October 2, 2006

Dear Armstrong Employee:

Today Armstrong has emerged from Chapter 11.  This is an important milestone.  I would like to thank you for your hard work, dedication and loyalty during the past six years.  This has been a lengthy and challenging Chapter 11 reorganization, and we could not have overcome the many obstacles along the way without your efforts.

Our Plan of Reorganization provides for an asbestos trust, to which the company will make a one time contribution of cash, insurance and stock in the reorganized Armstrong.  Asbestos claimants will be able to seek compensation only from the asbestos trust, which will be administered by independent trustees.

During our time in Chapter 11, we not only resolved our asbestos liability, we also transformed our business in many ways.  We made substantial improvements in our cost structure by closing several plants and streamlining the workforce in the U.S.  We also expanded capacity to manufacture wood flooring, broadened our product offerings in all product lines and improved product quality and customer service.

These improvements have helped produce several consecutive quarters of improved financial performance.  As we emerge from Chapter 11, Armstrong is poised for continued growth and success.  Free from our asbestos liability and with a strong balance sheet and solidly performing businesses, we will be better able to grow through capital investments in existing businesses and strategic transactions.

Every Armstrong employee plays a role in determining whether or not we realize our full potential.  More than ever we need to focus on improving productivity, quality and service.  I, our senior management team and our new Board of Directors are all excited about the future of Armstrong, and proud to be associated with such an outstanding group of employees.

Thank you again for your loyalty and dedication to Armstrong.

 Sincerely,

Michael D. Lockhart
Chairman and Chief Executive Officer