FORM 11-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF
    1934
                  For the fiscal year ended September 30, 2003

                                       OR

[_] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934

               For the transition period from _______ to _________

                  Commission file numbers 1-2116 and 000-50408

                   RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                            (Full title of the Plan)

                        ARMSTRONG WORLD INDUSTRIES, INC.
                            ARMSTRONG HOLDINGS, INC.
               2500 Columbia Avenue Lancaster, Pennsylvania 17604
           (Name of issuer of the securities held pursuant to the Plan
               and the address of its principal executive office)

                                       1





                                                                                Page No.
                                                                             
Item 1. Independent Auditors' Report                                                 4

Item 2. Statements of Net Assets Available for Benefits                              5
        September 30, 2003 and 2002

Item 3. Statements of Changes in Net Assets Available for Benefits                   6
        Years ended September 30, 2003 and 2002

Notes to Financial Statements                                                     7-18

Schedule H, line 4i - Schedule of Assets (Held at End of Year)                      19

Exhibits

        Consent of Independent Auditors                                             20


                                       2



                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the members
of the committee constituting the administrator which administers the plan have
duly caused this annual report to be signed by the undersigned hereunto duly
authorized.

                                     RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                                     OF ARMSTRONG WORLD INDUSTRIES, INC.

March 23, 2004                       By: /s/ Matthew J. Angello
                                     ---------------------------

                                     Matthew J. Angello, Chairman of the
                                     Retirement Committee

                                       3



Item 1

                          Independent Auditors' Report

The Retirement Committee
Armstrong World Industries, Inc.:

We have audited the accompanying statements of net assets available for benefits
of the Retirement Savings and Stock Ownership Plan of Armstrong World
Industries, Inc. as of September 30, 2003 and 2002 and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As discussed in Note 1 to the financial statements, on December 6, 2000,
Armstrong World Industries, Inc., the Plan's sponsor, filed a voluntary petition
for relief under Chapter 11 of the U.S. Bankruptcy Code in order to use the
court-supervised reorganization process to achieve a resolution of its asbestos
liability.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Retirement
Savings and Stock Ownership Plan of Armstrong World Industries, Inc. as of
September 30, 2003 and 2002 and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.

/s/ KPMG LLP

March 15, 2004
Philadelphia, Pennsylvania

                                       4



Item 2

                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                 Statements of Net Assets Available for Benefits
                           September 30, 2003 and 2002



                                                                          September 30,
                                                                  -----------------------------
                                                                      2003             2002
                                                                  ------------     ------------
                                                                              
Assets:
 Investments in master trust:
  Cash equivalents:
   Fidelity Retirement Money Market Portfolio                     $ 12,453,249     $  5,556,960
  Shares of registered investment companies:
   Fidelity Magellan Fund                                           68,528,640       51,003,508
   Fidelity Low-Priced Stock Fund                                    7,072,362        4,123,067
   Fidelity OTC Portfolio                                           15,405,596       11,362,627
   Fidelity Asset Manager Fund                                       6,876,337        5,215,695
   Fidelity Asset Manager:  Income Fund                              1,743,139        2,045,481
   Fidelity Asset Manager:  Growth Fund                              7,213,049        7,063,524
   Fidelity Overseas Fund                                            2,500,271          981,827
   MSIF Trust Value Portfolio                                        2,058,986        1,357,675
   MSIF Trust Mid Cap Core Portfolio                                 5,359,490        3,806,859
   Spartan US Equity Index Fund                                     38,428,154       32,293,863
   MSIF Global Value Equity Portfolio                                1,970,707        1,531,596
   Fidelity Equity Income Fund                                       5,557,608               --
   Fidelity Intermediate Bond Fund                                   3,845,027               --
   Fidelity Freedom 2010 Fund                                        1,453,389               --
   Fidelity Freedom 2020 Fund                                        1,472,476               --
   Fidelity Freedom 2030 Fund                                          569,659               --
   Fidelity Freedom 2040 Fund                                           61,620               --
   Fidelity Freedom Income Fund                                        363,012               --
  Interest in common/collective trusts:
    Fidelity Managed Income Portfolio II, Class 3                  134,356,409               --
   Fixed income investment contracts:
    Fidelity Interest Income Fund                                           --      129,426,624
   Armstrong Holdings, Inc. Common Stock                             1,442,043        1,315,270
   Participant loans                                                 4,115,721        3,340,927
                                                                  ------------     ------------
    Total investments in master trust                              322,846,944      260,425,503
  Investments in employee stock ownership funds:
   Cash equivalents                                                    112,280          115,529
   Allocated Armstrong Holdings, Inc. Common Stock                   3,665,459        3,556,219
   Unallocated Armstrong Holdings, Inc. Common Stock                 2,867,325        2,580,593
                                                                  ------------     ------------
    Total investments in employee stock ownership funds              6,645,064        6,252,341
 Restorative payment receivable pursuant to settlement agreement     1,500,000               --
 Interest and other receivables                                          4,299            1,441
                                                                  ------------     ------------
     Total assets                                                  330,996,307      266,679,285
                                                                  ------------     ------------

Liabilities:
 Guaranteed ESOP notes                                             142,158,150      142,158,150
 Interest and tax penalty                                           15,458,029       15,458,029
 Accrued interest                                                   74,457,059       47,360,229
                                                                  ------------     ------------
     Total liabilities                                             232,073,238      204,976,408
                                                                  ------------     ------------

 Net assets available for benefits                                $ 98,923,069     $ 61,702,877
                                                                  ============     ============


See accompanying notes to the financial statements.

