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, 2001
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
TRIANGLE PACIFIC CORP. NON-UNION HOURLY EMPLOYEES' 401(K) 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
Item 1. Independent Auditors' Report 4
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Item 2. Statements of Net Assets Available for Benefits as of December 31, 2001 and 2000 5
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Item 3. Statements of Changes in Net Assets Available for Benefits for the years ended
-------------------------------------------------------------------------------
December 31, 2001 and 2000 6
--------------------------
Notes to Financial Statements 7
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 13
Schedules not filed herewith are omitted because of the absence of conditions
under which they are required.
Exhibits
--------
Consent of Independent Auditors 14
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
July 1, 2002 By: /s/: Donald C. Fetzer, Jr.
------------------------------
Donald C. Fetzer, Jr., Member of the
Administrative Committee
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, 2001 and 2000, 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 Triangle
Pacific Corp. Non-Union Hourly Employees' 401(k) Plan as of December 31, 2001
and 2000, 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.
/S/ KPMG LLP
Dallas, Texas
May 24, 2002
4
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
2001 2000
------------ ------------
Assets:
Investments, at fair value (note 5):
Armstrong Holdings, Inc. common stock $ 5,133 8,277
Fidelity Magellan Fund 193,254 198,914
Fidelity Equity Income Fund 254,022 231,114
Fidelity Intermediate Bond Fund 148,607 119,463
Fidelity Overseas Fund 23,337 23,248
Fidelity Asset Manager Fund 87,073 75,608
Fidelity Retirement Money Market Fund 211,303 191,616
Participant loans 6,800 --
------------ ------------
Total investments 929,529 848,240
Receivables:
Participants (note 2) 4,356 3,856
------------ ------------
Total assets 933,885 852,096
------------ ------------
Net assets available for benefits $ 933,885 852,096
============ ============
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, 2001 and 2000
2001 2000
------------- ------------
Additions to net assets attributed to:
Investment income (loss):
Interest and dividend income $ 30,615 52,944
Net depreciation in fair value of investments (note 5) (50,706) (50,303)
------------- ------------
Net investment income (loss) (20,091) 2,641
Contributions:
Participants (note 2) 202,221 190,080
------------- ------------
Total additions 182,130 192,721
Deductions from net assets attributed to:
Benefits paid to participants (notes 2 and 3) (100,341) (87,289)
------------- ------------
Net increase 81,789 105,432
Net assets available for benefits at beginning of year 852,096 746,664
------------- ------------
Net assets available for benefits at end of year $ 933,885 852,096
============= ============
See accompanying notes to financial statements.
6
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES' 401(K) PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(1) General Information
The Triangle Pacific Corp. Non-Union Hourly Employees' 401(k) Plan (the
Plan) became effective on July 1, 1996. On July 22, 1998, Armstrong Wood
Products, Inc. (formerly known as Triangle Pacific Corp.) was acquired by
Armstrong World Industries, Inc. (a subsidiary of Armstrong Holdings,
Inc.). The Board of Directors of Armstrong Wood Products, Inc. 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 document for more detailed
information.
(a) General
The Plan is a defined contribution plan which provides retirement
benefits to hourly employees of Armstrong Wood Products, Inc. (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. In 2001, the Plan was amended to lower the age requirement to 18
years of age and eliminate the one year work requirement. The Plan is
administered by Bruce Hardwood Flooring, LLC, a subsidiary of
Armstrong Wood Products, Inc. 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 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 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 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.
7
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES' 401(K) PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(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 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. Armstrong Wood Products, Inc. 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.
. 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, 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.
8
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES' 401(K) PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(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.
(f) Participant Loans
Effective November 1, 2001, the Plan was amended to allow 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, 2001 was
5.75%.
(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 2001 and 2000, all significant expenses were paid by the
Company ($5,155 in 2001 and $8,783 in 2000).
(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).
9
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES' 401(K) PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(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.
(g) New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities
(SFAS No. 133). SFAS No. 133 requires that an entity recognize all
derivatives in its statement of net assets and measure those
instruments at fair value with changes recognized in the statement of
changes in net assets.
SFAS No. 133 is effective for fiscal years beginning after June 15,
2000. Pursuant to SFAS No. 137, the Plan adopted SFAS No. 133
effective January 1, 2001. The adoption of SFAS No. 133 did not have a
material impact on the Plan financial statements.
