SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 1998
                                                      OR

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

For the transition period from                 to                 .

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

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

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


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

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



                                                                     X Yes No

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

           Common stock, $.01 par value, outstanding at

               July 31, 1998                                  72,300,489 shares






<PAGE>




                          PART 1. FINANCIAL INFORMATION

Item 1.  Financial Statements

     American  Standard  Companies Inc. is a Delaware  corporation  organized in
March 1988, and has as its only investment all the  outstanding  common stock of
American  Standard  Inc.  Hereinafter,  "the  Company"  will  refer to  American
Standard  Companies Inc. or to its  subsidiary,  American  Standard Inc., as the
context requires.

      The  following   summary  statement  of  operations  of  the  Company  and
subsidiaries  for the three  months and six months  ended June 30, 1998 and 1997
has not been audited,  but management believes that all adjustments,  consisting
of normal recurring items,  necessary for a fair  presentation of financial data
for those  periods  have been  included.  Results  for the three- and  six-month
periods of 1998 are not necessarily indicative of results for the entire year.
<TABLE>

                AMERICAN STANDARD COMPANIES INC. AND SUBSIDIARIES
                    UNAUDITED SUMMARY STATEMENT OF OPERATIONS
                         (In millions except share data)

<CAPTION>
                                                  Three Months Ended       Six Months Ended
                                                        June 30,               June 30,
                                                   1998       1997         1998        1997
                                                  -----      -----        -----        ----
<S>                                            <C>         <C>          <C>        <C>

SALES                                            $1,795     $1,589       $3,288      $2,950
                                                 -------    -------      ------      ------

COST AND EXPENSES
  Cost of sales                                   1,315      1,163        2,439       2,181
  Selling and administrative expenses               289        258          547         494
  Other expense                                       9          7            8          12
  Interest expense                                   51         47          102          96
                                                   -----     -----        -----       -----
                                                  1,664      1,475        3,096       2,783
INCOME BEFORE INCOME TAXES
    AND EXTRAORDINARY ITEM                          131        114          192         167
Income taxes                                         53         40           78          60
                                                  -----      -----        -----       -----

INCOME BEFORE EXTRAORDINARY ITEM                     78         74          114         107
Extraordinary loss on retirement 
   of debt, net of tax                               50         15           50          23
                                                  -----      -----        -----       -----

NET INCOME                                       $   28     $   59       $   64      $   84
                                                  =====      =====        =====       =====

PER COMMON SHARE
  Basic:   Income before extraordinary item      $ 1.08     $  .99       $ 1.58      $ 1.43
           Extraordinary loss                      (.69)       .20         (.69)       (.32)
                                                  -----      -----        -----       -----
           Net Income                            $  .39     $  .79        $ .89       $1.11
                                                  =====      =====        =====       =====

  Diluted: Income before extraordinary item      $ 1.04     $  .96       $ 1.53      $ 1.38
            Extraordinary loss                     (.67)      (.20)        (.67)       (.30)
                                                  -----      -----        -----       -----
            Net Income                           $  .37   $    .76       $  .86      $ 1.08
                                                  =====     ======        =====       =====
  Average common shares outstanding
    Basic                                    72,472,970  74,033,708  72,285,567  75,158,665
    Diluted                                  74,971,695  76,564,766  74,628,831  77,634,740
<FN>

                                             See accompanying notes
</FN>
</TABLE>


<PAGE>
<TABLE>

Item 1.  Financial Statements (continued)

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

                                                      June 30,   December 31,
<CAPTION>
                                                        1998        1997    
                                                    ----------   -----------
<S>                                                <C>            <C> 
CURRENT ASSETS
Cash and cash equivalents                           $      73     $     29
Accounts receivable                                       991          831
Inventories
    Finished products                                     287          255
    Products in process                                    95           87
    Raw materials                                         112           89
                                                         ----         ----
                                                          494          431
Other current assets                                      121          103
                                                         ----         ----       
TOTAL CURRENT ASSETS                                    1,679        1,394

