SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[ X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1997
                                                      OR

[  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                 .

                         Commission file number 1-11415
                        AMERICAN STANDARD COMPANIES INC.
             (Exact name of Registrant as specified in its charter)

      Delaware                                                   13-3465896
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                              Identification No.)

One Centennial Avenue, P.O. Box 6820, Piscataway, NJ           08855-6820
(Address of principal executive offices)                        (Zip Code)


Registrant's telephone number, including area code             (732) 980-6000

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                                                    X Yes No

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

           Common stock, $.01 par value, outstanding at
October 31, 1997                                                   71,928,748
                                                                     (shares)





<PAGE>



                          PART 1. FINANCIAL INFORMATION

Item 1.  Financial Statements

     American  Standard  Companies Inc. is a Delaware  corporation  organized in
March 1988, and has as its only investment all the  outstanding  common stock of
American  Standard  Inc.  Hereinafter,  "the  Company"  will  refer to  American
Standard  Companies Inc. or to its  subsidiary,  American  Standard Inc., as the
context  requires.  The following summary statement of operations of the Company
and  subsidiaries  for the three months and nine months ended September 30, 1997
and 1996 has not been audited,  but  management  believes that all  adjustments,
consisting  of normal  recurring  items,  necessary for a fair  presentation  of
financial data for those periods have been included.  Results for the three- and
nine-month  periods of 1997 are not  necessarily  indicative  of results for the
entire year.

<TABLE>
<CAPTION>

                AMERICAN STANDARD COMPANIES INC. AND SUBSIDIARIES
                    UNAUDITED SUMMARY STATEMENT OF OPERATIONS

                         (In millions except share data)

                                            
                                                Three Months Ended   Nine Months Ended
                                                  September 30,        September 30,
                                                     -------------    -------------
<S>                                            <C>         <C>       <C>     <C>  
                                                  1997     1996       1997     1996

SALES                                           $1,519   $1,485     $4,469   $4,368
                                                 -----    -----     ------   ------

COST AND EXPENSES
  Cost of sales                                  1,138     1,115      3,319    3,282
  Selling and administrative expenses              236       226        730      684
  Asset impairment loss                              -         -          -      235
  Write-off of purchased research and
    development                                     90         -         90        -
  Other expense                                      9        10         21       28
  Interest expense                                  48        49        144      151
                                                    --        --        ---      ---
                                          
                                                 1,521     1,400      4,304    4,380
INCOME (LOSS) BEFORE INCOME TAXES
    AND EXTRAORDINARY ITEM                          (2)       85        165      (12)
Income taxes                                        31        29         91       80
                                                    --        --         --       --
                                                  
INCOME (LOSS) BEFORE
    EXTRAORDINARY ITEM                             (33)       56        74       (92)
Extraordinary loss on retirement of debt,
    net of tax                                       -         -        24         -
                                                    --        --        --        --  

NET INCOME (LOSS)                               $  (33)   $  56      $  50    $  (92)
                                                ======     ====      ======   =======

Income (loss) per common share:
    Income (loss) before extraordinary item     $ (.46)   $ .72      $ .96    $(1.18)
    Extraordinary loss on retirement of debt         -         -      (.31)        -
                                                 ------    -----      ----     -----                                             -
    NET INCOME (LOSS)                           $ (.46)   $ .72      $ .65   $ (1.18)
                                                 ======    =====      ====     =====

Average number of outstanding common shares
    and common share equivalents (Note 3)   72,985,131  78,241,940 76,903,567 77,813,214

<FN>

                                            See accompanying notes

</FN>
</TABLE>




<PAGE>
<TABLE>
<CAPTION>


                AMERICAN STANDARD COMPANIES INC. AND SUBSIDIARIES
                         UNAUDITED SUMMARY BALANCE SHEET
                              (Dollars in millions
                               except share data)

                                                   September 30,   December 31,
                                                        1997           1996
                                                        ----           ----
<S>                                                 <C>          <C>    
CURRENT ASSETS
Cash and cash equivalents                           $      39    $     60
Accounts receivable                                       895         800
Inventories
    Finished products                                     291         236
    Products in process                                    97          78
    Raw materials                                         104          95
                                                          ----         --
                                                          492         409
Other current assets                                      132         117
                                                          ----        ---
TOTAL CURRENT ASSETS                                    1,558       1,386

