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 June 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

               July 31, 1997                                       73,051,655
                                                                    (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 six months  ended June 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  six-month
periods of 1997 are not necessarily indicative of results for the entire year.
<TABLE>

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

                         (In millions except share data)
<CAPTION>

                                                           Three Months Ended       Six Months Ended
                                                                June 30,                June 30,
                                                              1997       1996         1997      1996
                                                             -----      -----        -----     ----
<S>                                                        <C>         <C>         <C>       <C>
SALES                                                       $1,589     $1,519       $2,950    $2,883
                                                            -------    ------       ------    ------

COST AND EXPENSES
  Cost of sales                                              1,163      1,136        2,181     2,167
  Selling and administrative expenses                          258        230          494       457
  Asset impairment loss                                          -          -            -       235
  Other expense                                                  7         11           12        18
  Interest expense                                              47         50           96       102
                                                            ------     -------      ------     ----- 
                                                             1,475      1,427        2,783     2,979
INCOME (LOSS) BEFORE INCOME TAXES
    AND EXTRAORDINARY ITEM                                     114         92          167       (96)
Income taxes                                                    40         33           60        50
                                                            ------     -------      ------     -----

INCOME (LOSS) BEFORE
    EXTRAORDINARY ITEM                                          74         59          107      (146)
Extraordinary loss on retirement of debt, net of tax            15          -           23         -
                                                            ------     -------      ------    -------

NET INCOME (LOSS)                                         $     59  $      59      $    84   $  (146)
                                                          ========   =========      ======    =======

INCOME (LOSS) PER COMMON SHARE AND
  COMMON SHARE EQUIVALENTS:
    Income (loss) before extraordinary item               $    .96  $     .75      $  1.38   $ (1.89)
    Extraordinary loss on retirement of debt                   .20          -          .30         -
                                                            ------     -------       -----     ------
    NET INCOME (LOSS)                                     $    .76  $     .75      $  1.08   $ (1.89)
                                                          ========  =========      =======    =======

Average number of outstanding common shares
  and common share equivalents                          76,564,766  77,876,499  77,634,740 77,595,299
<FN>


                                             See accompanying notes
</FN>
</TABLE>


<PAGE>




Item 1.  Financial Statements (continued)
<TABLE>

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

                                                     June 30,  December 31,
<S>                                                    <C>        <C> 
                                                       1997       1996
CURRENT ASSETS
Cash and cash equivalents                            $   51    $     60
Accounts receivable                                     902         800
Inventories
    Finished products                                   312         236
    Products in process                                  77          78
    Raw materials                                       102          95
                                                       ----         ---
                                                        491         409
Other current assets                                    121         117
                                                       ----         ---
TOTAL CURRENT ASSETS                                  1,565       1,386

FACILITIES, less accumulated depreciation;
    June 1997 - $583; Dec. 1996 - $577                  997       1,006
GOODWILL                                                799         875
OTHER ASSETS                                            487         253
                                                       ----         ---
TOTAL ASSETS                                        $ 3,848      $3,520
                                                     ======      ======

CURRENT LIABILITIES
Loans payable to banks                              $   812     $   109
Current maturities of long-term debt                     20          73
Accounts payable                                        455         469
Accrued payrolls                                        186         152
Other accrued liabilities                               475         434
                                                       ----         ---
TOTAL CURRENT LIABILITIES                             1,948       1,237

LONG-TERM DEBT                                        1,557       1,742
RESERVE FOR POSTRETIREMENT BENEFITS                     439         473
OTHER LIABILITIES                                       453         448
                                                       ----         ---
TOTAL LIABILITIES                                     4,397       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; 73,637,526 shares issued and
    outstanding in 1997; 78,572,638 in 1996               1           1
Capital surplus and other                               345         563
Accumulated deficit                                    (687)       (771)
Foreign currency translation effects                   (208)       (173)
                                                        ---        ----

TOTAL STOCKHOLDERS' DEFICIT                            (549)       (380)
                                                        ---         ---
                                                    $ 3,848      $3,520
                                                    =======      ======