FACILITIES, less accumulated depreciation;
    June 1998 - $630; Dec. 1997 - $578                  1,170        1,139
GOODWILL                                                  843          844
OTHER ASSETS                                              345          292
                                                         ----         ---- 
TOTAL ASSETS                                           $4,037       $3,669
                                                        =====        =====

CURRENT LIABILITIES
Loans payable to banks                                 $  681       $  718
Current maturities of long-term debt                      170           30
Accounts payable                                          524          466
Accrued payrolls                                          208          180
Other accrued liabilities                                 561          447
                                                         ----         ---- 
TOTAL CURRENT LIABILITIES                               2,144        1,841

LONG-TERM DEBT                                          1,521        1,551
RESERVE FOR POSTRETIREMENT BENEFITS                       456          438
OTHER LIABILITIES                                         443          449
                                                         ----         ----
TOTAL LIABILITIES                                       4,564        4,279

STOCKHOLDERS' DEFICIT
Preferred stock, 2,000,000 shares 
   authorized, none issued and outstanding                  -            -
Common stock, $.01 par value, 200,000,000 shares
    authorized; 72,418,170 shares issued and
    outstanding in 1998; 71,962,713 in 1997                 1            1
Capital surplus and other                                 591          587
Treasury stock                                           (303)        (310)
Accumulated deficit                                      (611)        (675)
Foreign currency translation effects                     (205)        (213)
                                                        -----        -----  

TOTAL STOCKHOLDERS' DEFICIT                              (527)        (610)
                                                        -----        ----- 
                                                       $4,037       $3,669
                                                        =====        =====
<FN>
                             See accompanying notes
</FN>
</TABLE>

<PAGE>

<TABLE>


Item    1.  Financial Statements (continued)

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

                              (Dollars in millions)
                                Six Months Ended
<CAPTION>
                                                                 June 30,
                                                              1998     1997
                                                              ----     ----
<S>                                                         <C>      <C> 
CASH PROVIDED (USED) BY:
  OPERATING ACTIVITIES:
    Income before extraordinary item                        $ 114    $ 107
    Depreciation                                               66       63
    Amortization of goodwill and other intangibles             25       18
    Non-cash interest                                          28       29
    Non-cash stock compensation                                 4       12
    Changes in assets and liabilities:
      Accounts receivable                                    (151)    (129)
      Inventories                                             (62)     (97)
      Accounts payable and other accruals                     148       83
      Other assets and liabilities                             (5)     (18)
                                                             ----     ---- 
  Net cash provided by operating activities                   167       68
                                                             ----     ---- 

  INVESTING ACTIVITIES:
    Purchases of property, plant and equipment                (97)     (94)
    Investments in affiliated companies                       (10)      (1)
    Acquisition of medical diagnostic businesses                -     (210)
    Other                                                      (5)      (2)
                                                             ----     ----  
  Net cash used by investing activities                      (112)    (307)
                                                             ----     ----

  FINANCING ACTIVITIES:
    Repurchases of common stock                                (3)    (232)
    Proceeds from issuance of long-term debt                1,011      380
    Repayments of long-term debt, including
      redemption premiums                                    (966)    (615)
    Net change in revolving credit facility                   (32)     705
    Net change in other short-term debt                         6       11
    Financing costs and other                                 (27)     (18)
                                                             ----     ----
  Net cash provided (used) by financing activities            (11)     231
                                                             ----     ----

Effect of exchange rate changes on cash and
  cash equivalents                                              -       (1)
                                                             ----     ----   
Net increase (decrease) in cash and cash equivalents           44       (9)
Cash and cash equivalents at beginning of period               29       60
                                                             ----     ----   
Cash and cash equivalents at end of period                 $   73   $   51
                                                             ====     ====

<FN>
                             See accompanying notes
</FN>
</TABLE>


<PAGE>


                AMERICAN STANDARD COMPANIES INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS


   Note 1.  Public Offering of Debt

   In the first quarter and early April of 1998,  the Company  completed  public
   offerings  of  $1  billion   principal  amount  of  senior  debt  securities,
   including:  (i) $125  million  of 7-1/8%  Senior  Notes  due 2003;  (ii) $250
   million of 7-3/8% Senior Notes due 2005;  (iii) $350 million of 7-3/8% Senior
   Notes due 2008;  and (iv) $275 million of 7-5/8%  Senior Notes due 2010.  The
   Company used the net proceeds of these offerings (approximately $963 million,
   net of  underwriting  discounts and interest rate hedge costs) to redeem,  on
   June 1, 1998 (the  "Redemption"),  its 10-1/2% Senior  Subordinated  Discount
   Debentures due 2005 and 9-7/8% Senior  Subordinated Notes due 2001. The total
   amount required to complete the Redemption,  including  redemption  premiums,
   was $954  million,  net of the  effect  of the  settlement  of  certain  swap
   transactions related to the Senior Subordinated Discount Debentures.  Pending
   the Redemption,  the net proceeds of the offerings were applied to the extent
   possible to reduce  borrowings  under the revolving  portion of the Company's
   $1.75 billion bank credit  agreement  (the "1997 Credit  Agreement")  and the
   excess was invested in short-term securities. The Redemption was funded using
   approximately $200 million of such short-term  securities and $750 million of
   borrowings  under the revolving  portion of the 1997 Credit  Agreement.  As a
   result  of  the   Redemption,   the  second   quarter  of  1998  included  an
   extraordinary  charge of approximately $50 million,  net of taxes, related to
   the Redemption, including call premiums and the write-off of unamortized debt
   issuance costs.

   Note 2.  Comprehensive Income

   In the first  quarter of 1998,  the Company  adopted  Statement  of Financial
   Accounting   Standards  No.  130,  Reporting   Comprehensive   Income.  Total
   comprehensive   income,   consisting  of  net  income  and  foreign  currency
   translation  effects, for the three months and six months ended June 30, 1998
   and  1997  was $23  million,  $72  million,  $93  million  and  $49  million,
   respectively.

   Note 3.  Tax Matters

   As described in Note 6 of Notes to Consolidated  Financial  Statements in the
   Company's  Annual  Report on Form 10-K for the year ended  December 31, 1997,
   there are  pending  German tax issues for the years 1984  through  1990.  See
   "Management's  Discussion and Analysis of Financial  Condition and Results of
   Operations -- Liquidity and Capital Resources."

   Note 4.  Earnings Per Share

   The average  number of  outstanding  common shares used in computing  diluted
   earnings per share for the three months ended June 30, 1998 and 1997 included
   2,498,725 and 2,531,058 average  incremental  shares,  respectively,  for the
   assumed exercise of stock options, and for the six months ended June 30, 1998
   and  1997  included  2,343,264  and  2,476,075  average  incremental  shares,
   respectively.


<PAGE>



   Note 5.  Impact of Recently Issued Accounting Standards

   In June 1998, the Financial  Accounting  Standards Board issued Statement No.
   133, Accounting for Derivative  Instruments and Hedging Activities,  which is
   required to be adopted in years  beginning after June 15, 1999. The Company's
   use of derivatives  is minimal,  and therefore  management  believes that the
   adoption of the new Statement will not have a significant  effect on earnings
   or the financial position of the Company.



<PAGE>


                                          PART 1. FINANCIAL INFORMATION

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

Overview

         Sales for the second quarter of 1998 were $1.8 billion,  an increase of
13% (16%  excluding  the  unfavorable  effects  of foreign  exchange)  from $1.6
billion in the second  quarter of 1997.  Operating  income was $202 million,  an
increase of 13% (17% excluding the unfavorable effects of foreign exchange) from
$178 million in the second quarter of 1997.  Operating income for the first half
of 1998 was $327 million,  an increase of 10% over the $297 million of operating
income in the first half of 1997.
<TABLE>

                         SUMMARY SEGMENT AND INCOME DATA
                              (Dollars in millions)
                                   (Unaudited)

<CAPTION>
                                         Three Months Ended    Six Months Ended
                                             June 30,              June 30,
                                             --------              --------
                                           1998      1997       1998      1997
                                           ----      ----       ----      ----
<S>                                    <C>         <C>       <C>       <C>  

Sales:
    Air Conditioning Products           $1,112    $   983    $1,950    $1,765
    Plumbing Products                      384        367       742       710
    Automotive Products                    274        239       546       475
    Medical Systems                         25          -        50         -
                                        ------     ------    ------    ------    
    Total  sales                        $1,795     $1,589    $3,288    $2,950
                                        ======     ======    ======    ======

