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 June 27, 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                                   (I.R.S. Employer
      jurisdiction of                                  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>

                       GRAHAM PACKAGING HOLDINGS COMPANY
                                     INDEX

                        PART I.  FINANCIAL INFORMATION


                                                                   Page Number
Item 1.   Condensed Financial Statements:

          CONDENSED BALANCE SHEETS -
               At June 27, 1999 and December 31, 1998. . . . . . . .   3

          CONDENSED STATEMENTS OF OPERATIONS - For the Three
               Months and Six Months Ended June 27, 1999 and
               June 28, 1998  . . . . . . . . . . . . . . . . . . . .  4

          CONDENSED STATEMENTS OF PARTNERS' CAPITAL/
               OWNERS' EQUITY (DEFICIT) - For the Year Ended
               December 31, 1998 and Six Months
               Ended June 27, 1999 . . . . . . . . . . . . . . . . .   5

          CONDENSED STATEMENTS OF CASH FLOWS - For the
               Six Months Ended June 27, 1999 and
               June 28, 1998 . . . . . . . . . . . . . . . . . . . .   6

          NOTES TO CONDENSED FINANCIAL STATEMENTS  . . . . . . . . .   7

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

Item  3.  Quantitative and Qualitative Disclosures About
               Market Risk  . . . . . . . . . . . . . . . . . . . .    32


                      PART II.         OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K  . . . . . . . . . . . .    33

Signature:  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34











                                      -2-

<PAGE>

PART I.   FINANCIAL INFORMATION

Item 1.   Condensed Financial Statements

                       GRAHAM PACKAGING HOLDINGS COMPANY
                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                           June 27,              December 31,
                                                                                             1999                    1998
                                                                                        -------------           --------------
                                                                                         (Unaudited)
                                                                                                    (in thousands)
<S>                                                                                <C>                      <C>
ASSETS
Current assets:
 Cash and cash equivalents  . . . . . . . . . . . . . . . . . . . . . . . . . . .          $  8,116                $  7,476
 Accounts receivable, net   . . . . . . . . . . . . . . . . . . . . . . . . . . .           109,699                  87,618
 Inventories  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            40,970                  41,247
 Prepaid expenses and other current assets  . . . . . . . . . . . . . . . . . . .            13,636                  14,587
                                                                                           --------                --------
Total current assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           172,421                 150,928
Property, plant, and equipment, net . . . . . . . . . . . . . . . . . . . . . . .           419,508                 386,692
Other assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            57,849                  59,127
                                                                                           --------               --------
Total assets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $649,778                $596,747
                                                                                           ========                ========

LIABILITIES AND PARTNERS' CAPITAL/OWNERS' EQUITY (DEFICIT)
Current liabilities:
 Accounts payable and accrued expenses  . . . . . . . . . . . . . . . . . . . . .          $152,390                $148,916
 Current portion of long-term debt  . . . . . . . . . . . . . . . . . . . . . . .            14,333                  11,929
                                                                                           --------                --------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . .           166,723                 160,845
Long-term debt  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           932,205                 863,468
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .             8,936                  11,228
Commitments and contingencies . . . . . . . . . . . . . . . . . . . . . . . . . .                --                      --
Partners' capital/owners' equity (deficit):
Partners'/owners' capital (deficit) . . . . . . . . . . . . . . . . . . . . . . .          (442,210)               (442,271)
Notes receivable for ownership interests  . . . . . . . . . . . . . . . . . . . .                --                      --
Accumulated other comprehensive income  . . . . . . . . . . . . . . . . . . . . .           (15,876)                  3,477
                                                                                           --------                --------
Total partners' capital/owners' equity (deficit)  . . . . . . . . . . . . . . . .          (458,086)               (438,794)
                                                                                           --------                --------
Total liabilities and partners' capital/owners' equity (deficit)  . . . . . . . .          $649,778                $596,747
                                                                                           ========                ========
</TABLE>


                            See accompanying notes.