<FN>

                             See accompanying notes
</FN>
</TABLE>

<PAGE>

Item    1.  Financial Statements (continued)
<TABLE>

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

                              (Dollars in millions)
<CAPTION>
                                                       Six Months Ended
                                                           June 30,
                                                       1997       1996
<S>                                                  <C>        <C>   
                                                       ----       ----
CASH PROVIDED (USED) BY:
  OPERATING ACTIVITIES:
    Income (loss) before extraordinary item          $ 107     $ (146)
    Asset impairment loss                                -        235
    Depreciation                                        63         60
    Amortization of goodwill                            14         14
    Non-cash interest                                   29         32
    Non-cash stock compensation                         12         17
    Changes in assets and liabilities:
      Accounts receivable                             (129)       (93)
      Inventories                                      (97)       (53)
      Accounts payable and other accruals               83         26
      Other assets and liabilities                     (14)       (45)
                                                       ----       ---
  Net cash provided by operating activities             68         47
                                                        ---        --

  INVESTING ACTIVITIES:
    Purchases of property, plant and equipment         (94)       (75)
    Investments in affiliated companies                 (1)        (2)
    Acquisition of medical diagnostic businesses      (210)         -
    Other                                               (2)        20
                                                        ---        --
  Net cash used by investing activities               (307)       (57)
                                                      -----       ---

  FINANCING ACTIVITIES:
    Repurchase of common stock                        (232)         -
    Proceeds from issuance of long-term debt           380          3
    Repayments of long-term debt, including
      redemption premiums                             (615)       (33)
    Net change in revolving credit facility            705        (21)
    Net change in other short-term debt                 11          4
    Other                                              (18)        (7)
                                                       ---        ---
  Net cash provided (used) by financing activities     231        (54)
                                                       ---       ----

Effect of exchange rate changes on cash and
  cash equivalents                                      (1)        (1)
                                                        ---        ---
Net decrease in cash and cash equivalents               (9)       (65)
Cash and cash equivalents at beginning of period        60         89
                                                       ---        ---
Cash and cash equivalents at end of period          $   51      $  24
                                                    =======     =====
<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 Repurchase 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.  See  Management's  Discussion  and
   Analysis of  Financial  Position and Results of  Operations  - Liquidity  and
   Capital Resources.



   Note 2.  Redemption of Senior Debentures

         In May 1997 the Company redeemed its $250 million  aggregate  principal
   amount of 11-3/8% Senior  Debentures (at a redemption price of 105.69% of the
   principal plus accrued  interest) with borrowings  under the 1997 bank credit
   agreement ("the 1997 Credit Agreement"). As a result, the Company incurred an
   extraordinary  charge of $15 million,  net of taxes, in the second quarter of
   1997, including call premiums on the debentures and the write-off of deferred
   debt issuance costs.  See  Management's  Discussion and Analysis of Financial
   Position and Results of Operations - Financial Review.


   Note 3.  Acquisition  of Medical Diagnostics Businesses

         On June 30, 1997, the Company acquired for  approximately  $210 million
   the European medical diagnostic business (the "Sorin Business" or "Sorin") of
   Sorin  Biomedica  S.p.A.,  an  affiliate  of the  Fiat  Group,  and  all  the
   outstanding  shares  of  INCSTAR  Corporation  ("Incstar"),  a  biotechnology
   company  based in  Stillwater,  Minnesota,  in which Sorin  Biomedica  S.p.A.
   indirectly owned a 52% interest.  This transaction will be accounted for as a
   purchase. The Company is in the process of valuing the assets and liabilities
   acquired and in connection  therewith will be required to write off the value
   of purchased  research and  development,  which the Company believes could be
   material. See Management's  Discussion and Analysis of Financial Position and
   Results of Operations - Liquidity and Capital Resources. At June 30, 1997 the
   $210 million  acquisition  cost was included in "Other Assets" on the Balance
   Sheet.