Operating income (loss):
    Air Conditioning Products           $  132     $  118    $  200   $  187
    Plumbing Products                       33         33        52       55
    Automotive Products                     42         31        84       63
    Medical Systems                         (5)        (4)       (9)      (8)
                                        ------     ------    ------   ------
                                           202        178       327      297
 Equity in net income of
     unconsolidated joint ventures           6          3        12        6
                                        ------     ------    ------   ------
                                           208        181       339      303

 Interest expense                          (51)       (47)     (102)     (96)
 Corporate and other expenses              (26)       (20)      (45)     (40)
                                        ------     ------    ------   ------
 Income before income taxes
     and extraordinary item            $   131   $    114   $   192  $   167
                                       =======   ========   =======  =======
</TABLE>


<PAGE>

     Results of Operations  for the Second  Quarter and First Six Months of 1998
Compared with the Second Quarter and First Six Months of 1997

         The  Company  achieved  record  sales in the second  quarter of 1998 of
$1,795  million,  an  increase  of  $206  million,  or 13%  (16%  excluding  the
unfavorable  effects of foreign  exchange),  from  $1,589  million in the second
quarter of 1997.  Sales  increased  13% for Air  Conditioning  Products,  5% for
Plumbing Products and 15% for Automotive Products,  and included $25 million for
the new Medical Systems segment.

         Operating  income for the  second  quarter of 1998 was also a record at
$202 million, an increase of $24 million, or 13% (17%% excluding the unfavorable
effects of foreign  exchange),  from $178 million in the second quarter of 1997.
Operating income increased 12% for Air Conditioning Products, 35% for Automotive
Products  and was flat for Plumbing  Products.  The  operating  loss for Medical
Systems was $5 million in the second  quarter of 1998 compared with a $4 million
loss in the 1997 quarter.

         Sales for the first half of 1998 were  $3,288  million,  an increase of
$338  million,  or  11%  (15%  excluding  the  unfavorable  effects  of  foreign
exchange),  from $2,950 million in the first half of 1997.  Sales  increased 10%
for Air Conditioning  Products,  5% for Plumbing Products and 15% for Automotive
Products, and included $50 million of sales for the new Medical Systems segment.
Operating income was $327 million for the first half of 1998, an increase of 10%
(15% excluding the unfavorable effects of foreign exchange),  compared with $297
million  in the  first  half of  1997.  Operating  income  increased  7% for Air
Conditioning  Products  and 33% for  Automotive  Products  but  declined  5% for
Plumbing Products. The operating loss for Medical Systems was $9 million for the
first  half of 1998  compared  with a loss of $8  million  for the first half of
1997.

         Sales of Air  Conditioning  Products  increased 13% (15%  excluding the
unfavorable  effects  of  foreign  exchange)  to $1,112  million  for the second
quarter of 1998,  from $983 million for the second quarter of 1997.  These gains
reflected  a 17%  increase in the U.S.,  resulting  from  continued  strength in
commercial  businesses  and  expanding  sales and service  operations,  and a 9%
increase in international  operations  (excluding  unfavorable  foreign exchange
effects),  due to strong growth in Latin  America and modest  growth  elsewhere.
Sales of applied and unitary  commercial  products in the U.S. increased because
of improved markets. U.S. residential product sales surged 24% due to the effect
of hot  weather on the  replacement  market as well as strong new  construction.
International sales for the second quarter of 1998 increased principally because
of higher volumes in Latin America,  the Far East and Middle East. Sales for Air
Conditioning Products for the first half of 1998 increased by 10% (12% excluding
foreign  exchange  effects) to $1,950  million from $1,765  million in the first
half of 1997,  primarily for the reasons cited for the second quarter  increase,
offset somewhat by the adverse  effects of a four-week  strike at the Lexington,
Kentucky, air handling facility in the first quarter of 1998.