                                       5



Item 3

                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
           Statements of Changes in Net Assets Available for Benefits
                     Years Ended September 30, 2003 and 2002



                                                                  Year Ended September 30,
                                                                ----------------------------
                                                                   2003             2002
                                                                -----------     ------------
                                                                          
Additions to net assets attributed to:
  Employee contributions                                        $18,201,070     $ 16,014,947
  Employer contributions                                          5,485,615        4,581,065
                                                                -----------     ------------
                                                                 23,686,685       20,596,012

  Dividends                                                       6,457,768        1,671,532
  Interest on fixed income investments and cash equivalents       1,637,176        7,023,448
  Interest on loans                                                 209,971          234,551
  Net appreciation in fair value of investments                  29,827,015               --
  Restorative payment pursuant to settlement agreement            1,500,000               --
  Net transfers from other employee benefit plans                27,215,884          617,509
                                                                -----------     ------------
                                                                 66,847,814        9,547,040
                                                                -----------     ------------

     Total additions                                             90,534,499       30,143,052
                                                                -----------     ------------

Reduction in net assets attributed to:
  Benefits paid to participants                                  26,142,786       20,216,869
  Deemed distributions of participant loans                          74,691           20,087
  Interest expense                                               27,096,830       23,932,139
  Net depreciation in fair value of investments                          --       36,493,094
                                                                -----------     ------------

     Total reductions                                            53,314,307       80,662,189
                                                                -----------     ------------

  Net increase (decrease)                                        37,220,192      (50,519,137)

Net assets available for benefits:

  Beginning of year                                              61,702,877      112,222,014
                                                                -----------     ------------

  End of year                                                   $98,923,069      $61,702,877
                                                                ===========     ============


See accompanying notes to the financial statements.

                                       6



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                          Notes to Financial Statements

(1)  Plan Description

     The Retirement Savings and Stock Ownership Plan of Armstrong World
     Industries, Inc. ("the Plan") is a defined contribution plan established
     for the purpose of providing participants a means for long-term savings
     intended for the accumulation of retirement income. The Plan is comprised
     of two parts--Retirement Savings Plan and Employee Stock Ownership Plan
     (ESOP). Each part has its own set of participant accounts and investment
     funds. On December 6, 2000 Armstrong World Industries, Inc. ("Armstrong")
     filed a voluntary petition for relief under Chapter 11 of the U.S.
     Bankruptcy Code in the United States Bankruptcy Court for the District of
     Delaware in order to use the court-supervised reorganization process to
     achieve a resolution of its asbestos-related liability. On December 6, 2000
     Armstrong filed a motion with the bankruptcy court to allow Armstrong to
     continue making contributions to the Plan. The motion was approved by the
     bankruptcy court. Management does not anticipate that Armstrong's
     bankruptcy filing will have an adverse impact on the operations of the
     Plan. See Note 13 for further discussion of Chapter 11 events.

     On October 17, 2002, Armstrong's Retirement Committee unanimously passed a
     resolution to merge the Armstrong Wood Products Salaried Employees' Profit
     Sharing Plan and portions of the Hartco Flooring Co. Retirement Savings
     Plan and the Robbins Hardwood Flooring, Inc. Employees' Retirement Savings
     Plan into the Plan. Effective December 20, 2002, plan assets of $26.9
     million were transferred into the Plan.

     (a) Retirement Savings

         Separate balances are maintained for contributions made by or on behalf
         of a participant. The balances in each fund reflect the participants'
         contributions together with dividends, interest, other income, and
         realized and unrealized gains and losses allocated thereon.

         Each participant may have up to seven accounts that make up the
         participant's total balance:

                Sheltered account - The Plan was amended effective April 1, 2002
                to allow participants to contribute from 1% to 40% of pretax
                compensation as deferred compensation, as permitted under
                Section 401(k) of the Internal Revenue Code. Prior to April 1,
                2002, participants could contribute from 1% to 15% of pretax
                compensation.

                Standard account - Participants may contribute from 1% to 10% of
                after-tax compensation.

                Rollover account - Participants may invest any untaxed amounts
                rolled over from another tax-qualified, employer-sponsored plan.
                The Plan was amended to expand the permissible sources of
                rollover contributions beginning January 1, 2003 to include
                qualified annuity contracts, tax-deferred annuity plans,
                governmental deferred compensation plans, and individual
                retirement arrangements.

                Retirement savings match account - This account holds any cash
                match amount contributed by Armstrong beginning in December
                2000. Armstrong contributes an amount equal to 50% of the first
                6% of each participant's sheltered account contributions. This
                account also holds any amount contributed by Armstrong before
                cash matching contributions were discontinued in 1990 (formerly
                referred to as the Old Match account).

                Age 50 catch-up account - The Plan was amended effective January
                1, 2003 to allow participants who are age 50 or older to make
                "catch-up" contributions, subject to the annual limits on
                catch-up contributions specified in the Internal Revenue Code.

                AWP profit sharing account - This account holds discretionary
                profit sharing money contributed by Armstrong for certain
                employees.

                Tax-deductible account (MIRA) - This account holds any
                contributions made to the Plan before January 1, 1987. No new
                contributions can be made to this account.

                                       7



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

     Participants have an immediate 100% vested interest with respect to their
     contributions and are fully vested with regard to any Armstrong
     contributions in the retirement savings match account attributable to
     matching contributions made before December 1, 2000. Participants have a
     100% vested interest in Armstrong amounts contributed to their retirement
     savings match account made on or after December 1, 2000 upon completion of
     five years of service. On June 25, 2002, the Plan was amended such that all
     participants actively employed on or after October 1, 2002 will become 100%
     vested in Armstrong amounts contributed to their retirement savings match
     account upon completion of three years of service. Participants who were
     former participants in the Armstrong Wood Products Salaried Employees'
     Profit Sharing Plan, the Hartco Flooring Co. Retirement Savings Plan and
     the Robbins Hardwood Flooring, Inc. Employees' Retirement Savings Plan and
     were hired prior to and actively employed on January 1, 2003 are fully
     vested with regard to any Armstrong contributions. Participants who were
     former participants in the Armstrong Wood Products Salaried Employees'
     Profit Sharing Plan, the Hartco Flooring Co. Retirement Savings Plan and
     the Robbins Hardwood Flooring, Inc. Employees' Retirement Savings Plan but
     were not actively employed on January 1, 2003 will become vested based upon
     the requirements of those predecessor plans (maximum vesting period of five
     years).

