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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13

For the Fiscal Year Ended December 31, 2003

Commission File Number 1-11793

The Dial Corporation

Registrant’s Telephone Number, Including Area Code:

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

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

     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 þ          No o

     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.     o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).     Yes þ          No o

     As of June 27, 2003, the aggregate market value of Dial’s common stock (based on its closing price on such date) held by nonaffiliates was approximately $1.8 billion.

     As of March 4, 2004, 98,285,862 shares of Dial’s common stock were outstanding.

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PART I

      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 belief that we have ample resources for most raw material; the adequacy of our reserves for environmental matters; our anticipated costs to comply with environmental laws; our belief that our facilities are adequate and suitable for their purposes and that manufacturing capacity is sufficient for current needs; our belief that our relations with our employees are satisfactory; our belief that our current net deferred tax assets will be realized; our belief that our success over the last three years will make comparisons challenging in the future; our belief that we may need to increase our spending to grow our sales of Purex detergents; our belief that we will not be able to cut costs as rapidly or to the extent that we have over the past few years; our belief that the unpredictability of interest rates, foreign currency rates, commodity prices and other factors may cause actual results to differ materially from those projected; our belief that legal claims relating to the merger agreement with Henkel KGaA are without merit and our belief that liabilities from other legal claims, after taking into account amounts already accrued and inclusive of any potential insurance recovery, should not have a material adverse effect on our financial position, cash flows or operating results. 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” on page 26 in this Form 10-K.

      Unless otherwise indicated, the industry data contained herein are derived from confidential reports published by AC Nielsen. AC Nielsen captures consumer purchases in U.S. Food and Drug stores plus Kmart and Target via scanners while consumer purchases from Wal-Mart are recorded by AC Nielsen’s Homescan program panelists. A substantial portion of our sales are to club and dollar stores. However, consumer purchases in these stores are not included in market share resources such as those provided by AC Nielsen. Unless otherwise noted, all market share data are as of the 52 weeks ended December 31 and are based upon volume and retail dollar sales in the U.S. market. Market share volume of soap and detergent products are measured by ounces sold. Market share volume of air fresheners and canned meats are measured by units sold.

      In the third quarter of 2003, we completed the sale of our Argentina business. In addition, we sold our Specialty Personal Care (“SPC”) business in the third quarter of 2001. Accordingly, historical amounts and percentages disclosed in this Form 10-K have been restated to reflect our reporting of our former Argentina and SPC businesses as discontinued operations in the accompanying consolidated financial statements. See Item 1. “Business — Sale of Dial Argentina Business” and “Business — Sale of Specialty Personal Care Segment” on page 4 in this Form 10-K.

Pending Acquisition by Henkel KGaA

      On December 14, 2003, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Henkel KGaA, a Kommanditgesellschaft auf Aktien (a partnership limited by shares) organized under the laws of the Federal Republic of Germany (“Henkel”) and Henkel Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Henkel (“Merger Sub”) and us. Pursuant to the Merger Agreement, Henkel will acquire us through a merger of Merger Sub with and into us, with Dial surviving as a wholly-owned subsidiary of Henkel (the “Merger”). Upon the consummation of the Merger, each outstanding share of our common stock will be converted into the right to receive $28.75 in cash. The completion of the Merger is subject to the satisfaction or waiver of several conditions, including approval of

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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 believe that our brand names have contributed to our products achieving leading market positions.

      We are organized into two business segments: (i) Domestic Branded and (ii) International 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. The following table sets forth the percentage of our net sales represented by each of our segments:

     Domestic Branded

      Our Domestic Branded business segment consists of four franchises. The following table sets forth the percentage of net sales represented by each franchise.

      Within our Domestic Branded business segment, we have chosen to focus our marketing and product development efforts on the Dial, Purex, Renuzit and Armour brands. Each of our four franchises is discussed below. Additionally, see “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition — Non-Financial Key Performance Indicators” on page 23 in this Form 10-K for additional market share data for each of our businesses.

