##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 ARMSTRONG WORLD INDUSTRIES, INC.
  Pennsylvania
    
    1-2116
    
    23-0366390(State or other jurisdiction of
    
    Commission file
    
    (I.R.S. Employerincorporation or organization)
    
    number
    
    Identification No.)
 P. O. Box 3001, Lancaster, Pennsylvania
    
    17604(Address of principal executive offices)
    
    (Zip Code)
 (717) 397-0611
   Common Stock ($0.01 par value)
 Yes þ No o
 Yes o No þ
 þ o
 o o




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þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o
 o þ
 þ o
  Documents Incorporated by Reference
     2




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##### 



TABLE OF CONTENTS
 SECTION
    
    PAGESUncertainties Affecting Forward-Looking Statements
    
    
    4PART IItem 1. Business
    
    
    5Item 1A. Risk Factors
    
    
    10Item 1B. Unresolved Staff Comments
    
    
    14Item 2. Properties
    
    
    15Item 3. Legal Proceedings
    
    
    15PART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    16Item 6. Selected Financial Data
    
    
    18Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    
    
    36Item 8. Financial Statements and Supplementary Data
    
    
    38Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    96Item 9A. Controls and Procedures
    
    
    96PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    97Item 11. Executive Compensation
    
    
    97Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
    
    
    97Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    97Item 14. Principal Accountant Fees and Services
    
    
    97PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    98Signatures
    
    
    103Exhibit 10.4Exhiibt 10.23Exhibit 10.25Exhibit 10.37Exhibit 11Exhibit 14Exhibit 21Exhibit 23.1Exhibit 23.2Exhibit 24Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2Exhibit 99.1
   3




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Uncertainties Affecting Forward-Looking Statements
     4




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PART I
 
 ITEM 1.
    
    BUSINESS
     Reportable Segments
  Markets
  North American Residential.
   5




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North American Commercial.
 Outside of North America.
  (Estimatedpercentages of
    
    North American
    
    
    North American
    
    
    Outside of Northindividual
    
    Residential
    
    
    Commercial
    
    
    Americasegments sales)
    
    New
    
    
    Renovation
    
    
    New
    
    
    Renovation
    
    
    New
    
    
    Renovation
    
    
    TotalResilient Flooring
    
    
    5
    %
    
    
    30
    %
    
    
    5
    %
    
    
    30
    %
    
    
    10
    %
    
    
    20
    %
    
    
    100
    %Wood Flooring
    
    
    35
    %
    
    
    65
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    %Building Products
    
    
    
    
    
    
    10
    %
    
    
    15
    %
    
    
    40
    %
    
    
    20
    %
    
    
    15
    %
    
    
    100
    %Cabinets
    
    
    50
    %
    
    
    45
    %
    
    
    5
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    %
 Geographic Areas
  Americas
    
    
    71
    %Europe
    
    
    20
    %Pacific Rim
    
    
    9
    %
   6




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Customers
    Competition
     Raw Materials
  Business
    
    Principal Raw MaterialsResilient Flooring
    
    Polyvinylchloride (PVC) resins and films,
plasticizers, backings, limestone, pigments, linseed
oil, inks and stabilizersWood Flooring
    
    Hardwood lumber, veneer, coatings and stainsBuilding Products
    
    Mineral fibers, fiberglass, perlite, waste paper,
clays, starches and steel used in the production of
metal ceilings and for our WAVE joint ventures
manufacturing of ceiling gridCabinets
    
    Lumber, veneer, plywood, particleboard and components,
such as doors and hardware
  7




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Sourced Products
   Patent and Intellectual Property Rights
   ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ®
   8




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Employees
  Research & Development
  Sustainability and Environmental Matters
      9




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ITEM 1A.
    
    RISK FACTORS
   Our November 23, 2010 refinancing, which was part of a leveraged recapitalization plan, resulted in
a substantial amount of indebtedness which may adversely affect our cash flow and our ability to
operate our business, comply with debt covenants, make payments on our indebtedness and declare
dividends on our capital stock. The refinancing is described in more detail in the financial
condition and liquidity section of managements discussion and analysis (MD&A).
  
    
    make it more difficult for us to satisfy our obligations with respect to our
indebtedness, and any failure to comply with the obligations of any of our debt
instruments, including restrictive covenants and borrowing conditions, could result in
an event of default under the agreements governing such indebtedness;
 
    
    make us more vulnerable to adverse changes in general economic, industry and
competitive conditions and adverse changes in government regulation;
 
    
    limit our flexibility in planning for, or reacting to, changes in our business and
the industry in which we operate;
 
    
    place us at a competitive disadvantage compared to our competitors that are less
leveraged and therefore more able to take advantage of opportunities that our leverage
prevents us from exploiting;
 
    
    limit our ability to borrow additional amounts for working capital, capital
expenditures, acquisitions, debt service requirements, execution of our business
strategy or other purposes;
 
    
    restrict our ability to pay dividends on our capital stock; and
 
    
    adversely affect our credit ratings.
    10




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The agreements that govern the indebtedness contain a number of covenants that impose significant
operating and financial restrictions, including restrictions on our ability to engage in acts that
may be in our best long-term interests.
  
    
    incur additional debt;
 
    
    pay dividends on or make other distributions in respect of our or our restricted
subsidiaries capital stock or redeem, repurchase or retire our or our restricted
subsidiaries capital stock or subordinated debt or make certain other restricted
payments;
 
    
    sell certain assets;
 
    
    consolidate, merge, sell or otherwise dispose of all or substantially all of our
assets; and
 
    
    create liens on certain assets to secure debt.
  In addition to increased indebtedness levels due to the refinancing, we still may be able to incur
substantially more debt. This could further exacerbate the risks associated with additional
leverage.
  Our business is dependent on construction activity. Downturns in construction activity and global
economic conditions, such as weak consumer confidence and weak credit markets, adversely affect our
business and our profitability.
   11




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We require a significant amount of liquidity to fund our operations, and borrowing has increased
our vulnerability to negative unforeseen events.
  If the availability of raw materials and energy decreases, or the costs increase, and we are unable
to pass along increased costs, our operating results could be adversely affected.
  Labor disputes or work stoppages could hurt production and reduce sales and profits.
  Our markets are highly competitive. Competition can reduce demand for our products or cause us to
lower prices. Failure to compete effectively by meeting consumer preferences maintaining market
share would adversely affect our results.
  Reduction in sales to key customers could have a material adverse effect on our revenues and
profits.
   12




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Changes in the political, regulatory and business environments of our international markets,
including changes in duty rates, trade regulations, and currency exchange fluctuations could have
an adverse effect on our business.
  Our restructuring actions and LEAN initiatives may not achieve expected savings in our operating
costs or improved operating results.
  Adverse judgments in regulatory actions, product claims and other litigation could be costly.
Insurance coverage may not be available or adequate in all circumstances.
   13




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Our principal shareholders could significantly influence our business and our affairs.
  
 ITEM 1B.
    
    UNRESOLVED STAFF COMMENTS
   14




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ITEM 2.
    
    PROPERTIES
   Business
    
    NumberSegment
    
    of Plants
    
    
    Location of Principal FacilitiesResilient Flooring
    
    
    11
    
    
    U.S. (California, Illinois,
Mississippi, Oklahoma,
Pennsylvania), Australia and
GermanyWood Flooring
    
    
    10
    
    
    U.S. (Arkansas, Kentucky,
Missouri, North Carolina,
Pennsylvania, Tennessee, and West
Virginia) and ChinaBuilding Products
    
    
    12
    
    
    U.S. (Florida, Georgia, Oregon,
Pennsylvania), China, France,
Germany and the U.K.Cabinets
    
    
    1
    
    
    U.S. (Pennsylvania)
    
 ITEM 3.
    
    LEGAL PROCEEDINGS
   15




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PART II
 
 ITEM 5.
    
    MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
  First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    Total Year2010Price range of common stockhigh
    
    $
    40.93
    
    
    $
    45.05
    
    
    $
    43.05
    
    
    $
    54.58
    
    
    $
    54.58Price range of common stocklow
    
    $
    33.42
    
    
    $
    29.44
    
    
    $
    28.01
    
    
    $
    39.55
    
    
    $
    28.012009Price range of common stockhigh
    
    $
    23.74
    
    
    $
    21.80
    
    
    $
    35.50
    
    
    $
    45.45
    
    
    $
    45.45Price range of common stocklow
    
    $
    9.42
    
    
    $
    10.55
    
    
    $
    15.05
    
    
    $
    33.14
    
    
    $
    9.42
    Issuer Purchases of Equity Securities
 Total Number of
    
    
    MaximumShares
    
    
    Number ofPurchased as
    
    
    Shares that mayPart of Publicly
    
    
    yet beTotal Number
    
    
    Average Price
    
    
    Announced
    
    
    Purchased underof Shares
    
    
    Paid per
    
    
    Plans or
    
    
    the Plans orPeriod
    
    Purchased
    
    
    Share
    
    
    Programs1
    
    
    ProgramsOctober 1-31, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    November 1-30, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    December 1-31, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A
 1
    
    The Company does not have a share buy-back program.
  16




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EQUITY COMPENSATION PLAN INFORMATION
  (a) Number of securities to
    
    
    (b) Weighted-average
    
    
    (c) Number of securities remainingbe issued upon exercise
    
    
    exercise price of
    
    
    available for future issuance underof outstanding options,
    
    
    outstanding options,
    
    
    equity compensation plans (excludingwarrants, and rights
    
    
    warrants, and rights
    
    
    securities reflected in column (a)Equity compensation
plans approved by
security holders
    
    
    1,978,371
    
    
    $
    24.02
    
    
    
    2,001,535Equity compensation
plans not approved
by security holders
    
    
    0
    
    
    Not Applicable
    
    
    
    0Totals
    
    
    1,978,371
    
    
    $
    24.02
    
    
    
    2,001,535
  17




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ITEM 6.
    
    SELECTED FINANCIAL DATA
 PredecessorSuccessor Company
    
    
    
    CompanyThree
    
    
    
    NineMonths
    
    
    
    MonthsEnded
    
    
    
    EndedYear
    
    
    Year
    
    
    Year
    
    
    Year
    
    
    December
    
    
    
    September(Dollars in millions except for per-share data)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    31, 2006
    
    
    
    30, 2006(1)Income statement dataNet sales
    
    $
    2,766.4
    
    
    $
    2,780.0
    
    
    $
    3,393.0
    
    
    $
    3,549.7
    
    
    $
    817.3
    
    
    
    $
    2,608.6Operating income
    
    
    81.1
    
    
    
    90.6
    
    
    
    210.9
    
    
    
    296.7
    
    
    
    16.5
    
    
    
    
    194.3Earnings from continuing operations
    
    
    11.0
    
    
    
    77.7
    
    
    
    80.4
    
    
    
    152.8
    
    
    
    3.3
    
    
    
    
    1,424.2Per common share  basic (a)
    
    $
    0.19
    
    
    $
    1.36
    
    
    $
    1.41
    
    
    $
    2.69
    
    
    $
    0.06
    
    
    
    
    n/aPer common share  diluted (a)
    
    $
    0.19
    
    
    $
    1.36
    
    
    $
    1.41
    
    
    $
    2.69
    
    
    $
    0.06
    
    
    
    
    n/aDividends declared per share of
common stock
    
    $
    13.74
    
    
    
    
    
    
    $
    4.50
    
    
    
    
    
    
    
    
    
    
    
    
    Balance sheet data (end of period)Total assets
    
    
    2,922.4
    
    
    
    3,302.6
    
    
    
    3,351.8
    
    
    
    4,639.4
    
    
    
    4,152.7Long-term debt
    
    
    839.6
    
    
    
    432.5
    
    
    
    454.8
    
    
    
    485.8
    
    
    
    801.5Total equity
    
    
    1,090.8
    
    
    
    1,907.9
    
    
    
    1,751.3
    
    
    
    2,444.1
    
    
    
    2,172.1
 (1)
    
    Reflects the effects of the Plan of Reorganization and fresh-start reporting. AWI and its
subsidiaries adopted fresh-start reporting upon AWI emerging from Chapter 11. Consequently, the
impact of emergence, including the gain on settlement of liabilities subject to compromise and the
gain on fresh-start reporting of $1,955.5 million, is reflected in the Predecessor Company for the
nine months ended September 30, 2006. The results of operations beginning October 1, 2006 are
reflected within the Successor Company.Notes:(a)
    
    See definition of basic and diluted earnings per share in Note 2 to the Consolidated
Financial Statements. The common stock of the Predecessor Company was not publicly traded.
  18




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ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
     OVERVIEW
      19




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Factors Affecting Revenues
  Markets.
 
    
    According to the U.S. Census Bureau, in 2010 housing starts in the U.S. residential
market increased 6% compared to 2009 to 0.59 million units. Housing completions in the U.S.
declined by 18% in 2010 with approximately 0.66 million units completed. The National
Association of Realtors indicated that sales of existing homes decreased 5% to 4.92 million
units in 2010 from a level of 5.16 million units in 2009.
 
    
    According to the U.S. Census Bureau, for the value of new construction put in place, the
rate of decline in the North American key commercial market, in nominal dollar terms, was
19% in 2010 compared to 2009. Construction activity in the office, healthcare, education
and retail segments declined 29%, 12%, 15% and 26%, respectively, in 2010 compared to 2009.
These measures reflect the weakness of the new construction market. In addition, the
market is comprised of renovation and repair and replacement which have generally been
positive in 2010.
 
    
    Markets in Western European countries declined with modest growth in Central Europe and
continued weakness elsewhere. Eastern European markets grew.
 
    
    Activity in Pacific Rim markets, specifically India, China, and Australia, grew.
 Pricing Initiatives
  
    
    Resilient Flooring announced a pricing increase in the Americas effective March 2010
which was rescinded after competition did not follow. We then announced a pricing increase
in the Americas effective June 2010. We have also announced pricing increases in Europe
effective January 2011 and domestically effective February 2011.
 
    
    Wood Flooring announced price increases effective March and June of 2010.
 
    
    Building Products announced price increases for ceiling tile in the Americas and Europe
effective February 2010, for grid effective May 2010, again for ceiling tile in the
Americas effective August 2010, and again for grid in the Americas effective in October
2010. We have also announced price increases for ceiling tile and grid in the Americas
effective February 2011.
 
