UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549-1004
                                        
                                   FORM 10-Q

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

                 For the quarterly period ended March 28, 1999
                                      OR

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

     For the transition period from _____________ to ____________________
Commission file number:  333-53603-03

                       GRAHAM PACKAGING HOLDINGS COMPANY
            (Exact name of registrant as specified in its charter)

           Pennsylvania                               23-2553000

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

                             2401 Pleasant Valley Road
                                York, Pennsylvania
                     (Address of principal executive offices)
                                       17402
                                    (zip code)
                                  (717) 849-8500
               (Registrant's telephone number, including area code)

Indicate by checkmark 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  [   ]
<PAGE>
<PAGE>

                       GRAHAM PACKAGING HOLDINGS COMPANY
                                     INDEX


                        PART I.  FINANCIAL INFORMATION

                                                                   Page Number


Item 1.   Condensed Financial Statements  . . . . . . . . . . . . . . . . .  3

     CONDENSED BALANCE SHEETS
          At March 28, 1999 and December 31, 1998   . . . . . . . . . . . .  3

     CONDENSED STATEMENTS OF OPERATIONS
          For the Three Months Ended March 28, 1999 and March 29, 1998  . .  5

     CONDENSED STATEMENTS OF PARTNERS' CAPITAL/OWNERS' EQUITY (DEFICIT)
          For the Year Ended December 31, 1998 and
          Three Months Ended March 28, 1999   . . . . . . . . . . . . . . .  6

     CONDENSED STATEMENTS OF CASH FLOWS
          For the Three Months Ended March 28, 1999 and March 29, 1998  . .  7

     NOTES TO CONDENSED FINANCIAL STATEMENTS  . . . . . . . . . . . . . . .  9

Item 2.   Management's Discussion and Analysis of Financial Condition
            And Results of Operations . . . . . . . . . . . . . . . . . . . 21

Item 3.   Quantitative and Qualitative Disclosures About Market Risk  . . . 29


                          PART II   OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K  . . . . . . . . . . . . . . . . 30

SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31












<PAGE>
<PAGE>

PART I.   FINANCIAL INFORMATION

Item 1.   Condensed Financial Statements


                       GRAHAM PACKAGING HOLDINGS COMPANY
                           CONDENSED BALANCE SHEETS


                                               March 28,        December 31,
                                                 1999               1998
                                            --------------    ---------------
ASSETS                                       (Unaudited)
                                                     (in thousands)

Current assets:

  Cash and cash equivalents  . . . . . .        $ 6,273           $7,476

  Accounts receivable, net . . . . . . .         99,512           87,618

  Inventories  . . . . . . . . . . . . .         38,497           41,247

  Prepaid expenses and other                    
    current assets  . . . . . . . . . . .        11,410           14,587
                                                -------          -------
Total current assets  . . . . . . . . . .       155,692          150,928

Property, plant, and equipment, net . . .       395,007          386,692

Other assets  . . . . . . . . . . . . . .        56,601           59,127
                                                -------          -------
Total assets  . . . . . . . . . . . . . .      $607,300         $596,747
                                               ========         ======== 

LIABILITIES AND PARTNERS' CAPITAL/OWNERS'
  EQUITY (DEFICIT)

Current liabilities:                                             

  Accounts payable and accrued                  
    expenses  . . . . . . . . . . . . . .      $136,868         $148,916

  Current portion of long-term debt  . .          8,293           11,929
                                                -------          -------

Total current liabilities . . . . . . . .       145,161          160,845

Long-term debt  . . . . . . . . . . . . .       909,984          863,468

Other non-current liabilities . . . . . .        10,442           11,228


                            See accompanying notes
<PAGE>
<PAGE>

Commitments and contingencies . . . . . . . . .      ---            ---

Partners' capital/owners' equity (deficit):

Partners'/owners' capital (deficit) . . . . . .  (445,081)      (442,271)

Notes receivable for ownership interests  . . .      ---            ---

Accumulated other comprehensive income  . . . .   (13,206)         3,477
                                                  --------       --------
Total partners' capital/owners' equity          
(deficit) . . . . . . . . . . . . . . . . . . .  (458,287)      (438,794)
                                                  --------      --------- 

Total liabilities and partners'                 
capital/owners' equity (deficit)  . . . . . . .  $607,300       $596,747
                                                 ========       ========

<PAGE>
                       GRAHAM PACKAGING HOLDINGS COMPANY
                      CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)


                                                        Three Months Ended 
                                                  ---------------------------
                                                   March 28,     March 29,
                                                     1999           1998
                                                  ---------------------------
                                                        (in thousands)

Net Sales . . . . . . . . . . . . . . . . . . .      $159,085       $134,418
Cost of goods sold  . . . . . . . . . . . . . .       131,205        109,841
                                                     --------       --------
                                                       27,880         24,577

Selling, general, and administrative expenses .        10,445          8,422

Special charges and unusual items . . . . . . .         1,217         14,898
                                                     --------       --------

Operating income  . . . . . . . . . . . . . . .        16,218          1,257

Recapitalization expenses . . . . . . . . . . .          ---          11,496

Interest expense, net . . . . . . . . . . . . .        19,446         11,939

Other (income) expense  . . . . . . . . . . . .           (62)           161
                                                      --------       -------
Income (loss) before income taxes and                          
extraordinary item  . . . . . . . . . . . . . .        (3,166)       (22,339)

Income tax provision  . . . . . . . . . . . . .           238              8
                                                      -------        -------

Income (loss) before extraordinary item . . . .        (3,404)       (22,347)

Extraordinary loss from early extinguishment    
of debt . . . . . . . . . . . . . . . . . . . .          ---            675
                                                      -------      ---------

Net income (loss) . . . . . . . . . . . . . . .       $(3,404)     $(23,022)
                                                      =======      =========




                            See accompanying notes
<PAGE>
<PAGE>

                       GRAHAM PACKAGING HOLDINGS COMPANY
      CONDENSED STATEMENTS OF PARTNERS' CAPITAL/OWNERS' EQUITY (DEFICIT)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                            
                                  Partners'     Notes Receivable      Accumulated   
                                   Capital           For                Other 
                                   Owners'        Ownership          Comprehensive 
                                   Equity         Interests             Income          Total
                                  --------      ----------------     -------------      -----
                                                           (in thousands)

<S>                             <C>               <C>                  <C>           <C>
Balance at January 1, 1998       $ 20,383          $ (20,240)            $ 194           $ 337
                                                                                       ------- 
  Net loss for the year . .       (26,062)            ---                  ---         (26,062)

  Cumulative translation
  adjustment  . . . . . . .           ---             ---                3,283           3,283
                                                                                       -------  
  Comprehensive income  . .                                                            (22,779)
                                                                                       ------- 
  Cash distributions to
  owners  . . . . . . . . .        (6,852)            ---                  ---          (6,852)

  Recapitalization  . . . .      (429,740)            20,240               ---        (409,500)
                                 ---------          --------           ---------      ---------
                                          
