Document MoazrRgJVYgz6bYL29Jgzvz6y

_- vuau/oif9e[. ru ao* 11410 Columoia. SC 29211 303) 771-8818/(800)922-1524 SECUUTUS AMO EXCHANGE GOtMZSSlOC Uukintco^ D. C. 20549 root io-q QOAXTEXLX BMC OBCft SSCTZH U OK IS(d) OT THE SEC0MTIES OCHAKE ACT Of 1934 l iI II i j For Quarter Ended Sept--her 30. 1987 Co--iaslon Kin H--her 1-2114 At--croag World Indoacrlea. Inc. (Exact a--a of registrant an specified la Its charter) ____________Psnnaylpsala_______________;______________________________________23-0344390 (State or other Jurisdiction of (I.t~S. Employer incorporation or organlxatioe) Identlflcatloe So.) F. 0. Box 3COI. Lancaster, FesnsylPaala (Address of principal executive offices) 17404 (Zip Code) ta(ls crane's telephone camber, Including area code (717) 397-0411 Indicate by check aark whether Che registrant (1) has filed all reports required to be filed by Section 13 or 13(d) of the Sccarltles Exchange Act of 1934 during the preceding 12 months, and (2) has bees subject to such filing require--nes for at least Che past 90 days. Tes X So Fart X - flamcUI Idfoftlw It-- l. Financial Stmmti Operating raanlta for do third fMRtt aed first also anasha of 1987 coopered irlth tha corresponding parloda of 1986 laclndad la this nfort are no--diced. In tha opinion of cha Coopany, all adjustments necessary to a fair staCst--at of rasalta for cha reporting parloda ha-- bona included. Three snaths' aad nine Booths' raanlta ara not nacaaaarlly ladlcatl-- of --il earxlsgs. 4r--croog Borld Ind--cries, lac., aad Sobaldlarlaa Cos--lldatad StataaaaCa of tamings (Aaouata la allllo-- except for par--ahara data) Onaodlted Three Moatha Eodad ****** 1987 1966 (1) Use Hoache Ended T JU 1987 1986 fix Net aalaa Coat of goods sold Cross profit Selling 6 administrative expanse Earnings before ochar fnen-- (expense) and loco-- rasas $622.3 450.4 171.9 95.8 76.1 $506.0 356.0 146.0 61.1 $1,760.0 1,267.9 492.1 286.6 $1,423.9 1.013.7 410.2 239.5 66.9 205.5 170.7 Other loco-- (axpensa): Intaraat expense Miscellaneous, net Earnings befors lnco-- taxas Inco-- taxas Net eerntnga Dividend requirement -- praferred stock Net earnings applicable to caa--o stock (2.7) 1.6 UED 75.0 31.1 43.9 .1 $ '43.8 (1.2) jL> (2.0) (*-7) 1.4 TTTT) (3J) ( -5) zn> 64.9 27.9 37.0 .1 $ 36.9 198.2 81.3 116.9 .3 $ "116.6 166.4 69.9 96.5 .3 $ "90 Average ouaber of cob--a shares oatstanding ) 47.5 48.3 47.4 48.2 Warnings par co--on share (2) $ .92 $ .77 $ 2.46 $ 2.00 Dividends paid per common share (2) $ .225 $ .18 $ .66 $ .5225 Depredation and aaortlxatlon charged against eardngs before lnco-- aaounced to $21.7 alllloB and $18.3 alllloa la the three sooths ended Sept--ber 30, 1987 and 1986, respectively. Depreciation and aaortlxatlon charged against earnings before loco-- taxes amounted to $67.6 alllloa and $54.1 million In the nine aonths ended Sept--ber 30, 1987 and 1986, respectively. (1) and (2) See next page -2- Zot 17 (ram io-q) (1) iMalu tor lttt hit* Wri mucW Co raflaec tho rifiy'i adopcloa. ntnrtlw co January 1, HM, at Cha TIhkUI Accaaacla* Scaadardo loard'a Scacanaac lo. 87 nUcli* co ico poaaloa pint la cfco Oalcad Such. (2) tata* anahr af caaaina dam oatiuodlai, aarnlags par coaaoa ahara. and dlvldanda paid par eaaaoa ahara hara baa fatatad for Uti co raflaec Cha cao-for-ooa aCocfc apllc of cha Caapaay'a coaaoa acacJt m ocearrnd oo Iwabat 7, 1988. -3- 3*$/7 Anttraai World Industries, lac., ssd Subsidiaries Consolidated hlnei Skecci <S Rillloos) Onosdltod (.ram io-q) Assecs Sept--her 30. 19*7 Oteobcir 31. H Cumae assets: Cosh Short-tars secarltles (st coat, which appear!