What changed in this filing

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Item 1. Financial Statements

2021-07-27 compared with 2021-04-27 · 214 added, 133 removed, 616 unchanged (36% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Cost of goods sold

Selling, general and administrative expenses

Change in fair value of contingent consideration

(Gain) related to sale of fixed and intangible assets

Equity (earnings) from joint venture

5 unchanged sentences

Earnings (loss) from continuing operations

(Loss) from disposal of discontinued businesses, net of tax expense (benefit) of $ 1.7 and

Net (loss) from discontinued operations

Gain (loss) from disposal of discontinued businesses, net of tax expense (benefit) of $-, $-, $ 1.7 and ($ 1.4 )

Net earnings (loss) from discontinued operations

Net earnings (loss)

3 unchanged sentences

Pension and postretirement adjustments

Total other comprehensive income

Total other comprehensive income (loss)

Total comprehensive income

Earnings (loss) per share of common stock, continuing operations:

(Loss) per share of common stock, discontinued operations:

Earnings (loss) per share of common stock, discontinued operations:

Net earnings (loss) per share of common stock:

4 unchanged sentences

(amounts in millions, except share and per share data)

March 31, 2021

June 30, 2021

December 31, 2020

34 unchanged sentences

Common stock, $ 0.01 par value per share, 200 million shares authorized, 62,738,546

shares issued and 47,828,464 shares outstanding as of March 31, 2021 and

shares issued and 47,732,943 shares outstanding as of June 30, 2021 and

62,599,331 shares issued and 47,913,821 shares outstanding as of December 31, 2020

1 unchanged sentence

Retained earnings

Treasury stock, at cost, 14,811,145 shares as of March 31, 2021 and 14,685,510

Treasury stock, at cost, 15,005,603 shares as of June 30, 2021 and 14,685,510

shares as of December 31, 2020

6 unchanged sentences

(amounts in millions, except share data)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Treasury Stock

Comprehensive

March 31, 2021

Stock issuance, net

Cash dividends - $ 0.21 per common share

Share-based employee compensation

Other comprehensive income

Acquisition of treasury stock

June 30, 2021

Six Months Ended June 30, 2021

Treasury Stock

Comprehensive

December 31, 2020

4 unchanged sentences

Acquisition of treasury stock

June 30, 2021

Three Months Ended June 30, 2020

Treasury Stock

Comprehensive

March 31, 2020

Three Months Ended March 31, 2020

Stock issuance, net

Cash dividends - $ 0.20 per common share

Share-based employee compensation

Other comprehensive (loss)

Acquisition of treasury stock

June 30, 2020

Six Months Ended June 30, 2020

Treasury Stock

6 unchanged sentences

Acquisition of treasury stock

March 31, 2020

June 30, 2020

See accompanying notes to Condensed Consolidated Financial Statements beginning on page 9.

2 unchanged sentences

(amounts in millions)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

5 unchanged sentences

Loss on disposal of discontinued operations

Gain related to sale of fixed and intangible assets

Equity earnings from joint venture

Change in fair value of contingent consideration

Other non-cash adjustments, net

7 unchanged sentences

Return of investment from joint venture

Payments of proceeds from Knauf to investment in joint venture

Payments to Knauf upon disposal of discontinued operations

10 unchanged sentences

Payments for treasury stock acquired

Net cash (used for) provided by financing activities

Net cash (used for) financing activities

Effect of exchange rate changes on cash and cash equivalents

17 unchanged sentences

In the opinion of management, all adjustments of a normal recurring nature have been included to provide a fair statement of the results for the reporting periods presented.

Operating results for the first quarter of 2021 and 2020 included in this report are unaudited.

Operating results for the second quarter and first six months of 2021 and 2020 included in this report are unaudited.

Quarterly results are not necessarily indicative of annual earnings, primarily due to the different level of sales in each quarter of the year and the possibility of changes in general economic conditions.

30 unchanged sentences

COVID-19 Considerations

The COVID-19 outbreak has created significant volatility and economic disruption and the impact on our future consolidated results of operations is uncertain .

The COVID-19 pandemic has created significant volatility and economic disruption and the impact on our future consolidated results of operations is uncertain .

The extent to which COVID-19 impacts our employees, operations, customers, suppliers and financial results depends on numerous evolving factors that we are not be able to accurately predict, including:

1 unchanged sentence

government actions taken in response to the pandemic;

the availability and distribution of vaccinations;

the availability and distribution of vaccines;

the impact on construction activity;

4 unchanged sentences

states and by individual countries in the Americas.