     Laundry Care

      Our Laundry Care business includes Purex detergents, bleach and fabric softeners, Zout® stain remover, Trend® detergent, Borateem® bleach, Sta-Flo® starches, Boraxo® soap and 20 Mule Team® borax and Fels Naptha® laundry soap. In 2003, retail sales in the U.S. detergent category were $4.9 billion. Although retail sales in the category declined 0.6%, retail volume increased 4.1% over 2002 due to growth in value brands. Category volume growth was driven by increased sales of value priced liquid detergent products. Dry detergent products continue to decline due to a consumer preference for liquid detergent products.

      Our Laundry Care business had volume market share of the U.S. detergent category of 14.9% and 13.7% for 2003 and 2002, respectively. Our Laundry Care business had dollar market share of the U.S. detergent category of 9.4% and 8.6% for 2003 and 2002, respectively. Based on ounces sold, Purex is the second largest brand of detergent in the U.S.

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      The U.S. stain remover category accounted for $199 million of retail sales in 2003, an increase of 6.6% from 2002. Zout is the number three brand in the stain remover category.

     Personal Care

      Our Personal Care business includes Dial, Coast®, Tone® and Pure & Natural® soaps and body washes. In 2003, retail sales in the U.S. soap category measured $2.2 billion, down 1% from 2002, with retail volume increasing 0.4%. Our Personal Care business had volume market share of the U.S. soap category of 19.9% for 2003 and 2002, respectively. Our Personal Care business had dollar market share of the U.S. soap category of 17.2% and 17.5% for 2003 and 2002, respectively.

      Dial is America’s leading deodorant bar soap brand. Overall, both category and our own bar soap sales continue to decline due to a consumer preference for body wash and liquid hand soap products. Body wash was the fastest growing segment in the U.S. soap category in 2003. We are the third largest marketer of body washes including the Dial, Coast, Tone and Pure & Natural brands. Dial is the second largest liquid hand soap brand.

      Sales of soap pellets and chemicals, principally glycerin and fatty acids, which are by-products of the soap making process, also are included in our Personal Care business. These sales represented 4% of our Personal Care sales in 2003 and 2002.

     Food Products

      Our Food Products business includes Armour and Armour Star® canned meats, chili, hash, meat spreads and meat snacks and Cream® cornstarch. We also manufacture and sell shelf stable food products for third parties. Private label and copack sales represented 26% and 28% of the volume of our Food Products business in 2003 and 2002, respectively.

      Sales in the U.S. canned meat category were $1.3 billion, a 2.4% increase over 2002. Our Armour branded products within our Food Products business had unit market share of the U.S. canned meat category of 21.6% and 21.2% for 2003 and 2002, respectively, and dollar market share of 10.8% and 10.6% for 2003 and 2002, respectively. Market share data for the private label portion of our Food Products business is not available.

      In 2003, Armour was the largest brand, measured by unit sales, in the canned meat category. Armour is the leading brand in the Vienna sausage and potted meat segments. In the chili segment, Armour is the fourth largest brand in unit sales. Armour Treet is the second largest brand in the spiced meat segment.

     Air Fresheners

      Our Air Fresheners business includes a wide variety of air freshener forms and fragrances, all of which are marketed and sold under the Renuzit brand. Sales in the U.S. air freshener category were $1.3 billion in 2003, a 2.5% increase over 2002. Category dollar growth in 2003 was driven by the instant action, pillar scented candle and small space segments. Our Air Fresheners business had volume market share of the U.S. air freshener category of 21.3% and 20.4% for 2003 and 2002, respectively. Our Air Fresheners business had dollar market share of the U.S. air freshener category of 14.8% and 15.5% for 2003 and 2002, respectively.