--ten rhec) Accounts rscslwabls, las* silo--nee In--stories: Finished goods Work la process In ssterlals sad supplies Total lowoseorlas S 1*6.2 33.3 7A.5 Other entreat eseets Total current assets $ 6.8 5 8.3 *6.2 331.1 95.2 262.2 256.2 22.0 660.3 9 135.8 29.0 67.4 232.2 67.6 625.5 Property, plant, aad equip--st 1.333.8 Less ecc--Dieted deprsclarlns and asortlxatlou 631.3 Hat property, plane, sad equip--sc 706.3 1.198.7 595.7 603.0 Other aoacnrrenc assets (1) 91.0 69.7 Liabilities aad Stockholders* Xqslty SI,655.6 $1,298.2 Current liabilities: botes payable Current Install--nts of loog-tera debt Accounts payable Accrued expenses Total curreac liabilities . $ 96.5 3.8 127.7 128.2 -------37C2 $ 102.8 6.3 100.3 90.4 "557.4 Long-ters debt (2} Other long-tern liabilities Deferred lnco-- taxes Klnorlty Interest in subsidiaries 38.8 7.6 125.3 7.3 Stockholders' equity: Capital stock Capital surplus 2etained earnings Foreign currency translation (3) Treasury stock Total stockholders* equity $ 68.5 21.0 876.3 9.5 (73.1) 902.6 Tocal liabilities and stockholders* equity $1,655.6 (l), (2) and (3) See next page. 58.8 7.6 114.7 6.3 S 68.5 19.7 791.2 (*) (66.0) 813.0 51 .298.2 -*- (rcm io-q) (1) Tha $21.3 million lacrmmmm la ocher uncarmt umu la primarily ictrliack to incaaglblaa reaelclag from Cha tcqallltlaa of ISO Holding. A.C. (2) Oaring Cha flrac mlaa nnaftia of 1JU, cha Caaptey, la ordar ca badge earcaln foralga lnutanu, created laco an!Ina Cara lacaraac race/enrreacy nap agraaaaace wlch third pertlee oboreby Cha fitianj aeapped JM.3 allllaa for an eqaloaleac aanaat of French and lolglaa franca and Careen aarha. Ac cha and of SepCenher 1JO, cha VJ. dollar value of cha foreign eorraaclaa choc Cha Caapany ooad aadar than a aaapa vaa $83.6 allllaa. Sloca chaaa agraaaanra laclada the right of offaac. only cha net difference batonan Cha too eaooata la Included oa cha bal ance ahaec. (3) Foreign currency crenalacloa reporcod aa a eeparace caapooant of atockholdara* acuity, la detailed aa followa: (S HlUlaaa) 1987 taginning balanca Oacaabar 31. 198* Vina aoncha Cranaladoo adjoaonenCa and hedging of foreign 1areaQuanta Allocated tncoaa Cazaa lading balance Sapcaabar 30, 1987 S (.*) 8.9 1.0 S 9.3 - 5- S-tf/7 (RHM 10-Q) Aractsog World IndafCrlca, lac., uid Subsidiaries ' CoMolltotd Statens nt of Changes la financial position Um Moatto ad<d S^tnbtr 30, 1987 and Septoaber 30, 1988 ($ Millone) OoaadlCed Operating activities: Hat earnings Depreciation and nrrl i if ton Other long-ters liabilities Deferred Income taxis aad other September 30 1987 September : 1986 (1) $116.9 67.6 -- 5.7 $ 96.5 54.X (1.2) 8.6 Cash provided by operating earnings 190.2 158.0 (Increase) la receivables (Increase) la Inventories Decrease la other current assets Increass la current liabilities, excluding debt Other, net (70.7) (12.6) 11.2 46.5 3.8 (55.7) (9-0) 28.2 19.4 .4 Hec cash provided by operating activities Investing activities: Purchases of property, pleat, and equipment and aggregate cost of acquisitions Hec cash nacd for Investing activities Financing activities: Incrsase (decrease) la short-ten debc and current Inscallnents of Long-tare debc Increase (decrease) la loag-ten debt Decrease In prefunding of asployee aedlcal benefit trust Purchase of cnisna end preferred stack for the treasury Purchsssd tax benefits and other 168.4 (111-*) (1*7.4) (20.1) (6.2) 17.2 (7-0) 4.2 141.] (102.3) (102.3) 8.2 .8 -- 7.1 Het cash provided by (used for) financing activities (11.9) 16.1 Total cash provided (used) Less cash dividends paid Hec Increase (decrease) In cash and short-tern securities (20.9) (31.6) 5(52.5) 55.1 (25.5) 5 29.6 (1) Set earnings, current liabilities, and other, net, have been restated to reflect the Ccepany's adoption, retroactive to January l, 1986, of the financial Accounting Standards Board's Statement Ho. 87 relative to Its pension plans la the United States. - 6- (FORM 10-Q) Araetroeg Vorld Industries, lac., and Subsidiaries Industry Segnent Financial Data Tore Month* and Kina Month* ended Septeeber 30, 1987 and Septeeber 30, 1988 (9 Million*) Unaudited Mat trade tala*: Floor coverings: teslllcnc flooring Carpet Total floor covering* Building.product* Furniture Industry products and other Total net sale* Operating profit: Floor covering* Building products Furniture Industry products and other Total operating profit General Corporate Expense Earnings before Incone Taxes Three noatha ended Septeaber 30 1986 line k>ntha ended Sept saber 30 1987 1986 3214.3 91.5 305.8 166.3 88.6 61.6 $622.3 3178.8 76.1 154.9 119.6 80.3 51.2 $506.0 3 573.9 263.3 837.2 477.6 262.0 183.2 $1 .760.0 3 493.9 209.3 763. i 353.1 221.1 146.5 $1,413.9 3 41.9 28.7 8.0 10.5 $ 89.1 $(14.1) $ 38.6 20.3 7.7 8.0 $ 74.6 $( 9.7) $ 75.0 $ 64.9 3 108.6 74.4 25.5 33.4 $ 241.9 $ (*3.7) $ 198.2 3 90.8 61.1 20.2 