  Balance at December 31,         
  1998  . . . . . . . . . .      (442,271)            ---                3,477        (438,794)
                                                                                      -------- 
  Net loss for the period .        (3,404)            ---                  ---          (3,404)
  Cumulative translation
  adjustment  . . . . . . .           ---             ---              (16,683)        (16,683)
                                                                                       ------- 
  Comprehensive income  . .                                                            (20,087)
                                                                                      -------- 
  Recapitalization  . . . .           594             ---                  ---             594
                                ---------          --------           ---------      --------- 
Balance at March 28, 1999       $(445,081)         $  ---             $(13,206)      $(458,287)
                                =========          ========           ========       =========   
</TABLE>






                            See accompanying notes
<PAGE>
<PAGE>

                       GRAHAM PACKAGING HOLDINGS COMPANY
                      CONDENSED STATEMENTS OF CASH FLOWS
                                  (Unaudited)





                                                      Three Months Ended
                                                   -----------------------
                                                   March 28,     March 29,
                                                     1999           1998
                                                   ---------     ---------
                                                        (in thousands)



Operating activities:

  Net loss  . . . . . . . . . . . . . . . . . . .    $ (3,404)      $(23,022)

  Adjustments to reconcile net loss to net 
  cash provided  by operating activities:

  Depreciation and amortization  . . . . . . . .       11,792          9,243

  Amortization of debt issuance fees  . . . . . .       1,010            661

  Accretion of Senior Discount Notes  . . . . . .       2,896          1,659

  Extraordinary loss  . . . . . . . . . . . . . .         ---            675

  Write-off of license fees . . . . . . . . . . .         ---          1,436

  Equity income in earnings of joint venture  . .         (75)           (75)

  Foreign currency transaction loss . . . . . . .          22             10

  Other non-cash recapitalization expense . . . .         594            622

  Changes in operating assets and liabilities,
  net of Acquisition of business:
  Accounts receivable . . . . . . . . . . . . . .     (15,773)       (11,560) 

  Inventories . . . . . . . . . . . . . . . . . .       1,409          1,992

  Prepaid expenses and other current assets . . .       2,510            889

  Accounts payable and accrued expenses . . . . .      (8,150)         1,991
                                                       ------         ------ 
Net cash used by operating activities . . . . . .      (7,169)       (15,479) 


                            See accompanying notes
<PAGE>
<PAGE>

Investing activities:

  Net purchases of property, plant, and               (33,825)         (13,505)
  equipment . . . . . . . . . . . . . . . . . . .

  Acquisition of Brazilian business . . . . . . .         ---           (2,995)

  Other . . . . . . . . . . . . . . . . . . . .           122              (66)
                                                      -------         --------
  Net cash used in investing activities . . . . .     (33,703)         (16,566)
                                                                 
Financing activities:

  Net proceeds from issuance of long-term 
    debt  . . . . . . . . . . . . . . . . . . .        40,555          734,328

  Recapitalization debt repayments  . . . . . .           ---         (264,410)

  Recapitalization owner note payments  . . . .           ---           20,240

  Recapitalization cash distributions to                  ---         (429,566)
    owners  . . . . . . . . . . . . . . . . . .   

  Other cash distributions to owners  . . . . .           ---             (624)

  Debt issuance fees  . . . . . . . . . . . . .            (3)         (30,876)
                                                       ------          -------
Net cash provided by financing activities . . .        40,552           29,092

Effect of exchange rate changes . . . . . . . .          (883)             (68)
                                                       ------          ------- 
Decrease in cash and cash equivalents . . . . .        (1,203)          (3,021)

Cash and cash equivalents at beginning of               7,476            7,218
period  . . . . . . . . . . . . . . . . . . . .        ------           ------

Cash and cash equivalents at end of period  . .        $6,273          $ 4,197
                                                       ======          ======= 





                            See accompanying notes
<PAGE>
<PAGE>

                       GRAHAM PACKAGING HOLDINGS COMPANY
              NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
                                March 28, 1999


1.       Basis of Presentation

         The accompanying unaudited condensed financial statements of Graham
Packaging Holdings Company have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X and therefore do
not include all of the information and footnotes required by generally
accepted accounting principles for complete annual financial statements.  In
the opinion of management, all adjustments (consisting only of usual
recurring adjustments considered necessary for a fair presentation) are
reflected in the condensed financial statements.  The condensed consolidated
balance sheet as of December 31, 1998 is derived from audited financial
statements.  The condensed financial statements and notes thereto should be
read in conjunction with the consolidated financial statements and notes
thereto for the year ended December 31, 1998.  The results of operations for
the three month period ended March 28, 1999 are not necessarily indicative of
the results to be expected for the full year ending December 31, 1999.

         The financial statements include the operations of Graham Packaging
Holdings Company, a Pennsylvania limited partnership formerly known as Graham
Packaging Company ("Holdings"); Graham Packaging Company L.P., a Delaware
limited partnership formerly known as Graham Packaging Holdings I, L.P. (the
"Operating Company"); Graham Packaging Italy, S.r.L.; Graham Packaging France
Partners; Graham Packaging Poland, L.P.; Graham Packaging do Brasil Industria
e Comercio S.A.; Graham Packaging Canada Limited; Graham Recycling Company
L.P.; subsidiaries thereof; and land and buildings that were used in the
operations, owned by the control group of owners and contributed to the
Graham Packaging Group (as defined).  Prior to February 2, 1998, these
operations of the Graham Packaging Group were under common control by virtue
of ownership by the Donald C. Graham family.  In addition, the consolidated
financial statements of the Group include GPC Capital Corp. I, a wholly owned
subsidiary of the Operating Company and GPC Capital Corp. II, a wholly owned
subsidiary of Holdings.  The purpose of GPC Capital Corp. I is solely to act
as co-obligor with the Operating Company under the Senior Subordinated 
Notes (as herein defined) and as co-borrower with the Operating Company 
under the New Credit Agreement (as herein defined), and the purpose of
GPC Capital Corp. II is solely to act as co-obligor with Holdings under the 
Senior Discount Notes and as co-guarantor with Holdings of the New Credit 
Agreement.  GPC Capital Corp. I and GPC Capital Corp. II have only nominal 
assets and do not conduct any independent operations.  Furthermore, since
July 27, 1998 the consolidated financial statements of the Group include the 
operations of Graham Emballages Plastiques S.A.; Graham Packaging U.K. Ltd.;
Graham Plastpak Plastic, Ambalaj A.S.; and Graham Packaging Deutschland Gmbh 
as a result of the acquisition of selected plants of Crown Cork & Seal (see 
Note 8).  These entities and assets are referred to collectively as Graham
<PAGE>
<PAGE>

Packaging Group (the "Group").  With respect to the periods subsequent to the
Recapitalization that occurred on February 2, 1998 (see Note 2), the
financial statements and references to the "Group" relate to Holdings and its
subsidiaries on a consolidated basis and for the period prior to the
Recapitalization to the "Group" on a combined basis.  The combined financial
statements include the accounts and results of operations of the Group for
all periods that the operations were under common control.  All amounts in
the financial statements are those reported in the historic financial
statements of the individual operations.  All significant intercompany
accounts and transactions have been eliminated in the consolidated and
combined financial statements.

