content: ================================================================================
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC 20549
  
                                      FORM 10-Q
  
  [ 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
  
  [   ]  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 1-2227
  
                           CROWN CORK & SEAL COMPANY, INC.
               (Exact name of registrant as specified in its charter)
  
  
              Pennsylvania                                23-1526444
    (State or other jurisdiction              (I.R.S. Employer Identification No.)
  of incorporation or organization)
  
      One Crown Way, Philadelphia, PA.                     19154-4599
  (Address of principal executive offices)                 (Zip Code)
  
                                    215-698-5100
                (Registrant's telephone number, including area code)
  
  
  Indicated  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 ___
  
  There were 124,410,543 shares of Common Stock outstanding as of July 31, 1998.
  
  ================================================================================
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
                           PART I - FINANCIAL INFORMATION
  
                          CONSOLIDATED STATEMENTS OF INCOME
  
                    (In millions except share and per share data)
                                     (Unaudited)
  <TABLE>
  <CAPTION>
  -----------------------------------------------------------------------------------------------------------
  Three months ended June 30,                                                  1998                 1997
  -----------------------------------------------------------------------------------------------------------
  <S>                                                                  <C>                  <C>              
  Net sales                                                            $         2,245.0    $         2,286.6
                                                                       -----------------    -----------------
  
  Cost, expenses & other income
    Cost of products sold, excluding depreciation and amortization               1,727.2              1,786.0
    Depreciation and amortization                                                  136.1                138.9
    Selling and administrative expense                                              93.2                104.6
    Gain on sale of assets                                                                              (28.1)
    Interest expense                                                               104.1                 94.0
    Interest income                                                                (12.4)                (9.4)
    Translation and exchange adjustments                                             5.8                  1.7
                                                                       -----------------    -----------------
                                                                                 2,054.0              2,087.7
                                                                       -----------------    -----------------
  
  Income before income taxes                                                       191.0                198.9
  
  Provision for income taxes                                                        64.4                 64.1
  Minority interest, net of equity earnings                                          (.9)                (2.8)
                                                                       -----------------    -----------------
  
  Net income                                                                       125.7                132.0
  
  Preferred stock dividends                                                          4.1                  5.8
                                                                       -----------------    -----------------
  
  Net income available to common shareholders                          $           121.6    $           126.2
                                                                       =================    =================
  
  Earnings per average common share
                       Basic                                           $             .98    $             .98
                                                                       =================    =================
                       Diluted                                         $             .95    $             .94
                                                                       =================    =================
  Dividends per common share                                           $             .25    $             .25
                                                                       =================    =================
  
  Weighted average common shares outstanding:
                      Basic                                                  124,442,024          128,554,649
                      Diluted                                                132,826,655          140,553,858
  -----------------------------------------------------------------------------------------------------------
  </TABLE>
  
  Certain prior year balances have been reclassified to improve comparability.
  
  The accompanying notes are an integral part of these financial statements.
  
                                         2
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
                           PART I - FINANCIAL INFORMATION
  
                          CONSOLIDATED STATEMENTS OF INCOME
                    (In millions except share and per share data)
                                     (Unaudited)
  
  <TABLE>
  <CAPTION>
  -------------------------------------------------------------------------------------------------------------
  Six months ended June 30,                                                   1998                 1997
  -------------------------------------------------------------------------------------------------------------
  <S>                                                                  <C>                  <C>              
  Net sales                                                            $         4,137.4    $         4,223.9
                                                                       -----------------    -----------------
  
  Cost, expenses & other income
    Cost of products sold, excluding depreciation and amortization               3,229.4              3,330.4
    Depreciation and amortization                                                  272.7                278.2
    Selling and administrative expense                                             190.8                208.5
    Gain on sale of assets                                                                              (34.2)
    Interest expense                                                               197.9                186.6
    Interest income                                                                (19.8)               (16.7)
    Translation and exchange adjustments                                             7.5                  2.8
                                                                       -----------------    -----------------
                                                                                 3,878.5              3,955.6
                                                                       -----------------    -----------------
  
  Income before income taxes                                                       258.9                268.3
  
  Provision for income taxes                                                        92.3                 89.9
  Minority interest, net of equity earnings                                           .8                 (7.4)
                                                                       -----------------    -----------------
  
  Net income                                                                       167.4                171.0
  
  Preferred stock dividends                                                          9.2                 11.7
                                                                       -----------------    -----------------
  
  Net income available to common shareholders                          $           158.2    $           159.3
                                                                       =================    =================
  
  Earnings per average common share
                       Basic                                           $            1.26    $            1.24
                                                                       =================    =================
                       Diluted                                         $            1.24    $            1.22
                                                                       =================    =================
  Dividends per common share                                           $             .50    $             .50
                                                                       =================    =================
  
  Weighted average common shares outstanding:
                      Basic                                                  125,763,763          128,517,313
                      Diluted                                                135,295,628          140,532,982
  -------------------------------------------------------------------------------------------------------------
  </TABLE>
  
  Certain prior year balances have been reclassified to improve comparability.
  
  The accompanying notes are an integral part of these financial statements.
  
                                         3
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
                       CONSOLIDATED BALANCE SHEETS (Condensed)
                         (In millions except per share data)
                                     (Unaudited)
  
  --------------------------------------------------------------------------------
                                                      June 30,     December 31,
                                                        1998           1997
  --------------------------------------------------------------------------------
  Assets
  Current Assets
    Cash and cash equivalents                      $      214.8   $      205.6
    Receivables                                         1,727.4        1,353.5
    Inventories                                         1,563.0        1,387.5
    Prepaid expenses and other current assets             207.2          200.6
                                                   ------------   ------------
                     Total current assets               3,712.4        3,147.2
                                                   ------------   ------------
  
  Long-term notes and receivables                          53.5           65.0
  Investments                                              88.4           89.5
  Goodwill, net of amortization                         4,547.6        4,625.2
  Property, plant and equipment                         3,656.8        3,663.9
  Other non-current assets                                832.4          714.9
                                                   ------------   ------------
                     Total                         $   12,891.1   $   12,305.7
                                                   ============   ============
  
  Liabilities and shareholders' equity
  Current liabilities
    Short-term debt                                     2,366.4   $    1,385.4
    Current portion of long-term debt                     384.5          399.3
    Accounts payable and accrued liabilities            2,206.3        2,236.7
    United States and foreign income taxes                 75.2           27.9
                                                   ------------   ------------
                    Total current liabilities           5,032.4        4,049.3
                                                   ------------   ------------
  
  Long-term debt, excluding current maturities          3,209.8        3,301.4
  Postretirement and  pension liabilities                 705.6          711.7
  Other non-current liabilities                           435.1          431.3
  Minority interests                                      279.6          282.8
  Shareholders' equity                                  3,228.6        3,529.2
                                                   ------------   ------------
                   Total                           $   12,891.1   $   12,305.7
                                                   ============   ============
  Book value per common share                      $      24.37   $      25.26
  --------------------------------------------------------------------------------
  
  The accompanying notes are an integral part of these financial statements.
  
                                         4
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)
                                    (In millions)
                                     (Unaudited)
  <TABLE>
  <CAPTION>
  -----------------------------------------------------------------------------------------
  Six months ended June 30,                                           1998          1997
  -----------------------------------------------------------------------------------------
  <S>                                                              <C>          <C>      
  Cash flows from operating activities
    Net income                                                     $   167.4    $   171.0
    Depreciation and amortization                                      272.7        278.2
    Gain on sale of assets                                                          (25.0)
    Change in assets and liabilities, other than debt, net of
       businesses acquired                                            (573.9)      (573.1)
                                                                   ---------    ---------
       Net cash used in operating activities                          (133.8)      (148.9)
                                                                   ---------    ---------
  
  Cash flows from investing activities
    Capital expenditures                                              (237.3)      (202.6)
    Acquisition of businesses, net of cash acquired                    (34.2)       (10.0)
    Proceeds from sale of property, plant and equipment                 27.6         25.5
    Proceeds from sale of businesses                                                 90.0
    Other, net                                                          (5.1)        ( .4)
                                                                   ---------    ---------
       Net cash used in investing activities                          (249.0)       (97.5)
                                                                   ---------    ---------
  Cash flows from financing activities
    Proceeds from long-term debt                                         3.9          1.5
    Repayment of long-term debt                                       (108.1)      (257.2)
    Net change in short-term debt                                      938.8        647.1
    Stock repurchased                                                 (369.0)       (17.2)
    Dividends paid                                                     (73.2)       (76.0)
    Common stock issued under various employee benefit plans             5.2          7.3
    Minority contributions, net of dividends paid                       (3.4)        (3.4)
                                                                   ---------    ---------
       Net cash provided by financing activities                       394.2        302.1
                                                                   ---------    ---------
  
  Effect of exchange rate changes on cash and cash equivalents          (2.2)       (10.3)
                                                                   ---------    ---------
  
  Net change in cash and cash equivalents                                9.2         45.4
  Cash and cash equivalents at beginning of period                     205.6        160.4
                                                                   ---------    ---------
  Cash and cash equivalents at end of period                       $   214.8    $   205.8
                                                                   =========    =========
  
  -----------------------------------------------------------------------------------------
                                                                      1998         1997
  -----------------------------------------------------------------------------------------
  Schedule of non-cash investing activities:
     Acquisition of businesses:
       Fair value of assets acquired                               $    51.2    $    70.0
       Liabilities assumed                                             (17.0)
       Note Payable                                                                 (60.0)
                                                                   ---------    ---------
                           Cash Paid                               $    34.2    $    10.0
                                                                   =========    =========
  -----------------------------------------------------------------------------------------
  </TABLE>
  
  Certain prior year balances have been reclassified to improve comparability.
  
  The accompanying notes are an integral part of these financial statements.
  
                                         5
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
             CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                    (In millions)
                                     (Unaudited)
  <TABLE>
  <CAPTION>
  -----------------------------------------------------------------------------------------------------------------------------------
                                                    |                                                           Accumulated
                                                    |                                                           Other
                               Comprehensive Income |Preferred   Common     Paid-In    Retained    Treasury     Comprehensive
                              Quarter  Year-To-Date |  Stock      Stock     Capital    Earnings     Stock       Income         Total
  -----------------------------------------------------------------------------------------------------------------------------------
  <S>                          <C>       <C>        <C>          <C>       <C>         <C>         <C>          <C>          <C>     
  Balance at December 31, 1997                      | $520.8     $779.0    $1,560.7    $1,327.2    ($137.0)     ($521.5)     $3,529.2
  Net income                   $125.7    $167.4     |                                     167.4                                 167.4
  Translation adjustments        22.7     (31.8)    |                                                             (31.8)        (31.8)
                               ------    ------     |
  Comprehensive income         $148.4    $135.6     |
                               ======    ======     |
                                                    |
  Dividends declared:                               |
      Common                                        |                                     (63.2)                                (63.2)
      Preferred                                     |                                      (9.2)                                 (9.2)
  Stock repurchased                                 | (153.3)                (195.2)                 (20.5)                    (369.0)
  Common stock issued under                         |
      employee benefit plans                        |                           4.4                     .8                        5.2
  -----------------------------------------------------------------------------------------------------------------------------------
  Balance at June 30, 1998                          | $367.5     $779.0    $1,369.9    $1,422.2    ($156.7)     ($553.3)     $3,228.6
  ===================================================================================================================================
                                                    |
                                                    |                                                           Accumulated
                                                    |                                                           Other
                               Comprehensive Income |Preferred   Common     Paid-In    Retained    Treasury     Comprehensive
                              Quarter  Year-To-Date |  Stock      Stock     Capital    Earnings     Stock       Income        Total
  -----------------------------------------------------------------------------------------------------------------------------------
  Balance at December 31, 1996                      | $520.8     $779.0    $1,567.3    $1,185.0    ($136.9)     ($351.9)     $3,563.3
  Net income                   $132.0    $171.0     |                                     171.0                                 171.0
  Translation adjustments       (83.5)   (137.2)    |                                                            (137.2)       (137.2)
                               ------    ------     |
  Comprehensive income          $48.5     $33.8     |
                               ======    ======     |
                                                    |
  Dividends declared:                               |
      Common                                        |                                     (64.3)                                (64.3)
      Preferred                                     |                                     (11.7)                                (11.7)
  Stock repurchased                                 |                         (15.6)                  (1.6)                     (17.2)
  Common stock issued under                         |
      employee benefit plans                        |                           6.1                    1.2                        7.3
  -----------------------------------------------------------------------------------------------------------------------------------
  Balance at June 30, 1997                          | $520.8     $779.0    $1,557.8    $1,280.0    ($137.3)     ($489.1)     $3,511.2
  ===================================================================================================================================
  </TABLE>
  
  Certain prior year balances have been reclassified to improve comparability. 
  