We did not record any asset impairments, inventory charges or material bad debt reserves related to COVID-19 during the first quarters of 2021 and 2020 but future events may require such charges, which could have a material adverse effect on our financial condition, liquidity or results of operations.

We did not record any asset impairments, inventory charges or material bad debt reserves related to COVID-19 during the second quarter and first six months of 2021 and 2020 but future events may require such charges, which could have a material adverse effect on our financial condition, liquidity or results of operations.

SEGMENT RESULTS

Three Months Ended

Six Months Ended

Mineral Fiber

2 unchanged sentences

Three Months Ended

Six Months Ended

Segment operating income (loss)

3 unchanged sentences

Total consolidated operating income

The Architectural Specialties operating loss for the three months ended March 31, 2021 was driven by intangible asset amortization and other acquisition-related expenses related to our acquisitions of Turf, Moz and Arktura in 2020.

See Note 4 for additional information related to our acquisitions.

Three Months Ended

Six Months Ended

Total consolidated operating income

2 unchanged sentences

Earnings (loss) from continuing operations before income taxes

March 31, 2021

June 30, 2021

December 31, 2020

15 unchanged sentences

At the point of shipment, the customer is required to pay under normal sales terms.

Our normal payment terms in most cases are 45 days or less and our sales arrangements do not have any material financing components.

In most cases our normal payment terms are 45 days or less and our sales arrangements do not have any material financing components.

In addition, our customer arrangements do not produce contract assets or liabilities that are material to our consolidated financial statements.

33 unchanged sentences

(dollar amounts in millions, except share data)

The following tables provide net sales by major customer group within our Mineral Fiber and Architectural Specialties segments for the three months ended March 31, 2021 and 2020:

The following tables provide net sales by major customer group within our Mineral Fiber and Architectural Specialties segments for the three and six months ended June 30, 2021 and 2020:

Three Months Ended

Six Months Ended

Mineral Fiber

2 unchanged sentences

Three Months Ended

Six Months Ended

Architectural Specialties

8 unchanged sentences

Acquisition-related contingent consideration that is classified as a liability is measured at fair value at the acquisition date.

Changes in the fair value of contingent consideration liabilities recorded in reporting periods after the acquisition date are recorded within selling, general and administrative (“SG&A”) expenses on our Condensed Consolidated Statements of Operations and Comprehensive Income.

Changes in the fair value of contingent consideration liabilities recorded in reporting periods after the acquisition date are recorded within change in fair value of contingent consideration on our Condensed Consolidated Statements of Operations and Comprehensive Income.

On December 16, 2020, we acquired all the issued and outstanding equity of Arktura LLC (“Arktura”) and its subsidiaries with operations in the United States and Argentina for $ 91.3 million of cash paid at closing, net of $ 0.1 million of cash acquired, subject to customary post-closing adjustments for working capital.

3 unchanged sentences

Compensation expense associated with these cash payments and restricted stock awards will be recorded over the required service and vesting periods.

Customary post-closing adjustments for working capital may become known during the remainder of the measurement period.

Changes to amounts recorded may result in a corresponding adjustment to acquired assets or liabilities, including goodwill.

Armstrong World Industries, Inc., and Subsidiaries

3 unchanged sentences

The acquisition resulted in $ 57.0 million of goodwill.

The following table summarizes the fair value s of identifiable intangible assets acquired , and their estimated useful lives:

The following table summarizes the fair values of identifiable intangible assets acquired, and their estimated useful lives:

Fair Value at Acquisition Date

3 unchanged sentences

Total identifiable intangible assets

Valuations for assets acquired and liabilities assumed are based on provisional estimates.

We will continue to evaluate the fair value of assets acquired and liabilities assumed related to the acquisition.

Additional information, which existed as of the acquisition date, but was at that time unknown to us, may become known during the remainder of the measurement period.

Changes to amounts recorded may result in a corresponding adjustment to these assets and liabilities, including goodwill.

The determination of the estimated fair values of all assets acquired and liabilities assumed is expected to be completed within one year from the date of acquisition.

In connection with the Arktura acquisition, we formed Arktura Ventures LLC, an incubator entity for the development and commercialization of new products and solutions in the architecture, engineering and construction space.

As of March 31, 2021, the venture entity had no funding or operations.

As of June 30, 2021, the venture entity had no funding or operations.

On August 24, 2020, we acquired the business and assets of Moz for $ 4.2 million of cash paid at closing and the potential for a contingent earn-out payable in 2022 not to exceed $ 4.7 million.