      At the end of 2003, Renuzit was the second largest brand of air fresheners in the U.S. based on units sold. Renuzit’s LongLast Adjustable solid air freshener is the largest selling item in the U.S. air freshener category. Renuzit is the third largest brand in the instant action segment. In the instant action segment, we sell Renuzit aerosols and Renuzit Super Odor Neutralizer sprays. Renuzit Super Odor Neutralizer Spray was introduced in the fourth quarter of 2002. Renuzit discontinued its One Touch electric scented oil air freshener and, as a result, does not have a substantial presence in the electrics segment. We have tried to overcome sales lost on this item with Renuzit Scented Oil refills and Renuzit electric gel refills in the electrics segment.

      Renuzit candles are the second largest brand in the scented candle segment. The candle segment sales, and our candle sales, have continued to decline and we expect this trend to continue.

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     International and Other

      Our International and Other segment includes our international businesses and commercial markets.

     International

      Our international operations are focused in Canada, Puerto Rico and exports to Asia and Latin America. During 2003 and 2002, approximately 84% and 82%, respectively, of our international sales came from these markets. In total, international sales represent 5.2% and 4.4% of sales in 2003 and 2002, respectively.

      In Canada, Purex is the number two brand in the liquid laundry detergent category and continues to be a catalyst for growth with retail dollar sales up 28%. With the body wash category growing at 15%, Dial body wash continues to be a major contributor to year over year growth with retail sales up 33%. Despite the decline in the bar soap category, Dial is leading the growth in the deodorant bar segment due to our newly formatted bars which have seen a 46% growth in retail sales.

      In Mexico, we moved to a licensing arrangement in 2002 with a third party who previously served as our distributor in Mexico. Under this licensing arrangement, we have licensed our Dial, Breck and Renuzit trademarks to a third party in exchange for a royalty based upon net sales. As a result, we did not record sales in Mexico in 2003 or 2002, but instead recorded royalty income. We recorded sales in Mexico of $6.0 million in 2001.

      Export sales, including royalty income from our licensing arrangement in Mexico, grew by 15% versus 2002. Dial body wash, Armour products, and Renuzit Adjustables were the main contributors to this increase in sales.

     Commercial Markets

      We sell a broad range of branded and co-branded products through various commercial channels, including amenity products to lodging customers and soap and cleaning products to healthcare and janitorial customers. According to the most recent Kline & Company, Inc. Janitorial and Housekeeping Cleaning Products report performed in 2002, total consumption of liquid, bar, waterless and powder hand soaps and cleaners was estimated at $638.5 million during 2002. Based on this study, Dial is estimated to be the sixth largest supplier of hand soaps and cleaners in the janitorial and housekeeping commercial sectors. In the lodging sector, Dial is estimated to be the third largest supplier of in-room amenity products. The commercial markets business also sells products to governmental agencies, including correctional facilities, schools and the military. Key competitors include Marietta Corporation and Guest Supply, Inc. in lodging, Ecolab, Inc. and STERIS Corporation in healthcare and GOJO Industries and Kimberly-Clark Corporation in janitorial.

Sale of Dial Argentina Business

      On June 30, 2003, we completed the sale of our discontinued Argentina business to an entity designated by Southern Cross Group, a private equity investor in Argentina. The transaction was structured as the sale of assets of Dial Argentina, S.A., which included the stock of its two subsidiaries, Sulfargen, S.A. and The Dial Corporation San Juan, S.A. In December 2002, we recorded an after-tax loss of $62.4 million on the pending sale and reclassified our Argentina business as a discontinued operation.

      Completion of the sale in 2003 resulted in higher cash proceeds and lower projected exit and closing costs than originally anticipated. Accordingly, in the second quarter of 2003 we recognized a $2.1 million after-tax ($3.4 million pre-tax) reduction in the previously recorded loss on the disposal of our discontinued Argentina business. As a result of the reclassification to discontinued operations, we did not recognize any income from operation of this business during 2003. The related assets and liabilities that were sold were removed from our balance sheet.

      For additional information concerning this transaction, see “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition — Sale of Dial Argentina Business” on page 18 in this Form 10-K.