  The accompanying notes are an integral part of these financial statements.
  
                                         6
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (In millions, except per share data)
                                     (Unaudited)
  
  
  A.   Statement of Information Furnished
  
       The accompanying  unaudited  interim  consolidated and condensed  financial
       statements  have been prepared by the Company in accordance  with Form 10-Q
       instructions.  In the opinion of management,  these consolidated  financial
       statements  contain  all  adjustments   necessary  to  present  fairly  the
       financial position of Crown Cork & Seal Company,  Inc. as of June 30, 1998,
       and the results of its operations and cash flows for the periods ended June
       30, 1998 and 1997, respectively.  These results have been determined on the
       basis  of  generally   accepted   accounting   principles   and   practices
       consistently applied.
  
       Certain  information  and  footnote   disclosures,   normally  included  in
       financial  statements  presented  in  accordance  with  generally  accepted
       accounting  principles,  have been condensed or omitted.  The  accompanying
       Consolidated  Financial  Statements  should be read in conjunction with the
       financial  statements  and notes thereto  incorporated  by reference in the
       Company's Annual Report on Form 10-K for the year ended December 31, 1997.
  
  B.   Earnings Per Share
  
       The following  table  summarizes the basic and diluted  earnings per common
       share   computations  for  the  periods  ended  June  30,  1998  and  1997,
       respectively:
  <TABLE>
  <CAPTION>
                                                     1998                                  1997
                                        ----------------------------         -----------------------------
                                                    Average                              Average
  Quarter                                Income      Shares      EPS          Income      Shares      EPS
  -------                               ----------------------------         -----------------------------
  <S>                                    <C>         <C>        <C>           <C>         <C>        <C>  
  Net income                             $125.7                               $132.0
     Less:
        Preference dividends               (4.1)                                (5.8)
                                         ------                               ------
  Basic EPS                               121.6      124.4      $ .98          126.2      128.6      $ .98
  
  Potentially dilutive securities:
     Stock options                                      .4                                   .7
     Assumed preferred stock
        conversion                          4.1        8.0                       5.8       11.3
                                         ------      -----                    ------      -----
  Diluted EPS                            $125.7      132.8      $ .95         $132.0      140.6      $ .94
                                         ======      =====                    ======      =====
  
  
                                                     1998                                  1997
                                        ----------------------------         -----------------------------
                                                    Average                              Average
  Year-to-date                           Income      Shares      EPS          Income      Shares      EPS
  ------------                           ----------------------------         -----------------------------
  
  Net income                             $167.4                               $171.0
     Less:
        Preference dividends               (9.2)                               (11.7)
                                         ------                               ------
  Basic EPS                               158.2      125.8      $1.26          159.3      128.5      $1.24
  
  Potentially dilutive securities:
     Stock options                                      .4                                   .7
     Assumed preferred
         stock conversion                   9.2        9.1                      11.7       11.3
                                         ------      -----                    ------      -----
  Diluted EPS                            $167.4      135.3      $1.24         $171.0      140.5      $1.22
                                         ======      =====                    ======      =====
  </TABLE>
  
                                         7
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
  C.   Inventories
  
            ----------------------------------------------------------
                                         June 30,         December 31,
                                           1998              1997
            ----------------------------------------------------------
            Finished goods              $    464.4       $    560.5
            Work in progress                 227.6            187.3
            Raw materials                    668.9            467.6
            Supplies and repair parts        202.1            172.1
                                        ----------       ----------
                                        $  1,563.0       $  1,387.5
                                        ==========       ==========
  
  
  D.   Restructuring
  
       During the third quarter of 1997,  the Company  provided $66.6 ($43.3 after
       taxes or $.31 per diluted  share) for the costs  associated  with a plan to
       improve the structure of its  polyethylene  terephthalate  ("PET")  plastic
       beverage   container   business  in  the  United   States  by  closing  and
       reorganizing six  manufacturing  locations in its CONSTAR  subsidiary along
       with other, non-PET, restructuring activities,  primarily in Europe. Annual
       savings relating to these actions, when fully implemented,  are expected to
       be  approximately  $20.0 ($.14 per diluted  share).  The Company expects to
       maintain its existing  manufacturing  capacity, and by relocating equipment
       among its remaining  larger  facilities,  meet all current and  prospective
       volume  requirements.  The Company  records  restructuring  charges against
       operations and provides a reserve based on the best  information  available
       at the time  that the  decision  is made to  restructure.  The  balance  of
       restructuring  reserves  (excluding  the  write-down  of  assets  which  is
       reflected as a reduction of the related asset  account) is included  within
       accounts payable and accrued liabilities.
  
       The  Company  has  incurred  restructuring  and exit costs  relative to the
       acquisition of CMB. Affected by the plan of restructuring were forty plants
       and regional  administrative  offices  which were closed and an  additional
       fifty-two plants which were reorganized.  Since commencement of the plan of
       restructuring, the Company determined alternative sites for manufacture and
       qualified the new manufacturing  sites with customers.  The Company accrued
       approximately   $534  for  the  costs  associated  with  restructuring  CMB
       operations  and  allocated  such  costs  to the  purchase  price  of CMB in
       accordance with purchase  accounting  requirements.  These costs comprised;
       severance pay and benefits,  write-down of assets,  lease  termination  and
       other exit costs. The cost of providing  severance pay and benefits for the
       reduction of approximately  6,500 employees was approximately  $257 and was
       primarily a cash expense.  Employees  terminated included most, if not all,
       employees at each plant or office  which was closed and selected  employees
       at those plants which were reorganized,  including  salaried  employees and
       employees of the  respective  unions  represented  at each plant site.  The
       write-down  of  assets  (principally  property,  plant and  equipment)  was
       approximately  $217 and has been  reflected  as a reduction in the carrying
       value of the  Company's  assets.  Lease  termination  and other exit costs,
       primarily repayments of government grants and subsidies, were approximately
       $60 and were primarily cash expenses.  The restructuring  costs recorded in
       connection with the CMB  acquisition  included a $95  restructuring  charge
       announced  in 1996 by  CarnaudMetalbox  Asia,  Ltd.,  a  subsidiary  of the
       Company.
  
       The plan of restructuring  CMB operations will generate annual cost savings
       of  approximately  $160  ($105  after-tax)  on a full year  basis.  Capital
       expenditures  of  approximately  $100 were made to expand and upgrade other
       facilities to minimize the adverse effects of the restructuring on existing
       business and customer relationships.
  
                                         8
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
       Remaining  balances  in  the  restructuring  reserve  primarily  relate  to
       employee  termination  agreements.   Such  agreements  are  made  with  the
       respective union or with the local  governmental body, whereby a portion of
       the  employee  severance is paid when the  employee is  terminated  and the
       remaining portion is paid out over an agreed period of time. The components
       of the restructuring reserve are as follows:
  
       ---------------------------------------------------------------------------
                                      Balance                 Balance
                                         at          1998        at
                                    December 31,   activity   June 30,
                                        1997                    1998
       ---------------------------------------------------------------------------
            Employee costs            $  119.5    ($  87.9)   $  31.6
            Lease termination and
              other exit costs            35.8       (21.7)      14.1
                                      --------    --------    -------
                                      $  155.3    ($ 109.6)   $  45.7
                                      ========    ========    =======
  
       The foregoing  restructuring charges and related cost savings represent the
       Company's best estimates,  but necessarily  make numerous  assumptions with
       respect to industry performance,  general business and economic conditions,
       raw materials and product pricing levels,  the timing of  implementation of
       the restructuring and related employee reductions and facility closings and
       other  matters,  many of which  are  outside  the  Company's  control.  The
       Company's  estimates  of  cost  savings,  which  are  unaudited,   are  not
       necessarily  indicative of future  performance,  which may be significantly
       more or less  favorable  than as set  forth  above  and is  subject  to the
       considerations   described   herein  on  page  13  under   "Forward-Looking
       Statements" within Item 2 - Management's Discussion and Analysis of Results
       of Operations and Financial  Condition".  Shareholders are cautioned not to
       place undue  reliance on the estimates or the  underlying  assumptions  and
       should  appreciate that such  information may not necessarily be updated to
       reflect  circumstances  existing  after the date  hereof or to reflect  the
       occurrence of unanticipated events.
  
  E.   New Reporting and Disclosure Requirement
  
       Commencing  January 1, 1998,  the Company  adopted  Statement  of Financial
       Accounting  Standards ("SFAS") No. 130, "Reporting  Comprehensive  Income",
       issued in June 1997.  SFAS No.130  establishes a standard for reporting and
       displaying  comprehensive  income and its  components  within the financial
       statements.  Comprehensive  income  includes  charges and credits to equity
       that are not the result of transactions  with  shareholders.  Comprehensive
       income is composed of two subsets - "net  income" and "other  comprehensive
       income". Included in comprehensive income, for the Company, are net income,
       cumulative  translation  adjustments required under SFAS No. 52 and minimum
       pension liability  adjustments  required under SFAS No. 87. The adjustments
       for translation and minimum pension represent "other comprehensive  income"
       and are accumulated within the Statement of Shareholders'  Equity under the
       caption "Accumulated Other Comprehensive Income".
  
       As of June 30,  1998 and June 30,  1997,  accumulated  other  comprehensive
       income (loss),  as reflected in the  consolidated  statements of changes in
       shareholders' equity, comprised the following:
  
                                                       June 30,     June 30,
                                                        1998         1997
                                                      ---------   ---------
            Minimum pension liability adjustments     ($  16.9)   ($  14.8)
            Cumulative translation adjustments        (  536.4)   (  474.3)
                                                      --------    --------
                                                      ($ 553.3)   ($ 489.1)
                                                      ========    ======== 
  
                                         9
  <PAGE>
                           Crown Cork & Seal Company, Inc.
  
  F.   Supplemental Cash Flow Information
  
       Cash payments for interest,  net of amounts  capitalized ($2.7 for 1998 and
       1997), were $189.3 and $198.2 during the six months ended June 30, 1998 and
       1997,  respectively.  Cash payments for income taxes  amounted to $22.5 and
       $40.0 during the six months ended June 30, 1998 and 1997, respectively.
  
  
  G.   Commitments and Contingent Liabilities
  
       The Company has various  commitments to purchase  materials and supplies as
       part of the  ordinary  conduct of  business.  Such  commitments  are not at
       prices in excess of current market.
  
       The Company's  basic raw materials for its products are tinplate,  aluminum
       and resins,  all of which are purchased from multiple sources.  The Company
       is subject to material  fluctuations in the cost of these raw materials and
       has  previously  adjusted its selling  prices to reflect  these  movements.
       There  can be no  assurance,  however,  that  the  Company  will be able to
       recover fully any increases or  fluctuations in raw material costs from its
       customers.
  
       The  Company  is subject to various  lawsuits  and claims  with  respect to
       matters such as  governmental  regulations and other actions arising out of
       the normal course of business. While the impact on future financial results
       is not subject to reasonable  estimation because  considerable  uncertainty
       exists,  management  believes,  after  consulting  with  counsel,  that the
       ultimate  liabilities  resulting  from such  lawsuits  and claims  will not
       materially  affect the  consolidated  results or financial  position of the
       Company.
  
                                         10
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
                           PART I - FINANCIAL INFORMATION
  
  Item 2.   Management's Discussion and Analysis of Results of Operations and
            Financial Condition
            (in millions, except share, per share, employee, shareholder and
            statistical data)
  
            Introduction
  
            The following discussion presents management's analysis of the results
            of  operations  for the  three and six  months  ended  June 30,  1998,
            compared  to the  corresponding  periods  in 1997 and the  changes  in
            financial  condition  and  liquidity  from  December  31,  1997.  This
            discussion  should  be  read  in  conjunction  with  the  Consolidated
            Financial  Statements  and Notes  thereto  included  in the  Company's
            Annual Report on Form 10-K for the year ended December 31, 1997, along
            with the consolidated  financial statements and related notes included
            in and referred to within this report.
  
            All per share  information  is computed  using  average  common shares
            outstanding, assuming dilution.
  
                                Results of Operations
  
            Net Income and Earnings Per Share
  
            Net income available to common shareholders for the quarter ended June
            30,  1998  was  $121.6,  a  decrease  of  3.6%  when  compared  to the
            respective  prior year  amount of $126.2.  Earnings  per common  share
            increased by 1.1% to $.95 from $.94 a year earlier and reflects a 5.5%
            decline  in  diluted  average  common  shares  outstanding,  primarily
            resulting  from the March 1998  repurchase  of shares  from  Compagnie
            Generale d' Industrie et de Participations  (CGIP). Further details of
            this  transaction are presented under Liquidity and Capital  Resources
            as provided later in this  discussion.  The effects of a stronger U.S.
            dollar  reduced  net  income  by  approximately  $.02 per share in the
            second quarter of 1998.
  