9 unchanged sentences

Full payout for achievement over target performance requires compounded annual growth rates in excess of 38 % through December 31, 2022.

See Note 15 for details related to the change in fair value of the contingent consideration.

Armstrong World Industries, Inc., and Subsidiaries

4 unchanged sentences

The unaudited pro forma results include the depreciation and amortization associated with the acquired assets, compensation expense related to cash payments and equity awards granted to employees of the acquired companies and adjustments to net sales for the purchase accounting effects of recording deferred revenue at fair value.

In addition, the unaudited pro forma results do not include any expected benefits of the acquisitions.

In addition, the unaudited pro forma results do not include any expected benefits of the acquisitions or adjustments to as reported changes in the fair value of the contingent consideration.

Accordingly, the unaudited pro forma results are not necessarily indicative of either future results of operations or results that might have been achieved had the acquisitions been consummated as of January 1, 2020.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net sales from continuing operations, pro forma

Net sales from continuing operations, as reported

Net earnings (loss) from continuing operations, pro forma

Net earnings (loss) from continuing operations, as reported

For the three months ended March 31, 2021, net sales of $ 16.5 million and a pre-tax net loss of $ 5.7 million from Arktura, Moz and Turf were included in our Condensed Consolidated Statements of Operations and Comprehensive Income.

Net earnings (loss) from continuing operations before income taxes, pro forma

Net earnings (loss) from continuing operations before income taxes, as reported

For the three months ended June 30, 2021, net sales of $ 17.5 million and a pre-tax net earnings of $ 3.7 million from Arktura, Moz and Turf were included in our Condensed Consolidated Statements of Operations and Comprehensive Income.

For the six months ended June 30, 2021, net sales of $ 34.0 million and a pre-tax net loss of $ 2.0 million from Arktura, Moz and Turf were included in our Condensed Consolidated Statements of Operations and Comprehensive Income.

DISCONTINUED OPERATIONS

1 unchanged sentence

In 2019, we completed the sale of certain subsidiaries comprising our businesses in EMEA and the Pacific Rim to Knauf.

During the three months ended March 31, 2021, we recorded a loss on sale of $ 0.4 million for final purchase price adjustments related to certain pension liabilities included in the Sale.

During the three months ended March 31, 2020, we recorded a loss on sale of $ 5.0 million representing working capital and other adjustments.

During the six months ended June 30, 2021, we recorded a pre-tax loss on sale of $0.4 million for final purchase price adjustments related to certain pension liabilities included in the Sale.

During the six months ended June 30 , 2020, we recorded a pre-tax loss on sale of $ 5.0 million representing working capital and other adjustments.

We did no t record a gain or loss during the three months ended June 30, 2021 or 2020.

See Note 1 for further discussion of the Sale.

European Resilient Flooring

During the three and six months ended June 30, 2020, we recorded a gain of $ 0.8 million related to Accumulated Other Comprehensive Income (“AOCI”) adjustments from a previously discontinued foreign flooring entity, which was dissolved in the second quarter of 2020.

The AOCI adjustments related to accumulated foreign currency translation amounts.

Summarized Financial Information of Discontinued Operations

The following table details the line items that comprise discontinued operations on the Condensed Consolidated Statements of Operations and Comprehensive Income.

Three Months Ended

EMEA and Pacific Rim Businesses

Six Months Ended June 30, 2021

(Loss) from disposal of discontinued businesses, before income tax

Income tax expense (benefit)

(Loss) from disposal of discontinued business, net of tax

Income tax expense

(Loss) from disposal of discontinued businesses, net of tax

Net (loss) from discontinued operations

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

European Resilient Flooring

Three Months Ended June 30, 2020

Gain from disposal of discontinued businesses, before income tax

Income tax expense

Gain from disposal of discontinued business, net of tax

Net earnings from discontinued operations

EMEA and Pacific Rim Businesses

European Resilient Flooring

Six Months Ended June 30, 2020

(Loss) gain from disposal of discontinued businesses, before income tax

Income tax (benefit)

(Loss) gain from disposal of discontinued businesses, net of tax

Net (loss) earnings from discontinued operations

ACCOUNTS AND NOTES RECEIVABLE

March 31, 2021

June 30, 2021

December 31, 2020

3 unchanged sentences

Accounts and notes receivable, net

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

We sell our products to select, pre-approved customers whose businesses are affected by changes in economic and market conditions.

We consider these factors and the financial condition of each customer when establishing our allowance for losses from doubtful accounts.

