American Standard to Separate its Three Businesses

American Standard Companies Inc. announced that its board of directors has completed a strategic review of the company and unanimously approved a plan to
separate its three businesses this year. "The board has concluded that separating American Standard into three focused, better understood companies will
create greater shareowner value than the current structure,” says Fred Poses, chairman and CEO. "The businesses have the size, global reach, industry leadership and organizational talent to succeed as separate companies.”
Upon completion of the plan, American Standard will focus on its global market-leading air conditioning systems and services business with 2006 sales of $6.8 billion and will change the company’s name to Trane, the
company’s flagship air conditioning brand. The company plans to spin off its global vehicle control systems business with 2006 sales of $2.0 billion as an independent, publicly traded company, expected to be known as
WABCO. It plans to implement the spinoff through a tax-free stock dividend of all WABCO common stock to American Standard shareowners, who would receive one share of WABCO common stock for every three shares of American Standard common stock currently owned. In addition, American Standard plans to sell its bath and kitchen business with 2006 sales of $2.4 billion. The company expects to complete both the spinoff of WABCO and the sale of Bath and Kitchen by early fall of this year. “We’ve come a long way since the company went public in 1995,” says Poses. “Over the past 12 years, we’ve generated average annual total shareowner returns of about 18 percent. Over the past seven years, we reduced our debt by more than $1 billion, achieved investment grade ratings, and established our quarterly dividend and subsequently increased it. At the same time, we invested in our businesses to strengthen their overall capabilities.
“Looking to the future, our board concluded that the separation plan we are announcing today is the best way to enhance shareowner value,” says Poses. “Operating separately, the businesses will benefit from greater strategic focus, increased market recognition, improved capital flexibility, and an increased ability to attract, retain and motivate employees.”
Air Conditioning Systems and Services is the largest of American Standard’s businesses, with 2006 sales of $6.8 billion.
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