            For the six months ended June 30, 1998, net income available to common
            shareholders  was $158.2 or $1.24 per common share  compared  with net
            income  of $159.3 or $1.22  per  common  share for the same  period in
            1997.
  
            Net Sales
  
            Net  sales in the  quarter  decreased  1.8% from  $2,286.6  in 1997 to
            $2,245.0  in 1998.  Net sales  for the  first six  months of 1998 were
            $4,137.4,  a decrease of $86.5 or 2.0% from net sales of $4,223.9  for
            the same period in 1997.  Excluding  the  effects of foreign  exchange
            translation  and the  divestiture of the  Crown-Simplimatic  machinery
            operations (disposed of in May of 1997), net sales would have been .8%
            higher  for the  quarter  and  2.1%  higher  for the six  months.  The
            strengthening of the U.S. dollar against other  currencies,  primarily
            those within Europe,  reduced  consolidated  net sales by $48.6 in the
            second  quarter as compared to 1997. In the quarter,  sales from U. S.
            operations  increased by 1.1% and those in non-U.S.  markets decreased
            by  3.7%.  U.S.   sales,   in  the  second   quarter,   accounted  for
            approximately  40.7% of  consolidated  net  sales in 1998 and 39.5% in
            1997.  Sales of beverage cans and ends as a percentage of consolidated
            net sales have increased in the second quarter from 30.9% to 32.7% and
            sales  of food  cans  and  ends  have  increased  from  28.2% to 28.4%
            compared to the prior year second quarter. North American beverage can
            and  end  sales   represented  20.2%  and  18.9%,   respectively,   of
            consolidated  net sales for the quarter and six months  ended June 30,
            1998 as  compared  to 18.4% and 17.2% for the  comparable  periods  in
            1997.
  
                                         11
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            An analysis of comparative net sales by operating division follows:
  <TABLE>
  <CAPTION>
                                        Net Sales                          Percentage Change
                   --------------------------------------------------  -----------------------
                        Second Quarter           Six Months Ended         Second      Six
                        --------------           ----------------         ------      ---
                      1998          1997         1998        1997         Quarter    Months
                      ----          ----         ----        ----         -------    ------
  <S>              <C>          <C>          <C>          <C>               <C>        <C> 
  Divisions:
  
  Americas         $  1,068.1   $  1,012.6   $  1,969.6   $  1,864.1        5.5%       5.7%
  Europe              1,054.2      1,103.7      1,944.7      2,026.3       (4.5%)    ( 4.0%)
  Asia-Pacific           91.7        104.2        166.8        201.6      (12.0%)    (17.3%)
  Other                  31.0         66.1         56.3        131.9      (53.1%)    (57.3%)
                   ----------   ----------   ----------   ----------
  
                   $  2,245.0   $  2,286.6   $  4,137.4   $  4,223.9       (1.8%)     (2.0%)
                   ==========   ==========   ==========   ==========
  </TABLE>
  
  
            Net  sales in the  Americas  Division  increased  by $55.5 or 5.5% and
            $105.5 or 5.7% for the three and six  months  ended  June 30,  1998 as
            compared to the same periods in 1997.  The increase in the quarter was
            primarily due to sales unit volume increases in (i) U. S. aerosol cans
            and  beverage  cans  and  ends,  (ii) U. S. PET  beverage  containers,
            primarily single serve 20 ounce bottles and beverage  preforms,  (iii)
            U. S. plastic beverage closures and (iv) beverage cans and ends at the
            Company's new beverage can and end plants in Brazil  partially  offset
            by (i) lower U. S. food can volumes,  (ii) lower Canadian beverage can
            volumes and (iii) decreased  aluminum prices which forced decreases in
            selling prices in aluminum beverage cans and ends.
  
            Net sales in the European  Division  decreased $49.5 or 4.5% and $81.6
            or 4.0%  for the  three  and six  months  ended  June  30,  1998,  due
            primarily to the general weakening of most European currencies against
            the U. S. dollar. The impact of translation on sales resulted in a net
            sales  reduction  of $32.1 in the quarter.  Excluding  the impact from
            translation, net sales would have been down 1.6% in the quarter and up
            .1% for the six months as compared to the prior year  periods.  Second
            quarter  local  sales  decreased  primarily  due to lower  sales  unit
            volumes  of food,  aerosol  and  beverage  cans,  partially  offset by
            increased  sales  unit  volumes in (i)  beverage  ends,  (ii)  plastic
            closures and (iii) PET beverage bottles. Competition has remained very
            aggressive throughout the division in most product lines.
  
            Net sales in the  Asia-Pacific  Division have decreased $12.5 or 12.0%
            and $34.8 or 17.3% for the three and six months  ended  June 30,  1998
            from a year earlier due to (i) weakening Asian currencies resulting in
            a U. S.  dollar  sales  loss of $6.1  and (ii)  the  general  economic
            slowdown in the region.  Excluding the impact from translation,  local
            sales  would have been lower by 6.1% in the  quarter and 11.2% for the
            six months  compared to the same periods in 1997. The decline in local
            sales is due  primarily  to (ii)  lower  food can sales  unit  volumes
            primarily  reflecting the  restructuring of operations in Malaysia and
            Singapore in 1997 and (ii) competitive  pricing throughout the region;
            partially offset by increased beverage can volumes resulting from full
            production  at  the  Company's  new  plant  in  Singapore  along  with
            increased demand in both China and Vietnam
  
            Net sales for  Other  operating  units are lower for the three and six
            months  ended June 30,  1998  compared  to the prior year  periods due
            primarily   to   the   May   1997   divestiture   of   the   Company's
            Crown-Simplimatic   machinery   operations  and  lower  sales  at  the
            Company's Golden Aluminum facilities.
  
                                         12
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            Cost of Products Sold
  
            Cost of products sold,  excluding  depreciation and amortization,  was
            $1,727.2  for the quarter and  $3,229.4  for the six months ended June
            30,  1998, a decrease of 3.3% and 3.0%,  respectively,  as compared to
            the same periods in 1997. The decrease  reflects (i) cost savings from
            restructuring  programs,  (ii) decreased  aluminum costs and (iii) the
            appreciation  of the U.S.  dollar  against  most  foreign  currencies;
            offset by increased sales unit volumes in many product lines.
  
            As a  percentage  of net sales,  cost of  products  sold was 76.9% and
            78.1% for the quarter and six months ended June 30, 1998,  as compared
            to 78.1% and 78.8% in the same periods of 1997.  The  improvement  has
            resulted from (i)  increased U. S. sales unit  volumes,  (ii) benefits
            derived  from  the   Company's   continuing   cost   containment   and
            restructuring  programs  and (iii)  the  effect  of  decreases  in raw
            material costs.
  
            Selling and Administrative
  
            Selling and  administrative  expenses  for the quarter  ended June 30,
            1998 were $93.2,  a decrease of $11.4 or 10.9% from the second quarter
            of 1997.  As a  percentage  of net sales,  selling and  administrative
            expenses,  excluding depreciation,  were 4.2% in the second quarter as
            compared to 4.6% for the same period of 1997. For the six months ended
            June 30, 1998, these expenses have decreased $17.7 or 8.5% from a year
            earlier and, as a percentage of net sales, decreased from 4.9% in 1997
            to 4.6% in 1998. The decrease in 1998 costs is directly related to the
            restructuring  of activities  within  acquired  CarnaudMetalbox  (CMB)
            operations.
  
            Operating Income
  
            For the quarter  ended June 30, 1998,  consolidated  operating  income
            increased  $31.4 or 12.2% compared to the same period in 1997. For the
            six  months  ended  June  30,  1998,   consolidated  operating  income
            increased $37.7 or 9.3% from the same period a year earlier. Operating
            income  as a  percentage  of net  sales  was  12.9%  and 10.7% for the
            quarter  and six months  ended June 30,  1998 as compared to 11.2% and
            9.6% for the same periods in 1997. An analysis of operating  income by
            operating division follows:
  
                               Operating Income                 Percentage Change
                 --------------------------------------------  -------------------
                     Second Quarter        Six Months Ended      Second      Six
                     --------------        ----------------      ------      ---
                    1998        1997       1998        1997      Quarter    Months
                    ----        ----       ----        ----      -------    ------
  Divisions:
  
  Americas         $   89.4   $   90.2   $  144.1   $  147.4      (.9%)    ( 2.2%)
  Europe              195.8      158.2      293.5      247.4     23.8%      18.6%
  Asia-Pacific           .6        8.6        1.7        8.8    (93.0%)    (80.7%)
  Other                 2.7         .1        5.2        3.2                62.5%
                   --------   --------   --------   --------
  
                   $  288.5   $  257.1   $  444.5   $  406.8     12.2%       9.3%
                   ========   ========   ========   ========
  
            As a  percentage  of net  sales,  operating  income  for the  Americas
            Division  was 8.4% in the  second  quarter  and 7.3% for the first six
            months of 1998 as  compared  to 8.9% and 7.9% for the same  periods in
            1997.  The  decrease  in second  quarter  1998  operating  margin  was
            primarily due to (i) continued  U.S.  pricing  pressures in both metal
            and plastic  beverage  containers,  (ii) lower beverage can pricing in
            Argentina  and  Brazil  and  (iii)  production  inefficiencies  at the
            Company's new beverage can and end plants in Brazil;  partially offset
            by sales unit volume increases in most product lines.
  
                                         13
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            Operating  income  as a  percentage  of net  sales  for  the  European
            Division  was 18.6% in the second  quarter and 15.1% for the first six
            months of 1998 as  compared  to 14.3%  and  12.2%  for the  comparable
            periods in 1997. The increased margin is directly  attributable to (i)
            the  benefits   realized  from  the  closure  or   reorganization   of
            inefficient plants, removal of products with negative contribution and
            the elimination of excess administrative overheads as part of the cost
            reduction  programs  initiated  with the  acquisition  of CMB and (ii)
            increased  sales unit  volumes in PET  beverage  bottles  and  plastic
            closures;  offsetting the (i)  appreciation of the U.S. dollar against
            most European  currencies  and (ii)  decreased  sales unit volumes for
            food and beverage  cans.  Competitive  pricing,  especially in certain
            food can markets, continues to restrain profit growth.
  
            Operating income in the  Asia-Pacific  Division as a percentage of net
            sales was .7% in the second  quarter and 1.0% for the first six months
            of 1998 versus 8.3% and 4.4% in the same periods of 1997. The decrease
            in 1998 operating  margins is due primarily to (i) the appreciation of
            the U. S. dollar against most Asian  currencies,  (ii) weak demand due
            to the general economic  slowdown in the region and (iii)  competitive
            pricing throughout the region.
  
            Operating  income for Other  operating  units was 8.7% of net sales in
            the  quarter  and  9.2% for the six  months  ended  June  30,  1998 as
            compared to .2% and 2.4% for the same periods in 1997. The improvement
            in the  operating  margin  is  directly  attributable  to the May 1997
            divestiture of the Company's Crown-Simplimatic machinery operations.
  
            Net Interest Expense / Income
  
            Net interest  expense for the second quarter and six months ended June
            30, 1998 was $91.7 and $178.1, respectively,  as compared to $84.6 and
            $169.9  for the  comparable  periods  in  1997.  The  increase  in net
            interest   expense  is  due   primarily  to  cash   requirements   for
            restructuring programs and the March 1998 stock repurchase from CGIP.
  
            Taxes on Income
  
            The  effective  tax rate for the six months  ended  June 30,  1998 was
            35.7% as compared to 33.5% for the same period of 1997.  The effective
            tax  rate  of  35.7%  exceeds  the U.  S.  statutory  rate  of 35% due
            primarily   to   provisions   for  state   taxes  and   non-deductible
            amortization  of goodwill and other  intangibles  offset  partially by
            income  derived  from non-U.  S.  operations  which are taxed at lower
            rates than the U. S. statutory rate.
  
            Minority Interests, Net of Equity in Earnings of Affiliates
  
            Minority interests, net of equity earnings, improved in the quarter by
            $1.9 and $8.2 for the  first six  months  compared  to the prior  year
            periods  due  primarily  to (i)  increased  operating  results  in the
            Company's unconsolidated joint ventures in Brazil and Venezuela,  (ii)
            decreased  profits in the  Company's  consolidated  joint  ventures in
            China and (iii) no further  losses being  recognized  in the Company's
            unconsolidated  joint  venture  in  Korea as the  investment  has been
            reduced  to zero and the  Company  does not  plan nor is  required  to
            inject capital in the future.
  
