<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, 20549

                                    FORM 10-K

/X/   Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
      Act of 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

/ /   Transition Report 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, NEW JERSEY        08855-6820
------------------------------------------------------------        ----------
(Address of principal executive office)                             (Zip Code)


Registrant's telephone number, including area code: (908) 980-6000
Securities registered pursuant to Section 12(b) of the Act:


  Title of each class                 Name of each exchange on which registered 
 --------------------                 -----------------------------------------
Common Stock, $.01 par value                      New York Stock Exchange, Inc.
 (and associated Common Stock Rights)

Securities registered pursuant to Section 12 (g) of the Act: None.

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. Yes  X  No
                                       ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge in definitive proxy or information statements
incorporated by reference in part III of this Form 10-K or any amendment to this
Form 10-K. [X]


The aggregate market value of the voting stock (Common Stock) held by
non-affiliates of the Registrant as of the close of business on March 11, 1996
was approximately $1.5 billion based on the closing sale price of the common
stock on the New York Stock Exchange consolidated tape on that date.


Number of shares outstanding of each of the Registrant's classes of Common
Stock, as of the close of business on March 11, 1996:


  Common Stock, $.01 par value                                77,032,003 Shares

Documents incorporated by reference:
                                                    Part of the Form 10-K into
  Document (Portions only)                      which document is incorporated.
  ------------------------                      -------------------------------
Annual Report to Stockholders for the year                  Parts I, II and IV
ended December 31, 1995

Definitive Proxy Statement dated March 28,
1996 for use in connection with the Annual Meeting
of Stockholders to be held on May 2 , 1996                            Part III
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                                TABLE OF CONTENTS

<TABLE>
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                                                                             PAGE
<S>        <C>                                                               <C>
                                     PART I

Item 1.    Business.                                                           1
Item 2.    Properties.                                                        15
Item 3.    Legal Proceedings.                                                 16
Item 4.    Submission of Matters to a Vote of Security Holders.               16
           Executive Officers of the Registrant.                              17

                                     PART II


Item 5.    Market for the Registrant's Common Equity and Related
              Stockholder Matters.                                            20
Item 6.    Selected Financial Data.                                           21
Item 7.    Management' s Discussion and Analysis of Financial Condition
               and Results of  Operations.                                    22

Item 8.    Financial Statements and Supplementary Data.                       22
Item 9.    Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure.                           22

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant.                23
Item 11.   Executive Compensation.                                            23
Item 12.   Security Ownership of Certain Beneficial Owners and Management.    23
Item 13.   Certain Relationships and Related Transactions.                    23


                                     PART IV

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K.   24
</TABLE>
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                                     PART I

ITEM 1.  BUSINESS


American Standard Companies Inc. (the "Company") is a Delaware corporation that
has as its only significant asset all the outstanding common stock of American
Standard Inc., a Delaware corporation ("American Standard Inc."). Hereinafter,
"American Standard" or "the Company" will refer to the Company, or to the
Company and American Standard Inc., including its subsidiaries, as the context
requires.

American Standard is a globally-oriented manufacturer of high quality,
brand-name products in three major product groups: air conditioning systems (57%
of 1995 sales); bathroom and kitchen fixtures and fittings (24% of 1995 sales);
and braking and control systems for medium-sized and heavy trucks, buses,
trailers and utility vehicles (19% of 1995 sales). American Standard is a market
leader in each of these business segments in the principal geographic areas in
which it competes. The Company's brand names include TRANE(R) and AMERICAN
STANDARD(R) for air conditioning systems, AMERICAN STANDARD(R), IDL STANDARD(R),
STANDARD(R) and PORCHER(R) for plumbing products and WABCO(R) and PERROT(R) for
braking and related systems. The Company emphasizes technologicall advanced
products such as air conditioning systems that utilize energy-efficient
compressors and environmentally-preferred refrigerants, water-saving plumbing
products and commercial vehicle braking and related systems (including antilock
braking systems, "ABS") utilizing electronic controls. At December 31, 1995,
American Standard had 102 manufacturing facilities in 34 countries.


OVERVIEW OF BUSINESS SEGMENTS

American Standard operates three business segments: Air Conditioning Products,
Plumbing Products and Automotive Products.


AIR CONDITIONING PRODUCTS. American Standard is a leading U.S. manufacturer of
air conditioning systems for both domestic and export sales, and also
manufactures air conditioning systems outside the United States. Air
conditioning products are sold primarily under the TRANE(R) and AMERICAN
STANDARD(R) names by the Trane Company ("Trane"). Sales to the commercial and
residential markets accounted for approximately 75% and 25%, respectively, of
Trane's total sales in 1995. Approximately 60% of Trane's sales in 1995 was in
the replacement, renovation and repair markets which have been less cyclical
than the new residential and commercial construction markets. Management
believes that Trane is well positioned for growth because of its high quality,
brand-name products, significant existing market shares, the introduction of new
product features such as electronic controls, the expansion of its broad
distribution network, conversion to products utilizing environmentally-preferred
refrigerants and expansion of operations to developing market areas throughout
the world, principally the Asia-Pacific area and Latin America.


PLUMBING PRODUCTS. American Standard is a leading manufacturer in Europe, the
U.S. and a number of other countries of bathroom and kitchen fixtures and
fittings for the residential and commercial construction markets and retail
sales channels. Plumbing Products manufactures and distributes its products
under the AMERICAN STANDARD(R), IDEAL STANDARD(R), 




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STANDARD(R) and PORCHER(R) names. Of Plumbing Products' 1995 sales, 71% w
derived from operations outside the United States and 29% from within.
Management believes that Plumbing Products is well positioned for growth due to
the high quality of its brand-name products, significant existing market shares
in a number of countries and the expansion of existing operations in developing
market areas throughout the world (principally the Far East, Latin America and
Eastern Europe).

AUTOMOTIVE PRODUCTS. Automotive Products ("WABCO") is a leading manufacturer,
primarily in Europe and Brazil, of braking and related systems for the
commercial and utility vehicle industry. Its most important products are
pneumatic braking systems and related electronic and other control systems
(including ABS) marketed under the WABCO(R) name for medium-size and heavy
trucks, tractors, buses, trailers and utility vehicles. WABCO supplies vehicle
manufacturers such as Mercedes-Benz, Volvo, Iveco (Fiat), RVI (Renault) and
Rover. Management believes that WABCO is well positioned to benefit from its
strong market positions in Europe and Brazil and increasing demand for ABS and
other sophisticated electronic control systems in a number of markets (including
the U.S. commercial market, where phase-in of ABS has been mandated beginning in
1997), as well as from the technological advances embodied in the Company's
products and its close relationships with a number of vehicle manufacturers.


STRATEGY

  GLOBALIZATION

American Standard has historically had a significant global presence. One of its
major strategic objectives is to continue to expand that presence through the
growth of existing operations and the establishment of new operations in
developing market areas in the Far East, Latin America and Eastern Europe. The
Company often uses joint ventures with local manufacturing and distribution
partners to facilitate risk sharing and to allow the Company to benefit from the
additional expertise of local market participants.


Air Conditioning Products continues to expand its operations in the Far East,
Latin America and Europe. It has recently established a joint venture in
Australia and continues to expand its sales forces in the Far East, Latin
America, the Middle East and India. In December 1995 the Company completed
arrangements for the development and expansion of its air conditioning business
in the People's Republic of China ("PRC"), to become an integrated manufacturer,
marketer and distributor of a broad range of air conditioning systems and
related products for residential and commercial applications. The Company and a
minority investor established ASI China Holdings Limited ("ASI China"), in which
the Company has an initial ownership interest of 64.4%, and formed A - S Air
Conditioning Products Limited ("ASAP"), owned 50.4% by ASI China, to establish
or acquire majority ownership in up to five manufacturing joint ventures as well
as sales and service businesses in the PRC. The Company contributed to ASAP its
50% interest (valued at $10 million) in a Hong Kong joint venture (which imports
and distributes air conditioning products) and has committed to contribute $20
million in cash, $8 million of which had been contributed as of December 31,
1995. The minority investor in ASI China and third-party investors in ASAP have
committed to contribute a total of $62 million, $26 million of which had been
contributed as of December 31, 1995. As of December 31, 1995, ASAP had acquired
majority ownership in three manufacturing joint ventures and in conjunction
therewith assumed debt of $21 million.





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Plumbing Products has entered new markets through joint ventures in Eastern
Europe, Spain and Portugal and is continuing to expand using this approach. In
1995 operations were expanded in France through the acquisition of Porcher (see
"Plumbing Products Segment"). Plumbing Products continues to expand its
operations in the PRC through its affiliate, A-S China Plumbing Products Limited
("ASPPL"), in which American Standard has a current ownership position of 28%
and effective control over day-to-day operations. ASPPL has expanded its
operations to Beijing, Tianjin, Shanghai and Guangzhou in order to provide a
full product line of fixtures, fittings, and bathtubs throughout the PRC market.
ASPPL has entered into seven joint ventures with local business concerns which,
together with one wholly-owned operation, have received business licenses from
Chinese government authorities. These include two chinaware manufacturing
facilities currently under construction, an existing chinaware manufacturing
facility being expanded, two operating fittings plants and two operating steel
tub factories. The Company's ownership interest in ASPPL is expected to increase
over time to at least 51% of the equity of ASPPL through reinvestment of
royalties and management fees and through additional stock purchases.


Automotive Products, headquartered in Europe, since 1993 has established a joint
venture in the PRC, acquired a business in Spain, is in the process of
establishing joint ventures in Eastern Europe and is expanding the volume of
business done through its existing joint ventures in Japan and the United
States.


  DEMAND FLOW(R) TECHNOLOGY*


To build on its position as a leader in each of its industries and to increase
sales and operating income, American Standard began in 1990 to apply Demand Flow
methods to all its businesses. Under Demand Flow, products are produced as and
when required by the customer, the production process is streamlined, and
quality control is integrated into each step of the manufacturing process. The
benefits of Demand Flow include better customer service, quicker response to
changing market needs, improved quality control, higher productivity, increased
inventory turnover rates and reduced requirements for working capital and
manufacturing and warehouse space.


As part of American Standard's strategy to integrate Demand Flow into all of its
operations, most of American Standard's approximately 43,000 employees worldwide
have been trained in Demand Flow, which has been implemented in substantially
all of American Standard's production facilities. In addition, American Standard
is implementing Demand Flow methods in its acquired operations such as Perrot, a
German brake manufacturer acquired in January 1994, and Porcher, acquired in
1995. American Standard is also applying Demand Flow to administrative functions
and is re-engineering its organizational structure to manage its businesses
based on processes instead of functions.


American Standard believes that its implementation of Demand Flow methods has
achieved significant benefits. Product cycle time (the time from the beginning
of the manufacturing of a product to its completion) has been reduced and, on
average, inventory turnover rates have more than tripled since 1990. Principally
as a result of the implementation of Demand Flow American Standard has reduced
inventories by 49% from December 31, 1989 while related sales have grown 57% for
the same period. American Standard further believes that as a result of the
introduction of Demand Flow employee productivity has risen significantly,
customer service
-----------------------------
*Demand Flow is a registered trademark of J-I-T Institute of Technology, Inc.


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has improved and, without reducing production capacity, the Company has been
able to free more than three million square feet of manufacturing and warehouse
space, allowing for expansion, plant consolidation or other uses.