         Since the Recapitalization, Holdings has had no assets, liabilities
or operations other than its direct and indirect investments in the Operating
Company, its ownership of GPC Capital Corp. II and the Senior Discount Notes
and related unamortized issuance costs.  Holdings has fully and
unconditionally guaranteed the Senior Subordinated Notes of the Operating
Company and GPC Capital Corp. I on a senior subordinated basis.  Holdings is
jointly and severally liable with GPC Capital Corp. II with respect to all
obligations on the Senior Discount Notes of Holdings and GPC Capital Corp.
II.  Condensed financial data for the Operating Company is presented in Note
11.  No separate financial statements are presented for GPC Capital Corp. I
and GPC Capital Corp. II.  As indicated above, GPC Capital Corp. I and GPC
Capital Corp. II have no independent operations, and Management has
determined that separate financial statements for GPC Capital Corp. I and GPC
Capital Corp. II would not be material to investors.

         Certain reclassifications have been made to the 1998 financial
statements to conform to the 1999 presentation.

2.       Recapitalization

         Pursuant to an Agreement and Plan of Recapitalization, Redemption and
Purchase, dated as of December 18, 1997 (the "Recapitalization Agreement"),
(i) Holdings, (ii) the owners of the Group (the "Graham Partners") and (iii)
BMP/Graham Holdings Corporation, a Delaware corporation formed by Blackstone
Capital Partners III Merchant Banking Fund L.P. ("Investor LP"), and
BCP/Graham Holdings L.L.C., a Delaware limited liability company and a wholly
owned subsidiary of Investor LP ("Investor GP" and together with Investor LP,
the "Equity Investors") agreed to a recapitalization of Holdings (the
"Recapitalization").  Closing under the Recapitalization Agreement occurred
on February 2, 1998.

         The principal components and consequences of the Recapitalization
included the following:

         -       A change in the name of Holdings to Graham Packaging
                 Holdings Company;
<PAGE>
<PAGE>

         -       The contribution by Holdings of substantially all of its
                 assets and liabilities to the Operating Company, which was
                 renamed "Graham Packaging Company";

         -       The contribution by certain Graham Partners to the Group of
                 their ownership interests in certain partially-owned
                 subsidiaries of Holdings and certain real estate used but
                 not owned by Holdings and its subsidiaries;

         -       The initial borrowing by the Operating Company of $403.5
                 million (the "Bank Borrowings") in connection with the New
                 Credit Agreement entered into by and among the Operating
                 Company, Holdings and a syndicate of lenders;

         -       The issuance of $225 million of Senior Subordinated Notes by
                 the Operating Company and GPC Capital Corp. I and $100.6 
                 million gross proceeds ($169 million aggregate principal 
                 amount at maturity) of Senior Discount Notes by Holdings 
                 and GPC Capital Corp. II;

         -       The repayment by the Operating Company of substantially all
                 of the existing indebtedness and accrued interest of
                 Holdings and its subsidiaries;

         -       The distribution by the Operating Company to Holdings of all
                 of the remaining net proceeds of the Bank Borrowings and the
                 Senior Subordinated Notes (other than amounts necessary to
                 pay certain fees and expenses and payments to Management);

         -       The redemption by Holdings of certain partnership interests
                 in Holdings held by the Graham Partners for $429.6 million; 

         -       The purchase by the Equity Investors of certain partnership
                 interests in Holdings held by the Graham Partners for $208.3
                 million;

         -       The repayment by the Graham Partners of amounts owed to
                 Holdings under the $20.2 million promissory notes;

         -       The recognition of additional compensation expense under the
                 Equity Appreciation Plan;

         -       The payment of certain bonuses and other cash payments and
                 the granting of certain equity awards to senior and middle
                 level management;
<PAGE>
<PAGE>

         -       The execution of various other agreements among the parties;
                 and

         -       The payment of a $6.2 million tax distribution by the
                 Operating Company on November 2, 1998 to certain Graham
                 Partners for tax periods prior to the Recapitalization.

         As a result of the consummation of the Recapitalization, Investor LP
owns an 81% limited partnership interest in Holdings, and Investor GP owns a
4% general partnership interest in Holdings.  Certain Graham Partners or
affiliates thereof or other entities controlled by Donald C. Graham and his
family, have retained a 1% general partnership interest and a 14% limited
partnership interest in Holdings.  Additionally, Holdings owns a 99% limited
partnership interest in the Operating Company, and GPC Opco GP L.L.C., a
wholly owned subsidiary of Holdings, owns a 1% general partnership interest
in the Operating Company.

         As a result of the Recapitalization, the Group incurred charges of
approximately $32 million related to the issuance of debt which will be
recognized as interest expense over 6 to 11 years based upon the terms of the
related debt instruments.  In addition, Recapitalization expenses of
approximately $25 million, which related to transaction fees, expenses,
compensation, unamortized licensing fees and costs associated with the
termination of the interest rate collar and swap agreements were incurred. 
The Recapitalization also resulted in the write-off of unamortized debt
issuance fees which is reflected as an extraordinary loss in the financial
statements.  Compensation expense totaling $10.7 million, of which $7.9
million had been expensed as of March 28, 1999, related to stay bonuses and
the granting of certain ownership interests to management which will be
recognized over a period up to three years.  See Note 9.

3.       Debt Arrangements

         On February 2, 1998, the Group refinanced the majority of its
existing credit facilities in connection with the Recapitalization and
entered into a new Credit Agreement (the "New Credit Agreement") with a
consortium of banks.  The New Credit Agreement was amended on August 13, 1998
(the "Amendment") to provide for an additional Term Loan Borrowing of up to
an additional $175 million which can be drawn in two installments (of which
$175 million was drawn and outstanding as of March 28, 1999).  A commitment
fee of .75% is due on the unused portion.  The New Credit Agreement and the
Amendment consist of four term loans to the Operating Company totaling up to
$570 million and two revolving loan facilities to the Operating Company
totaling $255 million.  The obligations of the Operating Company under the
New Credit Agreement and Amendment are guaranteed by Holdings and certain
other subsidiaries of Holdings. The term loans are payable in quarterly
installments through January 31, 2007, and require payments of $5.0 million
in 1999, $15.0 million in 2000, $20.0 million in 2001, $25.0 million in 2002
and $27.5 million in 2003.  The revolving loan facilities expire on January
<PAGE>
<PAGE>

31, 2004.  Interest is payable at (a) the "Alternate Base Rate" (the higher
of the Prime Rate or the Federal Funds Rate plus 0.50%) plus a margin ranging
from 0% to 2.00%; or (b) the "Eurocurrency Rate" (the applicable interest
rate offered to banks in the London interbank eurocurrency market) plus a
margin ranging from 0.625% to 3.00%.   A commitment fee ranging from 0.20% to
0.50% is due on the unused portion of the revolving loan commitment.  As part
of the Amendment to the New Credit Agreement, if certain events of default
were to occur (including, without limitation, if the Company's Net Leverage
Ratio were above 5.15:1.0 at March 31, 2000), Blackstone has agreed to make
an equity contribution to the Group through the administrative agent of up
to $50 million.  In addition, the New Credit Agreement and Amendment contain
certain affirmative and negative covenants as to the operations and financial
condition of the Group, as well as certain restrictions on the payment of
dividends and other distributions to Holdings.  