                                         14
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
                           Liquidity and Capital Resources
  
            Cash from Operations
  
            Net cash of $133.8  was used by  operating  activities  during the six
            months ended June 30, 1998, as compared to cash used of $148.9 for the
            same  period  in  1997.  The  improvement  in cash  used by  operating
            activities is related to increased profits from continuing  operations
            (income before gain on sale of assets). Due to higher sales volumes in
            the second  and third  quarters,  it is  customary  for large  working
            capital buildups in the first six months.
  
            Investing Activities
  
            Investing  activities  used cash of $249.0 during the six months ended
            June 30, 1998  compared with cash used of $97.5 for the same period in
            1997.  The increase in cash used in investing  activities is primarily
            due to (i) the 1997  divestiture  of the  Crown-Simplimatic  machinery
            operations  which  resulted  in cash  proceeds  of $90 in  1997,  (ii)
            capital expenditures for the six months ended June 30, 1998 of $237.3,
            an increase of $34.7 as  compared  to capital  expenditures  of $202.6
            during  the  same  period  of  1997  and  (iii)  expenditures  for the
            acquisition of businesses,  net of cash acquired, of $34.2 as compared
            to $10.0 for the same period in 1997.
  
            Financing Activities
  
            Financing  activities  provided  cash of $394.2  during the six months
            ended June 30, 1998 compared with $302.1 for the prior year period.
  
            On  March  2,  1998,   the  Company   completed   the   repurchase  of
            approximately  4.1  million  shares of its common  stock at $49.00 per
            share  and   approximately  3.7  million  shares  of  its  acquisition
            preferred  at $46.00  per share  from  CGIP.  The  repurchased  shares
            represented  approximately  5.3%  of the  Company's  then  outstanding
            voting  securities  and  leaves  CGIP with 4.99%  voting  power in the
            Company.  The  repurchased  shares  include all of CGIP's  acquisition
            preferred  position which  represented  approximately  30% of the then
            outstanding shares of acquisition preferred.  The transaction includes
            an agreement to terminate the  Shareholders  Agreement  dated February
            22, 1996 between the Company and CGIP. Among other changes,  CGIP will
            no  longer  retain  the  right to  designate  Company  directors.  The
            transaction  value  of  $369  was  financed  through  an  increase  in
            short-term indebtedness.
  
            Total  debt,  net of cash and cash  equivalents,  at June 30, 1998 was
            $5,745.9 and  represents  an increase of $865.4 above the December 31,
            1997 level of $4,880.5.  Total debt, net of cash and cash equivalents,
            as a percentage of total  capitalization was 62.1% at June 30, 1998 as
            compared  to 56.1% at  December  31,  1997.  Total  capitalization  is
            defined  by  the  Company  as  total  debt,   minority  interests  and
            shareholders' equity.
  
            The  increase in total debt,  net of cash and cash  equivalents,  from
            December  31, 1997 is due  primarily to (i) the  repurchase  of shares
            from CGIP, (ii) the funding of the Company's restructuring  activities
            and (iii) the funding of working capital  requirements on a short-term
            basis through the issuance of commercial paper.
  
            The Company  funds its working  capital  requirements  on a short-term
            basis primarily  through issuances of commercial paper. The commercial
            paper program is supported by a $2,500 multi-currency credit agreement
            which  matures in February  2002 with  interest at market  rates.  The
            Company's use of the facility is not restricted.  At June 30, 1998 and
            1997,  $200.5  and  $407.9,  respectively,   was  drawn  against  this
            facility.  At  December  31,  1997,  $355.2  was  drawn  against  this
            facility. Based on the Company's
  
                                         15
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            intention and ability to maintain its credit  facility beyond 1999 and
            1998,   respectively,   $700  of  commercial   paper  borrowings  were
            classified  as  long-term  at both June 30,  1998 and 1997.  There was
            $2,494.2 and $1,554.6 in commercial paper outstanding at June 30, 1998
            and 1997, respectively, and $1,248.0 outstanding at December 31, 1997
  
            Recent Accounting Developments
  
            In June 1998, the Financial Accounting Standards Board ("FASB") issued
            SFAS No.  133,  "Accounting  for  Derivative  Instruments  and Hedging
            Activities".  This  accounting  standard is  effective  for all fiscal
            quarters  of all fiscal  years  beginning  after June 15,  1999.  This
            statement   establishes   accounting   and  reporting   standards  for
            derivative  instruments  and for  hedging  activities.  The  statement
            requires  that all  derivatives  are  recognized  as either  assets or
            liabilities in the statement of financial position and are measured at
            their  fair   values.   The  Company  is  currently   evaluating   the
            requirements   of  this  standard  to  determine  its  impact  on  the
            consolidated financial statements.
  
            The  Company,  in  the  fourth  quarter,  will  adopt  SFAS  No.  131,
            "Disclosures about Segments of an Enterprise and Related Information",
            issued in June 1997, and SFAS No. 132,  "Employers'  Disclosures about
            Pensions and Other Postretirement Benefits",  issued in February 1998.
            Neither  standard  will  have  an  adverse  effect  on  the  Company's
            financial position, cash flows or results of operations.  SFAS No. 131
            requires the disclosure of segment  information on the same basis that
            is used  internally  for  evaluating  performance  and for  allocating
            resources. SFAS No. 132 revises the disclosures required about pension
            and other postretirement benefit plans.
  
            Market Risk
  
            In  the  normal  course  of  business,   the  Company  is  exposed  to
            fluctuations in currency values,  interest rates, commodity prices and
            other  market  risks.  The Company  addresses  these  risks  through a
            program that  includes the use of financial  instruments.  The Company
            controls the credit risks associated with these financial  instruments
            through credit approval,  investment limits and centralized monitoring
            procedures and systems.  The Company uses only liquid investments from
            creditworthy institutions and does not enter into leveraged, tiered or
            illiquid contracts. Further, the Company does not enter into financial
            instruments for trading purposes.
  
            There have been no  material  changes  in the  Company's  exposure  to
            market risk since December 31, 1997.
  
            Year 2000
  
            The Company  has  substantially  completed  an  inventory  of critical
            information systems,  manufacturing equipment and facilities worldwide
            in support of its Year 2000 (Y2K)  global  assessment.  In addition to
            addressing  these  internal Y2K risks,  the Company has also initiated
            global  reviews  of  the  Y2K  compliance  of the  Company's  critical
            vendors,  customers,  and other third  parties to assess the Company's
            external  Y2K risks.  These  assessment  efforts  are  expected  to be
            substantially completed during the fourth quarter of 1998.
  
            The Company is currently  remediating  (or in the process of launching
            remediation  of ) its important  systems within each of its divisions.
            The  targeted  completion  date  for  all  critical  modifications  is
            mid-1999;  however,  additional  refinement  and  system  testing  may
            continue through the end of 1999.
  
                                         16
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            Meaningful  cost estimates will not be available  until the completion
            of the  Company's  internal Y2K  assessment  effort.  However,  at the
            present  time,  management  does  not  expect  these  costs  to have a
            material  adverse  effect on the Company's  financial  position,  cash
            flows or results of operations.
  
            The  foregoing  timetable  and initial  assessment of cost exposure to
            correct  Y2K  issues  reflects  management's  best  estimates.   These
            estimates are based upon many assumptions, including assumptions about
            the ultimate  results of its internal Y2K  assessment  efforts and the
            availability  and  capability  of resources  to  remediate  and modify
            affected systems. The Company, however, cannot reasonably estimate the
            potential impact on its financial condition and operations if critical
            vendors, customers or key third parties, including governments, do not
            become Y2K capable on a timely basis. As noted previously, the Company
            is currently  assessing the Y2K  compliance of critical third parties.
            In order to  mitigate  such  external  risks,  the  Company  has begun
            contingency  planning to address potential  disruptions in electrical,
            telecommunications,  transportation  and  distribution  services.  The
            Company can give no  assurance  that all critical  third  parties will
            become   compliant;   and,   accordingly,   management  is  developing
            strategies  to minimize  the effect,  if any, on the Company from such
            failures by third parties to be Y2K compliant.
  
            Forward Looking Statements
  
            Statements included herein in "Management's Discussion and Analysis of
            Results of Operations and Financial Condition",  and in the discussion
            of the  restructuring  plans in Note D to the  Consolidated  Financial
            Statements  included in this Quarterly Report on Form 10-Q and also in
            Part I, Item 1: "Business" and Item 3: "Legal Proceedings" and in Part
            II,  Item  7:  "Management's  Discussion  and  Analysis  of  Financial
            Condition  and Results of  Operations",  within the  Company's  Annual
            Report on Form 10-K for the fiscal year ended December 31, 1997, which
            are not historical  facts  (including any statements  concerning plans
            and  objectives  of  management  for  future  operations  or  economic
            performance,  or assumptions  related thereto),  are  "forward-looking
            statements"  within the meaning of the  federal  securities  laws.  In
            addition,  the Company and its  representatives  may from time to time
            make other oral or written statements which are also  "forward-looking
            statements".
  
            These  forward-looking  statements  are made based  upon  management's
            expectations  and  beliefs  concerning  future  events  impacting  the
            Company  and  therefore  involve a number of risks and  uncertainties.
            Management cautions that forward-looking statements are not guarantees
            and that actual results could differ  materially  from those expressed
            or implied in the forward-looking statements.
  
            While  the  Company   periodically   reassesses  material  trends  and
            uncertainties  affecting  the  Company=s  results  of  operations  and
            financial condition in connection with the preparation of Management's
            Discussion  and  Analysis  of  Results  of  Operations  and  Financial
            Condition  and  certain  other  sections  contained  in the  Company's
            quarterly,  annual or other  reports  filed with the SEC,  the Company
            does not  intend to review or revise  any  particular  forward-looking
            statement in light of future events.
  
            A discussion of important  factors that could cause the actual results
            of  operations  or  financial  condition of the Company to differ from
            expectations has been set forth in the Company's Annual Report on Form
            10-K for the year ended  December  31,  1997  within  Part II, Item 7;
            "Management's  Discussion  and Analysis of Results of  Operations  and
            Financial  Condition" under the caption  "Forward Looking  Statements"
            and is incorporated herein by reference.  Some of the factors are also
            discussed  elsewhere  in this Form 10-Q and in prior  Company  filings
            with the  Securities  and Exchange  Commission  ("SEC").  In addition,
            other  factors have been or may be discussed  from time to time in the
            Company's SEC filings.
  
                                         17
  <PAGE>
                          Crown Cork & Seal Company, Inc.
  
                             PART II - OTHER INFORMATION
  
  Item 4.   Submission of Matters to Vote of Security Holders
  
            The Company's  Annual  Meeting of  Shareholders  was held on April 23,
            1998. The matters voted upon and the results  thereof are set forth in
            Part II, Item 4 of the Company's Quarterly Report on Form 10-Q for the
            quarter ended March 31, 1998 and such Item 4 is incorporated herein by
            reference.
  
  
  Item 5.   Other Information
  
            Any shareholder proposal submitted outside the processes of Rule 14a-8
            under the Securities Exchange Act of 1934 intended to be presented for
            action at the Company's  1999 Annual Meeting of  Shareholders  will be
            considered  untimely  for  purposes of Rules 14a-4 and 14a-5 if notice
            thereof is received by the Company  earlier  than  January 23, 1999 or
            later than February 22, 1999.
  
            On July 23,  1998,  the  Company's  Board of Directors  declared  cash
            dividends of $.25 per share on the  Company's  common stock and $.4712
            per share on the Company's  4.5%  convertible  preferred  stock.  Both
            dividends are payable on August 20, 1998 to  shareholders of record on
            August 6, 1998.
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            a)   Exhibits
  
                 2.   Letter  Agreement,  dated  July 9, 1998,  between  Compagnie
                      Generale  d'Industrie et de Participations  and Crown Cork &
                      Seal Company, Inc.
  
                 27.  Financial Data Schedule
  
            b)   Reports on Form 8-K
  
                 There  were no  reports  on Form 8-K  filed by Crown  Cork & Seal
                 Company, Inc., during the quarter for which this report is filed.
  
                                         18
  <PAGE>
                                      SIGNATURE
  
       Pursuant to the  requirements  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.
  