    
    Cabinets announced a price increase effective February 2011.
  Mix.
  20




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Factors Affecting Operating Costs
 Operating Expenses.
   Intangible Asset Impairments.
  Factors Affecting Cash Flow
   Employees
   21




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CRITICAL ACCOUNTING ESTIMATES
   Fresh-Start Reporting and Reorganization Value
  U.S. Pension Credit and Postretirement Benefit Costs
    22




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Assumptions
    
    
    ActualPost 65
    
    
    Pre 65
    
    
    Overall
    
    
    Post 65
    
    
    Pre 65
    
    
    Overall2009
    
    
    10.0
    %
    
    
    9.5
    %
    
    
    9.8
    %
    
    
    (7
    )%
    
    
    (1
    )%
    
    
    (5
    )%2010
    
    
    9.0
    %
    
    
    8.5
    %
    
    
    8.8
    %
    
    
    (3
    )%
    
    
    12
    %
    
    
    4
    %2011
    
    
    8.5
    %
    
    
    8.6
    %
    
    
    8.5
    %
   Impairments of Long-Lived Tangible and Intangible Assets
  23




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24




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Income Taxes
     ACCOUNTING PRONOUNCEMENTS EFFECTIVE IN FUTURE PERIODS
   25




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##### Table of Contents



RESULTS OF OPERATIONS
  2010 COMPARED TO 2009
 CONSOLIDATED RESULTS
 Change is Favorable2010
    
    
    2009
    
    
    (Unfavorable)Net sales:Americas
    
    $
    1,966.7
    
    
    $
    1,995.6
    
    
    
    (1.4
    )%Europe
    
    
    600.9
    
    
    
    626.0
    
    
    
    (4.0
    )%Pacific Rim
    
    
    198.8
    
    
    
    158.4
    
    
    
    25.5
    %Total consolidated net sales
    
    $
    2,766.4
    
    
    $
    2,780.0
    
    
    
    (0.5
    )%Operating income
    
    $
    81.1
    
    
    $
    90.6
    
    
    
    (10.5
    )%
           26




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REPORTABLE SEGMENT RESULTS
 Resilient Flooring
 Change is Favorable2010
    
    
    2009
    
    
    (Unfavorable)Net sales:Americas
    
    $
    653.0
    
    
    $
    673.1
    
    
    
    (3.0
    )%Europe
    
    
    276.5
    
    
    
    294.3
    
    
    
    (6.0
    )%Pacific Rim
    
    
    83.7
    
    
    
    64.3
    
    
    
    30.2
    %Total segment net sales
    
    $
    1,013.2
    
    
    $
    1,031.7
    
    
    
    (1.8
    )%Operating income
    
    $
    13.1
    
    
    $
    0.1
    
    
    Favorable
      27




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Wood Flooring
 Change is2010
    
    
    2009
    
    
    (Unfavorable)Total segment net sales
    
    $
    479.1
    
    
    $
    510.4
    
    
    
    (6.1
    )%Operating (loss)
    
    $
    (45.8
    )
    
    $
    (5.9
    )
    
    Unfavorable
   Building Products
 Change is Favorable2010
    
    
    2009
    
    
    (Unfavorable)Net sales:Americas
    
    $
    696.0
    
    
    $
    661.9
    
    
    
    5.2
    %Europe
    
    
    324.4
    
    
    
    331.7
    
    
    
    (2.2
    )%Pacific Rim
    
    
    115.1
    
    
    
    94.1
    
    
    
    22.3
    %Total segment net sales
    
    $
    1,135.5
    
    
    $
    1,087.7
    
    
    
    4.4
    %Operating income
    
    $
    171.0
    
    
    $
    155.9
    
    
    
    9.7
    %
     Cabinets
 Change is Favorable/2010
    
    
    2009
    
    
    (Unfavorable)Total segment net sales
    
    $
    138.6
    
    
    $
    150.2
    
    
    
    (7.7
    )%Operating (loss)
    
    $
    (6.4
    )
    
    $
    (18.3
    )
    
    
    65.0
    %
    28




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Unallocated Corporate
  FINANCIAL CONDITION AND LIQUIDITY
 Cash Flow
    Liquidity
       29




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2009 COMPARED TO 2008
 CONSOLIDATED RESULTS
 Change is2009
    
    
    2008
    
    
    (Unfavorable)Net sales:Americas
    
    $
    1,995.6
    
    
    $
    2,384.4
    
    
    
    (16.3
    )%Europe
    
    
    626.0
    
    
    
    826.0
    
    
    
    (24.2
    )%Pacific Rim
    
    
    158.4
    
    
    
    182.6
    
    
    
    (13.3
    )%Total consolidated net sales
    
    $
    2,780.0
    
    
    $
    3,393.0
    
    
    
    (18.1
    )%Operating income
    
    $
    90.6
    
    
    $
    210.9
    
    
    
    (57.0
    )%
           31




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REPORTABLE SEGMENT RESULTS
 Resilient Flooring
 Change is Favorable/2009
    
    
    2008
    
    
    (Unfavorable)Net sales:Americas
    
    $
    673.1
    
    
    $
    786.2
    
    
    
    (14.4
    )%Europe
    
    
    294.3
    
    
    
    355.1
    
    
    
    (17.1
    )%Pacific Rim
    
    
    64.3
    
    
    
    78.8
    
    
    
    (18.4
    )%Total segment net sales
    
    $
    1,031.7
    
    
    $
    1,220.1
    
    
    
    (15.4
    )%Operating income (loss)
    
    $
    0.1
    
    
    $
    (16.8
    )
    
    Favorable
     Wood Flooring
 Change is2009
    
    
    2008
    
    
    (Unfavorable)Total segment net sales
    
    $
    510.4
    
    
    $
    624.6
    
    
    
    (18.3
    )%Operating (loss)
    
    $
    (5.9
    )
    
    $
    (2.4
    )
    
    Unfavorable
    32




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Building Products
 Change is2009
    
    
    2008
    
    
    (Unfavorable)Net sales:Americas
    
    $
    661.9
    
    
    $
    794.4
    
    
    
    (16.7
    )%Europe
    
    
    331.7
    
    
    
    470.9
    
    
    
    (29.6
    )%Pacific Rim
    
    
    94.1
    
    
    
    103.8
    
    
    
    (9.3
    )%Total segment net sales
    
    $
    1,087.7
    
    
    $
    1,369.1
    
    
    
    (20.6
    )%Operating income
    
    $
    155.9
    
    
    $
    239.7
    
    
    
    (35.0
    )%
     Cabinets
 Change is2009
    
    
    2008
    
    
    (Unfavorable)Total segment net sales
    
    $
    150.2
    
    
    $
    179.2
    
    
    
    (16.2
    )%Operating (loss)
    
    $
    (18.3
    )
    
    $
    (6.7
    )
    
    Unfavorable
   Unallocated Corporate
  CASH FLOW
    33




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##### Table of Contents



OFF-BALANCE SHEET ARRANGEMENTS
  CONTRACTUAL OBLIGATIONS
  2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    Thereafter
    
    
    TotalLong-term debt
    
    $
    10.3
    
    
    $
    18.1
    
    
    $
    30.5
    
    
    $
    43.0
    
    
    $
    180.5
    
    
    $
    567.5
    
    
    $
    849.9Scheduled interest payments (1)
    
    
    38.5
    
    
    
    39.6
    
    
    
    45.1
    
    
    
    51.6
    
    
    
    52.9
    
    
    
    119.5
    
    
    
    347.2Operating lease obligations (2)
    
    
    11.3
    
    
    
    8.8
    
    
    
    4.4
    
    
    
    2.3
    
    
    
    1.2
    
    
    
    4.5
    
    
    
    32.5Unconditional purchase obligations (3)
    
    
    27.6
    
    
    
    15.0
    
    
    
    2.5
    
    
    
    1.7
    
    
    
    1.7
    
    
    
    
    
    
    
    48.5Other obligations(4), (5)
    
    
    19.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19.2Total contractual obligations
    
    $
    106.9
    
    
    $
    81.5
    
    
    $
    82.5
    
    
    $
    98.6
    
    
    $
    236.3
    
    
    $
    691.5
    
    
    $
    1,297.3
 (1)
    
    For debt with variable interest rates, we projected future interest payments based
on market based interest rate swap curves.(2)
    
    Lease obligations include the minimum payments due under existing agreements with
noncancelable lease terms in excess of one year.(3)
    
    Unconditional purchase obligations include (a) purchase contracts whereby we must
make guaranteed minimum payments of a specified amount regardless of how little material is
actually purchased (take or pay contracts) and (b) service agreements. Unconditional
purchase obligations exclude contracts entered into during the normal course of business that
are non-cancelable and have fixed per unit fees, but where the monthly commitment varies based
upon usage. Cellular phone contracts are an example.(4)
    
    Other obligations include payments under severance agreements.(5)
    
    Other obligations does not include $126.3 million of liabilities under ASC 740
Income Taxes. Due to the uncertainty relating to these positions, we are unable to
reasonably estimate the ultimate amount or timing of the settlement of these issues. See Note
16 to the Consolidated Financial Statements for more information.
    34




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##### Table of Contents



Total
    
    
    LessOther Commercial
    
    Amounts
    
    
    Than 1
    
    
    1  3
    
    
    4  5
    
    
    Over 5Commitments
    
    Committed
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    YearsLetters of credit
    
    $
    73.5
    
    
    $
    73.5
    
    
    
    
    
    
    
    
    
    
    
    
     35




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##### Table of Contents



ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk
  Counter Party Risk
  Interest Rate Sensitivity
   Scheduled maturity date
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    After($ millions)
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015
    
    
    2016
    
    
    TotalAs of December 31, 2010Long-term debt:Fixed rate
    
    $
    4.5
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    0.0
    
    
    $
    4.5Avg. interest rate
    
    
    5.25
    %
    
    
    5.77
    %
    
    
    5.77
    %
    
    
    5.77
    %
    
    
    5.77
    %
    
    
    5.77
    %
    
    
    5.25
    %Variable rate
    
    $
    5.8
    
    
    $
    18.1
    
    
    $
    30.5
    
    
    $
    43.0
    
    
    $
    180.5
    
    
    $
    567.5
    
    
    $
    845.4Avg. interest rate
    
    
    4.85
    %
    
    
    4.43
    %
    
    
    5.30
    %
    
    
    6.29
    %
    
    
    7.06
    %
    
    
    7.14
    %
    
    
    6.94
    %
  36




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##### Table of Contents



Exchange Rate Sensitivity
    Maturing inOn balance sheet foreign exchange related derivatives
    
    2011As of December 31, 2010Notional amounts (millions)
    
    $
    229.1(Liabilities) at fair value (millions)
    
    $
    (7.0
    )
 Natural Gas Price Sensitivity
   37




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##### Table of Contents



ITEM 8.
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 SUPPLEMENTARY DATA
   Reports of Independent Registered Public Accounting Firm
    
    
    42Consolidated Statements of Earnings for the Years Ended December 31, 2010, 2009 and 2008
    
    
    44Consolidated Balance Sheets as of December 31, 2010 and 2009
    
    
    45Consolidated Statements of Equity for the Years Ended December 31, 2010, 2009 and 2008
    
    
    46Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008
    
    
    47Notes to Consolidated Financial Statements
    
    
    48Schedule II for the Years Ended December 31, 2010, 2009, and 2008
  38




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##### Table of Contents



(millions except for per share data)
 First
    
    
    Second
    
    
    Third
    
    
    Fourth2010Net sales
    
    $
    658.9
    
    
    $
    724.8
    
    
    $
    739.8
    
    
    $
    642.9Gross profit
    
    
    145.8
    
    
    
    170.4
    
    
    
    172.0
    
    
    
    123.6Net earnings (loss)
    
    
    (19.4
    )
    
    
    26.8
    
    
    
    24.6
    
    
    
    (21.0
    )Per share of common stock:Basic
    
    $
    (0.34
    )
    
    $
    0.47
    
    
    $
    0.42
    
    
    $
    (0.36
    )Diluted
    
    $
    (0.34
    )
    
    $
    0.46
    
    
    $
    0.42
    
    
    $
    (0.36
    )Price range of common stockhigh
    
    $
    40.93
    
    
    $
    45.05
    
    
    $
    43.05
    
    
    $
    54.58Price range of common stocklow
    
    $
    33.42
    
    
    $
    29.44
    
    
    $
    28.01
    
    
    $
    39.55Dividends paid per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    13.74
 First
    
    
    Second
    
    
    Third
    
    
    Fourth2009Net sales
    
    $
    668.3
    
    
    $
    705.7
    
    
    $
    753.0
    
    
    $
    653.0Gross profit
    
    
    131.4
    
    
    
    164.0
    
    
    
    188.0
    
    
    
    137.6Net earnings (loss)
    
    
    (11.2
    )
    
    
    28.3
    
    
    
    64.4
    
    
    
    (3.8
    )Per share of common stock:Basic
    
    $
    (0.20
    )
    
    $
    0.50
    
    
    $
    1.13
    
    
    $
    (0.07
    )Diluted
    
    $
    (0.20
    )
    
    $
    0.50
    
    
    $
    1.12
    
    
    $
    (0.07
    )Price range of common stockhigh
    
    $
    23.74
    
    
    $
    21.80
    
    
    $
    35.50
    
    
    $
    45.45Price range of common stocklow
    
    $
    9.42
    
    
    $
    10.55
    
    
    $
    15.05
    
    
    $
    33.14Dividends paid per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Note:
    
    The net sales and gross profit amounts reported above are reported on a continuing
operations basis. The sum of the quarterly earnings per share data may not equal the total year
amounts due to changes in the average shares outstanding and, for diluted data, the exclusion of
the antidilutive effect in certain quarters.  39




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##### Table of Contents



Fourth Quarter 2010 Compared With Fourth Quarter 2009
          40




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##### Table of Contents



MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  Internal Control-Integrated Framework
  /s/ Matthew J. Espe

Matthew J. EspeChief Executive Officer and President/s/ Thomas B. Mangas

Thomas B. MangasSenior Vice President and Chief Financial Officer/s/ Stephen F. McNamara

Stephen F. McNamaraVice President and Corporate Controller
   41




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal
Control-Integrated Framework
    Internal Control-Integrated Framework
   
  42




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
    Internal Control-Integrated Framework
  
  43




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##### Table of Contents



Years Ended December 31,2010
    
    
    2009
    
    
    2008Net sales
    
    $
    2,766.4
    
    
    $
    2,780.0
    
    
    $
    3,393.0Cost of goods sold
    
    
    2,154.6
    
    
    
    2,159.0
    
    
    
    2,632.0Gross profit
    
    
    611.8
    
    
    
    621.0
    
    
    
    761.0Selling, general and administrative expenses
    
    
    531.3
    
    
    
    552.4
    
    
    
    579.9Intangible asset impairment
    
    
    22.4
    
    
    
    18.0
    
    
    
    25.4Restructuring charges
    
    
    22.0
    
    
    
    
    
    
    
    0.8Equity earnings from joint venture
    
    
    (45.0
    )
    
    
    (40.0
    )
    
    
    (56.0
    )Operating income
    
    
    81.1
    
    
    
    90.6
    
    
    
    210.9Interest expense
    
    
    21.2
    
    
    
    17.7
    
    
    
    30.8Other non-operating expense
    
    
    1.2
    
    
    
    0.9
    
    
    
    1.3Other non-operating (income)
    
    
    (8.0
    )
    
    
    (3.2
    )
    
    
    (10.6
    )Earnings before income taxes
    
    
    66.7
    
    
    
    75.2
    
    
    
    189.4Income tax expense (benefit)
    
    
    55.7
    
    
    
    (2.5
    )
    
    
    109.0Earnings from continuing operations
    
    
    11.0
    
    
    
    77.7
    
    
    
    80.4Gain from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    0.6Net earnings
    
    $
    11.0
    
    
    $
    77.7
    
    
    $
    81.0Earnings per share of common stock, continuing operations:Basic
    
    $
    0.19
    
    
    $
    1.36
    
    
    $
    1.41Diluted
    
    $
    0.19
    
    
    $
    1.36
    
    
    $
    1.41Gain per share of common stock, discontinued operations:Basic
    
    $
    
    
    
    $
    
    
    
    $
    0.01Diluted
    
    $
    
    
    
    $
    
    
    
    $
    0.01Earnings per share of common stock:Basic
    
    $
    0.19
    
    
    $
    1.36
    
    
    $
    1.42Diluted
    
    $
    0.19
    
    
    $
    1.36
    
    
    $
    1.42Average number of common shares outstanding:Basic
    
    
    57.7
    
    
    
    56.8
    
    
    
    56.4Diluted
    
    
    58.2
    
    
    
    57.0
    
    
    
    56.4
   44




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##### Table of Contents



December 31,
    
    
    December 31,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    315.8
    
    
    $
    569.5Accounts and notes receivable, net
    
    
    229.5
    
    
    
    229.1Inventories, net
    
    
    398.5
    
    
    
    445.0Deferred income taxes
    
    
    20.9
    
    
    