         Substantially all tangible and intangible assets of the Group are
pledged as collateral pursuant to the terms of the New Credit Agreement and
Amendment. 

         The Recapitalization also included the issuance of $225 million of
Senior Subordinated Notes of the Operating Company and GPC Capital Corp. I
and $100.6 million gross proceeds of Senior Discount Notes ($169 million
aggregate principal amount at maturity) of Holdings and GPC Capital Corp. II. 
The Senior Subordinated Notes are unconditionally guaranteed on a senior
subordinated basis by Holdings and mature on January 15, 2008, with interest
payable on $150 million at 8.75% and with interest payable on $75 million at
LIBOR plus 3.625%.  The Senior Discount Notes mature on January 15, 2009, and
cash interest begins to accrue on January 15, 2003 at 10.75%.  The effective
interest rate to maturity on the Senior Discount Notes is 10.75%.

         Interest paid during the three months ended March 28, 1999 and March
29, 1998 was $18.3 million and $3.2 million, respectively.

         The Operating Company has entered into three U.S. Dollar interest
rate swap agreements that effectively fix the Eurocurrency Rate on $450
million of the term loans, on $200 million through April 9, 2002 at 5.8075%,
on $100 million through April 9, 2003 at 5.77% and on $150 million through
September 10, 2001 at 5.5075%.

         Under the New Credit Agreement and Amendment, the Operating Company
is subject to restrictions on the payment of dividends or other distributions
to Holdings; provided that, subject to certain limitations, the Operating
Company may pay dividends or other distributions to Holdings (i) in respect
of overhead, tax liabilities, legal, accounting and other professional fees
and expenses, (ii) to fund purchases and redemptions of equity interests of
Holdings or Investor LP held by the present or former officers or employees
of Holdings, the Operating Company or their Subsidiaries (as defined) or by
any employee stock ownership plan upon such person's death, disability,
retirement or termination of employment or other circumstances with certain
<PAGE>
<PAGE>

annual dollar limitations and (iii) to finance starting on July 15, 2003, the
payment of cash interest payments on the Senior Discount Notes.

         On September 8, 1998, Holdings and GPC Capital Corp. II consummated
an exchange offer for all of their outstanding Senior Discount Notes Due 2009
which had been issued on February 2, 1998 (the "Senior Discount Old Notes")
and issued in exchange therefor their Senior Discount Notes Due 2009, Series
B (the "Senior Discount Exchange Notes"), and the Operating Company and GPC
Capital Corp. I consummated exchange offers for all of their outstanding
Senior Subordinated Notes Due 2008 which had been issued on February 2, 1998
(the "Senior Subordinated Old Notes" and, together with the Senior Discount
Old Notes, the "Old Notes") and issued in exchange therefor their Senior
Subordinated Notes Due 2008, Series B (the "Senior Subordinated Exchange
Notes" and, together with the Senior Discount Exchange Notes, the "Exchange
Notes").  Each issue of Exchange Notes has the same terms as the
corresponding issue of Old Notes, except that the Exchange Notes are
registered under the Securities Act of 1933 and do not include the
restrictions on transfer applicable to the Old Notes.  The Senior
Subordinated Old Notes were, and the Senior Subordinated Exchange Notes are,
fully and unconditionally guaranteed by Holdings on a senior subordinated
basis.

4.       Related Party Transactions

         Pursuant to the Recapitalization Agreement, the Graham Partners have
agreed that neither they nor their affiliates will, subject to certain
exceptions, for a period of five years from and after the Closing of the
Recapitalization, engage in the manufacture, assembly, design, distribution
or marketing for sale of rigid plastic containers for the packaging of
consumer products less than ten liters in volume.

         Also pursuant to the Recapitalization Agreement, Holdings entered
into an Equipment Sales, Service and Licensing Agreement and a Consulting
Agreement with certain entities controlled by Donald C. Graham and members of
his family and a Partners Registration Rights Agreement with partners of
Holdings and certain other entities.   Additionally, Holdings has entered
into a Monitoring Agreement with Blackstone Management Partners III L.L.C.
for advisory and consulting services.


<PAGE>
<PAGE>
5.       Inventories
         Inventories consisted of the following:
                                                                           
                                                 March 28,    December 31,
                                                   1999           1998
                                                 --------     -----------
                                                      (in thousands)

Finished goods  . . . . . . . . . . . . . . . .  $24,501        $23,497
Raw materials and parts . . . . . . . . . . . .   13,996         17,750
                                                 -------        -------
                                                  38,497         41,247
Less LIFO allowance . . . . . . . . . . . . . .     ---            ---
                                                 -------        ------- 
                                                 $38,497        $41,247
                                                 =======        =======
6.       Accounts Payable and Accrued Expenses

         Accounts payable and accrued expenses included the following:

                                                 March 28,    December 31,
                                                   1999           1998
                                                 ---------    -----------
                                                      (in thousands)

Accounts payable  . . . . . . . . . . . . . . .  $66,729        $77,485
Accrued employee compensation and benefits  . .   18,940         19,983
Special charges and unusual items . . . . . . .    4,070          7,744
Accrued interest  . . . . . . . . . . . . . . .   14,101         16,736
Other . . . . . . . . . . . . . . . . . . . . .   33,028         26,968
                                                --------       --------
                                                $136,868       $148,916
                                                ========       ========

7.       Income Taxes

         The Group does not pay U.S. federal income taxes under the provisions
of the Internal Revenue Code, as the applicable income or loss is included in
the tax returns of the partners/owners.  For the Group's foreign operations
subject to tax in their local jurisdictions, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases and are
measured using enacted tax rates expected to apply to taxable income in the
years in which the temporary differences are expected to reverse.  During
1999 and 1998, some of the Group's various taxable entities incurred
additional net operating loss carryforwards for which no benefit has been
recognized.