  
                                              Crown Cork & Seal Company, Inc.
                                              Registrant
  
                                              By: /s/ Timothy J. Donahue
                                                 Timothy J. Donahue
                                                 Senior Vice President and 
                                                 Corporate Controller
  
  Date: August 13, 1998
  
  
  
                                         19
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 72378}]
metadata_filer: {"company-data": {"conformed-name": "CROWN CORK & SEAL CO INC", "cik": "0000025890", "assigned-sic": "3411", "irs-number": "231526444", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-02227", "film-number": "98686705"}, "business-address": {"street1": "ONE CROWN WAY", "city": "PHILADELPHIA", "state": "PA", "zip": "19154", "phone": "215-698-5100"}}
text: ================================================================================
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC 20549
  
                                      FORM 10-Q
  
  [ 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
  
  [   ]  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 1-2227
  
                           CROWN CORK & SEAL COMPANY, INC.
               (Exact name of registrant as specified in its charter)
  
              Pennsylvania                                23-1526444
    (State or other jurisdiction              (I.R.S. Employer Identification No.)
  of incorporation or organization)
  
      One Crown Way, Philadelphia, PA.                     19154-4599
  (Address of principal executive offices)                 (Zip Code)
  
                                    215-698-5100
                (Registrant's telephone number, including area code)
  
  Indicated  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 ___
  
  There were 124,410,543 shares of Common Stock outstanding as of July 31, 1998.
  
  ================================================================================
  Crown Cork & Seal Company, Inc.
  
                           PART I - FINANCIAL INFORMATION
  
                          CONSOLIDATED STATEMENTS OF INCOME
  
                    (In millions except share and per share data)
                                     (Unaudited)
  -----------------------------------------------------------------------------------------------------------
  Three months ended June 30,                                                  1998                 1997
  -----------------------------------------------------------------------------------------------------------
  Net sales                                                            $         2,245.0    $         2,286.6
                                                                       -----------------    -----------------
  
  Cost, expenses & other income
    Cost of products sold, excluding depreciation and amortization               1,727.2              1,786.0
    Depreciation and amortization                                                  136.1                138.9
    Selling and administrative expense                                              93.2                104.6
    Gain on sale of assets                                                                              (28.1)
    Interest expense                                                               104.1                 94.0
    Interest income                                                                (12.4)                (9.4)
    Translation and exchange adjustments                                             5.8                  1.7
                                                                       -----------------    -----------------
                                                                                 2,054.0              2,087.7
                                                                       -----------------    -----------------
  
  Income before income taxes                                                       191.0                198.9
  
  Provision for income taxes                                                        64.4                 64.1
  Minority interest, net of equity earnings                                          (.9)                (2.8)
                                                                       -----------------    -----------------
  
  Net income                                                                       125.7                132.0
  
  Preferred stock dividends                                                          4.1                  5.8
                                                                       -----------------    -----------------
  
  Net income available to common shareholders                          $           121.6    $           126.2
                                                                       =================    =================
  
  Earnings per average common share
                       Basic                                           $             .98    $             .98
                                                                       =================    =================
                       Diluted                                         $             .95    $             .94
                                                                       =================    =================
  Dividends per common share                                           $             .25    $             .25
                                                                       =================    =================
  
  Weighted average common shares outstanding:
                      Basic                                                  124,442,024          128,554,649
                      Diluted                                                132,826,655          140,553,858
  -----------------------------------------------------------------------------------------------------------
  Certain prior year balances have been reclassified to improve comparability.
  
  The accompanying notes are an integral part of these financial statements.
  
                                         2
  Crown Cork & Seal Company, Inc.
  
                           PART I - FINANCIAL INFORMATION
  
                          CONSOLIDATED STATEMENTS OF INCOME
                    (In millions except share and per share data)
                                     (Unaudited)
  -------------------------------------------------------------------------------------------------------------
  Six months ended June 30,                                                   1998                 1997
  -------------------------------------------------------------------------------------------------------------
  Net sales                                                            $         4,137.4    $         4,223.9
                                                                       -----------------    -----------------
  
  Cost, expenses & other income
    Cost of products sold, excluding depreciation and amortization               3,229.4              3,330.4
    Depreciation and amortization                                                  272.7                278.2
    Selling and administrative expense                                             190.8                208.5
    Gain on sale of assets                                                                              (34.2)
    Interest expense                                                               197.9                186.6
    Interest income                                                                (19.8)               (16.7)
    Translation and exchange adjustments                                             7.5                  2.8
                                                                       -----------------    -----------------
                                                                                 3,878.5              3,955.6
                                                                       -----------------    -----------------
  
  Income before income taxes                                                       258.9                268.3
  
  Provision for income taxes                                                        92.3                 89.9
  Minority interest, net of equity earnings                                           .8                 (7.4)
                                                                       -----------------    -----------------
  
  Net income                                                                       167.4                171.0
  
  Preferred stock dividends                                                          9.2                 11.7
                                                                       -----------------    -----------------
  
  Net income available to common shareholders                          $           158.2    $           159.3
                                                                       =================    =================
  
  Earnings per average common share
                       Basic                                           $            1.26    $            1.24
                                                                       =================    =================
                       Diluted                                         $            1.24    $            1.22
                                                                       =================    =================
  Dividends per common share                                           $             .50    $             .50
                                                                       =================    =================
  
  Weighted average common shares outstanding:
                      Basic                                                  125,763,763          128,517,313
                      Diluted                                                135,295,628          140,532,982
  -------------------------------------------------------------------------------------------------------------
  Certain prior year balances have been reclassified to improve comparability.
  
  The accompanying notes are an integral part of these financial statements.
  
                                         3
  Crown Cork & Seal Company, Inc.
  
                       CONSOLIDATED BALANCE SHEETS (Condensed)
                         (In millions except per share data)
                                     (Unaudited)
  
  --------------------------------------------------------------------------------
                                                      June 30,     December 31,
                                                        1998           1997
  --------------------------------------------------------------------------------
  Assets
  Current Assets
    Cash and cash equivalents                      $      214.8   $      205.6
    Receivables                                         1,727.4        1,353.5
    Inventories                                         1,563.0        1,387.5
    Prepaid expenses and other current assets             207.2          200.6
                                                   ------------   ------------
                     Total current assets               3,712.4        3,147.2
                                                   ------------   ------------
  
  Long-term notes and receivables                          53.5           65.0
  Investments                                              88.4           89.5
  Goodwill, net of amortization                         4,547.6        4,625.2
  Property, plant and equipment                         3,656.8        3,663.9
  Other non-current assets                                832.4          714.9
                                                   ------------   ------------
                     Total                         $   12,891.1   $   12,305.7
                                                   ============   ============
  
  Liabilities and shareholders' equity
  Current liabilities
    Short-term debt                                     2,366.4   $    1,385.4
    Current portion of long-term debt                     384.5          399.3
    Accounts payable and accrued liabilities            2,206.3        2,236.7
    United States and foreign income taxes                 75.2           27.9
                                                   ------------   ------------
                    Total current liabilities           5,032.4        4,049.3
                                                   ------------   ------------
  
  Long-term debt, excluding current maturities          3,209.8        3,301.4
  Postretirement and  pension liabilities                 705.6          711.7
  Other non-current liabilities                           435.1          431.3
  Minority interests                                      279.6          282.8
  Shareholders' equity                                  3,228.6        3,529.2
                                                   ------------   ------------
                   Total                           $   12,891.1   $   12,305.7
                                                   ============   ============
  Book value per common share                      $      24.37   $      25.26
  --------------------------------------------------------------------------------
  
  The accompanying notes are an integral part of these financial statements.
  
                                         4
  Crown Cork & Seal Company, Inc.
  
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)
                                    (In millions)
                                     (Unaudited)
  -----------------------------------------------------------------------------------------
  Six months ended June 30,                                           1998          1997
  -----------------------------------------------------------------------------------------
  Cash flows from operating activities
    Net income                                                     $   167.4    $   171.0
    Depreciation and amortization                                      272.7        278.2
    Gain on sale of assets                                                          (25.0)
    Change in assets and liabilities, other than debt, net of
       businesses acquired                                            (573.9)      (573.1)
                                                                   ---------    ---------
       Net cash used in operating activities                          (133.8)      (148.9)
                                                                   ---------    ---------
  
  Cash flows from investing activities
    Capital expenditures                                              (237.3)      (202.6)
    Acquisition of businesses, net of cash acquired                    (34.2)       (10.0)
    Proceeds from sale of property, plant and equipment                 27.6         25.5
    Proceeds from sale of businesses                                                 90.0
    Other, net                                                          (5.1)        ( .4)
                                                                   ---------    ---------
       Net cash used in investing activities                          (249.0)       (97.5)
                                                                   ---------    ---------
  Cash flows from financing activities
    Proceeds from long-term debt                                         3.9          1.5
    Repayment of long-term debt                                       (108.1)      (257.2)
    Net change in short-term debt                                      938.8        647.1
    Stock repurchased                                                 (369.0)       (17.2)
    Dividends paid                                                     (73.2)       (76.0)
    Common stock issued under various employee benefit plans             5.2          7.3
    Minority contributions, net of dividends paid                       (3.4)        (3.4)
                                                                   ---------    ---------
       Net cash provided by financing activities                       394.2        302.1
                                                                   ---------    ---------
  
  Effect of exchange rate changes on cash and cash equivalents          (2.2)       (10.3)
                                                                   ---------    ---------
  
  Net change in cash and cash equivalents                                9.2         45.4
  Cash and cash equivalents at beginning of period                     205.6        160.4
                                                                   ---------    ---------
  Cash and cash equivalents at end of period                       $   214.8    $   205.8
                                                                   =========    =========
  
  -----------------------------------------------------------------------------------------
                                                                      1998         1997
  -----------------------------------------------------------------------------------------
  Schedule of non-cash investing activities:
     Acquisition of businesses:
       Fair value of assets acquired                               $    51.2    $    70.0
       Liabilities assumed                                             (17.0)
       Note Payable                                                                 (60.0)
                                                                   ---------    ---------
                           Cash Paid                               $    34.2    $    10.0
                                                                   =========    =========
  -----------------------------------------------------------------------------------------
  Certain prior year balances have been reclassified to improve comparability.
  
  The accompanying notes are an integral part of these financial statements.
  
                                         5
  Crown Cork & Seal Company, Inc.
  
             CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                    (In millions)
                                     (Unaudited)
  -----------------------------------------------------------------------------------------------------------------------------------
                                                    |                                                           Accumulated
                                                    |                                                           Other
                               Comprehensive Income |Preferred   Common     Paid-In    Retained    Treasury     Comprehensive
                              Quarter  Year-To-Date |  Stock      Stock     Capital    Earnings     Stock       Income         Total
  -----------------------------------------------------------------------------------------------------------------------------------
  Balance at December 31, 1997                      | $520.8     $779.0    $1,560.7    $1,327.2    ($137.0)     ($521.5)     $3,529.2
  Net income                   $125.7    $167.4     |                                     167.4                                 167.4
  Translation adjustments        22.7     (31.8)    |                                                             (31.8)        (31.8)
                               ------    ------     |
  Comprehensive income         $148.4    $135.6     |
                               ======    ======     |
                                                    |
  Dividends declared:                               |
      Common                                        |                                     (63.2)                                (63.2)
      Preferred                                     |                                      (9.2)                                 (9.2)
  Stock repurchased                                 | (153.3)                (195.2)                 (20.5)                    (369.0)
  Common stock issued under                         |
      employee benefit plans                        |                           4.4                     .8                        5.2
  -----------------------------------------------------------------------------------------------------------------------------------
  Balance at June 30, 1998                          | $367.5     $779.0    $1,369.9    $1,422.2    ($156.7)     ($553.3)     $3,228.6
  ===================================================================================================================================
                                                    |
                                                    |                                                           Accumulated
                                                    |                                                           Other
                               Comprehensive Income |Preferred   Common     Paid-In    Retained    Treasury     Comprehensive
                              Quarter  Year-To-Date |  Stock      Stock     Capital    Earnings     Stock       Income        Total
  -----------------------------------------------------------------------------------------------------------------------------------
  Balance at December 31, 1996                      | $520.8     $779.0    $1,567.3    $1,185.0    ($136.9)     ($351.9)     $3,563.3
  Net income                   $132.0    $171.0     |                                     171.0                                 171.0
  Translation adjustments       (83.5)   (137.2)    |                                                            (137.2)       (137.2)
                               ------    ------     |
  Comprehensive income          $48.5     $33.8     |
                               ======    ======     |
                                                    |
  Dividends declared:                               |
      Common                                        |                                     (64.3)                                (64.3)
      Preferred                                     |                                     (11.7)                                (11.7)
  Stock repurchased                                 |                         (15.6)                  (1.6)                     (17.2)
  Common stock issued under                         |
      employee benefit plans                        |                           6.1                    1.2                        7.3
  -----------------------------------------------------------------------------------------------------------------------------------
  Balance at June 30, 1997                          | $520.8     $779.0    $1,557.8    $1,280.0    ($137.3)     ($489.1)     $3,511.2
  ===================================================================================================================================
  Certain prior year balances have been reclassified to improve comparability. 
  