25.1 $ 197.2 $ (30.8) S 166.4 -7- 7^/7 (FORM 10-q) Hof l. Under Che Company's Employees' Scock OpCloe Plan of 1974 (the *1974 Plea*), opcions wen outstanding on September 30, 1987 for total of 299,106 shares of Common Stock. The price range per share eaa from $6.6873 to $13,625. Total price of all options outstanding eaa $3.4 million. Options covering 68,923 shares were exercised and no options sere cancelled during the third quarter; shares are no longer reserved for future options under the 1974 Plan which expired aa to any future grants on April 29, 1984. Under the Long-term Stock Option Plan for Key Employees adopted by the stockholders in 1984, options wre outstanding on SepCobcr 30, 1987 for a total of 531,674 shares of Common Stock. The price range per share was froa $17,875 to $38.50. Total price of all options outstanding was $16.7 nlllloa. Options covering 23,077 shares were exercised and 1,200 shares were cancelled during the third quarter; a total of 1,398,970 shares were reserved for future options. Mote 2. The aeeospanylag consolidated financial statements have been reviewed by the Company's independent public accountants. Peat Marwick Main 4 Co., In accordance with the established professional standards and procedures for such limited review. Mote 3. The Company Is named as one of natty defendants la pending lawsuits and claims Involving, aa of October 31, 1987 approximately 39,316 Individuals alleging personal Injury from exposure to asbestos or ashestoe-cootalalag products. Hearly all the personal Injury suits and claims allege gaaersl and punitive damagee arising from alleged expoeure tn asbeetoe-contalning Insulation products used, aami factored or sold by the Coepany. The Company discontinued the sale of all aabestos-cootalnlng Insulation products In 1969. Although a large number of such suits and claims pending In prior years hsve cither been settled, dismissed or otherwise resolved, sad the number of pending eases has been Increasing period-to-period, neither the rate of futura dispositions nor the number of future potential unassarted clalas can be reasonably predicted. The Company along with 53 other companies (defendants In the asbestosrelated litigation and certain of their Insurers) have signed the 1985 Agreement Concerning Asbeetos-Selated Claims, the *VelllngCon Agreement.' This Agreement provides for a final settlement of nearly all disputes concerning Insurance for asbestos-related personal Injur- claims as between the Company and three of Its primary Insurers and eight of Its excess Insurers which elso subscribed to the Agreement. The one primary carrier which has not signed the Wellington Agreement has paid Into the Wellington Facility. The payments the carrier has made are still subject to final accounting and poeential judicial or contractual reallocation. During 1986, one of the Compeny's Larger excess insurance carriers entered Into a settlement agreement with the Company under which payments will also be aade through Wellington. No ocher Insurance carriers have subscribed to Che Wellington Agreement Co date. ACandS, Inc., a former subsidiary of Che -8- \ V<M1 Company, which for certain Insurance period* haa coverage rights under sane Coepany lnaurance policies, also subscribed to the Wellington Agreement. The t'slllngton Agreeeent also provides for the establishment of an Asbestos Claims Facility to evaluate, settle, pay and defend all pending and future aabeatoe-related personal injury claims against those companies which subscribed to the Agreement, Liability payments and allocated expenses with reapect to each claim filed against Wellington subscriber* who are defendants In Che underlying aabesCos-ralated personal injury litigation are allocated on a formula percentage basis to each such defendant, Including the Coepany. Although continuing to support the Facility, one if the larger subscribing companies has withdrawn its designation of ths Facility aa agent to administer future filed claims. A lawsuit filed a a purported class action by alleged plaintiffs' representative*, attached the formation and operation of ths Wellington Facility on antitrust grounds; ths Company believes the suit la totally unjustified and unwarranted. An earlier lawsuit filed on anti-trust grounds by a personal Injury plaintiff's lawyer has been dismissed. The Company ir also one of naay defendants In aa Increasing number of pend It.