8.       Purchase of Certain Plants of Crown, Cork & Seal

         On July 27, 1998 the Company acquired selected plastic bottle
manufacturing operations of Crown, Cork & Seal located in France, Germany,
the United Kingdom and Turkey for a total purchase price (including
acquisition-related costs) of $42.2 million, net of liabilities assumed,
subject to certain adjustments.  The acquisition was recorded under the
purchase method of accounting and accordingly, the results of operations of
the acquired operations are included in the financial statements of the Group
beginning on July 27, 1998.  The initial purchase price has been allocated on
a preliminary basis to assets acquired and liabilities assumed based on
<PAGE>
<PAGE>

estimated fair values.  Negotiations regarding the final purchase price are
still ongoing which could result in a reduction of the purchase price which
is not expected to be significant.  Goodwill is being amortized over 20 years
on the straight-line basis.  The initial allocated fair value of assets
acquired and liabilities assumed is summarized as follows (in thousands):

Current assets  . . . . . . . . . . . . . . . . . . . . .   $21,771
Property, plant and equipment . . . . . . . . . . . . . .    29,597
Other assets  . . . . . . . . . . . . . . . . . . . . . .     2,379
Goodwill  . . . . . . . . . . . . . . . . . . . . . . . .    16,230
                                                             ------
Total . . . . . . . . . . . . . . . . . . . . . . . . . .    69,977
Less liabilities assumed  . . . . . . . . . . . . . . . .    27,820
                                                             ------
Net cost of acquisition . . . . . . . . . . . . . . . . .   $42,157
                                                            =======

         The following table sets forth unaudited pro forma combined results
of operations, assuming that the acquisition had taken place on January 1,
1998.

                                                              Three Months
                                                             Ended March 29,
                                                                  1998
                                                             ---------------
                                                             (in thousands)

Net sales . . . . . . . . . . . . . . . . . . . . . . . .       $151,628
Loss before extraordinary item  . . . . . . . . . . . . .        (23,898)
Net loss  . . . . . . . . . . . . . . . . . . . . . . . .        (24,573)

         These unaudited pro forma results have been prepared for comparative
purposes only and include certain adjustments, such as additional
depreciation expense as a result of a step-up in the basis of fixed assets
and increased interest expense on acquisition debt.  They do not purport to
be indicative of the results of operations which actually would have resulted
had the combination been in effect on January 1, 1998, or of future results
of operations of the combined entities.

9.       Special Charges and Unusual Items

         The special charges and unusual items recorded in the three month
periods ended March 28, 1999 and March 29, 1998, were as follows:

<PAGE>
<PAGE>

                                                      Three Months Ended
                                                   -----------------------
                                                   March 28,     March 29,
                                                     1999           1998
                                                   --------      --------
                                                       (in thousands)

Systems conversion  . . . . . . . . . . . . . .       $253           $366
Recapitalization compensation . . . . . . . . .      1,010         14,532
Aborted acquisition costs . . . . . . . . . . .        (46)            --
                                                    ------        -------
                                                    $1,217        $14,898
                                                    ======        =======

         The systems conversion expenses relate to costs incurred by the Group
as part of a multi-year project to ensure that its information systems and
related hardware will be year 2000 compliant.  The Group engaged outside
consultants beginning in 1997 to assist with the evaluation and assessment of
its information systems requirements and the selection and implementation of
enterprise resource planning software.

         Recapitalization expenses included in special charges and unusual
items relate to compensation and to write-off of unamortized licensing fees.
Additionally, Recapitalization expenses relate to stay bonuses and the
granting of certain ownership interests to Management pursuant to the terms
of the Recapitalization (see Note 2), which are being recognized over a
period of up to three years.

10.      Contingencies

         The Group is party to various litigation matters arising in the
ordinary course of business.  The ultimate legal and financial liability of
the Group with respect to litigation cannot be estimated with certainty, but
Management believes, based on its examination of such matters, experience to
date and discussions with counsel, that such liability will not be material
to the business, financial condition, results of operations or cash flows of
the Group.


11.      Condensed Operating Company Data

         Condensed financial data for the Operating Company as of March 28,
1999 and December 31, 1998 was as follows:

                                                 March 28,     December 31,
                                                   1999           1998
                                                ---------      -----------
                                                        (in thousands)

Current assets  . . . . . . . . . . . . . . . .  $162,664       $157,900
Noncurrent assets . . . . . . . . . . . . . . .   446,677        440,772
Total assets  . . . . . . . . . . . . . . .       609,341        598,672
<PAGE>
<PAGE>

Current liabilities . . . . . . . . . . . . . .   145,161        160,845
Noncurrent liabilities  . . . . . . . . . . . .   806,833        763,999
Partners' capital/owners' equity (deficit)  . .  (342,653)      (326,172)  

         Condensed financial data for the Operating Company for the three-
month periods ended March 28, 1999 and March 29, 1998 was as follows:

                                                    Three Months Ended
                                                 ------------------------
                                                  March 28,      March 29,
                                                     1999           1998
                                                  ---------      --------
                                                        (in thousands)

Sales . . . . . . . . . . . . . . . . . . . . .  $159,085       $134,418
Gross profit  . . . . . . . . . . . . . . . . .    27,880         24,577
Loss from continuing operations . . . . . . . .      (392)       (19,614) 
Net loss  . . . . . . . . . . . . . . . . . . .      (392)       (20,289)

         Full separate financial statements and other disclosures of the
Operating Company have not been presented.  Management has determined that
such financial information is not material to investors.  

12.      Comprehensive Income

         Effective January 1, 1998, the Group adopted the provisions of
Statement of Financial Accounting Standards No. 130,  "Reporting
Comprehensive Income". Comprehensive income (loss) for the three month
periods ended March 28, 1999 and March 29, 1998, was as follows:

                                                     Three Months Ended
                                                  ------------------------
                                                   March 28,     March 29,
                                                     1999           1998
                                                  ----------    ----------
                                                        (in thousands)

Net loss  . . . . . . . . . . . . . . . . . . .  $(3,404)        $(23,022) 
Foreign currency  . . . . . . . . . . . . . . .  (16,683)            (699)
                                                 -------         --------
Comprehensive income (loss) . . . . . . . . . . $(20,087)        $(23,721)
                                                ========         ========

<PAGE>
<PAGE>

13.      Segment Information

         The Group has adopted SFAS No. 131, "Disclosures about Segments of a
Business Enterprise and Related Information".  The Group is managed in three
operating segments:  North America, which includes the United States and
Canada; Europe and Latin America.  Segment information for the three month
periods ended March 28, 1999 and March 29, 1998 was as follows (in
thousands):

                                          North              Latin
                                         America   Europe   America   Total

Net sales . . . . . . . . . .  1999      $119,828  $34,673   $4,584   $159,085
                                                      
                               1998      112,235    17,237    4,946    134,418
                                                          
Income (loss) before          
extraordinary item  . . . . .  1999       (2,570)    (854)       20     (3,404)

                               1998      (20,015)  (1,956)     (376)   (22,347)

Net income (loss) . . . . . .  1999       (2,570)    (854)       20     (3,404)

                               1998      (20,690)  (1,956)     (376)   (23,022)


14.      New Accounting Pronouncements

         Effective January 1, 1999, the Group adopted Statement of Position
("SOP") 98-1, "Accounting for the Cost of Computer Software Developed For or
Obtained For Internal Use".  The adoption of this SOP had no significant
impact on the Group's earnings or financial position.

