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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
     (Mark One)
     [ X ]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
               For the fiscal year ended December 31, 1997

     [   ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
               For the transition period from _________ to _________

                          Commission file number 1-2227


                         Crown Cork & Seal Company, Inc.
             (Exact name of registrant as specified in its charter)

                 Pennsylvania                          23-1526444
     (State or other  jurisdiction of        (Employer Identification No.)
      incorporation  or organization)

       One Crown Way, Philadelphia, PA                     19154
 (Address of principal executive offices)               (Zip Code)

        Registrant's telephone number, including area code: 215-698-5100
                                 ---------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

     Title of each class               Name of each exchange on which registered

     Common Stock $5.00 Par Value      New York Stock Exchange & Paris Bourse

     4.5% Convertible Preferred Stock  New York Stock Exchange & Paris Bourse
       $41.8875 Par Value

     Common Stock Purchase Rights      New York Stock Exchange & Paris Bourse
                                  -------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                                      NONE
                                (Title of Class)
                                 --------------

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and (2) has  been  subject  to such  filings
requirements for the past 90 days.
               Yes _X_                                   No ___

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

As of March 13,  1998,  124,402,863  shares of the  Registrant's  Common  Stock,
excluding shares held in Treasury, and 8,771,493 shares of the Registrant's 4.5%
Convertible  Preferred  Stock were  issued and  outstanding,  and the  aggregate
market value of such shares held by  non-affiliates  of the  Registrant  on such
date was $6,867,651,317.

                       DOCUMENTS INCORPORATED BY REFERENCE

Notice  of  Annual  Meeting  and  Proxy   Statement  dated  March  23,  1998  is
incorporated by Reference into Part III hereof.  Only those specific portions so
incorporated are to be deemed filed as part of this Form 10-K Annual Report.
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<PAGE>
                         Crown Cork & Seal Company, Inc.

                          1997 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

                                     PART I

Item 1    Business............................................................1

Item 2    Properties..........................................................6

Item 3    Legal Proceedings...................................................7

Item 4    Submission of Matters to a Vote of Security Holders.................7


                                     PART II

Item 5    Market for Registrant's Common Stock and Related
            Stockholder Matters...............................................7

Item 6    Selected Financial Data.............................................8

Item 7    Management's Discussion and Analysis of Financial Condition
            and Results of Operations........................................10

Item 8    Financial Statements and Supplementary Data........................23

Item 9    Disagreements on Accounting and Financial Disclosure...............50


                                    PART III

Item 10   Directors and Executive Officers of the Registrant.................50

Item 11   Executive Compensation.............................................51

Item 12   Security Ownership of Certain Beneficial Owners and Management.....51

Item 13   Certain Relationships and Related Transactions.....................51


                                     PART IV

Item 14   Exhibits, Financial Statement Schedules and Reports
            on Form 8-K......................................................52

SIGNATURES...................................................................56
<PAGE>
                         Crown Cork & Seal Company, Inc.


                                     PART I

ITEM 1.   BUSINESS

                                     GENERAL

Crown Cork & Seal Company,  Inc. (the "Company" and the  "Registrant") is one of
the world's leading  manufacturers of packaging  products with 1997 consolidated
net sales of $8.5  billion.  More than 60% of 1997 net sales were  derived  from
operations  outside the United  States with  approximately  75% of the non- U.S.
revenues  derived in Europe.  The Company  believes  that it is well  positioned
within its  industry  having the ability to supply  food,  beverage  and aerosol
containers  to  multinational  consumer  marketers  on  a  global  basis.  As  a
multinational  packaging producer, the Company benefits from, but is exposed to,
the  fluctuations  of world trade.  The Company  currently  operates 247 plants,
along  with  sales  and  service   facilities   in  52  countries   and  employs
approximately  41,000 people.  The Company  continually  reviews its operations,
especially in terms of their  competitiveness  and the appropriate  number, size
and location of its plants,  emphasizing service to customers and rate of return
to investors.

Financial  information  concerning the Company's operations in its two principal
industry  segments,   Metals  Packaging  and  Plastics  Packaging,   and  within
geographic areas is set forth in Part II of this Report on pages 46 and 47 under
Note S to the Consolidated Financial Statements entitled "Segment Information by
Industry Segment and Geographic Area."

The  Company's  products  include  steel and aluminum  cans for food,  beverage,
brewing, household and other consumer products; plastic containers for beverage,
processed food, household,  personal care and other products;  metal and plastic
packaging products for health and beauty care applications  including cosmetics,
fragrances  and  pharmaceuticals;  metal  specialty  and  promotional  packaging
products;  a wide  variety  of caps,  crowns,  closures,  pumps  and  dispensing
systems; composite containers; and canmaking equipment.

Under current  management,  the Company has pursued a strategy of growth through
acquisition  within the global packaging  industry.  From 1989 through 1996, the
Company  completed twenty  acquisitions of companies with aggregate net sales of
approximately  $8 billion.  The largest  acquisitions  over this period  include
CarnaudMetalbox  ("CMB") (February 1996), Van Dorn Company (April 1993), CONSTAR
International   (October  1992),   Continental  Can  International  (May  1991),
Continental  Can's  U.S.  food and  beverage  can  businesses  (July  1990)  and
Continental  Can Canada  (December  1989).  This strategy has  contributed to an
increase in the Company's net sales from $1.9 billion in 1989 to $8.5 billion in
1997. The Company's  acquisition  strategy has resulted in numerous  benefits to
the  Company,  including  improved  market  positions,  product  and  geographic
diversification, and cost savings.

Information  about the Company's  acquisitions  over the most recent three years
appears  in  Part  II  herein  on  pages  18  and  19  under   "Acquisition   of
CarnaudMetalbox"  within  Item  7,  "Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results of  Operations"  and within Item 8, herein on
pages 32 and 33 under Note H to the Consolidated Financial Statements.

The  Company  has  invested  in  capital  projects  to  (i)  create   additional
manufacturing  capacity for beverage can production in emerging  markets and for
polyethylene  terephthalate (PET) containers  globally,  (ii) improve production
efficiencies,  (iii) improve product quality and (iv) lower manufacturing costs.
The Company  plans to continue  capital  expenditure  programs  designed to take
advantage of technological  developments which enhance  productivity and contain
costs, as well as, those that provide growth opportunities.

                                       -1-
<PAGE>
                         Crown Cork & Seal Company, Inc.


                                  DISTRIBUTION

As of December 31, 1997, the Company's  products were  manufactured in 74 plants
within the United States and 173 plants outside the U.S. The Company markets and
sells  products to customers  through its own sales and marketing  staff located
centrally  within each  division.  The  divisions'  sales staff are supported by
regional  sales  personnel.  Most of the  Company's  products are sold in highly
competitive markets, primarily based on price, service, quality and performance.
The majority of the Company's  sales are to companies  which have leading market
positions  in the  packaged  food,  beverage,  aerosol,  health  and  beauty and
specialty businesses.  Contracts with global suppliers are centrally negotiated,
although products are ordered through and distributed directly by each plant.

In each of the years in the period 1995  through  1997,  no one  customer of the
Company accounted for more than ten percent of the Company's net sales.

                            RESEARCH AND DEVELOPMENT

The Company's principal Research, Development & Engineering ("RD&E") centers are
located in Alsip,  Illinois  and  Wantage,  England.  The Company  uses its RD&E
capabilities to (i) promote development of value-added  packaging systems,  (ii)
design  cost-efficient  manufacturing  systems and  materials  that also provide
continuous  quality  improvement,  (iii) support technical needs in customer and
vendor  relationships,  and (iv) provide engineering  services for the Company's
worldwide packaging activities. These capabilities allow the Company to identify
market opportunities by working directly with customers to develop new products,
such as the  conversion  to  plastic  from  other  materials  , as well as,  the
creation of new packaging shapes.

The Company  expended  $53.1  million,  $51.5 million and $22.3 million in 1997,
1996 and 1995, respectively,  on RD&E activities.  These activities are expected
to improve and expand the Company's  product  lines in the future.  Expenditures
were also made to improve  manufacturing  efficiencies  and reduce  unit  costs,
principally raw material  costs, by reducing the material  content of containers
while  improving  or  maintaining  other  physical  properties  such as material
strength.

                                    MATERIALS

The Company  continues  to pursue  strategies  which enable it to source its raw
materials with increasing  effectiveness,  and may consider vertical integration
into the production of certain raw materials.  Recent  acquisitions  allowed the
Company to realize  increased  efficiencies in materials  sourcing.  The Company
purchased Golden Aluminum  Company from ACX  Technologies in March 1997.  Golden
Aluminum is a pioneer  and  innovator  in the use of  continuous  block  casting
(mini-mill)  technology to produce  aluminum for use in can making,  among other
capabilities.

The  raw  materials  used  in the  manufacture  of the  Company's  products  are
primarily  aluminum  and  tinplate for Metals  Packaging,  and various  types of
resins,  which are  petrochemical  derivatives,  for Plastics  Packaging.  These
materials are generally available from several sources.  The Company has secured
what it  considers  adequate  supplies  of raw  materials  but  there  can be no
assurance  that  sufficient  quantities  will be  available  in the future.  The
Company may be subject to adverse price fluctuations on the purchase of such raw
materials. See "Metals Packaging" below.

                                   SEASONALITY

The 1996  acquisition of CMB has increased the potential for seasonal effects on
the Company's results of operations.  Food packaging products accounted for $2.6
billion or approximately  31% of 1997 consolidated net sales as compared to $1.0
billion or  approximately  19% in 1995.  Sales and  earnings  for food cans have
historically  been  higher  in  the  third  quarter  of  the  year  due  to  the
agricultural harvest.

The Company's metal and plastic beverage container  businesses are predominantly
located in the Northern Hemisphere. Generally, beverage products are consumed in
greater amounts during warmer

                                       -2-
<PAGE>
                         Crown Cork & Seal Company, Inc.


months of the year. Consequently,  sales and earnings have generally been higher
in the second and third quarters of the calendar year.

The Company's other businesses  include aerosol,  specialty,  health and beauty,
canmaking   equipment  and  various  other   products   which  tend  not  to  be
significantly affected by seasonal variations.

                              ENVIRONMENTAL MATTERS

The Company's operations are subject to numerous laws and regulations  governing
the protection of the  environment,  disposal of waste,  discharges  into water,
emissions into the atmosphere and the protection of employee  health and safety.
Future  regulations  may  impose  stricter  environmental  requirements  on  the
packaging industry. Anticipated future restrictions in some jurisdictions on the
use of certain  paint and  lacquering  ingredients  may  require  the Company to
employ additional  control equipment or alternative  coating  technologies.  The
Company has a  Corporate  Environmental  Protection  Policy,  and  environmental
considerations  are among the criteria by which the Company evaluates  projects,
products,  processes and purchases.  While the Company does not believe that any
of the foregoing  matters are likely to have a material effect,  there can be no
assurance that current or future  environmental laws or remediation  liabilities
will not have a material effect on the Company's  financial condition or results
of  operations.  Further  discussion of the Company's  environmental  matters is
contained in Part II, Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of this Report on page 20 under the caption
"Environmental Matters."

                                 WORKING CAPITAL

Information  relating to the Company's  liquidity  and capital  resources is set
forth in Part II, Item 7,  "Management's  Discussion  and  Analysis of Financial
Condition  and Results of  Operations,"  of this Report on pages 15 and 16 under
the caption "Liquidity and Capital Resources."

                                    EMPLOYEES

At December 31, 1997, the Company employed 40,985 people throughout the world. A
significant  number  of  the  Company's  employees  are  covered  by  collective
bargaining agreements with varying terms and expiration dates.

                                METALS PACKAGING

Metals  Packaging,  which accounted for  approximately  82% of consolidated  net
sales  and  approximately  81% of  consolidated  operating  income  (before  net
interest costs, foreign exchange  adjustments and other non-operating  expenses)
in 1997,  manufactures  and markets steel and aluminum cans as well as composite
cans,  crowns  (also known as bottle caps) and metal  closures.  In May 1997 the
Company sold its Machinery  Division,  previously  included in Metals Packaging.
All  products  within  Metals  Packaging  are sold through the  Company's  sales
organization  to the soft drink,  food,  citrus,  brewing,  household  products,
personal care and various other  industries.  Approximately  32,000 persons were
employed in Metals Packaging at December 31, 1997.

Global  beverage and food marketers  continue to increase the  consolidation  of
their supplier base under long-term arrangements and to qualify suppliers on the
basis of their  ability to provide  service  globally  and to create  innovative
designs and technologies in a cost-effective  manner.  The acquisition of CMB in
February 1996 has created a geographically  diversified and innovative packaging
company with significant operations in Europe, the Middle East, Africa, Asia and
an RD&E center in England.

The Company believes that price,  quality and customer service are the principal
competitive  factors  affecting  its  business.  Based upon  sales,  the Company
believes  that it is a leader in the  markets  for metal  packaging  in which it
competes; however, the Company encounters competition from a number of companies
offering similar products.

                                       -3-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The Company's basic raw materials for its Metals Packaging products are tinplate
and  aluminum.  These  metals are  supplied by the major mills in the  countries
within  which  the  Company  operates  plants.  Some  plants  in  less-developed
countries,  which do not have  local  mills,  obtain  their  metal  from  nearby
more-developed  countries.  In 1997,  approximately  78% of metal consumption in
Europe  was for  tinplate.  In the  United  States,  approximately  61% of metal
consumption was for aluminum.  Although  sufficient  quantities of raw materials
have been  available  in the past,  there can be no  assurance  that  sufficient
quantities will be available in the future.

Prior to 1996, the Company entered into annual  agreements with its tinplate and
aluminum suppliers, pursuant to which the Company obtained price commitments for
its tinplate and aluminum  requirements  for the next calendar year. The Company
continues to contract for its tinplate requirements on this basis. The Company's
suppliers of aluminum can and end sheet  implemented a new pricing  structure in
1995  which,  by formula,  is directly  tied to the price of ingot on the London
Metal Exchange (LME). The formula takes the LME spot price of aluminum ingot and
adds  other  costs  to  convert  and  transport  aluminum,  thereby  effectively
transferring  the  volatility  in the  commodity  markets to the  Company.  This
pricing formula remained in effect during 1997. During 1997, the Company entered
into  contracts  with its  suppliers  of aluminum  can and end sheet  which,  by
formula, guarantees prices for a period of six months. This pricing structure is
directly  tied to a rolling  average of the prior six  months'  market  price of
aluminum on the LME. Further, "ceiling" prices have been established under these
contracts which set maximum prices that the Company would pay for aluminum.

Historically,  the Company has adjusted  the selling  prices for its products in
response  to changes in the cost of  tinplate  and  aluminum.  During  1995 when
aluminum costs increased, the Company announced price increases to its customers
but  due to  overcapacity  within  the  aluminum  beverage  can  market  and the
customers'  willingness to shift a portion of their packaging  requirements away
from aluminum, the Company was unable to fully recover the increases in the cost
of aluminum  from its  customers.  During  1997,  as aluminum  prices  declined,
selling  prices  to  customers  for  aluminum  beverage  cans and ends were also
reduced. In the future,  there can be no assurance that the Company will be able
to  recover  fully  any  increases  or  fluctuations  in metal  prices  from its
customers.

The  Company,  based on  sales,  is one of two  leading  producers  of  aluminum
beverage  cans and ends within the United  States.  Sales  dollars for  aluminum
beverage  cans and ends in 1997  increased  over 1996 due to sales  unit  volume
growth  which  was  partially  offset  by the  continued  pass-through  of lower
aluminum  costs to  customers.  The  Company  continues  to  reduce  can and end
diameter,   lightweight  its  cans,   reduce  non-metal  costs  and  restructure
production  processes.  Some of the  Company's  excess  beverage can capacity in
North America has been redeployed to emerging  markets,  and to a lesser extent,
retrofitted to produce two-piece food cans.

As the Company has continued to integrate the  operations of CMB, it has made an
assessment of the  restructuring  and exit costs to be incurred  relative to the
acquisition.  Since  commencement of the plan of restructuring,  the Company has
determined alternative sites for manufacture and qualified the new manufacturing
sites  with  customers.   Further  discussion  of  the  Company's  restructuring
activities  is  contained  in  Part  II  hereof  within  Item  7,  "Management's
Discussion  and Analysis of Financial  Condition and Results of  Operations"  on
page 19 under "Provision for  Restructuring."  and within Item 8 herein on pages
34 and 35 under Note K to the Consolidated Financial Statements.

The CMB  acquisition,  when combined with the 1994  acquisition of the container
division of Tri-Valley  Growers,  significantly  enhances the Company's position
with global food marketers and also reduces the percentage of aluminum  beverage
can sales to  overall  consolidated  net  sales.  The food can  market is highly
competitive  based  on price  and  innovation.  New  technologies  and  products
continue to be  developed  to add value to customer  products  and to offer more
efficient  packaging,  such as easy-open ends, stackable cans and ferrolite cans
and ends.  Food closure  operations in Europe  produce  vacuum metal closures as
well as sealing systems for integration into customers' production lines.

                                       -4-
<PAGE>
                         Crown Cork & Seal Company, Inc.


Outside North America,  the Company's Metals Packaging products consist of metal
cans for food, beverage, aerosol and specialty packaging as well as metal crowns
and closures.  Europe is the most significant  beverage crown and closure market
for the Company with returnable  bottles  continuing to be a significant form of
packaging for the beverage and brewing industries in the region.


                               PLASTICS PACKAGING

Plastics   Packaging,   which  in  1997  accounted  for   approximately  18%  of
consolidated net sales and  approximately  19% of consolidated  operating income
(before net interest costs, foreign exchange adjustments and other non-operating
expenses),   manufactures  plastic  containers  and  plastic  closures  for  the
beverage, food, health and beauty,  household products,  personal care, chemical
and other industries. Within the U.S. the Company manufactures and sells plastic
bottles through its CONSTAR  subsidiary and plastic  closures through its plants
in  Virginia  and Utah  and  plants  acquired  in the CMB  acquisition.  Plastic
closures are also  manufactured in various metals  packaging  operations  within
Europe, Asia, the Middle East and South America. CONSTAR, based on net sales, is
one of the two leading  producers of plastic  containers  produced  from PET and
HDPE (high-density polyethylene) within the United States.

During  1997,  the  Company  commenced  a  restructuring  program to improve the
structure of its PET plastic beverage  container  business in the United States.
Six CONSTAR  manufacturing  locations  were closed or  reorganized.  The Company
expects to maintain  its  existing  manufacturing  capacity,  and by  relocating
equipment  among  its  remaining  larger   facilities,   meet  all  current  and
prospective volume requirements.

The  combination  of  CMB's  Plastics  division  with  CONSTAR   International's
operations in Europe has resulted, the Company believes, in the leading European
producer  of  plastics  packaging.  This  combination  further  strengthens  the
Company's plastics marketing base in Europe and has added product and geographic
diversity.  The  combination of CMB European  plastics  operations with existing
Company operations has led to certain redundant  operations being  consolidated.
The ultimate  result of these actions  represents  the Company's best efforts to
react to industry  performance  and general  business and  economic  conditions.
Further  discussion  of the Company's  restructuring  activities is contained in
Part II hereof within Item 7, "Management's Discussion and Analysis of Financial
Condition  and  Results  of  Operations"   on  page  19  under   "Provision  for
Restructuring"  and within  Item 8 herein on pages 34 and 35 under Note K to the
Consolidated Financial Statements.

The Company believes that price,  quality and customer service are the principal
competitive  factors  affecting  this  segment.  Based upon  sales,  the Company
believes  that it is a leader in the markets for plastics  packaging in which it
competes; however, the Company encounters competition from a number of companies
offering similar products.

The principal raw materials used in the  manufacture  of plastic  containers and
closures are various types of resins which are purchased from several commercial
sources. Resins are presently available in quantities adequate for the Company's
needs.  The Company has  experienced  fluctuations  in the cost of resins in the
past and has periodically adjusted its selling prices for plastic containers and
closures to reflect these  movements in resin costs.  There can be no assurance,
however,  that the Company will be able to recover  fully any increases in resin
prices from its customers in the future.

