Armstrong World Industries (AWI) 8-K Unaudited Pro Forma Consolidated Statement of Earnings

Exhibit 99.1

Armstrong World Industries, Inc., and Subsidiaries

Unaudited Pro Forma Consolidated Statement of Earnings

(amounts in millions, except per share data)

	Year Ended December 31, 2015
	Historical AWI (as reported)			Discontinued Operation - AFI (a)			Pro Forma Adjustments		Pro Forma AWI Continuing Operations
Net sales	$	2,420.0		$	1,188.7			—	$	1,231.3
Cost of goods sold		1,817.2			962.3			—		854.9
Gross profit		602.8			226.4			—		376.4
Selling, general and administrative expenses		447.2			179.5			—		267.7
Separation costs		34.3			—			—		34.3
Equity earnings from joint venture		(66.1	)		—			—		(66.1	)
Operating income		187.4			46.9			—		140.5
Interest expense		45.3			—			—		45.3
Other non-operating expense		23.5			3.4			—		20.1
Other non-operating (income)		(5.3	)		(0.3	)		—		(5.0	)
Earnings from continuing operations before income taxes		123.9			43.8			—		80.1
Income tax expense		71.3			17.4			—		53.9
Earnings from continuing operations	$	52.6		$	26.4			—	$	26.2
Earnings per share of common stock, continuing operations:
Basic	$	0.95							$	0.47
Diluted	$	0.94							$	0.47
Average number of common shares outstanding:
Basic		55.5								55.5
Diluted		55.9								55.9

See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.

1

Armstrong World Industries, Inc., and Subsidiaries

Unaudited Pro Forma Consolidated Statement of Earnings

(amounts in millions, except per share data)

	Year Ended December 31, 2014
	Historical AWI (as reported)			Discontinued Operation - AFI (a)			Pro Forma Adjustments		Pro Forma AWI Continuing Operations
Net sales	$	2,515.3		$	1,221.0			—	$	1,294.3
Cost of goods sold		1,932.0			1,020.8			—		911.2
Gross profit		583.3			200.2			—		383.1
Selling, general and administrative expenses		398.5			148.4			—		250.1
Intangible asset impairments		10.8			10.8			—		—
Equity earnings from joint venture		(65.1	)		—			—		(65.1	)
Operating income		239.1			41.0			—		198.1
Interest expense		46.0			—			—		46.0
Other non-operating expense		10.5			4.6			—		5.9
Other non-operating (income)		(2.6	)		(0.4	)		—		(2.2	)
Earnings from continuing operations before income taxes		185.2			36.8			—		148.4
Income tax expense		83.2			13.0			—		70.2
Earnings from continuing operations	$	102.0		$	23.8			—	$	78.2
Earnings per share of common stock, continuing operations:
Basic	$	1.85							$	1.42
Diluted	$	1.83							$	1.41
Average number of common shares outstanding:
Basic		55.0								55.0
Diluted		55.4								55.4

See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.

2

Armstrong World Industries, Inc., and Subsidiaries

Unaudited Pro Forma Consolidated Statement of Earnings

(amounts in millions, except per share data)

	Year Ended December 31, 2013
	Historical AWI (as reported)			Discontinued Operation - AFI (a)			Pro Forma Adjustments		Pro Forma AWI Continuing Operations
Net sales	$	2,527.4		$	1,262.8			—	$	1,264.6
Cost of goods sold		1,934.4			1,051.8			—		882.6
Gross profit		593.0			211.0			—		382.0
Selling, general and administrative expenses		386.9			142.2			—		244.7
Restructuring charges, net		(0.1	)		—			—		(0.1	)
Equity earnings from joint venture		(59.4	)		—					(59.4	)
Operating income		265.6			68.8			—		196.8
Interest expense		68.7			—			—		68.7
Other non-operating expense		2.0			0.6			—		1.4
Other non-operating (income)		(3.8	)		(1.1	)		—		(2.7	)
Earnings from continuing operations before income taxes		198.7			69.3			—		129.4
Income tax expense		71.4			27.0			—		44.4
Earnings from continuing operations	$	127.3		$	42.3			—	$	85.0
Earnings per share of common stock, continuing operations:
Basic	$	2.19							$	1.47
Diluted	$	2.17							$	1.46
Average number of common shares outstanding:
Basic		57.8								57.8
Diluted		58.4								58.4

See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.