     (b) Stock Ownership

         The ESOP portion of the Plan has three accounts maintained for each
         member for contributions and allocations of shares of Armstrong
         Holdings, Inc. common stock from the Unallocated Armstrong Holdings,
         Inc. Common Stock Fund:

                Exchange account -Participants who elected to reduce their
                pretax compensation in amounts ranging from 1% to 6% had these
                contributions credited to an Exchange Account. Contributions to
                the Exchange Account were invested in Armstrong Holdings, Inc.
                common stock. Effective December 1, 2000, all regular
                contributions and allocations to the Exchange Account ceased.

                Match account - The Plan matched a portion of the contributions
                made to the Exchange Account with additional shares of Armstrong
                Holdings, Inc. common stock. The matching amounts were recorded
                in participants' Match Accounts. The match percentage, either
                50% or 75%, was determined by the closing stock price on the
                last day of the allocation period. Effective December 1, 2000,
                all regular contributions and allocations to the Match Account
                ceased.

                Equity account - Eligible participants also received shares of
                Armstrong Holdings, Inc. common stock in their Equity Account.
                The Equity Account was intended to provide a source of funds to
                replace certain retiree medical benefits which were phased out
                in conjunction with the adoption of the ESOP. Effective December
                1, 2000, all allocations to the Equity Account ceased.

         All participants have a 100% vested interest in the full value of their
         Exchange Account. Interest in the Equity and Match Accounts vests after
         five years of service. On June 25, 2002, the Plan was amended such that
         all participants actively employed on or after October 1, 2002 will
         become 100% vested in their Equity and Match Accounts upon completion
         of three years of service.

     Amounts forfeited by participants are first used to reduce future Armstrong
     contributions, and then to pay administrative expenses under the Plan.

(2)  Summary of Significant Accounting Policies

     (a) Basis of Presentation

         The accompanying financial statements have been prepared on the accrual
         basis except for interest income on participant loans, which is
         recorded when received.

                                       8



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

         The preparation of financial statements in conformity with generally
         accepted accounting principles in the United States of America requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosure of contingent assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenues and expenses during the reporting period.
         Actual results could differ from estimates recorded.

     (b) Investments in Master Trust

         The money market and managed income portfolios are stated at cost,
         which approximates fair value. The value of the participant loans
         represents the unpaid principal of employee loans. The value of all
         other investments is based on quoted market price.

         Securities transactions are recognized on the settlement date (the date
         on which payment for a buy or sell order is made or received), since
         adjustment to a trade-date basis would not be material. Dividend income
         is recorded on the ex-dividend date. Interest income on participant
         loans is recorded when received.

         Deemed distributions occur when active participants default on their
         loans. Their loans are in default due to failure to make the required
         repayments or their loans mature and have not been repaid in full.

         Employee Stock Ownership Funds

         Investments in the Employee Stock Ownership Funds represent shares of
         Armstrong Holdings, Inc. common stock valued at quoted market price.
         Cash equivalents are stated at cost, which approximates fair value.

     (c) Expenses

         All legal, accounting and administrative expenses associated with Plan
         operations are paid by Armstrong.

(3)  Investments in Master Trust

     (a) Retirement Savings Funds

         Assets are held in a Master Trust administered by Fidelity Management
         Trust Co., as Trustee, and are segregated into twenty-one investment
         options.

         The following is a brief description of the investment funds to which
         Plan participants may elect to allocate their contributions.
         Participants should refer to fund prospectuses for more complete
         information regarding the investment funds.

             1.   Spartan US Equity Index Fund - This fund is principally a
                  portfolio of common stocks constructed and maintained with the
                  objective of providing investment results which approximate
                  the overall performance of the common stocks included in the
                  Standard & Poor's Composite Index of 500 stocks.

             2.   Fidelity Magellan Fund - This fund invests in common stocks of
                  companies having substantial growth prospects as determined by
                  independent investment managers.

             3.   Fidelity Low-Priced Stock Fund - This fund seeks capital
                  appreciation through investments primarily in U.S. and foreign
                  low-priced stocks that may be undervalued, overlooked or out
                  of favor.

             4.   Fidelity Retirement Money Market Portfolio - This fund invests
                  in short-term (less than one year maturity) fixed income
                  instruments such as U.S. Treasury Bills, bank certificates of
                  deposit, and high grade commercial paper.

                                       9



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

             5.   Fidelity Managed Income Portfolio II, Class 3 - Prior to May
                  15, 2001, contributions to the Fidelity Interest Income Fund
                  were invested in the general accounts of insurance companies
                  and were credited at contracted interest rates. Invested
                  principal and accumulated interest amounts were guaranteed
                  against loss by the insurance company. Crediting interest
                  rates were reset periodically during the plan year. At
                  September 30, 2002, the interest rates ranged between 3.25%
                  and 6.82%. The average yield at September 30, 2002 was 4.98%.
                  Beginning May 15, 2001, contributions to this fund are
                  invested in shares of Fidelity Managed Income Portfolio II
                  (MIPII). As existing insurance contracts matured or were
                  liquidated, the Fidelity Interest Income Fund used the
                  proceeds to purchase shares of MIPII. As of January 2, 2003,
                  all insurance contracts had matured or were liquidated, the
                  Fidelity Interest Income Fund was dissolved, and the Plan
                  began investing directly in the Fidelity MIPII Fund. MIPII is
                  a commingled pool of the Fidelity Group Trust for 401(k) plans
                  which is comprised of high-quality fixed income investment
                  contracts.

             6.   MSIF Global Value Equity Portfolio - This fund invests in a
                  diversified selection of stocks throughout the world. It seeks
                  to increase the value of the investment over the long term
                  through growth of capital.

             7.   Armstrong Holdings, Inc. Common Stock - Amounts invested in
                  this fund, along with dividend earnings thereon, are invested
                  in Armstrong Holdings, Inc. common stock. Common stock shares
                  held by the fund at September 30, 2003 and 2002 were 961,362
                  and 974,274, respectively. On May 1, 2000, Armstrong Holdings,
                  Inc. acquired the stock of Armstrong World Industries, Inc. An
                  indirect holding in Armstrong World Industries, Inc. makes up
                  substantially all of the assets of Armstrong Holdings, Inc. As
                  of December 19, 2000, the Plan was amended to eliminate this
                  investment option effective with contributions made on or
                  after December 27, 2000 and transfers processed on or after
                  January 1, 2001.