Typically,  the Company identifies market opportunities by working cooperatively
with customers and implementing  commercially  successful programs.  The Company
believes that it will  capitalize on  conversions to plastic from other forms of
packaging and new markets through its technical  expertise,  quality  reputation
and customer service. The Company also believes that its plastic container plant
sites are strategically located and sized to meet market requirements.

Capital  expenditures  for Plastics  Packaging were  approximately 23 percent of
total  capital  spending  for the  Company in 1997 as  compared to 15 percent in
1996. The increase, in percentage terms,

                                       -5-
<PAGE>
                         Crown Cork & Seal Company, Inc.


is  primarily  due to the  completion  of a PET  plant in China,  lower  overall
capital spending,  particularly in metals, as well as, those investments made in
connection  with  the  ongoing  restructuring   programs.  The  Company  remains
committed to servicing its global customers with plastic containers. Information
relating to the Company's capital  expenditures is set forth in Part II, Item 7,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"  of this  Report  on  pages 19 and 20 under  the  caption  "Capital
Expenditures."

ITEM 2.   PROPERTIES

Crown Cork & Seal Company,  Inc.,  and its worldwide  consolidated  subsidiaries
operate 247  manufacturing  facilities.  Within the United  States  there are 50
Metals   Packaging   manufacturing   facilities   and  24   Plastics   Packaging
manufacturing  facilities.  Outside  the  United  States  there  are 129  Metals
Packaging  manufacturing  facilities  and 38  Plastics  Packaging  manufacturing
facilities.  There are six  manufacturing  facilities  outside the United States
that manufacture both metal and plastic products.

The geographic distribution of the manufacturing facilities is as follows:
<TABLE>
<CAPTION>
                                             Metals          Plastics           Both            No. of           No.
Geographic Area*                           Packaging        Packaging         Segments          Plants          Leased
<S>                                      <C>              <C>                              <C>             <C>
United States                                    50               24                -              74              28
Canada                                            9                1                -              10               -
Central America                                   7                1                -               8               3
South America                                     9                1                1              11               -
Europe                                           74               31                3             108              22
Africa                                           14                -                -              14               3
Middle East                                       -                -                1               1               -
Asia                                             16                4                1              21              16
                                        -----------------------------------------------------------------------------
         Worldwide Total                        179               62                6             247              72
                                        =============================================================================
</TABLE>

* Excluded are  productive  facilities  in announced  restructurings  as well as
service or support facilities.

The Company's manufacturing and support facilities are designed according to the
requirements  of  the  products  to be  manufactured.  Therefore,  the  type  of
construction  varies from plant to plant.  Warehouse and delivery facilities are
generally provided at each of the manufacturing locations,  although the Company
does  lease  outside  warehouses.  Management  believes  that its  manufacturing
facilities,  taken as a whole,  are well  maintained and generally  adequate for
current operations.

Utilization of any particular facility varies based upon demand for the product.
While it is not possible to measure  with any degree of certainty or  uniformity
the  productive  capacity of these  facilities,  management  believes  that,  if
necessary,  production  can be  increased  at  existing  facilities  through the
addition of personnel, capital equipment and, in some facilities, square footage
available for production. In addition, the Company may from time to time acquire
additional facilities and / or dispose of existing facilities.

In the design of each new facility,  the Company's  engineers are  instructed to
pay particular  attention to the safety of  operations,  abatement of pollution,
incorporation  of the  Company's  research  activities  and the  quality  of the
product to be manufactured at such facility.

In addition to the  manufacturing  facilities for Metals  Packaging and Plastics
Packaging,  the Company has various support facilities.  Such facilities include
machine shop  operations,  printing  for cans and crowns,  coil  shearing,  coil
coating and RD&E.

                                       -6-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The Company  generally owns its  manufacturing  and other  facilities,  although
office facilities are often leased. The Company maintains research facilities in
Alsip,  Illinois  within the United  States and in Wantage,  England  within the
United Kingdom.

The Company is directly involved in post-consumer  plastic  container  recycling
and aluminum and steel can recycling at two locations in the United States.

ITEM 3.   LEGAL PROCEEDINGS

In management's opinion, there are no pending claims or litigations, the adverse
determination  of which would have a material adverse effect on the consolidated
financial position or results of operations of the Company. The Company has been
identified by the Environmental  Protection Agency as a potentially  responsible
party (along with others,  in most cases) at a number of sites.  Information  on
this is presented in Part I, Item 1, entitled "Business"  appearing on page 3 of
this  Report  and in Part II,  Item 7,  entitled  "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations" under  "Environmental
Matters" appearing on page 20 of this Report.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
         MATTERS

The  Registrant's  Common Stock and  Preferred  Stock are listed on the New York
Stock  Exchange  and the Paris  Bourse.  On March 13,  1998,  there  were  5,758
registered  shareholders  of the  Registrant's  Common  Stock and 12  registered
shareholders of the Registrant's  4.5% Cumulative  Convertible  Preferred Stock.
The market price at December 31, 1997, with respect to the  Registrant's  Common
Stock  is set  forth  in  Item 8 on  page 48  under  Note U to the  Consolidated
Financial  Statements  entitled  "Quarterly  Data  (unaudited)".  The  foregoing
information regarding the number of registered  shareholders of Common Stock and
Preferred  Stock does not include  persons  holding stock through  clearinghouse
systems in the United  States and  France.  It is the present  intention  of the
Company to continue paying  dividends on its common stock on a quarterly  basis.
Further details  regarding the Company's  policy as to payment of cash dividends
are set forth in Part II,  Item 7,  "Management's  Discussion  and  Analysis  of
Financial  Condition  and Results of  Operations"  under "Common Stock and Other
Shareholders' Equity" appearing on pages 20 and 21 of this Report.

                                       -7-
<PAGE>
                         Crown Cork & Seal Company, Inc.


ITEM 6.   SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
(in millions, except per share, ratios and
  other statistics)                                       1997         1996         1995         1994         1993
<S>                                                    <C>          <C>          <C>           <C>           <C>
Summary of Operations
Net sales........................................      $ 8,494.6    $ 8,331.9    $ 5,053.8     $4,452.2      $4,162.6
                                                       --------------------------------------------------------------
Cost of products sold............................        6,707.7      6,732.5      4,319.4      3,706.2       3,474.7
Depreciation and amortization....................          540.0        495.9        256.3        218.3         191.7
Selling and administrative expense...............          413.6        387.2        139.3        135.4         126.6
   % to net sales................................            4.9%         4.6%         2.8%         3.0%          3.0%
Provision for restructuring......................           66.6         39.8        102.7        114.6
Gain on sale of assets...........................          (38.1)       (23.8)        (8.4)        (6.7)          (.7)
Interest expense, net of interest income.........          339.9        305.8        136.1         91.6          79.7
Translation and exchange adjustments.............            7.9       ( 36.5)       ( 1.1)        10.1          10.8
                                                       --------------------------------------------------------------
Income before income taxes
and cumulative effect of accounting changes......          457.0        431.0        109.5        182.7         279.8
   % to net sales................................            5.4%         5.2%         2.2%         4.1%          6.7%
Provision for income taxes.......................          147.7        134.4         24.9         55.6          97.4
Minority interests, net of equity earnings.......           (7.7)       (12.6)        (9.7)         3.9          (1.5)
                                                       --------------------------------------------------------------
Net income before cumulative effect of
   accounting changes............................          301.6        284.0         74.9        131.0         180.9
     % to net sales..............................            3.6%         3.4%         1.5%         2.9%          4.3%
Cumulative effect of accounting changes (1)......           (7.6)                                               (81.8)
                                                       --------------------------------------------------------------
Net income (2)...................................          294.0        284.0         74.9        131.0          99.1
Preferred stock dividends........................           23.4         19.8
                                                       --------------------------------------------------------------
Net income available to common
   shareholders..................................      $   270.6    $   264.2    $    74.9     $  131.0      $   99.1
                                                       ==============================================================

Return on average shareholders' equity (3).......            8.3%        11.3%         5.3%        10.0%          8.3%
-----------------------------------------------------------------------------------------------------------------------

Financial Position at December 31
Working capital..................................     ($   902.1)  ($   370.6)   $   429.9     $  122.6      $   43.8
Total assets.....................................       12,305.7     12,590.2      5,051.7      4,781.3       4,236.3
Short-term debt plus current long-term
   debt maturities...............................        1,784.7      1,154.3        608.1        735.8         474.8
Long-term debt...................................        3,301.4      3,923.5      1,490.1      1,089.5         891.5
Total debt to total capitalization...............           56.1%        56.4%        56.2%        55.3%         50.1%
Minority interests...............................          282.8        243.8        118.6         75.4          53.7
Shareholders' equity.............................        3,529.2      3,563.3      1,461.2      1,365.2       1,251.8
-----------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       -8-
<PAGE>
                         Crown Cork & Seal Company, Inc.


FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA (Continued)
<TABLE>
<CAPTION>
(in millions, except per share, ratios and
  other statistics)                                      1997         1996         1995         1994         1993
<S>                                                  <C>          <C>           <C>         <C>           <C>
Common Share Data (dollars per share)
Earnings per average common share
   Basic -    before cumulative effect of
              accounting change..................        $2.17        $2.16         $.83        $1.47         $2.08
              after cumulative effect of
              accounting change..................         2.11                                                 1.14
   Diluted -  before cumulative effect of
              accounting change..................         2.15         2.14          .83         1.46          2.03
              after cumulative effect of
              accounting change..................         2.10                                                 1.11
Cash Dividends...................................         1.00         1.00
Market price on December 31......................        50.13        54.38        41.75        37.75         41.88
Book value (based on year-end
   outstanding shares plus assumed
   conversion of preference shares)..............        25.26        25.50        16.13        15.27         14.09
Number of shares outstanding
   at year-end...................................        128.4        128.4         90.6         89.4          88.8
Average shares outstanding
   Basic.........................................        128.4        122.5         90.2         89.1          87.1
   Diluted.......................................        140.3        132.4         90.6         89.9          89.2
Shareholders (on record).........................        5,763        5,736        5,976        6,011         6,168
---------------------------------------------------------------------------------------------------------------------

Other Statistics

Capital expenditures.............................       $514.8       $631.2       $433.5       $439.8        $271.3

Number of Employees..............................       40,985       44,611       20,409       22,373        21,254
Actual preferred shares outstanding..............         12.4         12.4

=====================================================================================================================
</TABLE>

Notes:

Total  capitalization  includes  total debt (net of cash and cash  equivalents),
minority interests and shareholders' equity.

Certain  reclassifications  of prior  years'  data  have  been  made to  improve
comparability.  The Company has  completed a number of  acquisitions  during the
periods  presented.  Such  acquisitions  were  accounted  for using the purchase
method and may affect the comparability of data on a year-to-year basis.

(1)  The cumulative  effect of accounting  changes resulted from the adoption by
     the Company of EITF  Bulletin  97-13 in 1997 and SFAS No's 106, 109 and 112
     in 1993.
(2)  Figures for 1997,  1996,  1995 and 1994 include  after-tax  adjustments for
     restructuring,  $43.3 or $.34 per basic share and $.31 per  diluted  share,
     $31.7 or $.26 per basic share and $.24 per diluted share, $67.0 or $.74 per
     basic and  diluted  share  and  $73.2 or $.82 per basic  share and $.81 per
     diluted share, respectively.
(3)  Excluding the adjustments for  restructuring  and the cumulative  effect of
     accounting  changes,  the return on average  shareholders'  equity in 1997,
     1996,  1995, 1994 and 1993 would have been 9.7%,  12.6%,  10.0%,  15.6% and
     15.1%, respectively.

                                       -9-
<PAGE>
                         Crown Cork & Seal Company, Inc.


ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

(in millions, except per share, employee, shareholder and statistical data)

                                  INTRODUCTION

This  discussion  summarizes the  significant  factors  affecting the results of
operations  and  financial  position  of Crown Cork & Seal  Company,  Inc.  (the
"Company") during the three-year period ended December 31, 1997. This discussion
should  be  read in  conjunction  with  the  Consolidated  Financial  Statements
included  in this  annual  report.  References  to  earnings  per share are on a
diluted basis only.

Effective   February  22,  1996,  the  Company   completed  its  acquisition  of
CarnaudMetalbox  ("CMB").  The  consolidated  financial  statements  include the
results of CMB operations from this date.

Financial results (operating income,  pretax income, net income and earnings per
share)  for 1997,  1996 and 1995  were  impacted  by  restructuring  charges  or
accounting changes. These items are summarized below:

                                  RESTRUCTURING

Pretax income was charged for $66.6 ($43.3 after taxes or $.31 per share), $39.8
($31.7 after taxes or $.24 per share) and $102.7  ($67.0 after taxes or $.74 per
share), in 1997, 1996 and 1995, respectively.

Further information concerning the details of the restructuring plans, including
a  reconciliation  of the  restructuring  accrual is  included  in Note K to the
Consolidated  Financial  Statements  and under  Provision for  Restructuring  as
provided later in this discussion.

                               ACCOUNTING CHANGES

During  the  fourth  quarter  of  1997,  the  Company   implemented  EITF  97-13
retroactive to October 1, 1997. The after-tax  effect of this accounting  change
was a  one-time  charge  to  1997  earnings  of  $7.6 or  $.05  per  share.  The
incremental  charge to 1997 earnings in the fourth quarter from this  accounting
change was not significant.  This accounting  change did not, and will not, have
any cash flow impact on the Company and is more fully described in Note B to the
Consolidated Financial Statements.

                              RESULTS OF OPERATIONS

NET SALES

Net sales during 1997 were  $8,494.6,  an increase of $162.7 or 2.0% versus 1996
net sales of $8,331.9. Net sales during 1995 were $5,053.8.  Sales from domestic
operations increased 2.0% in 1997 compared with a 1.5% decrease in 1996. Foreign
sales increased 1.9% in 1997 following a 198.3% increase in 1996. Domestic sales
accounted for 40.0% of consolidated  net sales in 1997,  39.9% in 1996 and 66.8%
in 1995.
<TABLE>
<CAPTION>
                                                                                               % Increase/
                                                            Net Sales                           (Decrease)
DIVISION                                           1997       1996       1995              1997/1996    1996/1995
<S>                                             <C>        <C>        <C>                     <C>       <C>
Americas....................................    $3,729.3   $3,625.9   $3,903.8                2.9         (7.1)
Europe......................................     4,193.0    4,165.9      914.3                 .7        355.6
Asia-Pacific................................       368.5      376.2      151.9               (2.0)       147.7
Other.......................................       203.8      163.9       83.8               24.3         95.6
                                                ------------------------------
                                                $8,494.6   $8,331.9   $5,053.8                2.0         64.9
                                                ==============================
</TABLE>

                                      -10-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The increase in 1997  Americas  Division net sales is a result of (i) sales unit
volume  increases of aerosol cans,  food cans,  beverage cans and beverage ends,
(ii) increased sales unit volumes of single-serve PET beverage bottles,  plastic
beverage  closures and beverage  preforms and (iii) initial sales volumes at the
Company's  new beverage can and end plants in Brazil;  offsetting  (i) decreased
raw material prices which resulted in decreased selling prices, primarily in PET
bottles and aluminum cans and ends, (ii) sales unit volume  decreases of 2 liter
PET beverage  bottles and (iii) sluggish  demand for beverage cans in Mexico and
Argentina.  The decrease in 1996 Americas Division net sales was a result of (i)
lower raw material prices which were passed on to customers in the form of lower
selling  prices,  (ii) a seven week work stoppage at eight plants and (iii) weak
economic  conditions  in  Argentina  and  Brazil;  partially  offset  by (i) the
inclusion of Anchor Hocking  Packaging  acquired as part of the CMB  transaction
and (ii) sales unit volume  increases  of  aluminum  beverage  ends,  food cans,
aerosol cans and plastic closures.  U.S. sales accounted for approximately 82.2%
of division net sales in 1997, 84.2% in 1996 and 85.4% in 1995.

Net sales in the European Division  increased  marginally in 1997 as a result of
(i) the  consolidation of CMB activity for the full year versus only 45 weeks in
1996 and (ii) increased  sales unit volumes of PET beverage  bottles and plastic
beverage closures due to strong customer demand;  offset by (i) the appreciation
of the U.S. dollar against most European  currencies  which reduced division net
sales by  approximately  $310, (ii) lower PET resin costs passed on to customers
in the  form of lower  selling  prices,  (iii)  ongoing  restructuring  efforts,
including the elimination of products with negative  contribution and (iv) sales
unit volume  decreases  of food and beverage  cans.  Food can sales unit volumes
were soft in Greece due to a spring  frost  which  damaged the peach crop and in
Italy due to early season  rains which  limited the tomato  yield.  Beverage can
sales  unit  volumes  declined  due to poor  summer  weather  in some  areas and
restructuring  efforts which  restricted  output in the Benelux region.  Pricing
remained  very  competitive  across all  product  lines.  The  increase  in 1996
European Division net sales was due to the acquisition of CMB.

Net  sales  in the  Asia-Pacific  Division  decreased  as a  result  of (i)  the
appreciation of the U.S. dollar against most Southeast  Asian  currencies  which
reduced  division  net sales by  approximately  $25,  (ii) excess  beverage  can
capacity and  aggressive  competition  which continue to erode selling prices in
China,  (iii)  reduced  demand  in some  areas  as a result  of  tight  customer
liquidity due to the regional currency devaluation and (iv) the closure of seven
plants in the region since the second quarter of 1996;  partially  offset by (i)
the  consolidation  of CMB activity for a full year versus only 45 weeks in 1996
and (ii) increased  sales unit volumes of (a) beverage cans in China,  Thailand,
Singapore  and  Vietnam  and (b) food cans in  Thailand.  The  increase  in 1996
Asia-Pacific  Division net sales was a result of (i) the  acquisition of CMB and
(ii) increased  sales unit volumes of beverage cans at company joint ventures in
China.

Net  sales  for  Other  operating  units  increased  in 1997 as a result  of the
acquisition  of  Golden  Aluminum  Company  ("GAC"),  partially  offset  by  the
divestiture  of the  Crown-Simplimatic  Machinery  operations  in May 1997.  The
increase  in Other net sales in 1996 was a result of the  Simplimatic  Machinery
operations acquired as part of the CMB transaction.

COST OF PRODUCTS SOLD

Cost of products sold,  excluding  depreciation  and  amortization  for 1997 was
$6,707.7; a .4% decrease from $6,732.5 in 1996, following increases of 55.9% and
16.5% in 1996 and 1995, respectively. The decrease in 1997 cost of products sold
is attributable to the appreciation of the U.S. dollar against most European and
Southeast  Asian  currencies  and  decreased  raw material  prices,  principally
aluminum and PET resin  offsetting  increased sales unit volumes in many product
lines.  The increase in 1996 cost of products sold was directly  attributable to
the increased net sales level in 1996 partially offset by decreased raw material
prices.  The  increase in 1995 cost of products  sold was  primarily a result of
increased  aluminum and PET resin prices and increased sales unit volumes of (i)
PET beverage bottles in the U.S. and Europe and (ii) aluminum  beverage cans and
ends in South America, the Middle East and China.

As a  percentage  of net  sales,  cost of  products  sold  was  79.0% in 1997 as
compared to 80.8% in 1996 and 85.5% in 1995.

                                      -11-
<PAGE>
                         Crown Cork & Seal Company, Inc.


SELLING AND ADMINISTRATIVE

Selling and  administrative  expenses for 1997 were $413.6,  an increase of 6.8%
over  1996  compared  to  increases  of 178.0%  for 1996 and 2.9% for 1995.  The
relative  increase in 1997 costs and their  percentage  to net sales is directly
related to the consolidation of CMB activity for a full year in 1997 as compared
to only 45 weeks in 1996. The large increase in 1996 is directly attributable to
the  acquisition of CMB whose general and  administrative  activities are highly
decentralized  and which  operates  many  business  units in  countries in which
social  costs  are  very  high.  As a  percentage  of  net  sales,  selling  and
administrative expenses were 4.9% in 1997, 4.6% in 1996 and 2.8% in 1995.