                                      -3-

<PAGE>

                       GRAHAM PACKAGING HOLDINGS COMPANY
                      CONDENSED STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                     Three Months Ended                   Six Months Ended
                                                                ----------------------------        ---------------------------
                                                                 June 27,          June 28,          June 27,          June 28,
                                                                   1999              1998              1999              1998
                                                                ---------         ----------        ----------       -----------
                                                                                         (in thousands)
<S>                                                         <C>               <C>                <C>               <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . .        $172,791          $145,053          $331,876          $279,471
Cost of goods sold  . . . . . . . . . . . . . . . . . . .         135,801           113,161           267,006           223,002
                                                                 --------          --------          --------          --------
                                                                   36,990            31,892            64,870            56,469
Selling, general, and administrative expenses . . . . . .          10,881             8,282            21,326            16,704
Special charges and unusual items . . . . . . . . . . . .           2,030             1,937             3,247            16,835
                                                                 --------          --------          --------          --------
Operating income  . . . . . . . . . . . . . . . . . . . .          24,079            21,673            40,297            22,930
Recapitalization expenses . . . . . . . . . . . . . . . .              --                --                --            11,496
Interest expense, net . . . . . . . . . . . . . . . . . .          21,354            18,262            40,800            30,201
Other (income) expense  . . . . . . . . . . . . . . . . .             (20)              (30)              (82)              131
                                                                 --------          --------          --------          --------
Income (loss) before income taxes and extraordinary item            2,745             3,441              (421)          (18,898)
Income tax provision  . . . . . . . . . . . . . . . . . .             298                --               536                 8
                                                                 --------          --------          --------          --------
Income (loss) before extraordinary item . . . . . . . . .           2,447             3,441              (957)          (18,906)
Extraordinary loss from early extinguishment of debt  . .              --                --                --               675
                                                                 --------          --------          --------          --------
Net income (loss) . . . . . . . . . . . . . . . . . . . .        $  2,447          $  3,441          $   (957)         $(19,581)
                                                                 ========          ========          ========          ========
</TABLE>

                            See accompanying notes.



















                                      -4-

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                    Notes
                                                                Partners'         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  . . . . . . . . . . . . . . . .             (957)              ---               ---              (957)
 Cumulative translation adjustment  . . . . . . . . . . .              ---               ---           (19,353)          (19,353)
                                                                                                                        --------
 Comprehensive income   . . . . . . . . . . . . . . . . .                                                                (20,310)
                                                                                                                        --------
 Recapitalization   . . . . . . . . . . . . . . . . . . .            1,018               ---               ---             1,018
                                                                ----------         ---------         ---------          --------
Balance at June 27, 1999  . . . . . . . . . . . . . . . .       $ (442,210)       $      ---         $ (15,876)        $(458,086)
                                                                ==========         =========          =========         =========
</TABLE>

                            See accompanying notes.




















                                      -5-

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                   Six Months Ended
                                                                                                  ------------------
                                                                                           June 27,                June 28,
                                                                                             1999                    1998
                                                                                          ----------              -----------
                                                                                                    (in thousands)
<S>                                                                                <C>                      <C>
Operating activities:
 Net loss   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $   (957)               $(19,581)
   Adjustments to reconcile net loss to net cash provided by operating
    activities:
   Depreciation and amortization  . . . . . . . . . . . . . . . . . . . . . . . .            24,895                  17,948
   Amortization of debt issuance fees . . . . . . . . . . . . . . . . . . . . . .             2,103                   1,559
   Accretion of Senior Discount Notes . . . . . . . . . . . . . . . . . . . . . .             5,916                   4,356
   Extraordinary loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                --                     675
   Write-off of license fees  . . . . . . . . . . . . . . . . . . . . . . . . . .                --                   1,436
   Equity income in earnings of joint venture . . . . . . . . . . . . . . . . . .               (60)                   (150)
   Foreign currency transaction loss  . . . . . . . . . . . . . . . . . . . . . .                17                      19
   Other non-cash recapitalization expense  . . . . . . . . . . . . . . . . . . .             1,018                   1,554
   Changes in operating assets and liabilities, net of acquisition of business:
     Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (26,919)                (11,169)
     Inventories  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (1,252)                  1,213
     Prepaid expenses and other current assets  . . . . . . . . . . . . . . . . .                97                  (1,883)
     Accounts payable and accrued expenses  . . . . . . . . . . . . . . . . . . .             8,598                  (3,311)
                                                                                           --------                --------
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . .            13,456                  (7,334)

