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. NON-UNION HOURLY EMPLOYEES 401(K) 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
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December 31, 1999 and 1998 5
Item 3. Statements of Changes in Net Assets Available for Benefits
----------------------------------------------------------
Years ended December 31, 1999 and 1998 6
Notes to Financial Statements 7-12
Schedule of Assets Held for Investment Purposes 13
Exhibits 14
- --------
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. NON-UNION HOURLY
EMPLOYEES 401(K) 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. Non-Union Hourly
Employees 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the Triangle Pacific Corp. Non-Union Hourly Employees 401(k) 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. Non-Union Hourly Employees 401(k) 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.
NON-UNION HOURLY EMPLOYEES 401(k) 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 $ 6,359 $ --
Fidelity Magellan Fund 204,625 138,809
Fidelity Equity Income Fund 189,749 144,292
Fidelity Intermediate Bond Fund 91,837 78,573
Fidelity Overseas Fund 28,203 19,516
Fidelity Asset Manager Fund 66,694 54,025
Fidelity Retirement Money Market Fund 156,671 119,023
--------- --------
Total investments 744,138 554,238
--------- --------
Receivables - participants (note 2) 2,526 2,298
--------- --------
Total assets 746,664 556,536
--------- --------
Net assets available for benefits $ 746,664 $556,536
========= ========
See accompanying notes to financial statements.
5
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) 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 $ 52,646 $ 32,280
Net appreciation in fair value of investments (note 5) 15,976 31,932
----------- ----------
Net investment income 68,622 64,212
Contributions - participants (note 2) 190,603 202,812
----------- ----------
Total additions 259,225 267,024
Deductions from net assets attributed to benefits paid
to participants (notes 2 and 3) (69,097) (59,499)
----------- ----------
Net increase 190,128 207,525
Net assets available for benefits at beginning of year 556,536 349,011
----------- ----------
Net assets available for benefits at end of year $ 746,664 $ 556,536
=========== ==========
See accompanying notes to financial statements.
6
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1) General Information
The Triangle Pacific Corp. Non-Union Hourly Employees 401(k) Plan (the
Plan) became effective on July 1, 1996.
(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 hourly employees of Triangle Pacific Corp. (the Plan
administrator or the Company) who are not members of a collective
bargaining agreement who work at least 1,000 hours annually, with new
participants required to be at least 21 years of age and employed by
the Company at least one year. The Plan is administered by Triangle
Pacific Corp. and advised by the profit sharing 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 up to 10% 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 the Fidelity Management Trust
Company, the Trustee. Participants are able to direct all
contributions to their account in 10% increments to the investment
funds offered by the Trustee. Participants are immediately fully
vested in their voluntary contributions plus actual earnings thereon.
(c) Participant Accounts
Each participant's account is credited with the participant's
contribution and Plan earnings. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
account.
(d) Investment Options
Elective and nondeductible contributions may be invested in a
guaranteed income fund, 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 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.
(Continued)
7
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
. 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.
. 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.
(e) Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum distribution or a
rollover into another investment. Any disbursement less than $3,500 is
required to become distributed in a lump-sum payment. The timing of the
lump-sum payment will be determined by the Plan administrator or disbursed
within 30 days upon filing a notice with the Employee Benefits Department.
(Continued)
8
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(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 1999 and 1998, all significant expenses were paid by the
Company ($10,000 in 1999 and $10,000 in 1998, 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 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.
(Continued)
9
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(4) Units
Participant accounts are assigned investment fund units/shares. The net
asset value per unit/share by fund/account for the 1999 and 1998 calendar
quarters ended, are as follows:
1999 quarters ended Units at
------------------------------------------------------------------- December 31,
March 31 June 30 September 30 December 31 1999
--------- -------- ------------- ------------- ------------
Armstrong Holdings, $ 45.19 $ 57.81 $ 44.94 $ 33.37 191
Inc. common stock
Fidelity Magellan 129.75 129.77 122.02 136.63 1,498
Fund
Fidelity Equity 55.92 61.63 56.03 53.48 3,548
Income Fund
Fidelity Intermediate 10.16 9.96 9.88 9.76 9,410
Bond Fund
Fidelity Overseas 36.99 38.88 41.11 48.01 587
Fund
Fidelity Asset 17.54 18.08 17.28 18.38 3,629
Manager Fund
Fidelity Retirement 1.00 1.00 1.00 1.00 156,671
Money Market Fund
1998 quarters ended Units at
------------------------------------------------------------------- December 31,
March 31 June 30 September 30 December 31 1999
--------- -------- ------------- ------------- ------------
Fidelity Magellan $ 108.81 $ 109.63 $ 97.52 $ 120.82 1,149
Fund
Fidelity Equity 57.51 57.20 49.60 55.55 2,598
Income Fund
Fidelity Intermediate 10.17 10.20 10.40 10.27 7,651
Bond Fund
Fidelity Overseas 37.09 37.70 31.14 35.98 542
Fund
Fidelity Asset 19.59 19.54 18.24 17.39 3,107
Manager Fund
Fidelity Retirement 1.00 1.00 1.00 1.00 119,023
Money Market Fund
(Continued)
10
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(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 $ 204,625 $ 138,809
Fidelity Equity Income Fund 189,749 144,292
Fidelity Intermediate Bond Fund 91,837 78,573
Fidelity Asset Manager Fund 66,694 54,025
Fidelity Retirement Money Market Fund 156,671 119,023
Other - less than 5% 34,562 19,516
--------- ---------
Total investments $ 744,138 $ 554,238
========= =========
During 1999 and 1998, the Plan's investments had net realized and unrealized
gains (losses) as follows:
1999 1998
--------- ---------
Common stock $ (3,450) $ --
Equity Funds 20,183 33,959
Fixed Income Funds (4,170) 596
Equity/Fixed Income Funds 3,413 (2,623)
--------- ---------
Net appreciation in fair value
of investments $ 15,976 $ 31,932
========= =========
(Continued)
11
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
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 $ 52,646 $ 32,280
Net appreciation in fair value
of investments 15,976 31,932
--------- --------
$ 68,622 $ 64,212
========= ========
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 Company has not yet received a determination letter from the Internal
Revenue Service as of December 31, 1999. 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 Internal Revenue Code.
(8) Plan Termination
Although it has not expressed intent to do so, the Plan administrator has
the right to terminate the Plan at any time, subject to the provisions of
ERISA.
(9) 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 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 or funds qualify as party-in-interest
transactions.
(Continued)
12
Schedule 1
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) 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 $ 6,359
Fidelity Investments* Fidelity Magellan Fund 204,625
Fidelity Investments* Fidelity Equity Income Fund 189,749
Fidelity Investments* Fidelity Intermediate Bond Fund 91,837
Fidelity Investments* Fidelity Overseas Fund 28,203
Fidelity Investments* Fidelity Asset Manager Fund 66,694
Fidelity Investments* Fidelity Retirement Money Market Fund 156,671
-----------
Total investments $ 744,138
===========
* Party-in-interest
See accompanying independent auditors' report.
13