FACILITIES, less accumulated depreciation;
    Sept. 1997 - $622; Dec. 1996 - $577                 1,044       1,006
GOODWILL                                                  832         875
OTHER ASSETS                                              278         253
                                                          ----        ---
TOTAL ASSETS                                         $  3,712      $3,520
                                                     =========     ======

CURRENT LIABILITIES
Loans payable to banks                               $    743     $   109
Current maturities of long-term debt                       18          73
Accounts payable                                          437         469
Accrued payrolls                                          190         152
Other accrued liabilities                                 513         434
                                                          ---         ---
TOTAL CURRENT LIABILITIES                               1,901       1,237

LONG-TERM DEBT                                          1,584       1,742
RESERVE FOR POSTRETIREMENT BENEFITS                       437         473
OTHER LIABILITIES                                         448         448
                                                          ---         ---
TOTAL LIABILITIES                                       4,370       3,900

STOCKHOLDERS' DEFICIT
Preferred stock, 2,000,000 shares authorized, 
    none issued and outstanding                             -           -
Common stock $.01 par value, 200,000,000 shares
    authorized; 71,971,183 shares issued and
    outstanding in 1997; 78,572,638 in 1996                 1           1
Capital surplus and other                                 274         563
Accumulated deficit                                      (721)       (771)
Foreign currency translation effects                     (212)       (173)
                                                         -----       ----

TOTAL STOCKHOLDERS' DEFICIT                              (658)       (380)
                                                         -----       ----
                                                     $   3,712      $3,520
                                                      ========      ======
<FN>

                             See accompanying notes
</FN>
</TABLE>


<PAGE>


Item1.  Financial Statements (continued)
<TABLE>
<CAPTION>

                AMERICAN STANDARD COMPANIES INC. AND SUBSIDIARIES
             UNAUDITED CONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS

                              (Dollars in millions)
                                                              Nine Months Ended
                                                                 September 30,
                                                               1997       1996
                                                               ----       ----
<S>                                                        <C>          <C>   
CASH PROVIDED (USED) BY:
  OPERATING ACTIVITIES:
    Income (loss) before extraordinary item                  $  74    $   (92)
    Write-off of purchased in-process research and
      development                                               90          -
    Asset impairment loss                                        -        235
    Depreciation                                                94         91
    Amortization of goodwill                                    21         21
    Non-cash interest                                           44         47
    Non-cash stock compensation                                 10         25
    Changes in assets and liabilities:
      Accounts receivable                                      (92)       (58)
      Inventories                                              (84)       (67)
      Accounts payable and other accruals                       54         16
      Other assets and liabilities                              15        (18)
                                                                ---       ----
  Net cash provided by operating activities                    226        200
                                                               ----       ---

  INVESTING ACTIVITIES:
    Purchases of property, plant and equipment                (157)      (123)
    Investments in affiliated companies                         (1)       (12)
    Acquisition of medical diagnostic businesses             ( 212)         -
    Other                                                        5         20
                                                                --         --
  Net cash used by investing activities                       (365)      (115)
                                                              -----      -----

  FINANCING ACTIVITIES:
    Minority partners' contributions to PRC venture              -         12
    Repurchases of common stock                               (294)         -
    Proceeds from issuance of long-term debt                   399          6
    Repayments of long-term debt, including
      redemption premiums                                     (626)       (67)
    Net change in revolving credit facility                    640        (31)
    Net change in other short-term debt                         11        (18)
    Other                                                       (8)        (6)
                                                               ---        ---
  Net cash provided (used) by financing activities             122       (104)
                                                               ---        ---

Effect of exchange rate changes on cash and
  cash equivalents                                              (4)        (1)
                                                                ---        ---
Net decrease in cash and cash equivalents                      (21)       (20)
Cash and cash equivalents at beginning of period                60         89
                                                                ---        ---
Cash and cash equivalents at end of period                  $   39    $    69
                                                            =======    =======
<FN>

                             See accompanying notes

</FN>
</TABLE>

<PAGE>


                AMERICAN STANDARD COMPANIES INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS


   Note 1.  Public Offering of Common Stock and Repurchases of Common Stock

         In the first quarter of 1997 the Company  completed a secondary  public
   offering of 12,429,548  shares of the  Company's  common stock owned by Kelso
   ASI Partners,  L.P. ("ASI Partners"),  the Company's  largest  stockholder at
   December 31,  1996,  and the  repurchase  by the Company from ASI Partners of
   4,628,755  shares of common  stock of the Company.  In addition,  the Company
   issued to ASI Partners  5-year warrants to purchase  3,000,000  shares of the
   Company's  common  stock at $55 per share.  ASI  Partners  no longer owns any
   common stock of the Company and is no longer entitled to designate any of the
   Company's directors.  On October 6, 1997, the Company completed an additional
   repurchase  of 2,320,900  shares of its common stock for $100 million under a
   program  commenced in May 1997. See  Management's  Discussion and Analysis of
   Financial  Position  and  Results  of  Operations  -  Liquidity  and  Capital
   Resources.

