The Disclosure Statement provides additional details for Armstrong's Chapter 11 Plan of Reorganization (Plan) and enables holders of claims against Armstrong to make an informed judgment about whether to accept or reject the Plan of Reorganization. The Court must approve the proposed Disclosure Statement as containing adequate information before AWI can solicit votes on the Plan. The Court approved Armstrong’s Disclosure Statement on May 30, 2003.

The Plan of Reorganization, filed on November 4, 2002 and amended on May 23, 2003, provides for a mechanism to resolve Armstrong’s liability for present and future asbestos personal injury claims with finality. Filing the Plan means Armstrong is on a path toward emerging from Chapter 11 and will continue operating its business as usual.

Q: What are the key elements of the Disclosure Statement?

AWI estimates that, based upon an assumed effective date of the Plan of Reorganization of November 2003, the total value of consideration to be distributed to the asbestos personal injury trust, other than the insurance asset, will be approximately $ 1.8 billion.

The total value of consideration to be distributed to holders of allowed unsecured claims (other than convenience claims) is estimated to be approximately $982 million. Based upon the estimated value of the Plan consideration and AWI’s estimate that allowed unsecured claims (other than convenience claims) will total approximately $1.65 billion, AWI estimates that holders of allowed unsecured claims (other than convenience claims) will receive a recovery having a value equal to approximately 59.5% of their allowed claims. AWI’s estimates of value and potential recoveries are based upon a number of assumptions, which are set forth more fully in the Disclosure Statement.

The Disclosure Statement and the Plan are available at www.armstrongplan.com, where additional information will also be posted as it becomes available.

Q: What is the Plan of Reorganization and what does it mean for Armstrong?

Filing a Plan of Reorganization represents a critical step forward in the resolution of Armstrong’s Chapter 11 case. The Plan provides for a mechanism to resolve Armstrong’s liability for present and future asbestos personal injury claims with finality. Filing the Plan means Armstrong is on a path toward emerging from Chapter 11 and will continue operating its business as usual.

The Plan essentially is a “new contract” between Armstrong and its creditors, which sets forth how claims, including all present and future asbestos personal injury claims, will be satisfied and discharged.

Q: What is a warrant?

A warrant is a right to purchase a predetermined number of shares of stock of a company in the future at a specified price.

The new warrants proposed in the Plan of Reorganization for Armstrong World Industries, Inc. (AWI) will have an exercise price equal to 125% of the Equity Value (the agreed upon stock value of reorganized AWI, which is set at $30.00/share in the final, Court approved Disclosure Statement for the Plan of Reorganization) and will have a term of seven years from the effective date of AWI's reorganization. AWI's Plan of Reorganization proposes to distribute the warrants to AHI for potential distribution to AHI's stockholders under AHI's Plan of Liquidation. The warrants are estimated to have a value of $35-40 million.

Q: Where is the existing common stock of Armstrong Holdings, Inc. currently traded?

The common stock of AHI is now quoted on the OTC (Over-the-Counter) Bulletin Board (OTCBB) with the ticker symbol of ACKHQ. The OTCBB is a regulated quotation service that displays real-time quotes, last sale prices, and volume information in OTC equity securities. Information about the OTCBB may be found on the Internet at www.otcbb.com.

AHI's common stock previously had been traded on the New York Stock Exchange (NYSE) under the ticker symbol ACK until the NYSE determined to suspend its trading following the filing of AWI's Plan of Reorganization.

Q: Where do holders of AKK fit into the Plan of Reorganization?

The claims of holders of AKK bonds as well as ACK08 bonds are treated in Class 6, within the class of unsecured creditors, under the Plan of Reorganization.

Q: When will Armstrong World Industries, Inc. emerge from Chapter 11?

There are a number of steps that must be taken prior to AWI reorganizing and emerging from Chapter 11. These steps and important dates in the process include:

• Filing a Plan of Reorganization, (filed on November 4, 2002, amended May 23, 2003).
• Filing a Disclosure Statement, (filed on December 20, 2002, amended May 23, 2003). In a Chapter 11 case, a Disclosure Statement is used to solicit votes to accept or reject a Plan. Prior to soliciting votes, the Court must determine that the Disclosure Statement contains "adequate information" to enable holders of claims to make an informed judgment to accept or reject the Plan.
• On May 30, 2003, the Bankruptcy Court approved AWI’s Disclosure Statement as containing "adequate information" and approved procedures for the solicitation of votes on the Plan.
• The Disclosure Statement and AWI’s Plan of Reorganization will be distributed to creditors for voting on the Plan of Reorganization and to other interested parties. The deadline for distribution of the Disclosure Statement to creditors is June 20, 2003. The Disclosure Statement will be distributed to shareholders of Armstrong Holdings, Inc. at a later date, but no later than August 22, 2003.
• Creditors with unsecured claims and holders of asbestos personal injury claims will then vote on whether to accept or reject AWI's Plan of Reorganization. The deadline for returning ballots on AWI’s Plan of Reorganization or filing an objection to confirmation of the Plan is September 22, 2003.
• After the solicitation of votes, the Court will hold a hearing to consider confirmation of AWI's Plan of Reorganization. The confirmation hearing currently is scheduled for November 17, 2003.
• If AWI's Plan of Reorganization is confirmed and certain conditions to the Plan becoming effective are satisfied, the Plan of Reorganization will be implemented, and AWI will emerge from Chapter 11.

Q: What are the key elements of the Plan?

