FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______ to _________
Commission file numbers 1-2116 and 333-32530
HARTCO FLOORING COMPANY RETIREMENT SAVINGS PLAN
(Full title of the Plan)
ARMSTRONG WORLD INDUSTRIES, INC.
ARMSTRONG HOLDINGS, INC.
2500 Columbia Avenue Lancaster, Pennsylvania 17604
(Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office)
1
Page No.
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Item 1. Independent Auditors' Report 4
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Item 2. Statements of Net Assets Available for Benefits
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December 31, 2000 and 1999 5
Item 3. Statements of Changes in Net Assets Available for Benefits
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Years ended December 31, 2000 and 1999 6
Notes to Financial Statements 7-14
Schedule of Assets Held for Investment Purposes 15
Exhibits 16
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Consent of Independent Auditors
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the members
of the committee constituting the administrator which administers the plan have
duly caused this annual report to be signed by the undersigned hereunto duly
authorized.
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
June 28, 2001 By: /s/: Jennifer E. Wisdom
----------------------------
Jennifer E. Wisdom Vice President Human Resources
3
Independent Auditors' Report
----------------------------
To the Retirement Committee of the
Hartco Flooring Company
Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Hartco Flooring Company Retirement Savings Plan as of December 31, 2000
and 1999, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan'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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Hartco
Flooring Company Retirement Savings Plan as of December 31, 2000 and 1999, and
the changes in net assets available for benefits for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
KPMG LLP
Dallas, Texas
May 28, 2001
4
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999
2000 1999
-------------- ----------------
Assets:
Investments, at fair value (note 5):
Armstrong Holdings, Inc. common stock $ 183,608 $ 56,257
Fidelity Magellan Fund 1,813,926 1,941,949
Fidelity Equity Income Fund 1,454,970 1,516,877
Fidelity Intermediate Bond Fund 963,539 980,972
Fidelity Overseas Fund 488,818 575,744
Fidelity Asset Manager Fund 229,440 215,799
Fidelity Retirement Money Market Fund 804,567 1,043,205
Participant loans 295,746 264,984
------------- ----------------
Total investments 6,234,614 6,595,787
Receivables (note 2):
Employer contributions 180,305 -
Employee contributions 2,947 2,674
Participant loans 1,135 -
Other - 34,098
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Total receivables 184,387 36,772
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Total assets 6,419,001 6,632,559
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Refund payable to participants 42,669 -
------------- ----------------
Net assets available for benefits $ 6,376,332 $ 6,632,559
============= ================
See accompanying notes to financial statements.
5
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2000 and 1999
2000 1999
---------------- --------------
Additions to net assets attributed to:
Investment income (loss):
Interest and dividend income $ 427,583 $ 498,432
Net appreciation (depreciation) in fair value of investments (note 5) (1,057,188) 235,315
-------------- --------------
Net investment income (loss) (629,605) 733,747
Contributions:
Participant (note 2) 343,653 379,718
Employer (note 2) 319,976 50,795
Rollovers (note 3) 36,801 4,074
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Total contributions 700,430 434,587
-------------- --------------
Total additions 70,825 1,168,334
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Deductions from net assets attributed to - benefits paid
to participants (notes 2 and 3) ( 327,052) (417,778)
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Net increase (decrease) (256,227) 750,556
Net assets available for benefits at the beginning of the year 6,632,559 5,882,003
--------------- --------------
Net assets available for benefits at the end of the year $ 6,376,332 $ 6,632,559
=============== ==============
See accompanying notes to financial statements.
6
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(1) General Information
On June 28, 1996, Triangle Pacific Corp. (the Company) acquired from
Premark International, Inc. (Premark) all of the common stock of Hartco
Flooring Company. In connection with this acquisition, Premark and the
Company agreed to spin off, effective as of June 28, 1996, that portion of
the Premark Plan benefiting participants who were employees or former
employees of Premark, to a separate plan sponsored and maintained by the
Company to be known as the Hartco Flooring Company Retirement Savings Plan
(the Plan), as set forth herein, as a continuation, without interruption,
of such portion of the Premark Plan.
On July 22, 1998, Triangle Pacific Corp. was acquired by Armstrong World
Industries, Inc. (a subsidiary of Armstrong Holdings, Inc.). The Board of
Directors of Triangle Pacific Corp. intends to continue providing
retirement benefits through the Company's defined contribution plans.