   Note 2.  Acquisition  of Medical Diagnostics Businesses

         On June 30, 1997, the Company acquired for $212 million, including fees
   and expenses,  the European  medical  diagnostic  business of Sorin Biomedica
   S.p.A.  ("Sorin"),  an affiliate of the Fiat Group,  and all the  outstanding
   shares of INCSTAR Corporation  ("Incstar"),  a biotechnology company based in
   Stillwater,  Minnesota. This transaction has been accounted for as a purchase
   and the financial  statements as of September 30, 1997 reflect the allocation
   of the purchase  price.  Purchase  price  allocated to the value of purchased
   in-process research and development  totaling $90 million has been charged to
   operations  in the  third  quarter  of 1997.  Approximately  $50  million  of
   goodwill resulted after allocation of the purchase price to the fair value of
   assets  acquired and liabilities  assumed.  See  Management's  Discussion and
   Analysis of Financial  Position and Results of  Operations  -- Liquidity  and
   Capital Resources.

   Note 3.  Earnings Per Share

        Effective  December 31, 1997, the Company is required to adopt Statement
   of Financial  Accounting  Standards No. 128, Earnings per Share,") which will
   simplify  the  calculation  and  presentation  of earnings per share data and
   require  the  restatement  of earnings  per share data for all prior  periods
   presented,  the effect of which will not be material.  Earlier application is
   not permitted.  The average number of outstanding common shares for the three
   months ended September 30, 1997 excludes average common stock  equivalents of
   2,535,678 shares, as their inclusion would have been antidilutive to the loss
   per share.

   Note 4.  Tax Matters

        As described in Note 6 of Notes to Consolidated  Financial Statements in
   the  Company's  Annual  Report on Form 10-K for the year ended  December  31,
   1996,  there are pending  German tax issues for the years 1984 through  1990.
   See "Management's  Discussion and Analysis of Financial Condition and Results
   of Operations -- Liquidity and Capital Resources."


<PAGE>


                          PART 1. FINANCIAL INFORMATION

     Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations

Overview

         The Company's sales in the third quarter of 1997 increased 2% to $1,519
million  and  operating  income  was $2  million  below the  prior  year at $155
million,  excluding the $90 million write-off of purchased  in-process  research
and  development  related  to the  June  30,  1997  acquisition  of the  medical
diagnostics  businesses.  Operating income for the first nine months of 1997 was
$452 million  (excluding  the  write-off of  purchased  in-process  research and
development), an increase of 2% over the $443 million of operating income in the
first nine months of 1996  (excluding  an asset  impairment  charge).  Operating
losses for  Medical  Systems and equity in net income  (loss) of  unconsolidated
joint  ventures  for  1996  have  been  reclassified  to  conform  with the 1997
presentation.
<TABLE>
<CAPTION>

                         SUMMARY SEGMENT AND INCOME DATA
                              (Dollars in millions)
                                   (Unaudited)
                                                   Three Months Ended        Nine Months Ended
                                                     September 30,             September 30,
<S>                                                <C>           <C>          <C>           <C> 
                                                   1997          1996         1997          1996
Sales:
    Air Conditioning Products                   $   919       $   920       $2,684        $2,602
    Plumbing Products                               352           359        1,062         1,079
    Automotive Products                             224           206          699           687
    Medical Systems                                  24             -           24             -
                                                 ------        ------       ------        ------
    Total  sales                                 $1,519        $1,485       $4,469        $4,368
                                                 ======        ======       ======        ======