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Sale of Specialty Personal Care Segment

      On August 28, 2001, we completed the sale of our Specialty Personal Care (“SPC”) business. Businesses included in this segment consisted of a variety of skin, hair, bath, body and foot care products sold under the Freeman and Sarah Michaels brand names. As a result of the sale, we incurred a one-time charge of $198.4 million, net of income tax benefits and expected sale proceeds, related to the write-off of SPC assets and an accrual for estimated exit costs.

      For additional information concerning this transaction, see “Item 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition — Sale of Specialty Personal Care Segment” on page 19 in this Form 10-K.

Discontinuation of Dial/ Henkel Joint Ventures

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

      In March 2000, we formed another joint venture with Henkel named Dial/ Henkel Mexico S.A. de C.V. Henkel owned 51% and we 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.

      During the third quarter of 2000, the Dial/ Henkel LLC joint venture discontinued operations of Purex Advanced laundry detergents. Our portion of the loss on disposal of Purex Advanced was $12.6 million. This charge consisted of recording inventory at net realizable value and recording reserves for expected returns and deductions by joint venture customers. In addition, we recorded a charge of $5.4 million to write down to net realizable value the fixed assets used to manufacture Purex Advanced.

      During the fourth quarter of 2000, the Dial/ Henkel LLC joint venture recorded a $15 million special charge relating to the Custom Cleaner home dry cleaning business. This charge consisted of recording inventory at net realizable value and writing down impaired goodwill and deferred tax assets. Our share of this charge was $7.5 million.

      In December 2000, we sold our interest in the Dial/ Henkel Mexico joint venture to Henkel for $18.9 million and recorded a $5.0 million loss on the sale.

      In the third quarter of 2001, Dial/ Henkel LLC discontinued the Custom Cleaner home dry cleaning business.

      In the second quarter of 2002, Henkel received certain intellectual property rights related to the former Custom Cleaner business in exchange for its interest in Dial/ Henkel LLC, which did not operate during 2002. We accounted for our investments in these joint ventures under the equity method of accounting. During 2002, we recorded a $2.1 million gain related to lower than expected costs of the joint venture associated with exiting the discontinued Custom Cleaner business. During 2001, we recorded a $3.0 million gain from lower than expected marketing costs of the Custom Cleaner and Purex Advanced businesses and lower than expected costs of exiting the joint venture. During 2000, the two Dial/ Henkel joint ventures resulted in net losses to us of $37.6 million, which included $30.5 million in special charges related to exit activities.

Customers

      Our products are sold throughout the United States primarily through mass merchandisers, supermarkets, drug stores, membership club stores and other outlets. Generally, our payment terms to customers are

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      Our products are also sold internationally through the same channels, principally in Canada, Puerto Rico and the Caribbean. Payment terms for international customers are generally 30 days.

Sales

      Sales within the United States were 95%, 96% and 95% of our total sales during 2003, 2002, and 2001, respectively. Our customers are served by a national sales organization of approximately 160 employees. The sales organization is divided into regional divisions and account teams for grocery sales and specialized sales operations that sell to large mass merchandisers, membership club stores, chain drug stores, vending and military customers. In addition, some customers and regions are served by a national sales and marketing agency.

      The following table sets forth our U.S. net sales by channel:

(1)	Includes all private label and copack food products that are sold through the Food channel.

      Our international customers are primarily served by salespeople at three foreign sales offices, consisting of 16 employees. In addition, independent distributors also service some regions.

Distribution

      We ship products to our customers primarily from four full-line domestic distribution centers. The distribution centers are operated by third parties, except for one full-line distribution center that we operate. We use third party carriers to transport our products.

      We also ship full truckload quantities directly to customers from our manufacturing facilities. Direct shipment to customers is primarily limited to certain high volume products, such as Purex liquid laundry detergent. The percent of tonnage shipped directly from our plants to our customers was approximately 25%, 25% and 23% in 2003, 2002, and 2001, respectively.