AIR CONDITIONING PRODUCTS SEGMENT

Air Conditioning Products began with the 1984 acquisition by the Company of the
Trane Company, a manufacturer and distributor of air conditioning products since
1913. Air conditioning products are sold primarily under the TRANE(R) and
AMERICAN STANDARD(R) names. In 1995 Trane, with revenues of $2,953 million,
accounted for approximately 57% of the Company's sales and 49% of its operating
income. Outside the United States, Trane derived 21% of its sales in 1995 from
manufacturing operations and 7% from U.S. exports. Approximately 60% of Trane's
sales in 1995 was in the replacement, renovation and repair markets, which in
general are less cyclical than the new residential and commercial construction
markets.

Trane manufactures three general types of air conditioning systems. The first,
called "unitary," which is sold for residential and commercial applications, is
a factory-assembled central air conditioning system which generally encloses in
one or two units all the components to cool or heat, clean, dehumidify or
humidify, and move air. The second, called "applied," is typically
custom-engineered for commercial use and involves field installation of several
different components of the air conditioning system. Trane is a world leader in
both unitary and applied air conditioning products. The third type, called
"mini-split," is a small unitary air conditioning system, generally for
residential use, which operates without air ducts. Trane manufactures and
distributes mini-split units principally in the Far East and Europe.

Product and marketing programs have been, and are being, developed to increase
penetration in the growing replacement, repair, and servicing businesses, in
which margins are generally higher than on sales of original equipment. Much of
the equipment sold in the fast-growing air conditioning markets of the 1960's
and 1970's is reaching the end of its useful life. Also, equipment sold in the
1980's is likely to be replaced earlier than originally expected with
higher-efficiency products recently developed to meet required efficiency
standards and to capitalize on the availability of environmentally-preferred
refrigerants.

In May 1994 a subsidiary of the Company, Standard Compressors Inc., concluded
arrangements for a partnership, Alliance Compressors, formed in December 1993
with Heatcraft Technologies Inc., a subsidiary of Lennox International Inc., for
the manufacture of compressors for use in air conditioning and refrigeration
equipment. Each partner has a 50% interest in Alliance Compressors, which
initially is manufacturing reciprocating compressors in a section of the
Company's existing facility in Tyler, Texas. Construction has begun on a new
facility in Natchitoches, Louisiana, for the manufacture of a new scroll
compressor being developed for use primarily in residential air conditioners.

Many of the products manufactured by Trane utilize HCFCs and prior to 1994
utilized CFCs as refrigerants. Various federal and state laws and regulations,
principally the 1990 Clean Air Act Amendments, require the eventual phase-out of
the production and use of these chemicals because of their possible deleterious
effect on the earth's ozone layer if released into the atmosphere. Phase-in of
substitute refrigerants will require replacement or modification of much of the
air conditioning equipment already installed, which has created a new market
opportunity. In order to ensure that the Company's products will be compatible
with the substitute refrigerants, Trane has been working closely with the
manufacturers that are



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developing substitutes for those refrigerants being phased out. See
"General-Regulations and Environmental Matters."

Various federal and state statutes, including the National Appliance Energy
Conservation Act of 1987, as amended, impose energy efficiency standards for
certain of the Company's unitary air conditioning products. Although the Company
has been able to meet or exceed such standards to date, stricter standards in
the future could require substantial research and development expense and
capital expenditures to maintain compliance.

At December 31, 1995 Air Conditioning Products had 31 manufacturing plants in 9
countries, employing approximately 19,100 people.

Air Conditioning Products comprises three operating groups: Unitary Products,
North American Commercial, and International.

  UNITARY PRODUCTS GROUP

Unitary Products, which accounted for 37% of Air Conditioning Products' 1995
sales, manufactures and distributes products for commercial and residential
unitary applications in the United States. This group benefits the most from the
growth of the replacement market for residential and commercial air conditioning
systems. Other major suppliers in the unitary market are Carrier, Rheem, Lennox,
Goodman and Intercity Products.

Commercial unitary products range from 2 to 120 tons and include combinations of
air conditioners, heat pumps, and gas furnaces, along with variable-air-volume
equipment and integrated control systems. Typical applications are in retail
stores, small-to-medium-size office buildings, manufacturing plants,
restaurants, and commercial buildings located in office parks and strip malls.
These products are sold through commercial sales offices in 121 locations.
Residential central air conditioning products range from 1 to 5 tons and include
air conditioners, heat pumps, air handlers, furnaces, and coils. These products
are sold through independent wholesale distributors and Company-owned sales
offices in over 250 locations to dealers and contractors who sell and install
the equipment.

During 1994 and 1995 the Unitary Products Group successfully introduced several
new, products including a new line of outdoor condensing units for the AMERICAN
STANDARD(R) brand; a very high efficiency residential air conditioner; a new
furnace line; micro-electronic controlled large rooftop units; rooftop units
with special features that appeal to national accounts; and a large rooftop line
(27.5 tons to 50 tons). The commercial unitary business also concentrated on
enhancements and new capabilities for existing products.

The Company also markets an AMERICAN STANDARD(R) brand name product to serve
distributors who typically carry other products in addition to air conditioning
products.


  NORTH AMERICAN COMMERCIAL GROUP

North American Commercial Group, which accounted for 42% of Air Conditioning
Products' 1995 sales, manufactures and distributes products in the United States
for sale in the U.S. and Canada for air conditioning applications in larger
commercial, industrial, and institutional buildings. Other major suppliers of
commercial systems are Carrier, York, and McQuay.

North American Commercial Group distributes its products through 95 sales
offices. Thirty-four of these offices are Company-owned and 61 are franchised.
The Company acquired the



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Toronto, Canada, and St. Louis, Missouri offices in 1994 and the Albany, New
York, and Nashville, Tennessee offices in 1995. Through March of 1996 the
Company acquired the Grand Rapids, Michigan, Pittsburgh, Pennsylvania, and New
Haven, Connecticut, offices and expects to continue to acquire major sales
offices from its franchisees.

Over the last few years the North American Commercial Group has added additional
aftermarket business activities, such as emergency rentals of air conditioning
equipment. Also, the group has expanded its line to include components for
converting installed centrifugal chiller products to use more
environmentally-preferred refrigerants.


During 1994 and 1995 the Company continued its introduction of a number of newer
products such as the high-efficiency centrifugal chiller, an expanded air cooled
series R chiller line, and the new fan coil line. Integrated Comfort Systems
continue to grow as a percentage of total sales. Indoor air quality is emerging
as a significant new application to be served by the Company's products and
services.

  INTERNATIONAL GROUP

The International Group, which accounted for approximately 21% of Trane's 1995
sales, manufactures applied and unitary products in foreign facilities operated
by subsidiaries and joint ventures and exports many of the products manufactured
in the United States by the Unitary Products and North American Commercial
Groups. Like the North American Commercial Group, the International Group has an
extensive network of sales and service agencies, both Company-owned and
franchised, to provide maintenance and warranty service for its equipment
installed around the world.

Trane expects to continue the expansion of its presence outside the U.S. In the
Asia-Pacific region Trane recently established a joint venture in Australia as
well as three manufacturing joint ventures in the PRC (see "Globalization") and
expanded its operations in Malaysia. In the early 1990's it purchased an air
conditioning manufacturing and distribution firm in Taiwan, and entered into a
sales and manufacturing joint venture in Thailand. In Europe, in addition to its
plants in Epinal and Charmes, France, the group opened plants in Mirecourt and
in Colchester, U.K., in 1992. A joint venture in Egypt commenced operations in
1992 to serve markets in the Middle East.


PLUMBING PRODUCTS SEGMENT

Plumbing Products manufactures and distributes bathroom and kitchen fixtures and
fittings primarily under the IDEAL STANDARD(R), AMERICAN STANDARD(R),
STANDARD(R) and PORCHER(R), names. In 1995 Plumbing Products, with revenues of
$1,270 million, accounted for 24 % of the Company's sales and 22 % of its
operating income. Plumbing Products derived approximately 71 % of its total 1995
sales from operations outside the United States.

Of Plumbing Products' sales, 53% consists of vitreous china fixtures, 26%
consists of fittings (typically brass), 7% consists of bathtubs, and the
remainder consists of related plumbing products. Throughout the world these
products are generally sold through wholesalers and distributors and installed
by plumbers and contractors. In total the residential market accounts for
approximately 75% of Plumbing Products' sales, with the commercial and
industrial markets providing the remaining 25%.


Plumbing Products operates through four primary geographic groups: European
Plumbing Products, U.S. Plumbing Products, Americas International and the Far
East Group. Plumbing 



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Products' fittings operations, the Worldwide Fittings Group, which has primary
responsibility for faucet technology, product development and manufacturing,
with manufacturing facilities in Germany, Bulgaria, the U.S., and Mexico.
Worldwide Fittings sales and operating results are reported in the four primary
geographic groups within which it operates.

European Plumbing Products, which sells products primarily under the brand names
IDEAL STANDARD(R) and PORCHER(R), manufactures and distributes bathroom and
kitchen fixtures and fittings through subsidiaries or joint ventures in Germany,
Italy, France, England, Greece, the Czech Republic, Spain, Portugal, and Egypt.
In November 1995 the Company acquired substantially all of the remaining
outstanding common shares and convertible bonds of Etablissement Porcher
("Porcher"), a French manufacturer and distributor of plumbing products in which
the Company previously had an ownership interest of 32.88%. The $25 million cost
of the acquisition was funded with a borrowing under the Company' s revolving
credit facilities. In addition $31 million of Porcher debt was assumed. In 1995
Porcher had sales of $216 million.

U.S. Plumbing Products manufactures bathroom and kitchen fixtures and fittings,
selling under the brand names AMERICAN STANDARD(R) and STANDARD(R) in the United
States. Americas International manufactures bathroom and kitchen fixtures and
fittings, selling under the names AMERICAN STANDARD(R), IDEAL STANDARD(R), and
STANDARD(R) through its wholly owned operations in Mexico, Canada, and Brazil
and its majority-owned subsidiaries in Central America.

The Far East Group manufactures bathroom and kitchen fixtures and fittings,
selling under the names AMERICAN STANDARD(R), IDEAL STANDARD(R), and STANDARD(R)
through its wholly owned operations in South Korea, its majority-owned
operations in Thailand and the Philippines, and its manufacturing joint venture
in Indonesia and is developing a new joint venture in Vietnam. The Company is
also significantly expanding its operations in the PRC. See - "Globalization".

The market for the Company's plumbing products is divided into the replacement
and remodeling market and the new construction market. The replacement and
remodeling market accounts for about 60% of the European and U.S. groups' sales
but only about 40% of the sales of the Far East group, for which new
construction is more important. In the United States and Europe the replacement
and remodeling market has historically been more stable than the new
construction market and has shown moderate growth over the past several years.
In 1995 the new construction market in Europe declined slightly, especially in
Germany and France, after recovering somewhat in 1994 and 1993. In the U.S. the
new construction market hit its recent low in 1992 but had some recovery through
1995. The new construction market, in which the product selection is made by
builders or contractors, is more price-competitive and volume-oriented than the
replacement and remodeling market. In the replacement and remodeling market
consumers make the model selection and, therefore, this market is more
responsive to quality and design than price, making it the principal market for
higher-margin luxury products. Although management believes it must continue to
offer a full line of fixtures and fittings in order to support its distribution
system, Plumbing Products' current strategy is to focus on increasing its sales
of higher-margin products in the middle and upper segments of both the
remodeling and new construction markets.