OPERATING INCOME

The Company  views  operating  income as the  principal  measure of  performance
before interest costs and other non-operating expenses.  Operating income, after
restructuring  charges,  was $766.7,  $676.5 and $236.1 in 1997,  1996 and 1995,
respectively.  Operating  income  of $833.3 in 1997,  before  the  restructuring
charge of $66.6,  was $117.0 or 16.3% greater than in 1996.  Operating income of
$716.3 in 1996, before the  restructuring  charge of $39.8, was $377.5 or 111.4%
greater than in 1995. Operating income, before restructuring, as a percentage of
net sales was 9.8% in 1997 as compared to 8.6% in 1996 and 6.7% in 1995.

An analysis of operating income,  before  restructuring,  by operating  division
follows:
<TABLE>
<CAPTION>
                                                                                               % Increase/
                                                        Operating Income                        (Decrease)
DIVISION                                           1997       1996       1995              1997/1996    1996/1995
<S>                                               <C>        <C>        <C>                  <C>       <C>
Americas....................................      $259.5     $200.3     $227.1               29.6      (11.8)
Europe......................................       558.7      490.0       70.7               14.0      593.1
Asia-Pacific................................         6.3       10.7       31.0              (41.1)     (65.5)
Other.......................................         8.8       15.3       10.0              (42.5)      53.0
                                                  ----------------------------
                                                  $833.3     $716.3     $338.8               16.3      111.4
                                                  ============================
</TABLE>

Operating  income in the Americas  Division was 7.0% of net sales in 1997 versus
5.5% in 1996 and 5.8% in 1995. The increase in 1997 operating  margins is due to
(i) increased sales unit volumes of beverage cans,  beverage ends, aerosol cans,
food cans,  plastic  beverage  closures,  single-serve  PET beverage bottles and
beverage  preforms  in  the  U.S.  and  Canada,  (ii)  increased   manufacturing
efficiencies  in most U.S. and Canadian  plants due to the completion of the 202
diameter  conversion  programs  in 1996  and  other  cost  improvement  programs
initiated in recent years and (iii) the start-up of the  Company's  new beverage
can and  beverage  end  plants  in  Brazil;  offsetting  (i)  continued  pricing
pressures in both metal and plastic beverage  containers,  (ii) lower sales unit
volumes of 2 liter PET beverage  bottles and (iii) weak demand for beverage cans
in Mexico and Argentina.  The decrease in 1996 operating margins was due to: (i)
continued pricing pressures in both metal and plastic beverage containers,  (ii)
a seven week work  stoppage at eight  plants;  (iii) lower sales unit volumes of
PET  bottles  and (iv)  weaker  economic  conditions  in  Argentina  and Brazil,
partially offset by; (i) the benefits accruing from the  restructuring  programs
initiated  in the U.S.  in 1995 and 1994,  (ii) sales unit volume  increases  in
aluminum  beverage ends,  food cans,  aerosol cans and plastic  closures,  (iii)
increased sales unit volumes and improved  productivity in Canada and Mexico and
(iv) the  inclusion  of Anchor  Hocking  Packaging,  acquired as part of the CMB
transaction. The Company's suppliers of aluminum can and end sheet implemented a
new pricing  structure  during 1995 which,  by formula,  is directly tied to the
price of ingot on the London Metal Exchange  ("LME").  The formula takes the LME
spot price of  aluminum  ingot and adds other  costs to  convert  and  transport
aluminum,  thereby  effectively  transferring  the  volatility  in the commodity
markets to the Company.  This pricing  formula  remained in effect  during 1997.
During 1997,  the Company  entered into contracts with its suppliers of aluminum
can and end sheet  which,  by  formula,  guarantees  prices  for a period of six
months.  This  pricing  structure is directly  tied to a rolling  average of the
prior six months' market price of aluminum on the LME.

                                      -12-
<PAGE>
                         Crown Cork & Seal Company, Inc.


Further,  "ceiling" prices have been established under these contracts which set
maximum prices that the Company would pay for aluminum.

European  Division  operating  income was 13.3% as a percentage  of net sales in
1997  compared  to 11.8% in 1996 and 7.7% in 1995.  The  increase  in  operating
income in 1997 is directly attributable to (i) cost reduction programs initiated
by the Company upon the acquisition of CMB whereby inefficient plants,  products
with negative contribution and excess administrative  overheads were eliminated,
(ii) increased sales unit volumes in PET beverage bottles,  plastic closures and
aerosol cans and (iii) better market  conditions for specialty cans;  offsetting
(i) the  appreciation of the U.S. dollar against most European  currencies which
reduced 1997 operating  income by  approximately  $35, (ii) decreased sales unit
volumes of food cans in Greece and Italy due to poor early season weather, (iii)
competitive pricing pressure on food cans in France and Italy and (iv) decreased
sales unit volumes of beverage cans and ends.  The increase in operating  income
in 1996 is directly  attributable to the addition of CMB  operations,  primarily
its food,  beverage  and  aerosol  can  businesses.  Operating  margins  for the
Company's  existing  facilities  in  Europe  were  lower  than 1995  levels  due
primarily to competitive  pressures  resulting in reduced volumes and prices for
metal and plastic  packaging.  Comparable  operating  margins for  acquired  CMB
operations were ahead of 1995 levels due to (i) sales unit volume gains in food,
beverage and aerosol cans and (ii) cost reduction  programs in which the Company
began streamlining (a) inefficient plants, (b) excess  administrative  overheads
and (c) negative  contribution  products.  Partially offsetting these gains were
(i) increased prices for tinplate and (ii) volume erosion and pricing  pressures
from soft markets in specialty packaging and plastics.

Operating  income  in the  Asia-Pacific  Division  was 1.7% of net sales in 1997
versus 2.8% in 1996 and 20.4% in 1995. The decrease in 1997 operating margins is
due to (i)  reduced  beverage  can  pricing  throughout  the  region,  (ii)  the
appreciation of the U.S. dollar against most Southeast Asian  currencies,  (iii)
weak  demand for food  closures  in China and (iv) lower  sales unit  volumes of
three-piece  cans in  Malaysia;  offsetting  (i) strong  sales  unit  volumes of
beverage  cans in  Singapore,  Malaysia  and  Thailand,  (ii) strong  sales unit
volumes of food cans in Thailand and (iii) the benefits  accruing to the Company
from the closure of seven plants since the second  quarter of 1996. The decrease
in 1996 operating margins was due primarily to the addition of CMB operations as
excess beverage can capacity and competitive  pricing has  significantly  eroded
profits in China. Other factors affecting operating margins were (i) lower sales
unit volumes and competitive  pricing in Malaysia (ii) competitive  beverage can
pricing in Singapore,  (iii) sales unit volume  declines in three-piece  cans in
Singapore  and (iv)  new  plant  start-ups  in  China,  Singapore  and  Vietnam;
partially  offset by (i)  strong  beverage  and food can sales  unit  volumes in
Thailand and (ii) increased efficiencies in Shanghai.

Operating income from Other operating units was 4.3% of net sales in 1997 versus
9.3% in 1996 and 11.9% in 1995.  Operating  income decreased in 1997 as a result
of (i) start-up losses at GAC which was acquired in March 1997 and (ii) the sale
of the Company's  Crown-Simplimatic  Machinery operations.  The increase in 1996
operating income was a result of the Simplimatic  Machinery  operations acquired
as part of the CMB  transaction.  The  decrease  in 1996  operating  income as a
percentage to net sales reflects the lower margins  earned on Simplimatic  sales
compared to margins earned on tool shop and other operating unit sales.

GAIN ON SALE OF ASSETS

On May 14, 1997, the Company sold its Crown-Simplimatic  Machinery operations to
a group of investors  including division  management.  The selling price of $105
million  included  $90  million in cash and $15  million of 8% Class A Preferred
Stock  that  is  convertible  into  approximately  20% of the  common  stock  of
Crown-Simplimatic.  The Company also sold ten surplus properties in 1997. Gains,
totaling  $38.1,  were realized from the sales of the machinery  operations  and
surplus properties in 1997 as compared to gains of $23.8 in 1996.

                                      -13-
<PAGE>
                         Crown Cork & Seal Company, Inc.


NET INTEREST EXPENSE/INCOME

Net interest  expense was $339.9 in 1997,  an increase of $34.1 when compared to
1996 net interest  expense of $305.8.  Net interest  expense was $136.1 in 1995.
The increase in 1997 net interest  expense is due to (i) borrowings  used in the
acquisition of CMB remaining  outstanding  for the full year as compared to only
45 weeks in 1996 and (ii) cash  requirements  for  restructuring  programs.  The
increase in 1996 net interest  expense is directly  attributable  to  borrowings
which funded the acquisition of CMB. Further information regarding  acquisitions
is found in Note H to the Consolidated  Financial Statements,  while information
specific  to  Company  financing  is  presented  in the  Liquidity  and  Capital
Resources  section  of this  discussion  and  Notes L and M to the  Consolidated
Financial Statements.

FOREIGN EXCHANGE

Unfavorable foreign exchange adjustments of $7.9 in 1997 resulted primarily from
the remeasurement of the Company's operations in highly inflationary  economies.
Favorable  foreign exchange  adjustments of $36.5 and $1.1 were recorded in 1996
and 1995,  respectively.  During 1996, the Company  recorded a foreign  exchange
gain of $42.1 due to the impact of a stronger  U.S.  dollar on the Company's CMB
acquisition   financing,   denominated  in  French  Francs.  This  French  Franc
acquisition debt was subsequently  refinanced into several functional currencies
during 1996.

TAXES ON INCOME

The effective tax rates on income were 32.3%,  31.2% and 22.7% in 1997, 1996 and
1995, respectively.  The effective rate is lower than the U.S. statutory rate of
35% as a  result  of  lower  effective  rates  in  non-U.S.  operations  and the
continuing  re-evaluation  of  reserve  and  valuation  allowance  requirements;
partially   offset  by   non-deductible   amortization  of  goodwill  and  other
intangibles.  A reconciliation of the Company's effective tax rate from the U.S.
statutory rate is presented in Note Q to the Consolidated Financial Statements.

MINORITY INTERESTS, NET OF EQUITY EARNINGS

Minority  interests share of net income was $9.8, $5.4 and $13.6 in 1997,  1996,
and 1995,  respectively.  The  increase  in  minority  interests  in 1997 is due
primarily to increased  profits in Brazil,  Greece,  Singapore  and Thailand and
lower losses in South Africa.

Equity in  earnings/(losses)  of affiliates  was $2.1,  ($7.2) and $3.9 in 1997,
1996 and 1995,  respectively.  The increase in equity earnings in 1997 primarily
relates to improved  earnings in the  Company's  non-consolidated  affiliates in
Brazil, Mexico and Morocco and lower losses in Korea.

NET INCOME AND EARNINGS PER SHARE

Net income for 1997,  excluding the effect of an accounting  change,  was $278.2
compared with $264.2 for 1996 and $74.9 in 1995.  Diluted earnings per share for
1997 was $2.15  compared  with  $2.14  and $.83 in 1996 and 1995,  respectively.
Excluding the provision for  restructuring,  1997 net income  increased  8.7% to
$321.5  and 1997  earnings  per share  increased  3.4% to $2.46.  Excluding  the
provision for restructuring, 1996 net income increased 108.5% to $295.9 and 1996
earnings  per  share  increased  51.6%  to $2.38  compared  to 1995  while  1995
decreased 30.5% and 30.8%,  respectively  compared to 1994. The sum of per share
earnings  by  quarter  does not equal  earnings  per  share for the years  ended
December 31, 1997, 1996 and 1995 due to the effect of shares issued during those
respective years.

INDUSTRY SEGMENT PERFORMANCE

This section presents  individual  segment results for the last three years. The
after-tax  charge of $43.3 or $.31 per share  related to the 1997  restructuring
charge  is  included  as an  after-tax  charge in the  Metal  Packaging  segment
("Metals")  of $7.4 or $.05 per share and an  after-tax  charge of $35.9 or $.26
per share in the  Plastics  Packaging  segment  ("Plastics")  and is excluded in
making comparisons to 1997 results. The

                                      -14-
<PAGE>
                         Crown Cork & Seal Company, Inc.


after-tax  charge of $31.7 or $.24 per share  related to 1996  restructuring  is
included in Metals and is excluded in making  comparisons  to 1996 results.  The
after-tax  charge of $67.0 or $.74 per share  related to the 1995  restructuring
charge is included as an  after-tax  charge in Metals of $60.1 or $.66 per share
and an after-tax charge of $6.9 or $.08 per share in Plastics and is excluded in
making comparisons to 1995 results.

Net sales for Metals in 1997 were $6,940.9, an increase of 4.9% compared to 1996
net sales of  $6,619.7.  Net sales in 1995 were  $3,811.1.  Metals sales in 1997
increased  over 1996 due to (i) the  consolidation  of CMB activity for the full
year  versus  only 45 weeks in 1996;  (ii) sales unit  volume  increases  in all
product  lines in the U.S. and (iii)  initial sales volumes at the Company's new
beverage  can and end  plants  in  Brazil;  offsetting  (i)  the  effect  of the
appreciation of the U.S. dollar against most European and Asian currencies, (ii)
decreased  aluminum  prices which  resulted in lower selling prices for beverage
cans and  ends and  (iii)  European  sales  unit  volume  decreases  in food and
beverage  cans.  Metals  sales  in  1996  increased  over  1995  due to the  CMB
acquisition,  partially offset by decreased aluminum prices which were passed on
to customers in the form of lower selling prices.

Metals  operating  income in 1997 was $635.6,  before  restructuring  charges of
$11.4, or 9.2% of net sales compared to 1996 operating  income of $542.8 or 8.2%
of net sales, before  restructuring  charges of $39.8.  Operating income in 1995
was $253.6 or 6.7% of net sales, before  restructuring  charges of $94.4. Metals
operating income increased in 1997 over 1996 due to (i) the consolidation of CMB
activity for the full year versus only 45 weeks in 1996,  (ii) sales unit volume
increases  in all  product  lines in the  U.S.,  (iii)  increased  manufacturing
efficiencies in the U.S. and Canada and (iv) cost reduction  programs  initiated
in Europe and Asia by the Company upon the  acquisition  of CMB. The increase in
Metals operating income in 1996 was directly  attributable to the European food,
beverage and aerosol  businesses  acquired with CMB and increased margins in the
North  American  food and  beverage  businesses  due to  improved  manufacturing
efficiencies, a result of prior restructuring and capital expenditure programs.

Net sales for Plastics  decreased  $158.5 or 9.3% in 1997 from $1,712.2 in 1996.
The decrease in Plastics  sales in 1997 is due to (i) decreased PET resin prices
which resulted in lower selling  prices and (ii) the effect of the  appreciation
of the U.S.  dollar  against  most  European  and Asian  currencies;  offsetting
increased unit sales in PET beverage bottles and plastics  beverage  closures in
the U.S.,  Europe  and Asia.  The  increase  in 1996  Plastics  net sales is due
entirely to Plastics  businesses  acquired  with the CMB  transaction  partially
offset by decreased  PET prices which were passed on to customers in the form of
lower selling prices.

Plastics  operating  income  in 1997 was  $197.7  or 12.7% of net  sales  before
restructuring  charges of $55.2, as compared to 1996 operating  income of $173.5
or 10.1% of net sales.  Operating income in 1995 was $85.2 or 6.9% of net sales,
before restructuring  charges of $8.3. The increase in Plastics operating income
in 1997 is due to (i) the consolidation of CMB activity for the full year versus
only 45 weeks in 1996,  (ii)  restructuring  programs  initiated in the U.S. and
Europe and (iii) sales unit volume increases in the U.S., Europe and Asia in PET
beverage  bottles  and  plastic  beverage  closures.  The  increase  in Plastics
operating  income  in 1996  was due to the CMB  acquisition  as  profits  in all
sectors of Plastics,  excluding PET beverage  bottles,  offset  increasing price
competition in PET beverage bottles. Additionally, as a percentage to net sales,
Plastics operating income increased in 1996 due to the effect of PET resin price
decreases.

                               FINANCIAL POSITION

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents totaled $205.6 at December 31, 1997 compared to $160.4
and $68.1 at December 31, 1996 and 1995,  respectively.  The  Company's  primary
sources of cash in 1997 consisted of (i) funds provided from operations  $402.1;
(ii) the sale of assets and  businesses  $133.3;  (iii)  proceeds from long-term
borrowings  $123.7;  and (iv) the net  change in  short-term  debt  $359.5.  The
Company's primary uses of cash in 1997 consisted of (i) capital  expenditures of
$514.8; (ii) payments of long-term

                                      -15-
<PAGE>
                         Crown Cork & Seal Company, Inc.


debt $268.5;  and (iii)  dividends  paid $151.8.  The decrease in funds provided
from  operations  in 1997  versus  1996 is a  result  of a  portion  of the 1996
seasonal buildup of CMB working capital occurring before the acquisition date.

The  Company  funds its  working  capital  requirements  on a  short-term  basis
primarily  through  issuances  of  commercial  paper.  At December  31, 1997 the
commercial  paper  program  was  supported  by a  $2,500  multi-currency  credit
agreement which was formalized in February 1997,  maturing in February 2002 with
interest at market rates.  The Company's use of the facility is not  restricted.
At December  31, 1997,  $355.2 was drawn  against  this  facility.  Based on the
Company's  intention and ability to maintain its credit facility beyond 1998 and
1997,  respectively,  $700 of  commercial  paper  borrowings  was  classified as
long-term at both  December 31, 1997 and 1996.  There was $1,248.0 and $932.1 in
commercial paper outstanding at December 31, 1997 and 1996, respectively.

On December 1, 1995, the Company  entered into a Revolving  Credit and Term Loan
Agreement  (Credit  Agreement)  with  a  syndicate  of  financial  institutions.
Pursuant to the Credit  Agreement,  the lenders  made  available  to the Company
French Francs (FRF) 13,700 in a multi-currency revolving credit facility to fund
the  cash  portion  of the  consideration  to be paid  in  connection  with  the
Company's  acquisition of  CarnaudMetalbox  and for general corporate  purposes.
Borrowings  under the facility were  permitted in FRF, U.S.  Dollars and British
Pound Sterling and bear interest at variable  market rates. A total of FRF 9,100
(approximately  $1,800) was drawn on February  22, 1996 to fund the  purchase of
shares from those CMB shareholders electing cash (approximately 40.1 million CMB
shares at FRF 225 per share).  At December 31, 1996,  borrowings  of $493.1 were
outstanding under this credit facility.

On  November  26,1996,  the  Company  filed  with the  Securities  and  Exchange
Commission a shelf registration statement for the offer and sale of up to $1,300
aggregate  principal  amount of debt securities of the Company.  This amount was
combined  with the  remaining  $200 from the December  1994 shelf  registration,
providing an aggregate $1,500 funding  availability.  On December  12,1996,  the
Company sold $1,200 of these public debt  securities in five separate  tranches,
with  maturities  ranging from seven to 100 years.  The issuers were the Company
and two  wholly-owned  finance  subsidiaries  located in the United  Kingdom and
France,  whose borrowings are fully guaranteed by the Company. The face value of
the notes bear interest rates ranging from 6.75% to 7.38%.  The offerings by the
subsidiaries were  simultaneously  converted into fixed rate, 8.28% Sterling and
5.75% French Franc  obligations  through  interest rate and currency  swaps with
various   counterparties.   Proceeds  from  the  offering  were  used  to  repay
acquisition  indebtedness  arising  from  the  CMB  acquisition.  The  Company's
long-term debt securities  ratings were  reaffirmed at Baa1 by Moody's  Investor
Service and confirmed at BBB by Standard and Poor's  Corporation  on February 3,
1998.