Suppliers

      We rely on a number of third parties for manufacturing, packaging and research and development. Some of our arrangements related 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 supplier arrangements can be terminated without material penalties.

      Currently, we rely on a single company-owned plant to manufacture our Dial bar soap and a single supplier for Purex liquid laundry detergent bottles. If this plant or supplier were unable to produce these

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Raw Materials

      We believe that ample sources of raw materials are available with respect to most of our major products. Paper, fats and oils, detergent chemicals and resins used in manufacturing bottles 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. Increases in the prices of certain raw materials could materially impact our profit margins and financial results. For example, tallow (a key ingredient in Dial bar soaps) and beef have experienced price fluctuations that directly impact our costs.

      In January 2004, the Secretary of the U.S. Department of Health and Human Services announced new public health measures that the U.S. Food and Drug Administration may implement to significantly strengthen existing safeguards against bovine spongiform encephalopathy (“BSE”), commonly known as “mad cow disease”. If implemented, these measures would prohibit certain specific sources for the type of tallow currently used in our bar soap manufacturing, which will likely result in shortages in the supply of usable tallow. Shortages in turn will likely result in significantly higher tallow prices which could adversely impact our profitability. Additionally, some portion of our tallow inventory could be rendered unusable. Tallow has fluctuated within the range of $0.09 to $0.26 per pound from January 1, 1998, to December 31, 2003. Recently, the price of tallow has been trading at the high end of this range. If prices increase further, we may not be able to increase the prices of our Dial bar soaps to offset these increases. In addition, because our competitors use less tallow in their bar soap products, increases in tallow prices would adversely impact us more than our competitors.

      Due to recent world events, including outbreaks of BSE in both the United States and other countries, the price of beef also has experienced significant fluctuations. The average price per pound of beef rose to $0.43 in 2003 versus $0.40 in 2002 and is expected to continue to rise in 2004. Price increases in beef would adversely impact our profitability.

      We attempt to reduce our risk by entering into contracts to provide six to twelve month supplies of tallow, other raw materials and packaging materials. In the past, we have used 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 Care

	•	The Procter & Gamble Company (“P&G”)
	•	Lever Brothers Co., a division of Unilever

	•	Colgate-Palmolive Company (“Colgate”)

      Food Products

	•	Hormel Foods Corp.
	•	ConAgra Foods, Inc.

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      Laundry Care

	•	P&G
	•	Lever
	•	Church & Dwight, Inc.
	•	Colgate
	•	S.C. Johnson & Son, Inc.
	•	Reckitt & Benckiser, Inc.
	•	Huish Detergents, Inc.
	•	Orange Glo International

      Air Fresheners

	•	S.C. Johnson & Son, Inc.
	•	Reckitt & Benckiser, Inc.
	•	Church & Dwight, Inc.

Research and Development

      We conduct research and development at our facility in Scottsdale, Arizona. Our internal research and development efforts are primarily directed at providing technical assistance, supporting our manufacturing activities and generating innovation for new and existing products. To increase our innovative capacity, we also contract general research and development activities in areas beyond our core areas of expertise. Our total research and development expenditures were approximately $19.0 million, $16.2 million and $14.3 million in 2003, 2002 and 2001, respectively.

Marketing Research

      We rely on industry data comprised of 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 purchases 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, Tone, Pure & Natural, Trend, Treet, 20 Mule Team, Boraxo, Borateem and Sta-Flo in addition to related trade names. In the U.S., we license the Armour and Armour Star trademarks from ConAgra, Inc., which also sells food products under the Armour trademark. We license the 20 Mule Team trademark from U.S. Borax, Inc.

      In 2001, we licensed our Breck trademarks in the U.S., Canada, Puerto Rico, Europe and Asia to a third party in exchange for a royalty based upon gross sales. This license was terminated effective September 30, 2003. In 2002, we licensed our Breck trademark in Mexico to a different third party in exchange for a royalty based upon net sales. For further discussion of our licensing arrangement in Mexico, see “Item 1. Business — International” on page 4 in this Form 10-K.