(2) Description of the Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan documents for more detailed
information.
(a) General
The Plan is a defined contribution plan which provides retirement
benefits to employees of Hartco Flooring Company, a division of
Triangle Pacific Corp., who are not members of a collective bargaining
agreement and whose customary employment is for at least 1,000 hours
during a 12 month period. Employees are eligible to participate in the
Plan on the first day of the month coincident with or following the
completion of six months of service. All eligible employees whose
customary employment is not for at least 1,000 hours during a year
participate in the plan on the first day of the month coincident with
or following the 12 month period after their employment or any plan
year thereafter, provided 1,000 hours of service are completed during
this time period. However, employees must not be active participants in
any other defined contribution plan to which the Company or any
subsidiary contributes on their behalf. The Plan is administered by
Hartco Flooring Company, a subsidiary of Triangle Pacific Corp., and
advised by the Company's Retirement Committee appointed by the Board of
Directors of the Company. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA).
(b) Contributions
Participants are permitted to contribute from 1% to 16% of their
eligible compensation to the Plan, as defined by the Plan documents.
Participants may elect to invest their contributions in any of the
available investment funds offered by Fidelity Management Trust
Company, the Trustee. Effective January 1, 2000, the Company provides a
50% match of active participants' contributions, up to 6% of the
participant's eligible compensation.
7
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
Effective January 1, 1998, the Plan was amended to include a profit sharing
component. The Company may contribute a discretionary profit sharing amount
based solely at the discretion of the board of Directors of the Company.
The Board of Directors approved a discretionary profit sharing contribution
of $179,034 and -0- for the years ended December 31, 2000 and 1999,
respectively.
(c) Participant Accounts
Each participant's account is credited with the participant's contributions
and an allocation of the Company's contributions, Plan earnings and
forfeitures of terminated participants' nonvested accounts. The benefit to
which a participant is entitled is the benefit that can be provided from
the participant's vested account.
(d) Vesting
Participants are fully vested in the current value of their own
contributions and earnings thereon, and become fully vested in Company
contributions and related earnings credited to their accounts based upon
their years of vesting service as shown in the following table:
Years of Vested
vesting service percentage
------------------- --------------
Less than 1 0%
1 but less than 2 20
2 but less than 3 40
3 but less than 4 60
4 but less than 5 80
5 or more 100
Participants who are age 65 or over or become permanently disabled are
automatically 100% vested in the value of Company contributions and related
earnings credited to their account.
8
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(e) Investment Options
Elective contributions may be invested in guaranteed income funds, fixed
income funds, equity funds or a money market fund at the option of the
participating employee. The Plan has investment options available to which
participants may allocate their contributions as follows:
. Armstrong Holdings, Inc. Common Stock - Effective April 1, 1999,
the Plan was amended to include Armstrong World Industries, Inc.
common stock as one of the investment options. On May 1, 2000,
Armstrong Holdings, Inc. acquired the stock of Armstrong World
Industries, Inc. An indirect holding in Armstrong World Industries,
Inc. makes up substantially all of the assets of Armstrong Holdings,
Inc. Armstrong Holdings, Inc. is publicly traded on the New York
Stock Exchange. On December 6, 2000, Armstrong World Industries,
Inc. filed a voluntary petition for relief under Chapter 11 of the
U.S. Bankruptcy Code in Wilmington, DE in order to use the
court-supervised reorganization process to achieve a resolution of
its asbestos liability. Triangle Pacific Corp. was not included in
the filing. As of December 19, 2000, the Plan was amended to
eliminate the Armstrong Holdings, Inc. Common Stock fund as an
investment option effective with contributions made on or after
December 27, 2000 and transfers processed on or after January 1,
2001.
. Fidelity Magellan Fund - The Fidelity Magellan Fund is a
diversified portfolio of common stocks of domestic and foreign
issuers. The portfolio seeks capital appreciation by investing in
growth stocks, value stocks or both.
. Fidelity Equity Income Fund - The Fidelity Equity Income Fund has a
primary objective of seeking reasonable income by investing 65% of
total assets in foreign and domestic income producing equity
securities, such as stocks, bonds and other debt securities. The fund
also seeks capital appreciation when consistent with its primary
objective.