    16.3Income tax receivable
    
    
    20.7
    
    
    
    16.5Other current assets
    
    
    35.3
    
    
    
    55.2Total current assets
    
    
    1,020.7
    
    
    
    1,331.6Property, plant and equipment, less accumulated depreciation
and amortization of $482.8 and $390.0, respectively
    
    
    854.9
    
    
    
    929.2Prepaid pension costs
    
    
    130.7
    
    
    
    114.3Investment in joint venture
    
    
    188.6
    
    
    
    194.6Intangible assets, net
    
    
    556.1
    
    
    
    592.8Restricted cash
    
    
    30.0
    
    
    
    Deferred income taxes
    
    
    45.0
    
    
    
    58.2Other noncurrent assets
    
    
    96.4
    
    
    
    81.9Total assets
    
    $
    2,922.4
    
    
    $
    3,302.6Liabilities and EquityCurrent liabilities:Short-term debt
    
    $
    25.0
    
    
    $
    0.1Current installments of long-term debt
    
    
    10.3
    
    
    
    40.0Accounts payable and accrued expenses
    
    
    340.3
    
    
    
    311.0Income tax payable
    
    
    4.9
    
    
    
    3.1Deferred income taxes
    
    
    2.4
    
    
    
    3.1Total current liabilities
    
    
    382.9
    
    
    
    357.3Long-term debt, less current installments
    
    
    839.6
    
    
    
    432.5Postretirement benefit liabilities
    
    
    277.9
    
    
    
    296.9Pension benefit liabilities
    
    
    202.1
    
    
    
    223.5Other long-term liabilities
    
    
    70.3
    
    
    
    67.1Income taxes payable
    
    
    34.7
    
    
    
    9.2Deferred income taxes
    
    
    24.1
    
    
    
    8.2Total noncurrent liabilities
    
    
    1,448.7
    
    
    
    1,037.4Shareholders equity:Common stock, $0.01 par value per share, authorized 200
million shares; issued 58,070,807 shares in 2010 and
57,433,503 shares in 2009
    
    
    0.6
    
    
    
    0.6Capital in excess of par value
    
    
    1,451.2
    
    
    
    2,052.1Retained earnings (accumulated deficit)
    
    
    (35.3
    )
    
    
    144.4Accumulated other comprehensive (loss)
    
    
    (325.7
    )
    
    
    (297.8
    )Total shareholders equity
    
    
    1,090.8
    
    
    
    1,899.3Non-controlling interest
    
    
    
    
    
    
    8.6Total equity
    
    
    1,090.8
    
    
    
    1,907.9Total liabilities and equity
    
    $
    2,922.4
    
    
    $
    3,302.6
   45




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##### Table of Contents



Total
    
    
    AWI Shareholders
    
    
    Non-Controlling InterestYear 2010Non-Controlling Interest:Balance at beginning of year
    
    $
    8.6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8.6Non-controlling interest purchase
    
    
    (8.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8.6
    )Balance as of December 31
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Common stock:Balance at beginning of year and December 31
    
    $
    0.6
    
    
    
    
    
    
    $
    0.6Capital in excess of par value:Balance at beginning of year
    
    $
    2,052.1
    
    
    
    
    
    
    $
    2,052.1Share-based employee compensation
    
    
    14.7
    
    
    
    
    
    
    
    14.7Dividend in excess of retained earnings
    
    
    (612.1
    )
    
    
    
    
    
    
    (612.1
    )Non-controlling interest purchase
    
    
    (3.5
    )
    
    
    
    
    
    
    (3.5
    )Balance at December 31
    
    $
    1,451.2
    
    
    
    
    
    
    $
    1,451.2Accumulated deficit:Balance at beginning of year
    
    $
    144.4
    
    
    
    
    
    
    $
    144.4Net earnings for period
    
    
    11.0
    
    
    $
    11.0
    
    
    
    11.0
    
    
    $
    11.0Dividend
    
    
    (190.7
    )
    
    
    
    
    
    
    (190.7
    )Balance at December 31
    
    $
    (35.3
    )
    
    
    
    
    
    $
    (35.3
    )Accumulated other comprehensive income (loss):Balance at beginning of year
    
    $
    (297.8
    )
    
    
    
    
    
    $
    (297.8
    )Foreign currency translation adjustments
    
    
    (0.3
    )
    
    
    
    
    
    
    (0.3
    )Derivative gain, net
    
    
    0.5
    
    
    
    
    
    
    
    0.5Non-controlling interest purchase
    
    
    1.1
    
    
    
    
    
    
    
    1.1Pension and postretirement adjustments
    
    
    (29.2
    )
    
    
    
    
    
    
    (29.2
    )Total other comprehensive (loss)
    
    
    (27.9
    )
    
    
    (27.9
    )
    
    
    (27.9
    )
    
    
    (27.9
    )Balance at December 31
    
    $
    (325.7
    )
    
    
    
    
    
    $
    (325.7
    )Comprehensive (loss)
    
    
    
    
    
    $
    (16.9
    )
    
    
    
    
    
    $
    (16.9
    )Total equity
    
    $
    1,090.8
    
    
    
    
    
    
    $
    1,090.8Year 2009Non-Controlling Interest:Balance at beginning of year
    
    $
    8.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8.1Common stock:Balance at beginning of year and December 31
    
    $
    0.6
    
    
    
    
    
    
    $
    0.6
    
    
    
    
    
    
    
    Capital in excess of par value:Balance at beginning of year
    
    $
    2,024.7
    
    
    
    
    
    
    $
    2,024.7
    
    
    
    
    
    
    
    Share-based employee compensation
    
    
    27.4
    
    
    
    
    
    
    
    27.4
    
    
    
    
    
    
    
    Balance at December 31
    
    $
    2,052.1
    
    
    
    
    
    
    $
    2,052.1
    
    
    
    
    
    
    
    Retained earnings:Balance at beginning of year
    
    $
    66.7
    
    
    
    
    
    
    $
    66.7
    
    
    
    
    
    
    
    Net earnings for period
    
    
    78.2
    
    
    $
    78.2
    
    
    
    77.7
    
    
    $
    77.7
    
    
    
    0.5
    
    
    $
    0.5Balance at December 31
    
    $
    144.9
    
    
    
    
    
    
    $
    144.4
    
    
    
    
    
    
    $
    0.5Accumulated other comprehensive (loss) income:Balance at beginning of year
    
    $
    (348.8
    )
    
    
    
    
    
    $
    (348.8
    )
    
    
    
    
    
    
    Foreign currency translation adjustments
    
    
    34.4
    
    
    
    
    
    
    
    34.4
    
    
    
    
    
    
    
    Derivative (loss), net
    
    
    (2.2
    )
    
    
    
    
    
    
    (2.2
    )
    
    
    
    
    
    
    Pension and postretirement adjustments
    
    
    18.8
    
    
    
    
    
    
    
    18.8
    
    
    
    
    
    
    
    Total other comprehensive income
    
    
    51.0
    
    
    
    51.0
    
    
    
    51.0
    
    
    
    51.0
    
    
    
    
    
    
    
    Balance at December 31
    
    $
    (297.8
    )
    
    
    
    
    
    $
    (297.8
    )
    
    
    
    
    
    
    Comprehensive income
    
    
    
    
    
    $
    129.2
    
    
    
    
    
    
    $
    128.7
    
    
    
    
    
    
    $
    0.5Total equity
    
    $
    1,907.9
    
    
    
    
    
    
    $
    1,899.3
    
    
    
    
    
    
    $
    8.6Year 2008Non-Controlling Interest:Balance at beginning of year
    
    $
    7.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    7.4Common stock:Balance at beginning of year and December 31
    
    $
    0.6
    
    
    
    
    
    
    $
    0.6
    
    
    
    
    
    
    
    Capital in excess of par value:Balance at beginning of year
    
    $
    2,112.6
    
    
    
    
    
    
    $
    2,112.6
    
    
    
    
    
    
    
    Share-based employee compensation
    
    
    7.2
    
    
    
    
    
    
    
    7.2
    
    
    
    
    
    
    
    Dividends in excess of retained earnings
    
    
    (95.1
    )
    
    
    
    
    
    
    (95.1
    )Balance at December 31
    
    $
    2,024.7
    
    
    
    
    
    
    $
    2,024.7
    
    
    
    
    
    
    
    Retained earnings:Balance at beginning of year
    
    $
    147.5
    
    
    
    
    
    
    $
    147.5
    
    
    
    
    
    
    
    Net earnings for period
    
    
    81.2
    
    
    $
    81.2
    
    
    
    81.0
    
    
    $
    81.0
    
    
    
    0.2
    
    
    $
    0.2Dividends
    
    
    (161.8
    )
    
    
    
    
    
    
    (161.8
    )
    
    
    
    
    
    
    Balance at December 31
    
    $
    66.9
    
    
    
    
    
    
    $
    66.7
    
    
    
    
    
    
    $
    0.2Accumulated other comprehensive (loss) income:Balance at beginning of year
    
    $
    176.0
    
    
    
    
    
    
    $
    176.0
    
    
    
    
    
    
    
    Foreign currency translation adjustments
    
    
    (42.2
    )
    
    
    
    
    
    
    (42.7
    )
    
    
    
    
    
    
    0.5Derivative gain, net
    
    
    1.4
    
    
    
    
    
    
    
    1.4
    
    
    
    
    
    
    
    Pension and postretirement adjustments
    
    
    (483.5
    )
    
    
    
    
    
    
    (483.5
    )
    
    
    
    
    
    
    Total other comprehensive (loss) income
    
    
    (524.3
    )
    
    
    (524.3
    )
    
    
    (524.8
    )
    
    
    (524.8
    )
    
    
    0.5
    
    
    
    0.5Balance at December 31
    
    $
    (348.3
    )
    
    
    
    
    
    $
    (348.8
    )
    
    
    
    
    
    
    0.5Comprehensive (loss) income
    
    
    
    
    
    $
    (443.1
    )
    
    
    
    
    
    $
    (443.8
    )
    
    
    
    
    
    $
    0.7Total equity
    
    $
    1,751.3
    
    
    
    
    
    
    $
    1,743.2
    
    
    
    
    
    
    $
    8.1
   46




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Year Ended December 31,2010
    
    
    2009
    
    
    2008Cash flows from operating activities:Net earnings
    
    $
    11.0
    
    
    $
    77.7
    
    
    $
    81.0Adjustments to reconcile net earnings to net cash provided by
operating activities:Depreciation and amortization
    
    
    143.3
    
    
    
    146.8
    
    
    
    149.8Asset impairments
    
    
    30.6
    
    
    
    21.0
    
    
    
    28.3Deferred income taxes
    
    
    21.3
    
    
    
    135.6
    
    
    
    74.0Stock-based compensation
    
    
    5.0
    
    
    
    38.2
    
    
    
    7.5Equity earnings from joint venture
    
    
    (45.0
    )
    
    
    (40.0
    )
    
    
    (56.0
    )Distributions from joint venture
    
    
    
    
    
    
    
    
    
    
    61.0U.S. pension credit
    
    
    (50.9
    )
    
    
    (58.2
    )
    
    
    (63.0
    )Restructuring charges
    
    
    22.0
    
    
    
    
    
    
    
    0.8Restructuring payments
    
    
    (7.5
    )
    
    
    
    
    
    
    Insurance proceeds  environmental recovery
    
    
    
    
    
    
    
    
    
    
    10.0Changes in operating assets and liabilities:Receivables
    
    
    (2.9
    )
    
    
    23.9
    
    
    
    42.8Inventories
    
    
    41.2
    
    
    
    105.9
    
    
    
    (16.1
    )Other current assets
    
    
    19.2
    
    
    
    7.0
    
    
    
    (7.2
    )Other noncurrent assets
    
    
    (25.4
    )
    
    
    2.1
    
    
    
    (2.6
    )Accounts payable and accrued expenses
    
    
    10.8
    
    
    
    (36.9
    )
    
    
    (88.2
    )Income taxes
    
    
    25.9
    
    
    
    (147.0
    )
    
    
    9.7Other long-term liabilities
    
    
    (7.9
    )
    
    
    (18.6
    )
    
    
    (10.2
    )Cash distributed under the POR
    
    
    
    
    
    
    
    
    
    
    (3.1
    )Other, net
    
    
    (0.3
    )
    
    
    2.7
    
    
    
    (4.3
    )Net cash provided by operating activities
    
    
    190.4
    
    
    
    260.2
    
    
    
    214.2Cash flows from investing activities:Purchases of property, plant and equipment
    
    
    (92.7
    )
    
    
    (105.1
    )
    
    
    (95.0
    )Divestiture (acquisition)
    
    
    (0.6
    )
    
    
    8.0
    
    
    
    (0.8
    )Restricted cash
    
    
    (30.0
    )
    
    
    
    
    
    
    Return of investment from joint venture
    
    
    51.0
    
    
    
    53.5
    
    
    
    19.5Proceeds from noncurrent note receivable
    
    
    5.5
    
    
    
    
    
    
    
    Proceeds from the sale of assets
    
    
    25.8
    
    
    
    2.6
    
    
    
    0.6Net cash (used for) investing activities
    
    
    (41.0
    )
    
    
    (41.0
    )
    
    
    (75.7
    )Cash flows from financing activities:Proceeds from revolving credit facility and other debt
    
    
    50.0
    
    
    
    
    
    
    
    25.0Payments on revolving credit facility and other debt
    
    
    (25.1
    )
    
    
    (1.2
    )
    
    
    (27.5
    )Issuance of long-term debt
    
    
    839.3
    
    
    
    2.4
    
    
    
    5.4Payments of long-term debt
    
    
    (462.1
    )
    
    
    (25.6
    )
    
    
    (20.9
    )Financing costs
    
    
    (18.0
    )
    
    
    
    
    
    
    (2.6
    )Special dividend paid
    
    
    (798.6
    )
    
    
    (1.3
    )
    
    
    (256.4
    )Proceeds from exercised stock options
    
    
    13.3
    
    
    
    2.3
    
    
    
    Purchase of non-controlling interest
    
    
    (7.8
    )
    
    
    (3.3
    )
    
    
    Net cash (used for) financing activities
    
    
    (409.0
    )
    
    
    (26.7
    )
    
    
    (277.0
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    5.9
    
    
    
    22.0
    
    
    
    (20.8
    )Net (decrease) increase in cash and cash equivalents
    
    $
    (253.7
    )
    
    $
    214.5
    
    
    $
    (159.3
    )Cash and cash equivalents at beginning of year
    
    
    569.5
    
    
    
    355.0
    
    
    
    514.3Cash and cash equivalents at end of year
    
    $
    315.8
    
    
    $
    569.5
    
    
    $
    355.0
   47




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##### Table of Contents



NOTE 1. BUSINESS AND CHAPTER 11 REORGANIZATION
   Resolution of Disputed Claims
  Asbestos PI Trust
  Accounting Impact
 Restructuring
   Share Ownership
   48




---



##### Table of Contents



NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Consolidation Policy
 Use of Estimates
 Reclassifications
 Revenue Recognition.
 Sales Incentives.
 Shipping and Handling Costs.
 Advertising Costs
 Research and Development Costs.
 Pension and Postretirement Benefits
 Taxes
    49




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##### Table of Contents



Earnings per Common Share
 Cash and Cash Equivalents
 Concentration of Credit
 Receivables
  Inventories
 Property and Depreciation
    50




---



##### Table of Contents



Asset Retirement Obligations
 Intangible Assets
     Foreign Currency Transactions.
  51




---



##### Table of Contents



Financial Instruments and Derivatives
 Stock-based Employee Compensation.
 Recently Adopted Accounting Standards
 Fair Value Measurements and Disclosures,
 Consolidation,
 Investments-Equity Method and
Joint Ventures,
 Derivatives and Hedging.
 Earnings Per
Share.
 Compensation 
Retirement Benefits,
  52