* lawsuits and claims, Including class actions, brought by public and private entitles. Including public school districts sod public and private building (.suers. These lawsuits and dales include allegations of damage to buildings caused by asbesCos--containing produets and generally claim compensatory and punitive damages snd equitable relief, including reimbursement for actual or potential inspection for, containment of, or removal and r-'lacement of such products and loea of saa or valna of such buildings, l.neaa suits and claims appear to be aimed at friable (easily crumbled) as* r containing products although allegations in soma suits ncoapaas otnet sestos-contalnlng products. A national class of public and private act. .is with respect to alleged compensatory damages (from whir1' any member of the class may elect to be excluded) has been certified and i mandatory class asking punitive damages has bees denied. Other suits seek class action status. The Company vigorously denies the validity of Che allegations against it contained in these suits and claims. Increasing defense coats, paid under reservation by the Company's insurance carriers, will be Incurred. These suits and claims are not encompassed within the Wellington Agreement. The Company Is currently engaged la a coordinated lawsuit in a California state court to resolve a dispute concerning certain of Its Insurance carriers' obligation* with reapect to coverage for asbestos-related lawsuits and claims, including whether certain carrier action constitutes jao faith. Based upon the crlel court's recent favorable decision la an Important phase of the trial and a review of the reaalnlng coverage Issues by Its couasel, the Company believes It haa a substantial legal basis for establishing Its rights to defense and indemnification and for pursuing its bad-faith claims. The Company has dismissed from the asbestos-related per sonal lajury portion of the litigation those l..suraaee carriers which subscribed Co the Wellington Agreeeenc and an excess carrier has been dis missed which entered into a settlement agreement with the Company which complements Wellington. -9- (root 10-Q) Th< California trial court baa Issued a tentative decision In a critical phaae of Che lnauraoce lawsuit. That decision coneladed that the trigger of Insurance coverage was coeclnuoua from exposure through death or filing of a claia racher than Halted to theories of 'exposure' or 'manifestation,* or variations thereof, as contended by the Insurance carrier. The court also found chat a triggered lnauraaca policy should respond with full Indemnification up to exhaustion of Che policy llalta. The court concluded thee any defease obHgacloa ceases upon exhaustion of policy llalta. laportaat lasuea reaala to be 11 Clgated by the trial court. Including disputes concerning coverage for alleged asbestos-related build ing daaage, eertala Insurance company defenses. Interpretation of certain policy provisions, the exteac of contractual Halts la policies covering less than an annual period, and daaages. Including daaages for carrier bad faith. Based upon Che Coapaay's experience with this litigation and Its disputes with insurance carriers, a reserve was recorded in June 1983 to cover esclaated potential Habillty and settleaent coats and legal and adalnlstratlve costs not covered under the Inearla Agreement, coat of litigation against tha Coapaay's ioauranca carriers, sad ocher factors involved la the litigation *tleh are referred Co herein about which uncertainties axlat. As a result of tha ValHngton Agreement, the reserve was reduced for chat portion associated with pending personal Injury suits and claims. The Company expects chat oaarly all of tbs Habillty payments and expenses associated with handling and disposing of asbostos-ralatad . personal injury suits and claims against the Company for Che reasonably foreseeabls future will be paid by agreed-re insurance coverage under the