Investing activities:
   Net purchases of property, plant, and equipment  . . . . . . . . . . . . . . .           (73,365)                (41,478)
   Acquisition of North American and Brazilian businesses . . . . . . . . . . . .            (1,800)                 (2,995)
   Loan to Affiliate  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .            (2,471)                     --
   Other  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               145                    (879)
                                                                                           --------                --------
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . .           (77,491)                (45,352)

Financing activities:
   Net proceeds from issuance of long-term debt . . . . . . . . . . . . . . . . .            66,029                 758,958
   Recapitalization debt repayments . . . . . . . . . . . . . . . . . . . . . . .                                 (264,410)
   Recapitalization owner note payments . . . . . . . . . . . . . . . . . . . . .                                   20,240
   Recapitalization cash distributions to owners  . . . . . . . . . . . . . . . .                                 (429,566)
   Other cash distributions to owners . . . . . . . . . . . . . . . . . . . . . .                                     (624)
   Debt issuance fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                (8)                (34,239)
                                                                                           --------                --------
Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . .            66,021                  50,359
Effect of exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . .            (1,346)                    197
                                                                                           --------                --------
Increase (decrease) in cash and cash equivalents  . . . . . . . . . . . . . . . .               640                  (2,130)
Cash and cash equivalents at beginning of period  . . . . . . . . . . . . . . . .             7,476                   7,218
                                                                                           --------                --------
Cash and cash equivalents at end of period  . . . . . . . . . . . . . . . . . . .          $  8,116                $  5,088
                                                                                           ========                ========
</TABLE>
                            See accompanying notes.

                                      -6-


<PAGE>

                       GRAHAM PACKAGING HOLDINGS COMPANY
              NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
                                 June 27, 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 and six month periods ended June 27, 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

                                      -7-

<PAGE>

8).  These entities and assets are referred to collectively as Graham
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.

     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 Group's financial position.

     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.


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 ("Investor LP"), a Delaware corporation formed
by Blackstone Capital Partners III Merchant Banking Fund L.P. (together
with its affiliates, "Blackstone"), 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:


                                      -8-

<PAGE>

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

           -   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;


                                     -9-

<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 $8.4
million had been expensed as of June 27, 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 June 27, 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

                                     -10-

<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 six months ended June 27, 1999 and June 28,
1998 was $30.3 million and $11.3 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

                                     -11-

<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.












                                     -12-

<PAGE>

5.  Inventories
         Inventories consisted of the following:

<TABLE>
<CAPTION>
                                                                  June 27,           December 31,
                                                                    1999                 1998
                                                                 ----------         -------------
                                                                         (in thousands)
<S>                                                          <C>                 <C>
Finished goods  . . . . . . . . . . . . . . . . . . . . .         $ 25,818             $ 23,497
Raw materials and parts . . . . . . . . . . . . . . . . .           15,152               17,750
                                                                  --------             --------
                                                                    40,970               41,247
Less LIFO allowance . . . . . . . . . . . . . . . . . . .               --                   --
                                                                  --------             --------
                                                                  $ 40,970             $ 41,247
                                                                  ========             ========
</TABLE>



6.  Accounts Payable and Accrued Expenses

         Accounts payable and accrued expenses included the following:

<TABLE>
<CAPTION>
                                                                  June 27,           December 31,
                                                                    1999                 1998
                                                                 ----------         --------------
                                                                         (in thousands)
<S>                                                          <C>                 <C>
Accounts payable  . . . . . . . . . . . . . . . . . . . .         $ 72,325             $ 77,485
Accrued employee compensation and benefits  . . . . . . .           19,238               19,983
Special charges and unusual items . . . . . . . . . . . .            4,451                7,744
Accrued interest  . . . . . . . . . . . . . . . . . . . .           19,494               16,736
Other . . . . . . . . . . . . . . . . . . . . . . . . . .           36,882               26,968
                                                                  --------             --------
                                                                  $152,390             $148,916
                                                                  ========             ========
</TABLE>


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

                                     -13-

<PAGE>

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 to
assets acquired and liabilities assumed based on 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
                                                   ==========
















                                     -14-

<PAGE>

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


<TABLE>
<CAPTION>
                                                                                      Three Months Ended       Six Months Ended
                                                                                      ------------------      ------------------
                                                                                           June 28,                June 28,
                                                                                             1998                    1998
                                                                                      ------------------      ------------------
                                                                                                    (in thousands)
<S>                                                                                <C>                      <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         $  164,674              $  316,302
Income (loss) before extraordinary item . . . . . . . . . . . . . . . . . . . . .              3,342                 (20,557)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              3,342                 (21,232)
</TABLE>

         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 and
six month periods ended June 27, 1999 and June 28, 1998 were as follows:

<TABLE>
<CAPTION>
                                                                     Three Months Ended                   Six Months Ended
                                                                ---------------------------        -----------------------------
                                                                 June 27,          June 28,          June 27,          June 28,
                                                                   1999              1998              1999              1998
                                                                ---------         ---------         ----------       -----------
                                                                                         (in thousands)
<S>                                                         <C>               <C>                <C>               <C>
Systems conversion                                                $  467            $  409            $  720           $   775
Recapitalization compensation                                        830             1,528             1,840            16,060
Restructuring of facilities                                          733                                 733
Aborted acquisition costs                                             --                --               (46)               --
                                                                  ------            ------            ------           -------
                                                                  $2,030            $1,937            $3,247           $16,835
                                                                  ======            ======            ======           =======
</TABLE>



                                     -15-

<PAGE>

         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.

         Restructuring of facilities charges relate to the decision to
restructure a plant in Blyes, France.   In 1998, the Group incurred
$1,200,000 related to the legal liability of severing 51 employees at the
Blyes plant. Additional restructuring charges, principally severance costs,
of $733,000 were incurred during the second quarter of 1999 relative to
the restructuring.  The amount of the restructuring charges paid as of
June 27, 1999 was $859,000.


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.



















                                     -16-

<PAGE>

11.  Condensed Operating Company Data

           Condensed financial data for the Operating Company as of June 27,
1999 and December 31, 1998 was as follows:

<TABLE>
<CAPTION>
                                                                June 27,           December 31,
                                                                  1999                 1998
                                                             --------------       --------------
                                                                       (in thousands)
<S>                                                       <C>                  <C>
Current assets  . . . . . . . . . . . . . . . . . . . .         $179,394             $157,900
Noncurrent assets . . . . . . . . . . . . . . . . . . .          472,551              440,772
Total assets  . . . . . . . . . . . . . . . . . . . . .          651,945              598,672
Current liabilities . . . . . . . . . . . . . . . . . .          166,723              160,845
Noncurrent liabilities  . . . . . . . . . . . . . . . .          824,527              763,999
Partners' capital/owners' equity (deficit)  . . . . . .         (339,305)            (326,172)
</TABLE>

         Condensed financial data for the Operating Company for the three
month and six month periods ended June 27, 1999 and June 28, 1998 was as
follows:

<TABLE>
<CAPTION>
                                                                     Three Months Ended                   Six Months Ended
                                                                ---------------------------         ----------------------------
                                                                 June 27,          June 28,          June 27,          June 28,
                                                                   1999              1998              1999              1998
                                                                ---------         ---------         ----------        ----------
                                                                                         (in thousands)
<S>                                                         <C>               <C>                <C>               <C>
Sales                                                            $172,791          $145,053          $331,876          $279,471
Gross profit                                                       36,990            31,892            64,870            56,469
Income (loss) from continuing operations                            5,594             6,243             5,202           (13,371)
Net income (loss)                                                   5,594             6,243             5,202           (14,046)
</TABLE>

         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.