The Company's  ratio of total debt (net of cash and cash  equivalents)  to total
capitalization  was 56.1%,  56.4% and 56.2% at December 31, 1997, 1996 and 1995,
respectively.  Total  capitalization  is defined by the  Company as total  debt,
minority interests and shareholders' equity. The increase in the Company's total
debt in  recent  years is due to  acquisition  activity,  particularly  the 1996
acquisition of CMB and the  significant  capital  expenditure  program which the
Company has  committed to in recent  years.  As of December 31, 1997,  $399.3 of
long-term debt matures within one year.

Management  believes that, in addition to current financial  resources (cash and
cash equivalents and the Company's  commercial paper program),  adequate capital
resources are available to satisfy the Company's  ongoing  investment  programs.
Such sources of capital would include,  but not be limited to, bank  borrowings.
Management  believes that the Company's  cash flow is sufficient to maintain its
current operations.

MARKET RISK

In the normal  course of  business,  the Company is exposed to  fluctuations  in
currency  values,  interest rates,  commodity prices and other market risks. The
Company  addresses  these  risks  through a  program  that  includes  the use of
financial  instruments.  The Company  controls the credit risks  associated with
these

                                      -16-
<PAGE>
                         Crown Cork & Seal Company, Inc.


financial instruments through credit approval, investment limits and centralized
monitoring procedures and systems. The Company uses only liquid investments from
creditworthy institutions and does not enter into leveraged,  tiered or illiquid
contracts.  Further,  the Company does not enter into financial  instruments for
trading purposes.

International operations, principally European, constitute a significant portion
of consolidated  revenues and identifiable  assets. These operations result in a
large  volume of foreign  currency  commitment  and  transaction  exposures  and
significant  foreign  currency  net asset  exposures.  The  Company  manages its
foreign  currency  transaction  risk to minimize  the  volatility  of cash flows
caused by currency fluctuations by forecasting foreign currency denominated cash
flows of each subsidiary and aggregating these cash inflows and outflows in each
currency to determine the overall net  transaction  exposures.  The Company does
not generally hedge its exposure to translation  gains and losses,  however,  by
borrowing in local currencies, it reduces such exposure.

The information below summarizes the Company's market risks associated with debt
obligations  and  other  significant  financial  instruments  outstanding  as of
December 31, 1997. Fair values  included  herein have been  determined  based on
quoted  market  prices.  Further  information  specific to Company  financing is
presented in Notes L and M to the Consolidated Financial Statements.

The table below provides information as of December 31, 1997 about the Company's
forward  currency  exchange  contracts.  The majority of the contracts expire in
1998.
<TABLE>
<CAPTION>
                                                  Contract   Average Contractual
Buy/Sell                                           Amount      Exchange Rate
<S>                                                <C>              <C>
GBP/FRF.........................................    $570             9.79
FRF/GBP.........................................     406             9.74
USD/GBP.........................................     372             1.65
FRF/USD.........................................     367             5.80
DEM/GBP.........................................     207             2.85
FRF/DEM.........................................     162             3.36
USD/FRF.........................................     159             5.82
SGD/USD.........................................     125             1.62
USD/BEF.........................................     103            36.54
</TABLE>

The Company has an additional $431 in a number of smaller  contracts to purchase
or sell various other currencies, principally European, as of December 31, 1997.

The  aggregate  cost to  settle  all  contracts,  which is not  material  to any
individual  contract,  was $9.1 at December 31,  1997.  Total  forward  exchange
contracts outstanding as of December 31, 1996 were $2,311.

The Company  manages  its  interest  rate risk in order to balance its  exposure
between  fixed and  variable  rates while  attempting  to minimize  its interest
costs.  Generally,  the Company maintains variable interest rate debt at a level
of 40% to 60% of total borrowings. The Company manages its interest rate risk by
retiring  and  issuing  debt from time to time and by  executing  interest  rate
swaps.

For debt obligations,  the table below presents principal cash flows and related
interest rates by year of maturity.  Variable interest rates disclosed represent
the weighted  average rates at December 31, 1997.  For interest rate swaps,  the
table presents  notional amounts and related interest rates by year of maturity.
For these swaps,  the variable rates presented are the average forward rates for
the term of each contract.

                                      -17-
<PAGE>
                         Crown Cork & Seal Company, Inc.

<TABLE>
<CAPTION>
                                                                    Year of Maturity
Debt                                     1998         1999          2000         2001         2002     Thereafter
<S>                                   <C>          <C>           <C>          <C>          <C>       <C>
Fixed rate.....................          $137.9       $155.6        $42.4        $95.1        $35.0     $1,899.5
Average interest rate..........            6.5%         7.4%         8.1%         8.4%         8.1%         7.6%
----------------------------------------------------------------------------------------------------------------
Variable rate (1)..............        $1,646.8        $14.6       $117.6       $113.1       $713.1       $115.4
Average interest rate..........            5.6%         7.1%         7.6%         4.8%         5.8%         7.6%
----------------------------------------------------------------------------------------------------------------
Interest rate swaps:
Fixed to variable..............          $254.3                    $100.0        $93.9                    $105.0
Average pay rate...............            3.7%                      7.7%         4.4%                      7.7%
Average receive rate...........            6.7%                      7.5%         6.9%                      7.0%
----------------------------------------------------------------------------------------------------------------
<FN>
(1)  $700.0  of  commercial  paper  borrowings  due in 1998  are  classified  as
     long-term,  reflecting the Company's  intent and ability to refinance these
     borrowings on a long-term basis through committed credit facilities.
</FN>
</TABLE>

The Company's use of financial  instruments  in managing  market risk  exposures
described above is consistent with the prior year.

ACQUISITION OF CARNAUDMETALBOX

On  February  26,  1996,  the Company  completed  settlement  of its  previously
announced  Exchange Offer (the "Offer") to acquire all of the outstanding shares
of common stock,  par value FRF 10 per share, of CMB, a French societe  anonyme.
Under the terms of the Offer,  the Company  offered to exchange or purchase each
CMB share  validly  tendered  in the Offer for,  at the  election of the holder,
either (1) 1.086  Units,  each Unit  consisting  of .75  shares of Crown  common
stock,  par  value  $5.00 per share  and .25  shares of Crown  4.5%  Convertible
Preferred Stock, par value $41.8875 per share (acquisition preferred) or (2) FRF
225 in cash.  The Offer was made  pursuant  to the terms of the  Exchange  Offer
Agreement  dated May 22,  1995,  as amended,  between the Company and  Compagnie
Generale  d'Industrie et de Participations  (CGIP), a French societe anonyme and
the principal  shareholder of CMB. A description of the Exchange Offer Agreement
was  previously  reported in the Company's  Current Report on Form 8-K dated May
22, 1995 and the Company's Proxy  Statement/Prospectus,  dated November 14, 1995
forming a part of the Company's Amendment No. 1 to its Registration Statement on
Form S-4 filed with the Securities and Exchange Commission on November 14, 1995.

85,932,200 CMB shares,  representing  approximately 98.7% of the outstanding CMB
shares,  were  validly  tendered  into the Offer.  Of the CMB  shares  tendered,
40,125,325  were  tendered  for cash  (aggregating  approximately  FRF  9,000 or
approximately  $1,800) and 45,797,825 were exchanged for Units (resulting in the
Company  issuing  37,300,818  shares of common  stock and  12,432,622  shares of
acquisition  preferred).  Pursuant to the terms of the Exchange Offer Agreement,
CGIP exchanged its CMB shares for Units and received 21,330,903 shares of common
stock and 7,110,300  shares of acquisition  preferred.  The Company acquired the
remaining  outstanding  shares of CMB  during the  second  quarter  of 1996.  On
October  24,  1996,  the Company  announced  that CGIP had sold a portion of its
investment  in the  Company  to a group of  underwriters.  CGIP sold  10,637,500
shares of the Company's  common stock and 3,450,000 shares of the Company's 4.5%
convertible preferred stock, resulting in total gross proceeds to CGIP of $644.6
million,   before  underwriting   discounts,   commissions  and  expenses.  Upon
completion of the offering,  CGIP owned common and  convertible  preferred stock
representing  approximately  10.1% of the  Company's  voting  power versus 19.9%
previously. The Company did not receive any of the proceeds from these secondary
offerings.

On March 2, 1998, the Company  completed the  repurchase of 4,093,826  shares of
its common  stock at $49.00 per share and  3,660,300  shares of its  acquisition
preferred  at $46.00 per share from CGIP.  The  repurchased  shares  represented
approximately  5.3% of the Company's  then  outstanding  voting  securities  and
leaves CGIP with 4.99%  voting  power in the  Company.  The  repurchased  shares
include all of CGIP's

                                      -18-
<PAGE>
                         Crown Cork & Seal Company, Inc.


acquisition  preferred position which represented  approximately 30% of the then
outstanding  shares  of  acquisition  preferred.  The  transaction  includes  an
agreement  to  terminate  the  Shareholders  Agreement  dated  February 22, 1996
between the Company and CGIP.  Among other  changes,  CGIP will no longer retain
the right to designate  Company  directors.  The  transaction  value of $369 was
financed through an increase in short-term indebtedness.

PROVISION FOR RESTRUCTURING

During 1997,  the Company  provided  $66.6 ($43.3 after taxes or $.31 per share)
for the costs associated with a plan to improve the structure of its PET plastic
beverage container business in the United States by closing and reorganizing six
manufacturing  locations in its CONSTAR  subsidiary  along with other,  non-PET,
restructuring activities,  primarily in Europe. The Company anticipates that the
restructuring   actions   referred  to  above,   when   complete  will  generate
approximately $20.0 in after-tax cost savings on an annualized basis.

The Company has made an  assessment  of the  restructuring  and exit costs to be
incurred   relative  to  the  acquisition  of  CMB.  Affected  by  the  plan  of
restructuring are forty regional  administrative offices and plants to be closed
and  approximately  fifty-two  plants to be  reorganized.  The cost of providing
severance pay and benefits for the reduction of  approximately  6,500  employees
(approximately  5,100 positions  eliminated by the end of 1997) is approximately
$257 and is primarily a cash expense.  Actual expenditures for severance pay and
benefits through December 31, 1997 amounted to approximately $165.  Employees to
be terminated  include most, if not all, employees at each plant to be closed or
reorganized  including salaried employees and employees of the respective unions
represented  at each plant site.  The cost  associated  with the  write-down  of
assets (principally property, plant and equipment) is approximately $217 and has
been  reflected as a reduction in the carrying  value of the  Company's  assets.
Lease  termination  and other exit costs,  primarily  repayments  of  government
grants and subsidies  approximates  $60 of the provision and is primarily a cash
expense of which  approximately  $50 has been  expended as of December 31, 1997.
Details of the  restructuring  are also presented in Note K to the  Consolidated
Financial Statements.

The  Company  estimates  that  the plan of  restructuring  CMB  operations  when
complete,  will  generate  annual  cost  savings  of  approximately  $160  ($105
after-tax)  on  an  annualized   basis.   It  is  also  estimated  that  capital
expenditures  of  approximately  $100 will be made to expand and  upgrade  other
facilities  to minimize  the adverse  effects of the  restructuring  on existing
business and customer relationships.

During 1996,  the Company  provided  $39.8 ($31.7 after taxes or $.24 per share)
for the costs  associated  with exiting  certain  lines of business in its South
African  operations,  the  closure  of a  South  American  operation  and  costs
associated with restructuring  existing  businesses in Europe.  During 1995, the
Company recorded a pre-tax  restructuring charge of $102.7 ($67.0 after taxes or
$.74 per share) to streamline North American  operations,  improve  productivity
and to enhance competitiveness.  The 1996 and 1995 restructuring plans have been
completed.

CAPITAL EXPENDITURES

Consolidated capital expenditures totaled $514.8 in 1997 as compared with $631.2
in 1996.  Minority partner  contributions to consolidated  capital  expenditures
were  approximately  $26 and $88 in 1997 and 1996.  During the past five  years,
capital expenditures totaled $2,290.6.

Expenditures in the Americas  Division  totaled $161 including the completion of
the construction of a beverage can plant and a beverage end plant in Brazil, the
construction  of a  beverage  can plant in  Columbia,  and the  completion  of a
two-piece steel food can line in the U.S.

Spending in the European Division for 1997 totaled $316 as the Company completed
the  construction of a new beverage can and end plant in South Africa as well as
converting  several  beverage can and end lines to the 202 diameter from the 206
diameter.   Investments   were  also  made  in   connection   with  the  ongoing
restructuring programs and for several easy open food can end lines.

                                      -19-
<PAGE>
                         Crown Cork & Seal Company, Inc.


Investments of $19 were made in the  Asia-Pacific  Division in 1997. The Company
expanded  its  beverage  can and  end  capacity  in  Huizhou,  China,  completed
construction  of a  PET  plant  in  Beijing,  China,  and  modernized  food  can
operations in Thailand.

The  Company  expects  its  capital  expenditures  in 1998 to  approximate  $475
including  joint-venture partner  contributions  estimated at approximately $20.
The Company  plans to continue  capital  expenditure  programs  designed to take
advantage of technological  developments which enhance  productivity and contain
costs, as well as those that provide growth opportunities. Capital expenditures,
exclusive of potential  acquisitions,  during the five-year  period 1998 through
2002 are expected to approximate  $2,250,  including $150 being contributed from
joint-venture partners. Cash flow from operating activities will provide support
for these  expenditures;  however,  depending  upon the Company's  evaluation of
growth  opportunities and other existing market  conditions,  external financing
may be required from time to time.

ENVIRONMENTAL MATTERS

The  Company  has  adopted a  Corporate  Environmental  Protection  Policy.  The
implementation  of  this  Policy  is a  primary  management  objective  and  the
responsibility of each employee of the Company.  The Company is committed to the
protection  of human health and the  environment,  and is  operating  within the
increasingly  complex  laws  and  regulations  of  national,  state,  and  local
environmental  agencies or is taking  action aimed at assuring  compliance  with
such laws and regulations.  Environmental  considerations are among the criteria
by which the Company evaluates projects, products, processes and purchases, and,
accordingly,  does not expect compliance with these laws and regulations to have
a material effect on the Company's  competitive  position,  financial condition,
results of operations or capital expenditures.

The Company is dedicated to a long-term environmental protection program and has
initiated and implemented many pollution  prevention  programs with the emphasis
on source  reduction.  The Company  continues  to reduce the amount of metal and
plastic  used in the  manufacture  of steel,  aluminum  and  plastic  containers
through  "lightweighting"  programs.  The Company not only  recycles  nearly 100
percent of scrap aluminum,  steel,  plastic and copper used in its manufacturing
processes, but through its Nationwide Recyclers subsidiary, is directly involved
in post-consumer aluminum,  steel and plastics recycling.  Many of the Company's
programs for pollution  prevention  reduce operating costs and improve operating
efficiencies.

The Company has been  identified by the EPA as a potentially  responsible  party
(along  with  others,  in most cases) at a number of sites.  Estimated  remedial
expenses  for active  projects  are  recognized  in  accordance  with  generally
accepted  accounting   principles  governing  probability  and  the  ability  to
reasonably  estimate future costs. Actual expenditures for remediation were $4.3
during 1997 and $6.0 in 1996.  The Company's  balance sheet  reflects  estimated
gross remediation  liabilities of $39.4 and $53.6 at December 31, 1997 and 1996,
respectively,  and  estimated  recoveries  related to  indemnification  from the
sellers of acquired companies and the Company's  insurance carriers of $18.5 and
$16.6 at December 31, 1997 and 1996, respectively.

Environmental exposures are difficult to assess for numerous reasons,  including
the   identification   of  new  sites,   advances  in  technology,   changes  in
environmental  laws and  regulations  and their  application,  the  scarcity  of
reliable data  pertaining to identified  sites,  the difficulty in assessing the
involvement  of and the financial  capability of other  potentially  responsible
parties and the time periods  (sometimes  lengthy)  over which site  remediation
occurs.  It is possible  that some of these  matters  (the  outcome of which are
subject  to  various  uncertainties)  may be  decided  unfavorably  against  the
Company. It is however, the opinion of Company management, after consulting with
counsel,  that any unfavorable  decision will not have a material adverse effect
on the Company's financial position, cash flows or results of operations.

COMMON STOCK AND OTHER SHAREHOLDERS' EQUITY

Shareholders' equity was $3,529.2 at December 31, 1997 as compared with $3,563.3
at December 31,  1996.  The  decrease in 1997 equity is due to  adjustments  for
currency translation in non-U.S. subsidiaries

                                      -20-
<PAGE>
                         Crown Cork & Seal Company, Inc.


of $167.5,  dividends  declared on common stock of $128.4 and the  repurchase of
342,414  common  shares  offset by $270.6 of  earnings in the  business  and the
issuance of 329,406  common shares for various stock purchase and savings plans.
The book value of each share of common  stock at December 31, 1997 was $25.26 as
compared to $25.50 at December 31, 1996.

In 1997, the return on average shareholders' equity before restructuring and the
1997  cumulative  effect of  accounting  change was 9.7% as compared to 12.6% in
1996.  Including the  restructuring  charges,  but excluding the 1997 cumulative
effect of accounting change, the return on average shareholders' equity was 8.5%
in 1997 compared to 11.3% in 1996.

The Board of  Directors  has  approved  resolutions  authorizing  the Company to
repurchase shares of its common stock to meet the requirements for the Company's
various stock purchase and savings plans.  The Company  acquired  342,414 shares
and  7,401  shares  of  common  stock  in 1997  and  1995  for  $17.2  and  $.3,
respectively. There were no stock repurchases during 1996.

The Company declared cash dividends totaling $128.4 and $128.2 in 1997 and 1996,
respectively, representing a quarterly dividend of $.25 per common share.

Upon  the  completion  of  the  CMB  acquisition,   the  Company's  shareholders
authorized  the Company to issue up to an additional  380 million  shares of its
common stock, up to 30 million shares of additional preferred stock ("additional
preferred") and up to 50 million shares of acquisition preferred.  In connection
with the completion of the CMB acquisition,  the Company,  on February 26, 1996,
issued  approximately  37.3 million  shares of its common stock and 12.4 million
shares  of  its  acquisition  preferred.  Subsequent  to  the  issuance  of  the
acquisition preferred,  the number of authorized shares of acquisition preferred
was reduced and no further shares of acquisition  preferred shall be issued. The
acquisition  preferred,  additional  preferred,  and shareholder rights plan are
more fully described in Note N to the Consolidated Financial Statements.

During 1996 the Company  filed a  Registration  Statement to register 10 million
shares of its common stock for  implementation  of a Dividend  Reinvestment  and
Stock Purchase Plan ("Plan"). The Plan covers all registered shareholders of the
Company's common stock as well as those beneficial owners who have either become
shareholders of record by having shares transferred into their name or by making
arrangements with their broker or other nominees to participate on their behalf.
During 1997 and 1996, 8,105 and 3,527 shares, respectively, of common stock were
issued under the Plan.

At December 31, 1997, common shareholders of record numbered 5,763 compared with
5,736 at the end of 1996.  Total common shares  outstanding  were 128,398,543 at
December  31,  1997  compared  to  128,410,797  at  December  31,  1996.   Total
acquisition  preferred  shares  outstanding were 12,431,793 at December 31, 1997
compared to 12,432,622 at December 31, 1996.

INFLATION

Inflation  has not had a  significant  impact on the Company over the past three
years due to strong cash flow from operations. The Company continues to maximize
cash  flow  through  programs  designed  for  cost   containment,   productivity
improvements, and capital spending. Management does not expect inflation to have
a significant impact on the results of operations or financial  condition in the
foreseeable future.

