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, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _______ to _________
Commission file number 1-2116
TRIANGLE PACIFIC CORP. SALARIED EMPLOYEES' PROFIT SHARING PLAN
(Full title of the Plan)
ARMSTRONG WORLD INDUSTRIES, 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 5
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December 31, 1999 and 1998
Item 3. Statements of Changes in Net Assets Available for Benefits 6
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Years ended December 31, 1999 and 1998
Notes to Financial Statements 7-13
Schedule of Assets Held for Investment Purposes 14
Exhibits 15
- --------
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.
TRIANGLE PACIFIC CORP. SALARIED EMPLOYEES'
PROFIT SHARING PLAN
June 26, 2000 By: /s/: Jennifer E. Wisdom
---------------------------
Jennifer E. Wisdom Vice President Human Resources
3
Independent Auditors' Report
To the Profit Sharing Committee of the
Triangle Pacific Corp. Salaried Employees' Profit
Sharing Plan:
We have audited the accompanying statements of net assets available for benefits
of the Triangle Pacific Corp. Salaried Employees' Profit Sharing Plan as of
December 31, 1999 and 1998, 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 generally accepted auditing
standards. 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 Triangle
Pacific Corp. Salaried Employees' Profit Sharing Plan as of December 31, 1999
and 1998, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
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
June 16, 2000
4
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
1999 1998
---------------- --------------
Assets:
Investments, at fair value (note 5):
Armstrong Holdings, Inc. common stock $ 573,978 $ --
Fidelity Magellan Fund 11,892,840 8,787,641
Fidelity Equity Income Fund 5,726,564 8,066,199
Fidelity Intermediate Bond Fund 1,328,382 1,312,874
Fidelity Overseas Fund 800,622 640,282
Fidelity Asset Manager Fund 2,576,403 2,370,238
Fidelity Retirement Money Market Fund 7,584,663 8,334,656
---------------- --------------
Total investments 30,483,452 29,511,890
Receivables:
Employer contributions (note 2) -- 1,006,842
Other receivables 16,500 --
---------------- --------------
Total assets 30,499,952 30,518,732
---------------- --------------
Net assets available for benefits $ 30,499,952 $ 30,518,732
================ ==============
See accompanying notes to financial statements.
5
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1999 and 1998
1999 1998
---------------- ---------------
Additions to net assets attributed to:
Investment income:
Interest and dividend income $ 2,256,002 $ 1,795,511
Net appreciation in fair value of investments (note 5) 1,193,800 2,176,593
---------------- ---------------
Net investment income 3,449,802 3,972,104
Contributions:
Participant (note 2) 1,314,704 1,163,476
Employer (note 2) 174,926 1,163,350
---------------- ---------------
Total contributions 1,489,630 2,326,826
---------------- ---------------
Total additions 4,939,432 6,298,930
---------------- ---------------
Deductions from net assets attributed to -
benefits paid to participants (notes 2 and 3) 4,958,212 2,573,310
---------------- ---------------
Net increase (decrease) (18,780) 3,725,620
Net assets available for benefit at beginning of year 30,518,732 26,793,112
---------------- ---------------
Net assets available for benefit at end of year $ 30,499,952 $ 30,518,732
================ ===============
See accompanying notes to financial statements.
6
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1) General Information
The Triangle Pacific Corp. Salaried Employees' Profit Sharing Plan (the
Plan) was established on January 5, 1976 by Triangle Pacific Corporation
(the Company). The Plan was amended and restated effective January 1, 1993,
to comply with applicable requirements of the Internal Revenue Code (IRC).
(2) Description of the Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan document for more detailed
information.
(a) General
The Plan is a defined contribution plan which provides retirement
benefits to the salaried employees of the Company who have worked
1,000 hours in a consecutive 12-month period, and have attained age
21. The participants are not required nor permitted to make any
contributions to the profit sharing portion of the Plan except for
transfers of balances from other qualified plans, but participants are
permitted to contribute up to 10% of their compensation to the 401(k)
portion of the Plan. The Plan is administered by the Company and
advised by the Profit Sharing Committee (Committee), whose members are
appointed by the Board of Directors of the Company (the Board).