  The accompanying notes are an integral part of these financial statements.
  
                                         6
  Crown Cork & Seal Company, Inc.
  
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        (In millions, except per share data)
                                     (Unaudited)
  
  A.   Statement of Information Furnished
  
       The accompanying  unaudited  interim  consolidated and condensed  financial
       statements  have been prepared by the Company in accordance  with Form 10-Q
       instructions.  In the opinion of management,  these consolidated  financial
       statements  contain  all  adjustments   necessary  to  present  fairly  the
       financial position of Crown Cork & Seal Company,  Inc. as of June 30, 1998,
       and the results of its operations and cash flows for the periods ended June
       30, 1998 and 1997, respectively.  These results have been determined on the
       basis  of  generally   accepted   accounting   principles   and   practices
       consistently applied.
  
       Certain  information  and  footnote   disclosures,   normally  included  in
       financial  statements  presented  in  accordance  with  generally  accepted
       accounting  principles,  have been condensed or omitted.  The  accompanying
       Consolidated  Financial  Statements  should be read in conjunction with the
       financial  statements  and notes thereto  incorporated  by reference in the
       Company's Annual Report on Form 10-K for the year ended December 31, 1997.
  
  B.   Earnings Per Share
  
       The following  table  summarizes the basic and diluted  earnings per common
       share   computations  for  the  periods  ended  June  30,  1998  and  1997,
       respectively:
  1998                                  1997
                                        ----------------------------         -----------------------------
                                                    Average                              Average
  Quarter                                Income      Shares      EPS          Income      Shares      EPS
  -------                               ----------------------------         -----------------------------
  Net income                             $125.7                               $132.0
     Less:
        Preference dividends               (4.1)                                (5.8)
                                         ------                               ------
  Basic EPS                               121.6      124.4      $ .98          126.2      128.6      $ .98
  
  Potentially dilutive securities:
     Stock options                                      .4                                   .7
     Assumed preferred stock
        conversion                          4.1        8.0                       5.8       11.3
                                         ------      -----                    ------      -----
  Diluted EPS                            $125.7      132.8      $ .95         $132.0      140.6      $ .94
                                         ======      =====                    ======      =====
  
                                                     1998                                  1997
                                        ----------------------------         -----------------------------
                                                    Average                              Average
  Year-to-date                           Income      Shares      EPS          Income      Shares      EPS
  ------------                           ----------------------------         -----------------------------
  
  Net income                             $167.4                               $171.0
     Less:
        Preference dividends               (9.2)                               (11.7)
                                         ------                               ------
  Basic EPS                               158.2      125.8      $1.26          159.3      128.5      $1.24
  
  Potentially dilutive securities:
     Stock options                                      .4                                   .7
     Assumed preferred
         stock conversion                   9.2        9.1                      11.7       11.3
                                         ------      -----                    ------      -----
  Diluted EPS                            $167.4      135.3      $1.24         $171.0      140.5      $1.22
                                         ======      =====                    ======      =====
  7
  Crown Cork & Seal Company, Inc.
  
  C.   Inventories
  
            ----------------------------------------------------------
                                         June 30,         December 31,
                                           1998              1997
            ----------------------------------------------------------
            Finished goods              $    464.4       $    560.5
            Work in progress                 227.6            187.3
            Raw materials                    668.9            467.6
            Supplies and repair parts        202.1            172.1
                                        ----------       ----------
                                        $  1,563.0       $  1,387.5
                                        ==========       ==========
  
  D.   Restructuring
  
       During the third quarter of 1997,  the Company  provided $66.6 ($43.3 after
       taxes or $.31 per diluted  share) for the costs  associated  with a plan to
       improve the structure of its  polyethylene  terephthalate  ("PET")  plastic
       beverage   container   business  in  the  United   States  by  closing  and
       reorganizing six  manufacturing  locations in its CONSTAR  subsidiary along
       with other, non-PET, restructuring activities,  primarily in Europe. Annual
       savings relating to these actions, when fully implemented,  are expected to
       be  approximately  $20.0 ($.14 per diluted  share).  The Company expects to
       maintain its existing  manufacturing  capacity, and by relocating equipment
       among its remaining  larger  facilities,  meet all current and  prospective
       volume  requirements.  The Company  records  restructuring  charges against
       operations and provides a reserve based on the best  information  available
       at the time  that the  decision  is made to  restructure.  The  balance  of
       restructuring  reserves  (excluding  the  write-down  of  assets  which  is
       reflected as a reduction of the related asset  account) is included  within
       accounts payable and accrued liabilities.
  
       The  Company  has  incurred  restructuring  and exit costs  relative to the
       acquisition of CMB. Affected by the plan of restructuring were forty plants
       and regional  administrative  offices  which were closed and an  additional
       fifty-two plants which were reorganized.  Since commencement of the plan of
       restructuring, the Company determined alternative sites for manufacture and
       qualified the new manufacturing  sites with customers.  The Company accrued
       approximately   $534  for  the  costs  associated  with  restructuring  CMB
       operations  and  allocated  such  costs  to the  purchase  price  of CMB in
       accordance with purchase  accounting  requirements.  These costs comprised;
       severance pay and benefits,  write-down of assets,  lease  termination  and
       other exit costs. The cost of providing  severance pay and benefits for the
       reduction of approximately  6,500 employees was approximately  $257 and was
       primarily a cash expense.  Employees  terminated included most, if not all,
       employees at each plant or office  which was closed and selected  employees
       at those plants which were reorganized,  including  salaried  employees and
       employees of the  respective  unions  represented  at each plant site.  The
       write-down  of  assets  (principally  property,  plant and  equipment)  was
       approximately  $217 and has been  reflected  as a reduction in the carrying
       value of the  Company's  assets.  Lease  termination  and other exit costs,
       primarily repayments of government grants and subsidies, were approximately
       $60 and were primarily cash expenses.  The restructuring  costs recorded in
       connection with the CMB  acquisition  included a $95  restructuring  charge
       announced  in 1996 by  CarnaudMetalbox  Asia,  Ltd.,  a  subsidiary  of the
       Company.
  
       The plan of restructuring  CMB operations will generate annual cost savings
       of  approximately  $160  ($105  after-tax)  on a full year  basis.  Capital
       expenditures  of  approximately  $100 were made to expand and upgrade other
       facilities to minimize the adverse effects of the restructuring on existing
       business and customer relationships.
  
                                         8
  Crown Cork & Seal Company, Inc.
  
       Remaining  balances  in  the  restructuring  reserve  primarily  relate  to
       employee  termination  agreements.   Such  agreements  are  made  with  the
       respective union or with the local  governmental body, whereby a portion of
       the  employee  severance is paid when the  employee is  terminated  and the
       remaining portion is paid out over an agreed period of time. The components
       of the restructuring reserve are as follows:
  
       ---------------------------------------------------------------------------
                                      Balance                 Balance
                                         at          1998        at
                                    December 31,   activity   June 30,
                                        1997                    1998
       ---------------------------------------------------------------------------
            Employee costs            $  119.5    ($  87.9)   $  31.6
            Lease termination and
              other exit costs            35.8       (21.7)      14.1
                                      --------    --------    -------
                                      $  155.3    ($ 109.6)   $  45.7
                                      ========    ========    =======
  
       The foregoing  restructuring charges and related cost savings represent the
       Company's best estimates,  but necessarily  make numerous  assumptions with
       respect to industry performance,  general business and economic conditions,
       raw materials and product pricing levels,  the timing of  implementation of
       the restructuring and related employee reductions and facility closings and
       other  matters,  many of which  are  outside  the  Company's  control.  The
       Company's  estimates  of  cost  savings,  which  are  unaudited,   are  not
       necessarily  indicative of future  performance,  which may be significantly
       more or less  favorable  than as set  forth  above  and is  subject  to the
       considerations   described   herein  on  page  13  under   "Forward-Looking
       Statements" within Item 2 - Management's Discussion and Analysis of Results
       of Operations and Financial  Condition".  Shareholders are cautioned not to
       place undue  reliance on the estimates or the  underlying  assumptions  and
       should  appreciate that such  information may not necessarily be updated to
       reflect  circumstances  existing  after the date  hereof or to reflect  the
       occurrence of unanticipated events.
  
  E.   New Reporting and Disclosure Requirement
  
       Commencing  January 1, 1998,  the Company  adopted  Statement  of Financial
       Accounting  Standards ("SFAS") No. 130, "Reporting  Comprehensive  Income",
       issued in June 1997.  SFAS No.130  establishes a standard for reporting and
       displaying  comprehensive  income and its  components  within the financial
       statements.  Comprehensive  income  includes  charges and credits to equity
       that are not the result of transactions  with  shareholders.  Comprehensive
       income is composed of two subsets - "net  income" and "other  comprehensive
       income". Included in comprehensive income, for the Company, are net income,
       cumulative  translation  adjustments required under SFAS No. 52 and minimum
       pension liability  adjustments  required under SFAS No. 87. The adjustments
       for translation and minimum pension represent "other comprehensive  income"
       and are accumulated within the Statement of Shareholders'  Equity under the
       caption "Accumulated Other Comprehensive Income".
  
       As of June 30,  1998 and June 30,  1997,  accumulated  other  comprehensive
       income (loss),  as reflected in the  consolidated  statements of changes in
       shareholders' equity, comprised the following:
  
                                                       June 30,     June 30,
                                                        1998         1997
                                                      ---------   ---------
            Minimum pension liability adjustments     ($  16.9)   ($  14.8)
            Cumulative translation adjustments        (  536.4)   (  474.3)
                                                      --------    --------
                                                      ($ 553.3)   ($ 489.1)
                                                      ========    ======== 
  
                                         9
  Crown Cork & Seal Company, Inc.
  
  F.   Supplemental Cash Flow Information
  
       Cash payments for interest,  net of amounts  capitalized ($2.7 for 1998 and
       1997), were $189.3 and $198.2 during the six months ended June 30, 1998 and
       1997,  respectively.  Cash payments for income taxes  amounted to $22.5 and
       $40.0 during the six months ended June 30, 1998 and 1997, respectively.
  
  G.   Commitments and Contingent Liabilities
  
       The Company has various  commitments to purchase  materials and supplies as
       part of the  ordinary  conduct of  business.  Such  commitments  are not at
       prices in excess of current market.
  
       The Company's  basic raw materials for its products are tinplate,  aluminum
       and resins,  all of which are purchased from multiple sources.  The Company
       is subject to material  fluctuations in the cost of these raw materials and
       has  previously  adjusted its selling  prices to reflect  these  movements.
       There  can be no  assurance,  however,  that  the  Company  will be able to
       recover fully any increases or  fluctuations in raw material costs from its
       customers.
  
       The  Company  is subject to various  lawsuits  and claims  with  respect to
       matters such as  governmental  regulations and other actions arising out of
       the normal course of business. While the impact on future financial results
       is not subject to reasonable  estimation because  considerable  uncertainty
       exists,  management  believes,  after  consulting  with  counsel,  that the
       ultimate  liabilities  resulting  from such  lawsuits  and claims  will not
       materially  affect the  consolidated  results or financial  position of the
       Company.
  
                                         10
  Crown Cork & Seal Company, Inc.
  
                           PART I - FINANCIAL INFORMATION
  
  Item 2.   Management's Discussion and Analysis of Results of Operations and
            Financial Condition
            (in millions, except share, per share, employee, shareholder and
            statistical data)
  
            Introduction
  
            The following discussion presents management's analysis of the results
            of  operations  for the  three and six  months  ended  June 30,  1998,
            compared  to the  corresponding  periods  in 1997 and the  changes  in
            financial  condition  and  liquidity  from  December  31,  1997.  This
            discussion  should  be  read  in  conjunction  with  the  Consolidated
            Financial  Statements  and Notes  thereto  included  in the  Company's
            Annual Report on Form 10-K for the year ended December 31, 1997, along
            with the consolidated  financial statements and related notes included
            in and referred to within this report.
  
            All per share  information  is computed  using  average  common shares
            outstanding, assuming dilution.
  
                                Results of Operations
  
            Net Income and Earnings Per Share
  
            Net income available to common shareholders for the quarter ended June
            30,  1998  was  $121.6,  a  decrease  of  3.6%  when  compared  to the
            respective  prior year  amount of $126.2.  Earnings  per common  share
            increased by 1.1% to $.95 from $.94 a year earlier and reflects a 5.5%
            decline  in  diluted  average  common  shares  outstanding,  primarily
            resulting  from the March 1998  repurchase  of shares  from  Compagnie
            Generale d' Industrie et de Participations  (CGIP). Further details of
            this  transaction are presented under Liquidity and Capital  Resources
            as provided later in this  discussion.  The effects of a stronger U.S.
            dollar  reduced  net  income  by  approximately  $.02 per share in the
            second quarter of 1998.
  