• Creation of a trust for the benefit of present and future asbestos personal injury claimants, which will assume all of the company’s obligations to those claimants;
• The distribution of new common shares and notes of the reorganized company and available cash (after reserving up to $100 million to fund ongoing operations and making provisions for amounts required to be paid in connection with the Plan), referred to as the “Plan Consideration,” to the trust and to unsecured creditors;
• The notes to be issued by the reorganized company will total at least $775 million in principal amount, which will be increased to the extent that available cash to be distributed under the Plan is less than $350 million;
• The assignment to the trust of certain rights to insurance coverage of the company;
• A class of “convenience claims,” general unsecured claims of $10,000 or less (other than debt securities), which will be paid 75% of their allowed claims in cash; and
• Cancellation of the existing common stock of AWI and the potential distribution to the stockholders of Armstrong Holdings, Inc. (AHI) (OTCBB:ACKHQ), AWI’s parent company of warrants for 5 percent of the common shares of the reorganized company, which are estimated to have a value of approximately $35-40 million. The stockholders of AHI are not entitled to vote on the proposed Plan. If the Plan is implemented, the only value that will be retained by stockholders of AHI is the potential to receive their ratable share of the warrants.

The Plan sets out a process for determining the portion of the Plan Consideration to be received by the asbestos personal injury trust and by the holders of unsecured creditor claims (other than asbestos personal injury and property damage claims).

The class of unsecured creditors would receive approximately 34.43% of the new common stock of AWI and approximately 35.5% of the new notes and available cash, which would be allocated among the unsecured creditors pro rata according to the amount of their allowed claims. The value of the distribution which unsecured creditors receive will depend principally on the value of the shares to be distributed to them and is not fixed by the Plan as a percentage of their claims. The asbestos personal injury trust will receive the portion of the Plan Consideration that is not distributed to the class of unsecured creditors.

The Plan is available on the Web site www.armstrongplan.com, where additional information will also be posted as it becomes available. Distribution of the Disclosure Statement and ballots for voting on the Plan will commence following the May 30, 2003, approval of Disclosure Statement.

Q: Why did Armstrong amend its Plan of Reorganization and Disclosure Statement?

The amended filings to the Court sought to address certain comments and objections made with respect to the original proposed Disclosure Statement and also include certain exhibits to the Plan of Reorganization and the proposed Disclosure Statement, such as the procedures describing how asbestos personal injury claims will be handled by the asbestos personal injury trust. The Court scheduled a hearing on the proposed Disclosure Statement for May 30, 2003, at which it approved the proposed Disclosure Statement. The order approving the Disclosure Statement set a deadline for voting on the Plan of September 22, 2003.

Q. How does the Plan deal with asbestos property damage claims?

AWI has reached an agreement in principle to resolve its liability for all asbestos property damage claims through a settlement payment funded exclusively out of insurance proceeds, and AWI expects to consummate such settlement prior to confirmation of the Plan. If the settlement is not completed, AWI may modify the Plan to provide treatment for asbestos property damage claims. AWI would not expect any such modification, however, to delay or otherwise interfere with confirmation of the Plan.

Q: Will this settlement lead to asbestos being behind Armstrong once and for all?

The Plan provides for the establishment of a trust under section 524(g) of the Bankruptcy Code to which all present and future asbestos personal injury claims will be channeled. If the Plan is confirmed by the Court and becomes effective, all holders of present and future asbestos personal injury claims will be permanently prohibited and enjoined from asserting any such claims against Armstrong.

Q: Are the two other debtors, Nitram Liquidators, Inc. and Desseaux Corporation of North America, part of the Plan?

The two other debtors, Nitram Liquidators, Inc. and Desseaux Corporation of North America, are not part of the Plan.

Important Information

In connection with the proposed Plan of Reorganization of Armstrong World Industries, Inc. (AWI), the Board of Directors of Armstrong Holdings, Inc. (AHI) contemplates proposing the dissolution and winding-up of AHI. In that regard, AHI intends to file relevant materials with the U.S. Securities and Exchange Commission (SEC), including a proxy or consent solicitation statement with respect to approval by AHI’s shareholders of the dissolution of AHI and a plan of liquidation. Because those documents will contain important information, stockholders of AHI are urged to read them, if and when they become available. When filed with the SEC, they will be available for free at the SEC’s website, www.sec.gov. AHI stockholders will receive information at an appropriate time on how to obtain documents related to such matters for free from AHI. Such documents are not currently available.

Directors and executive officers of AHI and its subsidiaries may be deemed to be participants in AHI’s solicitation of proxies or consents from its stockholders in connection with this matter. Information about such directors and executive officers and their respective stock ownership and other interests is set forth in AHI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001. Participants in AHI’s solicitation may also be deemed to include various directors, executive officers and other persons:

Directors: H. Jesse Arnelle, Van C. Campbell, Judith R. Haberkorn, John A. Krol, Michael D. Lockhart, James E. Marley, Ruth M. Owades, John J. Roberts, M. Edward Sellers, Jerre L. Stead

Officers: Matthew J. Angello, Leonard A. Campanaro, Chan W. Galbato, Gerard L. Glenn, David E. Gordon, Michael D. Lockhart, John N. Rigas, William C. Rodruan, Stephen J. Senkowski, Barry M. Sullivan, April L. Thornton

As of the date of this communication, none of these participants individually beneficially owns more than 1% of AHI’s common stock. Except as disclosed above, to the knowledge of AHI, none of these persons has any interest, direct or indirect, by security holdings or otherwise, in AHI. Stockholders will be able to obtain additional information regarding the interests of the participants by reading the proxy or consent solicitation statement of AHI if and when it becomes available.