Armstrong World Industries, Inc.

Lancaster, PA: (Feb-26-07) A settlement reached between Armstrong Holdings, Inc. and its former subsidiary, Armstrong World Industries, Inc. resolves all the companies' inter company claims and tax issues. The settlement agreement stated that AWI would pay AHI $20 million in cash, and give AHI an allowed claim under AWI's confirmed Plan of Reorganization of $8.5 million. AWI would also have the right to make all relevant tax elections and file all required tax returns on behalf of the Armstrong group of companies for all relevant tax periods during which the two companies were affiliated, and to receive and retain all related tax refunds. AHI would recover on the AHI Claim on the same basis as other unsecured creditors of AWI under the AWI Plan of Reorganization. The initial distribution in satisfaction of the $8.5 million AHI Claim would consist of approximately $2 million in cash plus approximately 98,690 shares of reorganized AWI. [EARTH TIMES: INTER BUSINESS CLAIMS]

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