(b) Contributions
Company contributions to the profit sharing portion of the Plan are
discretionary and are determined by the Board. Total contributions per
Plan year, including profit sharing and 401(k), to any one participant
cannot exceed the lesser of $30,000 or 25% of the participant's
compensation. A participant will not receive a Company profit sharing
contribution during a year in which the participant has a break in
service. Effective January 1, 1998, the Plan was amended and restated
(Amendment) to define the criteria of the Company contributions to the
401(k) portion. Company contributions to the 401(k) portion are
matching contributions that provide a 25% match of participant's tax
deferred contribution to the Plan up to 4% of the participants'
eligible compensation. Participants are fully vested in the current
value of their own contributions and earnings thereon, and become 100%
vested in Company contributions upon completion of five years of
service. Forfeitures resulting from non-vested employee termination
($159,397 in 1999 and $4,683 in 1998) are treated as a Company
contribution and serve to reduce Company contributions in the year
following the terminations. For each of the years ended December 31,
1999 and 1998, the Company made contributions of $174,926 and
$1,163,350, respectively. For the years ended December 31, 1999 and
1998, participants made contributions of $1,314,704 and $1,163,476,
respectively. Earnings therefrom were allocated to the remaining
participants' accounts according to the provisions of the Plan.
7
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(c) Payment of Benefits
Upon termination of employment, participants generally may elect to
receive the total value of their account attributable to their
contributions, as well as the vested value of their Company
contributions. Participants who are age 59 1/2 or over, or become
permanently and totally disabled are automatically 100% vested in the
value of Company contributions and related earnings credited to their
account. In the event that termination is caused by death, the
participant becomes 100% vested and the balance will be paid in full
to the beneficiary. Participants may also make hardship withdrawals
from their vested amounts, subject to provisions of the Plan document
and determination of eligibility by the plan administrator.
(d) Participant Accounts and Allocations
Allocations of Plan income are made to the participants based upon
their relative account balances in the Plan at the beginning of each
year. The annual Company contribution is allocated on a proportional
basis relative to each participant's compensation for the year, as
defined. Participants withdrawing from the Plan with a vested interest
may only receive their account balance in a lump-sum payment.
Participants are able to direct all contributions to their account in
10% increments to the various investment funds. The Magellan, Equity
Income, and the Overseas funds are classified as equity funds while
the Intermediate Bond and Retirement Money Market funds are classified
as fixed income funds. The Asset Manager Fund is considered to be a
mixture of both equity and fixed income funds.
(e) Investment Options
The Plan has investment options available to which participants may
allocate their contributions follow:
. Armstrong Holdings, Inc. Common Stock - Effective April 1,
1999, the Plan was amended to include Armstrong Holdings,
Inc. common stock as one of the investment options.
Armstrong Holdings, Inc. (formerly Armstrong World
Industries, Inc.) is the parent company of Triangle Pacific
Corp. (see note 6). Armstrong is publicly traded on the New
York Stock Exchange.
. 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.
8
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
. 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.
. 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.
(3) Summary of Significant Accounting Policies
(a) Basis of Accounting
The accompanying financial statements are prepared on the accrual
basis of accounting.
(b) Investments
The investments of the Plan are stated at fair value, determined
primarily on the basis of closing market quotations. Investment
transactions 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.
(c) Administrative Expenses
All administrative expenses, including audit fees, consulting fees,
recordkeeping fees, and trustee fees, are paid by the Company with no
liability to the Plan ($22,447 and $53,646 in 1999 and 1998,
respectively).
(d) Payment of Benefits
Benefits are recorded upon distribution.
9
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(e) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles 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.
(4) Units
Participant accounts are assigned investment fund unit/shares. The net
asset value per unit/share by fund/account for the 1999 and 1998 calendar
quarters ended as follows:
Units at
1999 quarter 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 17,198
Fidelity Magellan
Fund 129.75 129.77 122.02 136.63 87,044
Fidelity Equity
Income Fund 55.92 61.63 56.03 53.48 107,079
Fidelity Intermediate
Bond Fund 10.16 9.96 9.88 9.76 136,105
Fidelity Overseas
Fund 36.99 38.88 41.11 48.01 16,676
Fidelity Asset
Manager Fund 17.54 18.08 17.28 18.38 140,174
Fidelity Retirement
Money Market
Fund 1.00 1.00 1.00 1.00 7,584,663
10
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
Units at
1998 quarter ended December 31,
-------------------------------------------------------------------------
March 31 June 30 September 30 December 31 1998
-------------- -------------- ------------------ ------------------ ------------
Fidelity Magellan
Fund $ 108.81 $ 109.63 $ 97.52 $ 120.82 72,733
Fidelity Equity
Income Fund 57.51 57.20 49.6 55.55 145,206
Fidelity Intermediate
Bond Fund 10.17 10.20 10.4 10.27 127,836
Fidelity Overseas
Fund 37.09 37.7 31.14 35.98 17,796
Fidelity Asset
Manager Fund 19.59 19.54 18.24 17.39 136,299
Fidelity Retirement
Money Market
Fund 1.00 1.00 1.00 1.00 8,334,656
(5) Investments
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters (SOP
99-3). SOP 99-3 simplifies the disclosure for certain investments and is
effective for plan years ending after December 15, 1999. The Plan adopted
SOP 99-3 during the Plan year ending December 31, 1999. Accordingly
information previously required to be disclosed about participant directed
fund investment programs is not presented in the Plan's 1999 financial
statements. The Plan's 1998 financial statements have been reclassified to
conform with the current year's presentation.