Operating income (loss) before asset 
    impairment loss and write-off of 
    purchased research and development:
       Air Conditioning Products                $    98        $  111      $    285      $   284
       Plumbing Products                             31            29            86           79
       Automotive Products                           31            21            94           91
       Medical Systems                               (5)           (4)          (13)         (11)
                                                 ------         ------        -----       ------
                                                    155           157           452          443
Asset impairment loss and write-off
    of purchased research and development:
     Air Conditioning Products impairment loss        -             -             -         (121)
     Plumbing Products impairment loss                -             -             -         (114)
     Medical Systems write-off of purchased 
      research and development                      (90)            -           (90)           -
                                                 ------         ------        -----       ------
                                                    (90)            -           (90)        (235)
                                                 ------         ------        -----       ------
    Total operating income                           65           157           362          208
Equity in net income (loss) of
    unconsolidated joint ventures                     3            (1)            9           (4)
Interest expense                                    (48)          (49)         (144)        (151)
Corporate and other expenses                        (22)          (22)          (62)         (65)
                                                 ------         ------        -----       ------

Income (loss) before income taxes
    and extraordinary item                     $     (2)     $     85       $   165      $   (12)
                                               =========     ========       =======      ========
</TABLE>


<PAGE>



     Results of  Operations  for the Third Quarter and First Nine Months of 1997
Compared with the Third Quarter and First Nine Months of 1996

         Consolidated  sales for the third quarter of 1997 were $1,519  million,
an increase of $34  million,  or 2% (7%  excluding  the  unfavorable  effects of
foreign  exchange),  from  $1,485  million in the third  quarter of 1996.  Sales
increased 9% for Automotive Products, while sales were flat for Air Conditioning
Products and decreased 2% for Plumbing  Products compared with the third quarter
of 1996. Medical Systems contributed sales of $24 million.  Operating income for
the third quarter of 1997 was $155 million  (excluding the $90 million write-off
of purchased in-process research and development),  a decrease of $2 million, or
1%  (but  an  increase  of 4%  excluding  the  unfavorable  effects  of  foreign
exchange),  from $157  million in the third  quarter of 1996.  Operating  income
increased 46% for Automotive Products and 7% for Plumbing Products but decreased
11% for Air  Conditioning  Products,  while  Medical  Systems  incurred  a small
operating loss.

         Consolidated  sales for the  first  nine  months  of 1997  were  $4,469
million,  an increase  of $101  million,  or 2% (6%  excluding  the  unfavorable
effects of foreign  exchange),  from $4,368  million in the first nine months of
1996. The increase reflected gains of 3% for Air Conditioning  Products,  2% for
Automotive  Products and Medical Systems' third quarter sales. Partly offsetting
these gains was a decline of 2% for Plumbing Products. Operating income was $452
million for the first nine months of 1997  (excluding  the write-off of research
and  development),  an increase of 2% (6% excluding the  unfavorable  effects of
foreign  exchange),  compared with $443 million in the first nine months of 1996
(excluding the asset impairment charge previously  mentioned).  Operating income
increased 9% for Plumbing Products,  3% for Automotive Products and less than 1%
for Air Conditioning Products,  while Medical Systems incurred a slightly larger
loss.

         The following  discussion of sales and  operating  income  excludes the
effects of the write-off of purchased  in-process  research and  development  in
1997 and the asset impairment loss in 1996, as applicable.

         Sales of Air  Conditioning  Products  were $919  million  for the third
quarter of 1997,  essentially the same as the $920 million for the third quarter
of 1996,  but up by 2% excluding the  unfavorable  effects of foreign  exchange,
despite being adversely affected by cooler than normal temperatures in important
markets.  This  increase  reflected  continued  strength in the U.S.  commercial
business  and  higher  volume  in  international  operations.  Sales in the U.S.
increased because of higher volumes of applied and unitary  commercial  products
resulting  from  improved  markets  and gains in market  share  (for  commercial
unitary  products),  but was  partly  offset  by lower  volume  for  residential
products due to the cooler weather. International sales for the third quarter of
1997  increased  principally  because of higher volumes in Latin America and the
Middle East.  Sales for Air  Conditioning  Products for the first nine months of
1997  increased by 3% to $2,684  million  from $2,602  million in the first nine
months of 1996,  primarily for the reasons cited for the third quarter  increase
and volume increases in Europe in the first half of the year.