Plumbing Products also has continued its programs to expand its presence in
high-quality showrooms and showplaces featuring its higher-end products in
certain major countries. These programs, along with expanded sales training
activities, have enhanced the image of the Company's products with interior
designers, decorators, consumers and plumbers.


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U.S. Plumbing Products is focusing on the unique needs of the growing mass
retail home center industry, using products sourced from several of the
Company's manufacturing locations throughout the Americas. This market channel
accounted for about 26% of U.S. Plumbing Products' sales in 1995, and this
proportion is expected to grow.

In an effort to capture a larger share of the replacement and remodeling market,
over the last few years Plumbing Products has introduced a variety of new
products designed to suit customer tastes in particular countries. New offerings
include additional colors and ensembles, bathroom suites from internationally
known designers, and electronically controlled products. Faucet technology is
centered on anti-leak, anti-scald and other features to meet emerging consumer
and legislative requirements.

Water-saving fixtures and fittings have been a major focus of Plumbing Products
for the past several years, particularly in light of recent water shortages
experienced in a number of areas of the U.S. The Company produces one of the
most extensive lines of water-saving fixtures available in the United States.
Manufacture of water-saving toilets was mandated for residential use by federal
law commencing in January 1994 and for commercial use in January 1997.

Many of the Company's bathtubs are made from a proprietary porcelain on metal
composite, AMERICAST(R), which has gained an increasing share of the worldwide
market. Products made from the composite AMERICAST(R) have the durability of
cast iron with only one-half the weight and are characterized by improved
resistance to breaking and chipping. AMERICAST(R) products are easier to ship,
handle and install and are less expensive to produce than cast iron products.
Use of this advanced composite was extended to kitchen sinks, bathroom
lavatories and acrylic surfaced products during the early 1990's.

At December 31, 1995, Plumbing Products employed approximately 18,000 people
and, including affiliated companies, had 57 manufacturing plants in 24
countries.

In the U.S. Plumbing Products has several important competitors, including
Kohler Company and Masco Corporation in selected product lines. There are also
important competitors in foreign markets, for the most part operating
nationally. Friederich Grohe GmbH, the major manufacturer of fittings in Europe,
is a pan-European competitor. In Europe Villeroy Boch and Sanitec are the major
fixtures competitors, and in the Far East Toto is the major competitor.

AUTOMOTIVE PRODUCTS SEGMENT

Operating under the WABCO(R) name, Automotive Products manufactures air brake
and related systems for the commercial vehicle industry in Europe and Brazil.
WABCO's most important products are pneumatic braking systems and related
electronic control and other systems and components (including ABS) for
medium-size and heavy trucks, tractors, buses, trailers and utility vehicles. In
1995 WABCO, with sales of $998 million, accounted for 19 % of the Company's
sales and 29% of its operating income. The Company believes that WABCO is a
worldwide technological leader in the heavy truck and bus braking industry.
Electronic controls, first introduced in ABS in the early 1980's, are
increasingly applied in other systems sold to the commercial vehicle industry.

WABCO's products are sold directly to vehicle and component manufacturers. Spare
parts are sold through both original equipment manufacturers and an independent
distribution network. Although the business is not dependent on a single or
related group of customers, 



                                       8
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sales of truck braking systems are dependent on the demand for heavy trucks.
Some of the Company's important customers are Mercedes-Benz, Volvo, Iveco
(Fiat), RVI (Renault) and Rover. Principal competitors are Knorr, Robert Bosch,
and Bendix.

The European market for new trucks, buses, trailers, and replacement parts
continued to recover in 1995 following a strong recovery in 1994 after
significant declines in 1992 and 1993. European legislation mandating the
phase-in of ABS beginning in 1991 has had a positive impact on sales and is
expected to continue to do so. The Brazilian market continued its recovery which
began in 1993 after declining in 1992.

Through 1995 the WABCO(R) ABS system, which the Company believes leads the
market, has been installed in approximately one million heavy trucks, buses, and
trailers worldwide since 1981. Annual sales volume in Europe has significantly
increased in recent years to approximately 175,000 units in 1995 and to 56,000
units annually in other markets, primarily the United States and Japan. In
addition, WABCO has developed electronically controlled pneumatic gear shifting
systems, electronically controlled air suspension systems, and automatic
climate-control and door-control systems for the commercial vehicle industry.
These systems have resulted in greater sales per vehicle for WABCO. Significant
progress was made in recent years in market acceptance of electronically
controlled systems. New products under development are an advanced electronic
braking system and additional electronic drive line control systems. In
addition, WABCO has developed and implemented an electronic data interchange
system, which links certain customers directly to WABCO's information systems,
providing timely, accurate information and just-in-time delivery to the
customer.

WABCO and affiliated companies have 14 manufacturing facilities and 7 sales
organizations operating in 17 countries. Principal manufacturing operations are
in Germany, France, the United Kingdom, and Brazil. WABCO has joint ventures in
the United States with Rockwell International (Rockwell WABCO), in Japan with
Sanwa Seiki (SANWAB), in India with TVS Group (Clayton Sundaram) and in the PRC.
There is also a licensee in the PRC.

In January 1994 the Company acquired Perrot, a German brake manufacturer.
Through this acquisition the Company is able to offer complete brake systems for
trucks, buses and trailers, especially in the important and growing air-disc
brake business.

Since 1991 ABS for commercial vehicles has been gaining acceptance in the United
States and Japan, where WABCO participates through its joint venture operations.
Rockwell WABCO is now a supplier of WABCO systems to Freightliner, Mack,
Volvo-GM, Kenworth, Peterbilt and other vehicle manufacturers in North America.
SANWAB supplies Hino, Nissan and trailer manufacturers in Japan. In most
European countries, ABS has become mandatory for commercial vehicles. In March
1995, the U.S. Department of Transportation, National Highway Traffic Safety
Administration, adopted amended federal regulations which require that new
medium and heavy vehicles be equipped with antilock brake systems (ABS). These
amended regulations will be phased in over a two-year period beginning in March
1997. WABCO believes it is in a good position to take advantage of this
opportunity.

At December 31, 1995, WABCO employed approximately 5,700 people.


                                       9
<PAGE>   12
BUSINESS SEGMENT DATA

Information concerning revenues and operating profit and loss attributable to
each of the Company's business segments and geographic areas is set forth in the
Company's 1995 Annual Report to Stockholders on page 14, "Five Year Financial
Summary" under the caption "Segment Data", on pages 15 though 19 under the
caption entitled "Management's Discussion and Analysis" and on page 41 under the
caption entitled "Segment Data" which are incorporated herein by reference, and
information concerning identifiable assets of each of the Company's business
segments is set forth on page 41 of the Company's 1995 Annual Report to
Stockholders under the caption entitled "Segment Data", which is incorporated
herein by reference.

GENERAL

  RAW MATERIALS

The Company purchases a broad range of materials and components throughout the
world in connection with its manufacturing activities. Major items include
steel, copper tubing, aluminum, ferrous and nonferrous castings, clays, motors,
and electronics. The ability of the Company's suppliers to meet performance and
quality specifications and delivery schedules is important to its operations.
The Company is working closely with its suppliers to integrate them into the
Demand Flow manufacturing process by developing with them just-in-time supply
delivery schedules to coordinate with the Company's customer demand and delivery
schedules. The Company expects this closer working relationship to result in
better control of inventory quantities and quality and lower related overhead
and working capital costs. The energy and materials required for its
manufacturing operations have been readily available, and the Company does not
foresee any significant shortages.

  PATENTS, LICENSES AND TRADEMARKS

The Company's operations are not dependent to any significant extent upon any
single or related group of patents, licenses, franchises or concessions. The
Company's operations also are not dependent upon any single trademark, although
some trademarks are identified with a number of the Company's products and
services and are of importance in the sale and marketing of such products and
services. Some of the more important of the Company's trademarks are:

<TABLE>
<CAPTION>
     Business Segment                      Trademark
     ----------------                      ---------
     <S>                                <C>
        Air Conditioning Products       TRANE(R)
                                        AMERICAN STANDARD(R)
        Plumbing Products               AMERICAN STANDARD(R)
                                        IDEAL STANDARD(R)
                                        STANDARD(R)
                                        PORCHER(R)
        Automotive Products             WABCO(R)
                                        WABCO WESTINGHOUSE(R)
                                        CLAYTON DEWANDRE
                                        PERROT(R)
</TABLE>

The Company from time to time has granted patent licenses to, and has licensed
technology from, other parties.


                                       10
<PAGE>   13
  RESEARCH AND PRODUCT DEVELOPMENT

The Company made expenditures of $133 million in 1995, $123 million in 1994,
$114 million in 1993, for research and product development and for product
engineering. The expenditures for research and product development only were $49
million in 1995, $44 million in 1994 and $47 million in 1993 and were incurred
primarily by Automotive Products and Air Conditioning Products. Automotive
Products, which expended the largest amount, has conducted research and
development in recent years on advanced electronic braking systems, heavy-duty
disc brake systems, and additional electronic control systems for commercial
vehicles. Air Conditioning Products' research and development expenditures were
primarily related to alternative, environmentally-preferred refrigerants,
compressors, heat transfer surfaces, air flow technology, acoustics and
micro-electronic controls. Any amount spent on customer sponsored research and
development activities in these periods was insignificant.

  REGULATIONS AND ENVIRONMENTAL MATTERS


The Company's U.S. operations are subject to federal, state and local
environmental laws and regulations that impose limitations on the discharge of
pollutants into the air, water and soil and establish standards for the
treatment, storage and disposal of solid and hazardous wastes. A number of the
Company's plants are in the process of making changes or modifications to comply
with such laws and regulations as well as undertaking response actions to
address soil and groundwater issues at certain of its facilities. The Company is
a party to a number of remedial actions under various federal and state
environmental laws and regulations that impose liability on companies to clean
up, or contribute to the cost of cleaning up, sites at which hazardous wastes or
materials were disposed or released, including approximately 30 proceedings
under the Comprehensive Environmental Response, Compensation and Liability Act
and similar state statutes in which the Company has been named a potentially
responsible party or a third party by a potentially responsible party.
Expenditures in 1993, 1994 and 1995 to evaluate and remediate such sites were
not material. On the basis of the Company's historical experience and
information currently available, the Company believes that these environmental
actions will not have a material adverse effect on its financial condition,
results of operations or liquidity.

Additional sites may be identified for environmental remediation in the future,
including properties previously transferred by the Company and with respect to
which the Company may have contractual indemnification obligations. The Company
cannot estimate at this time the ultimate aggregate costs of all remedial
actions because of (a) uncertainties surrounding the nature and application of
environmental regulations, (b) the Company's lack of information about
additional sites at which it may be listed as a potentially responsible party,
(c) the level of clean-up that may be required at specific sites and choices
concerning the technologies to be applied in corrective actions, (d) the number
of contributors and the financial capacity of others to contribute to the cost
of remediation at specific sites and (e) the time periods over which remediation
may occur.