         On January 1, 1999, the Group adopted SOP 98-5, "Reporting on the
Cost of Start-Up Activities". The adoption of this SOP had no significant
impact on the Group's earnings or financial position. 

         In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS No. 133").  This
Standard establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging
activities.  It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure
<PAGE>
<PAGE>

those instruments at fair value.  This Standard is effective for the Group's
financial statements for all quarters in the year beginning January 1, 2000. 
Management has not completed its review of SFAS No. 133 and has not
determined the impact adoption will have on the Group's earnings or financial
position.

15.      Subsequent Event

         In April 1999, the Group made an investment in PlasPET Florida, 
Ltd., a developer and blowmolder of PET custom plastic containers.  
The amount of the investment is not material to the Company's financial 
position.
<PAGE>
<PAGE>

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

           CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

         All statements other than statements of historical facts included in
this Report on Form 10-Q, including, without limitation, statements regarding
the future financial position, economic performance and results of operations
of the Company (as defined below), as well as the Company's business
strategy, budgets and projected costs and plans and objectives of management
for future operations, and the information referred to under "Quantitative
and Qualitative Disclosures About Market Risk" (Part I, Item 3), are forward-
looking statements.  In addition, forward-looking statements generally can be
identified by the use of forward-looking terminology such as "may", "will",
"expect", "intend", "estimate", "anticipate", "believe", or "continue" or the
negative thereof or variations thereon or similar terminology.  Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, the Company can give no assurance that such
expectations will prove to have been correct.  Important factors that could
cause actual results to differ materially from the issuers' expectations
include, without limitation, the high degree of leverage and 
substantial debt service obligations of the Operating Company
and Holdings, the restrictive covenants contained in instruments governing
indebtedness of the Company, including the New Credit Agreement, competition
in the Company's markets, including the impact of possible new technologies,
a decline in the domestic motor oil business, risks associated with the
Company's international operations, the Company's exposure to fluctuations in
resin prices and its dependence on resin supplies, the Company's dependence
on significant customers and the risk that customers will not purchase the
Company's products in the amounts expected by the Company under their
requirements contracts, the Company's dependence on key employees and the
material adverse effect that could result from the loss of their services,
the Company's dependence on certain continuing relationships with Graham
Engineering and other Graham Partners and affiliates thereof, risks
associated with environmental regulation, risks associated with possible
future acquisitions, risks associated with hedging transactions, and the
possibility that the Company may not be able to achieve success in developing
and expanding its business, including, without limitation, the Company's hot-
fill PET plastic container business.  See "Business --Certain Risks of the
Business" in Holdings' Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.   All subsequent written and oral forward-looking
statements attributable to the Company, or persons acting on its behalf, are
expressly qualified in their entirety by the cautionary statements set forth 
in this paragraph.

         Overview

         Unless the context otherwise requires, all references herein to the
"Company," with respect to periods prior to the Recapitalization, refer to
the business historically conducted by Holdings (which served as the
<PAGE>
<PAGE>

operating entity for the business prior to the Recapitalization) and one of
its predecessors (Graham Container Corporation), together with Holdings'
subsidiaries and certain affiliates, and, with respect to periods subsequent
to the Recapitalization, refer to Holdings and its subsidiaries.

         The Company is a worldwide leader in the design, manufacture and sale
of custom blow-molded rigid plastic bottles for the automotive, food and
beverage and household cleaning & personal care (HC/PC) business.  Management
believes that critical success factors to the Company's business are its
ability to (i) serve the complex packaging demands of its customers which
include some of the world's largest branded customer products companies, (ii)
forecast trends in the packaging industry across product lines and geographic
territories (including those specific to the rapid conversion of packaging
products from glass, metal and paper to plastic), and (iii) make the correct
investments in plant and technology necessary to satisfy the two forces
mentioned above.

         Management believes that there are major synergistic acquisition,
joint venture and other opportunities across the Company's businesses.  In
this regard, the Company acquired certain assets and liabilities of
Rheem-Graham Embalagens Ltda., a leading supplier of bottles to the motor oil
industry in Brazil, 80% of which was acquired on April 30, 1997 and the
remaining 20% on February 17, 1998.  In addition, on July 27, 1998, the
Company acquired selected plastic bottle manufacturing operations of Crown,
Cork & Seal located in France, Germany, the United Kingdom and Turkey.

         Based on industry data, the following table summarizes the average 
market prices per pound of PET and HDPE resins:

                                                   Three Months Ended
                                                 ----------------------
                                                 March 28,     March 29,
                                                   1999           1998
                                                 --------      ---------
                  PET . . . . . . . . . . . .      $0.50          $0.52
                  HDPE  . . . . . . . . . . .       0.34           0.42

         In general, the Company's dollar gross profit is substantially
unaffected by fluctuations in the prices of HDPE and PET resins, the primary
raw materials for the Company's products, because industry practice and the
Company's agreements with its customers permit price changes to be passed
through to customers by means of corresponding changes in product pricing. 
Consequently, the Company believes that the cost of goods sold, as well
 as certain other expense items, should not be analyzed as a percentage of 
net sales.

Results of Operations

         The following tables set forth the major components of the Company's
net sales (in millions) and
<PAGE>
<PAGE>

such net sales expressed as a percentage of total revenue:

                                               Three Months Ended
                                      ------------------------------------
                                      March 28, 1999        March 29, 1998
                                      --------------        --------------

Automotive  . . . . . . . . . . .    $45.5     28.6%        $45.0     33.5%
                                             
Food & Beverage . . . . . . . . .     69.5     43.7          46.0     34.2

HC/PC . . . . . . . . . . . . . .     44.1     27.7          43.4     32.3
                                    ------    -----        ------    -----
Total Net Sales . . . . . . . . .   $159.1    100.0%       $134.4    100.0%
                                    ======    =====        ======    =====


                                              Three Months Ended
                                      ------------------------------------
                                      March 28, 1999        March 29, 1998
                                      --------------        --------------
North America . . . . . . . . . .     $119.8    75.3%       $112.3   83.6%

Europe  . . . . . . . . . . . . .       34.7    21.8          17.2   12.8

Latin America . . . . . . . . . .        4.6     2.9           4.9    3.6
                                      ------   -----        ------  -----
Total Net Sales . . . . . . . . .     $159.1   100.0%       $134.4  100.0%
                                      ======   =====        ======  =====

Three Months Ended March 28, 1999 Compared to Three Months Ended March 29,
1998

         Net Sales.   Net sales for the three months ended March 28, 1999
increased $24.7 million to $159.1 million from $134.4 million for the three
months ended March 29, 1998.   The increase in sales was primarily due to a
24.9% increase in resin pounds sold and changes in product mix.  These
increases were partially offset by a net decrease in average resin prices. 
On a geographic basis, sales for the three months ended March 28, 1999 in
North America were up $7.5 million or 6.7% from the three months ended March
29, 1998.  The North American sales increase included higher pounds sold of
14.5%.  North American sales in the food and beverage business contributed
$13.6 million to the increase, while sales in the automotive business and
HC/PC business were $2.9 million and $3.2 million lower, respectively.  Sales
for the three months ended March 28, 1999 in Europe were up $17.5 million or
101.7% from the three months ended March 29, 1998, principally in the food &
beverage and HC/PC businesses, primarily due to the inclusion of the
<PAGE>
<PAGE>

Company's newly-acquired European subsidiaries.  Overall, European sales
reflected a 99.5% increase in pounds sold.   Sales in Latin America for the
three months ended March 28, 1999 were down $0.3 million from 1997, primarily
as a result of the devaluation of the Brazilian currency.