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##### Table of Contents



Subsequent Events.
 Generally Accepted
Accounting Principles.
 Fair Value
Measurements and Disclosures
 Recently Issued Accounting Standards   Receivables
 NOTE 3. NATURE OF OPERATIONS
 Resilient Flooring
 Wood Flooring ® ® ® ® ® ®
 Building Products
  53




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##### Table of Contents



Cabinets ®
 Unallocated Corporate
 Resilient
    
    
    Wood
    
    
    Building
    
    
    
    
    
    
    UnallocatedFor the year ended 2010
    
    Flooring
    
    
    Flooring
    
    
    Products
    
    
    Cabinets
    
    
    Corporate
    
    
    TotalNet sales to external customers
    
    $
    1,013.2
    
    
    $
    479.1
    
    
    $
    1,135.5
    
    
    $
    138.6
    
    
    
    
    
    
    $
    2,766.4Equity (earnings) from joint venture
    
    
    
    
    
    
    
    
    
    
    (45.0
    )
    
    
    
    
    
    
    
    
    
    
    (45.0
    )Segment operating income (loss) (1)
    
    
    13.1
    
    
    
    (45.8
    )
    
    
    171.0
    
    
    
    (6.4
    )
    
    
    (50.8
    )
    
    
    81.1Restructuring charges
    
    
    13.9
    
    
    
    0.9
    
    
    
    3.2
    
    
    
    
    
    
    
    4.0
    
    
    
    22.0Segment assets
    
    
    582.6
    
    
    
    340.7
    
    
    
    931.4
    
    
    
    47.9
    
    
    
    1,019.8
    
    
    
    2,922.4Depreciation and amortization
    
    
    38.6
    
    
    
    26.4
    
    
    
    62.5
    
    
    
    2.0
    
    
    
    13.8
    
    
    
    143.3Asset impairments
    
    
    2.1
    
    
    
    22.4
    
    
    
    
    
    
    
    
    
    
    
    6.1
    
    
    
    30.6Investment in joint venture
    
    
    
    
    
    
    
    
    
    
    188.6
    
    
    
    
    
    
    
    
    
    
    
    188.6Capital additions
    
    
    24.0
    
    
    
    12.2
    
    
    
    47.7
    
    
    
    3.0
    
    
    
    5.8
    
    
    
    92.7
 Resilient
    
    
    Wood
    
    
    Building
    
    
    
    
    
    
    UnallocatedFor the year ended 2009
    
    Flooring
    
    
    Flooring
    
    
    Products
    
    
    Cabinets
    
    
    Corporate
    
    
    TotalNet sales to external customers
    
    $
    1,031.7
    
    
    $
    510.4
    
    
    $
    1,087.7
    
    
    $
    150.2
    
    
    
    
    
    
    $
    2,780.0Equity (earnings) from joint venture
    
    
    
    
    
    
    
    
    
    
    (40.0
    )
    
    
    
    
    
    
    
    
    
    
    (40.0
    )Segment operating income (loss) (1)
    
    
    0.1
    
    
    
    (5.9
    )
    
    
    155.9
    
    
    
    (18.3
    )
    
    
    (41.2
    )
    
    
    90.6Segment assets
    
    
    645.2
    
    
    
    410.3
    
    
    
    966.0
    
    
    
    53.2
    
    
    
    1,227.9
    
    
    
    3,302.6Depreciation and amortization
    
    
    45.2
    
    
    
    14.9
    
    
    
    61.5
    
    
    
    7.2
    
    
    
    18.0
    
    
    
    146.8Asset impairments
    
    
    3.0
    
    
    
    18.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21.0Investment in joint venture
    
    
    0.1
    
    
    
    
    
    
    
    194.5
    
    
    
    
    
    
    
    
    
    
    
    194.6Capital additions
    
    
    50.5
    
    
    
    10.3
    
    
    
    31.8
    
    
    
    2.5
    
    
    
    10.0
    
    
    
    105.1
 Resilient
    
    
    Wood
    
    
    Building
    
    
    
    
    
    
    UnallocatedFor the year ended 2008
    
    Flooring
    
    
    Flooring
    
    
    Products
    
    
    Cabinets
    
    
    Corporate
    
    
    TotalNet sales to external customers
    
    $
    1,220.1
    
    
    $
    624.6
    
    
    $
    1,369.1
    
    
    $
    179.2
    
    
    
    
    
    
    $
    3,393.0Equity (earnings) from joint venture
    
    
    
    
    
    
    
    
    
    
    (56.0
    )
    
    
    
    
    
    
    
    
    
    
    (56.0
    )Segment operating income (loss) (1)
    
    
    (16.8
    )
    
    
    (2.4
    )
    
    
    239.7
    
    
    
    (6.7
    )
    
    
    (2.9
    )
    
    
    210.9Restructuring charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.8
    
    
    
    0.8Segment assets
    
    
    670.2
    
    
    
    470.9
    
    
    
    1,049.6
    
    
    
    71.2
    
    
    
    1,089.9
    
    
    
    3,351.8Depreciation and amortization
    
    
    49.8
    
    
    
    12.6
    
    
    
    64.8
    
    
    
    2.4
    
    
    
    20.2
    
    
    
    149.8Asset Impairments
    
    
    2.9
    
    
    
    25.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28.3Investment in joint venture
    
    
    0.1
    
    
    
    
    
    
    
    208.1
    
    
    
    
    
    
    
    
    
    
    
    208.2Capital additions
    
    
    26.4
    
    
    
    11.8
    
    
    
    41.1
    
    
    
    3.7
    
    
    
    12.0
    
    
    
    95.0
 (1)
    
    Segment operating income (loss) is the measure of segment profit or
loss reviewed by the chief operating decision maker. The sum of the segments operating income
(loss) equals the total consolidated operating income as reported on our income statement. The
following
reconciles our total consolidated operating income to earnings from continuing operations before
income taxes. These items are only measured and managed on a consolidated basis:  54




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2010
    
    
    2009
    
    
    2008Segment operating income
    
    $
    81.1
    
    
    $
    90.6
    
    
    $
    210.9Interest expense
    
    
    21.2
    
    
    
    17.7
    
    
    
    30.8Other non-operating expense
    
    
    1.2
    
    
    
    0.9
    
    
    
    1.3Other non-operating (income)
    
    
    (8.0
    )
    
    
    (3.2
    )
    
    
    (10.6
    )Earnings from continuing operations
before income taxes
    
    $
    66.7
    
    
    $
    75.2
    
    
    $
    189.4
   Geographic AreasNet trade sales
    
    2010
    
    
    2009
    
    
    2008Americas:United States
    
    $
    1,742.4
    
    
    $
    1,810.5
    
    
    $
    2,177.4Canada
    
    
    179.4
    
    
    
    152.0
    
    
    
    166.0Other Americas
    
    
    39.5
    
    
    
    30.1
    
    
    
    43.4Total Americas
    
    $
    1,961.3
    
    
    $
    1,992.6
    
    
    $
    2,386.8Europe:Germany
    
    $
    146.3
    
    
    $
    154.7
    
    
    $
    185.7United Kingdom
    
    
    79.9
    
    
    
    94.1
    
    
    
    134.7Other Europe
    
    
    334.0
    
    
    
    347.3
    
    
    
    464.1Total Europe
    
    $
    560.2
    
    
    $
    596.1
    
    
    $
    784.5Total Pacific Rim
    
    $
    244.9
    
    
    $
    191.3
    
    
    $
    221.7Total net trade sales
    
    $
    2,766.4
    
    
    $
    2,780.0
    
    
    $
    3,393.0
 Property, plant and equipment, netat December 31
    
    2010
    
    
    2009Americas:United States
    
    $
    635.7
    
    
    $
    678.1Other Americas
    
    
    6.0
    
    
    
    14.1Total Americas
    
    $
    641.7
    
    
    $
    692.2Europe:Germany
    
    $
    115.2
    
    
    $
    123.1Other Europe
    
    
    44.3
    
    
    
    63.6Total Europe
    
    $
    159.5
    
    
    $
    186.7Total Pacific Rim
    
    $
    53.7
    
    
    $
    50.3Total property, plant and equipment, net
    
    $
    854.9
    
    
    $
    929.2
   55




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56




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NOTE 4 ACQUISITIONS
  NOTE 5. DIVESTITURES
  NOTE 6. ACCOUNTS AND NOTES RECEIVABLE
 December
    
    
    December31, 2010
    
    
    31, 2009Customer receivables
    
    $
    265.1
    
    
    $
    269.3Customer notes
    
    
    2.0
    
    
    
    2.5Miscellaneous receivables
    
    
    5.5
    
    
    
    5.6Less allowance for warranties, discounts and losses
    
    
    (43.1
    )
    
    
    (48.3
    )Accounts and notes receivable, net
    
    $
    229.5
    
    
    $
    229.1
  NOTE 7. INVENTORIES
 December
    
    
    December31, 2010
    
    
    31, 2009Finished goods
    
    $
    277.7
    
    
    $
    281.0Goods in process
    
    
    26.7
    
    
    
    36.2Raw materials and supplies
    
    
    119.9
    
    
    
    134.4Less LIFO and other reserves
    
    
    (25.8
    )
    
    
    (6.6
    )Total inventories, net
    
    $
    398.5
    
    
    $
    445.0
    57




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December 31,
    
    
    December 31,2010
    
    
    2009International locations
    
    $
    124.3
    
    
    $
    147.0Cabinets
    
    
    10.0
    
    
    
    13.7Wood flooring
    
    
    0.3
    
    
    
    0.6Resilient flooring
    
    
    1.3
    
    
    
    1.2U.S. sourced products
    
    
    3.7
    
    
    
    3.2Total
    
    $
    139.6
    
    
    $
    165.7
   NOTE 8. OTHER CURRENT ASSETS
 December 31,
    
    
    December 31,2010
    
    
    2009Prepaid expenses
    
    $
    28.7
    
    
    $
    36.0Assets held for sale
    
    
    2.5
    
    
    
    7.8Other
    
    
    4.1
    
    
    
    11.4Total other current assets
    
    $
    35.3
    
    
    $
    55.2
    NOTE 9. PROPERTY, PLANT AND EQUIPMENT
 December 31,
    
    
    December 31,2010
    
    
    2009Land
    
    $
    119.9
    
    
    $
    131.5Buildings
    
    
    298.4
    
    
    
    303.8Machinery and equipment
    
    
    827.0
    
    
    
    787.5Computer software
    
    
    32.2
    
    
    
    30.6Construction in progress
    
    
    60.2
    
    
    
    65.8Less accumulated depreciation and amortization
    
    
    (482.8
    )
    
    
    (390.0
    )Net property, plant and equipment
    
    $
    854.9
    
    
    $
    929.2
   58




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NOTE 10. EQUITY INVESTMENTS
    December 31,
    
    
    December 31,2010
    
    
    2009Property, plant and equipment
    
    $
    1.4
    
    
    $
    1.8Other intangibles
    
    
    168.7
    
    
    
    174.3Goodwill
    
    
    30.5
    
    
    
    30.5Total
    
    $
    200.6
    
    
    $
    206.6
   December 31,
    
    
    December 31,2010
    
    
    2009Current assets
    
    $
    112.5
    
    
    $
    110.0Non-current assets
    
    
    35.7
    
    
    
    36.2Current liabilities
    
    
    22.1
    
    
    
    17.3Other non-current liabilities
    
    
    154.8
    
    
    
    154.6
 2010
    
    
    2009
    
    
    2008Net sales
    
    $
    332.2
    
    
    $
    307.9
    
    
    $
    421.8Gross profit
    
    
    137.5
    
    
    
    118.9
    
    
    
    160.2Net earnings
    
    
    105.6
    
    
    
    92.8
    
    
    
    125.4
   59




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NOTE 11. INTANGIBLE ASSETS
    December 31, 2010
    
    
    December 31, 2009Gross
    
    
    
    
    
    
    GrossEstimated
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedUseful Life
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationAmortizing intangible assetsCustomer relationships
    
    20 years
    
    
    $
    170.7
    
    
    $
    36.3
    
    
    $
    171.0
    
    
    $
    27.7Developed technology
    
    15 years
    
    
    
    80.8
    
    
    
    22.9
    
    
    
    80.9
    
    
    
    17.5Other
    
    Various
    
    
    
    11.8
    
    
    
    0.7
    
    
    
    10.8
    
    
    
    0.5Total
    
    
    
    
    
    $
    263.3
    
    
    $
    59.9
    
    
    $
    262.7
    
    
    $
    45.7Non-amortizing intangible assetsTrademarks and brand names
    
    Indefinite
    
    
    352.7
    
    
    
    
    
    
    
    375.8Total other intangible assets
    
    
    
    
    
    $
    616.0
    
    
    
    
    
    
    $
    638.52010
    
    
    2009
    
    
    2008Amortization
    
    
    
    
    
    
    
    
    
    $
    14.2
    
    
    $
    14.2
    
    
    $
    14.3Intangible asset impairment
    
    
    
    
    
    
    
    
    
    
    22.4
    
    
    
    18.0
    
    
    
    25.4Total amortization expense and impairment charges
    
    $
    36.6
    
    
    $
    32.2
    
    
    $
    39.7
  NOTE 12. OTHER NON-CURRENT ASSETS
 December 31,
    
    
    December 31,2010
    
    
    2009Cash surrender value of Company owned life insurance policies
    
    $
    61.5
    
    
    $
    56.5Debt financing costs
    
    
    19.5
    
    
    
    5.6Other
    
    
    15.4
    
    
    
    19.8Total other non-current assets
    
    $
    96.4
    
    
    $
    81.9
  60




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NOTE 13. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 December 31,
    
    
    December 31,2010
    
    
    2009Payables, trade and other
    
    $
    169.5
    
    
    $
    159.6Employment costs
    
    
    109.9
    
    
    
    107.2Restructuring accruals
    
    
    14.5
    
    
    
    Other
    
    
    46.4
    
    
    
    44.2Total accounts payable and accrued expenses
    
    $
    340.3
    
    
    $
    311.0
 NOTE 14. SEVERANCE AND RELATED COSTS
         61




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NOTE 15. RESTRUCTURING ACTIONS
  ApproximateNumber ofEmployeesAction Title
    
    2010
    
    
    Affected
    
    
    SegmentFloor Products Europe
    
    $
    11.8
    
    
    
    520
    
    
    Resilient FlooringNorth America SG&A
    
    
    5.8
    
    
    
    160
    
    
    Unallocated Corporate, Building Products, Resilient FlooringBeaver Falls plant
    
    
    2.3
    
    
    
    150
    
    
    Building ProductsMontreal
    
    
    1.2
    
    
    
    170
    
    
    Resilient FlooringWood products
    
    
    0.9
    
    
    
    80
    
    
    Wood FlooringTotal
    
    $
    22.0
 Floor Products Europe
   North America SG&A
  Beaver Falls Plant
   62




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Montreal:
   Wood Products:
    Severance and Related CostsFloorProducts
    
    
    Consolidated
    
    
    Beaver Falls
    
    
    
    
    
    
    WoodEurope
    
    
    SG&A
    
    
    Plant
    
    
    Montreal
    
    
    Products
    
    
    TotalDecember 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net charges
    
    $
    11.8
    
    
    $
    5.8
    
    
    $
    2.3
    
    
    $
    1.2
    
    
    $
    0.9
    
    
    $
    22.0Cash payments
    
    
    (5.7
    )
    
    
    (1.1
    )
    
    
    (0.4
    )
    
    
    
    
    
    
    (0.3
    )
    