                                     -17-

<PAGE>

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 and six month periods
ended June 27, 1999 and June 28, 1998 was as follows:

<TABLE>
<CAPTION>
                                                                     Three Months Ended                   Six Months Ended
                                                               -----------------------------        ----------------------------
                                                                 June 27,          June 28,          June 27,          June 28,
                                                                   1999              1998              1999              1998
                                                                ----------       -----------        ----------        ----------
                                                                                         (in thousands)
<S>                                                         <C>               <C>                <C>               <C>
Net income (loss)                                                $  2,447          $  3,441          $   (957)         $(19,581)
Foreign currency                                                   (2,670)             (332)          (19,353)           (1,031)
                                                                 --------          --------          --------          --------
Comprehensive income (loss)                                      $   (223)         $  3,109          $(20,310)         $(20,612)
                                                                 ========          ========          ========          ========
</TABLE>






























                                     -18-

<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 and six month periods ended June 27, 1999 and June 28, 1998 was as
follows (in thousands):


<TABLE>
<CAPTION>
                                                                        North America      Europe      Latin America      Total
                                                                        -------------     --------     -------------     -------
<S>                         <C>                                         <C>            <C>            <C>            <C>
Net sales                   Three Months Ended June 27, 1999             $    135,084    $   32,809    $   4,898      $   172,791
                            Three Months Ended June 28, 1998                  122,220        17,630        5,203          145,053

                            Six Months Ended June 27, 1999                    254,912        67,482        9,482          331,876
                            Six Months Ended June 28, 1998                    234,455        34,866       10,150          279,471

Income (loss) before        Three Months Ended June 27, 1999                   1,788            456          203            2,447
      extraordinary item    Three Months Ended June 28, 1998                   4,109           (810)         142            3,441

                            Six Months Ended June 27, 1999                      (783)          (397)         223             (957)
                            Six Months Ended June 28, 1998                   (15,906)        (2,766)        (234)         (18,906)

Net income (loss)           Three Months Ended June 27, 1999                   1,788            456          203            2,447
                            Three Months Ended June 28, 1998                   4,109           (810)         142            3,441

                            Six Months Ended June 27, 1999                      (783)          (397)         223             (957)
                            Six Months Ended June 28, 1998                   (16,581)        (2,766)        (234)         (19,581)
</TABLE>


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 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 137, "Accounting for
Derivative Instruments and Hedging Activities - Deferral of Effective Date of

                                     -19-

<PAGE>

FASB Statement No. 133".  This Standard defers the effective date of FASB
Statement No. 133 ("SFAS No. 133") to all fiscal quarters and all fiscal years
beginning after June 15, 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 July 1999, the Group formed Graham Packaging Argentina, S.A., and
acquired Lidoplast, S.A., and Amerpack, S.A., leading plastic bottle and tube
manufacturers in Argentina.  The amount of the acquisitions is not material
to the Company's financial position.





































                                     -20-

<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, with 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 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.

                                     -21-

<PAGE>

         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 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 consumer 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.















                                     -22-

<PAGE>

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

<TABLE>
<CAPTION>
                                  Three Months Ended                   Six Months Ended
                            -------------------------------      -----------------------------
                              June 27,           June 28,          June 27,         June 28,
                                1999               1998              1999             1998
                            -------------      ------------      ------------     ------------
<S>                       <C>                <C>               <C>              <C>
PET                          $   0.50             $ 0.55            $ 0.50           $ 0.54
HDPE                             0.39               0.39              0.36             0.40
</TABLE>

             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 each such component expressed as a
         percentage of total net sales:

<TABLE>
<CAPTION>
                                                     Three Months Ended                             Six Months Ended
                                              --------------------------------              --------------------------------
                                              June 27,               June 28,                June 27,               June 28,
                                                1999                   1998                    1999                   1998
                                             ---------               ---------              ---------               ---------
<S>                                    <C>         <C>        <C>         <C>         <C>         <C>        <C>         <C>
Automotive                               $ 52.8        30.5%    $ 50.5        34.8%     $ 98.3        29.6%    $  95.5       34.2%
Food & Beverage                            77.2        44.7       51.6        35.6       146.7        44.2        97.6       34.9
HC/PC                                      42.8        24.8       43.0        29.6        86.9        26.2        86.4       30.9
                                         ------       -----     ------       -----      ------       -----     -------      -----
Total Net Sales                          $172.8       100.0%    $145.1       100.0%     $331.9       100.0%    $ 279.5      100.0%
                                         ======       =====     ======       =====      ======       =====     =======      =====
</TABLE>




                                     -23-

<PAGE>

<TABLE>
<CAPTION>
                                                     Three Months Ended                             Six Months Ended
                                             ---------------------------------              --------------------------------
                                              June 27,               June 28,                June 27,               June 28,
                                                1999                   1998                    1999                   1998
                                              --------              -----------             ----------              ---------
<S>                                    <C>         <C>        <C>         <C>         <C>         <C>        <C>         <C>
North America                            $135.1        78.2%    $122.2        84.2%     $254.9        76.8%    $ 234.5       83.9%
Europe                                     32.8        19.0       17.7        12.2        67.5        20.3        34.9       12.5
Latin America                               4.9         2.8        5.2         3.6         9.5         2.9        10.1        3.6
                                         ------       -----     ------       -----      ------       -----     -------      ------
Total Net Sales                          $172.8       100.0%    $145.1       100.0%     $331.9       100.0%    $ 279.5      100.0%
                                         ======       =====     ======       =====      ======       =====     =======      =====
</TABLE>

         Three Months Ended June 27, 1999 Compared to Three Months Ended June
         28, 1998

         Net Sales.   Net sales for the three months ended June 27, 1999
         increased $27.7 million to $172.8 million from $145.1 million for the
         three months ended June 28, 1998.   The increase in sales was
         primarily due to a 24.3% 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 June 27, 1999 in North America were up $12.9 million or
         10.6% from the three months ended June 28, 1998.  The North American
         sales increase included higher pounds sold of 14.5%.  North American
         sales in the food and beverage business contributed $17.0 million to
         the increase, while sales in the automotive business and HC/PC
         business were $2.0 million and $2.1 million lower, respectively.
         Sales for the three months ended June 27, 1999 in Europe were up
         $15.1 million or 85.3% from the three months ended June 28, 1998,
         principally in the food & beverage and HC/PC businesses, primarily
         due to the inclusion of the Company's newly-acquired European
         subsidiaries.  Overall, European sales reflected a 107.2% increase in
         pounds sold.  Sales in Latin America for the three months ended June
         27, 1999 were down $0.3 million from the three months ended June 28,
         1998, primarily as a result of the devaluation of the Brazilian
         currency.

         Gross Profit.  Gross profit for the three months ended June 27, 1999
         increased $5.1 million to $37.0 million from $31.9 million for the
         three months ended June 28, 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 June 27, 1999 increased $4.1 million in North
         America, $0.9 million in Europe and $0.1 million in Latin America
         when compared to the three months ended June 28, 1998.


                                     -24-

<PAGE>

         Selling, General & Administrative Expenses.   Selling, general and
         administrative expenses for the three months ended June 27, 1999
         increased $2.6 million to $10.9 million from $8.3 million for the
         three months ended June 28, 1998.  The increase in 1999 selling,
         general and administrative expenses is due to the inclusion
         of the Company's newly-acquired European subsidiaries and overall
         growth of the business, primarily in North America.