<PAGE>


   Note 4.  Impact of New Accounting Pronouncement

        Effective  December  31,  1997,  the  Company  will adopt  Statement  of
   Financial  Accounting  Standards  No. 128,  Earnings per Share,  ("FAS 128"),
   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. Earlier application is not permitted. Upon the adoption of
   FAS 128 at the end of 1997, primary income of $.96 and $1.38 per common share
   (based upon  76,564,766 and 77,634,740  average common and common  equivalent
   shares  outstanding,  respectively) for the three months and six months ended
   June 30, 1997, will be restated to reflect basic income of $.99 and $1.43 per
   common share,  respectively  (based upon  74,033,708 and  75,158,665  average
   common shares outstanding, respectively) and diluted income of $.96 and $1.38
   per share  (based upon  76,564,766  and  77,634,740  average  diluted  shares
   outstanding,  respectively). No restatement is necessary for the three months
   and six months ended June 30, 1996, as the effect of common stock equivalents
   was not material and their inclusion would have been antidilutive to the loss
   per share for the six months ended June 30, 1996.


   Note 5.  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  achieved  record sales and operating  income in the second
quarter  of 1997.  Sales  increased  5% to $1.6  billion  and  operating  income
increased 6% to $178  million.  Operating  income for the first half of 1997 was
$297 million, an increase of 4% over the $286 million of operating income in the
first half of 1996,  excluding an asset impairment  charge. In the first quarter
of 1996 the Company adopted FAS 121 related to impairment of long-lived  assets,
resulting  in a  non-cash  charge of $235  million,  approximately  90% of which
represented  the  write-down  of  goodwill,  for which there was no tax benefit.
Operating losses for Medical Systems for 1996 have been  reclassified to conform
with the 1997 presentation.
<TABLE>

                         SUMMARY SEGMENT AND INCOME DATA
                              (Dollars in millions)
                                   (Unaudited)
<CAPTION>
                                                      Three Months Ended   Six Months Ended
                                                          June 30,            June 30,
                                                          --------           --------
<S>                                                     <C>     <C>         <C>      <C> 
                                                        1997    1996        1997     1996
                                                        ----    ----        ----     ----
Sales:
    Air Conditioning Products                       $   983  $   924     $1,765    $1,682
    Plumbing Products                                   367      372        710       720
    Automotive Products                                 239      223        475       481
                                                        ---      ---        ---       ---

    Total  sales                                     $1,589   $1,519     $2,950    $2,883
                                                     ======   ======     ======    ======

Operating income (loss) before
    asset impairment loss:
        Air Conditioning Products                    $  118   $  112     $  187    $  173
        Plumbing Products                                33       31         55        50
        Automotive Products                              31       28         63        70
        Medical Systems                                  (4)      (5)        (8)       (7)
                                                        ---      ---        ---       ---
                                                        178      166        297       286
 Asset impairment loss:
      Air Conditioning Products                           -        -          -      (121)
      Plumbing Products                                   -        -          -      (114)
                                                        ---      ---     -------     ----
                                                          -        -          -      (235)
                                                        ---      ---        ---      ----
     Total operating income                             178      166        297        51
 Equity in net income (loss) of
     unconsolidated joint ventures                        3       (1)         6        (2)
 Interest expense                                       (47)     (50)       (96)     (102)
 Corporate and other expenses                           (20)     (23)       (40)      (43)
                                                        ---      ---        ---       ---

 Income (loss) before income taxes
     and extraordinary item                         $   114  $    92    $   167   $   (96)
                                                    =======  =======     =======   =======
</TABLE>


<PAGE>



     Results of Operations  for the Second  Quarter and First Six Months of 1997
Compared with the Second Quarter and First Six Months of 1996

         Consolidated  sales for the second quarter of 1997 were $1,589 million,
an increase of $70  million,  or 5% (8%  excluding  the  unfavorable  effects of
foreign  exchange),  from $1,519  million in the second  quarter of 1996.  Sales
increased 6% for Air Conditioning Products and 7% for Automotive Products, while
sales for Plumbing  Products  decreased 1% compared  with the second  quarter of
1996.  Operating  income for the second  quarter  of 1997 was $178  million,  an
increase of $12 million,  or 6% (9% excluding the unfavorable effects of foreign
exchange),  from $166 million in the second  quarter of 1996.  Operating  income
increased 4% for Air Conditioning  Products, 7% for Plumbing Products and 9% for
Automotive  Products.  The operating loss on Medical  Systems was slightly less,
reflecting lower development expenses.