             8.   Fidelity Overseas Fund - This fund invests in securities of
                  issuers whose principal business activities are outside the
                  U.S. Investments may include common stock and securities
                  convertible into common stock, as well as debt instruments.

             9.   Fidelity OTC Portfolio - This fund invests in securities
                  traded in the over-the-counter securities market with the
                  objective of maximizing capital appreciation. Over-the-counter
                  securities include common and preferred stocks, securities
                  convertible into common stock, warrants, and debt instruments.

             10.  Fidelity Asset Manager Fund - This is an asset allocation fund
                  which invests in a diversified portfolio of stocks, bonds, and
                  short-term instruments. The fund has a balanced investment
                  strategy with a goal of high total return with reduced risk
                  over the long term.

             11.  Fidelity Asset Manager: Income Fund - This is an asset
                  allocation fund which invests in a diversified portfolio of
                  stocks, bonds, and short-term instruments. The fund has an
                  investment strategy focusing on bonds and short-term
                  instruments to achieve a high level of current income and
                  capital preservation.

             12.  Fidelity Asset Manager: Growth Fund - This is an asset
                  allocation fund invested in a diversified mix of stocks,
                  bonds, and short-term instruments. The fund's investment
                  strategy is an aggressive one emphasizing stocks with the goal
                  of maximum total return over the long term.

             13.  MSIF Trust Mid Cap Core Portfolio - This fund invests in
                  undervalued common stocks of mid-sized companies with a strong
                  potential for increase in share price. It seeks to provide
                  above-average long-term returns.

                                       10



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

             14.  MSIF Trust Value Portfolio - This fund seeks to provide above
                  average long-term returns by investing mostly in common stocks
                  of large companies that are considered undervalued.

             15.  Fidelity Equity Income Fund - This fund has a primary
                  objective of seeking reasonable income levels by investing at
                  least 80% of total assets in income producing equity
                  securities, which tends to lead to investments in large cap
                  "value" stocks. The fund may also invest in other types of
                  equity securities and debt securities, including lower-quality
                  debt securities. The fund seeks a yield that exceeds the yield
                  of the securities comprising the Standard & Poor's 500 Index.

             16.  Fidelity Intermediate Bond Fund - This fund has a primary
                  objective of seeking high current income by investing in U.S.
                  dollar-dominated investment grade debt securities with
                  maturities between three to ten years. The Lehman Brothers
                  Intermediate Government/Corporate Bond Index is used as a
                  guide in structuring the fund and selecting the investments.

             17.  Fidelity Freedom 2010 Fund - This fund seeks high total return
                  by investing in a combination of Fidelity equity,
                  fixed-income, and money market funds using a moderate asset
                  allocation strategy designed for investors expecting to retire
                  around the year 2010.

             18.  Fidelity Freedom 2020 Fund - This fund seeks high total return
                  by investing in a combination of Fidelity equity,
                  fixed-income, and money market funds using a moderate asset
                  allocation strategy designed for investors expecting to retire
                  around the year 2020.

             19.  Fidelity Freedom 2030 Fund - This fund seeks high total return
                  by investing in a combination of Fidelity equity,
                  fixed-income, and money market funds using a moderate asset
                  allocation strategy designed for investors expecting to retire
                  around the year 2030.

             20.  Fidelity Freedom 2040 Fund - This fund seeks high total return
                  by investing in a combination of Fidelity equity,
                  fixed-income, and money market funds using a moderate asset
                  allocation strategy designed for investors expecting to retire
                  around the year 2040.

             21.  Fidelity Freedom Income Fund - This fund seeks high current
                  income and, as a secondary objective, capital appreciation.
                  The fund invests in a combination of Fidelity equity,
                  fixed-income, and money market funds using a moderate
                  allocation strategy designed for investors already in
                  retirement.

         Participant loans represent the unpaid principal balances of loans to
         Plan participants in accordance with established loan provision
         guidelines. At September 30, 2003, the interest rates ranged between
         4.00% and 11.50%. At September 30, 2002, the interest rates ranged
         between 4.75% and 11.96%.

         On June 25, 2002, the Plan was amended to add the Fidelity Equity
         Income Fund, the Fidelity Intermediate Bond Fund, and the Fidelity
         Freedom Funds as investment options effective January 1, 2003. In
         addition, the Asset Manager Funds are no longer offered with respect to
         contributions made or transfers requested on or after January 1, 2003.
         Any contribution election on December 31, 2002 to invest in one of the
         Asset Manager Funds was changed to a corresponding Fidelity Freedom
         Fund on January 1, 2003. Any balances in the Asset Manager Funds as of
         December 31, 2003 were also transferred to a corresponding Fidelity
         Freedom Fund on December 31, 2003.

                                       11



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

     The following table presents the estimated fair values of the investments
     of the Master Trust at September 30, 2003 and 2002:



                       Investment                     September 30, 2003     September 30, 2002
                       ----------                     ------------------     ------------------
                                                                             