FUTURE ACCOUNTING CHANGES

In June 1997,  the Financial  Accounting  Standards  Board issued  Statements of
Financial  Accounting Standards No. 130, "Reporting  Comprehensive  Income", No.
131,  "Disclosures about Segments of an Enterprise and Related  Information" and
No.  132,  "Employers'   Disclosure  about  Pensions  and  Other  Postretirement
Benefits."  The  Company  will adopt  these new  accounting  standards  in 1998.
Adoption of these accounting standards are for disclosure purposes only and will
not have an adverse effect on the Company's  financial  position,  cash flows or
results of operations.

                                      -21-
<PAGE>
                         Crown Cork & Seal Company, Inc.


YEAR 2000

The Company  continues to assess its exposure  related to the impact of the Year
2000  date  issue.  The Year  2000 date  issue  arises  as a result of  computer
programs being written using two digits (rather than four) to identify a year in
a date field. Company programs which have date-sensitive  software may recognize
a date using "00" as the year 1900 rather than the year 2000, which could result
in miscalculations  or system failures.  The Company's  strategic  financial and
operational  systems are being reviewed and, where required,  detailed plans are
being  developed and  implemented to identify,  correct,  reprogram and test for
Year 2000  compliance.  While final cost estimates are not complete,  management
does not expect these costs will have a material adverse effect on the Company's
financial position,  cash flows or results of operations.  However,  the Company
may be  adversely  affected  by the Year 2000  date  issue if the  Company,  its
suppliers or customers are unable to resolve this issue successfully. Management
continues to assess these risks and dedicate the necessary resources in order to
reduce exposure to the Company.

FORWARD LOOKING STATEMENTS

Statements  included  in  Management's  Discussion  and  Analysis  of Results of
Operations and Financial Condition and the discussion of the restructuring plans
in Note K to the  Consolidated  Financial  Statements  included  in this  Annual
Report,  which are not historical  facts  (including  any statements  concerning
plans  and   objectives  of  management   for  future   operations  or  economic
performance, or assumptions related thereto), are "forward-looking  statements",
within the meaning of the federal securities laws. In addition,  the Company and
its  representatives may from time to time make other oral or written statements
which are also "forward-looking statements".

These forward-looking  statements are made based upon management's  expectations
and beliefs concerning future events impacting the Company and therefore involve
a number of risks and uncertainties.  Management  cautions that  forward-looking
statements are not  guarantees  and that actual results could differ  materially
from those expressed or implied in the forward-looking statements.

Important factors that could cause the actual results of operations or financial
condition of the Company to differ include,  but are not necessarily limited to,
the  Company's  ability to continue  integration  of CMB's  operations  into its
existing operations and to realize synergistic benefits from the CMB acquisition
(including effective raw material procurement, elimination of redundant selling,
general and  administrative  functions,  and global  product  offerings) and the
consolidation  and  restructuring of the combined  operations and the ability to
realize cost savings from its  restructuring  programs;  changes in raw material
pricing (including  aluminum can sheet, steel tinplate,  plastic resin, inks and
coatings) and the Company's ability to pass raw material price increases through
to its  customers or to otherwise  manage these  commodity  pricing  risks;  the
Company's  ability to generate  significant  free cash to invest in its business
and to  maintain  appropriate  debt  levels;  the  Company's  ability to realize
efficient capacity  utilization and inventory levels and to innovate new designs
and  technologies  for its  products  in a  cost-effective  manner;  changes  in
consumer  preferences for different packaging products;  competitive  pressures,
including  new  product  developments  or changes in  competitors'  pricing  for
products;   changes  in  governmental   regulations  or  enforcement  practices,
especially  with  respect  to  environmental,  health  and  safety  matters  and
restrictions as to foreign investment or operation; weather conditions;  changes
in U.S. or international economic or political conditions, such as, inflation or
fluctuations in interest or foreign  exchange rates; the costs and other effects
of  legal  and   administrative   cases   and   proceedings,   settlements   and
investigations;  and labor relations and workforce and social costs. Some of the
factors  noted above are  discussed  elsewhere  in this Annual  Report and prior
Company  filings with the Securities  and Exchange  Commission  (the "SEC").  In
addition,  other factors have been or may be discussed  from time to time in the
Company's SEC filings.

While the Company  periodically  reassesses  material  trends and  uncertainties
affecting  the  Company's  results of  operations  and  financial  condition  in
connection  with the  preparation  of  Management's  Discussion  and Analysis of
Results of  Operations  and  Financial  Condition  and  certain  other  sections
contained in the  Company's  quarterly,  annual or other  reports filed with the
SEC,  the  Company   does  not  intend  to  review  or  revise  any   particular
forward-looking statement in light of future events.

                                      -22-
<PAGE>
                         Crown Cork & Seal Company, Inc.


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

         Financial Statements

                Report of Independent Accountants...................         24

                Consolidated Statements of Income...................         25

                Consolidated Balance Sheets.........................         26

                Consolidated Statements of Cash Flows...............         27

                Consolidated Statements of Shareholders' Equity.....         28

                Notes to Consolidated Financial Statements..........         29

         Financial Statement Schedule

         Schedule II - Valuation and Qualifying Accounts
             and Reserves...........................................         49



                                      -23-
<PAGE>
                         Crown Cork & Seal Company, Inc.



                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of Crown Cork & Seal Company, Inc.

In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects,  the financial position of Crown
Cork & Seal Company,  Inc. and its  subsidiaries  at December 31, 1997 and 1996,
and the results of their  operations  and their cash flows for each of the three
years in the period ended  December  31,  1997,  in  conformity  with  generally
accepted   accounting   principles.   These   financial   statements   are   the
responsibility of the Company's management;  our responsibility is to express an
opinion on these  financial  statements  based on our audits.  We conducted  our
audits of these  statements  in  accordance  with  generally  accepted  auditing
standards which require that we plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall financial statement  presentation.  We believe our audits
provide a reasonable basis for the opinion expressed above.




PRICE WATERHOUSE LLP

Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
March 16, 1998



                                      -24-
<PAGE>
                         Crown Cork & Seal Company, Inc.


CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)

<TABLE>
<CAPTION>
                                                                     1997             1996              1995
<S>                                                               <C>               <C>              <C>
Net sales.................................................         $8,494.6          $8,331.9         $5,053.8
                                                                   --------          --------         --------

Costs, expenses and other income
   Cost of products sold (excluding
     depreciation and amortization).......................          6,707.7           6,732.5          4,319.4
   Depreciation and amortization..........................            540.0             495.9            256.3
   Selling and administrative expense.....................            413.6             387.2            139.3
   Provision for restructuring . . Note K.................             66.6              39.8            102.7
   Gain on sale of assets.................................            (38.1)            (23.8)            (8.4)
   Interest expense, net of interest income...............            339.9             305.8            136.1
   Translation and exchange adjustments...................              7.9             (36.5)            (1.1)
                                                                   --------          --------         --------
                                                                    8,037.6           7,900.9          4,944.3
                                                                   --------          --------         --------

Income before income taxes and cumulative effect
   of accounting change...................................            457.0             431.0            109.5
   Provision for income taxes . . Note Q..................            147.7             134.4             24.9
                                                                   --------          --------         --------

Income from operations before cumulative effect
   of accounting change...................................            309.3             296.6             84.6

   Minority interests, net of equity earnings.............             (7.7)            (12.6)            (9.7)
                                                                   --------          --------         --------

Net income before cumulative effect
   of accounting change...................................            301.6             284.0             74.9

   Cumulative effect of accounting change,
     net of tax . . Note B................................             (7.6)
                                                                   --------          --------         --------

Net income................................................            294.0             284.0             74.9

Preferred stock dividends . . Note N......................             23.4              19.8
                                                                   --------          --------         --------

Net income available to common shareholders...............         $  270.6          $  264.2         $   74.9
                                                                   ========          ========         ========
---------------------------------------------------------------------------------------------------------------
Average common share data:

Earnings per average common share . . Note O

   Basic -    before cumulative effect of
              accounting change...........................         $   2.17          $   2.16         $    .83
                                                                   ========          ========         ========

              after cumulative effect of
              accounting change...........................         $   2.11
                                                                   ========          ========         ========

   Diluted -  before cumulative effect of
              accounting change...........................         $   2.15          $   2.14         $    .83
                                                                   ========          ========         ========

              after cumulative effect of
              accounting change...........................         $   2.10
                                                                   ========          ========         ========

Dividends.................................................         $   1.00          $   1.00
                                                                   ========          ========         ========
---------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -25-
<PAGE>
                         Crown Cork & Seal Company, Inc.


CONSOLIDATED BALANCE SHEETS
(in millions, except share data)

<TABLE>
<CAPTION>
December 31                                                                       1997                  1996
<S>                                                                            <C>                   <C>
Assets
Current assets
   Cash and cash equivalents...............................................    $   205.6             $   160.4
   Receivables . . Note C..................................................      1,353.5               1,349.3
   Inventories . . Note D..................................................      1,387.5               1,423.8
   Prepaid expenses and other current assets...............................        200.6                 358.4
                                                                               ---------             ---------
     Total current assets..................................................      3,147.2               3,291.9
                                                                               ---------             ---------
Long-term notes and receivables............................................         65.0                  82.2
Investments................................................................         89.5                  90.3
Goodwill, net of amortization..............................................      4,625.2               4,809.9
Property, plant and equipment . . Note E...................................      3,663.9               3,717.3
Other non-current assets...................................................        714.9                 598.6
                                                                               ---------             ---------
     Total.................................................................    $12,305.7             $12,590.2
                                                                               =========             =========

Liabilities & Shareholders' Equity
Current liabilities
   Short-term debt . . Note L..............................................    $ 1,385.4             $ 1,105.8
   Current portion of long-term debt . . Note L............................        399.3                  48.5
   Accounts payable and accrued liabilities . . Note F.....................      2,236.7               2,460.9
   United States and foreign income taxes..................................         27.9                  47.3
                                                                               ---------             ---------
     Total current liabilities.............................................      4,049.3               3,662.5
                                                                               ---------             ---------
Long-term debt, excluding current maturities . . Note L....................      3,301.4               3,923.5
Other non-current liabilities . . Note G...................................        431.3                 458.2
Postretirement and pension liabilities . . Note R..........................        711.7                 738.9
Minority interests.........................................................        282.8                 243.8

Shareholders' equity
   Preferred stock, 4.5% cumulative convertible,
     par value: $41.8875; authorized: 12,432,622 . . Note N
     1997 - outstanding 12,431,793.........................................        520.8
     1996 - outstanding 12,432,622.........................................                              520.8
   Additional preferred stock, authorized: 30,000,000;
     none issued . . Note N
   Common stock, par value: $5.00; authorized:
     500,000,000 . . Note N
     1997 - issued 155,792,386.............................................        779.0
     1996 - issued 155,791,632.............................................                              779.0
   Additional paid-in capital..............................................      1,560.7               1,567.3
   Retained earnings.......................................................      1,327.2               1,185.0
   Minimum pension liability . . Note R....................................        (16.9)                (14.8)
   Cumulative translation adjustment.......................................       (504.6)               (337.1)
   Treasury stock (1997 - 27,393,843 shares; 1996 -
     27,380,835 shares)....................................................       (137.0)               (136.9)
                                                                               ---------             ---------
     Total shareholders' equity............................................      3,529.2               3,563.3
                                                                               ---------             ---------
     Total.................................................................    $12,305.7             $12,590.2
                                                                               =========             =========
-----------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -26-
<PAGE>
                         Crown Cork & Seal Company, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<TABLE>
<CAPTION>
                                                                     1997             1996              1995
<S>                                                               <C>               <C>              <C>
Cash flows from operating activities
   Net income ..................................................  $   294.0         $   284.0        $    74.9
   Adjustments to reconcile net income to
     net cash provided by operating activities:
       Depreciation and amortization............................      540.0             495.9            256.3
       Provision for restructuring..............................       43.3              31.7             67.0
       Foreign currency gain....................................                        (42.1)
       Gain on sale of assets...................................      (27.6)            (15.5)            (5.5)
       Deferred income taxes....................................       92.9              91.7             (3.2)
   Changes in assets and liabilities, net of businesses acquired:
     Receivables................................................     (115.0)            247.2            (24.7)
     Inventories................................................      (69.8)             20.3            (55.1)
     Accounts payable, accrued and other liabilities............     (219.5)           (193.8)          (172.5)
     Other, net.................................................     (136.2)             (8.2)            27.4
                                                                  ---------         ---------        ---------
         Net cash provided by operating activities..............      402.1             911.2            164.6
                                                                  ---------         ---------        ---------

Cash flows from investing activities
   Capital expenditures.........................................     (514.8)           (631.2)          (433.5)
   Acquisition of businesses, net of cash acquired..............      (10.0)         (1,537.5)           (14.2)
   Proceeds from sale of property, plant and equipment..........       43.3              32.6             26.8
   Proceeds from sale of businesses.............................       90.0             107.9
   Other, net...................................................       (6.4)             (6.5)           (17.1)
                                                                  ---------         ---------        ---------
         Net cash used for investing activities.................     (397.9)         (2,034.7)          (438.0)
                                                                  ---------         ---------        ---------

Cash flows from financing activities
   Proceeds from long-term debt.................................      123.7           2,075.1            365.4
   Payments of long-term debt...................................     (268.5)           (303.3)          (209.0)
   Net change in short-term debt................................      359.5            (423.3)            99.8
   Dividends paid...............................................     (151.8)           (145.4)
   Common stock:
     Repurchased for treasury...................................      (17.2)                               (.3)
     Issued under various employee benefit plans................       10.5              11.0             21.2
   Minority contributions, net of dividends paid................       11.0               3.7             21.5
                                                                  ---------         ---------        ---------
         Net cash provided by financing activities..............       67.2           1,217.8            298.6
                                                                  ---------         ---------        ---------

Effect of exchange rate changes on cash
   and cash equivalents.........................................      (26.2)             (2.0)             (.6)
                                                                  ---------         ---------        ---------

Net change in cash and cash equivalents.........................       45.2              92.3             24.6

Cash and cash equivalents at January 1..........................      160.4              68.1             43.5
                                                                  ---------         ---------        ---------

Cash and cash equivalents at December 31........................  $   205.6         $   160.4        $    68.1
                                                                  =========         =========        =========
-----------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -27-
<PAGE>
                         Crown Cork & Seal Company, Inc.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in millions, except share data)

<TABLE>
<CAPTION>
                                                                                           Minimum   Cumulative
                                              Preferred    Common     Paid-In   Retained   Pension   Translation  Treasury
                                                Stock       Stock     Capital   Earnings  Liability  Adjustment     Stock    Total
<S>                                            <C>        <C>        <C>        <C>        <C>       <C>        <C>      <C>
Balance December 31, 1994...................               $592.5     $168.4     $974.1     ($48.1)   ($175.9)   ($145.8) $ 1,365.2
Net income - 1995...........................                                       74.9                                        74.9
Stock repurchased:
     7,401 shares...........................                             (.3)                                                   (.3)
Stock issued under stock option
     and employee savings plans:
     1,298,175 shares.......................                            14.6                                         6.6       21.2
Minimum pension liability
     adjustment.............................                                                  16.0                             16.0
Translation adjustments.....................                                                            (15.8)                (15.8)
                                                ------     ------   --------   --------     ------    -------    -------   --------

Balance December 31, 1995...................                592.5      182.7    1,049.0      (32.1)    (191.7)    (139.2)   1,461.2

Net income - 1996...........................                                      284.0                                       284.0
Stock issued in business
     combination:
     Common: 37,300,818 shares..............                186.5    1,375.9                                                1,562.4
     Preferred: 12,432,622 shares...........    $520.8                                                                        520.8
Dividends declared:
     Common.................................                                     (128.2)                                     (128.2)
     Preferred..............................                                      (19.8)                                      (19.8)
Stock issued under stock option
     and employee savings plans:
     459,165 shares.........................                             8.7                                         2.3       11.0
Minimum pension liability
     adjustment.............................                                                  17.3                             17.3
Translation adjustments.....................                                                           (145.4)               (145.4)
                                                ------     ------   --------   --------     ------    -------    -------   --------

Balance December 31, 1996...................     520.8      779.0    1,567.3    1,185.0      (14.8)    (337.1)    (136.9)   3,563.3

Net income - 1997...........................                                      294.0                                       294.0
Stock repurchased:
     342,414 shares.........................                           (15.5)                                       (1.7)     (17.2)
Dividends declared:
     Common.................................                                     (128.4)                                     (128.4)
     Preferred..............................                                      (23.4)                                      (23.4)
Stock issued under stock option
     and employee savings plans:
     329,406 shares.........................                             8.9                                         1.6       10.5
Minimum pension liability
     adjustment.............................                                                  (2.1)                            (2.1)
Translation adjustments.....................                                                           (167.5)               (167.5)
                                                ------     ------   --------   --------     ------    -------    -------   --------
Balance December 31, 1997...................    $520.8     $779.0   $1,560.7   $1,327.2     ($16.9)   ($504.6)   ($137.0)  $3,529.2
                                                ======     ======   ========   ========     ======    =======    =======   ========
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      -28-
<PAGE>
                         Crown Cork & Seal Company, Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share, employee, shareholder and statistical data)

A.   Summary of Significant Accounting Policies

Business and Principles of Consolidation
The consolidated  financial statements include the accounts of Crown Cork & Seal
Company, Inc. (the "Company") and its wholly-owned and majority-owned subsidiary
companies.  The Company  manufactures  and sells  metal and plastic  containers,
metal and plastic closures,  crowns and canmaking equipment.  These products are
manufactured  in the Company's  plants both within and outside the United States
and are sold through the Company's sales  organization to the soft drink,  food,
citrus, brewing, household products, personal care and various other industries.
The  financial  statements  have been  prepared  in  conformity  with  generally
accepted accounting principles and reflect management estimates and assumptions.
Actual results could differ from those estimates,  impacting reported results of
operations and financial  position.  All significant  intercompany  accounts and
transactions are eliminated in consolidation.  Investments in joint ventures and
other companies in which the Company does not have control,  but has the ability
to  exercise  significant   influence  over  operating  and  financial  policies
(generally greater than 20% ownership),  are accounted for by the equity method.
Other investments are carried at cost.

Foreign Currency Translation
For non-U.S. subsidiaries which operate in a local currency environment,  assets
and  liabilities are translated  into U.S.  dollars at year-end  exchange rates.
Income and expense items are  translated at average  exchange  rates  prevailing
during the year. Translation  adjustments for these subsidiaries are accumulated
in a separate component of Shareholders' Equity. For non-U.S. subsidiaries which
operate in U.S. dollars (functional  currency) or whose economic  environment is
highly inflationary, local currency inventories and plant and other property are
translated into U.S. dollars at approximate rates prevailing when acquired;  all
other  assets  and  liabilities  are  translated  at  year-end  exchange  rates.
Inventories  charged  to  cost of  sales  and  depreciation  are  remeasured  at
historical  rates;  all other income and expense items are translated at average
exchange rates  prevailing  during the year.  Gains and losses which result from
remeasurement are included in earnings.

Cash and Cash Equivalents
Cash equivalents  represent  investments with maturities of three months or less
from the time of purchase and are carried at cost which  approximates fair value
because of the short maturity of those instruments.

Inventory Valuation
Inventories  are stated at the lower of cost or market,  with cost for  domestic
metal, plastic container,  crown and closure inventories  principally determined
under  the  last-in,   first-out  ("LIFO")  method.  Non-U.S.   inventories  are
principally determined under the average cost method.

Goodwill
Goodwill,  representing  the  excess  of the  cost  over  the net  tangible  and
identifiable intangible assets of acquired businesses,  is stated at cost and is
amortized,  principally  on a  straight-line  basis,  over the estimated  future
periods to be  benefited  (primarily  40 years).  On an annual basis the Company
reviews the  recoverability  of  goodwill  based  primarily  upon an analysis of
undiscounted cash flows from the acquired businesses.  Accumulated  amortization
amounted to $333.8 and $221.6 at December 31, 1997 and 1996, respectively.