         Operating  income  of Air  Conditioning  Products  increased  12%  (14%
excluding the  unfavorable  effects of foreign  exchange) to $132 million in the
second  quarter  of 1998  from  $118  million  in the  1997  quarter,  primarily
reflecting higher  residential and commercial  product volumes in the U.S. Those
gains were partly offset by lower operating income for international operations,
reflecting  lower margins in Europe and the Far East.  Operating  income for the
first half of 1998  increased  7% (8%  excluding  unfavorable  foreign  exchange
effects)  to  $200  million  from  $187  million  in the  first  half  of  1997,
essentially for the reasons  mentioned for the second quarter  increase,  offset
partly by the effects of the strike at Lexington in the first quarter.
<PAGE>

         Sales of Plumbing Products  increased 5% (10% excluding the unfavorable
effects of foreign exchange) to $384 million in the second quarter of 1998, from
$367 million in the second quarter of 1997.  Sales increased 13% in the U.S. and
8% in  international  operations  excluding the  unfavorable  effects of foreign
exchange.  Sales in the U.S.  increased as a result of higher volume,  primarily
through expanding major retailers,  and gains in market share. The international
sales increase  resulted  primarily from increased volume in Latin America where
markets were strong, and from the effect of including results from operations in
China on a  consolidated  basis since the fourth  quarter of 1997  following the
acquisition of a majority interest. The gain in international sales was achieved
despite lower sales in the Far East (excluding China) as a result of the adverse
economic  conditions in that area. Sales of Plumbing Products for the first half
of 1998 increased 5% (11% excluding the unfavorable effects of foreign exchange)
to $742 million from $710 million in the first half of 1997.  This  increase was
due principally to the same factors affecting second quarter results.

         Operating  income of  Plumbing  Products  was $33 million in the second
quarter of 1998,  the same level as the second quarter of 1997, but increased 6%
excluding the unfavorable  effects of foreign exchange.  In the U.S.,  operating
income  improved  because of higher  sales and benefits of  lower-cost  products
manufactured at the Company's Mexican facilities.  For international operations,
operating income increased  primarily  because of higher volume in Latin America
and the effect of consolidating the China plumbing  operations,  which more than
offset the  effects of economic  weakness in the rest of Asia and interim  costs
associated with implementing the low-cost sourcing program in Europe.  Operating
income for the first half of 1998 was $52 million  compared  with $55 million in
the first  half of 1997,  but  increased  by 6%  excluding  unfavorable  foreign
exchange effects.  The  exchange-adjusted  increase  resulted  primarily for the
reasons mentioned for the second quarter.

         Sales of Automotive  Products for the second  quarter of 1998 increased
15% (19% excluding the unfavorable  effects of foreign exchange) to $274 million
from  $239  million  in the  second  quarter  of 1997.  This  increase  resulted
primarily  from higher  volume,  as unit volume of truck and bus  production  in
Western Europe increased 12% over the second quarter of 1997. In addition, sales
increased   because  of  higher  product   content  per  vehicle  on  new  model
introductions  launched in 1997 and  increased  shipments of  anti-lock  braking
systems (ABS) to the Company's U.S. marketing joint venture. The increased sales
in the U.S.  reflected  the  phase-in of  regulations  requiring  ABS on all new
heavy-duty trucks and trailers,  together with an increased level of heavy truck
production.  Sales of Automotive  Products for the first half of 1998  increased
15% (21% excluding the unfavorable  effects of foreign exchange) to $546 million
from $475 million in the first half of 1997, primarily for the reasons cited for
the second quarter.

         Operating income for Automotive Products for the second quarter of 1998
was $42 million,  an increase of 35% (45% excluding the  unfavorable  effects of
foreign exchange) from $31 million in the second quarter of 1997. This reflected
the  higher  sales  and  improved  margins  due  to  productivity  improvements.
Operating  income  for  Automotive  Products  for the first half of 1998 was $84
million,  an increase of 33% (42% excluding the  unfavorable  effects of foreign
exchange)  from $63 million in the first half of 1997  principally  for the same
reasons cited for the second quarter of 1998.