         Consolidated  sales for the first half of 1997 were $2,950 million,  an
increase of $67 million,  or 2% (5% excluding the unfavorable effects of foreign
exchange), from $2,883 million in the first half of 1996. Sales increased 5% for
Air  Conditioning  Products  but  declined  1% for both  Plumbing  Products  and
Automotive  Products.  Operating  income was $297  million for the first half of
1997,  an  increase  of 4% (7%  excluding  the  unfavorable  effects  of foreign
exchange),  compared with $286 million in the first half of 1996  (excluding the
asset impairment charge previously mentioned). Operating income increased 7% for
Air  Conditioning  Products and 11% for  Plumbing  Products but declined 10% for
Automotive Products.

         Sales of Air  Conditioning  Products  increased  6% (8%  excluding  the
unfavorable  effects of foreign exchange) to $983 million for the second quarter
of 1997  from  $924  million  for the  second  quarter  of 1996 as a  result  of
continued   strength  in  U.S.   commercial   business  and  higher   volume  in
international  operations.  Sales of applied and unitary commercial  products in
the U.S. increased because of higher volumes resulting from improved markets and
gains in market share (for commercial unitary products),  partly offset by lower
volume for residential  products due to cooler than normal  temperatures in many
of the company's  markets.  International  sales for the second  quarter of 1997
increased  principally  because of higher volumes in Latin  America,  especially
Mexico,  and volume  increases  in the Far East and Middle  East.  Sales for Air
Conditioning  Products  for the  first  half of 1997  increased  by 5% to $1,765
million from $1,682 million in the first half of 1996, primarily for the reasons
cited for the second quarter increase.

         Operating income of Air Conditioning Products increased 4% (with little
effect from foreign exchange) to $118 million in the second quarter of 1997 from
$112 million in the 1996 quarter, primarily reflecting higher commercial product
volumes in the U.S.  Operating  income  for  international  operations  improved
modestly, reflecting increased volumes in Latin America, the Far East and Middle
East.  Operating  income  for the first half of 1997,  excluding  the 1996 asset
impairment  charge  explained  above,  increased 7% essentially  for the reasons
mentioned for the second quarter increase.

         Sales of Plumbing  Products  declined 1% to $367  million in the second
quarter of 1997 from $372 million in the second  quarter of 1996.  Excluding the
unfavorable  effects of foreign  exchange,  sales  increased  4% over the second
quarter of 1996,  reflecting an increase of more than 4% in international  sales
and a gain of 2% in the U.S. The international sales increase resulted primarily
from increased volume in Latin America.  Europe contributed a small increase but
continued to experience weak economic conditions, particularly in Germany, Italy
and  France.  Sales in the U.S.  increased  as a result  of  higher  volumes  of

<PAGE>

fittings sold to the retail market channel.  Sales of Plumbing  Products for the
first half of 1997  decreased  1% to $710 million from $720 million in the first
half of 1996. Excluding unfavorable foreign exchange effects, sales increased by
3% for the first  half of 1997  compared  with the 1996  period  due to the same
factors  affecting the second 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% (12% excluding the
unfavorable  effects of foreign  exchange) to $33 million for the second quarter
of 1997 from $31 million for the second quarter of 1996. In the U.S.,  operating
income improved because of higher sales, benefits of lower-cost product sourcing
from the Company's Mexican facilities and manufacturing  cost improvements.  For
international  operations,  operating  income  increased  primarily  because  of
reduced costs in Europe.  Operating income for the first half of 1997, excluding
the aforementioned 1996 asset impairment charge, increased by 11% (16% excluding
foreign exchange effects) from the first half of 1996, primarily for the reasons
mentioned  for  the  second  quarter  and  because  of the  first  quarter  1996
Philippines strike.