         Operating  income  of Air  Conditioning  Products  decreased  11% (with
little effect from foreign exchange) to $98 million in the third quarter of 1997
from $111  million in the 1996  third  quarter.  This  primarily  reflected  the
effects of cooler than normal weather on U.S.  residential products and European
operations, partly offset by increased income in the U.S commercial business and
in the Middle East. Operating income for the first nine months of 1997 increased
slightly,  as gains in the U.S. commercial business and the Middle East exceeded
the declines experienced for residential products, Europe and the Far East.
<PAGE>

         Sales of Plumbing  Products  decreased  2% to $352 million in the third
quarter of 1997 from $359 million in the third  quarter of 1996.  Excluding  the
unfavorable  effects of foreign  exchange,  sales  increased  6%  reflecting  an
increase of 7% in international sales and 6% in the U.S. The international sales
increase  resulted  primarily  from  higher  volume  in  Latin  America.  Europe
contributed  a  small  increase  but  continued  to  experience   weak  economic
conditions, particularly in Germany and France. Sales growth in the Far East was
tempered  as a result of several  currency  devaluations  and  general  economic
conditions.  Sales in the U.S.  increased as a result of higher volumes to major
home improvement retailers. Sales of Plumbing Products for the first nine months
of 1997  decreased 2% to $1,062  million  from $1,079  million in the first nine
months of 1996. Excluding unfavorable foreign exchange effects,  sales increased
by 4% due to the same factors affecting the third quarter results and reflecting
the adverse  effect of a five-week  strike in the  Philippines  during the first
quarter of 1996.

         Operating income of Plumbing  Products  increased 7% (18% excluding the
unfavorable effects of foreign exchange) to $31 million for the third quarter of
1997 from $29  million  for the third  quarter of 1996.  In the U.S.,  operating
income improved  because of higher sales,  benefits of lower-cost  products from
the Company's  Mexican  facilities  and  manufacturing  cost  improvements.  For
international  operations,  operating  income  increased  primarily  because  of
reduced costs in Europe,  especially  France, and improved margins due to higher
volume in Latin  America.  Operating  income for the first  nine  months of 1997
increased by 9% (16% excluding  foreign exchange  effects) over the 1996 period,
primarily  for the reasons  mentioned  for the third  quarter and because of the
first quarter 1996 Philippines strike.

         Sales of Automotive Products for the third quarter of 1997 increased 9%
(24% excluding the unfavorable effects of foreign exchange) to $224 million from
$206 million in the third quarter of 1996,  primarily  because of higher volumes
in Europe and higher product  content per vehicle.  Unit volume of truck and bus
production  in Western  Europe  increased  23% overall from the third quarter of
1996,  with a particularly  strong gain in Germany.  Sales of ABS systems to the
Company's U.S. joint venture more than doubled,  reflecting the new  regulations
in effect for such systems on new heavy-duty  trucks and a rebound in U.S. truck
production.  Sales of  Automotive  Products  for the first  nine  months of 1997
increased 2% (11% excluding the unfavorable effects of foreign exchange) to $699
million from $687 million in the first nine months of 1996, primarily due to the
strong performance in the third quarter.

         Operating income for Automotive  Products for the third quarter of 1997
was $31 million,  an increase of 46% (74% excluding the  unfavorable  effects of
foreign   exchange)   from  $21  million  in  the  third  quarter  of  1996,  as
exchange-adjusted  income from European operations nearly doubled. This increase
resulted  from  the  higher  sales  and  improved  margins  due to  productivity
improvements.  This also  reflected the adverse  effects in the third quarter of
1996 of new product introductions.  Operating income for Automotive Products for
the first nine months of 1997 was $94 million,  an increase of 3% (15% excluding
the unfavorable  effects of foreign exchange) from $91 million in the first nine
months of 1996. This  principally was because of the  improvements for the third
quarter.

         Medical Systems sales reflected the acquisition of Sorin and Incstar on
June 30, 1997.  Medical Systems incurred an operating loss as development  costs
and the cost of integrating  operations more than offset the operating income of
the newly-acquired diagnostics businesses.



<PAGE>

Financial Review

         Interest  expense  decreased  $1 million  in the third  quarter of 1997
compared to the  year-earlier  quarter as lower overall  interest  rates on debt
outstanding  under the 1997  Credit  Agreement  more than  offset  the effect of
increased debt arising from share repurchases and the acquisition of the medical
diagnostics  businesses.  The Company  repurchased $308 million of shares of its
common  stock during the first nine months of 1997 (see  "Liquidity  and Capital
Resources"). In addition, on May 15, 1997, the Company redeemed the $250 million
aggregate  principal  amount of its 11-3/8%  Senior  Debentures (at a redemption
price of 105.69% of the principal amount plus interest accrued to the redemption
date) with lower-rate borrowings under the 1997 Credit Agreement.  Corporate and
other  expenses  were  essentially  unchanged.  The higher equity in earnings of
unconsolidated  joint ventures reflects the growth of Automotive  Products' U.S.
joint venture, the benefits from restructuring Air Conditioning Products' scroll
compressor venture,  the Company's financial services  partnership and increased
profitability of Plumbing Products' expanding joint ventures in China.