      United States trademark registrations are for a term of 10 years, renewable every 10 years as 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.

      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 may 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

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      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 could ultimately 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 Dial bar 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 us to develop new marketing campaigns, develop new products or utilize different antibacterial ingredients in our products, all of which could have a material adverse effect on our business, operating results and financial condition.

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 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 and 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. We only have one site that is currently active and we have executed a consent decree to settle our liability with respect to that site and are awaiting final court approval. Additionally, in 1999 and in prior years we used nonlyphenol ethoxylate as an ingredient in our liquid and powder detergents, and we continue to use it as an ingredient in our Zout stain remover products. We are in the process of reformulating our Zout stain remover products to eliminate the use of nonlyphenol ethoxylate. Certain environmental and regulatory groups have raised concerns regarding toxicity of compounds produced from nonlyphenol ethoxylate.

      We do not currently anticipate that we will incur significant capital expenditures in connection with matters relating to environmental control or compliance in 2004. 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. We believe our accounting reserves are adequate, however these costs are difficult to predict with certainty. 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 2,500 individuals, of whom approximately 1,020 were covered by collective bargaining agreements, as of December 31, 2003.

      Three of our five plants in the United States are unionized. In 2003, we finalized negotiations of the labor contract with the United Food and Commercial Workers union, covering approximately 380 employees at our

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Available Information

      Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge through our website (www.dialcorp.com) and in print upon request as soon as reasonably practicable after we electronically file the material with, or furnish it to, the Securities and Exchange Commission (the “SEC”).

      Additionally, the charters of our executive, audit, executive compensation, finance management succession and governance committees, as well as our Corporate Governance Guidelines and Code of Ethics and Business Responsibilities, are available on our website and in print upon request.

      Our corporate headquarters in Scottsdale, Arizona includes a 130,000-square-foot, single-tenant building adjacent to the 200,000-square-foot Dial Center for Innovation. We occupy both facilities under multi-year leases that expire in 2008.

      Our principal facilities include the following:

(1)	Facility currently held for sale. See Note 3 of the consolidated financial statements included in this Form 10-K for further information.
(2)	Leased facility
(3)	Public warehouse

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      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 believe that we will need an additional distribution center sometime in 2004, as we are running out of capacity at our Edwardsville, Illinois distribution center. We continue to seek ways to cut costs and may close facilities as warranted.

      On December 16, 2003, Mr. Jeffrey Berger (C.A. No. 116-N) filed a complaint in the Delaware Court of Chancery, New Castle County against us, our directors and Henkel, purporting to represent a class of all of our stockholders (except the defendants and any person, firm, trust, corporation, or other entity related to or affiliated with any of the defendants) who are or will be threatened with injury arising from the actions of the defendants. The complaint alleges, among other things, that our board of directors breached its fiduciary duties by agreeing to enter into the Merger Agreement with Henkel on the terms provided in the Merger Agreement. The complaint also seeks various forms of relief, including preliminary and permanent injunctive relief to prevent the closing of the Merger. On January 12, 2004 we filed a motion to dismiss this complaint for failure to state a claim upon which relief may be granted and a motion to stay discovery in the action pending decision on the motion to dismiss. We, our directors and Henkel believe that the allegations in this complaint are without merit and we intend to vigorously defend against the allegations asserted in the complaint.