     Spartan US Equity Index Fund                           $ 38,428,154           $ 32,293,863
     Fidelity Magellan Fund                                   68,528,640             51,003,508
     Fidelity Low-Priced Stock Fund                            7,072,362              4,123,067
     Fidelity Retirement Money Market Portfolio               12,453,249              5,556,960
     Fidelity Managed Income Portfolio II, Class 3           134,356,409                     --
     Fidelity Interest Income Fund                                    --            129,426,624
     MSIF Global Value Equity Portfolio                        1,970,707              1,531,596
     Armstrong Holdings, Inc. Common Stock                     1,442,043              1,315,270
     Fidelity Overseas Fund                                    2,500,271                981,827
     Fidelity OTC Portfolio                                   15,405,596             11,362,627
     Fidelity Asset Manager Fund                               6,876,337              5,215,695
     Fidelity Asset Manager: Income Fund                       1,743,139              2,045,481
     Fidelity Asset Manager: Growth Fund                       7,213,049              7,063,524
     MSIF Trust Mid Cap Core Portfolio                         5,359,490              3,806,859
     MSIF Trust Value Portfolio                                2,058,986              1,357,675
     Fidelity Equity Income Fund                               5,557,608                     --
     Fidelity Intermediate Bond Fund                           3,845,027                     --
     Fidelity Freedom 2010 Fund                                1,453,389                     --
     Fidelity Freedom 2020 Fund                                1,472,476                     --
     Fidelity Freedom 2030 Fund                                  569,659                     --
     Fidelity Freedom 2040 Fund                                   61,620                     --
     Fidelity Freedom Income Fund                                363,012                     --
     Participant loans                                         4,115,721              3,340,927
                                                      ------------------     ------------------
     Total investment in Master Trust                       $322,846,944           $260,425,503
                                                      ==================     ==================


                                       12



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

         The amounts of net appreciation (depreciation) in fair value of
         investments of the Master Trust for the years ended September 30, 2003
         and 2002 are presented below:

                     Investment                        2003           2002
                     ----------                     -----------   ------------
         Spartan US Equity Index Fund               $ 7,124,307   $ (8,995,610)
         Fidelity Magellan Fund                      10,853,379    (14,033,234)
         Fidelity Low-Priced Stock Fund               1,479,759       (314,962)
         MSIF Global Value Equity Portfolio             250,277       (324,665)
         Armstrong Holdings, Inc. Common Stock          268,408     (1,459,578)
         Fidelity Overseas Fund                         501,060       (172,507)
         Fidelity OTC Portfolio                       3,909,525     (1,180,609)
         Fidelity Asset Manager Fund                    853,262       (692,306)
         Fidelity Asset Manager: Income Fund            189,049        (92,950)
         Fidelity Asset Manager: Growth Fund          1,270,716     (1,431,149)
         MSIF Trust Mid Cap Core Portfolio            1,332,110     (1,040,335)
         MSIF Trust Value Portfolio                     407,810       (448,749)
         Fidelity Equity Income Fund                    503,291             --
         Fidelity Intermediate Bond Fund                 23,604             --
         Fidelity Freedom 2010 Fund                      97,554             --
         Fidelity Freedom 2020 Fund                     124,886             --
         Fidelity Freedom 2030 Fund                      41,422             --
         Fidelity Freedom 2040 Fund                       4,644             --
         Fidelity Freedom Income Fund                    10,388             --
                                                    -----------   ------------
         Total appreciation (depreciation)          $29,245,451   $(30,186,654)
                                                    ===========   ============

     (b) Stock Ownership Funds

         According to the terms of the trust agreement between JPMorgan Chase
         Bank ("the Trustee") and Armstrong World Industries, Inc., the Trustee
         manages a trust fund that has been created under the Plan and has been
         granted authority to purchase and sell Armstrong Holdings, Inc. common
         stock as is necessary to administer the Plan in accordance with its
         terms.

         At September 30, 2003, the investment in Armstrong Holdings, Inc.
         common stock represents 4,355,189 shares, valued at a quoted market
         price of $1.50. There are 2,443,639 shares held in the Allocated
         Armstrong Holdings, Inc. Stock Fund and 1,911,550 shares held in the
         Unallocated Armstrong Holdings, Inc. Stock Fund. The net appreciation
         in fair value of these investments for 2003 was $581,564. At September
         30, 2002, the investment in Armstrong Holdings, Inc. common stock
         represented 4,545,786 shares, valued at a quoted market price of $1.35.
         There were 2,634,236 shares held in theAllocated Armstrong Holdings,
         Inc. Stock Fund and 1,911,550 shares held in the Unallocated Armstrong
         Holdings, Inc. Stock Fund. The net depreciation in fair value of these
         investments for 2002 was $6,306,440.

 (4) Armstrong Contributions

     Armstrong matches in cash, 50% of the first 6% of each employee's
     before-tax contribution into the Sheltered Account. Armstrong may also
     make, for Armstrong Cabinets Products salaried employees, discretionary
     contributions to the profit sharing portion of the Plan which are
     determined by the Retirement Committee. On December 12, 2003, the Plan was
     amended to eliminate future discretionary profit sharing contributions
     effective January 1, 2004.

                                       13



                   RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

(5)  Guaranteed ESOP Notes and Loans Due Plan Sponsor

     The shares of Armstrong Holdings, Inc. common stock held in the Plan's
     Stock Ownership Accounts were purchased from Armstrong from the proceeds of
     the sale of Guaranteed ESOP notes in a total principal amount of
     $270,000,000 in 1989. Armstrong guaranteed the payment of principal and
     interest on the notes. The notes were scheduled to be repaid in semi-annual
     installments with interest per annum at 8.35% on the Series A Guaranteed
     Serial ESOP Notes due 1989-2001 and 8.92% on the Series B Guaranteed Serial
     ESOP notes due 2001-2004. At September 30, 2000, the principal amounts of
     the Guaranteed ESOP notes for Series A and Series B were $22,115,150 and
     $120,043,000, respectively. On November 22, 2000, Armstrong failed to repay
     $50,000,000 in commercial paper that was due. As a result, the Plan's
     remaining principal balance of $142,158,150 and unpaid interest became
     immediately payable along with a $15,458,029 interest and tax penalty. As
     discussed in Note 1, Armstrong filed a voluntary petition for relief under
     Chapter 11 of the U.S. Bankruptcy Code on December 6, 2000. On December 15,
     2000, the Plan failed to make the scheduled principal and interest payment
     and, in light of Armstrong's Chapter 11 filing, Armstrong was not permitted
     to comply with its guarantee to pay such amounts. Subsequent to December
     15, 2000, no debt service payments have been made and interest on unpaid
     principal, interest, and penalty accrues at contractual gross-up interest
     rates, 10.61% for the Series A notes and 11.32% for the Series B notes,
     plus 2% as stipulated in the ESOP notes. After Armstrong's Chapter 11
     filing, such interest amounts are not recorded on Armstrong's financial
     statements. None of the Plan's assets have been pledged as collateral for
     the Guaranteed ESOP notes.