3

Armstrong World Industries, Inc., and Subsidiaries

Unaudited Pro Forma Consolidated Balance Sheet

(amounts in millions, except per share data)

	December 31, 2015
	Historical AWI (as reported)			Discontinued Operation - AFI (a)			Pro Forma Adjustments			Pro Forma AWI Continuing Operations
Assets
Current assets:
Cash and cash equivalents	$	244.8		$	35.5			—		$	209.3
Accounts and notes receivable, net		184.3			70.0			—			114.3
Inventories, net		344.2			242.8			—			101.4
Deferred income taxes		35.5			2.5			—			33.0
Income tax receivable		11.1			—			—			11.1
Prepaid expenses and other current assets		60.9			27.2			—			33.7
Total current assets		880.8			378.0			—			502.8
Property, plant, and equipment, less accumulated depreciation		1,096.3			448.2			—			648.1
Prepaid pension costs		8.3			—			—			8.3
Investment in joint venture		130.8			—			—			130.8
Intangible assets, net		489.7			42.5			—			447.2
Deferred income taxes		21.0			12.7		$	11.6	(b)		19.9
Income tax receivable		2.4			—			—			2.4
Other non-current assets		62.6			0.9			—			61.7
Total assets	$	2,691.9		$	882.3		$	11.6		$	1,821.2
Liabilities and Shareholders’ Equity
Current liabilities:
Current installments of long-term debt	$	52.1			—			—		$	52.1
Accounts payable and accrued expenses		380.4		$	149.2			—			231.2
Income tax payable		3.2			—			—			3.2
Deferred income taxes		0.6			0.3			—			0.3
Total current liabilities		436.3			149.5			—			286.8
Long-term debt		950.9			10.0		($	50.0	)(c)		890.9
Postretirement benefit liabilities		172.4			85.1			—			87.3
Pension benefit liabilities		107.6			37.5			—			70.1
Other long-term liabilities		49.6			6.3			—			43.3
Income taxes payable		92.3			—			—			92.3
Deferred income taxes		114.0			2.1			11.6	(b)		123.5
Total noncurrent liabilities		1,486.8			141.0			(38.4	)		1,307.4
Shareholders’ equity:
Common stock, $0.01 par value per share, authorized 200 million shares; 60,416,446 shares issued, 55,359,064 and outstanding at December 31, 2015		0.6			—			—			0.6
Capital in excess of par value		1,151.8			655.1			—			496.7
Retained earnings		365.2			—			50.0	(d)		415.2
Treasury stock, at cost, 5,057,382 shares		(261.4	)		—			—			(261.4	)
Accumulated other comprehensive income (loss)		(487.4	)		(63.3	)		—			(424.1	)
Total shareholders’ equity		768.8			591.8			50.0			227.0
Total liabilities and shareholders’ equity	$	2,691.9		$	882.3		$	11.6		$	1,821.2

See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements on page 5.

4

Armstrong World Industries, Inc., and Subsidiaries

Unaudited Notes to Consolidated Financial Statements

(amounts in millions, except per share data)

(a) Reflects the operations, assets, liabilities and equity of AFI. Cost of goods sold and selling, general and administrative expenses for AFI include certain historical costs of employee benefits that were previously categorized as unallocated corporate costs. Expense categories exclude certain general corporate overhead expenses that were allocated to AFI in its historical financial statements that do not meet the requirements to be presented in discontinued operations and thus will be presented as part of AWI’s continuing operations.

Postretirement and pension benefit liabilities for AFI include historical benefit plan liabilities for certain AFI employees and retirees that were previously categorized as unallocated corporate liabilities, in addition to the related accumulated other comprehensive (loss) and related deferred tax assets associated with such benefit plans. Property, plant and equipment excludes allocations of certain corporate facilities that do not meet the requirements to be presented in discontinued operations and thus will be presented as part of AWI’s continuing operations.

(b) Reflects a reclassification of tax balances associated with jurisdictional netting within continuing operations.

(c) Reflects the cash distribution upon separation by AFI to AWI, pursuant to the terms of the Separation and Distribution Agreement, of $50.0 million, representing the dividend paid by AFI to AWI from the net proceeds of AFI’s borrowings. If the $50.0 million dividend had been paid as of December 31, 2015, AWI would have used the proceeds from the dividend to reduce borrowings outstanding.

(d) Total equity was adjusted as a result of adjustment (c) above.

5