         Gross Profit.  Gross profit for the three months ended March 28, 1999
increased $3.3 million to $27.9 million from $24.6 million for the three
months ended March 29, 1998.  The increase in gross profit resulted primarily
from the higher sales volume as compared to the prior year and continued
operational improvements.  Gross profit for the three months ended March 28,
1999 increased $0.6 million in North America, $2.4 million in Europe and $0.3
million in Latin America when compared to the three months ended March 29,
1998.

         Selling, General & Administrative Expenses.   Selling, general and
administrative expenses for the three months ended March 28, 1999 increased
$2.0 million to $10.4 million from $8.4 million for the three months ended
March 29, 1998.  The increase in 1999 selling, general and administrative
expenses is due primarily to the inclusion of the Company's newly-acquired
European subsidiaries.

         Special Charges and Unusual Items.   Special charges and unusual
items decreased $13.7 million to $1.2 million for the three months ended
March 28, 1999 from $14.9 million for the three months ended March 29, 1998. 
Special charges and unusual items in the three months ended March 28, 1999
included costs related to year 2000 system conversion of $0.2 million (see "-
- Information Systems Initiative" for a further discussion) and
Recapitalization compensation of $1.0 million.  The special charges and
unusual items in the three months ended March 29, 1998 included costs related
to year 2000 system conversion of $0.4 million and Recapitalization
compensation of $14.5 million.

         Interest Expense, Net.   Interest expense, net increased $7.5 million
to $19.4 million (including $2.9 million of non-cash interest on the Senior
Discount Notes) for the three months ended March 28, 1999 from $11.9 million
for the three months ended March 29, 1998.  The increase was primarily
related to the increase in debt resulting from the Recapitalization and
higher average interest rates associated with the new debt.

         Other (Income) Expense.  Other (income) expense was ($0.1) million
for the three months ended March 28, 1999 as compared to $0.2 million for the
three months ended March 29, 1998.  The higher income was due primarily to
lower foreign exchange loss in the three months ended March 28, 1999 as
compared to the three months ended March 29, 1998.

         Net Loss.   Primarily as a result of factors discussed above, net
loss for the three months ended March 28, 1999 was $3.4 million compared to
net loss of $23.0 million for the three months ended March 29, 1998.
<PAGE>
<PAGE>

Effect of Changes in Exchange Rates

         In general, the Company's results of operations are affected by
changes in foreign exchange rates.  Subject to market conditions, the Company
prices its products in its foreign operations in local currencies.  As a
result, a decline in the value of the U.S. dollar relative to these other
currencies can have a favorable effect on the profitability of the Company,
and an increase in the value of the dollar relative to these other currencies
can have a negative effect on the profitability of the Company.  Exchange
rate fluctuations did not have a material effect on the financial results of
the Company for the three months ended March 28, 1999 and March 29, 1998.

Information Systems Initiative

         The Company has assembled a team of professionals and consultants to
ensure that any significant Year 2000 issues which might have a material
impact on the Company's results of operations, liquidity or financial
position are timely identified and any resulting remediation timely resolved.

         The Company has completed an evaluation and assessment to ensure that
its information technology ("IT") systems and related hardware will be year
2000 compliant.  As a part of this process, the Company engaged outside
consultants in 1997 to assist with the evaluation and assessment of its
information systems requirements and the selection and implementation of
enterprise resource planning software.  As a result of this evaluation and
assessment, the Company decided to replace all of its core application
systems, including its financial accounting system, manufacturing operation
system and payroll and human resources system. Currently the Company is in
the process of converting its core application systems.  The Company expects
to complete the testing and training phases of the core application systems
conversion by the end of April 1999.  The conversion in the Company's North
American operations is expected to be completed by the end of 1999.  The
conversion in the Company's European operations will immediately follow the
North American conversion and is expected to be completed by the end of 1999. 
The conversion in the Company's Latin American operations is not expected to
be completed until after 1999.  For the Company's Latin American operations,
and if for some unforeseen reason the Company is unable to complete the
conversion of its IT systems on the timetable previously described for the
North American and European operations, the existing software will be
modified to allow for the uninterrupted business operations until such
conversion can be completed.

         For the three months ended March 28, 1999 and March 29, 1998 the
Company expensed $0.2 million and $0.4 million, respectively, associated with
its information systems evaluation, assessment and implementation and
expects to incur through the year 2000, approximately $12.6 million to 
purchase, test and install new software as well as incur internal staff costs,
consulting fees and other expenses.  As of March 28, 1999, $6.4 million of such 
costs has been capitalized.
<PAGE>
<PAGE>

         The Company has also commenced an evaluation and assessment to ensure
that its non-IT systems, namely its major manufacturing equipment, are Year
2000 compliant.  All vendors who supply the Company with equipment, materials
or services have been sent letters asking their status on Year 2000
compliance.  The Company has obtained representations from its primary
equipment suppliers indicating that the related machinery is already Year
2000 compliant or Year 2000 compliance will be timely completed with vendor
supplied upgrades.  Whereas the Company has not found any critical Year 2000
compliance problems with its systems that produce HDPE bottles, the systems
that produce PET bottles are not Year 2000 compliant; the required upgrades
are expected to be completed in the second quarter of 1999.  All of the
Company's personal computers and related software have been tested; any
required upgrades will be completed by the end of the third quarter of 1999.

         Based on the extensive reviews completed to date, the Company is not
aware of any conditions that will result in an interruption to production
capacity.  In addition, all critical material suppliers are either year 2000
compliant or have plans that will achieve these goals by the end of 1999.

         The Company expects to have its remediation efforts completed by the
end of 1999, and does not expect any material impact on its results of
operations, liquidity or financial position due to incomplete or untimely
resolution of the year 2000 issue.  As stated, critical material vendors are
or are expected to be year 2000 compliant by the end of 1999.  However, in 
forming a total assessment, the ability of all critical third parties with 
whom the Company transacts business to adequately address their year 2000 
issues is outside of the Company's control.  Risks to the Company include 
the possible interruption of production and negative effects on cash flow 
associated with reduced sales, increased production costs and reduced 
customer collections.

         While there are issues beyond the control of the Company, where
practical, contingency plans are being implemented.  Contingency plans, such
as switching transportation modes, reviewing year-end inventory levels by
plant and performing record keeping functions on a manual basis are being
formulated.