Property, Plant and Equipment
Property,  plant  and  equipment  ("PP&E")  is  carried  at  cost  and  includes
expenditures for new facilities and those costs which substantially increase the
useful lives of existing PP&E. Cost of significant  assets includes  capitalized
interest incurred during the construction and development  period.  Maintenance,
repairs and minor renewals are expensed as incurred. When properties are retired
or otherwise disposed, the

                                      -29-
<PAGE>
                         Crown Cork & Seal Company, Inc.


related costs and  accumulated  depreciation  are eliminated from the respective
accounts and any profit or loss on  disposition  is  reflected in income.  Costs
assigned to PP&E of acquired businesses are based on estimated fair value at the
date of acquisition.

Depreciation  and  amortization  are  provided  on  a  straight-line  basis  for
financial  reporting purposes and an accelerated basis for tax purposes over the
estimated  useful  lives of the assets.  The range of estimated  economic  lives
assigned  to  each  significant  fixed  asset  category  are  as  follows:  Land
Improvements--25;   Buildings  and  Building   Improvements--25   to  40;  Other
Depreciable Assets--3 to 14.

Impairment of Long-Lived Assets
In the event that facts and  circumstances  indicate that the cost of long-lived
assets may be impaired,  an evaluation of recoverability would be performed.  If
an  evaluation  is  required,  the  estimated  future  undiscounted  cash  flows
associated  with the asset would be compared to the asset's  carrying  amount to
determine whether a write-down to market value is required.

Treasury Stock
Treasury stock is reported at par value and constructively  retired.  The excess
of fair value over par value is first  charged to paid-in  capital,  if any, and
then to retained earnings.

Research and Development
Research,  development  and  engineering  expenditures  which amounted to $53.1,
$51.5 and $22.3 in 1997, 1996 and 1995, respectively,  are expensed as incurred.
Substantially  all engineering  and development  costs are related to developing
new products or designing significant improvements to existing products.

Earnings Per Share
The Financial  Accounting Standards Board ("FASB") issued Statement of Financial
Accounting  Standards No. 128,  Earnings Per Share ("SFAS No. 128"), in February
1997.  SFAS No. 128  simplifies  the procedure for computing  earnings per share
("EPS") and  replaces  primary and fully  diluted  earnings per share with basic
("Basic")  and diluted  ("Diluted")  earnings per share.  Basic EPS excludes all
potentially  dilutive securities and is computed by dividing income available to
common  shareholders by the weighted average number of common shares outstanding
during the period.  Diluted EPS includes the assumed  exercise and conversion of
potentially  dilutive  securities,   including  stock  options  and  convertible
preferred stock, in periods when they are not  anti-dilutive,  otherwise,  it is
the  same as  Basic  EPS.  The  adoption  of SFAS No.  128 has  resulted  in the
restatement  of  earnings  per  share  for all prior  periods  presented  in the
consolidated  financial  statements and notes thereto.  See Note O for a further
discussion and presentation of the computations required by the new Standard.

Reclassifications
Certain  reclassifications  of prior  years'  data  have  been  made to  improve
comparability.

--------------------------------------------------------------------------------
B.   Accounting Change

In the fourth quarter the Company  adopted the provisions of the Emerging Issues
Task Force  Bulletin  97-13 ("EITF  97-13"),  "Accounting  for Costs Incurred in
Connection  with a  Consulting  Contract or an Internal  Project  that  Combines
Business Process Reengineering and Information Technology Transformation".  EITF
97-13 requires that the costs of business process reengineering  activities that
are part of systems  development  projects  be  expensed  as they are  incurred.
Unamortized costs that were previously capitalized,  through September 30, 1997,
were written off as a cumulative effect of an accounting  change.  This resulted
in an after-tax charge of $7.6 or $.05 per diluted share.
--------------------------------------------------------------------------------

                                      -30-
<PAGE>
                         Crown Cork & Seal Company, Inc.


C. Receivables

                                                          1997           1996

Accounts and notes receivable...........................$1,150.1       $1,266.2
Less: allowance for possible losses.....................   (44.5)         (92.0)
                                                        --------       --------
     Net trade receivables.............................. 1,105.6        1,174.2
Miscellaneous receivables...............................   247.9          175.1
                                                        --------       --------
                                                        $1,353.5       $1,349.3
                                                        ========       ========

The  Company has  agreements  to sell  certain of its  non-U.S.  trade  accounts
receivable.  At December 31, 1997 approximately $149 ($134 at December 31, 1996)
of  receivables  had been sold with  limited  recourse  and are  reflected  as a
reduction of trade receivables. Related fees and discounting expense amounted to
$1.4 in 1997 and $5.0 in 1996 and are included in interest expense.

--------------------------------------------------------------------------------
D. Inventories

                                                            1997          1996

Finished goods.....................................       $  560.5     $  529.8
Work in process....................................          187.3        210.7
Raw materials......................................          467.6        550.1
Supplies and repair parts..........................          172.1        133.2
                                                          --------     --------
                                                          $1,387.5     $1,423.8
                                                          ========     ========

Approximately  29% and 34% of  worldwide  inventories  at December  31, 1997 and
1996,  respectively,  were stated on the LIFO method of inventory valuation. Had
average  cost  (which  approximates  replacement  cost)  been  applied  to  such
inventories  at December 31, 1997 and 1996,  total  inventories  would have been
$25.3 and $18.5 higher, respectively.
--------------------------------------------------------------------------------
E. Property, Plant and Equipment

                                                           1997           1996

Buildings and improvements............................   $  925.9      $  886.4
Machinery and equipment...............................    4,127.2       3,744.0
                                                         --------      --------
                                                          5,053.1       4,630.4
Less: accumulated depreciation and amortization.......   (1,921.0)     (1,537.9)
                                                         --------      --------
                                                          3,132.1       3,092.5
Land and improvements.................................      207.9         258.2
Construction in progress..............................      323.9         366.6
                                                         --------      --------
                                                         $3,663.9      $3,717.3
                                                         ========      ========
--------------------------------------------------------------------------------

                                      -31-
<PAGE>
                         Crown Cork & Seal Company, Inc.


F.   Accounts Payable and Accrued Liabilities

                                                          1997         1996

Trade accounts payable................................  $1,342.8     $1,377.0
Interest..............................................      65.5         78.2
Salaries, wages and other employee benefits...........     254.9        214.5
Environmental.........................................       4.5          6.7
Restructuring.........................................     151.9        243.3
Deferred taxes........................................      83.0        101.5
Other.................................................     334.1        439.7
                                                        --------     --------
                                                        $2,236.7     $2,460.9
                                                        ========     ========
--------------------------------------------------------------------------------
G. Other Non-Current Liabilities

                                                           1997         1996

Postemployment benefits...............................    $ 36.5       $ 36.3
Environmental.........................................      34.9         46.9
Restructuring.........................................       3.4         16.4
Deferred taxes........................................     304.4        304.0
Other.................................................      52.1         54.6
                                                          ------       ------
                                                          $431.3       $458.2
                                                          ======       ======

Other non-current  assets include $18.5 and $16.6 at December 31, 1997 and 1996,
respectively, for estimated recoveries related to environmental liabilities.

--------------------------------------------------------------------------------
H. Acquisitions

On March 5, 1997, the Company  acquired Golden Aluminum Company ("GAC") from ACX
Technologies,  Inc. The purchase  price was $70 which included an immediate cash
payment  of $10 and a deferred  payment  of $60 due within two years.  Under the
terms of the purchase,  the Company holds a put option enabling it to return GAC
to ACX if it chooses to exercise the option during the next two years.

Effective  February  22,1996 the Company  acquired  CarnaudMetalbox  ("CMB") for
approximately $3,986; including $1,903 in cash, $1,562 in Crown common stock and
$521 in Crown 4.5% cumulative  convertible  preferred stock. The cash portion of
the  consideration  was  financed  through  a  Revolving  Credit  and Term  Loan
Agreement.   This  agreement  was  subsequently  refinanced.   See  Note  L  and
Management's Discussion and Analysis for further details on the refinancing. The
Company also acquired, in separate transactions, the assets of a tooling company
in Pennsylvania  for  approximately  $1 in cash and the assets of a coil cutting
and  coating  facility  in  California  for   approximately  $5  in  cash.  Both
transactions were financed through cash from operations.

During 1995, the Company  acquired,  in separate  transactions,  the assets of a
plastics  recycling  company in  Florida  for  approximately  $3 in cash and the
assets of a beverage can manufacturer in Huizhou, China for approximately $11 in
cash. Both transactions were financed through cash from operations.

For financial reporting purposes,  all of the acquisitions above were treated as
purchases. An excess purchase price of approximately $3,800 has been determined,
based  upon the fair  values of  assets  acquired  and  liabilities  assumed  in
connection  with  the  above   acquisitions.   The  operating  results  of  each
acquisition  are  included  in   consolidated   net  income  from  the  date  of
acquisition.

                                      -32-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The following represents the non-cash impact of the acquisitions noted above:

                                                1997         1996        1995
Fair value of assets acquired,
     including goodwill ...............     $     70.0    $  7,995.2   $  14.2
Liabilities assumed ...................                     (4,003.5)
Note payable ..........................          (60.0)
Issuance of common stock ..............                     (1,562.4)
Issuance of 4.5% cumulative convertible
     preferred stock ..................                       (520.8)
                                            ----------    ----------   -------
Cash paid .............................     $     10.0    $  1,908.5   $  14.2
                                            ==========    ==========   =======

--------------------------------------------------------------------------------
I.   Lease Commitments

The Company  and its  subsidiaries  lease  manufacturing,  warehouse  and office
facilities and certain  equipment,  a significant  portion of these  obligations
having been assumed with the acquisition of CMB. Certain  non-cancelable  leases
are  classified as capital  leases,  and the leased assets are included in PP&E.
Other long-term non-cancelable leases are classified as operating leases and are
not capitalized. The amount of capital leases reported as capital assets, net of
accumulated amortization, at December 31, 1997 was $45.9.

Under  long-term  operating  leases,  minimum  annual rentals are $27.0 in 1998,
$19.6 in 1999,  $13.6 in 2000, $10.7 in 2001, $9.0 in 2002, and a total of $48.9
for 2003 and thereafter.  Under long-term capital leases, minimum annual rentals
are $11.2 in 1998,  $10.7 in 1999, $6.8 in 2000, $6.0 in 2001, $5.4 in 2002, and
a total of $9.5 for 2003 and  thereafter.  The present  value of future  minimum
payments on capital  leases is $42.9 with the current  portion of the obligation
being $9.0.  Rental expense (net of sublease rental income of $3.7 in 1997, $5.5
in 1996 and $.8 in 1995)  amounted to $37.5 in 1997,  $35.1 in 1996 and $22.7 in
1995.

--------------------------------------------------------------------------------
J.   Commitments and Contingent Liabilities

The Company has various  commitments to purchase  materials and supplies as part
of the  ordinary  conduct of  business.  Such  commitments  are not at prices in
excess of current market.

The  Company's  basic raw  materials for the products in its Metals and Plastics
packaging segments are tinplate, aluminum and resins, all of which are purchased
from multiple  sources.  The Company is subject to material  fluctuations in the
cost of these raw materials and has  previously  adjusted its selling  prices to
reflect these movements.  There can be no assurance,  however,  that the Company
will be able to recover  fully any  increases  or  fluctuations  in raw material
costs from its customers.

The Company is subject to various  lawsuits  and claims with  respect to matters
such as  governmental  regulations  and other actions  arising out of the normal
course of business.  While the impact on future financial results is not subject
to reasonable  estimation because  considerable  uncertainty exists,  management
believes, after consulting with counsel, that the ultimate liabilities resulting
from such  lawsuits  and claims  will not  materially  affect  the  consolidated
results or financial position of the Company.
--------------------------------------------------------------------------------

                                      -33-
<PAGE>
                         Crown Cork & Seal Company, Inc.


K.   Restructuring

During the third quarter of 1997, the Company  provided $66.6 ($43.3 after taxes
or $.31 per diluted share) for the costs  associated  with a plan to improve the
structure of its polyethylene  terephthalate  ("PET") plastic beverage container
business in the United  States by closing  and  reorganizing  six  manufacturing
locations in its CONSTAR  subsidiary  along with other,  non-PET,  restructuring
activities,  primarily in Europe. Annual savings relating to these actions, when
fully  implemented,  are  expected to be  approximately  $20.0 ($.14 per diluted
share). The Company expects to maintain its existing manufacturing capacity, and
by relocating equipment among its remaining larger facilities,  meet all current
and prospective volume requirements.  The Company records  restructuring charges
against  operations  and  provides  a  reserve  based  on the  best  information
available at the time that the decision is made to  restructure.  The balance of
restructuring reserves (excluding the write-down of assets which is reflected as
a reduction of the related asset account) is included  within  accounts  payable
and accrued liabilities.

The  Company  made an  assessment  of the  restructuring  and  exit  costs to be
incurred   relative  to  the  acquisition  of  CMB.  Affected  by  the  plan  of
restructuring are forty plants and regional  administrative offices to be closed
and approximately fifty-two plants to be reorganized.  Since commencement of the
plan  of  restructuring,  the  Company  has  determined  alternative  sites  for
manufacture  and  qualified  the new  manufacturing  sites with  customers.  The
Company  had  accrued   approximately   $534  for  the  costs   associated  with
restructuring  CMB  operations and allocated such costs to the purchase price of
CMB in accordance with purchase accounting  requirements.  These costs comprise;
severance pay and benefits,  write-down of assets,  lease  termination and other
exit costs.  The cost of providing  severance pay and benefits for the reduction
of  approximately  6,500  employees is estimated  at  approximately  $257 and is
primarily a cash expense.  Employees to be terminated  include most, if not all,
employees at each plant or office to be closed and  selected  employees at those
plants to be  reorganized,  including  salaried  employees  and employees of the
respective  unions  represented  at each plant site.  The  write-down  of assets
(principally  property,  plant and equipment) is estimated at approximately $217
and has been  reflected as a reduction in the  carrying  value of the  Company's
assets.  Lease  termination  and  other  exit  costs,  primarily  repayments  of
government  grants and  subsidies,  are estimated at  approximately  $60 and are
primarily cash expenses.  The $534 in restructuring costs recorded in connection
with the CMB acquisition includes the $95 restructuring charge announced in 1996
by CarnaudMetalbox Asia Ltd., a subsidiary of the Company.

The  Company  estimates  that  the plan of  restructuring  CMB  operations  will
generate annual cost savings of  approximately  $160 ($105  after-tax) on a full
year basis. It is also estimated that capital expenditures of approximately $100
will be made to expand and upgrade  other  facilities  to  minimize  the adverse
effects of the restructuring on existing business and customer relationships.

During 1996,  the Company  provided $39.8 ($31.7 after taxes or $.24 per diluted
share) for the costs  associated  with exiting  certain lines of business in its
South African  operations,  the closure of a South American  operation and costs
associated with restructuring  existing  businesses in Europe.  During 1995, the
Company recorded a pre-tax  restructuring charge of $102.7 ($67.0 after taxes or
$.74 per  diluted  share)  to  streamline  North  American  operations,  improve
productivity  and to enhance  competitiveness.  The 1996 and 1995  restructuring
plans have been completed.

                                      -34-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The components of the restructuring reserve are as follows:
<TABLE>
<CAPTION>
                                    Balance at   Provisions   Provisions                  Transfer    Balance at
                                   December 31, for existing    for CMB        1997        against   December 31,
                                       1996      businesses   businesses     activity      assets        1997
<S>                                  <C>            <C>         <C>         <C>           <C>          <C>
Employee costs...................     $222.1         $13.3       ($11.9)     ($104.0)                   $119.5
Write-down of assets.............                     44.3         32.0                    ($76.3)
Lease termination and
     other exit costs............       37.6           9.0         11.5        (22.3)                     35.8
                                      ------         -----        -----      -------       ------       ------
                                      $259.7         $66.6        $31.6      ($126.3)      ($76.3)      $155.3
                                      ======         =====        =====      =======       ======       ======
</TABLE>

The  foregoing  restructuring  charges and related  cost savings  represent  the
Company's best estimates, but necessarily make numerous assumptions with respect
to industry performance, general business and economic conditions, raw materials
and product pricing levels,  the timing of  implementation  of the restructuring
and related employee reductions and facility closings and other matters, many of
which are outside the Company's control. The Company's estimates of cost savings
are not necessarily indicative of future performance, which may be significantly
more  or  less  favorable  than  as  set  forth  above  and  is  subject  to the
considerations  described in Management's Discussion and Analysis under "Forward
Looking  Statements".  Shareholders are cautioned not to place undue reliance on
the estimates and the  assumptions and should  appreciate that such  information
may not necessarily be updated to reflect circumstances  existing after the date
hereof or to reflect the occurrence of unanticipated events.

--------------------------------------------------------------------------------

                                      -35-
<PAGE>
                         Crown Cork & Seal Company, Inc.


L.   Short-Term Borrowings and Long-Term Debt
<TABLE>
<CAPTION>
                                                                                  1997             1996
<S>                                                                             <C>               <C>
Short-term borrowings (1)
Commercial paper (2)...................................................         $  548.0          $  232.1
U.S. dollar bank loans/overdrafts......................................            155.2             164.9
Other currency bank loans/overdrafts...................................            682.2             708.8
                                                                                --------          --------
       Total short-term borrowings.....................................         $1,385.4          $1,105.8
                                                                                --------          --------

Long-term debt (6)
U.S. Dollars:
Commercial paper (2) (5)...............................................         $  700.0          $  700.0
Private placements: rates in 1997 ranging
   from 7.0% to 7.54%, due 2000 through 2005...........................            205.0             205.0
Senior notes and debentures:
   5.88% due 1998......................................................            100.0             100.0
   7.00% due 1999......................................................            100.0             100.0
   6.75% due 2003 (3)..................................................            400.0             400.0
   6.75% due 2003......................................................            200.0             200.0
   8.38% due 2005......................................................            300.0             300.0
   7.00% due 2006 (3)..................................................            300.0             300.0
   8.00% due 2023......................................................            200.0             200.0
   7.38% due 2026 (3)..................................................            350.0             350.0
   7.50% due 2096 (3)..................................................            150.0             150.0
Other indebtedness: rates in 1997 ranging from
   6.2% to 10.1%, due 1998 through 2015................................            202.3             188.0
                                                                                --------          --------
                                                                                 3,207.3           3,193.0
                                                                                --------          --------

Other currencies (average interest rate at December 31,
   1997 in parentheses):
Perpetual notes in French Francs (8.0%) (4)............................                              232.5
Preference shares in French Francs (6.7%), due 1998....................            254.3             283.9
Other French Franc indebtedness (7.0% to 9.8%),
   due 1998 through 2001...............................................             97.8             147.9
Capital lease obligations in various currencies........................             42.9              40.0
Other indebtedness in various currencies, rates in 1997
   ranging from 3.75% to 17.5%, due 1998 through 2003..................             98.4              74.7
                                                                                --------          --------
       Total long-term debt............................................          3,700.7           3,972.0

Less: current maturities...............................................           (399.3)            (48.5)
                                                                                --------          --------
       Total long-term debt............................................         $3,301.4          $3,923.5
                                                                                ========          ========
<FN>
(1)  The weighted average interest rates for commercial paper outstanding during
     1997, 1996 and 1995, were 5.3%, 5.5% and 6.1%,  respectively.  The weighted
     average  interest rates for notes and overdrafts  outstanding  during 1997,
     1996 and 1995, were 6.4%, 6.3% and 8.6%, respectively.
(2)  At December 31, 1997 and December 31, 1996,  $700 of  commercial  paper was
     reported  as long term,  reflecting  the  Company's  intent and  ability to
     refinance these  borrowings on a long-term basis through  committed  credit
     facilities.
(3)  On November 26, 1996,  the Company filed with the  Securities  and Exchange
     Commission a shelf  registration  statement  for the possible  offering and
     sale of up to $1,300  aggregate  principal amount of debt securities of the
     Company. This amount was combined with the remaining $200 from a

                                      -36-
<PAGE>

                         Crown Cork & Seal Company, Inc.