         The income tax provision for the third quarter of 1997 was $31 million,
or 35.3% of pretax income  (excluding  the  write-off of purchased  research and
development) compared with a provision of $29 million, or 34.5% of pretax income
in the third quarter of 1996.  The effective tax rates reflect  improvements  in
U.S. income in both nine-month  periods,  which enabled the Company to recognize
previously unrecognized tax benefits.

         As a result of the redemption of the 11-3/8% Senior  Debentures and the
retirement of debt upon completion of the 1997 Credit Agreement,  the first nine
months of 1997 included an  extraordinary  charge of $24 million,  net of income
taxes,  attributable  to call  premiums on the  debentures  and the write-off of
unamortized debt issuance costs.


Liquidity and Capital Resources


         Net cash provided by operating activities,  after cash interest paid of
$89 million,  was $226 million for the first nine months of 1997,  compared with
net cash  provided  of $200  million  for the  similar  period of 1996.  The $26
million  increase  resulted  primarily  from  higher  earnings   (excluding  the
write-off  of  purchased  research  and  development  from  1997  and the  asset
impairment  loss from  1996).  The  Company  acquired  the  Medical  diagnostics
businesses  for $212 million and made capital  expenditures  of $158 million for
the first nine months of 1997, including $1 million of investments in affiliated
companies,  compared with capital expenditures of $135 million in the first nine
months of 1996, including $12 million of investments in affiliated companies.

         In January  1997 the Company  entered  into the 1997 Credit  Agreement.
This agreement,  which expires in 2002, provides the Company with senior secured
credit facilities  aggregating $1.75 billion as follows: (a) a $750 million U.S.
dollar  revolving  credit facility and a $625 million  multi-currency  revolving
credit   facility  (the   "Revolving   Facilities")   and  (b)  a  $375  million
multi-currency  periodic  access  credit  facility.  Up to $500  million  of the
Revolving  Facilities  may be used  for  the  issuance  of  letters  of  credit.
Borrowings  under the Revolving  Facilities by their terms are  short-term.  The
1997 Credit Agreement and certain other American  Standard Inc. debt instruments
contain  restrictive  covenants  and other  requirements  with which the Company
believes it is currently in compliance. The 1997 Credit Agreement provides lower
interest costs,  significantly  increased borrowing  capacity,  less restrictive
covenants and no scheduled principal payments until maturity in 2002.
<PAGE>

         At September 30, 1997, the Company had  outstanding  borrowings of $694
million under the Revolving  Facilities.  There was $621 million available under
the Revolving  Facilities  after reduction for borrowings and for $60 million of
letters of credit  usage.  In addition,  at September  30, 1997,  the  Company's
foreign  subsidiaries had $71 million available under overdraft facilities which
can be withdrawn by the banks at any time.

         In the first  quarter of 1997 the  Company  completed  (i) a  secondary
public offering of 12,429,548  shares of the Company's common stock owned by ASI
Partners,   including  1,621,245  shares  sold  pursuant  to  the  underwriters'
over-allotment option (the "Secondary Offering"),  and (ii) the share repurchase
by the Company from ASI Partners,  then the Company's  largest  stockholder,  of
4,628,755  shares of the  Company's  common  stock for $208  million (the "Share
Repurchase").   In  conjunction  with  the  Secondary  Offering  and  the  Share
Repurchase, ASI Partners distributed to certain of its partners 3,780,353 shares
(the "Share  Distribution")  of the  Company's  common  stock that it owned.  In
addition,  the  Company  issued to ASI  Partners  5-year  warrants  to  purchase
3,000,000  shares of the Company's  common stock at $55 per share, $10 per share
over the public  offering price in the Secondary  Offering.  After the Secondary
Offering, the Share Distribution and the Share Repurchase, ASI Partners owned no
common stock of the Company and is no longer  entitled to  designate  any of the
Company's  directors.  All of the shares  sold in the  Secondary  Offering  were
previously   issued  and  outstanding  and  the  Company  received  no  proceeds
therefrom.