Wellington Agreement end supplemented by payments by a non-subscribing ' insurer which entered Into e settlement agreement with the Company. Additional lnauraaca coverage la reasonably anticipated from the outcome of the lnauraaca litigation In California. Accordingly, the Company believes Chat any future charges to expense associated with such suits cal claims should be alaleal. Even chough there still remain uncertainties as to the potential number of unasserted clalas, any Liability resulting therefrom, and the ultlsate scope of Its Insurance coverage, after consideration of the factors involved. Including the Wellington Agreement, Che 1986 settlement with an excess carrier, Che remaining reserve, and its experience, the Company believes chat this litigation will not have a material adverse effect on Its earnings or financial position. 10 (FORM 10--Q) Item 2. Discussion and Analysts of Financial Condition and Results of Operation* Financial CondiCion Th Company's operations during Ch fine nine months of 1987 ^re auffl-- clone to gcnoraco th* funds noadod Co covmr normal operating requirements for working capital and dividend payments and, also, a portion of Che total ouclay for heavy Investments la property, plane and equlpaenc, and Che coat of the acquisition of ISO Bolding, A.G. the balance of the fuada required- including choae required for non-operating uaee--were obtained from decreaaaa In caah and ahore-tera aecurlclea. Mon-operaclng uaee of funda during Che first half Include the Initial Inveataenc In ISO Bolding, A.G., the purchase of coaaon stock, for Che treasury, and a decrease la both short-tern and long-tern debt. During the third quarter of 1987, the Company's operations were sufficient to generate the funds needed to cover aoraal operating requlreaencs for working capital and dividend payments, and all of the continuing heavy lnvescaencs la property, plant and equlpaenc. Working capital as of Septeaber 30, 1987, ana $308.1 aillloa. $16.3 million higher than the $289.3 million on June 30, 1987, and $21.6 alllion below Che $327.7 alllion at year-end 1906. During the third quarter, accounts receivable Increased by $17.9 aillloa principally due to higher sales and a aodesc .:plifc In the days' sales outstanding. Inventories rose by only $3.1 million--a race lower Chan the Increase In sales--ss efforts continue to monitor this Investment, and ocher current assets --ere reduced by $4.4 all- lion because lceaa provided for at year-end 1986 were either expensed or concerted to caah during the quarter. The ratio of current assets to cur rent liabilities was 1.86 to 1 as of September 30, 1987, coeparad to 1.84 co l on June 30, 1987 and 2.10 to 1 December 31, 1986. No significant long-cera financing Is anticipated In 1987 to support present-day businesses. Should a need develop for such financing. It Is management's oolalo'n Chat Che Compeny has sufficient financial strength to warrant Che required support from both short-term and long-term lenders. Consolidated Results Sales during the third quarter were $622.3 million, an Increase of 23 percent from sales of $506.0 million In the similar period of 1986. For the first nine monchs of 1987, sales were $1,760.0 million, a gain of 24 percent from sales of $1,423.9 million In the comparable period last year. Net earnings were $43.9 mill'on, compared with $37.0 million earned In the chlrd quarter a year ago. For Che nine monchs, after-tax earnings were $116.9 million compared with $96.5 million In 1986. U- The return wi average common stockholders' Malty during the third quarter was 2').J perceac. up free IS.7 perceac la the toe period last year. For che flr*c aloe months. retara oo equity u 19.4 perceat. compared with 16.8 perceac la the ease 1986 period. All four of the Company's Industry segments cootrlboted to the lacreaaea la the third quarter of 1987. The worldwide bulldlag prodacta acgweat taraad la aa capeclally atroag performance deaplce a dec 1toe la cowaerdal aad lnaclcatlooal coeatruction la the Halted Scatea. da la the eecood quarter, a sizeable portion of the lacreaaed operatlag reaalta cane fron the acqul-- altloa of ISO Soldlag. a European conpaay. aad fron 