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 BARGAINING EMPLOYEES' 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 7-13
Schedule of Assets Held for Investment Purposes 14
Exhibits 15
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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
BARGAINING EMPLOYEES' 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
Bargaining Employees' Retirement Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Hartco Flooring Company Bargaining Employees' 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 Bargaining Employees' 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 started 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
BARGAINING EMPLOYEES' 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 $ 87,218 $ 16,077
Fidelity Magellan Fund 463,287 386,145
Fidelity Equity Income Fund 1,246,455 1,127,827
Fidelity Intermediate Bond Fund 2,019,074 1,922,404
Fidelity Overseas Fund 118,425 131,200
Fidelity Asset Manager Fund 221,301 171,386
Fidelity Retirement Money Market Fund 514,998 431,866
Participant loans 422,590 385,805
-------------- ------------
Total investments 5,093,348 4,572,710
Receivables (note 2):
Employer contributions 134,399 --
Employee contributions 5,783 2,342
Participant loans 2,676 --
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Total receivables 142,858 2,342
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Total assets 5,236,206 4,575,052
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Net assets available for benefits $ 5,236,206 $ 4,575,052
============== ============
See accompanying notes to financial statements.
5
HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' 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:
Interest and dividend income $ 337,549 $ 325,826
Net depreciation in fair value of
investments (note 5) (100,534) (81,276)
-------------- --------------
Net investment income 237,015 244,550
Contributions:
Participant (note 2) 350,257 292,904
Employer (note 2) 293,817 134,274
Rollovers (note 3) -- 1,198
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Total contributions 644,074 428,376
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Total additions 881,089 672,926
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Deductions from net assets attributed to benefits
paid to participants (notes 2 and 3) (219,935) (209,771)
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Net increase 661,154 463,155
Net assets available for benefits at beginning of year 4,575,052 4,111,897
-------------- --------------
Net assets available for benefits at end of year $ 5,236,206 $ 4,575,052
============== ==============
See accompanying notes to financial statements.
6
HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(1) General Information
The Hartco Flooring Company Bargaining Employees' Retirement Savings Plan
(the Plan) was established on January 1, 1985. On June 28, 1996, Triangle
Pacific Corp. (the Company or Plan Administrator) acquired all of the stock
of Hartco Flooring Company from Premark International, Inc. The Company
assumed responsibility for administering and sponsoring the Plan effective
June 30, 1996, and to continue the Plan without interruption by amending
and restating the Plan in its entirety effective June 28, 1996, to change
the sponsoring employer.
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 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
Triangle Pacific Corp. and advised by the Retirement Committee
appointed by the Board of Directors. The Plan is subject to the
provisions of the Department of Labor's Rules and Regulations for
Reporting and Disclosure under 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. The Company will provide a 50% match of active
participants' contributions, up to 6% of the participant's eligible
compensation. Effective January 1, 2000, the Plan was amended to
include an annual Company profit sharing contribution of 1% of a
participant's eligible compensation.
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HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(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.
(e) Investment Options
Elective and nondeductible 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:
|X| 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.
8
HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
|X| Fidelity Magellan Fund - The Fidelity Magellan Fund is a
portfolio of common stocks of domestic and foreign issuers.
The portfolio seeks capital appreciation by investing in
growth stocks, value stocks or both.
|X| Fidelity Equity Income Fund - The Fidelity Equity Income
Fund has a primary objective of seeking moderate income
levels 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.
|X| 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.
|X| Fidelity Overseas Fund - The Fidelity Overseas Fund seeks
long-term growth of capital by primarily investing in the
common stock of foreign issuers.
|X| 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.
|X| 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%.
9
HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(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 ($571 and $3,691 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.
(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 ($16,681 in 2000 and $19,071 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).
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HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' RETIREMENT SAVINGS PLAN
Notes to Financial Statements
December 31, 2000 and 1999
(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.
(4) Units
Participant accounts are assigned investment fund units/shares. The net
asset value per unit/share 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 42,277
Fidelity Magellan Fund 143.25 134.63 133.84 119.30 3,883
Fidelity Equity Income
Fund 50.62 50.37 53.71 53.43 23,329
Fidelity Intermediate
Bond Fund 9.75 9.75 9.86 10.04 201,103
Fidelity Overseas Fund 48.27 45.73 42.42 34.37 3,446
Fidelity Asset Manager
Fund 19.05 18.80 19.11 16.82 13,157
Fidelity Retirement
Money Market Fund 1.00 1.00 1.00 1.00 514,998
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 $ 33.37 482
Fidelity Magellan Fund 129.75 129.77 122.02 136.63 2,826
Fidelity Equity Income
Fund 55.92 61.63 56.03 53.48 21,089
Fidelity Intermediate
Bond Fund 10.16 9.96 9.88 9.76 196,968
Fidelity Overseas Fund 36.99 38.88 41.11 48.01 2,733
Fidelity Asset Manager
Fund 17.54 18.08 17.28 18.38 9,325
Fidelity Retirement
Money Market Fund 1.00 1.00 1.00 1.00 431,866
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HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' 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:
December 31,
-----------------------------
2000 1999
------------- --------------
Fidelity Magellan Fund $ 463,287 $ 386,145
Fidelity Equity Income Fund 1,246,455 1,127,827
Fidelity Intermediate Bond Fund 2,019,074 1,922,404
Fidelity Retirement Money Market Fund 514,998 431,866
Participant loans 422,590 385,805
Other - less than 5% 426,944 318,663
------------- --------------
Total investments $ 5,093,348 $ 4,572,710
============= ==============
During 2000 and 1999, the Plan's investments had net realized and
unrealized gains (losses) as follows:
2000 1999
------------- --------------
Armstrong Holdings, Inc. common stock $ (33,061) (8,940)
Fidelity Magellan Fund (69,620) 36,870
Fidelity Equity Income Fund 7,544 (43,645)
Fidelity Intermediate Bond Fund 56,239 (103,281)
Fidelity Overseas Fund (42,498) 30,165
Fidelity Asset Manager Fund (19,138) 7,555
------------- --------------
Net depreciation in fair value of
investments $ (100,534) $ (81,276)
============= ==============
The components of investment income for the years ended December 31, 2000
and 1999 are as follows:
2000 1999
------------- --------------
Investment income:
Interest and dividend income $ 337,549 $ 325,826
Net depreciation in fair value of investments (100,534) (81,276)
------------- --------------
$ 237,015 $ 244,550
============= ==============
12
HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' 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 November 26, 1997, 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 and funds qualify as
party-in-interest transactions.
13
Schedule 1
HARTCO FLOORING COMPANY
BARGAINING EMPLOYEES' 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 $ 87,218
Fidelity Investments* Fidelity Magellan Fund 463,287
Fidelity Investments* Fidelity Equity Income Fund 1,246,455
Fidelity Investments* Fidelity Intermediate Bond Fund 2,019,074
Fidelity Investments* Fidelity Overseas Fund 118,425
Fidelity Investments* Fidelity Asset Manager Fund 221,301
Fidelity Investments* Fidelity Retirement Money Market Fund 514,998
Participant Loans* Loans to participants 422,590
---------------
Total investments $ 5,093,348
===============
* Party-in-interest
See accompanying independent auditors' report.
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