March 31, 2021

June 30, 2021

December 31, 2020

5 unchanged sentences

OTHER CURRENT ASSETS

March 31, 2021

June 30, 2021

December 31, 2020

2 unchanged sentences

Total other current assets

As of March 31, 2021, assets held for sale included the property, plant and equipment of our idled mineral fiber plant in St.

As of June 30, 2021, assets held for sale included the property, plant and equipment of our idled mineral fiber plant in St.

Helens, Oregon.

We entered into a sale agreement for the property during the first quarter of 2021, with closing expected during 2021.

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

EQUITY INVESTMENT

3 unchanged sentences

Three Months Ended

Six Months Ended

GOODWILL AND INTANGIBLE ASSETS

The following table details amounts related to our goodwill and intangible assets as of March 31, 2021 and December 31, 2020.

March 31, 2021

The following table details amounts related to our goodwill and intangible assets as of June 30, 2021 and December 31, 2020.

June 30, 2021

December 31, 2020

10 unchanged sentences

Total intangible assets

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

The increase in goodwill since December 31, 2020 resulted primarily from customary adjustments to valuations for Arktura assets acquired and liabilities assumed on December 16, 2020 and foreign exchange movements.

Three Months Ended

Six Months Ended

Amortization expense

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

March 31, 2021

June 30, 2021

December 31, 2020

3 unchanged sentences

Payable to Knauf for purchase price adjustments

Acquisition-related contingent consideration

Total accounts payable and accrued expenses

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

INCOME TAX EXPENSE

Three Months Ended

Six Months Ended

Earnings (loss) from continuing operations before income taxes

1 unchanged sentence

Effective tax rate

Excluding the impact of the pension settlement in 2020, the effective tax rate for the first quarter of 2021 was flat compared to the same period in 2020.

Excluding the favorable tax impact of a gain on sale of our idled Mineral Fiber plant in China recorded in the second quarter of 2020, the effective tax rate for the second quarter of 2021 was higher as compared to the same period in 2020, due primarily to state law changes enacted during the second quarter of 2021 as well as a reduction in favorable permanent adjustments.

Excluding the impact of a pension settlement loss and the gain on sale of our idled plant recorded in the first six months of 2020, the effective tax rate for the first six months of 2021 was higher compared to the same period in 2020 due to state law changes enacted in 2021 and a reduction in favorable permanent adjustments.

It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months.

1 unchanged sentence

Changes to unrecognized tax benefits could result from the completion of ongoing examinations, the expiration of statutes of limitations or other unforeseen circumstances.

As of March 31, 2021 and December 31, 2020, our long-term debt included borrowings outstanding under our $ 1,000.0 million variable rate senior credit facility, which is composed of a $ 500.0 million revolving credit facility (with a $ 150.0 million sublimit for letters of credit) and a $ 500.0 million Term Loan A.

As of March 31, 2021 and December 31, 2020, borrowings outstanding under our revolving credit facility were $ 225.0 million.

As of March 31, 2021 and December 31, 2020, borrowings outstanding under our Term Loan A were $ 487.4 million and $ 493.7 million, respectively.

As of June 30, 2021 and December 31, 2020, our long-term debt included borrowings outstanding under our $ 1,000 .0 million variable rate senior credit facility, which is composed of a $ 500.0 million revolving credit facility (with a $ 150.0 million sublimit for letters of credit) and a $ 500 .0 million Term Loan A.

As of June 30, 2021 and December 31, 2020, borrowings outstanding under our revolving credit facility were $ 200.0 million and $ 225.0 million, respectively.

As of June 30, 2021 and December 31, 2020, borrowings outstanding under our Term Loan A were $ 481.3 million and $ 493.7 million, respectively.

We also have a $ 25 .0 million letter of credit facility, also known as our bi-lateral facility.

3 unchanged sentences

The following table presents details related to our letters of credit facilities:

March 31, 2021

June 30, 2021

Financing Arrangements

7 unchanged sentences

Three Months Ended

Six Months Ended

defined benefit plans:

4 unchanged sentences

Amortization of net actuarial loss

Net periodic pension cost

Net periodic pension cost (credit)

Retiree health and life insurance benefits

5 unchanged sentences

This plan is reported as a component of our Unallocated Corporate segment.

Net periodic pension cost for this plan was immaterial for the three months ended March 31, 2021 and 2020.

Net periodic pension cost for this plan was immaterial for the three and six months ended June 30, 2021 and 2020.