     Refinancing loans from Armstrong were used to ensure that the number of
     shares allocated during a semi-annual allocation period was equal to the
     sum of participants' exchange, equity and match shares. At September 30,
     2000, there were 11 loans outstanding totaling $39,864,575. In July 2001,
     Armstrong forgave these outstanding loans, resulting in a non-cash employer
     contribution to the Plan of $39,864,575.

     The sources of cash used to repay the Plan's debt were employee
     contributions, employer contributions, and dividends on unallocated shares.
     Currently, there are no employee or employer contributions being made to
     the ESOP portion of the Plan. In addition, Armstrong has not declared any
     dividends since July 2000. On December 12, 2003 the Plan was amended to
     prohibit the future use of employee contributions to repay the Plan's debt.

(6)  Benefits

     (a) Retirement Savings Accounts

         Under terms of the Plan, a participant (or a beneficiary) is eligible
         for benefits upon retirement, termination of employment, or death
         before retirement. Disbursement of the total amount credited to a
         participant's account is payable (i) in a lump sum or (ii) in the case
         of retirement, partial disbursements are allowed.

         In addition, an active employee may elect to withdraw all or any part
         of his account attributable to after-tax contributions. Before reaching
         age 59 1/2, an active employee may withdraw his pretax contributions
         from the Sheltered Account, provided he can demonstrate financial
         hardship. Such employee shall be ineligible to make contributions for a
         12-month period. On June 25, 2002, the Plan was amended with respect to
         hardship withdrawals made after December 31, 2002 to reduce the
         contribution suspension period to a 6-month period. An active employee
         may elect to withdraw all or any portion of his account balance in the
         Tax-Deductible (MIRA) and Rollover Accounts.

         Under the rules of the Plan, the participant may borrow up to the
         lessor of 50% of his vested balance or $50,000. The money borrowed must
         come from the Sheltered, Age 50 catch-up, Rollover, Standard, AWP
         profit sharing or Retirement Savings Match Accounts. The amount of the
         loan is transferred to a Loan Reserve pledged as security for the loan
         and is evidenced by a promissory note payable to the Plan. Interest
         rates are determined periodically by the Retirement Committee in
         accordance with prevailing interest rates. The loans are reflected in
         the Loan Portfolio investment fund. Loan repayments are made by payroll
         deductions or in a manner agreed to by the employee and the Plan
         Administrator. Effective November 22, 2002, Armstrong officers are
         restricted from receiving loans through the Plan.

                                       14



                   RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

     (b) Stock Ownership Accounts

         Upon death or any other separation from service from Armstrong,
         participants or their beneficiaries are entitled to receive a
         distribution of their vested account balances. Distributions are in the
         form of a lump sum cash payment or, upon request, Armstrong Holdings,
         Inc. common stock.

(7)  Obligation for Benefits

     All the funds of the Plan are held by investing institutions appointed by
     Armstrong under a trust agreement or investment contract. Benefits under
     the Plan are payable only out of these funds. Armstrong has no legal
     obligation to make any direct payment of benefits accrued under the Plan.
     Except as may be provided in an investment contract, neither Armstrong nor
     any investing institution guarantees the funds of the Plan against any loss
     or depreciation or guarantees the payment of any benefit thereunder.
     Although Armstrong has not expressed any intent to terminate the Plan, it
     may do so at any time. In case of termination or partial termination, the
     total amount in each employee's account will be distributed as the Plan
     Administrator directs.

(8)  Eligibility

     All salaried employees of Armstrong or any participating affiliated company
     which adopts this plan are eligible to participate in the Plan except for
     foreign nationals and leased employees. In addition, certain hourly
     employees are eligible to participate, including those employees in a
     collective bargaining unit where the collective bargaining agent for that
     unit agrees to coverage under the Plan. Eligible participants who leave
     Armstrong and are later reemployed can resume participation in the Plan on
     the date of rehire.

(9)  Diversification

     Although the Plan allows all participants, regardless of age and vested
     status, to fully diversify their ESOP accounts, certain participants are
     precluded from diversifying because of Armstrong's ongoing Chapter 11
     proceedings.


(10) Litigation

     About 370 former Armstrong employees that were separated in two business
     divestitures in 2000 brought two purported class actions against the
     Retirement Committee of Armstrong, certain current and former members of
     the Retirement Committee, the Plan, Armstrong Holdings, Inc. and the
     trustee bank of the Plan. Plaintiffs allege breach of Employee Retirement
     Income Security Act (ERISA) fiduciary duties and other violations of ERISA
     pertaining to losses in their Plan accounts, which were invested in
     Armstrong Holdings, Inc. common stock. An agreement was reached to settle
     this matter. Contributors to the settlement are Armstrong, its insurer and
     the trustee bank of the Plan. Armstrong made a $750,000 payment for this
     matter in December 2003. The full amount of the settlement was allocated
     among the approximately 370 former employees. The settlement was approved
     by the Bankruptcy Court on March 31, 2003 and by the United States District
     Court (Eastern District of PA) on June 16, 2003.

     Subsequent to an audit by the United States Department of Labor ("DOL"),
     Armstrong was informed that the DOL was challenging the validity of the use
     of certain contributions to fund debt payments made by the ESOP, as
     provided for by the Plan. Armstrong and the DOL reached a settlement to
     resolve this matter with a funding to the ESOP of $1.5 million, which was
     paid to the Plan in December 2003 and was distributed to plan participants'
     accounts in February 2004 in accordance with terms of the agreement. Of the
     $1.5 million total settlement, insurance and third parties contributed $0.9
     million to Armstrong.


(11) Federal Income Taxes

     The Internal Revenue Service issued its latest determination letter on
     November 25, 2003, which stated that the Plan and its underlying trust
     qualify under the applicable provisions of the Internal Revenue Code and
     therefore are exempt from federal income taxes. The Plan has been amended
     since receiving the determination letter. In the opinion of the Plan
     administrator and the Plan's qualified tax adviser, the Plan is currently
     designed and being operated in compliance with the applicable requirements
     of the Internal Revenue Code. Therefore, they believe that the Plan is
     qualified and the related trust is tax-exempt.