    
    (7.5
    )December 31, 2010
    
    $
    6.1
    
    
    $
    4.7
    
    
    $
    1.9
    
    
    $
    1.2
    
    
    $
    0.6
    
    
    $
    14.5
  NOTE 16. INCOME TAXES
    63




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##### Table of Contents



December 31,
    
    
    December 31,Deferred income tax assets (liabilities)
    
    2010
    
    
    2009Postretirement benefits
    
    $
    122.4
    
    
    $
    165.1Pension benefit liabilities
    
    
    14.4
    
    
    
    19.3Net operating losses
    
    
    375.7
    
    
    
    354.4Foreign tax credit carryforwards
    
    
    97.3
    
    
    
    88.6Capital losses
    
    
    4.4
    
    
    
    3.3Other
    
    
    89.6
    
    
    
    97.2Total deferred income tax assets
    
    
    703.8
    
    
    
    727.9Valuation allowances
    
    
    (168.1
    )
    
    
    (155.4
    )Net deferred income tax assets
    
    
    535.7
    
    
    
    572.5Intangibles
    
    
    (259.9
    )
    
    
    (275.8
    )Accumulated depreciation
    
    
    (82.5
    )
    
    
    (94.6
    )Prepaid pension costs
    
    
    (32.0
    )
    
    
    (28.3
    )Tax on unremitted earnings
    
    
    (98.5
    )
    
    
    (87.0
    )Inventories
    
    
    (20.4
    )
    
    
    (18.3
    )Other
    
    
    (3.0
    )
    
    
    (5.3
    )Total deferred income tax liabilities
    
    
    (496.3
    )
    
    
    (509.3
    )Net deferred income tax assets
    
    $
    39.4
    
    
    $
    63.2Deferred income taxes have been classified in the Consolidated
Balance Sheet as:Deferred income tax assets  current
    
    $
    20.9
    
    
    $
    16.3Deferred income tax assets  noncurrent
    
    
    45.0
    
    
    
    58.2Deferred income tax liabilities  current
    
    
    (2.4
    )
    
    
    (3.1
    )Deferred income tax liabilities  noncurrent
    
    
    (24.1
    )
    
    
    (8.2
    )Net deferred income tax assets
    
    $
    39.4
    
    
    $
    63.2
  64




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Details of taxes
    
    2010
    
    
    2009
    
    
    2008Earnings (loss) from continuing
operations before income taxes:Domestic
    
    $
    229.9
    
    
    $
    75.5
    
    
    $
    171.0Foreign
    
    
    (17.1
    )
    
    
    (0.3
    )
    
    
    18.4Eliminations of dividends from
foreign subsidiaries
    
    
    (146.1
    )
    
    
    
    
    
    
    Total
    
    $
    66.7
    
    
    $
    75.2
    
    
    $
    189.4Income tax provision (benefit):Current:Federal
    
    $
    24.0
    
    
    $
    (153.4
    )
    
    $
    8.3Foreign
    
    
    10.5
    
    
    
    13.9
    
    
    
    21.3State
    
    
    (0.1
    )
    
    
    1.4
    
    
    
    5.4Total current
    
    
    34.4
    
    
    
    (138.1
    )
    
    
    35.0Deferred:Federal
    
    
    22.5
    
    
    
    134.9
    
    
    
    46.5Foreign
    
    
    (3.0
    )
    
    
    
    
    
    
    (1.1
    )State
    
    
    1.8
    
    
    
    0.7
    
    
    
    28.6Total deferred
    
    
    21.3
    
    
    
    135.6
    
    
    
    74.0Total income tax expense (benefit)
    
    $
    55.7
    
    
    $
    (2.5
    )
    
    $
    109.0
  Reconciliation to U.S. statutory tax rate
    
    2010
    
    
    2009
    
    
    2008Continuing operations tax at statutory rate
    
    $
    23.3
    
    
    $
    26.3
    
    
    $
    66.3State income tax expense, net of federal benefit
    
    
    1.5
    
    
    
    2.2
    
    
    
    8.1(Decrease)/increase in valuation allowances on
deferred state income tax assets
    
    
    (2.2
    )
    
    
    (0.8
    )
    
    
    13.9Increases in valuation allowances on deferred foreign
income tax assets
    
    
    14.9
    
    
    
    17.3
    
    
    
    14.2Decrease in valuation allowance for foreign tax credits
    
    
    
    
    
    
    (31.3
    )
    
    
    Tax on foreign and foreign-source income
    
    
    (4.4
    )
    
    
    (3.7
    )
    
    
    (0.9
    )Interest on uncertain tax positions
    
    
    
    
    
    
    
    
    
    
    5.9Permanent book/tax differences
    
    
    1.2
    
    
    
    4.7
    
    
    
    (2.4
    )Impact of health care reform legislation on Medicare
Part D subsidy
    
    
    22.0
    
    
    
    
    
    
    
    IRS audit settlement
    
    
    
    
    
    
    (12.9
    )
    
    
    Recharacterization of stock loss
    
    
    
    
    
    
    (7.6
    )
    
    
    Tax on unremitted earnings
    
    
    (0.6
    )
    
    
    3.3
    
    
    
    3.9Tax expense (benefit) at effective rate
    
    $
    55.7
    
    
    $
    (2.5
    )
    
    $
    109.0
   65




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2010
    
    
    2009
    
    
    2008Unrecognized tax benefits balance at
January 1
    
    $
    57.5
    
    
    $
    174.4
    
    
    $
    180.7Gross change for current year positions
    
    
    71.5
    
    
    
    6.1
    
    
    
    0.8Increases for prior period positions
    
    
    2.5
    
    
    
    29.1
    
    
    
    3.4Decrease for prior period positions
    
    
    (2.4
    )
    
    
    (149.8
    )
    
    
    (8.0
    )Decrease due to settlements and payments
    
    
    (1.8
    )
    
    
    (1.9
    )
    
    
    (0.9
    )Decrease due to statute expirations
    
    
    (1.0
    )
    
    
    (0.4
    )
    
    
    (1.6
    )Unrecognized tax benefits balance at
December 31
    
    $
    126.3
    
    
    $
    57.5
    
    
    $
    174.4
 Other taxes
    
    2010
    
    
    2009
    
    
    2008Payroll taxes
    
    $
    64.3
    
    
    $
    64.7
    
    
    $
    71.2Property, franchise and capital stock taxes
    
    
    14.4
    
    
    
    16.0
    
    
    
    15.4
 NOTE 17. DEBT
 Average
    
    
    
    
    
    
    AverageDecember 31,
    
    
    year-end
    
    
    December 31,
    
    
    year-end2010
    
    
    interest rate
    
    
    2009
    
    
    interest rateTerm loan A due 2011
    
    
    
    
    
    
    
    
    
    $
    262.5
    
    
    
    1.78
    %Term loan B due 2013
    
    
    
    
    
    
    
    
    
    
    191.6
    
    
    
    1.98
    %Term loan A due 2015
    
    $
    250.0
    
    
    
    3.28
    %
    
    
    
    
    
    
    Term loan B due 2017
    
    
    550.0
    
    
    
    5.00
    %
    
    
    
    
    
    
    Revolver ($250 million) due 2015
    
    
    25.0
    
    
    
    5.25
    %
    
    
    
    
    
    
    Other Short Term Bank Loans
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    1.00
    %Other Long Term Bank Loans
    
    
    4.9
    
    
    
    3.85
    %
    
    
    8.3
    
    
    
    5.05
    %Tax exempt bonds due 2025  2041
    
    
    45.0
    
    
    
    2.00
    %
    
    
    10.0
    
    
    
    1.83
    %Capital lease obligations due through 2018
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    4.37
    %Subtotal
    
    
    874.9
    
    
    
    4.36
    %
    
    
    472.6
    
    
    
    1.92
    %Less current portion and short-term debt
    
    
    35.3
    
    
    
    5.02
    %
    
    
    40.1
    
    
    
    2.47
    %Total long-term debt, less current portion
    
    $
    839.6
    
    
    
    4.33
    %
    
    $
    432.5
    
    
    
    1.87
    %
    67




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68




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Scheduled payments of long-term debt:2011
    
    $
    10.32012
    
    $
    18.12013
    
    $
    30.52014
    
    $
    43.02015
    
    $
    180.52016 and later
    
    $
    567.5
   NOTE 18. PENSION AND OTHER BENEFIT PROGRAMS
  UNITED STATES PLANS
   69




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##### Table of Contents



U.S. defined-benefit pension plans
    
    2010
    
    
    2009Change in benefit obligation:Benefit obligation as of beginning of period
    
    $
    1,780.1
    
    
    $
    1,755.7Service cost
    
    
    16.4
    
    
    
    18.0Interest cost
    
    
    96.4
    
    
    
    96.0Plan amendments
    
    
    0.4
    
    
    
    12.9Special termination benefits
    
    
    
    
    
    
    0.2Actuarial loss
    
    
    91.6
    
    
    
    11.1Benefits paid
    
    
    (117.2
    )
    
    
    (113.8
    )Benefit obligation as of end of period
    
    $
    1,867.7
    
    
    $
    1,780.1Change in plan assets:Fair value of plan assets as of beginning of period
    
    $
    1,850.3
    
    
    $
    1,701.6Actual return on plan assets
    
    
    210.1
    
    
    
    259.2Employer contribution
    
    
    3.4
    
    
    
    3.3Benefits paid
    
    
    (117.2
    )
    
    
    (113.8
    )Fair value of plan assets as of end of period
    
    $
    1,946.6
    
    
    $
    1,850.3Funded status of the plans
    
    $
    78.9
    
    
    $
    70.2
 U.S. defined-benefit pension plans
    
    2010
    
    
    2009Weighted-average assumptions used to
determine benefit obligations
at end of period:Discount rate
    
    
    5.10
    %
    
    
    5.60
    %Rate of compensation increase
    
    
    3.10
    %
    
    
    4.00
    %Weighted-average assumptions used to
determine net periodic benefit cost for
the period:Discount rate
    
    
    5.60
    %
    
    
    5.60
    %Expected return on plan assets
    
    
    8.00
    %
    
    
    8.00
    %Rate of compensation increase
    
    
    4.00
    %
    
    
    4.00
    %
  U.S. pension plans with benefit obligations in excess of assets
    
    2010
    
    
    2009Projected benefit obligation, December 31
    
    $
    49.4
    
    
    $
    43.9Accumulated benefit obligation, December 31
    
    
    48.8
    
    
    
    42.8Fair value of plan assets, December 31
    
    
    
    
    
    
    
  U.S. defined-benefit pension plans
    
    2010
    
    
    2009
    
    
    2008Service cost of benefits earned during the period
    
    $
    16.4
    
    
    $
    18.0
    
    
    $
    17.4Interest cost on projected benefit obligation
    
    
    96.4
    
    
    
    96.0
    
    
    
    97.8Expected return on plan assets
    
    
    (167.0
    )
    
    
    (171.2
    )
    
    
    (175.3
    )Amortization of prior service cost
    
    
    1.8
    
    
    
    1.8
    
    
    
    0.3Recognized net actuarial loss
    
    
    4.3
    
    
    
    
    
    
    
    Net periodic pension credit
    
    $
    (48.1
    )
    
    $
    (55.4
    )
    
    $
    (59.8
    )
  70




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Investment Policies
 
 
    
    Investing a substantial portion of the plan assets in high quality corporate bonds whose
duration is at least equal to that of the plans liabilities such that there is a
relatively high correlation between the movements of the plans liability and asset values.
 
    
    Investing in publicly traded equities in order to increase the ratio of plan assets to
liabilities over time.
 
    
    Limiting investment return volatility by diversifying among additional asset classes
with differing expected rates of return and return correlations.
 
    
    Using derivatives to either implement investment positions efficiently or to hedge risk
but not to create investment leverage.
  Target Weight at
    
    
    Position at December 31,Asset Class
    
    December 31, 2010
    
    
    2010
    
    
    2009Domestic equity
    
    
    40
    %
    
    
    37
    %
    
    
    38
    %International equity
    
    
    22
    %
    
    
    21
    %
    
    
    22
    %High yield bonds
    
    
    5
    %
    
    
    5
    %
    
    
    6
    %Long duration bonds
    
    
    26
    %
    
    
    31
    %
    
    
    30
    %Real estate
    
    
    7
    %
    
    
    5
    %
    
    
    4
    %Other fixed income
    
    
    0
    %
    
    
    1
    %
    
    
    0
    %
       71




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##### Table of Contents



Value at December 31, 2010Description
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalLong duration bonds
    
    
    
    
    
    $
    604.5
    
    
    
    
    
    
    $
    604.5Domestic equity
    
    $
    604.2
    
    
    
    91.5
    
    
    
    
    
    
    
    695.7International equity
    
    
    145.1
    
    
    
    254.3
    
    
    
    
    
    
    
    399.4High yield bonds
    
    
    
    
    
    
    98.3
    
    
    
    
    
    
    
    98.3Real estate
    
    
    
    
    
    
    
    
    
    $
    103.1
    
    
    
    103.1Other investments
    
    
    
    
    
    
    
    
    
    
    5.5
    
    
    
    5.5Money market investments
    
    
    29.9
    
    
    
    
    
    
    
    
    
    
    
    29.9Receivables/short term
investments, net
    
    
    10.2
    
    
    
    
    
    
    
    
    
    
    
    10.2Net assets
    
    $
    789.4
    
    
    $
    1,048.6
    
    
    $
    108.6
    
    
    $
    1,946.6
 Value at December 31, 2009Description
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalLong duration bonds
    
    
    
    
    
    $
    541.2
    
    
    
    
    
    
    $
    541.2Domestic equity
    
    $
    683.4
    
    
    
    2.9
    
    
    
    
    
    
    
    686.3International equity
    
    
    145.2
    
    
    
    260.6
    
    
    
    
    
    
    
    405.8High yield bonds
    
    
    
    
    
    
    98.1
    
    
    
    
    
    
    
    98.1Real estate
    
    
    
    
    
    
    
    
    
    $
    84.6
    
    
    
    84.6Other investments
    
    
    
    
    
    
    
    
    
    
    8.4
    
    
    
    8.4Money market investments
    
    
    24.9
    
    
    
    
    
    
    
    
    
    
    
    24.9Receivables/short term
investments, net
    
    
    1.0
    
    
    
    
    
    
    
    
    
    
    
    1.0Net assets
    
    $
    854.5
    
    
    $
    902.8
    
    
    $
    93.0
    
    
    $
    1,850.3
  72




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##### Table of Contents



Level 3 Assets Gains and LossesOtherReal Estate
    
    
    Investments
    
    
    TotalBalance, December 31, 2008
    
    $
    116.1
    
    
    $
    10.2
    
    
    $
    126.3Realized (loss) gain
    
    
    (0.5
    )
    
    
    0.3
    
    
    
    (0.2
    )Unrealized (loss) gain
    
    
    (30.8
    )
    
    
    (1.4
    )
    
    
    (32.2
    )Purchases, (sales),
issuances, (settlements),
net
    
    
    (0.2
    )
    
    
    (0.7
    )
    
    
    (0.9
    )Balance, December 31, 2009
    
    $
    84.6
    
    
    $
    8.4
    
    
    $
    93.0Realized (loss) gain
    
    
    (1.6
    )
    
    
    0.4
    
    
    
    (1.2
    )Unrealized (loss) gain
    
    
    9.7
    
    
    
    (1.5
    )
    
    
    8.2Purchases, (sales),
issuances, (settlements),
net
    
    
    10.4
    
    
    
    (1.8
    )
    
    
    8.6Balance, December 31, 2010
    
    $
    103.1
    
    
    $
    5.5
    
    
    $
    108.6
  Long Duration Bonds:
 Domestic and International equity securities:
 High Yield Bonds:
 Real Estate:
  73