The service cost component of net benefit cost has been presented in the Condensed Consolidated Statements of Operations and Comprehensive Income within cost of goods sold and SG&A expenses for all periods presented, which are the same line items as other compensation costs arising from services rendered by the pertinent employees during the period.

6 unchanged sentences

The estimated fair values of our financial instruments are as follows:

March 31, 2021

June 30, 2021

December 31, 2020

19 unchanged sentences

The fair value measurement of liabilities measured at fair value on a recurring basis and reported on the Condensed Consolidated Balance Sheets is summarized below:

March 31, 2021

June 30, 2021

December 31, 2020

4 unchanged sentences

Acquisition-related contingent consideration

The contingent consideration liability represents estimated future contingent purchase price payments related to the Moz and Turf acquisitions.

The significant unobservable inputs used in the fair value measurement of the contingent consideration liability include the financial projections over the earn-out period, the volatility of the underlying financial metrics and estimated discount rates.

The following table summarizes the weighted average of the significant unobservable inputs as of March 31, 2021:

The contingent consideration liability represents the estimated fair value of additional cash consideration payable related to the Moz and Turf acquisitions upon the achievement of certain financial and performance milestones.

The contingent consideration is measured on a recurring basis and significant unobservable inputs used in the fair value measurement of the contingent consideration liability include the financial projections over the earn-out period, the volatility of the underlying financial metrics and estimated discount rates.

All changes in the contingent consideration liability subsequent to the initial acquisition-date measurements were recorded as a component of operating income on our Condensed Consolidated Statements of Operations and Comprehensive Income.

The following table summarizes the weighted average of the significant unobservable inputs as of June 30, 2021:

Unobservable input

2 unchanged sentences

See Note 4 for further information.

The changes in fair value of the acquisition-related contingent consideration liability for the three months ended March 31, 2021 were as follows:

Three Months Ended

March 31, 2021

Balance as of beginning of period

Adjustments to fair value measurements

Balance as of end of period

The changes in fair value of the acquisition-related contingent consideration liability for the three months ended March 31, 2021 and June 30, 2021 were as follows:

Fair Value of Contingent Consideration

Balance as of December 31, 2020

Change in fair value of contingent consideration

Balance as of March 31, 2021

Change in fair value of contingent consideration

Balance as of June 30, 2021

The $ 9.7 million change in the fair value of the contingent consideration reflected in the table above was primarily due to changes in the Turf and Moz financial projections over each entity’s respective earn-out period.

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

DERIVATIVE FINANCIAL INSTRUMENTS

5 unchanged sentences

We use derivative financial instruments as risk management tools and not for speculative trading purposes.

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

Counterparty Risk

10 unchanged sentences

These swaps are designated as cash flow hedges against changes in the London Interbank Offered Rate (“LIBOR”) for a portion of our variable rate debt.

The following table summarizes our interest rate swaps as of March 31, 2021:

The following table summarizes our interest rate swaps as of June 30, 2021:

Coverage Period

10 unchanged sentences

March 2021 to March 2024

Under the terms of the November 2018 swap maturing in 2023 , we pay a fixed rate monthly and receive 1-month LIBOR.

This is inclusive of a 0 % floor.

Under the terms of the November 2018 swap maturing in 2025 , we pay a fixed rate monthly and receive 1-month LIBOR.

This is inclusive of a 0 % floor.

Under the terms of the March 2020 swap maturing in 2022 , we pay a fixed rate monthly and receive 1-month LIBOR.

This is inclusive of a 0 % floor.

Under the terms of the March 2020 swaps maturing in 2024 , we pay a fixed rate monthly and receive 1-month LIBOR.

These are inclusive of a 0 % floor.

Under the terms of our interest rate swaps above, we pay a fixed rate monthly and receive 1-month LIBOR, inclusive of a 0 % floor.

Financial Statement Impacts

The following tables detail amounts related to our derivatives as of March 31, 2021 and December 31, 2020.

We did not have any derivative assets or liabilities not designated as hedging instruments as of March 31, 2021 or December 31, 2020.

The following tables detail amounts related to our derivatives as of June 30, 2021 and December 31, 2020.

We did not have any derivative assets or liabilities not designated as hedging instruments as of June 30, 2021 or December 31, 2020.

The derivative liability amounts below are shown gross and have not been netted.

10 unchanged sentences

AOCI into Net Earnings (Loss)

Gain (Loss) Reclassified

from AOCI into Net Earnings (Loss)

Three Months Ended

Gain Reclassified

from AOCI into Net Earnings

Six Months Ended

Three Months Ended

Six Months Ended

Derivatives in cash flow hedging relationships

4 unchanged sentences

(dollar amounts in millions, except share data)

As of March 31, 2021, the amount of existing losses in AOCI expected to be recognized in earnings over the next twelve months was $ 8.5 million.