On May 31, 1994, the Company's Salem, Ohio plant received a Request for
Information Pursuant to the Clean Air Act from the U.S. Environmental Protection
Agency (Region 5). This request was fully complied with by July 22, 1994. During
the development of the response, American Standard noted several questions
concerning the status of certain air sources. On August 2, 1994, American
Standard Inc. proposed to enter consensual "Findings and Orders" with the Ohio
Environmental Protection Agency to resolve these questions. On November 17, 1995
the Company reached a verbal agreement with the Ohio EPA which would


                                       11
<PAGE>   14
result in the Company being assessed a penalty of $25,000. The Company expects
to finalize this agreement in the first half of 1996.

The Company's international operations are also subject to various environmental
statutes and regulations. Generally, these requirements tend to be no more
restrictive than those in effect in the United States. The Company believes it
is in substantial compliance with such existing domestic and foreign
environmental statutes and regulations.

On December 15, 1992 the Company, along with 15 other major manufacturers of
plumbing fittings, was sued in the Superior Court of the State of California,
County of San Francisco by the State of California. The same companies were sued
in a companion case, filed the same day, by the Natural Resources Defense
Council and a second environmental group. In each case, plaintiffs sought
injunctive relief, civil penalties and compensatory damages, alleging, inter
alia, that faucets sold by the parties discharged lead into drinking water in
excess of minimum standards allegedly established by Proposition 65. Both cases
were settled in November of 1995 for a minimal amount without any admission of
liability. The Company agreed that 95% of its fittings sold in California would
meet agreed upon lead leachate standards by the year 2000. The majority of the
Company's fittings already meet these standards and the Company foresees no
difficulties in meeting the settlement deadlines. No penalties, restitution or
other damages were paid.

In September 1987 the United States became a signatory to an international
agreement known as the Montreal Protocol on Substances that Deplete the Ozone
Layer (the "Montreal Protocol"). The Montreal Protocol requires its signatories
to reduce production and consumption of CFCs. In November 1992 the Montreal
Protocol was amended in Copenhagen, Denmark, to phase out all except critical
uses of CFCs by January 1, 1996, and to limit consumption of HCFCs beginning in
1996 and phase them out completely by 2030. In 1988 the EPA issued regulations
implementing the Montreal Protocol in the United States. Mexico, the Federal
Republic of Germany, the United Kingdom, France and other countries have also
become signatories to the Montreal Protocol. The manner in which these countries
implement the Montreal Protocol and regulate CFCs could differ from the approach
taken in the United States.

The 1990 Clean Air Act Amendments (the "CAAA") implement the Montreal Protocol
by establishing a program for limiting the production and use of CFCs and other
ozone-depleting chemicals. Under the CAAA the production and consumption of
"Class I substances," including CFCs, are being phased out, and the production
of most was discontinued December 31, 1995 pursuant to final action of the EPA.

The EPA has taken final action to phase out production of the long-lived HCFCs,
such as HCFC-22, for use in new equipment by 2010 and totally by 2020, while
adopting the current CAAA schedule for the short-lived HCFCs, such as HCFC-123,
by phasing them out for use in new equipment by 2020 and completely out of
production in 2030.

The Company derived significant revenues in 1993 and prior years from sales of
air conditioning products utilizing Class I substances, particularly CFC-11.
However, the more recent versions of these products are designed to operate with
substitute short-lived Class II substances, such as HCFC-123, which, the Company
believes, under current proposals is not likely to be subject to a phase-out
accelerated from the 2020/2030 schedule of the CAAA, or with refrigerants that
do not affect ozone and are not regulated at all. Beginning with orders accepted
after January 1, 1993, Air Conditioning Products ceased selling CFC-11 with any
of its products.


                                       12
<PAGE>   15
The Company continues to derive substantial revenues from servicing and
repairing installed equipment that use Class I substances. The emissions from
servicing and repairing of equipment that use Class I substances were regulated
by the EPA beginning in mid-1993, although the Company does not expect these
regulations to have a material adverse effect on its financial condition or
results of operations. The Company believes that these regulations will have the
effect of generating additional product sales and parts and service revenues, as
existing air conditioning equipment operating on CFCs is converted to operate on
environmentally-preferred refrigerants or replaced, although this is likely to
happen only over a number of years and the Company is unable to estimate the
magnitude or timing of such additional conversion or replacements. In addition,
the Company currently offers a number of products that improve the operation of
existing installed equipment using alternative refrigerants.

Prior to the effectiveness of any prohibition on use of Class I or Class II
substances it will be necessary for the Company and its competitors to address
the need to substitute permitted refrigerants for the Class I and Class II
substances used in their products. Adoption of the new refrigerants will require
replacement or modification of much of the air conditioning equipment already
installed. The Company has been working closely with the manufacturers of
refrigerants that are developing substitutes for the CFCs and HCFCs to be phased
out in order to ensure that its products will be compatible with the
substitutes. Although the Company believes that its commercial products
currently in production will not require substantial modification to use
substitutes, residential and light commercial products produced by the Company
and its competitors may require modification for substitute refrigerants.

   EMPLOYEES

The Company employed approximately 43,000 people (excluding employees of
unconsolidated joint venture companies) at December 31, 1995. The Company has a
total of 18 labor union contracts in North America (covering approximately 8,500
employees), six of which expire in 1996 (covering approximately 4,800 employees)
and four of which expire in 1997 (covering approximately 1100 employees). One of
the contracts expiring in 1996 has already been successfully renegotiated. There
can be no assurance that the Company will successfully negotiate the remaining
labor contracts expiring during 1996 without work stoppages. However, the
Company does not anticipate any problems in renegotiating those contracts that
would materially affect its results of operations.

In 1994, 230 Plumbing Products employees went on strike for 64 days at the
Landsdowne (Toronto), Canada chinaware manufacturing plant. In 1991, 1,200 Air
Conditioning Products employees went on strike for 54 days at the LaCrosse,
Wisconsin facility and, in 1989, 1,300 Air Conditioning Products workers went on
strike for 40 days at the Clarksville, Tennessee facility. Other than these
strikes, the Company has not experienced any other significant work stoppages in
North America since 1985.

The Company also has a total of 40 labor contracts outside North America
(covering approximately 18,000 employees). In early 1996 there was a
5-week work stoppage at the two chinaware manufacturing plants of the
Philippines plumbing products subsidiary, involving 700 employees, where the
Company has announced plans to combine the two facilities. Other than the
Philippines work stoppage, the Company has not experienced any significant work
stoppage in the last five years outside North America.


                                       13
<PAGE>   16
Although the Company believes relations with its employees are generally
satisfactory, there can be no assurance that the Company will not experience
significant work stoppages in the future or that its relations with employees
will continue to be satisfactory.

   CUSTOMERS

The business of the Company taken as a whole is not dependent upon any single
customer or a few customers.

   INTERNATIONAL OPERATIONS

The Company conducts significant non-U.S. operations through subsidiaries in
most of the major countries of Western Europe, Canada, Brazil, Mexico, Central
American countries, the PRC, Malaysia, the Philippines, South Korea, Thailand,
Taiwan, Australia and Egypt. In addition, the Company conducts business in these
and other countries through affiliated companies and partnerships in which the
Company owns 50% or less of the stock or partnership interest.

Because the Company has manufacturing operations in 34 countries, fluctuations
in currency exchange rates may have a significant impact on its financial
statements. Such fluctuations have much less effect on local operating results,
however, because the Company for the most part sells its products within the
countries in which they are manufactured. The asset exposure of foreign
operations to the effects of exchange volatility has been partly offset by the
denomination in foreign currencies of a portion of the Company's borrowings.


                                       14
<PAGE>   17
ITEM 2.   PROPERTIES

At December 31, 1995 the Company conducted its manufacturing activities through
102 plants in 34 countries, of which the principal facilities are as follows:


<TABLE>
<CAPTION>
     BUSINESS
     SEGMENT               LOCATION                      MAJOR PRODUCTS MANUFACTURED AT LOCATION
     -------               --------                      ---------------------------------------
<S>                        <C>                           <C>
Air Conditioning           Clarksville, TN                      Commercial unitary air conditioning
  Products                 Fort Smith, AK                       Commercial unitary air conditioning
                           La Crosse, WI                        Applied air conditioning systems
                           Lexington, KY                        Air handling products
                           Macon, GA                            Commercial air conditioning systems
                           Pueblo, CO                           Applied air conditioning systems
                           Rushville, IN                        Air handling products
                           Trenton, NJ                          Residential gas furnaces and air handlers
                           Tyler, TX                            Residential air conditioning
                           Waco, TX                             Water source heat pumps and air handling
                                                                  products
                           Charmes, France                      Applied air conditioning systems
                           Epinal, France                       Applied air conditioning systems
                           Mirecourt, France                    Mini-splits and air handling products

Plumbing Products          Salem, OH                            Enameled-steel fixtures and acrylic bathtubs
                           Tiffin, OH                           Vitreous china
                           Trenton, NJ                          Vitreous china
                           Toronto, Canada                      Vitreous china and enameled-steel fixtures
                           Hull, England                        Vitreous china and acrylic bathtubs
                           Middlewich, England                  Vitreous china
                           Dole, France                         Vitreous china and acrylic bathtubs
                           Neuss, Germany                       Vitreous china
                           Wittlich, Germany                    Brass plumbing fittings
                           Orcenico, Italy                      Vitreous china
                           Brescia, Italy                       Vitreous china
                           Mexico City, Mexico                  Vitreous china, water heaters
                           Monterrey, Mexico                    Brass plumbing fittings
                           Manila, Philippines                  Vitreous china
                           Seoul, South Korea                   Brass plumbing fittings
                           Bangkok, Thailand                    Vitreous china
Automotive                 Campinas, Brazil                     Braking equipment
 Products                  Leeds, England                       Braking equipment
                           Claye-Souilly, France                Braking equipment
                           Hanover, Germany                     Braking equipment
                           Mannheim, Germany                    Foundation brakes
</TABLE>


Except for the properties located in Mirecourt, France and Manila, Philippines,
all of the plants described above are owned by the Company or a subsidiary. The
properties listed above located in the United States, Canada, and the U.K. are
subject to mortgages securing the Company's obligations under its bank credit
agreement which was amended and restated effective February 9, 1995 (the "1995
Credit Agreement"). The Company is obligated to mortgage the properties listed
above located in France (other than the property located in Mirecourt) to secure
certain obligations under the 1995 Credit Agreement and related documents. In
addition, to the extent required by the respective indentures pursuant to which
certain debt securities of American Standard Inc. were issued, the obligations
of American 



                                       15
<PAGE>   18
Standard Inc. under such debt instruments are secured by mortgages on principal
U.S. properties equally and ratably with indebtedness under the 1995 Credit
Agreement. Through joint ventures, the Company participates in the operation (or
is in the process of constructing) up to ten plants in the PRC, and operates one
plant in each of Indonesia and India. The Company considers that its properties
are generally in good condition, are well maintained, and are generally suitable
and adequate to carry on the Company's business.

In 1995 several Air Conditioning Products' plants operated at or near capacity
and others operated moderately below capacity.

In 1995 Plumbing Products' plants worldwide operated at levels of utilization
which varied from country to country but overall were satisfactory.

Automotive Products' plants generally operated moderately below capacity in
1995.