     December 1994 Registration Statement, providing an aggregate $1,500 funding
     availability.  On December 12,1996, the Company sold $1,200 of these public
     debt securities in five separate  tranches,  with  maturities  ranging from
     seven to 100 years.  The issuers  included the Company and two wholly-owned
     finance  subsidiaries  located  in the United  Kingdom  and  France,  whose
     borrowings are fully guaranteed by the Company. The face value of the notes
     bear  interest  rates  ranging  from 6.75% to 7.38%.  The  offerings by the
     subsidiaries,  amounting to $700, were simultaneously  converted into fixed
     rate,  8.28% Sterling and 5.75% French Franc  obligations  through interest
     rate and currency  swaps with  various  counterparties.  Proceeds  from the
     offering were used to repay acquisition  indebtedness  arising from the CMB
     acquisition.
(4)  On January 31, 1997, the perpetual  notes were terminated and refinanced by
     the Company's committed long-term credit facilities.
(5)  On February 4, 1997, the Company's $1,000 multicurrency credit facility and
     FRF  13,700  credit  agreement  were  replaced  with  a  new  multicurrency
     revolving  credit agreement with a group of domestic and foreign banks. The
     new agreement makes available $2,500 through 2002.  Borrowings of $355.2 at
     December 31, 1997 under the new  agreement  are unsecured and bear interest
     at  variable  market  rates.  The  agreement   contains  certain  financial
     covenants related to leverage and interest coverage. Borrowings outstanding
     under the  prior FRF  13,700  credit  agreement  amounting  to  $493.1,  at
     December 31, 1996, were refinanced under this new agreement.
(6)  The  Company is also party to other  interest  rate swap  agreements,  with
     remaining terms of between one to five years. The notional amounts of these
     agreements do not represent  amounts exchanged by the parties and are not a
     measure of the Company's  exposure to credit or market  risks.  At December
     31, 1997 and  December  31, 1996 the  notional  amounts of these swaps were
     $553 and $1,219, respectively.
</FN>
</TABLE>

Aggregate  maturities of total  long-term debt for the five years  subsequent to
December 31, 1997 are $399.3,  $170.2,  $160.0, $208.2 and $48.1,  respectively.
Cash  payments  for interest  were $378.7 in 1997,  $290.5 in 1996 and $113.4 in
1995  (including  amounts  capitalized of $6.0 in 1997, $7.7 in 1996 and $5.8 in
1995, respectively).

The  estimated  fair  value of the  Company's  long-term  borrowings,  including
interest rate financial instruments,  based on quoted market prices for the same
or similar  issues or on current  rates  offered to the  Company for debt of the
same  remaining  maturities was $3,790.8 at December 31, 1997 and did not differ
materially from the carrying value at December 31, 1996.


--------------------------------------------------------------------------------
M.   Financial Instruments

In the normal  course of  business,  operations  of the  Company  are exposed to
fluctuations  in currency  values,  interest rates,  commodity  prices and other
market risks. The Company  addresses these risks through a program that includes
the  use of  financial  instruments.  The  Company  controls  the  credit  risks
associated with these financial instruments through credit approval,  investment
limits and centralized  monitoring procedures and systems. The Company uses only
liquid  investments  from  creditworthy  institutions  and does not  enter  into
leveraged,  tiered or illiquid  contracts.  Further,  the Company does not enter
into financial instruments for trading purposes.

Foreign Currency Management
With respect to balance  sheet  exposures,  the Company has an internal  netting
strategy to match foreign  currency  assets and liabilities  wherever  possible.
This  is  achieved  through  the  individual   capital   structure  of  overseas
subsidiaries complemented by the use of financial instruments.  The Company also
enters into various types of foreign  exchange  contracts,  principally  forward
exchange contracts and swaps, in managing the foreign exchange risk arising from
certain  foreign  currency  transactions.  At December  31, 1997 the Company had
outstanding  forward  exchange  contracts,  principally in European  currencies,
Singapore dollars,  and US dollars (both buy and sell) for an aggregate notional
amount of $2,902 ($2,311

                                      -37-

<PAGE>
                         Crown Cork & Seal Company, Inc.


at December 31, 1996).  Based on year-end  exchange rates and the maturity dates
of  the  various  contracts,   the  aggregate  contract  value  of  these  items
approximated  fair value at December 31, 1997 and  December 31, 1996.  Gains and
losses  resulting from contracts that are designated and effective as hedges are
recognized in the same period as the underlying hedged transaction.

Interest Rate Risk Management
The Company uses interest rate swaps,  interest rate caps, and currency swaps to
manage interest rate risk related to borrowings. Interest rate and currency swap
agreements  which hedge third party debt issues are  described  in Note L. Costs
associated  with these financial  instruments  are generally  amortized over the
lives  of the  instruments  and  are not  material  to the  Company's  financial
results.  Differences in interest, which are paid or received, are recognized as
adjustments to interest expense.

Commodities
The  Company's  basic raw  materials  for  products  in its  metal  and  plastic
packaging  segments are subject to significant price  fluctuations.  In terms of
commodity risks,  the Company uses a combination of commercial  supply contracts
and financial  instruments,  including  forwards and options,  to minimize these
exposures.  The maturity of the commodity  instruments  correlates to the actual
purchases of the commodities. Commodity instruments are accounted for as hedges,
with any gains or losses  included  in  inventory,  to the extent  that they are
designated and are effective as hedges of anticipated  commodity  purchases.  At
December  31,  1997  and  December  31,1996  the fair  value of the  outstanding
commodity  contracts was not material to the Company's  earnings,  cash flows or
financial position.

--------------------------------------------------------------------------------
N.   Capital Stock

The  purchase of CMB  resulted in the  issuance of  approximately  37.3  million
shares  of the  Company's  common  stock  and 12.4  million  shares  of its 4.5%
cumulative convertible preferred stock (acquisition  preferred) to tendering CMB
shareholders.  Generally,  each share of acquisition preferred stock is entitled
to the number of votes equal to the number of shares of common  stock into which
such share of  acquisition  preferred  stock is convertible as of the applicable
record date. Dividends on shares issued accrue and are paid quarterly in arrears
on February  20, May 20,  August 20 and November 20 each year.  The  acquisition
preferred  stock ranks senior to the Company's  common stock as to dividends and
liquidation  rights.  Each share of acquisition  preferred  stock is convertible
into common stock at a rate equal to the $41.8875 par value of such  acquisition
preferred stock divided by the applicable conversion price of $45.9715,  subject
to adjustment in certain events.  The Company will at all times reserve and keep
available,  out of its authorized and unissued common stock,  sufficient amounts
of its common stock to effect any future conversions.  The acquisition preferred
stock is mandatorily  convertible  February 26, 2000 and has a liquidation value
equivalent to its par value plus accrued and unpaid dividends.

The Board of Directors has the  authority to issue,  at any time or from time to
time, up to a maximum of 30 million shares of additional  preferred stock in one
or more classes or series of classes.  The additional preferred stock would rank
on a parity  with or junior to the  acquisition  preferred  stock in  respect of
dividend  and  liquidation  rights and such shares would not be entitled to more
than one vote per share  when  voting as a class with  holders of the  Company's
common stock. The voting rights and such designations,  preferences, limitations
and  special  rights  are,  subject to the terms of the  Company's  Articles  of
Incorporation, determined by the Board of Directors.

In May 1996,  the Company  registered 10 million shares of common stock with the
Securities  and  Exchange  Commission  for  the  implementation  of  a  Dividend
Reinvestment  and Stock Purchase Plan  ("Plan").  The Plan covers all registered
shareholders of the Company's  common stock as well as those  beneficial  owners
who have either become  shareholders of record by having shares transferred into
their name or by making  arrangements  with their  broker or other  nominees  to
participate  on their  behalf.  The Plan  allows  for full or  partial  dividend
reinvestment in the Company's common stock.

                                      -38-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The Board of Directors adopted a Shareholder  Rights Plan in 1995 and declared a
dividend of one right for each  outstanding  share of common stock.  Such rights
only become  exercisable,  or transferable  apart from the common stock, after a
person or group  acquires  beneficial  ownership  of, or  commences  a tender or
exchange offer for, 15% or more of the Company's  common stock.  Each right then
may be exercised  to acquire one share of common  stock at an exercise  price of
$200,  subject  to  adjustment.   Alternatively,   under  certain  circumstances
involving the  acquisition  by a person or group of 15% or more of the Company's
common stock,  each right will entitle its holder to purchase a number of shares
of the  Company's  common  stock having a market value of two times the exercise
price of the right.  In the event the  Company is  acquired in a merger or other
business  combination  transaction  after a person or group has  acquired 15% or
more of the  Company's  common  stock,  each  right will  entitle  its holder to
purchase a number of the acquiring company's common shares having a market value
of two times the exercise price of the right.  The rights may be redeemed by the
Company  at $.01 per right at any time  until the  tenth  day  following  public
announcement  that a 15% position has been  acquired.  The rights will expire on
August 10, 2005.

--------------------------------------------------------------------------------
O.   Earnings Per Share

The  following  table  summarizes  the  basic  and  diluted  earnings  per share
computations for 1997, 1996 and 1995:
<TABLE>
<CAPTION>
                                              1997                      1996                        1995
                                             Average                   Average                     Average
                                   Income    Shares    EPS     Income  Shares     EPS    Income    Shares    EPS
<S>                                 <C>       <C>      <C>     <C>      <C>      <C>      <C>       <C>      <C>
Net Income                          $294.0                     $284.0                     $74.9
     Less: Preferred stock
           dividends                 (23.4)                     (19.8)
                                    ------                     ------                     -----
Basic EPS                           $270.6    128.4    $2.11   $264.2   122.5    $2.16    $74.9     90.2     $.83

Potentially dilutive securities:
     Stock options                               .6                        .3                         .4
     Assumed preferred stock
       conversion                     23.4     11.3              19.8     9.6
                                    ------    -----            ------   -----             -----     ----
Diluted EPS                         $294.0    140.3    $2.10   $284.0   132.4    $2.14    $74.9     90.6     $.83
                                    ======    =====            ======   =====             =====     ====
</TABLE>

--------------------------------------------------------------------------------
P.   Stock Options

As  of  December  31,  1997,  the  Company  has  three   stock-based   incentive
compensation  plans under which the Company grants options to executives and key
employees to purchase  common stock:  the 1990 plan,  the 1994 plan and the 1997
plan. The number of shares authorized for issuance were 6,000,000 under the 1990
plan,  4,000,000 under the 1994 plan and 5,000,000  under the 1997 plan.  Awards
can be made in the form of stock options,  deferred stock,  restricted  stock or
stock  appreciation  rights  ("SARs") and may be subject to the  achievement  of
certain  performance  goals as determined by the Plan Committee as designated by
the  Board of  Directors.  There  have  been no  issuances  of  deferred  stock,
restricted stock or SARs under any of the plans. At December 31, 1997, there had
been no awards granted under the 1997 plan. Under all plans, the option exercise
price  equals  the fair  market  value of the  common  shares on the date of the
grant.  Options  generally  become  exercisable over a five-year period from the
grant date and expire ten years after the date of grant.

In  1995,  the  Financial  Accounting  Standards  Board  issued  SFAS  No.  123,
Accounting for Stock-Based  Compensation  ("SFAS No. 123"). Under the provisions
of SFAS No. 123,  companies  can elect to account for  stock-based  compensation
plans using a fair-value-based method or continue measuring compensation expense
for those plans  using the  intrinsic  value  method  prescribed  in APB No. 25,
Accounting for Stock

                                      -39-
<PAGE>
                         Crown Cork & Seal Company, Inc.


Issued to Employees  ("APB No.25").  The Company  applies APB No. 25 and related
interpretations in accounting for its plans.  Accordingly,  no compensation cost
has been recognized for these plans.

Stock option transactions were:
<TABLE>
<CAPTION>
                                                    1997                    1996                     1995
                                                        Weighted                Weighted                Weighted
                                                         Average                 Average                 Average
                                                        Exercise                Exercise                Exercise
                                              Shares      Price       Shares      Price       Shares      Price
<S>                                        <C>          <C>        <C>          <C>        <C>          <C>
Options outstanding
   at January 1.........................    4,625,708    $42.28     1,836,452    $33.30     2,970,225    $25.67
Granted.................................      877,350     52.27     3,544,750     44.35       326,600     40.32
Exercised...............................     (281,380)    33.36      (516,100)    25.58    (1,385,309)    17.56
Canceled................................     (475,882)    43.39      (239,394)    39.94       (75,064)    36.87
                                            ---------               ---------              ----------
Options outstanding
   at December 31.......................    4,745,796    $44.54     4,625,708    $42.28     1,836,452    $33.30
                                            =========               =========              ==========
Options exercisable
   at December 31.......................    1,083,464                 709,115                 591,351
Options available for
   grant at December 31.................    6,469,616               1,871,084               5,176,440
</TABLE>

The following table summarizes  information concerning currently outstanding and
exercisable options:
<TABLE>
<CAPTION>
                            Options Outstanding                                            Options Exercisable
                                              Weighted
                                               Average      Weighted                                    Weighted
             Range of                         Remaining      Average                                     Average
             Exercise            Number      Contractual    Exercise                       Number       Exercise
              Prices           Outstanding      Life          Price                      Exercisable     Price
<S>                           <C>            <C>         <C>                           <C>           <C>
           $10.44 to $38.25      485,740        4.9         $35.22                        263,927       $33.50
            38.38 to  43.13      413,256        3.4          40.11                        238,999        39.57
            44.13 to  52.56    3,260,800        4.9          44.96                        580,538        44.46
            53.00 to  54.38      586,000        8.9          53.03
                               ---------                                                ---------
                               4,745,796        5.3         $44.54                      1,083,464       $40.71
                               =========                                                =========
</TABLE>

Had  compensation  cost for the Company's  stock-based  compensation  plans been
determined  based on the fair  value at the grant date for  awards  under  those
plans, consistent with the requirements of SFAS No. 123, net income and earnings
per share would have been reduced to the following pro forma amounts:

<TABLE>
<CAPTION>
                                                                       1997               1996              1995

<S>                                 <C>                               <C>               <C>               <C>
Net income                          As reported                        $270.6            $264.2            $74.9
                                    Pro forma                          $263.6            $260.5            $74.7

Basic earnings per share            As reported                        $ 2.11            $ 2.16            $ .83
                                    Pro forma                          $ 2.05            $ 2.13            $ .83

Diluted earnings per share          As reported                        $ 2.10            $ 2.14            $ .83
                                    Pro forma                          $ 2.05            $ 2.12            $ .82
</TABLE>

                                      -40-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The pro forma  results  may not be  representative  of the  effects on  reported
income for future  years.  The fair  value of each stock  option  grant has been
estimated on the date of the grant using the Black-Scholes  option pricing model
with the following weighted average assumptions:

<TABLE>
<CAPTION>
                                                                       1997             1996              1995
<S>                                                                 <C>               <C>              <C>
Risk-free interest rate                                                  5.7%              6.2%             5.4%
Expected life of option                                             4.9 years         4.9 years        4.9 years
Expected stock price volatility                                         21.7%             20.7%            20.7%
Expected dividend yield                                                  2.0%              2.2%             None
</TABLE>

The weighted  average  grant date fair values for options  granted  during 1997,
1996 and 1995 were $12.92, $11.01 and $13.01, respectively.

--------------------------------------------------------------------------------
Q.   Income Taxes

Pretax  income for the years ended  December  31 was taxed  under the  following
jurisdictions:

<TABLE>
<CAPTION>
                                                                 1997              1996              1995
<S>                                                            <C>              <C>               <C>
Domestic..................................................       $ 48.8           $ 66.8            $ 30.8
Foreign...................................................        408.2            364.2              78.7
                                                                 ------           ------            ------
                                                                 $457.0           $431.0            $109.5
                                                                 ======           ======            ======

The provision for income taxes consists of the following:

Current tax provision:
     U.S. Federal.........................................       $ 13.9           $ 15.0            $ 16.2
     State and foreign....................................         40.9             27.7              11.9
                                                                 ------           ------            ------
                                                                   54.8             42.7              28.1
                                                                 ------           ------            ------
Deferred tax provision:
     U.S. Federal.........................................          9.9             17.5              (3.1)
     State and foreign....................................         83.0             74.2               (.1)
                                                                 ------           ------            ------
                                                                   92.9             91.7              (3.2)
                                                                 ------           ------            ------
                                                                 $147.7           $134.4            $ 24.9
                                                                 ======           ======            ======
</TABLE>

The provision for income taxes differs from the amount of income tax  determined
by applying the  applicable  U.S.  statutory  federal  income tax rate to pretax
income as a result of the following differences:
<TABLE>
<CAPTION>
                                                                   1997             1996              1995
<S>                                                              <C>              <C>               <C>
U.S. statutory rate.......................................         35.0%            35.0%             35.0%
Non-U.S. operations at different rates....................         (6.6)            (7.7)            (14.5)
Effect of non-U.S. statutory rate changes.................         (1.5)
Amortization of acquisition adjustments...................          9.5              8.5               8.0
Valuation allowance.......................................         (2.7)            (4.0)             (1.8)
Other items, net..........................................         (1.4)             (.6)             (4.0)
                                                                   -----            -----             -----
     Effective income tax rate............................         32.3%            31.2%             22.7%
                                                                   =====            =====             =====
</TABLE>

                                      -41-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The Company paid federal,  state,  local and foreign (net) income taxes of $51.0
for 1997,  $41.4 for 1996 and $28.0 for 1995.  The  components  of deferred  tax
assets and liabilities at December 31, were:

<TABLE>
<CAPTION>
                                                                        1997                      1996
                                                                 Asset       Liability      Asset      Liability
<S>                                                              <C>          <C>          <C>          <C>
Depreciation..............................................                    $397.7                    $421.5
Postretirement and
   postemployment benefits................................       $221.8                    $208.3
Pensions..................................................                      90.7                      46.9
Inventories...............................................                      27.4                      32.6
Tax loss and
   credit carryforwards...................................        209.9                     275.0
Restructuring.............................................         40.6                      90.0
Accruals and other........................................         88.3         25.8         85.6         16.8
                                                                 ------       ------       ------       ------
                                                                  560.6        541.6        658.9        517.8
Valuation allowance.......................................       (124.2)                   (139.0)
                                                                 ------       ------       ------       ------
                                                                 $436.4       $541.6       $519.9       $517.8
                                                                 ======       ======       ======       ======
</TABLE>

Prepaid  expenses and other current  assets include $95.3 and $237.1 of deferred
tax assets at December 31, 1997 and 1996, respectively. Other non-current assets
include  $186.9 and $170.5 of deferred tax assets at December 31, 1997 and 1996,
respectively.

The Company has recorded  $61.4 of deferred tax assets arising from tax loss and
credit  carryforwards,  which will be realized through future  operations and an
additional  $24.3  which will be  realized  through  the  reversal  of  existing
temporary  differences.  Future recognition of the remaining $124.2 will be made
either when the benefit is  realized or when it has been  determined  that it is
more likely than not that the benefit will be realized  through future earnings.
Carryforwards  of $52.4  expire  over the next  five  years,  $49.7 in years six
through fifteen and $107.8 can be utilized over an indefinite period.

The valuation  allowance of $124.2  includes $113.3 which, if reversed in future
periods, will reduce goodwill.

The  cumulative  amount of the  Company's  share of  undistributed  earnings  of
non-U.S.  subsidiaries for which no deferred taxes have been provided was $238.8
as of December 31, 1997.  Management has no plans to distribute such earnings in
the foreseeable future.

