Armstrong World Industries Inc. (AWI), the operating subsidiary of Armstrong Holdings Inc. (AHI), has filed its fourth amended Plan of Reorganization (POR) and proposed Disclosure Statement with the U.S. Bankruptcy Court in Wilmington, Del. The proposed Disclosure Statement contains revised projected financial information for reorganized AWI required for the Chapter 11 process.

The revisions reflect developments regarding AWI's business since December 2002 and current economic and financial conditions and are adverse in comparison to the projections previously filed by AWI in the Chapter 11 process to a degree that is not immaterial. These projections factor prominently into the valuation of the consideration to be distributed under the POR.

The court must approve the proposed Disclosure Statement, which provides details of the POR, before AWI can solicit votes on its POR. The POR will only become effective after a vote of various classes of creditors and with the approval of the court. The court has scheduled a hearing on the proposed Disclosure Statement for May 30, 2003. Creditors of AWI and shareholders of AHI are encouraged to read the POR and the proposed Disclosure Statement for the full details on the planned distributions and other items that will affect them. The POR, Disclosure Statement and related press releases are available at

In the proposed Disclosure Statement, AWI estimates the value of reorganized AWI at $2.4 to $3 billion, with a mid-point value of $2.7 billion used for POR purposes. Based on this valuation, the revised value of the consideration (cash and shares and notes of reorganized AWI) to be distributed under the POR to the asbestos personal injury trust (other than certain insurance assets) will be approximately $1.8 billion, and the value of consideration to be distributed to holders of allowed unsecured claims (other than convenience claims) will be approximately $982 million. Based upon the revised financial projections, the revised estimated value of the POR 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 percent of their allowed claims. As previously disclosed, all existing stock interests in AWI will be cancelled; but the POR provides for a distribution of warrants of reorganized AWI to AHI. The warrants, which AHI intends to distribute pursuant to a plan of dissolution to be submitted to AHI's shareholders for approval, have a revised estimated value of approximately $35-$40 million. AWI's estimates of value and potential recoveries are based upon a number of assumptions, which are set forth more fully in the proposed Disclosure Statement.

In connection with the proposed dissolution and winding-up of AHI, AHI will file relevant materials with the SEC, including a proxy statement with respect to approval by AHI's shareholders of the dissolution and a plan of winding-up.