The following investments exceed 5% of the Plan's net assets available for
Plan benefits at December 31, 1999 and 1998:
Fair value
------------------------------------
1999 1998
---------------- ----------------
Fidelity Magellan Fund $ 11,892,840 $ 8,787,641
Fidelity Equity Income Fund 5,726,564 8,066,199
Fidelity Asset Manager Fund 2,576,403 2,370,238
Fidelity Retirement Money Market Fund 7,584,663 8,334,656
Other - less than 5% 2,702,982 1,953,156
---------------- ----------------
Total investments $ 30,483,452 $ 29,511,890
================ ================
11
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
During 1999 and 1998, the Plan's investments had net realized and
unrealized gains (losses) as follows:
1999 1998
---------------- ----------------
Common stock $ (219,272) $ --
Equity Funds 1,337,223 2,276,775
Fixed Income Funds (60,071) (100,182)
Equity/Fixed Income Funds 135,920 --
---------------- ----------------
Net appreciation in fair value of
investments $ 1,193,800 $ 2,176,593
================ ================
The components of investment income for the years ended December 31, 1999
and 1998 are as follows:
1999 1998
---------------- ----------------
Investment income:
Interest and dividend income $ 2,256,002 $ 1,795,511
Net appreciation in fair value of
investments 1,193,800 2,176,593
---------------- ----------------
$ 3,449,802 $ 3,972,104
================ ================
(6) Acquisition
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.
(7) Tax Status of the Plan
The Internal Revenue Service has determined and informed the Company by a
letter dated January 3, 1995, that the Plan and related trust are designed
in accordance with applicable requirements of the IRC. The Plan has been
amended since receiving the determination letter. However, the Plan
administrator and the Plan's management believe that the Plan is designed
and is currently being operated in compliance with the applicable
requirements of the IRC.
12
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(8) Plan Termination
Although the Company has not expressed an intent to terminate the Plan, in
the event of such a termination, the priority of distribution of assets is
in accordance with the provisions of the Employee Retirement Income
Security Act of 1974. Distribution of Plan assets will be as follows:
(a) in the event of partial termination of the Plan, distributions
shall be treated for participants affected by the termination in
the same manner as distributions for complete termination are
treated;
(b) in the event of complete termination of the Plan, the Committee
may instruct the Trustee to:
(i) continue to administer the Plan and distribute funds to
Participants upon termination of employment until the Fund
is liquidated or
(ii) distribute the assets remaining in the Plan, after payment
of any expenses.
(9) Party-in-interest
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 Holdings, Inc.
Fidelity Management Trust Company is the Trustee as defined by the Plan.
Therefore, transactions involving these entities and funds qualify as
party-in-interest transactions.
(10) Subsequent Events
Effective January 1, 2000, the Plan was amended to increase the employer
matching contribution percentage to 50% of qualified employee contributions
up to 6% of the employee's annual earnings for all participants.
13
Schedule 1
TRIANGLE PACIFIC CORP.
SALARIED EMPLOYEES' PROFIT SHARING PLAN
Schedule of Assets held for investment purposes
at end of year December 31, 1999
Current
Identity of issuer Description of investment value
- ------------------------------------ ------------------------------------------------ ---------------
Armstrong Holdings, Inc.* Common stock $ 573,978
Fidelity Investments* Fidelity Magellan Fund 11,892,840
Fidelity Investments* Fidelity Equity Income Fund 5,726,564
Fidelity Investments* Fidelity Intermediate Bond Fund 1,328,382
Fidelity Investments* Fidelity Overseas Fund 800,622
Fidelity Investments* Fidelity Asset Manager Fund 2,576,403
Fidelity Investments* Fidelity Retirement Money Market Fund 7,584,663
--------------
Total investments $ 30,483,452
==============
*Party-in-interest
See accompanying independent auditors' report.
14