. Fidelity Intermediate Bond Fund - The Fidelity Intermediate Bond
Fund has a primary objective of seeking high current income by
investing in U.S. dollar-dominated investment grade debt securities
with maturities between three to ten years. The Lehman Brothers
Intermediate Government/ Corporate Bond Index is used as a guide in
structuring the fund and selecting the investments.
. Fidelity Overseas Fund - The Fidelity Overseas Fund seeks long-
term growth of capital by primarily investing in the common stock
of foreign issuers.
9
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
. Fidelity Asset Manager Fund - The Fidelity Asset Manager Fund
strives for high total return with reduced risk over the long
term. The fund pursues this goal with diversified investments of
stocks, bonds and short-term and money market instruments, both
domestic and international, while maintaining a diversified mix
of securities.
. Fidelity Retirement Money Market Fund - The Fidelity Retirement
Money Market Fund seeks to earn a high level of current income
while maintaining a stable $1.00 share price by investing in
high-quality, short- term securities. These securities may include,
but are not limited to, high-quality short-term U.S. dollar
denominated money market securities, domestic and foreign issuers.
(f) Participant Loans
Participants may borrow from the Plan an amount greater than $1,000 but
less than 50% of the participant's vested account balance. In no event can
the participant borrow more than $50,000. Loans are for a period not to
exceed five years and bear interest at 1% above the prime rate of interest
being charged by local banks at the time the loan is authorized. The
interest rate at December 31, 2000 was 10.50%.
(g) Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive the total value of their account
attributable to their contributions, as well as the vested value of their
Company contributions, in cash or by purchasing an annuity under the terms
of an annuity contract. For termination of service due to other reasons, a
participant may receive the value of the vested interest in his or her
account as a lump sum distribution. Participants may make hardship
withdrawals from their earnings deferred contributions at specified times,
subject to the determination by the Plan administrator that the withdrawal
is required to meet an immediate and heavy financial need.
(h) Forfeitures
Company contributions forfeited by terminating employees are used to reduce
future Company contributions to the Plan ($6,708 and $10,881 in 2000 and
1999, respectively). The Company will reinstate forfeited balances to the
accounts of participants who rejoin the Company within five years of their
termination.
10
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(3) Summary of Significant Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
(b) Investment Valuation and Income Recognition
The Plan's investments are stated at fair value and have been
determined based on closing market quotations. Purchases and sales of
securities are recorded by the trustee at current cost on the trade
date. Realized and unrealized gains (losses) on investments are based
on the fair value of the assets at the beginning of the Plan year or
at the time of purchase during the year. Interest income is recorded
on the accrual basis. Dividends are recorded on the ex-dividend date.
(c) Administration Expenses
In accordance with the provisions of the Plan, unless paid by the
Company, all costs of administering the Plan are charged to the Plan.
During 2000 and 1999, all significant expenses were paid by the
Company ($16,087 in 2000 and $18,305 in 1999, respectively).
(d) Payment of Benefits
Benefits are recorded when distributed.
(e) Rollover Contributions
Employee rollovers represent receipts from employees receiving
distributions from their previous employers' qualified plan(s).
(f) Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates.