            For the six months ended June 30, 1998, net income available to common
            shareholders  was $158.2 or $1.24 per common share  compared  with net
            income  of $159.3 or $1.22  per  common  share for the same  period in
            1997.
  
            Net Sales
  
            Net  sales in the  quarter  decreased  1.8% from  $2,286.6  in 1997 to
            $2,245.0  in 1998.  Net sales  for the  first six  months of 1998 were
            $4,137.4,  a decrease of $86.5 or 2.0% from net sales of $4,223.9  for
            the same period in 1997.  Excluding  the  effects of foreign  exchange
            translation  and the  divestiture of the  Crown-Simplimatic  machinery
            operations (disposed of in May of 1997), net sales would have been .8%
            higher  for the  quarter  and  2.1%  higher  for the six  months.  The
            strengthening of the U.S. dollar against other  currencies,  primarily
            those within Europe,  reduced  consolidated  net sales by $48.6 in the
            second  quarter as compared to 1997. In the quarter,  sales from U. S.
            operations  increased by 1.1% and those in non-U.S.  markets decreased
            by  3.7%.  U.S.   sales,   in  the  second   quarter,   accounted  for
            approximately  40.7% of  consolidated  net  sales in 1998 and 39.5% in
            1997.  Sales of beverage cans and ends as a percentage of consolidated
            net sales have increased in the second quarter from 30.9% to 32.7% and
            sales  of food  cans  and  ends  have  increased  from  28.2% to 28.4%
            compared to the prior year second quarter. North American beverage can
            and  end  sales   represented  20.2%  and  18.9%,   respectively,   of
            consolidated  net sales for the quarter and six months  ended June 30,
            1998 as  compared  to 18.4% and 17.2% for the  comparable  periods  in
            1997.
  
                                         11
  Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            An analysis of comparative net sales by operating division follows:
  Net Sales                          Percentage Change
                   --------------------------------------------------  -----------------------
                        Second Quarter           Six Months Ended         Second      Six
                        --------------           ----------------         ------      ---
                      1998          1997         1998        1997         Quarter    Months
                      ----          ----         ----        ----         -------    ------
  Divisions:
  
  Americas         $  1,068.1   $  1,012.6   $  1,969.6   $  1,864.1        5.5%       5.7%
  Europe              1,054.2      1,103.7      1,944.7      2,026.3       (4.5%)    ( 4.0%)
  Asia-Pacific           91.7        104.2        166.8        201.6      (12.0%)    (17.3%)
  Other                  31.0         66.1         56.3        131.9      (53.1%)    (57.3%)
                   ----------   ----------   ----------   ----------
  
                   $  2,245.0   $  2,286.6   $  4,137.4   $  4,223.9       (1.8%)     (2.0%)
                   ==========   ==========   ==========   ==========
  Net  sales in the  Americas  Division  increased  by $55.5 or 5.5% and
            $105.5 or 5.7% for the three and six  months  ended  June 30,  1998 as
            compared to the same periods in 1997.  The increase in the quarter was
            primarily due to sales unit volume increases in (i) U. S. aerosol cans
            and  beverage  cans  and  ends,  (ii) U. S. PET  beverage  containers,
            primarily single serve 20 ounce bottles and beverage  preforms,  (iii)
            U. S. plastic beverage closures and (iv) beverage cans and ends at the
            Company's new beverage can and end plants in Brazil  partially  offset
            by (i) lower U. S. food can volumes,  (ii) lower Canadian beverage can
            volumes and (iii) decreased  aluminum prices which forced decreases in
            selling prices in aluminum beverage cans and ends.
  
            Net sales in the European  Division  decreased $49.5 or 4.5% and $81.6
            or 4.0%  for the  three  and six  months  ended  June  30,  1998,  due
            primarily to the general weakening of most European currencies against
            the U. S. dollar. The impact of translation on sales resulted in a net
            sales  reduction  of $32.1 in the quarter.  Excluding  the impact from
            translation, net sales would have been down 1.6% in the quarter and up
            .1% for the six months as compared to the prior year  periods.  Second
            quarter  local  sales  decreased  primarily  due to lower  sales  unit
            volumes  of food,  aerosol  and  beverage  cans,  partially  offset by
            increased  sales  unit  volumes in (i)  beverage  ends,  (ii)  plastic
            closures and (iii) PET beverage bottles. Competition has remained very
            aggressive throughout the division in most product lines.
  
            Net sales in the  Asia-Pacific  Division have decreased $12.5 or 12.0%
            and $34.8 or 17.3% for the three and six months  ended  June 30,  1998
            from a year earlier due to (i) weakening Asian currencies resulting in
            a U. S.  dollar  sales  loss of $6.1  and (ii)  the  general  economic
            slowdown in the region.  Excluding the impact from translation,  local
            sales  would have been lower by 6.1% in the  quarter and 11.2% for the
            six months  compared to the same periods in 1997. The decline in local
            sales is due  primarily  to (ii)  lower  food can sales  unit  volumes
            primarily  reflecting the  restructuring of operations in Malaysia and
            Singapore in 1997 and (ii) competitive  pricing throughout the region;
            partially offset by increased beverage can volumes resulting from full
            production  at  the  Company's  new  plant  in  Singapore  along  with
            increased demand in both China and Vietnam
  
            Net sales for  Other  operating  units are lower for the three and six
            months  ended June 30,  1998  compared  to the prior year  periods due
            primarily   to   the   May   1997   divestiture   of   the   Company's
            Crown-Simplimatic   machinery   operations  and  lower  sales  at  the
            Company's Golden Aluminum facilities.
  
                                         12
  Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            Cost of Products Sold
  
            Cost of products sold,  excluding  depreciation and amortization,  was
            $1,727.2  for the quarter and  $3,229.4  for the six months ended June
            30,  1998, a decrease of 3.3% and 3.0%,  respectively,  as compared to
            the same periods in 1997. The decrease  reflects (i) cost savings from
            restructuring  programs,  (ii) decreased  aluminum costs and (iii) the
            appreciation  of the U.S.  dollar  against  most  foreign  currencies;
            offset by increased sales unit volumes in many product lines.
  
            As a  percentage  of net sales,  cost of  products  sold was 76.9% and
            78.1% for the quarter and six months ended June 30, 1998,  as compared
            to 78.1% and 78.8% in the same periods of 1997.  The  improvement  has
            resulted from (i)  increased U. S. sales unit  volumes,  (ii) benefits
            derived  from  the   Company's   continuing   cost   containment   and
            restructuring  programs  and (iii)  the  effect  of  decreases  in raw
            material costs.
  
            Selling and Administrative
  
            Selling and  administrative  expenses  for the quarter  ended June 30,
            1998 were $93.2,  a decrease of $11.4 or 10.9% from the second quarter
            of 1997.  As a  percentage  of net sales,  selling and  administrative
            expenses,  excluding depreciation,  were 4.2% in the second quarter as
            compared to 4.6% for the same period of 1997. For the six months ended
            June 30, 1998, these expenses have decreased $17.7 or 8.5% from a year
            earlier and, as a percentage of net sales, decreased from 4.9% in 1997
            to 4.6% in 1998. The decrease in 1998 costs is directly related to the
            restructuring  of activities  within  acquired  CarnaudMetalbox  (CMB)
            operations.
  
            Operating Income
  
            For the quarter  ended June 30, 1998,  consolidated  operating  income
            increased  $31.4 or 12.2% compared to the same period in 1997. For the
            six  months  ended  June  30,  1998,   consolidated  operating  income
            increased $37.7 or 9.3% from the same period a year earlier. Operating
            income  as a  percentage  of net  sales  was  12.9%  and 10.7% for the
            quarter  and six months  ended June 30,  1998 as compared to 11.2% and
            9.6% for the same periods in 1997. An analysis of operating  income by
            operating division follows:
  
                               Operating Income                 Percentage Change
                 --------------------------------------------  -------------------
                     Second Quarter        Six Months Ended      Second      Six
                     --------------        ----------------      ------      ---
                    1998        1997       1998        1997      Quarter    Months
                    ----        ----       ----        ----      -------    ------
  Divisions:
  
  Americas         $   89.4   $   90.2   $  144.1   $  147.4      (.9%)    ( 2.2%)
  Europe              195.8      158.2      293.5      247.4     23.8%      18.6%
  Asia-Pacific           .6        8.6        1.7        8.8    (93.0%)    (80.7%)
  Other                 2.7         .1        5.2        3.2                62.5%
                   --------   --------   --------   --------
  
                   $  288.5   $  257.1   $  444.5   $  406.8     12.2%       9.3%
                   ========   ========   ========   ========
  
            As a  percentage  of net  sales,  operating  income  for the  Americas
            Division  was 8.4% in the  second  quarter  and 7.3% for the first six
            months of 1998 as  compared  to 8.9% and 7.9% for the same  periods in
            1997.  The  decrease  in second  quarter  1998  operating  margin  was
            primarily due to (i) continued  U.S.  pricing  pressures in both metal
            and plastic  beverage  containers,  (ii) lower beverage can pricing in
            Argentina  and  Brazil  and  (iii)  production  inefficiencies  at the
            Company's new beverage can and end plants in Brazil;  partially offset
            by sales unit volume increases in most product lines.
  
                                         13
  Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            Operating  income  as a  percentage  of net  sales  for  the  European
            Division  was 18.6% in the second  quarter and 15.1% for the first six
            months of 1998 as  compared  to 14.3%  and  12.2%  for the  comparable
            periods in 1997. The increased margin is directly  attributable to (i)
            the  benefits   realized  from  the  closure  or   reorganization   of
            inefficient plants, removal of products with negative contribution and
            the elimination of excess administrative overheads as part of the cost
            reduction  programs  initiated  with the  acquisition  of CMB and (ii)
            increased  sales unit  volumes in PET  beverage  bottles  and  plastic
            closures;  offsetting the (i)  appreciation of the U.S. dollar against
            most European  currencies  and (ii)  decreased  sales unit volumes for
            food and beverage  cans.  Competitive  pricing,  especially in certain
            food can markets, continues to restrain profit growth.
  
            Operating income in the  Asia-Pacific  Division as a percentage of net
            sales was .7% in the second  quarter and 1.0% for the first six months
            of 1998 versus 8.3% and 4.4% in the same periods of 1997. The decrease
            in 1998 operating  margins is due primarily to (i) the appreciation of
            the U. S. dollar against most Asian  currencies,  (ii) weak demand due
            to the general economic  slowdown in the region and (iii)  competitive
            pricing throughout the region.
  
            Operating  income for Other  operating  units was 8.7% of net sales in
            the  quarter  and  9.2% for the six  months  ended  June  30,  1998 as
            compared to .2% and 2.4% for the same periods in 1997. The improvement
            in the  operating  margin  is  directly  attributable  to the May 1997
            divestiture of the Company's Crown-Simplimatic machinery operations.
  
            Net Interest Expense / Income
  
            Net interest  expense for the second quarter and six months ended June
            30, 1998 was $91.7 and $178.1, respectively,  as compared to $84.6 and
            $169.9  for the  comparable  periods  in  1997.  The  increase  in net
            interest   expense  is  due   primarily  to  cash   requirements   for
            restructuring programs and the March 1998 stock repurchase from CGIP.
  
            Taxes on Income
  
            The  effective  tax rate for the six months  ended  June 30,  1998 was
            35.7% as compared to 33.5% for the same period of 1997.  The effective
            tax  rate  of  35.7%  exceeds  the U.  S.  statutory  rate  of 35% due
            primarily   to   provisions   for  state   taxes  and   non-deductible
            amortization  of goodwill and other  intangibles  offset  partially by
            income  derived  from non-U.  S.  operations  which are taxed at lower
            rates than the U. S. statutory rate.
  
            Minority Interests, Net of Equity in Earnings of Affiliates
  
            Minority interests, net of equity earnings, improved in the quarter by
            $1.9 and $8.2 for the  first six  months  compared  to the prior  year
            periods  due  primarily  to (i)  increased  operating  results  in the
            Company's unconsolidated joint ventures in Brazil and Venezuela,  (ii)
            decreased  profits in the  Company's  consolidated  joint  ventures in
            China and (iii) no further  losses being  recognized  in the Company's
            unconsolidated  joint  venture  in  Korea as the  investment  has been
            reduced  to zero and the  Company  does not  plan nor is  required  to
            inject capital in the future.
  