As of June 30, 2021, the amount of existing losses in AOCI expected to be recognized in earnings over the next twelve months was $ 8.5 million.

OTHER LONG-TERM LIABILITIES

March 31, 2021

June 30, 2021

December 31, 2020

7 unchanged sentences

Since July 29, 2016, our Board of Directors has approved our share repurchase program pursuant to which we are currently authorized to repurchase up to $ 1,200.0 million of our outstanding shares of common stock through December 31, 2023 (the “Program”).

We currently have $ 583.8 million remaining under the Board’s repurchase authorization as of March 31, 2021.

We currently have $ 563.8 million remaining under the Board’s repurchase authorization as of June 30, 2021.

Repurchases under the Program may be made through open market, block and privately negotiated transactions, including Rule 10b5-1 plans, at such times and in such amounts as management deems appropriate, subject to market and business conditions, regulatory requirements and other factors.

The Program does not obligate AWI to repurchase any particular amount of common stock and may be suspended or discontinued at any time without notice.

During the three months ended March 31, 2021, we repurchased 0.1 million shares under the Program for a total cost of $ 10.0 million, excluding commissions, or an average price of $ 79.60 per share.

Since inception, through March 31, 2021, we have repurchased 9.8 million shares under the Program for a total cost of $ 616.2 million, excluding commissions, or an average price of $ 62.57 per share.

In February 2021, our Board of Directors declared a $ 0.21 per share quarterly dividend, which was paid to shareholders in March 2021 .

On April 20, 2021, our Board of Directors declared a $ 0.21 dividend per share quarterly dividend to be paid in May 2021 .

During the six months ended June 30, 2021, we repurchased 0.3 million shares under the Program for a total cost of $ 30.0 million, excluding commissions, or an average price of $ 93.72 per share.

Since inception, through June 30, 2021, we have repurchased 10.0 million shares under the Program for a total cost of $ 636.2 million, excluding commissions, or an average price of $ 63.35 per share.

In February 2021 and April, our Board of Directors declared $ 0.21 per share quarterly dividends, which were paid to shareholders in March and May 2021 .

On July 21, 2021, our Board of Directors declared a $ 0.21 dividend per share quarterly dividend to be paid in August 2021 .

Accumulated Other Comprehensive (Loss)

2 unchanged sentences

Comprehensive

Balance, December 31, 2020

Balance, March 31, 2021

Other comprehensive income before reclassifications,

3 unchanged sentences

Net current period other comprehensive income

Balance, March 31, 2021

Balance, June 30, 2021

Armstrong World Industries, Inc., and Subsidiaries

5 unchanged sentences

Balance, December 31, 2020

Other comprehensive (loss) income before reclassifications,

net of tax benefit (expense) of $ -, $ 4.0 , ($ 2.9 ) and $ 1.1

Other comprehensive income before reclassifications,

net of tax (expense) of $ -, ($ 2.6 ), $- and ($ 2.6 )

Amounts reclassified from accumulated other

comprehensive (loss)

Net current period other comprehensive (loss) income

Net current period other comprehensive income

Balance, June 30, 2021

Translation Adjustments

Pension and Postretirement Adjustments (1)

Comprehensive

Balance, March 31, 2020

Other comprehensive income (loss) before reclassifications,

net of tax benefit of $ -, $ 0.4 , $ - and $ 0.4

Amounts reclassified from accumulated other

comprehensive (loss)

Net current period other comprehensive income (loss)

Balance, June 30, 2020

Translation Adjustments

Pension and Postretirement Adjustments (1)

Comprehensive

Balance, December 31, 2019

Other comprehensive (loss) before reclassifications,

net of tax benefit (expense) of $ -, $ 4.4 , ($ 2.9 ) and $ 1.5

Amounts reclassified from accumulated other

comprehensive (loss)

Net current period other comprehensive income (loss)

Balance, June 30, 2020

Amounts are net of tax

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

Reclassified from

5 unchanged sentences

and Comprehensive

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Derivative Adjustments:

6 unchanged sentences

Other non-operating (income) expense, net

Amortization of net actuarial loss

Amortization of net actuarial loss (gain)

Other non-operating (income) expense, net

Total loss, before tax

Total loss (income), before tax

Income tax expense

Total loss, net of tax

Total loss (income), net of tax

Total reclassifications for the period

7 unchanged sentences

We are actively involved in the investigation and remediation of existing or potential environmental contamination under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and state Superfund and similar environmental laws at two domestically owned locations allegedly resulting from past industrial activity.