         Medical  Systems sales were $25 million in the second  quarter of 1998,
reflecting  the  acquisition  of the  diagnostic  business  in  June  1997.  The
operating  loss was $5 million in the second  quarter of 1998 compared with a $4
million  loss in the  1997  quarter,  reflecting  development  costs,  including
efforts to obtain U.S.  and  European  regulatory  approvals  of new  diagnostic
products and tests.
<PAGE>

         Equity in net income of unconsolidated  joint ventures  increased to $6
million in the second  quarter of 1998 from $3 million in the second  quarter of
1997,  reflecting  the strong growth of Automotive  Products' U.S. joint venture
and increased earnings from the Company's financing joint venture established in
1996.


Financial Review

         Interest  expense  increased  $4 million in the second  quarter of 1998
compared to the year-earlier quarter principally due to debt incurred to finance
1997 share repurchases and the acquisition of the medical  diagnostic  business.
The  $6  million   increase  in  corporate  and  other   expenses  is  primarily
attributable to reduced exchange gains in hyperinflationary countries, increased
discount fees  associated with U.S.  customer  inventory  financing  through the
Company's  financial  services joint venture and an EPA settlement  related to a
discontinued operation.

         The  income  tax  provision  for the  second  quarter  of 1998  was $53
million,  or 40.5% of pretax income compared with a provision of $40 million, or
35.5% of pretax income in the second  quarter of 1997.  The lower  effective tax
rate in 1997 resulted from the  utilization of certain  previously  unrecognized
tax benefits. No similar benefits are available in 1998.

         On June 1, 1998, the Company  redeemed its 10-1/2% Senior  Subordinated
Discount  Debentures and its 9-7/8% Senior  Subordinated Notes with the proceeds
of offerings of $1 billion  principal amount of Senior Notes as described below.
As a  result  of  this  redemption,  the  second  quarter  of 1998  included  an
extraordinary charge of $50 million,  net of income taxes,  attributable to call
premiums and the  write-off  of  unamortized  debt  issuance  costs.  The second
quarter of 1997 also  included an  extraordinary  charge of $15 million,  net of
income  taxes,  related  to the  redemption  of  the  Company's  11-3/8%  Senior
Debentures.


Liquidity and Capital Resources

         Net cash provided by operating activities,  after cash interest paid of
$53 million,  was $167 million for the first six months of 1998,  compared  with
net cash provided of $68 million for the similar period of 1997. The $99 million
increase resulted primarily from improved net working capital.  The Company made
capital  expenditures of $107 million for the first half of 1998,  including $10
million  of   investments  in  affiliated   companies,   compared  with  capital
expenditures  of $95 million in the first half of 1997,  including $1 million of
investments in affiliated  companies  (excluding the  acquisition of the medical
diagnostic business).


         In the first  quarter  and early April of 1998,  the Company  completed
public  offerings  of $1 billion  principal  amount of senior  debt  securities,
including:  (i) $125 million of 7-1/8% Senior Notes due 2003;  (ii) $250 million
of 7-3/8%  Senior Notes due 2005;  (iii) $350 million of 7-3/8% Senior Notes due
2008;  and (iv) $275 million of 7-5/8%  Senior Notes due 2010.  The Company used
the  net  proceeds  of  these  offerings  (approximately  $963  million,  net of
underwriting  discounts and interest rate hedge costs) to effect the Redemption,
on June 1, 1998, of its 10-1/2% Senior Subordinated Discount Debentures due 2005
and 9-7/8%  Senior  Subordinated  Notes due 2001.  The total amount  required to
complete the Redemption, including redemption premiums, was $954 million, net of
the effect of the settlement of certain swap transactions  related to the Senior
Subordinated  Discount Debentures.  Pending the Redemption,  the net proceeds of
the offerings were applied to the extent possible to reduce borrowings under the
revolving  portion of the Company's $1.75 billion 1997 Credit  Agreement and the
<PAGE>

excess was invested in short-term  securities.  The  Redemption was funded using
approximately  $200 million of such  short-term  securities  and $750 million of
borrowings  under  the  revolving  portion  of the  1997  Credit  Agreement.  In
accordance  with  the  terms  of  the  10-1/2%  Senior   Subordinated   Discount
Debentures,  on June 1, 1998,  interest  on the  debentures  would  have  become
payable in cash. As a result of the  Redemption,  the Company  expects to reduce
its total annual cash interest payments by approximately $24 million compared to
the amount that would  otherwise  have been payable and to reduce its annual net
interest expense by approximately $20 million before taxes.