ITEM 3.  LEGAL PROCEEDINGS

American Standard Inc. is the defendant in a lawsuit brought by Entech Sales &
Service, Inc., on behalf of an alleged class of contractors engaged in the
service and repair of commercial air conditioning equipment. The suit, filed on
March 5, 1993 in the United States District Court for the Northern District of
Texas, alleges principally that the manner in which Air Conditioning Products
distributes repair service parts for its equipment violates the Federal
antitrust laws. It demands $680 million in damages (which would be subject to
trebling under the antitrust laws) and injunctive relief. American Standard Inc.
has filed an answer denying all claims of violation and is defending itself
vigorously. In July 1994, the district court denied class certification with
respect to two of the three violations alleged in the suit. These alleged
violations may now only be asserted by Entech on its own behalf. With respect to
the one claim that was certified as a class action, alleging a price fixing
conspiracy, management believes, on the basis of the facts known to it that the
claim is without merit. In management's opinion the litigation will not have any
material adverse effect on the financial position, cash flows, or results of
operations of the Company.

For a discussion of German tax issues see Note 5 of Notes to Consolidated
Financial Statements incorporated by reference herein (see Item 14(a) of Part IV
hereof). For a discussion of environmental issues see "Item 1. Business -
General - Regulations and Environmental Matters."


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of the Company's stockholders during the
fourth quarter of 1995.


                                       16
<PAGE>   19
EXECUTIVE OFFICERS OF THE REGISTRANT

In reliance on General Instruction G to Form 10-K, information on executive
officers of the Registrant is included in this Part I. The following table sets
forth certain information as of March 11, 1996 with respect to each person who
is an executive officer of the Company:


<TABLE>
<CAPTION>
             Name                     Age                           Position with Company
             ----                     ---                           ---------------------
<S>                                   <C>          <C>
Emmanuel A.  Kampouris                 61          Chairman, President and Chief Executive Officer, and Director
Horst Hinrichs                         63          Senior Vice President, Automotive Products, and Director
George H.  Kerckhove                   58          Senior Vice President, Plumbing Products, and Director
Fred A.  Allardyce                     54          Vice President and Chief Financial Officer
Alexander A.  Apostolopoulos           53          Vice President and Group Executive, Plumbing Products,
                                                     Americas International
Thomas S.  Battaglia                   53          Vice President and Treasurer
Gary A.  Brogoch                       45          Vice President and Group Executive, Plumbing Products,
                                                     PRC
Roberto Canizares M.                   46          Vice President, Air Conditioning Products, Asia Pacific Region
Wilfried Delker                        55          Vice President and Group Executive,  Plumbing Products,
                                                     Worldwide Fittings
Adrian B.  Deshotel                    50          Vice President, Human Resources
Peter Enss                             51          Vice President, Automotive Products, Germany
Cyril Gallimore                        66          Vice President, Systems and Technology
Luigi Gandini                          57          Vice President, Special Projects
Daniel Hilger                          55          Vice President, Air Conditioning Products,
                                                     Middle East and Africa Region
Frederick W.  Jaqua                    74          Vice President, Special Counsel and Assistant Secretary
Richard A.  Kalaher                    55          Vice President, General Counsel and Secretary
W.  Craig Kissel                       45          Vice President and Group Executive, Air Conditioning Products,
                                                     Unitary Group
William A.  Klug                       63          Vice President and Group Executive, Air Conditioning Products,
                                                     International
Jean-Claude Montauze                   49          Vice President, Automotive Products, France
G.  Eric Nutter                        60          Vice President and Group Executive, Plumbing Products, U.S.
Raymond D.  Pipes                      46          Vice President and Group Executive, Plumbing Products,
                                                     Far East Region
Bruce R.  Schiller                     51          Vice President, Air Conditioning Products,
                                                     Compressor Business
James H.  Schultz                      47          Vice President and Group Executive, Air Conditioning Products,
                                                     North American Commercial Group
G.  Ronald Simon                       54          Vice President and Controller
Benson I.  Stein                       58          Vice President, General Auditor
Wolfgang Voss                          49          Vice President and Group Executive, Plumbing Products, Europe
Robert M.  Wellbrock                   49          Vice President, Taxes
</TABLE>

Each officer of the Company is elected by the Board of Directors to hold office
until the first Board meeting after the Annual Meeting of Stockholders next
succeeding his election.

None of the Company's officers has any family relationship with any director or
other officer. "Family relationship" for this purpose means any relationship by
blood, marriage or adoption, not more remote than first cousin.

Set forth below is the principal occupation of each of the executive officers
named above during the past five years (except as noted, all positions are with
the Company and American Standard Inc.).


                                       17
<PAGE>   20
Mr. Kampouris was elected Chairman in December 1993 and President and Chief
Executive Officer in February 1989. He is also a director of Daido Hoxan Inc.
Mr. Kampouris has served as a director of the Company since July 1988.

Mr. Hinrichs was elected Senior Vice President, Automotive Products, in December
1990. Mr. Hinrichs has served as a director of the Company since March 1991.

Mr. Kerckhove was elected Senior Vice President, Plumbing Products, in June
1990. Mr. Kerckhove has served as a director of the Company since September
1990.

Mr. Allardyce was elected Vice President and Chief Financial Officer in January
1992. Prior thereto he served as Vice President and Controller from February
1983 until December 1991.

Mr. Apostolopoulos was elected Vice President and Group Executive, Plumbing
Products, Americas International, in December 1990.

Mr. Battaglia was elected Vice President and Treasurer in September 1991. Prior
thereto he was Assistant Treasurer from June 1977.

Mr. Brogoch was elected Vice President and Group Executive, Plumbing Products in
the PRC, in December 1994. Prior thereto he served as Vice President of Plumbing
Products' operations in the PRC from August 1993 until December 1994. Previously
he served as Vice President of Finance and Planning, European Plumbing Products
from August 1991 until August 1993 and as Managing Director of the Company's
Indonesian joint venture from November 1986 to August 1991.

Mr. Canizares was elected Vice President, Air Conditioning Products' Asia
Pacific Region, in December 1990.

Mr. Delker was elected Vice President and Group Executive, Plumbing Products,
Worldwide Fittings, in April 1990.

Mr. Deshotel was elected Vice President, Human Resources, in January 1992. Prior
thereto he served as Group Vice President, Human Resources, for U.S. Plumbing
Products from January 1980 until December 1991.

Mr. Enss was elected Vice President, Automotive Products in Germany, in July
1995. Prior thereto he served as Vice President, Business Development, and Group
Executive of the WABCO Austrian group of companies from January 1994 to June
1995 and in various executive capacities in the WABCO Automotive Products Group
headquarters in Brussels from January 1991 to December 1993.

Mr. Gallimore was elected Vice President, Systems and Technology, in December
1990.

Mr. Gandini has served as Vice President, Special Projects since October 1995,
having been elected Vice President and Group Executive, European Plumbing
Products, in July 1990.

Mr. Hilger was elected Vice President, Air Conditioning Products, Middle East
and Africa Region, in June 1988.

Mr. Jaqua was elected Vice President, Special Counsel and Assistant Secretary in
March 1995. Prior to that he was Vice President, General Counsel and Secretary
since April 1989.


                                       18
<PAGE>   21
Mr. Kalaher was elected Vice President, General Counsel and Secretary in March
1995, having served as Acting General Counsel and Acting Secretary since joining
the Company in February 1994. Prior thereto, he was Vice President and General
Counsel of AMAX Inc. from 1991 to 1994 and Vice President and Associate General
Counsel from 1985 to 1991.

Mr. Kissel was elected Vice President in charge of Air Conditioning Products'
Unitary Products Group in January 1992, becoming Group Executive in March 1994.
He served as Vice President, Sales and Distribution, for Air Conditioning
Products, from December 1990 until January 1992.

Mr. Klug was elected Vice President in 1985 and has been Group Executive in
charge of Air Conditioning Products' Trane International since December 1993. He
served as Group Executive, Unitary Products Group, from April 1990 until
December 1993.

Mr. Montauze was elected Vice President, Automotive Products in France, in
October 1994. He served as Vice President of Finance and Controller of
Automotive Products at the Brussels headquarters from September 1989 until
September 1994.

Mr. Nutter was elected Vice President and Group Executive, U.S. Plumbing
Products, in May 1995. Prior thereto he served as Vice President, Automotive
Products in the United Kingdom from January 1992 until April 1995 and as Vice
President and General Manager of WABCO Automotive U.K. Limited, the United
Kingdom automotive subsidiary of the Company from March 1991 until December 1991
and Group Managing Director of the United Kingdom automotive subsidiary from
June 1987 until February 1991.

Mr. Pipes was elected Vice President and Group Executive for the Far East Region
of Plumbing Products in May 1992. Prior thereto he served as Managing Director
of American Standard Inc.'s Philippine subsidiary from May 1990 until April
1992.

Mr. Schiller was elected Vice President, Compressor Business (Air Conditioning
Products) in March 1994. Prior thereto he served as General Manager, Compressor
Business Group, from May 1993 to February 1994 and Manager and then General
Manager of the Company's Tyler, Texas, facility from March 1986 to April 1993.

Mr. Schultz was elected Vice President and Group Executive, North American
Commercial Group of Air Conditioning Products, in 1987.

Mr. Simon was elected Vice President and Controller in January 1992. Prior
thereto he served as Vice President and Controller of the Air Conditioning
Products' North American Commercial Group from December 1984 to December 1991.

Mr. Stein was elected Vice President, General Auditor, in March 1994; from
December 1986 to February 1994 he was the Company's General Auditor.

Mr. Voss was elected Vice President and Group Executive, European Plumbing
Products in July 1995, to succeed Mr. Gandini in October 1995. Prior thereto, he
served as Process Owner, Order Fulfillment from January 1994 to June 1995, and
as Works Manager from January 1991 to December 1993, of the WABCO Automotive
company in Germany.

Mr. Wellbrock was elected Vice President, Taxes, effective January 1, 1994.
Prior thereto he served as Director of Taxes from 1988 through 1993.


                                       19
<PAGE>   22
                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
  STOCKHOLDER MATTERS

The common stock of the Company is listed on the New York Stock Exchange, Inc.
(the "Exchange"). The common stock was first traded on the Exchange on February
3, 1995 concurrent with the underwritten initial public offering of shares of
the Company's common stock at an initial price to the public of $20.00 per share
(the "Offering"). Prior to the Offering there was no established public trading
market for the Company's shares.

An Amended and Restated Stockholders Agreement among the Company, Kelso ASI
Partners, L.P., the Company's largest stockholder, and certain management
investors was adopted in December 1994. In January 1995 the Company adopted a
Restated Certificate of Incorporation, Amended Bylaws and a Stockholder Rights
Agreement. The Restated Certificate of Incorporation authorizes the Company to
issue up to 200,000,000 shares of common stock, par value $.01 per share, and
2,000,000 shares of preferred stock, par value $.01 per share, of which the
Board of Directors designated 900,000 shares as a new series of Junior
Participating Cumulative Preferred Stock. Each outstanding share of common stock
has associated with it one right to purchase a specified amount of Junior
Participating Cumulative Preferred Stock at a stipulated price in certain
circumstances relating to changes in ownership of the common stock of the
Company.

The number of holders of record of the common stock of the Company as of March
11, 1996, was 1,069.