(4) Units
Participant accounts are assigned investment fund units/shares. The net
asset value per unit/share by fund/account for the 2001 and 2000 calendar
quarters ended is as follows:
2001 quarters ended Units at
------------------------------------------------------------------ December 31,
March 31 June 30 September 30 December 31 2001
-------------- -------------- -------------- -------------- --------------
Armstrong Holdings, Inc.
common stock $ 4.05 3.55 2.73 3.41 1,505
Fidelity Magellan Fund 104.50 111.09 94.03 104.22 1,854
Fidelity Equity Income Fund 49.77 52.19 45.62 48.77 5,209
Fidelity Intermediate Bond
Fund 10.22 10.14 10.45 10.32 14,400
Fidelity Overseas Fund 30.50 30.50 24.89 27.42 851
Fidelity Asset Manager Fund 15.70 16.11 14.71 15.50 5,618
Fidelity Retirement Money
Market Fund 1.00 1.00 1.00 1.00 211,303
2000 quarters ended Units at
------------------------------------------------------------------ December 31,
March 31 June 30 September 30 December 31 2000
-------------- -------------- -------------- -------------- --------------
Armstrong Holdings, Inc.
common stock $ 17.88 15.30 11.94 2.07 4,012
Fidelity Magellan Fund 143.25 134.63 133.84 119.30 1,667
Fidelity Equity Income Fund 50.62 50.37 53.71 53.43 4,326
Fidelity Intermediate Bond
Fund 9.75 9.75 9.86 10.04 11,899
Fidelity Overseas Fund 48.27 45.73 42.42 34.37 676
Fidelity Asset Manager Fund 19.05 18.80 19.11 16.82 4,495
Fidelity Retirement Money
Market Fund 1.00 1.00 1.00 1.00 191,616
10
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES' 401(K) PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(5) Investments
The following investments exceed 5% of the Plan's net assets available for
Plan benefits at December 31, 2001 and 2000:
Fair value
-----------------------
2001 2000
----------- ----------
Fidelity Magellan Fund $ 193,254 198,914
Fidelity Equity Income Fund 254,022 231,114
Fidelity Intermediate Bond Fund 148,607 119,463
Fidelity Asset Manager Fund 87,073 75,608
Fidelity Retirement Money Market Fund 211,303 191,616
Other - less than 5% 35,270 31,525
----------- ----------
Total investments $ 929,529 848,240
=========== ==========
During 2001 and 2000, the Plan's investments had net realized and
unrealized gains (losses) as follows:
2001 2000
---------- ---------
Common stock $ 3,413 (12,752)
Equity funds (51,391) (34,340)
Fixed income funds 3,411 3,251
Equity/fixed income funds (6,139) (6,462)
---------- ---------
Net depreciation in fair value of investments $ (50,706) (50,303)
========== =========
The components of investment income for the years ended December 31, 2001
and 2000 are as follows:
2001 2000
---------- ---------
Investment income (loss):
Interest and dividend income $ 30,615 52,944
Net depreciation in fair value of investments (50,706) (50,303)
---------- ---------
$ (20,091) 2,641
========== =========
(6) Tax Status of the Plan
The Company has not yet received a determination letter from the Internal
Revenue Service as of December 31, 2001. 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.
11
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES' 401(K) PLAN
Notes to Financial Statements
December 31, 2001 and 2000
(7) 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.
(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. Armstrong
Wood Products, Inc. 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.
(9) Subsequent Events
Effective January 1, 2002, the Company's board of directors renamed the
Plan to Armstrong Wood Products, Inc. Non-Union Hourly Employees' 401(k)
Plan.
Additionally, the Plan was amended due to changes in various legislation
and governmental regulations. These amendments were compliance related and
no changes were made to the design of the Plan.
Subsequent to December 31, 2001, the date for valuation of plan assets
provided herein, the value of plan investments has changed, and some have
fallen significantly from their values shown here.
12
Schedule 1
TRIANGLE PACIFIC CORP.
NON-UNION HOURLY EMPLOYEES 401(k) PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2001
Identity of issuer Description of investment Current value
------------------------------ --------------------------------------------------- -----------------
Armstrong Holdings, Inc.* Common stock $ 5,133
Fidelity Investments* Fidelity Magellan Fund 193,254
Fidelity Investments* Fidelity Equity Income Fund 254,022
Fidelity Investments* Fidelity Intermediate Bond Fund 148,607
Fidelity Investments* Fidelity Overseas Fund 23,337
Fidelity Investments* Fidelity Asset Manager Fund 87,073
Fidelity Investments* Fidelity Retirement Money Market Fund 211,303
Participant loans* Loans to participants 6,800
-----------------
Total investments $ 929,529
=================
* Party-in-interest
See accompanying independent auditors' report.
13