      On December 16, 2003, Messrs. Jeffrey Silverberg (CV2003-023979) and Steven Rose (CV2003-023974) and, on December 17, 2003, Ms. Mary Crescente (CV2003-024012), each filed separate complaints in the Arizona Superior Court, Maricopa County against us and our directors, each purporting to represent a class of all of our stockholders (except any person, firm, trust, corporation or other entity related to or affiliated with any defendant) who are being and will be harmed by the actions of the defendants. The complaints allege, among other things, that our board of directors breached its fiduciary duties by engaging in self-dealing by receiving personal benefits under the terms of the Merger Agreement with Henkel, and by potentially entering into an unfair transaction with Henkel. On January 21, 2004, we filed motions to dismiss these complaints, or, in the alternative, to stay these actions in preference to the action filed by Mr. Berger in the Delaware Court of Chancery. On January 26, 2004, the Arizona Superior Court consolidated these actions. We and our directors believe the allegations in these complaints are without merit and we intend to vigorously defend against the allegations asserted in these complaints. On March 1, 2004, the Arizona Superior Court granted our motion to stay the Arizona cases pending the outcome of the Delaware cases.

      On January 6, 2004, Ms. Susan Soder (C.A. No. 154-N) filed a complaint in the Delaware Court of Chancery, New Castle County against us, our directors and Henkel, purporting to represent a class of all of our stockholders (except the defendants and any person, firm, trust, corporation, or other entity related to or affiliated with any of the defendants) who are or will be threatened with injury arising from the actions of the defendants. The complaint alleges, among other things, that our board of directors breached its fiduciary duties by agreeing to enter into the Merger Agreement on the terms provided in the Merger Agreement. The complaint also seeks various forms of relief, including preliminary and permanent injunctive relief to prevent the closing of the Merger. On January 13, 2004, counsel for Ms. Soder informed the Delaware Court of Chancery that Ms. Soder did not intend to serve the summonses on the defendants in this case at that time. We, our directors and Henkel believe that the allegations in this complaint are without merit and we intend to vigorously defend against the allegations asserted in the complaint.

      As we previously disclosed, we were defending a lawsuit filed by the U.S. Equal Employment Opportunity Commission (“EEOC”), which was pending in the U.S. District Court for the Northern District of Illinois, Eastern Division, and was entitled Equal Employment Opportunity Commission v. The Dial Corporation, Civil Action No. 99 C 3356. The EEOC alleged that we engaged in a pattern and practice of discrimination against a class of female employees at our Aurora, Illinois manufacturing facility by subjecting them to sexual harassment and not taking prompt remedial action after these employees complained. Most of the potential claimants’ allegations relate to incidences that allegedly occurred prior to 1996. The EEOC sought injunctive relief and unspecified compensatory and punitive damages. On April 29, 2003, we announced that we had reached a settlement with the EEOC that involved a payment of $10 million by Dial, which was made in the first quarter of 2004.

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      As is 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 including any potential insurance recovery, should not have a material adverse effect on our financial position, cash flows or operating results.

      We did not submit any matter to a vote of our stockholders during the fourth quarter of 2003.

      A special meeting of our stockholders to approve the Merger Agreement entered into with Henkel on December 14, 2003, is scheduled for March 24, 2004. Stockholders of record at the close of business on February 17, 2004 are entitled to be present and vote at the meeting. Definitive proxy materials relating to this special stockholder meeting were filed with the SEC on February 18, 2004 and were mailed on February 19, 2004, to stockholders of record as of the close of business on February 17, 2004.

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PART II

      Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol DL. The following table sets forth the high and low sale prices as reported on the NYSE for the periods indicated as well as the dividend paid with respect to these periods. The sale price of the common stock on March 4, 2004, was $28.75 per share.

      In January 2004, the Board of Directors declared a quarterly dividend of $0.09 per share, which is payable on April 15, 2004 to stockholders of record at the close of business on March 15, 2004.

      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, whether or not the pending Merger with Henkel is completed, and other factors deemed relevant at the time by the board. As of March 4, 2004, there were 98,285,862 shares of common stock outstanding, which were held by 26,754 stockholders of record.

      The following table presents selected financial information derived from our consolidated financial statements and includes the reclassification of the Argentina and SPC businesses as discontinued operations.

      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.

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SELECTED FINANCIAL AND OTHER DATA