No dividends were declared on the Company's common stock in 1994 or 1995. The
Company has no separate operations and its ability to pay dividends or
repurchase its common stock is dependent entirely upon the extent to which it
receives dividends or other funds from American Standard Inc. The terms of the
Company's 1995 Credit Agreement and certain indentures governing publicly-traded
debt securities of American Standard Inc. restrict the payment of dividends and
other extensions of funds by American Standard Inc. to the Company.

Set forth below are the high and low sales prices for shares of the Company's
common stock in 1995 from February 3, 1995, the date of the Offering, through
the end of the first quarter of 1995 and for each full quarterly period
thereafter in 1995.

<TABLE>
<CAPTION>
         1995:                           High             Low
         -----                           ----             ---
         <S>                            <C>             <C>
         First Quarter                  $  25           $ 19-5/8
         Second quarter 1995            $  28-1/4       $ 24-1/4
         Third quarter 1995             $  32           $ 26
         Fourth quarter 1995            $  31-7/8       $ 26-1/4
</TABLE>


                                       20
<PAGE>   23
ITEM 6. SELECTED FINANCIAL DATA

                             SELECTED FINANCIAL DATA
                  (Dollars in millions, except per share data)

<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31
 
                                                 1995              1994              1993              1992              1991
                                                 ----              ----              ----              ----              ----
<S>                                      <C>               <C>               <C>               <C>               <C>   
Statement of Operations Data:
Sales                                    $      5,221      $      4,457      $      3,830      $      3,792      $      3,595
Income (loss) before extraordinary
  item and cumulative effect of
  change in  accounting method(a)(b)     $        142      $        (77)     $       (117)     $        (57)     $       (111)
                                         ============      ============      ============      ============      ============
Per Common Share (c):
  Income (loss) before extraordinary
    item and cumulative effect of
    change in accounting method          $       1.90      $      (1.29)     $      (2.11)     $      (1.24)     $      (2.14)
                                         ============      ============      ============      ============      ============
Average number of outstanding
  common shares                            74,671,830        59,933,435        59,313,073        58,636,118        58,338,195

BALANCE SHEET DATA (AT END OF
  PERIOD):
  Total assets                           $      3,520      $      3,156      $      2,987      $      3,126      $      3,270
  Total debt                                    2,083             2,364             2,336             2,145             2,180
  Exchangeable preferred stock (d)               --                --                --                 133               117
  Stockholders'  deficit                         (390)             (798)             (723)             (449)             (350)
</TABLE>

(a) Retirements of debt in connection with the proceeds of the Offering in 1995,
    an October 1994 borrowing and a 1993 refinancing resulted in extraordinary
    charges of $30 million, $9 million and $92 million in 1995, 1994 and 1993,
    respectively, (including call premiums, the write-off of deferred debt 
    issuance costs, and in 1993 the loss on cancellation of foreign currency 
    swap contracts) on which there were no tax benefits (see Notes 5 and 8 of 
    Notes to Consolidated Financial Statements included in the Company's 1995 
    Annual Report to Stockholders and incorporated herein by reference).

(b) The year 1991 included a charge of $32 million (net of income tax effect)
    for the cumulative effect of the accounting changes related to 
    postretirement benefits other than pensions and warranty contract revenues 
    at January 1, 1991. The cumulative effect of these accounting changes 
    increased the postretirement benefit and warranty accruals at January 1, 
    1991 by $52 million.

(c) Per share data and average number of outstanding common shares and
    equivalents data reflect the 2.5 to 1 stock split effected in December 1994.

(d) In June 1993 the exchangeable preferred stock was exchanged for 12-3/4%
    Junior Subordinated Debentures which were redeemed on November 21, 1994.


                                       21
<PAGE>   24
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
  RESULTS OF OPERATIONS

Management's discussion and analysis of the financial condition and results of
operations of the Company is set forth on pages 15 through 22 of the Company's
1995 Annual Report to Stockholders and is incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Incorporated herein by reference from the Company's 1995 Annual Report to
Stockholders are the financial statements and related information listed under
the heading "1. Financial Statements" in the Index to Financial Statements and
Financial Statement Schedules on page 26 hereof.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not Applicable.


                                       22
<PAGE>   25
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Except for information regarding the Company's executive officers, the
information called for by this Item is incorporated in this report by reference
to the Company's definitive Proxy Statement dated March 28, 1996: under the
headings: "Stock Ownership" and "1. Election of Directors", except for
information not deemed to be "soliciting material" or "filed" with the SEC,
information subject to Regulations 14A or 14C under the Exchange Act or
information subject to the liabilities of Section 18 of the Exchange Act.

For information concerning the executive officers of the Company, see "Executive
Officers of the Registrant" under Part I of this report.

None of the Company's directors or officers has any family relationship with any
other director or officer. ("Family relationship" for this purpose means any
relationship by blood, marriage or adoption, not more remote than first cousin.)

ITEM 11.  EXECUTIVE COMPENSATION

Information concerning executive compensation and related matters is set forth
in the Company's definitive Proxy Statement dated March 28, 1996 as follows:
under the section entitled "Directors' Fees and Other Arrangements" on page 7
thereof, under the heading entitled "Executive Compensation" on pages 9 through
14 thereof, under the heading entitled "Compensation Committee Interlocks and
Insider Participation" on page 17 and under the heading entitled "Certain
Relationships and Related Party Transactions" on pages 17 through 19 thereof,
and is incorporated herein by reference except for the sections entitled
"Management Development and Nominating Committee Report on Compensation of
Executive Officers of the Company" and "Performance Graph" appearing on pages 14
through 17 except for information not deemed to be "soliciting material" or
"filed" with the SEC, information subject to Regulations 14A or 14C under the
Exchange Act or information subject to the liabilities of Section 18 of the
Exchange Act.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning shares of common stock of the Company beneficially owned
by management and others is set forth under the heading entitled "Stock
Ownership" on pages 3 and 4 in the Company's definitive Proxy Statement dated
March 28, 1996 and is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated in this report by
reference to the Company's definitive Proxy Statement dated March 28, 1996 under
the section entitled "Certain Relationships and Related Party Transactions",
except for information not deemed to be "soliciting material" or "filed" with
the SEC, information subject to Regulations 14A or 14C under the Exchange Act or
information subject to the liabilities of Section 18 of the Exchange Act.


                                       23
<PAGE>   26
                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K

(a) 1 and 2.   Financial statements and financial statement schedules

                  The financial statements and financial statement schedules are
                  listed in the accompanying index to financial statements on
                  page 26 of this annual report on Form 10-K. The financial
                  statements indicated on the index appearing on page 26 hereof
                  are incorporated herein by reference.

          3.   Exhibits

                  The exhibits to this Report are listed on the accompanying
                  index to exhibits and are incorporated herein by reference or
                  are filed as part of this annual report on Form 10-K.

(b)  Reports on Form 8-K for the quarter ended December 31, 1995.

                  The Company filed no current reports on Form 8-K during the
                  fourth quarter ended December 31, 1995.


                                       24
<PAGE>   27
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                            AMERICAN STANDARD COMPANIES INC.
                                            By:   /s/ EMMANUEL A.  KAMPOURIS
                                                      ----------------------
                                                     (Emmanuel A.  Kampouris)
                              Chairman, President and Chief Executive Officer

March 29, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated on March 29, 1996:

<TABLE>
<S>                                                <C> 
/s/  Emmanuel A.  Kampouris
-----------------------------
(Emmanuel A.  Kampouris)                           Chairman, President and Chief Executive Officer; Director (Principal
                                                   Executive Officer)

/s/  FRED A.  ALLARDYCE
-----------------------------
(Fred A.  Allardyce)                               Vice President and Chief Financial Officer
                                                   (Principal Financial Officer)

/s/  G.  RONALD SIMON
-----------------------------
(G.  Ronald Simon)                                 Vice President and Controller
                                                   (Principal Accounting Officer)

/s/  STEVEN E.  ANDERSON
-----------------------------
(Steven E.  Anderson)                              Director

/s/  HORST HINRICHS
-----------------------------
(Horst Hinrichs)                                   Director

/s/  GEORGE H.  KERCKHOVE
-----------------------------
(George H.  Kerckhove)                             Director

/s/  SHIGERU MIZUSHIMA
-----------------------------
(Shigeru Mizushima)                                Director

/s/  FRANK T.  NICKELL
-----------------------------
(Frank T.  Nickell)                                Director

/s/  ROGER W.  PARSONS
-----------------------------
(Roger W.  Parsons)                                Director

/s/  J.  DANFORTH QUAYLE
-----------------------------
(J.  Danforth Quayle)                              Director

/s/  DAVID  M.  RODERICK
-----------------------------
(David M.  Roderick)                               Director

/s/  JOHN RUTLEDGE
-----------------------------
(John Rutledge)                                    Director

/s/  JOSEPH S.  SCHUCHERT
-----------------------------
(Joseph S. Schuchert)                              Director
</TABLE>


                                       25
<PAGE>   28
                          INDEX TO FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES
                                   COVERED BY
                     REPORT OF CERTIFIED PUBLIC ACCOUNTANTS

<TABLE>
<CAPTION>
                                                                          -------------    
                                                                              1995
                                                                          ANNUAL REPORT
                                                                               TO
                                                                           STOCKHOLDERS
                                                                             (PAGES)
                                                                          -------------
<S>                                                                       <C>  
1.     Financial Statements (incorporated by reference from
       the Company's 1995 Annual Report to Stockholders)

       Consolidated Balance Sheet at
              December 31, 1995, and 1994                                       26
       Years ended December 31, 1995, 1994, and 1993:
              Consolidated Statement of Operations                              25
              Consolidated Statement of Cash Flows                              27
              Consolidated Statement of Stockholders'  Deficit                  28
       Notes to Financial Statements                                          29-41
       Segment Data                                                         14 and 41
       Quarterly Data (Unaudited)                                               42
       Report of Independent Auditors                                           24

                                                                            ---------
                                                                            FORM 10-K
                                                                             (PAGES)
                                                                            ---------

2.     Financial statement schedules, years ended
       December 31, 1995, 1994, and 1993

        I     Condensed Financial Information of Registrant                   28-31
       II     Valuation and Qualifying Accounts                                 32
</TABLE>

All other schedules have been omitted because the information is not applicable
or is not material or because the information required is included in the
financial statements or the notes thereto.


                                       26
<PAGE>   29
                         CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form 10-K)
of American Standard Companies Inc. and in the Registration Statement on Form
S-8 pertaining to the Stock Incentive Plan of American Standard Companies Inc.
(Registration No. 33-63007) of our report dated February 26, 1996 included in
the 1995 Annual Report to Stockholders of American Standard Companies Inc.