1ocraaaed wlaae la flberglaaa celling ascertain. The laduatry products aegaaat also reflected algalflcaac Increases la males aad operating profit as the Conpaay'* worldwide lasnlaclon aad textile sill supplies hualneasea regis tered improved resales, while d*naad softened for Its U.S. gasket aacarlals. Ia floor coverings, che percentage gala la sales was not sacchad by the rise la sparselog profit because of lacreaaea la raw asee rie1 prices without corresponding Increases la sales prices, because of relatively higher sales of lower-margin products, aad because of casts associated with new pleats aad plant expansions. In furniture, operating proflc waa affected by rising raw aaterlal prices aad by start-up coats of the oew upholstered furniture plant at Troutaaa, K.C., the new Carysbrrok, Va. plant, and the pleat expansion at Lenoir, 9.C. Also, che furniture business has eacauatamd coots associated with the further development of che Thonaavllle Callery prograa. In summary, the condoning records Is earnings occurred la apita of higher raw material prices for the Comp say's consumer-goods businesses, a somewhat lass favorable sales six, aad contin uing Investments la the future for these core boa1 nesses. .ioc worthy events daring the quarter Just aad ad Included the announced plana to build a new multi--million dollar facility at Thomaavllla, 8.C. to supply vaaeor peasla ro several of the Company's plants ia that area. This advaocad-techaology plant, which la expected to bcgla production by aid--1988, will enable the Company to expand production of mood furniture and will provide farther control of product quality. Ia addition, the Coapany signed a latter of latent aad subsequently acquired the assets at the Uestcheater compsales, aa acquisition that will aogaaat production capacity of upbolstarad furniture aad permit the addition of sew product categories, thereby providing csstoaars with batter service. The third quarter also Included completion of the consolidation of carpet-- related activities-- Including administrative, marketing aad technics 1 functions--in Lancaster, Fa. to provide greater efficiencies of operation. During the quarter the Caapsny also rounded out Its plans for a return to network television in tha fall of 1987 with a miltl-nllllon dollar campaign. Additionally, tha Company completed an agreenanc with an Italian company. Tecnoespaaal. S.p.A., to acquire facilities In Italy for the osnufacture of flexible-type Insulation. Subsequent to the end of the third quarter, che Conpaay completed the purchase of. aaaets of Leslle-Locke, Inc's celling suspension syateus business at a facility In Franklin Park. Illinois. The Company believes It la too early to assess the full effect of che recent fluctuations In the stock market and the uncertainty they lead to. ks the fourth quarter begins, che Company's business reulna strong, although lose weakness la che Company's principal domestic aerkecs can be seen under the pressure of rising yields on long-term boods and mortgages, dowever, recent events suggest tome relaxation of thac pressure la the com ing months. - 12 - /iff? Carofmd fuMK 1600 Mk Strut PtutBMWns. P* 1VKB ACCOPHIABTB* ggPOK The Board of Director* Armstrong World Indnstrlcs, Zac. Ve hare msds a review of die condensed consolidated balance sheet of Armstrong World Industries, Inc. aad subsidiaries as of September 30, 1987 and tbs related condensed consolidated statements of earnings for tbs three month and nine-month periods ended September 30, 1987 aad 1986 and tbs condensed consolidated abatements of changes In financial position for the alnm-nonth periods then ended. In accordance with standards established by the American Institute of Certified Public Accountants. A review of Interim financial Information consists principally of obtaining an understanding of the syutma for the preparation of interim financial information, applying analytical review procedures to financial data aad making Inquiries of persons responsible for financial and accounting matters. It la substantially leas la scope than an examination la accordance with generally accepted auditing standards, the objective of which la the