 Derivatives

         The Company enters into interest rate swap agreements to hedge the
exposure to increasing rates with respect to the New Credit Agreement.  The
differential to be paid or received as a result of these swap agreements is
accrued as interest rates change and recognized as an adjustment to interest
expense related to the New Credit Agreement.  Although the incremental effect
of these derivatives is an important component of the Company's interest rate
management program, their incremental effect on interest expense for the
three months ended March 28, 1999 and March 29, 1998 was not material.

         The Company also enters into forward exchange contracts, when
considered appropriate, to hedge the exchange rate exposure associated with
<PAGE>
<PAGE>

purchase commitments that are denominated in foreign currencies for
machinery, equipment and other items created in the normal course of
business.  Gains and losses related to qualifying hedges of foreign currency
firm commitments or anticipated transactions are deferred in other current
assets and are included in the basis of the underlying transactions.  The
deferred gains and losses on the instruments held at March 28, 1999 were not
material.

Liquidity and Capital Resources

         In the three month period ended March 28, 1999, the Company funded,
through its various borrowing arrangements, $7.2 million of operating
activities and $33.8 million of capital expenditures.

         On February 2, 1998 the Company refinanced the majority of its
existing credit facilities in connection with the Recapitalization, requiring
the repayment of $264.9 million of existing indebtedness, and entered into
the New Credit Agreement.  The New Credit Agreement consisted of three term
loans totaling $395 million and two revolving loans totaling $255 million, of
which $8.5 million was initially borrowed.  The Recapitalization also
included the issuance of $225 million of Senior Subordinated Notes Due 2008 
by the Operating Company and GPC Capital Corp. I and $100.6 million gross 
proceeds of Senior Discount Notes Due 2009 ($169 million aggregate
principal amount at maturity) of Holdings and GPC Capital Corp. II.  
Additionally, the Recapitalization included net distributions to owners
of $409.3 million and debt issuance costs of $32.4 million.  On 
August 13, 1998 the Company amended its credit facility to
provide for an additional Term Loan Borrowing of up to an additional $175
million which could be drawn in two installments.  At March 28, 1999, the
Company's outstanding indebtedness was $918.3 million.

         Substantially all tangible and intangible assets of the Company are
pledged as collateral pursuant to the terms of the New Credit Agreement and
Amendment. 

         On September 8, 1998, Holdings and GPC Capital Corp. II consummated
an exchange offer for all of their outstanding Senior Discount Notes Due 2009
which had been issued on February 2, 1998 (the "Senior Discount Old Notes")
and issued in exchange therefor their Senior Discount Notes Due 2009, Series
B (the "Senior Discount Exchange Notes"), and the Operating Company and GPC
Capital Corp. I consummated exchange offers for all of their outstanding
Senior Subordinated Notes Due 2008 which had been issued on February 2, 1998
(the "Senior Subordinated Old Notes" and, together with the Senior Discount
Old Notes, the "Old Notes") and issued in exchange therefor their Senior
Subordinated Notes Due 2008, Series B (the "Senior Subordinated Exchange
Notes" and, together with the Senior Discount Exchange Notes, the "Exchange
Notes").  Each issue of Exchange Notes has the same terms as the
corresponding issue of Old Notes, except that the Exchange Notes are
registered under the Securities Act of 1933 and do not include the
restrictions on transfer applicable to the Old Notes.  The Senior
Subordinated Old Notes were, and the Senior Subordinated Exchange Notes are,
<PAGE>
<PAGE>

fully and unconditionally guaranteed by Holdings on a senior subordinated
basis.

         Earnings before interest, taxes, depreciation and amortization,
special charges and unusual items and extraordinary items increased $4.1
million to $29.3 million for the three months ended March 28, 1999 from $25.2
million for the three months ended March 29, 1998.  Earnings before interest,
taxes, depreciation and amortization, special charges and unusual items and
extraordinary items is not intended to represent cash flow from operations as
defined by generally accepted accounting principles and should not be used as
an alternative to net income as an indicator of operating performance or to
cash flow as a measure of liquidity. Earnings before interest, taxes,
depreciation and amortization, special charges and unusual items and
extraordinary items is included in this Form 10-Q to provide additional
information with respect to the ability of the Company to satisfy debt
service, capital expenditure and working capital requirements and because
certain covenants in the Company's borrowing arrangements are tied to similar
measures.  While earnings before interest, taxes, depreciation and
amortization, special charges and unusual items and extraordinary items and
similar variations thereof are frequently used as a measure of operations and
the ability to meet debt service requirements, these terms are not
necessarily titled captions of other companies due to potential
inconsistencies in the method of calculation.

         Under the New Credit Agreement and Amendment, the Operating Company
is subject to restrictions on the payment of dividends or other distributions
to Holdings; provided that, subject to certain limitations, the Operating
Company may pay dividends or other distributions to Holdings (i) in respect
of overhead, tax liabilities, legal, accounting and other professional fees
and expenses, (ii) to fund purchases and redemptions of equity interests of
Holdings or Investor LP held by their present or former officers or employees
of Holdings, the Operating Company or their Subsidiaries (as defined) or by
any employee stock ownership plan upon such person's death, disability,
retirement or termination of employment or other circumstances with certain
annual dollar limitations and (iii) to finance starting on July 15, 2003, the
payment of cash interest payments on the Senior Discount Notes.

         The Company does not pay U.S. federal income taxes under the
provisions of the Internal Revenue Code, as the applicable income or loss is
included in the tax returns of the partners.  The Company makes tax
distributions to its partners to reimburse them for such tax obligations. 
The Company's foreign operations are subject to tax in their local
jurisdictions. 

New Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS No. 133").  This
<PAGE>
<PAGE>

Standard establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging
activities.  It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure
those instruments at fair value.  This Standard is effective for the
Company's financial statements for all quarters in the year beginning January
1, 2000.  Management has not completed its review of SFAS No. 133 and has not
determined the impact adoption will have on the Company's earnings or
financial position.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

         See the information set forth in Item 7A of Holdings' Annual Report
on Form 10-K for the fiscal year ended December 31, 1998.
<PAGE>
<PAGE>

PART II  OTHER INFORMATION

Item 6.          Exhibits and Reports on Form 8-K

(a)              Exhibits

                 Exhibit 27       Financial Data Schedule

(b)              Reports on Form 8-K

                 No reports on Form 8-K were required to be filed during the
                 quarter ended March 28, 1999.
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                                   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.


Dated:   May 11, 1999


                                    GRAHAM PACKAGING HOLDINGS COMPANY
                                    (Registrant)

                                    By:  BCP/Graham Holdings L.L.C.,
                                         its General Partner



                                    By: /s/ John E. Hamilton
                                    ---------------------
                                    John E. Hamilton
                                    Vice President, Finance and Administration
                                    (chief accounting officer and duly
                                     authorized officer)