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Other Investments: ,
 Money Market Investments:
 Receivables/Short Term Investments, net:
  Basis of Rate-of-Return Assumption
   74




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U.S. defined-benefit retiree health and lifeinsurance plans
    
    2010
    
    
    2009Change in benefit obligation:Benefit obligation as of beginning of period
    
    $
    327.5
    
    
    $
    334.3Service cost
    
    
    2.4
    
    
    
    1.9Interest cost
    
    
    14.8
    
    
    
    16.7Plan participants contributions
    
    
    5.9
    
    
    
    6.0Plan amendments
    
    
    
    
    
    
    0.1Effect of curtailment
    
    
    (1.9
    )
    
    
    (0.2
    )Actuarial gain
    
    
    (16.7
    )
    
    
    (3.9
    )Benefits paid, gross
    
    
    (29.8
    )
    
    
    (30.2
    )Medicare subsidy receipts
    
    
    2.2
    
    
    
    2.8Benefit obligation as of end of period
    
    $
    304.4
    
    
    $
    327.5Change in plan assets:Fair value of plan assets as of beginning of period
    
    
    
    
    
    
    Employer contribution
    
    $
    21.7
    
    
    $
    21.4Plan participants contributions
    
    
    5.9
    
    
    
    6.0Benefits paid, gross
    
    
    (29.8
    )
    
    
    (30.2
    )Medicare subsidy receipts
    
    
    2.2
    
    
    
    2.8Fair value of plan assets as of end of period
    
    $
    
    
    
    $
    Funded status of the plans
    
    $
    (304.4
    )
    
    $
    (327.5
    )
 U.S. defined-benefit retiree health and lifeinsurance plans
    
    2010
    
    
    2009Weighted-average discount rate used to
determine benefit obligations
at end of period
    
    
    4.90
    %
    
    
    5.30
    %Weighted-average discount rate used to
determine net periodic benefit cost for
the period
    
    
    5.30
    %
    
    
    5.60
    %
  U.S. defined-benefit retiree health and lifeinsurance plans
    
    2010
    
    
    2009
    
    
    2008Service cost of benefits earned during the period
    
    $
    2.4
    
    
    $
    1.9
    
    
    $
    1.7Interest cost on accumulated postretirement
benefit obligation
    
    
    14.8
    
    
    
    16.7
    
    
    
    18.9Amortization of net actuarial gain
    
    
    (6.3
    )
    
    
    (4.4
    )
    
    
    (1.5
    )Net periodic postretirement benefit cost
    
    $
    10.9
    
    
    $
    14.2
    
    
    $
    19.1
  One percentage pointU.S. retiree health and life insurance benefit plans
    
    Increase
    
    
    DecreaseEffect on total service and interest cost components
    
    $
    0.6
    
    
    $
    (0.5
    )Effect on postretirement benefit obligation
    
    
    10.4
    
    
    
    (9.4
    )
  75




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Amounts recognized in assets and (liabilities) at year end consist of
 Retiree Health and LifePension Benefits
    
    
    Insurance Benefits2010
    
    
    2009
    
    
    2010
    
    
    2009Prepaid pension costs
    
    $
    128.3
    
    
    $
    114.1
    
    
    
    
    
    
    
    Accounts payable and accrued
expenses
    
    
    (3.9
    )
    
    
    (3.3
    )
    
    $
    (26.5
    )
    
    $
    (30.6
    )Postretirement benefit liabilities
    
    
    
    
    
    
    
    
    
    
    (277.9
    )
    
    
    (296.9
    )Pension benefit liabilities
    
    
    (45.5
    )
    
    
    (40.6
    )
    
    
    
    
    
    
    Net amount recognized
    
    $
    78.9
    
    
    $
    70.2
    
    
    $
    (304.4
    )
    
    $
    (327.5
    )
 Pre-tax amounts recognized in accumulated other comprehensive income (loss) at year end consist
of
 Retiree Health and LifePension Benefits
    
    
    Insurance Benefits2010
    
    
    2009
    
    
    2010
    
    
    2009Net actuarial (loss) gain
    
    $
    (594.5
    )
    
    $
    (550.2
    )
    
    $
    58.2
    
    
    $
    46.9Prior service cost
    
    
    (12.8
    )
    
    
    (14.2
    )
    
    
    (0.1
    )
    
    
    (0.1
    )Accumulated other
comprehensive (loss)
income
    
    $
    (607.3
    )
    
    $
    (564.4
    )
    
    $
    58.1
    
    
    $
    46.8
    Retiree Health and
    
    
    Retiree HealthLife Insurance
    
    
    Medicare SubsidyPension Benefits
    
    
    Benefits, Gross
    
    
    Receipts2011
    
    $
    124.7
    
    
    $
    27.5
    
    
    $
    (1.1
    )2012
    
    
    124.3
    
    
    
    27.8
    
    
    
    (1.2
    )2013
    
    
    126.2
    
    
    
    28.1
    
    
    
    (1.3
    )2014
    
    
    127.8
    
    
    
    27.5
    
    
    
    (1.4
    )2015
    
    
    128.2
    
    
    
    27.4
    
    
    
    (1.5
    )2016-2020
    
    
    659.9
    
    
    
    124.1
    
    
    
    (9.9
    )
  NON-U.S. PLANS
   76




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##### Table of Contents



Non-U.S. defined-benefit plans
    
    2010
    
    
    2009Change in benefit obligation:Benefit obligation as of beginning of period
    
    $
    385.8
    
    
    $
    329.2Service cost
    
    
    5.4
    
    
    
    5.1Interest cost
    
    
    18.3
    
    
    
    19.3Plan participants contributions
    
    
    1.5
    
    
    
    2.0Foreign currency translation adjustment
    
    
    (27.7
    )
    
    
    18.7Effect of plan settlements and curtailments
    
    
    (7.7
    )
    
    
    (0.2
    )Effect of termination benefits
    
    
    1.3
    
    
    
    Actuarial loss
    
    
    6.1
    
    
    
    36.2Benefits paid
    
    
    (28.4
    )
    
    
    (24.5
    )Benefit obligation as of end of period
    
    $
    354.6
    
    
    $
    385.8Change in plan assets:Fair value of plan assets as of beginning of period
    
    $
    190.3
    
    
    $
    156.1Actual return on plan assets
    
    
    18.7
    
    
    
    23.2Employer contributions
    
    
    23.9
    
    
    
    17.7Plan participants contributions
    
    
    1.5
    
    
    
    2.0Foreign currency translation adjustment
    
    
    (11.7
    )
    
    
    15.8Effect of settlements
    
    
    (5.6
    )
    
    
    Benefits paid
    
    
    (28.4
    )
    
    
    (24.5
    )Fair value of plan assets as of end of period
    
    $
    188.7
    
    
    $
    190.3Funded status of the plans
    
    $
    (165.9
    )
    
    $
    (195.5
    )
 Non-U.S. defined-benefit plans
    
    2010
    
    
    2009Weighted-average assumptions used to determine
benefit obligations at end of period:Discount rate
    
    
    5.0
    %
    
    
    5.1
    %Rate of compensation increase
    
    
    3.1
    %
    
    
    3.3
    %Weighted-average assumptions used to determine
net periodic benefit cost for the period:Discount rate
    
    
    5.1
    %
    
    
    5.8
    %Expected return on plan assets
    
    
    6.5
    %
    
    
    6.5
    %Rate of compensation increase
    
    
    3.0
    %
    
    
    3.4
    %
  77




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Non-U.S. pension plans with benefit obligations in excess of assets
    
    2010
    
    
    2009Projected benefit obligation, December 31
    
    $
    208.2
    
    
    $
    384.6Accumulated benefit obligation, December 31
    
    
    201.3
    
    
    
    359.1Fair value of plan assets, December 31
    
    
    39.9
    
    
    
    189.0
  Non-U.S. defined-benefit plans
    
    2010
    
    
    2009
    
    
    2008Service cost of benefits earned during the period
    
    $
    5.4
    
    
    $
    5.1
    
    
    $
    5.6Interest cost on projected benefit obligation
    
    
    18.3
    
    
    
    19.3
    
    
    
    21.3Expected return on plan assets
    
    
    (13.4
    )
    
    
    (12.8
    )
    
    
    (16.0
    )Amortization of net actuarial loss (gain)
    
    
    0.3
    
    
    
    (0.9
    )
    
    
    (0.5
    )Net periodic pension cost
    
    $
    10.6
    
    
    $
    10.7
    
    
    $
    10.4
 Investment Policies
   Target Weight at
    
    
    Position at December 31,Asset Class
    
    December 31, 2010
    
    
    2010
    
    
    2009Equities
    
    
    54
    %
    
    
    56
    %
    
    
    60
    %Long duration bonds
    
    
    34
    %
    
    
    33
    %
    
    
    26
    %Other fixed income
    
    
    3
    %
    
    
    2
    %
    
    
    8
    %Real estate
    
    
    9
    %
    
    
    9
    %
    
    
    6
    %
  Value at December 31, 2010Description
    
    Level 1
    
    
    Level 2
    
    
    TotalBonds
    
    
    
    
    
    $
    65.3
    
    
    $
    65.3Equities
    
    $
    1.2
    
    
    
    105.1
    
    
    
    106.3Real estate
    
    
    
    
    
    
    15.6
    
    
    
    15.6Cash and other short term
investments
    
    
    1.5
    
    
    
    
    
    
    
    1.5Net assets
    
    $
    2.7
    
    
    $
    186.0
    
    
    $
    188.7
  78




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##### Table of Contents



Value at December 31, 2009Description
    
    Level 1
    
    
    Level 2
    
    
    TotalBonds
    
    
    
    
    
    $
    64.4
    
    
    $
    64.4Equities
    
    $
    4.3
    
    
    
    110.0
    
    
    
    114.3Real estate
    
    
    
    
    
    
    11.1
    
    
    
    11.1Cash and other short term
investments
    
    
    0.5
    
    
    
    
    
    
    
    0.5Net assets
    
    $
    4.8
    
    
    $
    185.5
    
    
    $
    190.3
  Bonds:
 Equities:
 Real Estate:
 Cash and other Short Term Investments:
  Basis of Rate-of-Return Assumption
   79




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##### Table of Contents



Amounts recognized in the consolidated balance sheets consist of
 2010
    
    
    2009Prepaid pension costs
    
    $
    2.4
    
    
    $
    0.1Accounts payable and accrued expenses
    
    
    (11.7
    )
    
    
    (12.8
    )Pension benefit liabilities
    
    
    (156.6
    )
    
    
    (182.8
    )Net amount recognized
    
    $
    (165.9
    )
    
    $
    (195.5
    )
 Pre-tax amounts recognized in accumulated other comprehensive
income (loss) at year end consist of
 2010
    
    
    2009Net actuarial (loss)
    
    $
    (11.2
    )
    
    $
    (14.4
    )Accumulated other comprehensive (loss)
    
    $
    (11.2
    )
    
    $
    (14.4
    )
     Pension Benefits2011
    
    $
    36.02012
    
    
    19.72013
    
    
    20.12014
    
    
    21.42015
    
    
    21.82016-2020
    
    
    116.6
  NOTE 19. FINANCIAL INSTRUMENTS
  December 31, 2010
    
    
    December 31, 2009Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    Estimatedamount
    
    
    Fair Value
    
    
    amount
    
    
    Fair ValueAssets/(Liabilities):Money market investments
    
    
    
    
    
    
    
    
    
    $
    250.1
    
    
    $
    250.1Total debt, including current portion
    
    $
    (874.9
    )
    
    $
    (882.8
    )
    
    
    (472.5
    )
    
    
    (462.1
    )Foreign currency derivative contracts
    
    
    (7.0
    )
    
    
    (7.0
    )
    
    
    (4.1
    )
    
    
    (4.1
    )Natural gas contracts
    
    
    (5.5
    )
    
    
    (5.5
    )
    
    
    (4.6
    )
    
    
    (4.6
    )
  80




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##### Table of Contents



December 31, 2010
    
    
    December 31, 2009Fair value based on
    
    
    Fair value based onOther
    
    
    Quoted,
    
    
    OtherQuoted, active
    
    
    observable
    
    
    active
    
    
    observablemarkets
    
    
    inputs
    
    
    markets
    
    
    inputsLevel 1
    
    
    Level 2
    
    
    Level 1
    
    
    Level 2Assets/(Liabilities):Money market investments
    
    
    
    
    
    
    
    
    
    $
    250.1
    
    
    
    Foreign currency contract obligations
    
    $
    (7.0
    )
    
    
    
    
    
    
    (4.1
    )
    
    
    Natural gas contracts
    
    
    
    
    
    $
    (5.5
    )
    
    
    
    
    
    $
    (4.6
    )
  NOTE 20. DERIVATIVE FINANCIAL INSTRUMENTS
   81




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##### Table of Contents



Counter Party Risk
  Commodity Price Risk
  Currency Rate Risk
 Sales and Purchases
   82




---



##### Table of Contents



Intercompany Loans and Dividends
 Financial Statement Impacts
   Liability DerivativesFair Value
    
    
    Fair ValueBalance Sheet
    
    December
    
    
    DecemberLocation
    
    31, 2010
    
    
    31, 2009Derivatives designated as hedging instrumentsNatural gas commodity contracts
    
    Accounts payable and accrued expenses
    
    $
    5.5
    
    
    $
    3.6Natural gas commodity contracts
    
    Other long-term liabilities
    
    
    
    
    
    
    0.2Foreign exchange contracts
    
    Accounts payable and accrued expenses
    
    
    2.4
    
    
    
    4.3Total derivatives designated as hedging instruments
    
    
    
    $
    7.9
    
    
    $
    8.1Derivatives not designated as hedging instrumentsNatural gas commodity contracts
    
    Accounts payable and accrued expenses
    
    
    
    
    
    $
    0.8Foreign exchange contracts
    
    Accounts payable and accrued expenses
    
    $
    4.6
    
    
    
    0.1Total derivative liabilities not designated as
hedging instruments
    
    
    
    $
    4.6
    
    
    $
    0.9
  83




---



##### Table of Contents



Amount of (Loss) Recognized in OtherComprehensive Income (OCI) (EffectivePortion) (a)For the Year Ended
    
    
    For the Year EndedDerivatives in Cash Flow Hedging Relationships
    
    December 31, 2010
    
    
    December 31, 2009Natural gas commodity contracts
    
    $
    (5.3
    )
    
    $
    (4.3
    )Foreign exchange contracts
    
    
    (2.4
    )
    
    
    (4.1
    )Total
    
    $
    (7.7
    )
    
    $
    (8.4
    )
 (a)
    
    As of December 31, 2010 the amount of existing (losses) in Accumulated OCI expected to
be recognized in earnings over the next twelve months is $ (7.6) million. Gain (Loss) Reclassified from Accumulated OCIinto Income (Effective Portion)For the YearEnded December 31,Derivatives in Cash Flow Hedging Relationships
    
    Location
    
    
    2010
    
    
    2009Natural gas commodity contracts
    
    Cost of goods sold
    
    $
    (9.2
    )
    
    $
    (22.4
    )Foreign exchange contracts
    
    Cost of goods sold
    
    
    (5.4
    )
    
    
    1.4Total
    
    
    
    
    
    $
    (14.6
    )
    
    $
    (21.0
    )
 Location of Gain (Loss)Recognized in Income onDerivative (IneffectiveDerivatives in Cash Flow Hedging Relationships
    
    Portion) (a)Natural gas commodity contracts
    
    Cost of goods soldForeign exchange contracts
    
    SG&A expense
 (a)
    