         Special Charges and Unusual Items.   Special charges and unusual
         items increased $0.1 million to $2.0 million for the three months
         ended June 27, 1999 from $1.9 million for the three months ended June
         28, 1998.  Special charges and unusual items in the three months
         ended June 27, 1999 included costs related to year 2000 system
         conversion of $0.5 million (see "--Information Systems Initiative"
         for a further discussion), Recapitalization compensation of $0.8
         million and restructuring of facilities charges of $0.7 million.  The
         special charges and unusual items in the three months ended June 28,
         1998 included costs related to year 2000 system conversion of $0.4
         million and Recapitalization compensation of $1.5 million.

         Interest Expense, Net.   Interest expense, net increased $3.1 million
         to $21.4 million (including $3.1 million of non-cash interest on the
         Senior Discount Notes) for the three months ended June 27, 1999 from
         $18.3 million for the three months ended June 28, 1998.  The increase
         was primarily related to increased debt levels in 1999 compared
         to 1998.

         Other (Income) Expense.    Other (income) expense was $0.0 million
         for both the three months ended June 27, 1999 and the three
         months ended June 28, 1998.

         Net Income.   Primarily as a result of factors discussed above, net
         income for the three months ended June 27, 1999 was $2.4 million
         compared to net income of $3.4 million for the three months ended
         June 28, 1998.


         Six Months Ended June 27, 1999 Compared to Six Months Ended June 28,
         1998

         Net Sales.   Net sales for the six months ended June 27, 1999
         increased $52.4 million to $331.9 million from $279.5 million for the
         six months ended June 28, 1998.   The increase in sales was primarily
         due to a 24.6% 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 six
         months ended June 27, 1999 in North America were up $20.4 million or

                                     -25-

<PAGE>

         8.7% from the six months ended June 28, 1998.  The North American
         sales increase included higher pounds sold of 14.5%.  North American
         sales in the food and beverage business contributed $30.6 million to
         the increase, while sales in the automotive business and HC/PC
         business were $4.9 million and $5.3 million lower, respectively.
         Sales for the six months ended June 27, 1999 in Europe were up $32.6
         million or 93.4% from the six months ended June 28, 1998, principally
         in the food & beverage and HC/PC businesses, primarily due to the
         inclusion of the Company's newly-acquired European subsidiaries.
         Overall, European sales reflected a 103.3% increase in pounds sold.
         Sales in Latin America for the six months ended June 27, 1999 were
         down $0.7 million from the six months ended June 28, 1998, primarily
         as a result of the devaluation of the Brazilian currency.

         Gross Profit.  Gross profit for the six months ended June 27, 1999
         increased $8.4 million to $64.9 million from $56.5 million for the
         six months ended June 28, 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 six months ended June 27, 1999 increased $4.6 million in North
         America, $3.3 million in Europe and $0.5 million in Latin America
         when compared to the six months ended June 28, 1998.

         Selling, General & Administrative Expenses.   Selling, general and
         administrative expenses for the six months ended June 27, 1999
         increased $4.6 million to $21.3 million from $16.7 million for the
         six months ended June 28, 1998.  The increase in 1999 selling,
         general and administrative expenses is due to the inclusion
         of the Company's newly-acquired European subsidiaries and overall
         growth of the business, primarily in North America.

         Special Charges and Unusual Items.   Special charges and unusual
         items decreased $13.6 million to $3.2 million for the six months
         ended June 27, 1999 from $16.8 million for the six months ended June
         28, 1998.  Special charges and unusual items in the six months ended
         June 27, 1999 included costs related to year 2000 system conversion
         of $0.7 million (see "--Information Systems Initiative" for a further
         discussion), Recapitalization compensation of $1.8 million and
         restructuring of facilities charges of $0.7 million.  The special
         charges and unusual items in the six months ended June 28, 1998
         included costs related to year 2000 system conversion of $0.8 million
         and Recapitalization compensation of $16.0 million.