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

In each location, we are one of multiple potentially responsible parties and have agreed to jointly fund the required investigation and remediation, while preserving our defenses to the liability.

1 unchanged sentence

We are currently pursuing coverage and recoveries under those policies with respect to certain of the sites, including the Macon, GA site and the Elizabeth City, NC site, each of which is summarized below.

These efforts have inclu ded two act ive and independent litigation matters against legacy primary and excess policy insurance carriers for recovery of fees and costs incurred by us in connection with our investigation and remediation activities for such sites.

These efforts have included two active and independent litigation matters against legacy primary and excess policy insurance carriers for recovery of fees and costs incurred by us in connection with our investigation and remediation activities for such sites.

Other than disclosed below, we are unable to predict the outcome of these matters or the timing of any recoveries, whether through settlement or otherwise.

1 unchanged sentence

Our final share of investigation and remediation costs may exceed any such recoveries, and such amounts net of insurance recoveries may be material.

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

Between 2017 and 2020, we entered settlement agreements totaling $ 52.5 million with certain legacy insurance carriers to resolve ongoing litigation and recover fees and costs previously incurred by us in connection with certain environmental sites.

2 unchanged sentences

The excess recoveries will be released to offset any future expenses incurred on the respective environmental sites.

During the three months ended March 31, 2021, we did not enter into any new settlement agreements and the balance of insurance recoveries in excess of cumulative expenses as of March 31, 2021 was $ 4.9 million.

In the first six months of 2021, we did not enter into any new settlement agreements and the balance of insurance recoveries in excess of cumulative expenses as of June 30, 2021 was $ 4.6 million.

We anticipate that we may enter into additional settlement agreements in the future, which may or may not be material, with other legacy insurers to obtain reimbursement or contribution for environmental site expenses.

11 unchanged sentences

That Plan required us to monitor the effectiveness of the WWTP Landfill response action over a five-year period.

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

It is probable that we will incur field investigation, engineering and oversight costs associated with a Remedial Investigation and Feasibility Study (“RI/FS”) with respect to the remainder of the Superfund site, which includes the other landfill on our property, as well as areas on and adjacent to our property and Rocky Creek (the “Remaining Site,” also known as “Operable Unit 2”).

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Investigative work on this portion of the site commenced in December 2019.

Ecological field work and risk evaluation remains ongoing.

We anticipate that the EPA will require significant investigative work for Operable Unit 2.

In June 2021, the PRPs submitted the Site Characterization Summary Report (SCSR) for Operable Unit 2 to the EPA.

The purpose of the SCSR is to demonstrate that the available data for Operable Unit 2 is adequate for the baseline risk assessment and for the development of remedial action objectives.

We anticipate that the EPA may require additional investigative work for Operable Unit 2.

We may ultimately incur costs in remediating any contamination discovered during the RI/FS.

The current estimate of future liability at this

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

site includes only our estimated share of the costs of the investigative work that, at this time, we anticipate the EPA will require the PRPs to perform.

The current estimate of future liability at this site includes only our estimated share of the costs of the investigative work that the EPA is requiring the PRPs to perform at this time.

We are unable to reasonably estimate our final share of the total costs associated with the investigation work or any resulting remediation therefrom, although such amounts may be material to any one quarter's or year's results of operations in the future.

However, we do not expect the total future costs to have a material adverse effect on our liquidity or financial condition as the cash payments may be made over many years.

We do not expect the total future costs to have a material adverse effect on our liquidity or financial condition as the cash payments may be made over many years.

Elizabeth City, NC

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During the third quarter of 2018, we increased our reserve for the cost of the interim cleanup, which we expect to be shared with CBS and the Navy.

In response to the September 2018 Special Notice Letter, AWI and CBS submitted a good faith offer to EPA on May 28, 2019, and negotiations among parties remain ongoing.

In response to the September 2018 Special Notice Letter, we and CBS submitted a good faith offer to the EPA on May 28, 2019.

In June 2021, we entered into a negotiated Partial Consent Decree and Site Participation Agreement with the EPA and the PRPs for the remedial design and remedial action to be completed by the parties at the site.

The current estimate of future liability at this site includes only our estimated share of the costs of the interim remedial action that, at this time, we anticipate the EPA will require the PRPs to perform.