    The amount recognized in income related to the ineffective portion of the hedging
relationships was immaterial in 2010 and 2009. No gains or losses are excluded from the
assessment of the hedge effectiveness.  NOTE 21. GUARANTEES
   84




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##### Table of Contents



NOTE 22. PRODUCT WARRANTIES
   2010
    
    
    2009Balance at beginning of year
    
    $
    14.1
    
    
    $
    16.3Reductions for payments
    
    
    (18.1
    )
    
    
    (20.4
    )Current year warranty accruals
    
    
    16.3
    
    
    
    18.7Preexisting warranty accrual changes
    
    
    (0.2
    )
    
    
    (0.5
    )Effects of foreign exchange translation
    
    
    (0.2
    )
    
    
    Balance at end of year
    
    $
    11.9
    
    
    $
    14.1
  NOTE 23. OTHER LONG-TERM LIABILITIES
 December 31,
 2010
    
    
    December 31,
 2009Long-term deferred compensation arrangements
    
    $
    27.9
    
    
    $
    29.8U.S. workers compensation
    
    
    12.2
    
    
    
    11.9Postemployment benefit liabilities
    
    
    8.1
    
    
    
    9.1Environmental liabilities
    
    
    8.3
    
    
    
    6.3Other
    
    
    13.8
    
    
    
    10.0Total other long-term liabilities
    
    $
    70.3
    
    
    $
    67.1
 NOTE 24. STOCK-BASED COMPENSATION PLANS
     85




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##### Table of Contents



Year Ended December 31, 2010Weighted-Weighted-
    
    
    average
    
    
    AggregateNumber of
    
    
    average
    
    
    remaining
    
    
    intrinsicshares
    
    
    exercise
    
    
    contractual
    
    
    value(thousands)
    
    
    price
    
    
    term (years)
    
    
    (millions)Option shares outstanding at beginning of period
    
    
    1,627.5
    
    
    $
    25.87Options granted
    
    
    526.5
    
    
    
    37.22Option adjustment for December dividend
    
    
    463.6
    
    
    
    24.01Option shares exercised
    
    
    (615.4
    )
    
    
    (21.55
    )
    
    
    
    
    
    $
    13.2Options forfeited
    
    
    (23.8
    )
    
    
    (38.06
    )Option shares outstanding at end of period
    
    
    1,978.4
    
    
    $
    24.02
    
    
    
    6.7
    
    
    $
    37.5Option shares exercisable at end of period
    
    
    1,323.7
    
    
    
    21.78
    
    
    
    5.4
    
    
    $
    28.1Option shares expected to vest
    
    
    627.0
    
    
    
    28.52
    
    
    
    
    
    
    $
    9.1
 Year Ended December 31, 2009Weighted-Weighted-
    
    
    average
    
    
    AggregateNumber of
    
    
    average
    
    
    remaining
    
    
    intrinsicshares
    
    
    exercise
    
    
    contractual
    
    
    value(thousands)
    
    
    price
    
    
    term (years)
    
    
    (millions)Option shares outstanding at beginning of period
    
    
    1,532.9
    
    
    $
    29.85Options granted
    
    
    434.9
    
    
    
    13.46Option shares exercised
    
    
    (79.3
    )
    
    
    (29.37
    )
    
    
    
    
    
    $
    1.0Options forfeited
    
    
    (261.0
    )
    
    
    (27.37
    )Option shares outstanding at end of period
    
    
    1,627.5
    
    
    $
    25.87
    
    
    
    7.3
    
    
    $
    21.3Option shares exercisable at end of period
    
    
    1,627.5
    
    
    
    25.87
    
    
    
    7.3
    
    
    $
    21.3Option shares expected to vest
    
    
    
    
    
    
    
   86




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##### Table of Contents



2010
    
    
    2009
    
    
    2008Weighted-average grant date fair value of
options granted (dollars per option)
    
    $
    15.44
    
    
    $
    4.77
    
    
    $
    12.21AssumptionsRisk free rate of return
    
    
    2.8
    %
    
    
    2.1
    %
    
    
    3.2
    %Expected volatility
    
    
    38.1
    %
    
    
    32.7
    %
    
    
    29.8
    %Expected term (in years)
    
    
    6.1
    
    
    
    6.0
    
    
    
    6.0Expected dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
   Pre-Dividend Grant Terms
    
    Post-Dividend Grant TermsNumber of
    
    
    Exercise
    
    Number of
    
    
    ExerciseShares
    
    
    Price
    
    Shares
    
    
    PriceOptions granted in 2006
    
    
    707,535
    
    
    $29.37
    
    
    921,281
    
    
    $22.55Options granted in 2007
    
    
    64,100
    
    
    39.88
    
    
    83,452
    
    
    30.62Options granted in 2008
    
    
    151,904
    
    
    28.45  36.74
    
    
    197,834
    
    
    21.85  28.21Options granted in 2009
    
    
    107,779
    
    
    13.46
    
    
    140,371
    
    
    10.34Options granted in 2010
    
    
    502,682
    
    
    34.13  38.06
    
    
    654,673
    
    
    26.21  29.23
  87




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##### Table of Contents



Non-Vested Stock AwardsWeighted-average fairNumber of
    
    
    value at grantShares
    
    
    dateJanuary 1, 2009
    
    
    607,486
    
    
    $
    36.86Granted
    
    
    445,183
    
    
    
    13.46Vested
    
    
    (947,459
    )
    
    
    (26.53
    )Forfeited
    
    
    (105,210
    )
    
    
    (34.23
    )December 31, 2009
    
    
    0
    
    
    $
    0.00Granted
    
    
    72,951
    
    
    
    36.52Vested
    
    
    0
    
    
    
    0.00Forfeited
    
    
    0
    
    
    
    0.00December 31, 2010
    
    
    72,951
    
    
    $
    36.52
  Non-Vested Performance StockAwardsWeighted-average fairNumber of
    
    
    value at grantShares
    
    
    dateJanuary 1, 2009
    
    
    96,290
    
    
    $
    41.23Granted
    
    
    116,624
    
    
    
    13.46Vested
    
    
    (319,371
    )
    
    
    (20.08
    )Performance premium
    
    
    106,457
    
    
    
    26.02Forfeited
    
    
    
    
    
    
    December 31, 2009
    
    
    
    
    
    $
    Granted
    
    
    290,950
    
    
    
    38.09Vested
    
    
    
    
    
    
    Performance premium
    
    
    11,064
    
    
    
    38.19Forfeited
    
    
    (29,987
    )
    
    
    38.06December 31, 2010
    
    
    272,027
    
    
    $
    38.09
   88




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##### Table of Contents



NOTE 25. EMPLOYEE COMPENSATION
  Employee compensation cost
    
    2010
    
    
    2009
    
    
    2008Wages, salaries and incentive compensation
    
    $
    627.6
    
    
    $
    623.4
    
    
    $
    697.5Payroll taxes
    
    
    64.3
    
    
    
    64.7
    
    
    
    71.2Pension expense (credits), net
    
    
    (24.3
    )
    
    
    (31.4
    )
    
    
    (34.6
    )Insurance and other benefit costs
    
    
    59.0
    
    
    
    69.1
    
    
    
    77.5Stock-based compensation
    
    
    5.6
    
    
    
    38.3
    
    
    
    8.1Total
    
    $
    732.2
    
    
    $
    764.1
    
    
    $
    819.7
   89




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##### Table of Contents



NOTE 26. LEASES
  2010
    
    
    2009
    
    
    2008Rent expense
    
    $
    24.0
    
    
    $
    25.8
    
    
    $
    25.0Sublease (income)
    
    
    (3.0
    )
    
    
    (3.1
    )
    
    
    (2.0
    )Net rent expense
    
    $
    21.0
    
    
    $
    22.7
    
    
    $
    23.0
  Total Minimum
    
    
    Sublease
    
    
    Net MinimumScheduled minimum lease payments
    
    Lease Payments
    
    
    (Income)
    
    
    Lease Payments2011
    
    $
    12.1
    
    
    $
    (0.8
    )
    
    $
    11.32012
    
    
    9.4
    
    
    
    (0.6
    )
    
    
    8.82013
    
    
    4.8
    
    
    
    (0.4
    )
    
    
    4.42014
    
    
    2.5
    
    
    
    (0.2
    )
    
    
    2.32015
    
    
    1.4
    
    
    
    (0.2
    )
    
    
    1.2Thereafter
    
    
    4.9
    
    
    
    (0.4
    )
    
    
    4.5Total
    
    $
    35.1
    
    
    $
    (2.6
    )
    
    $
    32.5
  NOTE 27. SHAREHOLDERS EQUITY
   December 31,
    
    
    December 31,2010
    
    
    2009Foreign currency translation adjustments
    
    $
    24.7
    
    
    $
    23.9Derivative (loss), net
    
    
    (5.0
    )
    
    
    (5.5
    )Pension and postretirement adjustments
    
    
    (345.4
    )
    
    
    (316.2
    )Accumulated other comprehensive (loss)
    
    $
    (325.7
    )
    
    $
    (297.8
    )
  Pre-tax
    
    
    
    
    
    
    After tax2010
    
    Amount
    
    
    Tax (Expense)
    
    
    AmountForeign currency translation adjustments
    
    $
    0.3
    
    
    $
    (0.6
    )
    
    $
    (0.3
    )Derivative gain (loss), net
    
    
    0.7
    
    
    
    (0.2
    )
    
    
    0.5Pension and postretirement adjustments
    
    
    (28.4
    )
    
    
    (0.8
    )
    
    
    (29.2
    )Purchase of non-controlling interest
    
    
    1.1
    
    
    
    
    
    
    
    1.1Total other comprehensive income (loss)
    
    $
    (26.3
    )
    
    $
    (1.6
    )
    
    $
    (27.9
    )
  90




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##### Table of Contents



Pre-tax
    
    
    
    
    
    
    After tax2009
    
    Amount
    
    
    Tax (Expense)
    
    
    AmountForeign currency translation adjustments
    
    $
    38.3
    
    
    $
    (3.9
    )
    
    $
    34.4Derivative gain (loss), net
    
    
    (1.6
    )
    
    
    (0.6
    )
    
    
    (2.2
    )Pension and postretirement adjustments
    
    
    37.9
    
    
    
    (19.1
    )
    
    
    18.8Total other comprehensive income (loss)
    
    $
    74.6
    
    
    $
    (23.6
    )
    
    $
    51.0
 Pre-tax
    
    
    
    
    
    
    After tax2008
    
    Amount
    
    
    Tax (Expense)
    
    
    AmountForeign currency translation adjustments
    
    $
    (49.2
    )
    
    $
    7.1
    
    
    $
    (2.2
    )Derivative gain (loss), net
    
    
    0.7
    
    
    
    0.7
    
    
    
    1.4Pension and postretirement adjustments
    
    
    (792.0
    )
    
    
    308.5
    
    
    
    (483.5
    )Total other comprehensive income (loss)
    
    $
    (840.5
    )
    
    $
    316.3
    
    
    $
    (524.3
    )
 NOTE 28. SUPPLEMENTAL FINANCIAL INFORMATION
 Selected operating expenses
    
    2010
    
    
    2009
    
    
    2008Maintenance and repair costs
    
    $
    94.6
    
    
    $
    103.5
    
    
    $
    111.3Research and development costs
    
    
    32.9
    
    
    
    38.0
    
    
    
    38.8Advertising costs
    
    
    27.5
    
    
    
    28.8
    
    
    
    29.6Other non-operating expenseForeign currency transaction loss, net of hedging activity
    
    $
    1.1
    
    
    $
    0.3
    
    
    $
    1.1Other
    
    
    0.1
    
    
    
    0.6
    
    
    
    0.2Total
    
    $
    1.2
    
    
    $
    0.9
    
    
    $
    1.3Other non-operating incomeInterest income
    
    $
    7.1
    
    
    $
    3.1
    
    
    $
    10.5Foreign currency transaction gain, net of hedging activity
    
    
    0.7
    
    
    
    0.1
    
    
    
    0.1Other
    
    
    0.2
    
    
    
    
    
    
    
    Total
    
    $
    8.0
    
    
    $
    3.2
    
    
    $
    10.6
 NOTE 29. SUPPLEMENTAL CASH FLOW INFORMATION
 2010
    
    
    2009
    
    
    2008Interest paid
    
    $
    11.3
    
    
    $
    10.4
    
    
    $
    24.2Income taxes paid, net
    
    
    8.5
    
    
    
    8.9
    
    
    
    25.7
 NOTE 30. RELATED PARTIES
    91




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NOTE 31. LITIGATION AND RELATED MATTERS
 ENVIRONMENTAL MATTERS
 Environmental Expenditures
  Environmental Remediation
 Summary
   Specific Events
    92




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Summary of Financial Position
    CUSTOMS LITIGATION
   93




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ANTIDUMPING AND COUNTERVAILING DUTY PETITION
   DIVESTITURE DISPUTE
  OTHER CLAIMS
   94




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##### Table of Contents



NOTE 32. EARNINGS PER SHARE
   2010
    
    
    2009
    
    
    2008Net earnings
    
    $
    11.0
    
    
    $
    77.7
    
    
    $
    81.0Net earnings allocated to non-vested share
awards
    
    
    
    
    
    
    (0.4
    )
    
    
    (0.6
    )Net earnings attributable to common shares
    
    $
    11.0
    
    
    $
    77.3
    
    
    $
    80.4
  millions of shares
    
    2010
    
    
    2009
    
    
    2008Basic shares outstanding
    
    
    57.7
    
    
    
    56.8
    
    
    
    56.4Dilutive effect of stock option awards
    
    
    0.5
    
    
    
    0.2
    
    
    
    Diluted shares outstanding
    
    
    58.2
    
    
    
    57.0
    
    
    
    56.4
 NOTE 33. SPECIAL CASH DIVIDEND
  NOTE 34. SUBSEQUENT EVENT
   95




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ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
     96




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##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
   97




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##### Table of Contents



PART IV
 
 Item 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
  1.
    
    The financial statements and schedule of Armstrong World Industries, Inc. filed as a part
of this 2010 Annual Report on Form 10-K is listed in the Index to Financial Statements and
Schedules on Page 38.2.
    
    The financial statements required to be filed pursuant to Item 15 of Form 10-K are:Worthington Armstrong Venture consolidated financial statements for the years ended
December 31, 2010, 2009, and 2008 (filed herewith as Exhibit 99.1)3.
    
    The following exhibits are filed as part of this 2010 Annual Report on Form 10-K:
 Exhibit No.
    
    DescriptionNo. 2
    
    Armstrong World Industries, Inc.s Fourth Amended Plan of Reorganization, as amended by
modifications through May 23, 2006, is incorporated by reference from the 2005 Annual Report
on Form 10-K, wherein it appeared as Exhibit 2.3.No. 3.1
    
    Amended and Restated Certificate of Incorporation of Armstrong World Industries, Inc.
is incorporated by reference from the Current Report on Form 8-K dated October 2, 2006,
wherein it appeared as Exhibit 3.1.No. 3.2
    
    Bylaws of Armstrong World Industries, Inc. as amended, are incorporated by reference
from the Current Report on Form 8-K dated August 5, 2010, wherein they appeared as Exhibit
3.1.No. 10.1
    
    Management Achievement Plan for Key Executives, effective as of November 28, 1983, as
amended April 30, 2007 and December 8, 2008, is incorporated by reference from the 2008
Annual Report on Form 10-K, wherein it appeared as Exhibit 10.1. *No. 10.2
    
    Retirement Benefit Equity Plan, effective January 1, 2005, as amended October 29, 2007
and December 8, 2008, is incorporated by reference from the 2008 Annual Report on Form 10-K,
wherein it appeared as Exhibit 10.2. *No. 10.3
    
    Bonus Replacement Retirement Plan, effective as of January 1, 1998, as amended January
1, 2007, is incorporated by reference from the 2007 Annual Report on Form 10-K, wherein it
appeared as Exhibit 10.9.*No. 10.4
    
    Nonqualified Deferred Compensation Plan effective January 2005, as amended July 23,
2010. The amended Nonqualified Deferred Compensation Plan is filed with this Report. *No. 10.5
    
    Schedule of Armstrong World Industries, Inc. Nonemployee Directors Compensation
Summary is incorporated by reference from the Quarterly Report on Form 10-Q for the quarter
ended June 30, 2010, wherein it appeared as Exhibit 10.5.*
  98




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Exhibit No.
    