                                         14
  Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
                           Liquidity and Capital Resources
  
            Cash from Operations
  
            Net cash of $133.8  was used by  operating  activities  during the six
            months ended June 30, 1998, as compared to cash used of $148.9 for the
            same  period  in  1997.  The  improvement  in cash  used by  operating
            activities is related to increased profits from continuing  operations
            (income before gain on sale of assets). Due to higher sales volumes in
            the second  and third  quarters,  it is  customary  for large  working
            capital buildups in the first six months.
  
            Investing Activities
  
            Investing  activities  used cash of $249.0 during the six months ended
            June 30, 1998  compared with cash used of $97.5 for the same period in
            1997.  The increase in cash used in investing  activities is primarily
            due to (i) the 1997  divestiture  of the  Crown-Simplimatic  machinery
            operations  which  resulted  in cash  proceeds  of $90 in  1997,  (ii)
            capital expenditures for the six months ended June 30, 1998 of $237.3,
            an increase of $34.7 as  compared  to capital  expenditures  of $202.6
            during  the  same  period  of  1997  and  (iii)  expenditures  for the
            acquisition of businesses,  net of cash acquired, of $34.2 as compared
            to $10.0 for the same period in 1997.
  
            Financing Activities
  
            Financing  activities  provided  cash of $394.2  during the six months
            ended June 30, 1998 compared with $302.1 for the prior year period.
  
            On  March  2,  1998,   the  Company   completed   the   repurchase  of
            approximately  4.1  million  shares of its common  stock at $49.00 per
            share  and   approximately  3.7  million  shares  of  its  acquisition
            preferred  at $46.00  per share  from  CGIP.  The  repurchased  shares
            represented  approximately  5.3%  of the  Company's  then  outstanding
            voting  securities  and  leaves  CGIP with 4.99%  voting  power in the
            Company.  The  repurchased  shares  include all of CGIP's  acquisition
            preferred  position which  represented  approximately  30% of the then
            outstanding shares of acquisition preferred.  The transaction includes
            an agreement to terminate the  Shareholders  Agreement  dated February
            22, 1996 between the Company and CGIP. Among other changes,  CGIP will
            no  longer  retain  the  right to  designate  Company  directors.  The
            transaction  value  of  $369  was  financed  through  an  increase  in
            short-term indebtedness.
  
            Total  debt,  net of cash and cash  equivalents,  at June 30, 1998 was
            $5,745.9 and  represents  an increase of $865.4 above the December 31,
            1997 level of $4,880.5.  Total debt, net of cash and cash equivalents,
            as a percentage of total  capitalization was 62.1% at June 30, 1998 as
            compared  to 56.1% at  December  31,  1997.  Total  capitalization  is
            defined  by  the  Company  as  total  debt,   minority  interests  and
            shareholders' equity.
  
            The  increase in total debt,  net of cash and cash  equivalents,  from
            December  31, 1997 is due  primarily to (i) the  repurchase  of shares
            from CGIP, (ii) the funding of the Company's restructuring  activities
            and (iii) the funding of working capital  requirements on a short-term
            basis through the issuance of commercial paper.
  
            The Company  funds its working  capital  requirements  on a short-term
            basis primarily  through issuances of commercial paper. The commercial
            paper program is supported by a $2,500 multi-currency credit agreement
            which  matures in February  2002 with  interest at market  rates.  The
            Company's use of the facility is not restricted.  At June 30, 1998 and
            1997,  $200.5  and  $407.9,  respectively,   was  drawn  against  this
            facility.  At  December  31,  1997,  $355.2  was  drawn  against  this
            facility. Based on the Company's
  
                                         15
  Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            intention and ability to maintain its credit  facility beyond 1999 and
            1998,   respectively,   $700  of  commercial   paper  borrowings  were
            classified  as  long-term  at both June 30,  1998 and 1997.  There was
            $2,494.2 and $1,554.6 in commercial paper outstanding at June 30, 1998
            and 1997, respectively, and $1,248.0 outstanding at December 31, 1997
  
            Recent Accounting Developments
  
            In June 1998, the Financial Accounting Standards Board ("FASB") issued
            SFAS No.  133,  "Accounting  for  Derivative  Instruments  and Hedging
            Activities".  This  accounting  standard is  effective  for all fiscal
            quarters  of all fiscal  years  beginning  after June 15,  1999.  This
            statement   establishes   accounting   and  reporting   standards  for
            derivative  instruments  and for  hedging  activities.  The  statement
            requires  that all  derivatives  are  recognized  as either  assets or
            liabilities in the statement of financial position and are measured at
            their  fair   values.   The  Company  is  currently   evaluating   the
            requirements   of  this  standard  to  determine  its  impact  on  the
            consolidated financial statements.
  
            The  Company,  in  the  fourth  quarter,  will  adopt  SFAS  No.  131,
            "Disclosures about Segments of an Enterprise and Related Information",
            issued in June 1997, and SFAS No. 132,  "Employers'  Disclosures about
            Pensions and Other Postretirement Benefits",  issued in February 1998.
            Neither  standard  will  have  an  adverse  effect  on  the  Company's
            financial position, cash flows or results of operations.  SFAS No. 131
            requires the disclosure of segment  information on the same basis that
            is used  internally  for  evaluating  performance  and for  allocating
            resources. SFAS No. 132 revises the disclosures required about pension
            and other postretirement benefit plans.
  
            Market Risk
  
            In  the  normal  course  of  business,   the  Company  is  exposed  to
            fluctuations in currency values,  interest rates, commodity prices and
            other  market  risks.  The Company  addresses  these  risks  through a
            program that  includes the use of financial  instruments.  The Company
            controls the credit risks associated with these financial  instruments
            through credit approval,  investment limits and centralized monitoring
            procedures and systems.  The Company uses only liquid investments from
            creditworthy institutions and does not enter into leveraged, tiered or
            illiquid contracts. Further, the Company does not enter into financial
            instruments for trading purposes.
  
            There have been no  material  changes  in the  Company's  exposure  to
            market risk since December 31, 1997.
  
            Year 2000
  
            The Company  has  substantially  completed  an  inventory  of critical
            information systems,  manufacturing equipment and facilities worldwide
            in support of its Year 2000 (Y2K)  global  assessment.  In addition to
            addressing  these  internal Y2K risks,  the Company has also initiated
            global  reviews  of  the  Y2K  compliance  of the  Company's  critical
            vendors,  customers,  and other third  parties to assess the Company's
            external  Y2K risks.  These  assessment  efforts  are  expected  to be
            substantially completed during the fourth quarter of 1998.
  
            The Company is currently  remediating  (or in the process of launching
            remediation  of ) its important  systems within each of its divisions.
            The  targeted  completion  date  for  all  critical  modifications  is
            mid-1999;  however,  additional  refinement  and  system  testing  may
            continue through the end of 1999.
  
                                         16
  Crown Cork & Seal Company, Inc.
  
  Item 2.   Management's Discussion and Analysis (Continued)
  
            Meaningful  cost estimates will not be available  until the completion
            of the  Company's  internal Y2K  assessment  effort.  However,  at the
            present  time,  management  does  not  expect  these  costs  to have a
            material  adverse  effect on the Company's  financial  position,  cash
            flows or results of operations.
  
            The  foregoing  timetable  and initial  assessment of cost exposure to
            correct  Y2K  issues  reflects  management's  best  estimates.   These
            estimates are based upon many assumptions, including assumptions about
            the ultimate  results of its internal Y2K  assessment  efforts and the
            availability  and  capability  of resources  to  remediate  and modify
            affected systems. The Company, however, cannot reasonably estimate the
            potential impact on its financial condition and operations if critical
            vendors, customers or key third parties, including governments, do not
            become Y2K capable on a timely basis. As noted previously, the Company
            is currently  assessing the Y2K  compliance of critical third parties.
            In order to  mitigate  such  external  risks,  the  Company  has begun
            contingency  planning to address potential  disruptions in electrical,
            telecommunications,  transportation  and  distribution  services.  The
            Company can give no  assurance  that all critical  third  parties will
            become   compliant;   and,   accordingly,   management  is  developing
            strategies  to minimize  the effect,  if any, on the Company from such
            failures by third parties to be Y2K compliant.
  
            Forward Looking Statements
  
            Statements included herein in "Management's Discussion and Analysis of
            Results of Operations and Financial Condition",  and in the discussion
            of the  restructuring  plans in Note D to the  Consolidated  Financial
            Statements  included in this Quarterly Report on Form 10-Q and also in
            Part I, Item 1: "Business" and Item 3: "Legal Proceedings" and in Part
            II,  Item  7:  "Management's  Discussion  and  Analysis  of  Financial
            Condition  and Results of  Operations",  within the  Company's  Annual
            Report on Form 10-K for the fiscal year ended December 31, 1997, which
            are not historical  facts  (including any statements  concerning plans
            and  objectives  of  management  for  future  operations  or  economic
            performance,  or assumptions  related thereto),  are  "forward-looking
            statements"  within the meaning of the  federal  securities  laws.  In
            addition,  the Company and its  representatives  may from time to time
            make other oral or written statements which are also  "forward-looking
            statements".
  
            These  forward-looking  statements  are made based  upon  management's
            expectations  and  beliefs  concerning  future  events  impacting  the
            Company  and  therefore  involve a number of risks and  uncertainties.
            Management cautions that forward-looking statements are not guarantees
            and that actual results could differ  materially  from those expressed
            or implied in the forward-looking statements.
  
            While  the  Company   periodically   reassesses  material  trends  and
            uncertainties  affecting  the  Company=s  results  of  operations  and
            financial condition in connection with the preparation of Management's
            Discussion  and  Analysis  of  Results  of  Operations  and  Financial
            Condition  and  certain  other  sections  contained  in the  Company's
            quarterly,  annual or other  reports  filed with the SEC,  the Company
            does not  intend to review or revise  any  particular  forward-looking
            statement in light of future events.
  
            A discussion of important  factors that could cause the actual results
            of  operations  or  financial  condition of the Company to differ from
            expectations has been set forth in the Company's Annual Report on Form
            10-K for the year ended  December  31,  1997  within  Part II, Item 7;
            "Management's  Discussion  and Analysis of Results of  Operations  and
            Financial  Condition" under the caption  "Forward Looking  Statements"
            and is incorporated herein by reference.  Some of the factors are also
            discussed  elsewhere  in this Form 10-Q and in prior  Company  filings
            with the  Securities  and Exchange  Commission  ("SEC").  In addition,
            other  factors have been or may be discussed  from time to time in the
            Company's SEC filings.
  
                                         17
  Crown Cork & Seal Company, Inc.
  
                             PART II - OTHER INFORMATION
  
  Item 4.   Submission of Matters to Vote of Security Holders
  
            The Company's  Annual  Meeting of  Shareholders  was held on April 23,
            1998. The matters voted upon and the results  thereof are set forth in
            Part II, Item 4 of the Company's Quarterly Report on Form 10-Q for the
            quarter ended March 31, 1998 and such Item 4 is incorporated herein by
            reference.
  
  Item 5.   Other Information
  
            Any shareholder proposal submitted outside the processes of Rule 14a-8
            under the Securities Exchange Act of 1934 intended to be presented for
            action at the Company's  1999 Annual Meeting of  Shareholders  will be
            considered  untimely  for  purposes of Rules 14a-4 and 14a-5 if notice
            thereof is received by the Company  earlier  than  January 23, 1999 or
            later than February 22, 1999.
  
            On July 23,  1998,  the  Company's  Board of Directors  declared  cash
            dividends of $.25 per share on the  Company's  common stock and $.4712
            per share on the Company's  4.5%  convertible  preferred  stock.  Both
            dividends are payable on August 20, 1998 to  shareholders of record on
            August 6, 1998.
  
  Item 6.   Exhibits and Reports on Form 8-K
  
            a)   Exhibits
  
                 2.   Letter  Agreement,  dated  July 9, 1998,  between  Compagnie
                      Generale  d'Industrie et de Participations  and Crown Cork &
                      Seal Company, Inc.
  
                 27.  Financial Data Schedule
  
            b)   Reports on Form 8-K
  
                 There  were no  reports  on Form 8-K  filed by Crown  Cork & Seal
                 Company, Inc., during the quarter for which this report is filed.
  
                                         18
  SIGNATURE
  
       Pursuant to the  requirements  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.
  
                                              Crown Cork & Seal Company, Inc.
                                              Registrant
  
                                              By: /s/ Timothy J. Donahue
                                                 Timothy J. Donahue
                                                 Senior Vice President and 
                                                 Corporate Controller
  
  Date: August 13, 1998
  
                                         19