expression of an opinion regarding the financial statements taken as a whole. Accordingly, ve do not express such an opinion. Baaed on our review, we are not aware of any naterlal modifications that should be aade to the condensed consolidated financial statements referred to above for then to be In conformity with generally accepted accounting principles. Ve have previously examined. In accordance with generally accepted auditing standards, the consolidated balance aheec as of December 31, 1986, and the related consolidated statements of earnings and changes In financial position for the year then ended (not presented herein); and In our report dated February 16, 1987, ve expressed an unqualified opinion on those consolidated financial statements. In our opinion, the Information aet forth In the accompanying condensed consolidated balance sheet as of Decenber 31, 1986, Is fairly stated In all aaterlal respects in relation to the consolidated balance sheet from which It has been derived. Philadelphia, Pennsylvania October 26, 1987 13 - A3*tf7 Part II - Other Information Item 5. Other Information On October 26, 1987, the Canpasy announced that its Board of directors had authorised the repurchase of op to am additional 2,000,000 sharea of the Company's irnmann stock la opaa aarket sad la associated transactloea. A copy of the Compaay's press ralaase with respect to this authorization Is attached hereto as Exhibit 28 and Is Incorporated herela by referase a. Item 6. Ezhlblts and laports os Pore HC (a) The following exhibits are filed as a part of this Quarterly leport oa fora 10-Q: Exhibits Ho. IS Copy of latter from ladepeedoat aecouataat regarding unaudited Interim financial InforestIon. Ho. 28 Copy of the Conpaay'a press release with (aspect to authorisation of the repurchase of ep to an additional 2,000,000 sharea of Its coaaon stack la open aarket acd in negotiated transactions. Signatures Pursuant to tha requirements at the legerities Irrtiesgn Act of 1934, the Esglstrant has duly caused this report to ha signed oa Its behalf by tha undersigned thereunto duly authorised. ArnecrnpgfVorld ladsetrles, Inc. *r rU.LmJf'-------------- . kabat, Vice-President, ataxy and Caaeral Coaaasl Sate: Hovenber 11, 1987 HUllsn J. Ulmer, Vice-President sad CoscxoUdr (Principal Aceaestlag Officer) 14 /ff7 infiM austtktn Services 15740 Shady Grow Road GMdMrsburg. Maryland 20877-1454 Omyo)W lt>-Q) EahlMt late bfelblC Bo. lo. IS lo- 23 Coff of latter fraa ktiwftf njutlai innttn< laterla flnaartol 1fnr--tloa. rr-,L Copy of th* Cppoay*o praaa wlim olch roepact to MtkotlutlM n*nof tto raporcbeae of op to at ottltloaol 2,000,003 okcoi of tea - 15 - /S*f/7 WOMaftatSmat PtiUadalcha. M W103 iaitmi World Industries, Inc. Luieastsr, TeauylTntlt ZSl___tcalatrmtlon itltaat Wo. 2-47833; 2-77936; 2-91890 Vltb respect to tbs subject leglstraciaa Statements, ve schaovledca oer avarmesa of tbs Incorporation bp reference therein of our report dated October 26, 1987 related to oar review of interim financial information. Pursuant to tale 436(e) under tbs Securities Act, such report is not considered a part of a Keclatratloa Statement prepared or certified bp an accountant or a report prepared or certified bp an accountant within the aeaninc of Sections 7 and 11 Of tbs Act. Very truly pours. PZAT RAKWICZ HAIS & CO Philadelphia, Pennsylvania October 26, 1987 /(, *. Armstrong *. UJUOIC AO. ^ . . ............... * : ........................ ** -* CMBi.iiS! OK RECEIPT October 26. 1937 LANCASTER. PA.. October 26--Armstrong World Industrial. Inc., announced today that its Board of Directors has authorized the purchase froa else to tins ot an additional 2.000.000 shares of the coapany's coaaeo acock la thi opes market and la negotiated transactions. These shares, the coapaay explained, say be used for general corpoxate purposes, including possible future acquisitions. The purchases will be aade primarily by Salth Barney, Harris llphaa A Co., Inc. Armstrong currently has spproxiaately *7.000.000 uhares of coanon stock outstanding. /7^/7 FILMED NOVEMBER 1987 "This microfiche, including title information and format is I 1986 Bechtel Information Services. All rights reserved."