         In January  1997 the Company  entered  into the 1997 Credit  Agreement.
This agreement, which requires no repayment of principal prior to its expiration
in 2002, provides the Company with senior secured credit facilities  aggregating
$1.75  billion as follows:  (a) a $750  million  U.S.  dollar  revolving  credit
facility  and a $625  million  multi-currency  revolving  credit  facility  (the
"Revolving  Facilities"),  which by their nature are short-term,  and (b) a $375
million  multi-currency  periodic access credit facility.  Up to $500 million of
the Revolving Facilities may be used to issue letters of credit. The 1997 Credit
Agreement and certain other  American  Standard  Inc. debt  instruments  contain
restrictive  covenants and other requirements with which the Company believes it
is currently in compliance.

         At  June  30,  1998,   the  Company  had  borrowings  of  $555  million
outstanding  under the Revolving  Facilities.  There was $760 million  available
under the  Revolving  Facilities  after  reduction  for  borrowings  and for $60
million of letters of credit usage. The Company's  foreign  subsidiaries had $73
million  available  at June 30, 1998,  under  overdraft  facilities  that can be
withdrawn by the banks at any time.  In addition,  the  Company's  operations in
China have $34 million  available under bank credit  facilities  after reduction
for borrowings of $8 million and letters of credit usage of $15 million.

         The Company had  previously  disclosed  that the  restructuring  of its
European  plumbing  operations  would entail a special  charge of  approximately
$75-$100 million related to employee  severance and  consolidation of production
facilities.  The Company  expects to record this charge in the third  quarter of
1998.  Also,  the Company plans to take a non-cash  asset  impairment  charge of
approximately  $40 million  related to  goodwill  associated  with the  European
plumbing  operations  in  accordance  with SFAS No. 121 and a special  charge of
approximately  $45 million  associated with  restructuring its plumbing products
operations in the Americas.

         The Company recently announced that it may repurchase additional shares
of its  common  stock.  The  Company's  Board  of  Directors  has  approved  the
repurchase  of up to $100  million of its common  stock per year for up to three
years. Full  implementation of this repurchase  program,  however, is subject to
obtaining the removal of certain  restrictive  covenants in the  Company's  debt
instruments  limiting the amount of stock  repurchases.  The Company  expects to
obtain the removal or modification of these restrictive covenants to permit full
implementation of the repurchase plan.

         As described in Note 6 of Notes to Consolidated Financial Statements in
the Company's  Annual Report on Form 10-K for the year ended  December 31, 1997,
there are pending  German Tax issues for the years 1984 through 1990.  There has
been no change in the status of these issues since that report was filed.
<PAGE>

         Comments  in  this  Quarterly  Report  on  Form  10-Q  contain  certain
forward-looking   statements   which  are  based  on  management's   good  faith
expectations  and belief  concerning  future  developments.  Actual  results may
differ materially from these expectations as a result of many factors,  relevant
examples of which are set forth in the Company's 1997 Annual Report on Form 10-K
and in the "Management's  Discussion and Analysis" section of the Company's 1997
Annual Report to Shareholders.


<PAGE>


                           PART II. OTHER INFORMATION

Item  1.  Legal Proceedings.

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

Item 2.  Changes in Securities and Use of Proceeds.

         On March 11, 1996, the Company issued 13,334 shares of its common stock
to Frankwich Service Agency  ("Frankwich"),  an independent sales office engaged
in sales of the  Company's air  conditioning  products,  in a private  placement
pursuant  to  Section  4(2) of the  Securities  Act of  1933,  as  amended  (the
"Securities  Act"),  and in  conformity  with  the  provisions  of  Rule  506 of
Regulation D thereunder as payment of the purchase  price of $375,000 to acquire
substantially all of the assets of Frankwich.