         Sales of Automotive  Products for the second  quarter of 1997 increased
7% (15% excluding the unfavorable  effects of foreign  exchange) to $239 million
from $223  million in the second  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  5%  overall  from the second
quarter  of 1996,  with a  particularly  strong  gain in  Germany.  Sales of ABS
systems to the Company's U.S. joint venture nearly  doubled,  reflecting the new
regulations  in effect  for such  systems  on new  heavy-duty  trucks.  Sales of
Automotive Products for the first half of 1997 declined slightly to $475 million
from $481 million in the first half of 1996.  Excluding the unfavorable  effects
of foreign exchange, first-half 1997 sales increased by 6% despite a small first
quarter decline, primarily for the reasons cited for the second quarter.

         Operating income for Automotive Products for the second quarter of 1997
was $31 million,  an increase of 9% (19%  excluding the  unfavorable  effects of
foreign exchange) from $28 million in the second quarter of 1996. This reflected
the higher sales and improved margins due to productivity  improvements,  offset
partly by the ongoing  effects of start-up costs on the new  electronic  braking
system product line. Operating income for Automotive Products for the first half
of 1997 was $63 million, a decrease of 10% (2% excluding the unfavorable effects
of foreign  exchange)  from $70  million  in the first half of 1996  principally
reflecting  declines  in the first  quarter of 1997 from the  record-high  first
quarter of 1996, offset partly by the aforementioned improvements for the second
quarter of 1997.


Financial Review

         Interest  expense  decreased  $3 million in the second  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 the $208  million  repurchase  of  shares  of the
Company's common stock in February 1997 (see "Liquidity and Capital Resources").
In addition,  on May 15, 1997, the Company  redeemed its $250 million  aggregate
principal amount of 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. The decrease in corporate
and other  expenses is primarily  attributable  to higher  equity in earnings of
unconsolidated joint ventures and reduced corporate expenses.  The higher equity

<PAGE>

income  reflects the growth of Automotive  Products'  U.S.  joint  venture,  the
benefits from restructuring Air Conditioning Products' scroll compressor venture
and increased  profitability of Plumbing  Products'  expanding joint ventures in
the PRC.

         The  income  tax  provision  for the  second  quarter  of 1997  was $40
million,  or 35.5% of pretax income compared with a provision of $33 million, or
36.3% of pretax income in the second quarter of 1996.  Those effective tax rates
reflect improvements in U.S. income in both periods which enabled the Company to
recognize previously unrecognized tax benefits.

         As a result of the  redemption of the 11-3/8%  Senior  Debentures,  the
second quarter of 1997 included an extraordinary  charge of $15 million,  net of
income taxes,  attributable  to call  premiums and the write-off of  unamortized
debt issuance  costs.  The first quarter of 1997 also included an  extraordinary
charge for the write-off of unamortized  debt issuance costs of $8 million,  net
of income taxes,  related to the retirement of debt upon  completion of the 1997
Credit Agreement.


Liquidity and Capital Resources


         Net cash provided by operating activities,  after cash interest paid of
$67 million, was $68 million for the first six months of 1997, compared with net
cash  provided of $47 million  for the similar  period of 1996.  The $21 million
increase  resulted  primarily  from higher  earnings.  Inventories  and accounts
receivable  increased  in both six  month  periods  reflecting  increased  sales
volumes  and the  seasonal  pattern  typical of the first half of the year.  The
Company  made  capital  expenditures  of $95 million for the first half of 1997,
including $1 million of  investments  in  affiliated  companies,  compared  with
capital  expenditures  of $77  million in the first half of 1996,  including  $2
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.

         At June 30,  1997,  the  Company  had  outstanding  borrowings  of $761
million under the Revolving  Facilities.  There was $554 million available under
the Revolving  Facilities  after reduction for borrowings and for $60 million of
letters of credit usage.  In addition,  at June 30, 1997, the Company's  foreign
subsidiaries had $60 million  available under overdraft  facilities which can be
withdrawn by the banks at any time.

<PAGE>

         On May 5, 1997, the Company announced a plan to repurchase from time to
time in the open  market up to $100  million  of its  common  stock  during  the
following twelve months. It is anticipated that shares  repurchased  pursuant to
this program will be available in connection  with the exercise of stock options
and other of the Company's  incentive  compensation  programs.  Through June 30,
1997,  the Company had  repurchased  $26 million of its common  stock under this
program.

         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,  the Company's largest stockholder at December
31, 1996,  of  4,628,755  shares of common stock of the Company 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  shares,  and the Company received no proceeds
therefrom.

         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 small medical
diagnostic  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 which Sorin Biomedica S.p.A. indirectly owned
a  52%  interest.   In  1996  the  Sorin  Business  and  Incstar  had  sales  of
approximately $80 million and $40 million,  respectively.  The aggregate cost of
the acquisition was approximately $210 million, including fees and expenses, and
was funded with borrowings  under the 1997 Credit  Agreement.  This  transaction
will be accounted for as a purchase and the Company is in the process of valuing
the assets and  liabilities  acquired  for purposes of  allocating  the purchase
price.  In connection  therewith,  the Company will be required to write off the
value of assets  associated with on-going  research and development  projects of
the  businesses  acquired.  Because  Sorin and Incstar  both have a  significant
number of research and  development  projects in process,  the Company  believes
that such write-off could be material.

         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.

         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.

<PAGE>


                           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  4.  Submission of Matters to a Vote of Security Holders.

         The Company's 1997 Annual Meeting of  Stockholders  ("Annual  Meeting")
was held on May 1, 1997. At the Annual Meeting,  the Company's  stockholders (a)
elected three Class II Directors  with terms  expiring at the  Company's  Annual
Meeting of  Stockholders in 2000, (b) approved The American  Standard  Companies
Inc.  Employee  Stock  Purchase  Plan and (c) ratified the  selection of Ernst &
Young LLP as  independent  certified  public  accountants of the Company and its
consolidated subsidiaries for 1997.

         Following  the Annual  Meeting,  three Class I Directors,  having terms
expiring in 1999, and three Class III Directors,  having terms expiring in 1998,
continued in office.
<TABLE>

         The following sets forth the results of voting at the Annual Meeting:

<CAPTION>
                                                                         Broker
                                                                          Non
                      Matters          For        Against   Abstentions  Votes
<S>                 <C>               <C>        <C>       <C>          <C>    
Election of Directors*
  - For a term expiring at the Annual
    Meeting of Stockholders in 2000
    Shigeru Mizushima                 58,082,853  472,403   *            -0-
    J. Danforth Quayle                58,147,591  407,665   *            -0-
    Joseph S. Schuchert               57,964,141  591,115   *            -0-

Approval of The American Standard
    Companies Inc. Employee Stock
    Purchase Plan                     52,782,2795,488,080     108,425    -0-
    -------------

Selection of Independent Accountants  58,387,018   57,846      98,341    -0-
------------------------------------
---------------------------
<FN>

* With  respect  to the  election  of  directors,  the form of  proxy  permitted
shareholders to check boxes indicating  votes either "For" or "Withheld",  or to
vote "For all  except"  and to name  exceptions;  votes  relating  to  directors
designated  above as "Against"  include votes cast as  "Withheld"  and for named
exceptions.
</FN>
</TABLE>
<PAGE>

Item 5.   Other Information
                  For a  discussion  of a $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 June 30, 1997, the
           Company filed no reports on Form 8-K.





<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)












August 12, 1997



<PAGE>


                        AMERICAN STANDARD COMPANIES INC.

                                INDEX TO EXHIBITS



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



                 Exhibit No.               Description
                    (27)                   Financial Data Schedule