         Interest Expense, Net.   Interest expense, net increased $10.6
         million to $40.8 million (including $6.2 million of non-cash interest
         on the Senior Discount Notes) for the six months ended June 27, 1999
         from $30.2 million for the six months ended June 28, 1998.  The
         increase was primarily related to the increase in debt resulting from
         the Recapitalization and expenditures for investing activities.

                                     -26-

<PAGE>

         Other (Income) Expense.    Other (income) expense was ($0.1) million
         for the six months ended June 27, 1999 as compared to $0.1 million
         for the six months ended June 28, 1998.  The higher income was due
         primarily to higher foreign exchange gains in the six months ended
         June 27, 1999 as compared to the six months ended June 28, 1998.

         Net Loss.   Primarily as a result of factors discussed above, net
         loss for the six months ended June 27, 1999 was $1.0 million compared
         to net loss of $19.6 million for the six months ended June 28, 1998.


         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 and six months ended June 27, 1999 and June 28,
         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 substantially all of its core application systems, including
         its financial accounting systems, manufacturing operation systems and
         payroll and human resources systems.  The Company has completed the
         testing, training and conversion of the core application systems in
         the Company's North American operations.  The conversion in the
         Company's European operations is in process and is expected to be
         completed by the end of 1999.  The conversion in the Company's Latin

                                     -27-

<PAGE>

         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 for the European operations by the end of 1999, the
         existing software will be modified to allow for the uninterrupted
         business operations until such conversion can be completed.

             For the six months ended June 27, 1999 and June 28, 1998 the
         Company expensed $0.7 million and $0.8 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 June 27, 1999, $6.8 million of such costs has
         been capitalized.

             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.  Substantially 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.  As of June 27, 1999, our testing has
         not identified any Year 2000 compliance problems with equipment that
         is critical to bottle manufacturing.  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, Management believes that 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.


                                     -28-

<PAGE>

             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 and six months ended June 27, 1999 and June 28, 1998
         was not material.

             The Company also enters into forward exchange contracts, when
         considered appropriate, to hedge the exchange rate exposure
         associated with 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 June 27, 1999 were not material.


         Liquidity and Capital Resources

             In the six month period ended June 27, 1999, the Company funded,
         through its various borrowing arrangements and operating activities,
         $77.5 million of investing activities, including $73.4 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 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

                                     -29-

<PAGE>

         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 (of which $175 million was drawn and
         outstanding as of June 27, 1999).  At June 27, 1999, the Company's
         outstanding indebtedness was $946.5 million, and the unused portion
         of the New Credit Agreement was $225.5 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, 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
         $6.9 million to $39.2 million for the three months ended June 27,
         1999 from $32.3 million for the three months ended June 28, 1998.
         Earnings before interest, taxes, depreciation and amortization,
         special charges and unusual items and extraordinary items increased
         $10.9 million to $68.5 million for the six months ended June 27, 1999
         from $57.6 million for the six months ended June 28, 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

                                     -30-

<PAGE>

         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.

             During the full year 1999, the Company expects to incur
         expenditures for investing activities, which include capital
         expenditures and acquisitions, of approximately $190 million.  The
         Company's principal sources of cash to fund investing activities will
         be net cash provided by operating activities and borrowings under the
         New Credit Agreement.

             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 may
         make tax distributions to its partners to reimburse them for such tax
         obligations, if any.  No such distributions have been made in 1999.
         The Company's foreign operations are subject to tax in their local
         jurisdictions.


         New Accounting Pronouncements

             In June 1999, the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards No. 137, "Accounting for
         Derivative Instruments and Hedging Activities - Deferral of Effective
         Date of FASB Statement No. 133".  This Standard defers the effective
         date of FASB Statement No. 133 ("SFAS No. 133") to all fiscal
         quarters and all fiscal years beginning after June 15, 2000.
         Management has not completed its review of SFAS No. 133 and has not

                                     -31-

<PAGE>

         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.









































                                     -32-

<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 June 27, 1999.




































                                     -33-

<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.


Dated:  August 10, 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)


























                                     -34-