Our audits also included the financial statement schedules of American Standard
Companies Inc. listed in Item 14(a). These schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

                                                            Ernst & Young LLP 

New York, New York
March 29, 1996


                                       27
<PAGE>   30
           SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
              STATEMENTS OF OPERATIONS (PARENT COMPANY SEPARATELY)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                             Year Ended December 31
                                          1995          1994           1993
                                          ----          ----           ---- 
<S>                                  <C>           <C>            <C>
Interest income                      $     450     $     219      $     188
Interest expense                           450           219            188
Equity in net loss of subsidiary       111,655       (86,421)      (208,567)
                                       -------       -------       -------- 
Net loss                             $ 111,655     $ (86,421)     $(208,567)
                                       =======       =======        ======= 
</TABLE>

                        See notes to financial statements

                                       28
<PAGE>   31
                 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF
                            REGISTRANT - (CONTINUED)

                    BALANCE SHEET (PARENT COMPANY SEPARATELY)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                   DECEMBER 31,
                                                                                   ------------
                                     ASSETS
                                     ------
                                                                                1995           1994
                                                                                ----           ----
<S>                                                                        <C>            <C>
Investment in subsidiary                                                   $(378,924)     $(774,560)
Loan receivable from subsidiary                                                4,823           --

                                   LIABILITIES
                                   -----------

Loan payable to subsidiary                                                       629          1,640
Stock repurchase obligation (Note C)                                          15,333         21,429


                             STOCKHOLDERS' DEFICIT
                             ---------------------

Common stock, $.01 par value, 200,000,000 shares authorized;
 shares issued and outstanding, 76,733,010 in 1995; 60,932,457 in 1994           767            609
Capital surplus                                                              509,218        194,236
Subscriptions receivable                                                        (629)        (1,640)
Accumulated deficit                                                         (724,769)      (836,424)
Foreign currency translation effects                                        (174,650)      (151,721)
Minimum pension liability adjustment                                            --           (2,689)
                                                                           ---------      ---------           
Total stockholders' deficit                                                 (390,063)      (797,629)
                                                                           ---------      ---------           
                                                                           $(378,924)     $(774,560)
                                                                           =========      =========
</TABLE>

 
                       See notes to financial statements.


                                       29
<PAGE>   32
           SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
               STATEMENT OF CASH FLOWS (PARENT COMPANY SEPARATELY)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                                  1995          1994           1993
                                                                  ----          ----           ----
<S>                                                          <C>            <C>            <C> 
Cash flows from operating activities:
  Net  income (loss)                                         $ 111,655      $ (86,421)     $(208,567)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities
    Equity in net loss (income) of subsidiary                 (111,655)        86,421        208,567
                                                             ---------      ---------      --------- 
Net cash flow from operating activities                              0              0              0
                                                             ---------      ---------      --------- 
Cash provided (used) by investing activities:
  Investment in subsidiary                                    (279,983)        (3,976)        (4,585)
  Loan to subsidiary                                            (4,823)          --             --
  Purchase of common stock by subsidiary                        10,989         16,927         12,194
                                                             ---------      ---------      --------- 
Net cash provided by investing activities                     (273,817)        12,951          7,609
                                                             ---------      ---------      --------- 
Cash provided (used) by financing activities:
  Proceeds from initial public offering of common stock        280,535           --             --
  Other issuances of common stock                                4,271          3,976          4,585
  Common stock repurchases                                     (10,989)       (16,927)       (12,194)
  Repayments on subscriptions receivable                         1,011            786            482
  Repayment of loan from subsidiary                             (1,011)          (786)          (482)
                                                             ---------      ---------      --------- 
Net cash used by financing activities                          273,817        (12,951)        (7,609)
                                                             ---------      ---------      --------- 

Net change in cash and cash equivalents                      $       0      $       0      $       0
                                                             =========      =========      =========
</TABLE>

                       See notes to financial statements.


                                       30
<PAGE>   33
                  SCHEDULE I -- CONDENSED FINANCIAL INFORMATION
                          ON REGISTRANT -- (CONTINUED)

      NOTES TO FINANCIAL STATEMENTS (PARENT COMPANY SEPARATELY)

(A)   The notes to the consolidated financial statements of American Standard 
      Companies Inc. (the "Parent Company"), are an integral part of these 
      condensed financial statements.


(B)   The Parent Company was organized by Kelso & Company, L.P., a private 
      merchant banking firm, to participate in the acquisition of American 
      Standard Inc. (the "Acquisition") in 1988. American Standard Inc.'s 
      common stock is owned solely by the Parent Company. The Parent Company 
      has no other investments or operations.

(C)   The Parent Company has sold its common stock to management employees in 
      connection with the Acquisition and issued common stock under various 
      employee benefit and incentive plans including the ESOP.  As no public 
      market existed for the stock prior to the initial public offering in the
      first quarter of 1995 (see Note  D), the Parent Company, to provide 
      liquidity to employees who have terminated employment, has made purchases
      of such employees' stock. Subsequent to December  2,  1994 the Parent 
      Company is no longer obligated to make such purchases.  Purchases through
      December 31, 1994, were based upon fair market value appraisals obtained 
      in connection with the ESOP.  The amount paid on such stock purchases is 
      subject to an annual limitation contained in American Standard Inc.'s 
      lending arrangements and debt instruments (the "Annual Limitation" ).  
      As the amount owed to terminated employees has exceeded the Annual
      Limitation, a liability for the unpaid balance has been recorded on the
      financial statements of the Parent Company with a concomitant reduction 
      in common stock and capital surplus accounts.

(D)   In the first quarter of 1995 the Parent Company sold 15,112,300 shares of
      its common stock in an initial public offering at an initial price to the
      public of $20 per share.  This offering yielded net proceeds of 
      approximately $281 million (including proceeds from the exercised portion
      of the underwriters' over-allotment option and after deducting
      underwriting discounts and expenses), which were transferred to American 
      Standard Inc. and used to reduce its indebtedness. Of the total net 
      proceeds transferred, $269 million was contributed to the capital of 
      American Standard Inc. and $12 million was advanced under an intercompany
      demand note.


                                       31
<PAGE>   34
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                  YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
            DESCRIPTION                                                                                FOREIGN
                                     BALANCE       ADDITIONS                                          CURRENCY       BALANCE
                                    BEGINNING     CHARGED TO                         OTHER           TRANSLATION     END OF
                                    OF PERIOD       INCOME        DEDUCTIONS        CHANGES            EFFECTS       PERIOD
<S>                                 <C>           <C>            <C>               <C>                <C>           <C>
1995:
Reserve deducted from assets:
Allowance for doubtful                                                      
accounts receivable                   $ 19,569       $10,811     $  6,064 (A)      $ 2,662            $    352      $ 27,330
============================================================================================================================
Reserve for post-retirement
benefits                              $437,708       $52,190     $(21,808)(B)      $(5,761)(C)        $ 20,069      $482,398
============================================================================================================================

1994:
Reserve deducted from assets:
Allowance for doubtful
accounts receivable                   $ 15,666       $10,208     $ (6,868)(A)      $   533            $     30      $ 19,569
============================================================================================================================
Reserve for post-retirement
benefits                              $387,038       $44,352     $(23,062)(B)      $ 3,188 (D)        $ 26,192      $437,708
============================================================================================================================

1993:
Reserve deducted from assets:
Allowance for doubtful
accounts receivable                   $ 12,827       $10,118     $ (6,584)(A)      $     -            $   (695)     $ 15,666
============================================================================================================================
Reserve for post-retirement
benefits                              $368,868       $48,827     $(25,815)(B)      $11,832 (E)        $(16,674)     $387,038
============================================================================================================================
</TABLE>

The reserve for postretirement benefits excludes the activity for currently
funded U.S. pension plans.
(A)      Accounts charged off.
(B)      Payments made during the year.
(C)      Includes $6 million reduction in minimum pension liability.
(D)      Includes $3 million reduction in minimum pension liability primarily 
         offset by $5 million from acquisition of new business.
(E)      Includes $19 million increase in minimum pension liability offset by a
         $7 million reduction resulting from curtailment of certain plans.


                                       32
<PAGE>   35
                        AMERICAN STANDARD COMPANIES INC.

                               INDEX TO EXHIBITS

                 (Item 14(a)3 -- Exhibits Required by Item 601
                   of Regulation S-K and Additional Exhibits

(The Commission File Number of American Standard Companies Inc. (formerly ASI
Holding Corporation), the Registrant (sometimes hereinafter referred to as
"Holding"), and for all Exhibits incorporated by reference, is 1-11415, except
those Exhibits incorporated by reference in filings made by American Standard
Inc. (the "Company") the Commission File Number of which is 33-64450. Prior to
filing its Registration Statement on Form S-2 on November 10, 1994, Holding's
Commission File Number was 33-23070.)

(3)    (i)  Restated Certificate of Incorporation of Holding; previously filed
            as Exhibit 3(i) in Amendment No. 4 to Registration Statement 
            No. 33-56409 under the Securities Act of 1933, as amended, filed 
            January 31, 1995, and herein incorporated by reference.

      (ii)  Amended By-laws of Holding; previously filed as Exhibit 3(ii) in 
            Amendment No. 4 to Registration Statement No. 33-56409 under the
            Securities Act of 1933, as amended, filed January 31, 1995, and
            herein incorporated by reference.


(4)    (i)  Form of Common Stock Certificate; previously filed as Exhibit 4(i)
            in Amendment No. 3 to Registration Statement No. 33-56409 under the
            Securities Act of 1933, as amended, filed January 5, 1995, and
            herein incorporated by reference.

      (ii)  Indenture, dated as of November 1, 1986, between the Company and 
            Manufacturers Hanover Trust Company, Trustee, including the form of
            9-1/4% Sinking Fund Debenture Due 2016 issued pursuant thereto on
            December 9, 1986, in the aggregate principal amount of $150,000,000;
            previously filed as Exhibit 4(iii) in the Company's Form 10-K for
            the fiscal year ended December 31, 1986, and herein incorporated by
            reference.

     (iii)  Instrument of Resignation, Appointment and Acceptance, dated as of
            April 25, 1988 among the Company, Manufacturers Hanover Trust
            Company (the "Resigning Trustee") and Wilmington Trust Company (the
            "Successor Trustee") relating to resignation of the Resigning
            Trustee and appointment of the Successor Trustee, under the
            Indenture referred to in Exhibit (4)(ii) above; previously filed as
            Exhibit (4)(ii) in Registration Statement No. 33-64450 of the
            Company under the Securities Act of 1933, as amended, and herein
            incorporated by reference.


                                       33


<PAGE>   36
(iv)   Indenture, dated as of May 15, 1992, between the Company and First Trust
       National Association, Trustee, relating to the Company's 10-7/8% Senior
       Notes due 1999, in the aggregate principal amount of $150,000,000; copy
       of Indenture previously filed as Exhibit (4)(i) by the Company in its
       Form 10-Q for the quarter ended June 30, 1992, and herein incorporated by
       reference.

(v)    Form of 10-7/8% Senior Notes due 1999 included as Exhibit A to the
       Indenture described in (4)(iv) above.

(vi)   Indenture dated as of May 15, 1992, between the Company and First Trust
       National Association, Trustee, relating to the Company's 11-3/8% Senior
       Debentures due 2004, in the aggregate principal amount of $250,000,000;
       copy of Indenture previously filed as Exhibit (4)(iii) by the Company in
       its Form 10-Q for the quarter ended June 30, 1992, and herein
       incorporated by reference.

(vii)  Form of 11-3/8% Senior Debentures due 2004 included as Exhibit A to the
       Indenture described in (4)(vi) above.

(viii) Form of Indenture, dated as of June 1, 1993, between the Company and
       United States Trust Company of New York, as Trustee, relating to the
       Company's 9-7/8% Senior Subordinated Notes Due 2001; previously filed as
       Exhibit (4)(xxxi) in Amendment No. 1 to Registration Statement No.
       33-61130 of the Company under the Securities Act of 1933, as amended, and
       herein incorporated by reference.