We are unable to reasonably estimate our final share of the total costs associated with the final remediation or any resulting remediation therefrom, although such amounts may be material to any one quarter’s or year’s results of operations in the future.

However, we do not expect the total future costs to have a material adverse effect on our liquidity or financial condition as the cash payments may be made over many years.

We do not expect the total future costs to have a material adverse effect on our liquidity or financial condition as the cash payments may be made over many years.

Summary of Financial Position

Total liabilities of $ 0.9 million and $ 1.2 million as of March 31, 2021 and December 31, 2020, respectively, were recorded for environmental liabilities that we consider probable and for which a reasonable estimate of the probable liability could be made.

As of March 31, 2021 no portion of environmental liabilities was reflected within accounts payable and accrued expenses.

As of December 31, 2020, $ 0.3 million of environmental liabilities were reflected within accounts payable and accrued expenses.

During the three months ended March 31, 2021 and 2020, we did no t record any additional reserves for potential environmental liabilities.

Total liabilities of $ 1.0 million and $ 1.2 million as of June 30, 2021 and December 31, 2020, respectively, were recorded for environmental liabilities that we consider probable and for which a reasonable estimate of the probable liability could be made.

As of June 30, 2021 and December 31, 2020, $ 0.5 million and $ 0.3 million, respectively, of environmental liabilities were reflected within accounts payable and accrued expenses.

During the three and six months ended June 30, 2021, we recorded $ 0.2 million of additional reserves for potential environmental liabilities.

As noted above, the expense associated with the additional reserves recorded in 2021 was offset through the release of a portion of the balance of insurance recoveries in excess of cumulative expenses.

During the three and six months ended June 30, 2020, we did no t record any additional reserves for environmental liabilities.

Where existing data is sufficient to estimate the liability, that estimate has been used;

where only a range of probable liabilities is available and no amount within that range is more likely than any other, the lower end of the range has been used.

As assessments and remediation activities progress at each site, these liabilities are reviewed to reflect new information as it becomes available and adjusted to reflect amounts actually incurred and paid.

As assessments and remediation activities

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

progress at each site, these liabilities are reviewed to reflect new information as it becomes available and adjusted to reflect amounts actually incurred and paid.

These liabilities are undiscounted .

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In connection with those matters, we may have rights of contribution or reimbursement from other parties or coverage under applicable insurance policies.

When applicable and appropriate,

Armstrong World Industries, Inc., and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

(dollar amounts in millions, except share data)

we will pursue coverage and recoveries under those policies, but are unable to predict the outcome of those demands.

When applicable and appropriate, we will pursue coverage and recoveries under those policies, but are unable to predict the outcome of those demands.

While complete assurance cannot be given to the outcome of any proceedings relating to these matters, we do not believe that any current claims, individually or in the aggregate, will have a material adverse effect on our financial condition, liquidity or results of operations.

EARNINGS PER SHARE

The following table is a reconciliation of earnings (loss) to earnings (loss) attributable to common shares used in our basic and diluted (Loss) Earnings Per Share (“EPS”) calculations for the three months ended March 31, 2021 and 2020.

The following table is a reconciliation of earnings (loss) to earnings (loss) attributable to common shares used in our basic and diluted Earnings (Loss) Per Share (“EPS”) calculations for the three and six months ended June 30, 2021 and 2020.

EPS components may not add due to rounding.

Three Months Ended

Six Months Ended

Earnings (loss) from continuing operations

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Earnings (loss) from continuing operations attributable to common shares

The following table is a reconciliation of basic shares outstanding to diluted shares outstanding for the three months ended March 31, 2021 and 2020 (shares in millions):

The following table is a reconciliation of basic shares outstanding to diluted shares outstanding for the three and six months ended June 30, 2021 and 2020 (shares in millions):

Three Months Ended

Six Months Ended

Basic shares outstanding

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Diluted shares outstanding

Anti-dilutive stock awards excluded from the computation of diluted EPS for the three months ended March 31, 2021 and 2020 were 33,643 and 702,513 , respectively.

Due to the net loss for the three months ended March 31, 2020, all common stock equivalents were considered anti-dilutive.

Anti-dilutive stock awards excluded from the computation of diluted EPS for the three and six months ended June 30, 2021, were 548 and 17,096 , respectively.

Due to the net loss for the six months ended June 30, 2020, all common stock equivalents were considered anti-dilutive.

Anti-dilutive stock awards excluded from the computation of diluted EPS for the three and six months ended June 30, 2020 were 25,588 and 441,722 , respectively.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements