Mr. Tipsord served as Vice President-Marketing. From
October 1996 to April 2000, he served as Marketing
Director-Dial and from July 1995 to February 1996,
Mr. Tipsord served as Senior Brand Manager-Dial of the
Predecessor Company.

Stephen L. Tooker.Mr. Tooker has served as Vice
President and General Manager-Laundry Care of Dial since
August 2000. Mr. Tooker has also served as
President-Dial/ Henkel LLC since September 2000. Mr. Tooker
served as Vice President-Detergents Marketing for Dial/ Henkel
LLC from June 1999 to August 2000. From
December 1998 to June 1999, he served as
Director-Purex Laundry Detergent. From the Spin-off until
December 1998, Mr. Tooker served as Assistant
Controller-Planning and Development. From January 1994 to
the Spin-off, Mr. Tooker served as Director-Planning and
Control of the Predecessor Company.

Joy A. Amundson.Ms. Amundson has been a Director of
Dial since 1997, and is Senior Vice President of Abbott
Laboratories, a diversified health care products and services
company. Ms. Amundson also is President of Ross Products, a
division of Abbott Laboratories. She has held a number of other
management positions since joining Abbott Laboratories in 1982.
Ms. Amundson also serves on the Boards of Childrens
Hospital and Lutheran General Hospital.

Joe T. Ford.Mr. Ford was a Director of the Company
from 1991 through 1996, and has continued as a Director of Dial
since the Spin-off. Mr. Ford is Chairman and Chief
Executive Officer of ALLTEL Corporation, a telecommunications
and information services company. Mr. Ford became Chief
Executive Officer of ALLTEL Corporation in 1987 and Chairman of
the Board in 1991. Mr. Ford also is a Director of Textron,
Inc. and Eltek A.S.A.

Thomas L. Gossage.Mr. Gossage was a Director of the
Predecessor Company from 1993 through 1996, and has continued as
a Director of Dial since the Spin-off. Mr. Gossage is the
Interim Chief Executive Officer of Hercules Incorporated
(Hercules), a worldwide producer of chemicals and
related products. Mr. Gossage had originally retired as
Chairman of Hercules in January 1997. Mr. Gossage also is a
Director of Fluor Corporation and Alliant Techsystems Inc.

Donald E. Guinn.Mr. Guinn was a Director of the
Predecessor Company from 1986 through 1996, and has continued as
a Director of Dial since the Spin-off. Mr. Guinn is
Chairman Emeritus of Pacific Telesis Group, a telecommunications
holding company (known as PacTel), which merged with
SBC Communications Inc. in 1997. Mr. Guinn served as
Chairman and Chief Executive Officer of PacTel from 1984 through
his retirement in 1988. He also is a Director of Pacific Mutual
Life Insurance Company and its affiliate, Pacific LifeCorp and
Bank of America Corporation.

James E. Oesterreicher.Mr. Oesterreicher has been a
Director of Dial since 2000. Mr. Oesterreicher retired as
Chairman and Chief Executive Officer of J.C. Penney
Company, Inc., a department store, drugstore, catalog and
e-commerce retailer, in September 2000.
Mr. Oesterreicher had been with J.C. Penney since 1964 and
held a number of other management positions. He also is a
Director of Brinker International, Inc. and TXU Corp.

Michael T. Riordan.Mr. Riordan has been a Director
of Dial since 1997, and is Chairman, President and Chief
Executive Officer of Paragon Trade Brands, Inc., a leading
manufacturer of private label disposable diapers and related
products. Mr. Riordan also served as President and Chief
Operating Officer of Fort James Corporation, a paper products
manufacturer, until August 1998. Prior to the merger of
Fort Howard Corporation with James River Corporation,
Mr. Riordan served as Chairman, President and Chief
Executive Officer of Fort Howard Corporation from 1996 to 1997
and as President and Chief Operating Officer of Fort

56



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##### Table of Contents





Barbara S. Thomas.Ms. Thomas has been a Director of
Dial since 1997. She was most recently President of
Warner-Lambert Consumer Healthcare, the over-the-counter
pharmaceuticals business of the Warner-Lambert Company until its
purchase by Pfizer Inc. in July 2000. Ms. Thomas was
with the Pillsbury Company from 1993 to 1997, serving last as
President of Pillsbury Canada Ltd. Prior to joining Pillsbury,
Ms. Thomas served as Senior Vice President of Marketing for
Nabisco Brands, Inc. Ms. Thomas also is a Director of The
Ocean Spray Company.

Salvador M. Villar.Mr. Villar has been a Director
of Dial since 1998, and is President and Chief Executive Officer
of California Commerce Bank, the U.S. banking arm of Banco
Nacional de México (known as Banamex).
Mr. Villar has been with California Commerce Bank since
1981. Mr. Villar also serves as Vice Chairman of the Board
of Banco Bansud, S.A.




Item 11.  Executive Compensation

Information concerning executive compensation matters is
incorporated herein by reference to Executive
Compensation, Option/ SAR Grants in Last Fiscal
Year, Aggregated Stock Option Exercises in Last
Fiscal Year and Fiscal Year End Options Values,
Pension Plans and Employment Agreements and
Change of Control Agreements in the Proxy Statement;
provided, however, that the Compensation Committee Report
on Executive Compensation and the Stock Price
Performance Graph contained in the Proxy Statement are not
incorporated by reference herein.




Item 12.  Security Ownership of Certain
Beneficial Owners and Management

Information concerning the Common Stock beneficially owned by
each Director of the Company, by all Executive Officers and
Directors of the Company as a group and by each stockholder
known by the Company to be the beneficial owner of more than 5%
of the outstanding Common Stock is incorporated herein by
reference to Common Stock Ownership of Certain Beneficial
Owners and Common Stock Ownership of Directors and
Executive Officers in the Proxy Statement.




Item 13.  Certain Relationships and Related
Transactions

During the fiscal year, there were no relationships or related
transactions that are required to be disclosed.

57



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##### Table of Contents






PART IV




Item 14.  Exhibits, Financial Statement
Schedules and Reports on Form 8-K

(a)  Financial Statements and Schedules

|     |  |                                |  |                                                                |                                                                                                                                                 |      |    |    | 
|---- |  | ------------------------------ |  | -------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | ---- | -- | -- | 
|     |  |                                |  |                                                                |                                                                                                                                                 | Page
|     |  |                                |  |                                                                |                                                                                                                                                 |     
|(i)  |  | Financial Statements.          |  |                                                                |                                                                                                                                                 |     
|    
|    
|    
|    
|     |  | (1)                            |  | Managements Report on Responsibility for Financial
	Reporting |                                                                                                                                                 |      | 27 |   
|    
|    
|    
|    
|     |  | (2)                            |  | Independent Auditors Report                                   |                                                                                                                                                 |      | 28 |   
|     |  | (3)                            |  | Consolidated Financial Statements:                             |                                                                                                                                                 |      |    |   
|    
|    
|    
|    
|     |  |                                |  |                                                                | Consolidated Balance Sheet at December 31, 2000, and
	December 31, 1999                                                                         |      |    | 29 | 
|    
|    
|    
|    
|     |  |                                |  |                                                                | Statement of Consolidated Operations and Comprehensive Income
	for the years ended December 31, 2000, December 31,
	1999, and December 31, 1998 |      |    | 30 | 
|    
|    
|    
|    
|     |  |                                |  |                                                                | Statement of Consolidated Cash Flows for the years ended
	December 31, 2000, December 31, 1999, and
	December 31, 1998                          |      |    | 31 | 
|    
|    
|    
|    
|     |  |                                |  |                                                                | Statement of Consolidated Stockholders Equity for the
	years ended December 31, 2000, December 31, 1999, and
	December 31, 1998                |      |    | 32 | 
|    
|    
|    
|    
|     |  |                                |  |                                                                | Notes to Consolidated Financial Statements                                                                                                      |      |    | 33 | 
|(ii) |  | Financial Statement Schedules. |  |                                                                |                                                                                                                                                 |     

Schedules have been omitted because of the absence of conditions
under which they are required or because the required material
information is included in the consolidated financial statements
or notes to the consolidated financial statements included
herein.

(b)  Reports on Form 8-K

We filed a Current Report on Form 8-K, dated
November 21, 2000, reporting that lenders under Dials
$450 million credit facility agreed to amend the covenant
requiring a maximum ratio of 3 to 1 for funded debt to EBITDA.

We also filed a Current Report on Form 8-K, dated
January 3, 2001, reporting that Dial issued a press release
relating to the modification of its joint venture relationships
in the United States and Mexico with Henkel KGaA of Dusseldorf,
Germany, a copy of which was filed as Exhibit 99.

We also filed a Current Report on Form 8-K dated
January 3, 2001, reporting that Dial issued a press release
relating to the webcast of an investor conference held on
January 8, 2001, a copy of which was filed as
Exhibit 99.

We also filed a Current Report on Form 8-K, dated
January 8, 2001, reporting that Dial would make a
presentation to investors on January 8, 2001, a copy of
which was filed as Exhibit 99.

We also filed a Current Report on Form 8-K, dated
January 16, 2001, reporting that Dial issued a press
release relating to the earnings release conference call held on
January 24, 2001, a copy of which was filed as
Exhibit 99.

We also filed a Current Report on Form 8-K, dated
January 29, 2001, reporting that Dial issued a press
release relating to its financial results for the fourth quarter
and year ended December 31, 2000 and its outlook for 2001,
a copy of which was filed as Exhibit 99.

We also filed a Current Report on Form 8-K, dated
February 23, 2001, reporting that Dial issued a press
release announcing that Herbert Baum, Dial Corporation Chairman,
President and CEO, would present to investors at Merrill
Lynchs 14th Annual Global Branded Consumer Products
Conference, a copy of which was filed as Exhibit 99.

58



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##### Table of Contents



(c)  Exhibits

|        |       |             |  |                                                                                                 |  |                                                                                                                     
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             |  |                                                                                                
|Number  |       | Description |  | Method of Filing                                                                               
|        |       |             |  |                                                                                                
|        | 3(a)  |             |  | Restated Certificate of Incorporation of the Company                                            |  | Incorporated by reference to Exhibit 3(a) of Dials
	Form 10/ A (Am. No. 2), dated July 26, 1996 (the
	Form 10).  
|       
|        | 3(b)  |             |  | Bylaws of the Company                                                                           |  | Incorporated by reference to Exhibit 3(b) of Dials
	Form 10-Q for the quarter ended July 4, 1998.                  
|       
|        | 4(a)  |             |  | Form of Rights Agreement between the Company and the Rights Agent                               |  | Incorporated by reference to Exhibit 4 of the Form 10.                                                              
|       
|        | 10(a) |             |  | Directors Indemnification Agreement                                                           |  | Incorporated by reference to Exhibit 10(a) of Dials
	Form 10-Q, dated November 11, 1996 (the Q3 1996
	Form 10-Q).
|       
|        | 10(b) |             |  | Officers Indemnification Agreement                                                            |  | Incorporated by reference to Exhibit 10(b) of the Q3 1996
	Form 10-Q.                                               
|       
|        | 10(c) |             |  | The Dial Corporation Future Investment Plan*                                                   |  |                                                                                                                     
|       
|        | 10(d) |             |  | The Dial Corporation Future Investment Restoration Plan*                                       |  |                                                                                                                     
|       
|        | 10(e) |             |  | The Dial Corporation Future Security Restoration Plan*                                         |  |                                                                                                                     
|       
|        | 10(f) |             |  | The Dial Corporation Amended & Restated 1996 Stock Incentive
	Plan*                            |  |                                                                                                                     
|       
|        | 10(g) |             |  | Annual Incentive Plan Agreement                                                                |  | Incorporated by reference to Exhibit 10(f) of Dials
	Form 10-K for the fiscal year ended December 28, 1996.        
|       
|        | 10(h) |             |  | Form of The Dial Corporation Directors Charitable Award
	Program                              |  | Incorporated by reference to Exhibit 10(f) of the
	Form 10.                                                         
|       
|        | 10(i) |             |  | Form of Change of Control Agreements with certain Executive
	Officers of the Company           |  | Incorporated by reference to Exhibit 10(h) of the 1998
	Form 10-K.                                                  
|       
|        | 10(j) |             |  | Credit Agreement*                                                                               |  |                                                                                                                     
|       
|        | 10(k) |             |  | Form of The Dial Corporation Employee Equity Trust                                              |  | Incorporated by reference to Exhibit 10(k) of the
	Form 10.                                                         
|       
|        | 10(l) |             |  | The Dial Corporation Amended and Restated Directors Deferred
	Compensation Plan*               |  |                                                                                                                     
|       
|        | 10(m) |             |  | The Dial Corporation Amended and Restated Management Deferred
	Compensation Plan*              |  |                                                                                                                     
|       
|        | 10(n) |             |  | Restated Employment Agreement, dated May 11, 1999, between
	the Company and Malcolm Jozoff     |  | Incorporated by reference to Exhibit 10(a) of Dials
	Form 10-Q dated August 17, 1999.                              
|       
|        | 10(o) |             |  | Employment Agreement with Herbert M. Baum, dated
	January 26, 2001*.                           |  |                                                                                                                     
|       
|        | 10(p) |             |  | Waiver of Claims and Acknowledgement Agreement with
	Susan J. Riley dated August 7, 2000.      |  | Incorporated by reference to Exhibit 10.1 of the Q3 2000
	10-Q.                                                     
|       
|        | 10(q) |             |  | Waiver of Claims and Acknowledgement Agreement with
	Jeffrey B. Dias dated September 29, 2000. |  | Incorporated by reference to Exhibit 10.1 of the Q3 2000
	10-Q.                                                     

59



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|        |    |             |  |                                   |  |                    
|------- | -- | ----------- |  | --------------------------------- |  | -------------------
|Exhibit |    |             |  |                                  
|Number  |    | Description |  | Method of Filing                 
|        |    |             |  |                                  
|        | 21 |             |  | List of Significant Subsidiaries* |  |                    
|       
|        | 23 |             |  | Consent of Deloitte & Touche LLP* |  |                    
|       
|        | 24 |             |  | Power of Attorney                 |  | See Signature Page.




|  |                                                         
|- | --------------------------------------------------------
| | Management contract or compensatory plan or arrangement.



|  |                
|- | ---------------
|* | Filed herewith.

60



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##### Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13 of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned;
thereunto duly authorized, in Scottsdale, Arizona, on
March 8, 2001.



| |                     
| | --------------------
| | THE DIAL CORPORATION



| |     |                   
| | --- | ------------------
| | By: | /s/HERBERT M. BAUM

| |                                 
| | --------------------------------
| |                                 
| | Herbert M. Baum                 
| | Chairman of the Board, President
| | and Chief Executive Officer     

KNOW ALL PERSONS BY THESE PRESENT that the persons whose
signatures appear below, constitute and appoint Herbert M. Baum
and Conrad A. Conrad, and each of them, as their true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for them and in their names, places and steads,
in any and all capacities, to sign the Annual Report on
Form 10-K for the fiscal year ended December 31, 2000,
and any and all amendments to the Form 10-K, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as they might or
could do in person, thereby ratifying and confirming all that
said attorney-in-fact and agent, or any of them, or their or his
or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities as of
March 8, 2001.

|                                       |  |                                                                                            
|-------------------------------------- |  | -------------------------------------------------------------------------------------------
|Signature                              |  | Title                                                                                      
|                                       |  |                                                                                            
|/s/ HERBERT M. BAUMHerbert M. Baum     |  | Chairman of the Board, President and Chief Executive Officer
	(Principal Executive Officer)
|/s/ CONRAD A. CONRADConrad A. Conrad   |  | Executive Vice President and Chief Financial Officer (Principal
	Financial Officer)        
|/s/ JOHN F. TIERNEYJohn F. Tierney     |  | Senior Vice President and Controller (Principal Accounting
	Officer)                       
|/s/ JOY A. AMUNDSONJoy A. Amundson     |  | Director                                                                                   
|/s/ JOE T. FORDJoe T. Ford             |  | Director                                                                                   
|/s/ THOMAS L. GOSSAGEThomas L. Gossage |  | Director                                                                                   
|/s/ DONALD E. GUINNDonald E. Guinn     |  | Director                                                                                   

61



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##### Table of Contents



|                                                 |  |         
|------------------------------------------------ |  | --------
|Signature                                        |  | Title   
|                                                 |  |         
|/s/ JAMES E. OESTERREICHERJames E. Oesterreicher |  | Director
|/s/ MICHAEL T. RIORDANMichael T. Riordan         |  | Director
|/s/ BARBARA S. THOMASBarbara S. Thomas           |  | Director
|/s/ SALVADOR M. VILLARSalvador M. Villar         |  | Director

62



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##### Table of Contents



INDEX TO EXHIBITS

|        |       |             |  |                                                                                                 |  |                                                                                                                     
|------- | ----- | ----------- |  | ----------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------
|Exhibit |       |             |  |                                                                                                
|Number  |       | Description |  | Method of Filing                                                                               
|        |       |             |  |                                                                                                
|        | 3(a)  |             |  | Restated Certificate of Incorporation of the Company                                            |  | Incorporated by reference to Exhibit 3(a) of Dials
	Form 10/ A (Am. No. 2), dated July 26, 1996 (the
	Form 10).  
|        | 3(b)  |             |  | Bylaws of the Company                                                                           |  | Incorporated by reference to Exhibit 3(b) of Dials
	Form 10-Q for the quarter ended July 4, 1998.                  
|        | 4(a)  |             |  | Form of Rights Agreement between the Company and the Rights Agent                               |  | Incorporated by reference to Exhibit 4 of the Form 10.                                                              
|        | 10(a) |             |  | Directors Indemnification Agreement                                                           |  | Incorporated by reference to Exhibit 10(a) of Dials
	Form 10-Q, dated November 11, 1996 (the Q3 1996
	Form 10-Q).
|        | 10(b) |             |  | Officers Indemnification Agreement                                                            |  | Incorporated by reference to Exhibit 10(b) of the Q3 1996
	Form 10-Q.                                               
|        | 10(c) |             |  | The Dial Corporation Future Investment Plan*                                                   |  |                                                                                                                     
|        | 10(d) |             |  | The Dial Corporation Future Investment Restoration Plan*                                       |  |                                                                                                                     
|        | 10(e) |             |  | The Dial Corporation Future Security Restoration Plan*                                         |  |                                                                                                                     
|        | 10(f) |             |  | The Dial Corporation Amended & Restated 1996 Stock Incentive
	Plan*                            |  |                                                                                                                     
|        | 10(g) |             |  | Annual Incentive Plan Agreement                                                                |  | Incorporated by reference to Exhibit 10(f) of Dials
	Form 10-K for the fiscal year ended December 28, 1996.        
|        | 10(h) |             |  | Form of The Dial Corporation Directors Charitable Award
	Program                              |  | Incorporated by reference to Exhibit 10(f) of the
	Form 10.                                                         
|        | 10(i) |             |  | Form of Change of Control Agreements with certain Executive
	Officers of the Company           |  | Incorporated by reference to Exhibit 10(h) of the 1998
	Form 10-K.                                                  
|        | 10(j) |             |  | Credit Agreement*                                                                               |  |                                                                                                                     
|        | 10(k) |             |  | Form of The Dial Corporation Employee Equity Trust                                              |  | Incorporated by reference to Exhibit 10(k) of the
	Form 10.                                                         
|        | 10(l) |             |  | The Dial Corporation Amended and Restated Directors Deferred
	Compensation Plan*               |  |                                                                                                                     
|        | 10(m) |             |  | The Dial Corporation Amended and Restated Management Deferred
	Compensation Plan*              |  |                                                                                                                     
|        | 10(n) |             |  | Restated Employment Agreement, dated May 11, 1999, between
	the Company and Malcolm Jozoff     |  | Incorporated by reference to Exhibit 10(a) of Dials
	Form 10-Q dated August 17, 1999.                              
|        | 10(o) |             |  | Employment Agreement with Herbert M. Baum, dated
	January 26, 2001*.                           |  |                                                                                                                     
|        | 10(p) |             |  | Waiver of Claims and Acknowledgement Agreement with Susan J.
	Riley dated August 7, 2000.      |  | Incorporated by reference to Exhibit 10.1 of the Q3 2000
	10-Q.                                                     
|        | 10(q) |             |  | Waiver of Claims and Acknowledgement Agreement with Jeffrey B.
	Dias dated September 29, 2000. |  | Incorporated by reference to Exhibit 10.1 of the Q3 2000
	10-Q.                                                     



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##### Table of Contents



|        |    |             |  |                                   |  |                    
|------- | -- | ----------- |  | --------------------------------- |  | -------------------
|Exhibit |    |             |  |                                  
|Number  |    | Description |  | Method of Filing                 
|        |    |             |  |                                  
|        | 21 |             |  | List of Significant Subsidiaries* |  |                    
|        | 23 |             |  | Consent of Deloitte & Touche LLP* |  |                    
|        | 24 |             |  | Power of Attorney                 |  | See Signature Page.




|  |                                                         
|- | --------------------------------------------------------
| | Management contract or compensatory plan or arrangement.



|  |                
|- | ---------------
|* | Filed herewith.