                                       15



                   RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

(12) Master Trust Agreement

     The Plan established a Master Trust Agreement with Fidelity Management
     Trust Company whereby the Plan assets held by Fidelity Management Trust
     Company are commingled and invested with the assets of the Retirement
     Savings Plan for Hourly-Paid Employees of Armstrong World Industries, Inc.
     and the Bonus Replacement Retirement Plan of Armstrong World Industries,
     Inc. Prior to December 20, 2002, the assets were also commingled with the
     assets of the Armstrong Wood Products Salaried Employees' Profit Sharing
     Plan, the Armstrong Wood Products Non-union Hourly 401(k) Plan, the Robbins
     Hardwood Flooring Inc. Employees' Retirement Savings Plan, the Hartco
     Flooring Co. Bargaining Employees Retirement Savings Plan, and the Hartco
     Flooring Co. Retirement Savings Plan. Separate accounting for each plan
     under the Master Trust Agreement is maintained. The Plan has an undivided
     interest in the assets of this trust, and ownership is represented by
     proportionate dollar interest. The following summarizes the financial
     information of the Master Trust at September 30, 2003 and 2002:



                                                         September 30, 2003              September 30, 2002
                                                         Cost        Fair Value         Cost         Fair Value
                                                     ------------   ------------    ------------    ------------
                                                                                        
     Cash equivalents                                $ 16,785,399   $ 16,785,399    $ 16,510,231    $ 16,510,231
     Armstrong Holdings, Inc. Common Stock             21,913,297      2,679,635      25,269,658       2,905,155
     Investments in registered investment companies   198,165,001    201,621,042     204,702,712     164,805,422
     Fixed income investment contracts                         --             --     176,543,179     176,543,179
     Investment in common/collective trusts           181,386,980    181,386,980              --              --
     Participant loans                                  6,443,352      6,443,352       6,163,258       6,163,258
                                                     ------------   ------------    ------------    ------------
       Total investments in Master Trust             $424,694,029   $408,916,408    $429,189,038    $366,927,245
                                                     ============   ============    ============    ============

     Plan's interest in Master Trust                 $329,492,583   $322,846,944    $298,508,049    $260,425,503
     Plan's percentage in Master Trust                       77.6%          79.0%           69.6%           71.0%


     During 2003 and 2002, the Master Trust's investments (including investments
     bought, sold, and held during the year) appreciated (depreciated) in value
     as follows:



                                                                                         2003              2002
                                                                                    -------------    -------------
                                                                                                
     Net appreciation (depreciation) in Master Trust                                  $35,812,595     ($41,014,128)
     Allocated net appreciation (depreciation) in Master Trust                         29,245,451      (30,186,654)


     During 2003 and 2002, interest and dividends in the Master Trust were as
     follows:



                                                                                         2003              2002
                                                                                    -------------     ------------
                                                                                                  
     Interest and dividends in Master Trust                                           $11,252,478       $12,841,359
     Allocated interest and dividends from
       investment in Master Trust                                                       8,304,138         8,927,296


     All of the above information was certified as complete and accurate by the
     trustee at September 30, 2003 and 2002 and for the years then ended.

(13) Chapter 11 Reorganization of Armstrong
     Plan of Reorganization

     On November 4, 2002, Armstrong filed a Plan of Reorganization with the
     United States Bankruptcy Court for the District of Delaware ("the
     Bankruptcy Court"). During 2003, Armstrong filed several amendments to the
     plan with the Bankruptcy Court, along with various exhibits. The Fourth
     Amended Plan of Reorganization, with certain exhibits, was filed on May 23,
     2003 (and, as so amended and as modified by modifications filed with the
     Bankruptcy Court on October 17, 2003 and November 10, 2003, it is referred
     to in this report as the "POR").

     During 2003, the POR was submitted for a vote by Armstrong's creditors for
     its approval. It was approved by each creditor class that was entitled to
     vote on the POR except the class of unsecured creditors. On November

                                       16



                   RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

     17 and 18, 2003, the Bankruptcy Court held a hearing on confirmation of the
     Plan and on December 19, 2003, issued proposed findings of fact and
     conclusions of law and a proposed order confirming the POR, notwithstanding
     the rejection of the POR by the class of unsecured creditors. On December
     29, 2003, the Unsecured Creditors' Committee filed an objection to the
     Bankruptcy Court's proposed findings of fact and conclusions of law and the
     proposed order of confirmation of the POR. This objection remains pending
     with the U.S. District Court. Confirmation of the POR requires action of
     the U.S. District Court, as well as the Bankruptcy Court, in accordance
     with the Bankruptcy Code. At this time, the District Court judge involved
     in the Chapter 11 Case has stayed all proceedings before him concerning the
     Chapter 11 Case. See "Recent Developments and Next Steps in the Chapter 11
     Process."

     Disclosure Statement

     In connection with the vote of creditors on the POR, Armstrong was required
     to prepare a disclosure statement concerning its business and the POR,
     including certain projected financial information assuming an Effective
     Date of the POR as July 1, 2003, intended to demonstrate to the Bankruptcy
     Court the feasibility of the POR and Armstrong's ability to continue
     operations upon its emergence from Chapter 11. On May 30, 2003, the
     Bankruptcy Court approved the disclosure statement for distribution to
     parties in interest in the Chapter 11 Case. The projected financial
     information included in the disclosure statement was updated in certain
     respects by information submitted to the Bankruptcy Court in connection
     with the Bankruptcy Court's November 2003 hearing on confirmation of the
     POR. The projected financial information was prepared for the limited
     purposes of consideration by the Bankruptcy Court, creditors and other
     parties in interest in the Chapter 11 Case of matters pertinent to the
     case. As indicated in the disclosure statement, the projected financial
     information and various estimates of value therein provided should not be
     regarded as representations or warranties by Armstrong or any other person.
     There is no assurance that any such projection or valuation will be
     realized. The projected financial information and estimates of value were
     prepared by Armstrong and its financial advisors and have not been audited
     or reviewed by independent accountants. The projections will not be updated
     on an ongoing basis. At the time they were prepared, the projections
     reflected numerous assumptions concerning reorganized Armstrong's
     anticipated future performance and with respect to prevailing and
     anticipated market and economic conditions, which were and remain beyond
     our control and which may not materialize. Projections are inherently
     subject to significant and numerous uncertainties and to a wide variety of
     significant business, economic and competitive risks and the assumptions
     underlying the projections may be wrong in a material respect. Actual
     results may vary significantly from those contemplated by the projections.