(ix)   Form of Note evidencing the 9-7/8% Senior Subordinated Notes Due 2001
       included as Exhibit A to the Form of Indenture referred to in (4)(viii) 
       above.

(x)    Form of Indenture, dated as of June 1, 1993, between the Company and
       United States Trust Company of New York, as Trustee, relating to the
       Company's 10-1/2% Senior Subordinated Discount Debentures Due 2005;
       previously filed as Exhibit (4)(xxxiii) in Amendment No. 1 to
       Registration statement No. 33-61130 of the Company under the Securities
       Act of 1933, as amended, and herein incorporated by reference.

(xi)   Form of Debenture evidencing the 10-1/2% Senior Subordinated Discount
       debentures Due 2005 included as Exhibit A to the Form of Indenture
       referred to in (4)(x) above.

(xii)  Assignment and Amendment Agreement, dated as of June 1, 1993, among the
       Company, Holding, certain subsidiaries of the Company, Bankers Trust


                                       34
<PAGE>   37
                Company, as agent under the 1988 Credit Agreement, the financial
                institutions named as Lenders in the 1988 Credit Agreement and
                certain additional Lenders and Chemical Bank, as Administrative
                Agent and Arranger; previously filed as Exhibit (4)(xiii) in
                Amendment No. 1 to Registration Statement No. 33-64450 of the
                Company under the Securities Act of 1933, as amended, and herein
                incorporated by reference.

        (xiii)  Credit Agreement, dated as of June 1, 1993, among the Company,
                Holding, certain subsidiaries of the Company and the lending
                institutions listed therein, Chemical Bank, as Administrative
                Agent and Arranger; Bankers Trust Company, The Bank of Nova
                Scotia, The Chase Manhattan Bank, N.A., Deutsche Bank AG, The
                Long-Term Credit Bank of Japan, Ltd., New York Branch, and
                NationsBank of North Carolina, N.A., as Managing Agents, and
                Banque Paribas, Citibank, N.A., and Compagnie Financiere de CIC
                et de l'Union Europeenne, New York Branch, as Co-Agents (the
                "1993 Credit Agreement"); previously filed as Exhibit (4)(xiv)
                in Amendment No. 1 to Registration Statement No. 33-64450 of the
                Company under the Securities Act of 1933, as amended, and herein
                incorporated by reference.

         (xiv)  First Amendment, Consent and Waiver, dated as of February 10,
                1994, to the 1993 Credit Agreement referred to in (4)(xiii)
                above; previously filed as Exhibit (4)(xvii) by the Company in
                its Form 10-K for the fiscal year ended December 31, 1993, and
                herein incorporated by reference. 

         (xv)   Second Amendment, dated as of October 21, 1994, to the 1993
                Credit Agreement referred to in paragraph (4)(xiii) above;
                previously filed as Exhibit (4)(xviii) in Registration Statement
                No. 33-56409 under the Securities Act of 1933, as amended, filed
                November 10, 1994, and herein incorporated by reference.

         (xvi)  Assignment and Amendment Agreement dated as of February 9, 1995,
                among Holding, the Company, certain subsidiaries of the Company,
                and the financial institutions listed in Schedule I thereto (the
                "Original Lenders"); the financial institutions listed in
                Schedule II thereto (the "Continuing Lenders"), including
                Chemical Bank as Administrative Agent for the Original Lenders
                and Continuing Lenders and as Collateral Agent for the Original
                Lenders and Continuing Lenders; previously filed as Exhibit
                (4)(xvi) in Holding's Form 10-K for the fiscal year ended
                December 31, 1994, and herein incorporated by reference.

        (xvii)  Amended and Restated Credit Agreement, dated as of February 9,
                1995, among Holding, the Company, certain subsidiaries of the
                Company and the lending institutions listed therein, Chemical
                Bank, as Administrative Agent; Citibank, N.A. and NationsBank,
                N.A. (Carolinas), as Senior Managing 

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<PAGE>   38
        Agents; Bank of America Illinois, The Bank of Nova Scotia, Bankers
        Trust Company, The Chase Manhattan Bank, N.A., Compagnie Financiere de
        CIC et de L'Union Europeenne, Credit Suisse, Deutsche Bank AG, The
        Industrial Bank of Japan Trust Company, The Long-Term Credit Bank of
        Japan, Limited and The Sumitomo Bank, Ltd., as Managing Agents; and The
        Bank of New York, Canadian Imperial Bank of Commerce, The Fuji Bank,
        Limited and The Sanwa Bank Limited, as Co-Agents (the "1995 Credit
        Agreement"), with exhibits but without schedules. (The 1995 Credit
        Agreement replaces the 1993 Credit Agreement referred to in Exhibit
        (4)(xiii) above, but the Security Documents and the Guarantee Documents
        entered into pursuant to the 1993 Credit Agreement continue in force and
        effect as amended by the Credit Documents Amendment Agreement dated as
        of February 9, 1995 described in Exhibit (4)(xviii) below); previously
        filed as Exhibit (4)(xvii) in Holding's Form 10-K for the fiscal year
        ended December 31, 1994, and herein incorporated by reference.
        (Schedules I, II, and III to the 1995 Credit Agreement are previously
        filed as Exhibit (4)(v) in Holding's Form 10-Q for the quarter ended
        March 31, 1995, and herein incorporated by reference.)

(xviii) Credit Documents Amendment Agreement dated as of February 9, 1995,
        among holding, the Company, certain domestic and foreign subsidiaries of
        the Company, and Chemical Bank, as Administrative Agent and as
        Collateral Agent for the Lenders under the 1995 Credit Agreement,
        described in Exhibit (4)(xvii) above; previously filed as Exhibit
        (4)(xviii) in Holding's Form 10-K for the fiscal year ended December 31,
        1994, and herein incorporated by reference.

(xix)   First Amendment, dated as of March 15, 1995, to the 1995 Credit
        Agreement referred to in (4)(xvii) above; previously filed as Exhibit
        (4)(vi) in Holding's Form 10-Q for the quarter ended March 31, 1995, and
        herein incorporated by reference.

(xx)    Amended and Restated Stockholders Agreement, dated as of December 2,
        1994, among Holding, Kelso ASI Partners, L.P. and the Management
        Stockholders named therein; previously filed as Exhibit 4 (xxi) in
        Amendment No. 1 to Registration Statement No. 33-56409 under the
        Securities Act of 1933, as amended, filed December 20, 1994, and herein
        incorporated by reference.

(xxi)   Rights Agreement, dated as of January 5, 1995, between Holding and
        Citibank, N.A. as Rights Agent; previously filed as Exhibit (4)(xxv) in
        Holding's Form 10-K for the fiscal year ended December 31, 1994, and
        herein incorporated by reference.


                                       36
<PAGE>   39
(10)* (i)  American Standard Inc. Long-Term Incentive Compensation Plan, as
           amended and restated as of February 3, 1995; previously filed 
           as Exhibit (10)(i) by the Company in its Form 10-K for the fiscal
           year ended December 31, 1994, and herein incorporated by reference.

     (ii)  Trust Agreement for American Standard Inc. Long-Term Incentive
           Compensation Plan and Supplemental Incentive Plan, as amended and
           restated as of February 3, 1995; previously filed as Exhibit (10)(ii)
           by the Company in its Form 10-K for the fiscal year ended December
           31, 1994, and herein incorporated by reference.

    (iii)  American Standard Inc. Annual Incentive Plan; previously filed as
           Exhibit (10)(vii) by the Company in its Form 10-K for the fiscal year
           ended December 31, 1988, and herein incorporated by reference.

     (iv)  American Standard Inc. Executive Supplemental Retirement Benefit
           Program, as restated to include all amendments through July 6, 1995;
           incorporated herein by reference to Exhibit (10)(iv) of Company's
           Form 10-K for the fiscal year ended December 31, 1995.

      (v)  Consulting Agreement made July 1, 1988, with Kelso & Company, L.P.
           concerning general management and financial consulting services to
           Company; previously filed as Exhibit (10)(xviii) in the Company's
           Form 10-K for the fiscal year ended December 31, 1988, and herein
           incorporated by reference.

     (vi)  Agreement, dated as of December 2, 1994, among Holding, Company and
           Kelso & Company, L.P., amending the Consulting Agreement referred to
           in paragraph (10)(v) above; previously filed as Exhibit (10)(xi) in
           Amendment No. 1 to Registration Statement No. 33-56409 under the
           Securities Act of 1933, as amended, filed December 20, 1994, and
           herein incorporated by reference.

*  Items in this series 10 consist of management contracts or compensatory
   plans or arrangements with the exception of (10)(v) and (vi).
<PAGE>   40
        (vii)   American Standard Inc. Supplemental Compensation Plan for
                Outside Directors, as amended through February 3, 1995;
                previously filed as Exhibit (10)(xii) by Company in its Form
                10-K for the fiscal year ended December 31, 1994, and herein
                incorporated by reference.

        (viii)  ASI Holding Corporation 1989 Stock Purchase Loan Program; 
                previously filed as Exhibit (10)(i) in Holding's Form 10-Q for
                the quarter ended September 30, 1989, and herein incorporated by
                reference.

        (ix)    Corporate Officers Severance Plan adopted by Company in
                December, 1990, effective April 27, 1991; previously filed as
                Exhibit (10)(xix) by Company in its Form 10-K for the fiscal
                year ended December 31, 1990, and herein incorporated by
                reference.

        (x)     Estate Preservation Plan, adopted by Company in December,
                1990; previously filed as Exhibit (10)(xx) by Company in its 
                Form 10-K for the fiscal year ended December 31, 1990, and 
                herein incorporated by reference.

        (xi)    Amendment adopted in March 1993 to Estate Preservation Plan
                referred to in (10)(x) above; previously filed as Exhibit
                (10)(xvii) by Company in its Form 10-K for the fiscal year ended
                December 31, 1993 and herein incorporated by reference.

        (xii)   Summary of terms of Unfunded Deferred Compensation Plan adopted
                December 2, 1993; previously filed as Exhibit (10)(xviii) by
                Company in its Form 10-K for the fiscal year ended December 31,
                1993 and herein incorporated by reference.

        (xiii)  American Standard Companies Inc. Stock Incentive Plan;
                previously filed as Exhibit (10)(xx) in Amendment No. 3 to
                Registration Statement No. 33-56409 under the Securities Act, as
                amended, filed January 5, 1995, and herein incorporated by
                reference.

        (xiv)   American Standard Inc. and Subsidiaries 1996-1998 Supplemental
                Incentive Compensation Plan adopted October 6, 1995; filed as an
                Exhibit to Holding's definitive Proxy Statement for its 1996
                Annual Meeting of Stockholders, and herein incorporated by
                reference.

        (xv)    Form of Indemnification Agreement; previously filed as 
                Exhibit (10)(xxi) in Amendment No. 3 to Registration Statement
                No. 33-56409 under the Securities Act of 1933, as amended, filed
                January 5, 1995, and herein incorporated by reference.


                                       38



<PAGE>   41
(13)  1995 Annual Report to Stockholders. (Only those portions specifically
      incorporated by reference are filed; no other portions of the Annual
      Report are to be deemed filed.)

(21)  Listing of Holding's subsidiaries.

(27)  Financial Data Schedule.


                                       39