         On April 30,  1996,  the Company  issued 231,  256 shares of its common
stock to the  shareholders of Diagnostics and Devices Inc.  ("DDI") in a private
placement  pursuant to Section 4(2) of the Securities Act and in conformity with
the provisions of Rule 506 of Regulation D thereunder as payment of the purchase
price of $6.4  million  for all the  issued  and  outstanding  shares of DDI not
already owned by the Company.

         On  November  1, 1997 and April 15,  1998,  respectively,  the  Company
issued 24,186 shares and 4,650 shares of its common stock to the shareholders of
Elsbree Corporation ("Elsbree"), an independent sales office engaged in sales of
the Company's air  conditioning  products,  in a private  placement  pursuant to
Section 4(2) of the Securities Act and in conformity with the provisions of Rule
506 of Regulation D thereunder  as payment of the purchase  price of $975,000 to
acquire substantially all of the assets and certain liabilities of Elsbree.

         On March 3, 1998 and April 23, 1998,  respectively,  the Company issued
143,358  shares and 29,541  shares of its common  stock to the  shareholders  of
Industrial Sheet Metal & Mechanical Corporation ("ISM&M") in a private placement
pursuant  to  Section  4(2) of the  Securities  Act and in  conformity  with the
provisions  of Rule 506 of  Regulation D  thereunder  as payment of the purchase
price of approximately  $7.7 million to acquire  substantially all of the assets
and certain liabilities of ISM&M.


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

         The Company's 1998 Annual Meeting of  Stockholders  ("Annual  Meeting")
was held on May 7, 1997. At the Annual Meeting,  the Company's  stockholders (a)
elected three Class III Directors  with terms  expiring at the Company's  Annual
Meeting  of  Stockholders  in 2001,  (b)  approved  the  1997-1999  Supplemental
Incentive  Compensation  Plan, (c) approved the amendment and restatement of the
Company's  Restated  Certificate of  Incorporation  to remove  certain  obsolete
provisions  and make a clarifying  change  conforming to the  Company's  Amended
By-laws  and (d)  ratified  the  selection  of Ernst & Young LLP as  independent
certified public  accountants of the Company and its  consolidated  subsidiaries
for 1998.
<PAGE>

         Following  the Annual  Meeting,  three Class I Directors,  having terms
expiring in 1999,  and three Class II Directors,  having terms expiring in 2000,
continued in office.

<TABLE>

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

                                                                                               Broker
                                                                                                Non
                      Matters                         For       Against      Abstentions       Votes
<S>                 <C>                             <C>        <C>         <C>                <C>

Election of Directors*
  - For a term expiring at the Annual
    Meeting of Stockholders in 2001
    Steven E. Anderson                               57,645,096      226,623      *             -0-
    Emmanuel A. Kampouris                            57,622,871      248,847      *             -0-
    Roger W. Parsons                                 57,647,545      224,174      *             -0-

Approval of the 1997-1999 Supplemental Incentive
    Compensation Plan                                55,761,802    1,699,821        464,215     -0-
    -----------------

Approval of amendment and restatement of Restated
    Certificate of Incorporation                     57,338,988      367,099        216,227     -0-
    ----------------------------

Selection of Independent Accountants                 57,756,560       56,112        110,973     -0-
------------------------------------
---------------------------
<FN>
* With  respect  to the  election  of  directors,  the form of  proxy  permitted
shareholders to check boxes indicating  votes either "For" or "Withheld",  or to
vote "For all  except"  and to name  exceptions;  votes  relating  to  directors
designated  above as "Against"  include votes cast as  "Withheld"  and for named
exceptions.
</FN>
</TABLE>

Item  6.  Exhibits and Reports on Form 8-K
           (a)  Exhibits.  The  exhibits  listed  on the  accompanying  Index to
           Exhibits are filed as part of this quarterly report on Form 10-Q.

           (b) Reports on Form 8-K.  During the quarter ended June 30, 1998, the
           Company filed no reports on Form 8-K.





<PAGE>


                                                 SIGNATURE

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

                                                AMERICAN STANDARD COMPANIES INC.






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












August 13, 1998



<PAGE>


                        AMERICAN STANDARD COMPANIES INC.
                                INDEX TO EXHIBITS



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



                 Exhibit No.               Description
                    (27)                   Financial Data Schedule



<PAGE>