    DescriptionNo. 10.6
    
    Amended and Restated Credit Agreement dated as of November 23, 2010, among the
company, the other borrower and guarantors named therein, Bank of America, N.A., as
administrative agent and collateral agent, the other lenders party thereto, JP Morgan Chase
Bank, N.A., as syndication agent, Barclays Bank PLC, as documentation agent, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities, Inc. and Barclays
Capital, the investment banking division of Barclays Bank, PLC, as co-lead arrangers and
joint book makers, is incorporated by reference from the Current Report on Form 8-K dated
November 23, 2010, wherein it appeared as Exhibit 10.1.No. 10.7
    
    Amended and Restated Security Agreement dated as of November 23, 2010, by and among
the Company, the grantors named therein and Bank of America, N.A., as collateral agent, is
incorporated by reference from the Current Report on Form 8-K dated November 23, 2010,
wherein it appeared as Exhibit 10.2.No. 10.8
    
    Amended and Restated Pledge Agreement dated as of November 23, 2010, by and among the
Company, the pledgors named therein and Bank of America, N.A., as collateral agent, is
incorporated by reference from the Current Report on Form 8-K dated November 23, 2010,
wherein it appeared as Exhibit 10.3.No. 10.9
    
    Amended and Restated Canadian Pledge Agreement dated as of November 23, 2010, by and
among the Company and Bank of America, N.A., as collateral agent, incorporated by reference
from the Current Report on Form 8-K dated November 23, 2010, wherein it appeared as Exhibit
10.4.No. 10.10
    
    Equitable Mortgage of Shares dated February 12, 2007, between the Company and Bank of
America, N.A., as administrative agent and collateral agent, is incorporated by reference on
from the Current Report on Form 8-K dated November 23, 2010, wherein it appeared as Exhibit
10.5.No. 10.11
    
    Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust Agreement
dated as of October 2, 2006, by and among Armstrong World Industries, Inc. and trustees, is
incorporated by reference from the Current Report on Form 8-K dated October 2, 2006, wherein
it appeared as Exhibit 10.2.No. 10.12
    
    Stockholder and Registration Rights Agreement, dated as of October 2, 2006, by and
between Armstrong World Industries, Inc. and the Armstrong World Industries, Inc. Asbestos
Personal Injury Settlement Trust is incorporated by reference from the Current Report on Form
8-K dated October 2, 2006, wherein it appeared as Exhibit 10.3.No. 10.13
    
    2006 Long-Term Incentive Plan, as amended February 23, 2009, is incorporated by
reference from the 2008 Annual Report on Form 10-K, wherein it appeared as Exhibit 10.13. *No. 10.14
    
    Form of 2006 Long-Term Incentive Plan Stock Option Agreement is incorporated by
reference from the Current Report on Form 8-K dated October 2, 2006, wherein it appeared as
Exhibit 10.5. *No. 10.15
    
    Form of 2006 Long-Term Incentive Plan Restricted Stock Award Agreement is
incorporated by reference from the Current Report on Form 8-K dated October 2, 2006, wherein
it appeared as Exhibit 10.6. *No. 10.16
    
    Form of 2006 Long-Term Incentive Plan notice of restricted stock and/or option award
is incorporated by reference from the Current Report on Form 8-K dated October 2, 2006,
wherein it appeared as Exhibit 10.7. *
  99




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Exhibit No.
    
    DescriptionNo. 10.17
    
    2006 Phantom Stock Unit Plan, as amended December 8, 2008, is incorporated by
reference from the 2008 Annual Report on Form 10-K, wherein it appeared as Exhibit 10.18. *No. 10.18
    
    2006 Phantom Stock Unit Agreement is incorporated by reference from the Current
Report on Form 8-K dated October 23, 2006, wherein it appeared as Exhibit 10.3. A Schedule
of Participating Directors is incorporated by reference from the 2006 Annual Report on Form
10-K, wherein it appeared as Exhibit 10.36. *No. 10.19
    
    2007 Award under the 2006 Phantom Stock Unit Agreement and the Schedule of
Participating Directors are incorporated by reference from the Current Report on Form 8-K
dated October 22, 2007, wherein they appeared as Exhibits 10.1 and 10.2, respectively. *No. 10.20
    
    Stipulation and Agreement with Respect to Claims of Armstrong Holdings, Inc. and
Armstrong Worldwide, Inc.; and Motion for Order Approving Stipulation and Agreement are
incorporated by reference from the Current Report on Form 8-K dated February 26, 2007,
wherein they appeared as Exhibits 99.2 and 99.3, respectively.No. 10.21
    
    Form of grant letter used in connection with awards of restricted stock under the
2006 Long-Term Incentive Plan is incorporated by reference from the 2007 Annual Report on
Form 10-K, wherein it appeared as Exhibit 10.35.*No. 10.22
    
    Form of grant letter used in connection with award of stock options under the 2006
Long-Term Incentive Plan is incorporated by reference from the Quarterly Report on Form 10-Q
for the quarter ended March 31, 2008, wherein it appeared as Exhibit 10.37. *No. 10.23
    
    The 2008 Directors Stock Unit Plan, as amended December 8, 2008, November 23, 2010
and November 30, 2010 is filed with this Report.*No. 10.24
    
    Form of 2009 Award under the 2008 Director Stock Unit Plan is incorporated by
reference from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2009,
wherein it appeared as Exhibit 10.27. *No. 10.25
    
    Form of Indemnification Agreement for Officers and Directors of Armstrong World
Industries, Inc. is incorporated by reference from the Report on Form 8-K dated June 4, 2010,
wherein it appeared as Exhibit 10.1. A Schedule of Participating Officers and Directors is
filed with this Report. *No. 10.26
    
    Non-Disclosure Agreement, dated July 30, 2009, between Armstrong World Industries,
Inc. and TPG Capital, L.P. (incorporated by reference to Exhibit 3 to the Schedule 13D filed
by TPG Advisors VI, Inc., TPG Advisors V, Inc., David Bonderman and James G. Coulter with the
SEC on August 11, 2009).No. 10.27
    
    Undertaking Letter from TPG Capital L.P., dated August 10, 2009, to Armstrong World
Industries, Inc. (incorporated by reference to Exhibit (e)(4) to the Schedule 14D-9 filed by
Armstrong World Industries, Inc. with the SEC on September 15, 2009).No. 10.28
    
    Offer Letter to Thomas B. Mangas dated December 23, 2009, is incorporated by
reference from the Current Report on Form 8-K dated January 8, 2010, wherein it appeared as
Exhibit 99.2. *
  100




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##### Table of Contents



Exhibit No.
    
    DescriptionNo. 10.29
    
    Letter to Frank J. Ready dated January 8, 2010, incorporated by reference from the
2009 Annual Report on Form 10-K, wherein it appeared as Exhibit 10.32. *No. 10.30
    
    Form of grant letter used in connection with the equity grant of stock options under
the 2006 Long-Term Incentive Plan to Thomas B. Mangas is incorporated by reference from the
Current Report on Form 8-K dated April 1, 2010, wherein it appeared as Exhibit 10.1. *No. 10.31
    
    Form of grant letter used in connection with the equity grant of stock options under
the 2006 Long-Term Incentive Plan to Messrs. McNamara, Nickel and Ready is incorporated by
reference from the Current Report on Form 8-K dated April 1, 2010, wherein it appeared as
Exhibit 10.2. *No. 10.32
    
    Employment Agreement with Matthew J. Espe dated June 24, 2010 is incorporated by
reference from the Current Report filed on Form 8-K dated June 25, 2010, wherein it appeared
as Exhibit 10.1. *No. 10.33
    
    Change in control agreement with Matthew J. Espe dated June 24, 2010 is incorporated
by reference from the Current Report on Form 8-K dated June 25, 2010, wherein it appeared as
Exhibit 10.2. *No. 10.34
    
    Form of change in control agreement with Thomas B. Mangas and Jeffrey D. Nickel is
incorporated by reference from the Current Report on Form 8-K dated July 2, 2010, wherein it
appeared as Exhibit 10.1. *No. 10.35
    
    Indemnification Agreement with Matthew J. Espe is incorporated by reference from the
Current Report on Form 8-K dated June 4, 2010, wherein it appeared as Exhibit 10.1.No. 10.36
    
    Form of change in control agreement with Stephen F. McNamara is incorporated by
reference from the Current Report on Form 8-K dated July 2, 2010, wherein it appeared as
Exhibit 10.1. *No. 10.37
    
    Form of 2010 Award under the 2008 Directors Stock Unit Plan is incorporated by
reference from the Quarterly Report on Form 10-Q for the quarter ended September 30, 2009,
wherein appeared as Exhibit 10.27. A schedule of Participating Directors to the 2010 Award
under the 2008 Directors Stock Unit Plan is filed with this Report.*No. 10.38
    
    Form of change in control agreement with Thomas B. Kane dated November 4, 2010, is
incorporated by reference from the Current Report on Form 8-K dated July 2, 2010, wherein it
appeared as Exhibit 10.1. *No. 11
    
    Computation of Earnings Per Share.No. 14
    
    The Armstrong Code of Business Conduct, revised as of December 21, 2010, is filed with
this Report.No. 21
    
    Armstrong World Industries, Inc.s Subsidiaries.No. 23.1
    
    Consent of Independent Registered Public Accounting Firm.No. 23.2
    
    Consent of Independent
Auditors.No. 24
    
    Power of Attorney and Authorizing Resolution.No. 31.1
    
    Certification of Chief Executive Officer required by Rule 13a-15(e) or 15d-15(e) of
the Securities Exchange Act.
  101




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Exhibit No.
    
    DescriptionNo. 31.2
    
    Certification of Chief Financial Officer required by Rule 13a-15(e) or 15d-15(e) of
the Securities Exchange Act.No. 32.1
    
    Certification of Chief Executive Officer required by Rule 13a and 18 U.S.C. Section
1350 (furnished herewith).No. 32.2
    
    Certification of Chief Financial Officer required by Rule 13a and 18 U.S.C. Section
1350 (furnished herewith).No. 99.1
    
    Worthington Armstrong Venture consolidated financial statements as of December 31,
2009 and 2010 and for the years ended December 31, 2008, 2009 and 2010.No. 99.2
    
    Shareholders Agreement, dated as of August 28, 2009, by and among Armor TPG Holdings
LLC and Armstrong World Industries, Inc. Asbestos Personal Injury Settlement Trust
(incorporated by reference to Exhibit (d)(3) of the Schedule TO filed on September 3, 2009,
by TPG Advisors VI, Inc., Armor TPG Holdings LLC and others with respect to Armstrong World
Industries, Inc.).
 *
    
    Management Contract or Compensatory Plan.  102




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ARMSTRONG WORLD INDUSTRIES, INC.
(Registrant)By:
    /s/ Matthew J. EspeChief Executive Officer and PresidentDate: February 28, 2011   Name
    
    TitleMatthew J. Espe
    
    Chief Executive Officer and President
(Principal Executive Officer)Thomas B. Mangas
    
    Senior Vice President and Chief Financial Officer
(Principal Financial Officer)Stephen F. McNamara
    
    Vice President and Controller
(Chief Accounting Officer)Stanley A. Askren
    
    DirectorDavid Bonderman
    
    DirectorKevin Burns
    
    DirectorJames J. Gaffney
    
    DirectorTao Huang
    
    DirectorMichael F. Johnston
    
    DirectorLarry S. McWilliams
    
    DirectorJames J. OConnor
    
    DirectorJohn J. Roberts
    
    DirectorRichard E. Wenz
    
    DirectorBettina M. Whyte
    
    Director
 By:
    /s/ Matthew J. Espe(Matthew J. Espe)As of February 28, 2011By:
    /s/ Thomas B. Mangas(Thomas B. Mangas)As of February 28, 2011By:
    /s/ Stephen F. McNamara(Stephen F. McNamara)As of February 28, 2011  103




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SCHEDULE II
 Valuation and Qualifying Reserves of Accounts Receivable
 2010
    
    
    2009
    
    
    2008Provision for LossesBalance at beginning of year
    
    $
    10.5
    
    
    $
    10.8
    
    
    $
    11.8Additions charged to earnings
    
    
    7.3
    
    
    
    7.8
    
    
    
    8.6Deductions
    
    
    (8.0
    )
    
    
    (8.1
    )
    
    
    (9.6
    )Divestitures
    
    
    (0.5
    )
    
    
    
    
    
    
    Balance at end of year
    
    $
    9.3
    
    
    $
    10.5
    
    
    $
    10.8Provision for Discounts and WarrantiesBalance at beginning of year
    
    $
    37.8
    
    
    $
    43.7
    
    
    $
    51.9Additions charged to earnings
    
    
    171.2
    
    
    
    182.0
    
    
    
    225.6Deductions
    
    
    (175.2
    )
    
    
    (187.9
    )
    
    
    (233.8
    )Balance at end of year
    
    $
    33.8
    
    
    $
    37.8
    
    
    $
    43.7




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##### Table of Contents



Exhibit Index
 Exhibit No.No. 10.4
    
    Nonqualified Deferred Compensation Plan effective January 2005, as
amended July 23, 2010.No. 10.23
    
    The 2008 Directors Stock Unit Plan, as amended December 8, 2008,
November 23, 2010 and November 30, 2010.No. 10.25
    
    Form of Indemnification Agreement for Officers and Directors of
Armstrong World Industries, Inc. is incorporated by reference from the
Report on Form 8-K dated June 4, 2010, wherein it appeared as Exhibit
10.1. A Schedule of Participating Officers and Directors is filed with
this Report.No. 10.37
    
    Form of 2010 Award under the 2008 Directors Stock Unit Plan is
incorporated by reference from the Quarterly Report on Form 10-Q for
the quarter ended September 30, 2009, wherein appeared as Exhibit
10.27. A schedule of Participating Directors to the 2010 Award under
the 2008 Directors Stock Unit Plan is filed with this Report.*No. 11
    
    Computation of Earnings Per Share.No. 14
    
    The Armstrong Code of Business Conduct, revised as of December 21, 2010.No. 21
    
    Armstrong World Industries, Inc.s Subsidiaries.No. 23.1
    
    Consent of Independent Registered Public Accounting Firm.No. 23.2
    
    Consent of Independent Auditors.No. 24
    
    Power of Attorney and Authorizing Resolution.No. 31.1
    
    Certification of Principal Executive Officer required by Rule 13a-15(e)
or 15d-15(e) of the Exchange Act.No. 31.2
    
    Certification of Principal Financial Officer required by Rule 13a-15(e)
or 15d-15(e) of the Exchange Act.No. 32.1
    
    Certification of Chief Executive Officer required by Rule 13a and 18
U.S.C. Section 1350.No. 32.2
    
    Certification of Chief Financial Officer required by Rule 13a and 18
U.S.C. Section 1350.No. 99.1
    
    Worthington Armstrong Venture consolidated financial statements as of
December 31, 2010 and 2009 and for the years ended December 31, 2010,
2009 and 2008.