         On October 6, 1997, the Company  completed an additional  repurchase of
2,320,900 shares of its common stock for $100 million under a program  commenced
in May 1997.

         In January 1997 the Company announced  formation of its Medical Systems
Group to pursue  initiatives  in the  medical  diagnostics  field.  For the last
several  years  the  Company  has  supported  the  development  of  two  medical
diagnostics  products groups focusing on test instruments using laser technology
and  reagents.  On June 30, 1997,  the Company  acquired  the  European  medical
diagnostic  business of Sorin Biomedica  S.p.A.,  an affiliate of the Fiat Group
and all the outstanding shares of INCSTAR Corporation,  a biotechnology  company
based  in  Stillwater,  Minnesota.  In 1996  Sorin  and  Incstar  had  sales  of
approximately $80 million and $40 million,  respectively.  The aggregate cost of
the acquisition was approximately $212 million, including fees and expenses, and
was funded with borrowings under the 1997 Credit Agreement. This transaction has
been  accounted for as a purchase and the  financial  statements as of September
30, 1997 reflect  allocation of the purchase price.  Purchase price allocated to
the value of in-process  research and development  projects totaling $90 million
has been charged to operations in the third quarter of 1997.  Approximately  $50
million of goodwill  resulted after allocation of the purchase price to the fair
value of assets acquired and liabilities assumed.

         On  August  1,  1997,   American   Standard   Companies  Inc.  and  its
wholly-owned   subsidiary,   American  Standard  Inc.,  jointly  filed  a  shelf
registration  statement with the Securities and Exchange  Commission covering $1
billion  of  debt  securities  to be  offered  by  American  Standard  Inc.  and
unconditionally guaranteed by American Standard Companies Inc. Proceeds from the
sale of the securities, to be issued from time to time at market interest rates,
will be used for general corporate purposes including refinancing of outstanding
debt, stock repurchases,  acquisitions,  additions to working capital or capital
expenditures.  In late  October the Company  announced  its intent to offer $300
million of senior notes under its shelf  registration  and plans to proceed when
suitable market conditions exist.
<PAGE>

         As described in Note 6 of Notes to Consolidated Financial Statements in
the Company's  Annual Report on Form 10-K for the year ended  December 31, 1996,
there are pending  German Tax issues for the years 1984 through 1990.  There has
been no change in the status of these issues since that report was filed.



                           PART II. OTHER INFORMATION




Item 1.  Legal Proceedings.

                  For a  discussion  of  German  tax  issues  see  "Management's
           Discussion  and  Analysis  of  Financial  Condition  and  Results  of
           Operations  --  Liquidity  and Capital  Resources"  in Part I of this
           report which is incorporated herein by reference.


Item 5.   Other Information
                  For a  discussion  of the $1 billion  debt shelf  registration
           statement jointly filed by American  Standard  Companies Inc. and its
           wholly-owned  subsidiary,  American Standard Inc., on August 1, 1997,
           see "Management's  Discussion and Analysis of Financial Condition and
           Results of Operations  -- Liquidity and Capital  Resources" in Part I
           of this Report which is incorporated herein by reference.


Item 6.  Exhibits and Reports on Form 8-K

           (a)  Exhibits.  The  exhibits  listed  on the  accompanying  Index to
           Exhibits are filed as part of this quarterly report on Form 10-Q.

           (b) Reports on Form 8-K. During the quarter ended September 30, 1997,
           the  Company  filed a  Current  Report  on Form  8-K  describing  the
           acquisition  on June 30,  1997,  of the European  medical  diagnostic
           business of Sorin  Biomedica  S.p.A.,  an affiliate of the Fiat Group
           and  all  the   outstanding   shares  of   INCSTAR   Corporation,   a
           biotechnology company based in Stillwater, Minnesota.



<PAGE>


                                    SIGNATURE

               Pursuant to the  requirements  of the Securities  Exchange Act of
1934,  the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                AMERICAN STANDARD COMPANIES INC.






                                                          By:/s/ G. Ronald Simon
                                                   Vice President and Controller
                                                  (Principal Accounting Officer)












November 14, 1997


<PAGE>


                             AMERICAN STANDARD INC.
                                INDEX TO EXHIBITS



(The File Number of the Registrant, American Standard Companies Inc. is 1-11415)



Exhibit No.               Description
   (12)                   Computation of Ratios of Earnings to Fixed Charges

   (27)                   Financial Data Schedule
<PAGE>