     Consideration to be Distributed under the POR (unaudited)

     Under the POR, the existing equity interests in Armstrong (including all of
     its outstanding shares of common stock) will be cancelled. The POR provides
     for the distribution of warrants to purchase shares of reorganized
     Armstrong (the "Warrants") to the holders of Armstrong's existing common
     stock. The terms of the Warrants are provided in an exhibit to the POR.
     Generally, the Warrants would permit the purchase of 5% of the common stock
     of reorganized Armstrong on a fully diluted basis upon exercise of all the
     Warrants, would be exercisable at any time during the seven years after the
     effective date of the POR, and would permit the purchase of shares at an
     exercise price of $37.50, which is equal to 125% of the $30.00 per share
     equity value of reorganized Armstrong. It is expected that warrants held
     inside the Plan will not be exercisable to purchase the common stock of
     reorganized Armstrong. Warrants held in the Plan may be sold by
     participants, with the monies reinvested among any of the investment funds
     available in the Plan. Whether any value will be realized from the Warrants
     will depend on whether the market value of reorganized Armstrong's new
     common stock reaches a value in excess of the exercise price of the
     Warrants during the period that they may be exercised. Armstrong Holdings
     Inc.'s ("AHI") shareholders were not entitled to vote on the POR. However,
     AHI's shareholders were sent the Disclosure Statement and the POR. If the
     POR is implemented, the only value that will be available to AHI
     shareholders is their ratable share of the Warrants available upon the
     contemplated dissolution of AHI. See AHI's Plan of Dissolution below.

     Armstrong Holdings, Inc's Plan of Dissolution, Winding Up and Distribution

     ("Plan of Dissolution")

     In connection with the implementation of the POR, the Warrants will be
     issued to AHI (or a wholly-owned subsidiary of AHI). The Board of Directors
     of AHI has determined that it is not practicable for AHI to continue


                                       17



                   RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
                   Notes to Financial Statements, (Continued)

     in operation as an on-going business owning the Warrants, which will then
     be AHI's only asset. Accordingly, the Board of Directors of AHI approved
     and recommended to AHI shareholders the Plan of Dissolution, whereby AHI
     will voluntarily dissolve and wind up its affairs in accordance with
     Pennsylvania law and, subject to completion of AHI's winding up (including
     the satisfaction of any liabilities of AHI), distribute any remaining
     Warrants to the shareholders. At a special meeting of AHI shareholders held
     on January 7, 2004, the Plan of Dissolution was approved by the AHI
     shareholders. The POR provides that Armstrong will pay the costs and
     expenses incurred in connection with administering AHI's Plan of
     Dissolution.

     Recent Developments and Next Steps in the Chapter 11 Process

     In order for the POR to be confirmed, the U.S. District Court must issue
     findings of fact and conclusions of law in support of confirmation of the
     POR, enter or affirm an order confirming the POR and issue the "524(g)
     injunction" which is part of the POR. In certain other companies'
     asbestos-related Chapter 11 cases, motions for recusal were filed in 2003
     against U.S. District Court Judge Alfred M. Wolin, who is jointly
     administering with the Bankruptcy Court the asbestos-related issues in the
     Chapter 11 cases of five companies, including Armstrong. The Unsecured
     Creditors' Committee requested that in the event Judge Wolin is recused in
     the other cases, he also be recused in Armstrong's case. Judge Wolin has
     stayed further proceedings in all five cases before him, including
     Armstrong's Chapter 11 Case. On February 2, 2004, Judge Wolin denied the
     motions for recusal. An appeal of Judge Wolin's ruling is currently
     pending, with oral argument before the U.S. Court of Appeals for the Third
     Circuit scheduled for April 19, 2004. Armstrong is uncertain as to the
     impact, if any, beyond the present delay in confirmation of the POR that
     the motions and appeal will have on Armstrong's Chapter 11 proceedings, and
     when confirmation of the POR will be considered by the U.S. District Court
     is uncertain.

     Common Stock

     As a result of Armstrong filing the POR on November 4, 2002, the New York
     Stock Exchange stopped trading on the Exchange of the common stock of
     Armstrong Holdings, Inc. (traded under the ticker symbol "ACK"). Armstrong
     Holdings, Inc.'s common stock resumed trading in the over-the-counter (OTC)
     Bulletin Board under the ticker symbol "ACKHQ."

     Conclusion

     Although the POR has been developed, implementation of the POR is subject
     to confirmation of the POR in accordance with the provisions of the
     Bankruptcy Code and satisfaction after consummation of certain conditions,
     as provided by the POR. Armstrong is unable to predict when and if the POR
     will be confirmed. Therefore, the timing and terms of a resolution of the
     Chapter 11 Case remain uncertain.

                                       18



                 THE RETIREMENT SAVINGS AND STOCK OWNERSHIP PLAN
                       OF ARMSTRONG WORLD INDUSTRIES, INC.
         Schedule H, line 4i - Schedule of Assets (Held at End of Year)
                               September 30, 2003

Description of Investment                                 Cost       Fair Value
-------------------------                            ------------   ------------

Unallocated Armstrong Holdings, Inc. Common Stock    $ 91,276,513   $  2,867,325

Allocated Armstrong Holdings, Inc. Common Stock       104,384,454      3,665,459

Investments in Master Trust                           329,492,583    322,846,944

                                       19