11
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(4) Units
Participant accounts are assigned investment fund units/shares. The net
asset value per unit/shares by fund/account for the 2000 and 1999 calendar
quarters ended is as follows:
Units at
2000 quarters ended December 31,
-----------------------------------------------------------------------------
March 31 June 30 September 30 December 31 2000
-------------- -------------- ------------------- ------------------ ------------------
Armstrong Holdings,
Inc. common stock $ 17.88 $ 15.30 $ 11.94 $ 2.07 89,001
Fidelity Magellan Fund 143.25 134.63 133.84 119.30 15,205
Fidelity Equity Income
Fund 50.62 50.37 53.71 53.43 27,231
Fidelity Intermediate
Bond Fund 9.75 9.75 9.86 10.04 95,970
Fidelity Overseas Fund 48.27 45.73 42.42 34.37 14,222
Fidelity Asset Manager
Fund 19.05 18.80 19.11 16.82 13,641
Fidelity Retirement
Money Market Fund 1.00 1.00 1.00 1.00 804,567
Units at
1999 quarters ended December 31,
-----------------------------------------------------------------------------
March 31 June 30 September 30 December 31 1999
-------------- -------------- ------------------- ------------------ ------------------
Armstrong Holdings,
Inc. common stock $ 45.19 $ 57.81 $ 44.94 $ 33.37 1,686
Fidelity Magellan Fund 129.75 129.77 122.02 136.63 14,213
Fidelity Equity Income
Fund 55.92 61.63 56.03 53.48 28,363
Fidelity Intermediate
Bond Fund 10.16 9.96 9.88 9.76 100,509
Fidelity Overseas Fund 36.99 38.88 41.11 48.01 11,992
Fidelity Asset Manager
Fund 17.54 18.08 17.28 18.38 11,741
Fidelity Retirement
Money Market Fund 1.00 1.00 1.00 1.00 1,043,205
12
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(5) Investments
The following investments exceed 5% of the Plan's net assets available for
Plan benefits at December 31, 2000 and 1999:
Fair value
--------------------------
2000 1999
------------ ----------
Fidelity Magellan Fund $ 1, 813,926 $ 1,941,949
Fidelity Equity Income Fund 1, 454,970 1,516,877
Fidelity Intermediate Bond Fund 963,539 980,972
Fidelity Overseas Fund 488,818 575,744
Fidelity Retirement Money Market Fund 804,567 1,043,205
Other - less than 5% 708,794 537,040
----------- ----------
Total investments $ 6, 234,614 $ 6,595,787
=========== ==========
During 2000 and 1999, the Plan's investments had net realized and unrealized
gains (losses) as follows:
2000 1999
------------ ----------
Armstrong Holdings, Inc.
common stock $ (621,277) $ (23,081)
Fidelity Magellan Fund (257,531) 204,771
Fidelity Equity Income Fund (3,549) (43,380)
Fidelity Intermediate Bond Fund 26,147 (51,714)
Fidelity Overseas Fund (182,982) 137,637
Fidelity Asset Manager Fund (17,995) 11,082
------------ ----------
Net appreciation (depreciation)
in fair value of investments $ (1,057,188) $ 235,315
============ ==========
The components of investment income (loss) for the years ended December 31,
2000 and 1999 are as follows:
2000 1999
------------ -----------
Investment income (loss):
Interest and dividend income $ 427,583 $ 498,432
Net appreciation (depreciation)
in the fair value of investments (1,057,188) 235,315
------------ -----------
$ (629,605) $ 733,747
============ ===========
13
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(6) Tax Status of the Plan
The Internal Revenue Service has determined and informed the Company by a
letter dated January 27, 1998, that the Plan and related trust are designed
in accordance with applicable requirements of the Internal Revenue Code
(IRC). The Plan has been amended since receiving the determination letter.
However, the Plan administrator and Plan's management believe that the Plan
is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
(7) Plan Termination
Although it has not expressed intent to do so, the Company has the right to
discontinue its contribution at any time and to terminate the Plan subject
to the provisions of ERISA. In the event of Plan termination, participants
will become fully vested in their accounts.
(8) Related Party Transactions
Certain Plan investments are shares of common stock of Armstrong Holdings,
Inc. and shares of mutual funds managed by Fidelity Investments. Triangle
Pacific Corp. is a wholly-owned subsidiary of Armstrong World Industries,
Inc. Fidelity Management Trust Company is the trustee as defined by the
Plan. Therefore, transactions involving these entities or funds qualify as
party-in-interest transactions.
14
HARTCO FLOORING COMPANY
RETIREMENT SAVINGS PLAN
Schedule of Assets Held for Investment Purposes
at end of year December 31, 2000
Current
Identity of issuer Description of investment value
---------------------------- --------------------------------- ----------
Armstrong Holdings, Inc.* Common stock $ 183,608
Fidelity Investments* Fidelity Magellan Fund 1,813,926
Fidelity Investments* Fidelity Equity Income Fund 1,454,970
Fidelity Investments* Fidelity Intermediate Bond Fund 963,539
Fidelity Investments* Fidelity Overseas Fund 488,818
Fidelity Investments* Fidelity Asset Manager Fund 229,440
Fidelity Investments* Fidelity Retirement Money Market Fund 804,567
Participant loans* Loans to participants $ 295,746
----------
Total investments $6,234,614
==========
* Party-in-interest
See accompanying independent auditors' report.
15