--------------------------------------------------------------------------------
R.   Pensions and Other Retirement Benefits

Pensions

The Company sponsors  various pension plans,  covering  substantially  all U.S.,
Canadian and some  non-U.S.  and  non-Canadian  employees  and  participates  in
certain  multi-employer  pension  plans.  The benefits for these plans are based
primarily on years of service and the employees'  remuneration  near retirement.
Contributions to multi-employer  plans in which the Company and its subsidiaries
participate are determined in accordance with the provisions of negotiated labor
contracts or applicable local  regulations.  The Company's  objective in funding
its pension plans is to accumulate  funds  sufficient to provide for all accrued
benefits.  In certain  countries  the  funding of pension  plans is not a common
practice as funding provides no economic benefit.  Consequently, the Company has
several pension plans which are not funded.

                                      -42-
<PAGE>
                         Crown Cork & Seal Company, Inc.


Plan assets of company-sponsored plans of $3,524.1 consist principally of common
stocks,  fixed income securities and other investments,  including $287.6 of the
Company's common stock.

The 1997, 1996 and 1995 components of pension (income)/cost were as follows:

<TABLE>
<CAPTION>
                                                                        1997              1996             1995
<S>                                                                  <C>               <C>              <C>
Service cost--benefits earned during the year.................         $ 43.4            $ 49.7           $ 19.9
Interest cost on projected benefit obligations................          228.5             200.3             96.9
Return on assets:    -actual..................................         (503.8)           (353.9)          (200.7)
                     -deferred gain...........................          151.5              66.4             79.3
Amortization of net unrecognized loss
     at January 1, 1986.......................................             .1                .1               .1
Amortization of net unrecognized (gain)/loss..................            (.4)              2.8              2.2
(Income)/cost attributable to plant closings..................            (.1)              (.8)             8.3
                                                                      -------           -------           ------
Total pension (income)/cost...................................        ($ 80.8)          ($ 35.4)          $  6.0
                                                                      =======           =======           ======
</TABLE>

The  funded  status  of  company-sponsored   plans,  including  the  assets  and
liabilities  assumed in connection with  acquisitions,  at December 31, 1997 and
1996 was as follows:
<TABLE>
<CAPTION>
                                                            1997                                            1996
                                              U.S. Plans           Non-U.S. Plans           U.S. Plans             Non-U.S. Plans
                                           Over-     Under-       Over-      Under-      Over-       Under-       Over-     Under-
                                          funded     funded      funded      funded     funded       funded      funded     funded
<S>                                     <C>          <C>       <C>          <C>        <C>           <C>       <C>          <C>
Actuarial present value of:
   Vested benefit obligation............($1,175.4)   ($19.9)   ($1,553.0)   ($168.3)   ($1,138.1)    ($17.7)   ($1,476.1)   ($155.6)
   Non-vested benefits..................    (11.4)     (1.3)        (2.8)     (15.4)        (8.2)      (1.5)        (4.0)     (15.2)
                                        -------------------------------------------------------------------------------------------
   Accumulated benefit obligation.......($1,186.8)   ($21.2)   ($1,555.8)   ($183.7)   ($1,146.3)    ($19.2)   ($1,480.1)   ($170.8)
                                        ===========================================================================================
Actuarial present value of projected
   benefit obligation...................($1,214.1)   ($22.7)   ($1,559.6)   ($211.0)   ($1,170.7)    ($20.5)   ($1,484.9)   ($200.5)
Plan assets at fair value...............  1,373.1       8.2      2,079.0       63.8      1,331.0        5.8      1,907.2       50.5
                                        -------------------------------------------------------------------------------------------
Plan assets in excess of (less than)
   projected benefit obligation.........    159.0     (14.5)       519.4     (147.2)       160.3      (14.7)       422.3     (150.0)
Unrecognized net (gain)/loss since 1986.    (51.8)     (1.6)      (177.6)      30.0        (99.5)      (1.8)      (131.2)       (.6)
Unrecognized (gain)/loss
   at January 1, 1986...................     (2.8)     10.2          (.2)                   (3.2)      11.0          (.4)
Unrecognized prior service cost.........      8.1        .3          3.2                     5.4                    (1.5)       3.1
Minimum liability.......................              (10.3)                  (29.1)                  (10.8)                  (25.8)
                                        -------------------------------------------------------------------------------------------
Prepaid (accrued) pension cost
   at December 31.......................   $112.5    ($15.9)      $344.8    ($146.3)       $63.0     ($16.3)      $289.2    ($173.3)
                                        ===========================================================================================
</TABLE>

Other  non-current  assets include $436.5 and $340.3 of prepaid  pension cost at
December 31, 1997 and 1996, respectively.

The Company  recognizes a minimum pension  liability for underfunded  plans. The
minimum liability is equal to the excess of the accumulated  benefit  obligation
over plan assets.  A corresponding  amount is recognized as either an intangible
asset,  to  the  extent  of  previously  unrecognized  prior  service  cost  and
previously unrecognized  transition obligation,  or a reduction of shareholders'
equity. The Company had recorded additional liabilities of $39.4 and $36.6 as of
December 31, 1997 and 1996, respectively. An intangible asset of $12.9 and $13.7
and a shareholders'  equity  reduction,  net of income taxes, of $16.9 and $14.8
was recorded as of December 31, 1997 and 1996, respectively.

                                      -43-
<PAGE>
                         Crown Cork & Seal Company, Inc.


The weighted average  actuarial  assumptions for the Company's pension plans are
as follows:
<TABLE>
<CAPTION>
                                            U.S. Plans                                Non-U.S. Plans
                                  1997         1996         1995              1997         1996         1995
<S>                               <C>          <C>          <C>               <C>          <C>          <C>
Discount rate..................     7.4%         8.0%         7.4%              8.0%         8.8%         8.5%
Compensation increase..........     3.5%         3.5%         5.0%              6.0%         6.5%         5.5%
Long-term rate of return.......    11.0%        11.0%        11.0%             11.0%        11.0%        11.0%
</TABLE>

Other Postretirement Benefit Plans
The Company and certain  subsidiaries  sponsor  unfunded plans to provide health
care and life insurance  benefits to pensioners and  survivors.  Generally,  the
medical plans pay a stated percentage of medical expenses reduced by deductibles
and other coverages. Life insurance benefits are generally provided by insurance
contracts.  The Company reserves the right, subject to existing  agreements,  to
change, modify or discontinue the plans.

The net postretirement benefit cost was comprised of the following:
<TABLE>
<CAPTION>
                                                                                     1997       1996       1995
<S>                                                                                  <C>        <C>        <C>
     Service cost - benefits earned during the year.............................      $3.5       $4.2       $4.0
     Interest cost on accumulated postretirement benefit obligation.............      39.5       38.8       36.5
     Amortization of net unrecognized (gain)....................................      (3.6)      (1.4)      (5.0)
     Cost attributable to plant closings........................................        .2                   4.2
                                                                                     -----      -----      -----
              Net postretirement benefit cost...................................     $39.6      $41.6      $39.7
                                                                                     =====      =====      =====
</TABLE>

Health care claims and life insurance benefits paid totaled $45.5 in 1997, $40.9
in 1996 and $42.5 in 1995.

The  following  provides  a  reconciliation  of the  accumulated  postretirement
benefit obligation to the liabilities  recognized in the Company's balance sheet
as of December 31:

                                                                1997      1996
     Retirees...............................................  ($452.3)  ($406.2)
     Fully eligible active plan participants................    (37.3)    (50.3)
     Other active plan participants.........................    (58.0)    (47.8)
                                                              -------   -------
     Total accumulated obligation...........................   (547.6)   (504.3)
     Unrecognized net (gain)................................    (53.7)   (103.6)
                                                              -------   -------
     Accrued postretirement benefit obligation..............  ($601.3)  ($607.9)
                                                              =======   =======

The health care accumulated  postretirement benefit obligation was determined at
December  31,  1997 and 1996 using  health  care  trend  rates of 8.7% and 9.2%,
respectively,  decreasing  to 4.8% and 4.9% over  eight  years  and nine  years,
respectively.  The assumed long-term rate of compensation increase used for life
insurance  was 3.5% at both  December 31, 1997 and 1996.  The discount  rate was
7.4% and 8.0% at December 31, 1997 and 1996, respectively.  Changing the assumed
health care cost trend rate by one  percentage  point in each year would  change
the  accumulated   postretirement  benefit  obligation  by  $42.8  and  the  net
postretirement benefit cost by $3.0.

                                      -44-
<PAGE>
                         Crown Cork & Seal Company, Inc.


Employee Savings Plan

The Company sponsors a Savings  Investment Plan which covers  substantially  all
domestic  salaried  employees  who are 21 years of age with one or more years of
service.  The Company matches with equivalent value of Company stock, up to 1.5%
of a participant's compensation.

Employee Stock Purchase Plan

The Company  also  sponsors an Employee  Stock  Purchase  Plan which  covers all
domestic  employees with one or more years of service who are  non-officers  and
non-highly  compensated  as  defined  by the  Internal  Revenue  Code.  Eligible
participants  contribute  85% of the  quarter-ending  market  price  towards the
purchase of each common share.  The Company's  contribution is equivalent to 15%
of the  quarter-ending  market price.  Total shares  purchased under the plan in
1997  and  1996  were  89,392  and  78,051,  respectively,   and  the  Company's
contributions were approximately $.6 in both years.

--------------------------------------------------------------------------------

                                      -45-

<PAGE>
                         Crown Cork & Seal Company, Inc.


S. Segment Information by Industry Segment and Geographic Area

A. Industry Segment
<TABLE>
<CAPTION>
                                              Net    Operating     % To    Identifiable  Depreciation     Capital
1997                                         Sales     Income    Net Sales    Assets    & Amortization Expenditures
<S>                                        <C>        <C>           <C>      <C>            <C>          <C>
Metal Packaging & Other (1).............   $6,940.9   $624.2(2)      9.0      $9,684.8       $389.2       $396.2
Plastic Packaging.......................    1,553.7    142.5(2)      9.2       2,415.3        150.8        118.6
                                           --------   ------                 ---------       ------       ------
Consolidated............................   $8,494.6   $766.7(5)      9.0     $12,100.1(6)    $540.0       $514.8
                                           ========   ======                 =========       ======       ======
1996
Metal Packaging & Other (1).............   $6,619.7   $503.0(3)      7.6      $9,877.1       $367.0       $534.1
Plastic Packaging.......................    1,712.2    173.5        10.1       2,552.7        128.9         97.1
                                           --------   ------                 ---------       ------       ------
Consolidated............................   $8,331.9   $676.5(5)      8.1     $12,429.8(6)    $495.9       $631.2
                                           ========   ======                 =========       ======       ======
1995
Metal Packaging & Other (1).............   $3,811.1   $159.2(4)      4.2      $3,688.9       $177.9       $287.7
Plastic Packaging.......................    1,242.7     76.9(4)      6.2       1,294.7         78.4        145.8
                                           --------   ------                 ---------       ------       ------
Consolidated............................   $5,053.8   $236.1(5)      4.7      $4,983.6(6)    $256.3       $433.5
                                           ========   ======                 =========       ======       ======

B. Geographic Area

1997
United States...........................   $3,394.4   $217.8(2)      6.4      $4,010.5       $212.4       $128.9
Europe..................................    3,775.9    482.5(2)     12.8       6,182.2        253.3        284.4
Asia-Pacific............................      368.5      3.3          .9         435.2         31.8         18.6
Other...................................      955.8     63.1         6.6       1,472.2         42.5         82.9
                                           --------   ------                 ---------       ------       ------
Consolidated............................   $8,494.6   $766.7(5)      9.0     $12,100.1(6)    $540.0       $514.8
                                           ========   ======                 =========       ======       ======

1996
United States...........................   $3,327.1   $205.1         6.2      $3,843.8       $204.0       $199.2
Europe..................................    3,745.2    427.8(3)     11.4       6,884.9        219.0        232.3
Asia-Pacific............................      383.9      5.9         1.5         619.8         34.6         90.9
Other...................................      875.7     37.7(3)      4.3       1,081.3         38.3        108.8
                                           --------   ------                 ---------       ------       ------
Consolidated............................   $8,331.9   $676.5(5)      8.1     $12,429.8(6)    $495.9       $631.2
                                           ========   ======                 =========       ======       ======

1995
United States...........................   $3,376.2   $140.6(4)      4.2      $3,372.6       $175.4       $260.5
Europe..................................      785.2     58.3         7.4         606.1         38.6         50.9
Asia - Pacific..........................      151.9     22.5        14.8         222.7          7.4         61.9
Other...................................      740.5     14.7(4)      2.0         782.2         34.9         60.2
                                           --------   ------                 ---------       ------       ------
Consolidated............................   $5,053.8   $236.1(5)      4.7      $4,983.6(6)    $256.3       $433.5
                                           ========   ======                 =========       ======       ======
<FN>
(1)  Within "Metal Packaging & Other" is the Company's machinery operation, sold
     in  May  1997,  which,  along  with  other  non-metal   packaging  domestic
     affiliates, is not significant.
(2)  Operating income for 1997 includes  restructuring charges of $55.2 for U.S.
     Plastics Packaging and $11.4 for Europe Metal Packaging.
(3)  Operating  income  for 1996  includes  restructuring  charges  of $30.1 for
     Europe Metal Packaging and $9.7 for Other Metal Packaging.
(4)  Operating income for 1995 includes  restructuring charges of $81.4 for U.S.
     Metal Packaging,  $3.9 for U.S. Plastic  Packaging,  $4.4 for Other Plastic
     Packaging and $13.0 for Other Metal Packaging.
</FN>
</TABLE>

                                      -46-
<PAGE>
                         Crown Cork & Seal Company, Inc.


(5) The following reconciles operating income to pre-tax income:

<TABLE>
<CAPTION>
                                                                 1997              1996             1995
<S>                                                            <C>              <C>               <C>
Operating income*.........................................      $ 766.7          $ 676.5           $ 236.1
Interest and other corporate
   expense**..............................................       (309.7)          (245.5)           (126.6)
                                                                -------          -------           -------

Pre-tax income............................................      $ 457.0          $ 431.0           $ 109.5
                                                                =======          =======           =======
</TABLE>

 *   Has been restated for prior years to conform with the 1996  presentation of
     operating income.

**   Includes  interest expense net of interest  income,  gain on sale of assets
     and translation and exchange adjustments.

(6) The following reconciles identifiable assets to total assets:

<TABLE>
<CAPTION>
                                                                1997              1996             1995
<S>                                                           <C>              <C>                <C>
Identifiable assets.......................................    $12,100.1        $12,429.8          $4,983.6
Corporate assets..........................................        205.6            160.4              68.1
                                                              ---------        ---------          --------

Total assets..............................................    $12,305.7        $12,590.2          $5,051.7
                                                              =========        =========          ========
</TABLE>

The results of operations and financial position of CarnaudMetalbox are included
from the acquisition date of February 22, 1996.

Included in "Other" are affiliates in Canada, Central and South America,  Africa
and the Middle East.

For the years ended  December  31,  1997,  1996 and 1995,  respectively,  no one
customer accounted for more than 10% of the Company's net sales.

Total non-U.S.  liabilities  were $4,760.1,  $4,772.0 and $822.4 at December 31,
1997, 1996 and 1995, respectively.

Certain  reclassifications  of prior  years'  data  have  been  made to  improve
comparability.

--------------------------------------------------------------------------------
T.   Subsequent Events

On March 2, 1998,  the Company  completed the  repurchase of  approximately  4.1
million  shares of its common  stock at $49.00 per share and  approximately  3.7
million shares of its  acquisition  preferred at $46.00 per share from CGIP. The
repurchased  shares  represented   approximately  5.3%  of  the  Company's  then
outstanding  voting  securities  and leaves CGIP with 4.99%  voting power in the
Company.  The  repurchased  shares include all of CGIP's  acquisition  preferred
position which represented  approximately 30% of the then outstanding  shares of
acquisition  preferred.  The transaction  includes an agreement to terminate the
Shareholders  Agreement  dated  February  22, 1996 between the Company and CGIP.
Among other changes,  CGIP will no longer retain the right to designate  Company
directors.  The  transaction  value of $369 was financed  through an increase in
short-term indebtedness.


--------------------------------------------------------------------------------


                                      -47-
<PAGE>
                         Crown Cork & Seal Company, Inc.


U. Quarterly Data (unaudited)

<TABLE>
<CAPTION>
                                                 1997                                             1996
                              First      Second       Third       Fourth       First        Second        Third       Fourth
<S>                         <C>        <C>          <C>         <C>          <C>         <C>         <C>         <C>
Net sales.................. $1,937.3   $2,286.6     $2,341.3    $1,929.4     $1,551.2      $2,353.7      $2,462.1    $1,964.9

Gross profit*..............    253.6      361.7        302.2(1)    262.8        170.8         294.2(3)      343.5       255.2(4)

Net income available to
   common shareholders.....     33.1      126.2         79.4(1)     31.9(2)      29.1          98.3(3)      103.5        33.3(4)
----------------------------------------------------------------------------------------------------------------------------------
Average common shares
  outstanding (in millions):
   Basic...................    128.5      128.6        128.3       128.4        105.1         128.1         128.5       128.3
   Diluted.................    140.5      140.6        140.1       140.0        109.8         139.8         139.8       140.1

Earnings per average
   common share:**
   Basic...................     $.26       $.98         $.62(1)     $.25(2)      $.28          $.77(3)       $.81        $.26(4)
   Diluted ................        +        .94          .61(1)        +            +           .75(3)        .78           +

Dividends per
   common share............      .25        .25          .25         .25          .25           .25           .25         .25

----------------------------------------------------------------------------------------------------------------------------------
Common stock
price range:***

   High....................  $59 3/4   $58 1/2      $56 7/8     $51 3/16     $51           $49 1/8     $49 1/2       $55 1/2

   Low.....................   51 5/8    51 1/8       44 7/8      43 9/16      40 5/8        43 5/8      41            45 1/2

   Close...................   51 5/8    53 7/16      46 1/8      50 1/8       48 3/4        45          46 1/8        54 3/8

----------------------------------------------------------------------------------------------------------------------------------
<FN>
     The results in 1996  include the  operations  of  CarnaudMetalbox  from the
     acquisition date of February 22,1996.

+    Diluted earnings per share for the first and fourth quarters is the same as
     Basic  as  the  assumed   exercise  of  stock  options  and  conversion  of
     convertible preferred stock is anti-dilutive.
*    Net sales less cost of products sold, depreciation and amortization and the
     provision for restructuring.
**   The sum of the quarterly earnings per share does not equal the year-to-date
     earnings per share due to the effect of shares issued during the year.
***  Source: New York Stock Exchange - Composite Transactions.
(1)  Includes pre-tax  restructuring charges of $66.6, $43.3 after taxes or $.34
     per basic share and $.31 per  diluted  share.  Excluding  the impact of the
     restructuring  charges,  net income was $122.7 or $.96 per basic  share and
     $.92 per diluted share. See Note K for additional details.
(2)  Includes the  after-tax  charge of $7.6 or $.06 per basic and diluted share
     for the cumulative effect of an accounting change.  Excluding the impact of
     the accounting  change,  net income was $39.5 or $.31 per basic and diluted
     share.
(3)  Includes pre-tax  restructuring charges of $29.6, $21.9 after taxes or $.17
     per basic share and $.16 per  diluted  share.  Excluding  the impact of the
     restructuring  charges,  net income was $120.2 or $.94 per basic  share and
     $.90 per diluted share. See Note K for additional details.
(4)  Includes pre-tax  restructuring  charges of $10.2, $9.8 after taxes or $.08
     per basic and  diluted  share.  Excluding  the impact of the  restructuring
     charges, net income was $43.1 or $.34 per basic and diluted share. See Note
     K for additional details.
</FN>
</TABLE>

                                      -48-
<PAGE>
                         Crown Cork & Seal Company, Inc.

          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

(In millions)
<TABLE>
<CAPTION>
COLUMN A                         COLUMN B                         COLUMN C                      COLUMN D          COLUMN E
                                                                  Additions
                                 Balance at       Charged to costs       Charged to other
                                 beginning of     and expenses           accounts               Deductions-       Balance at end
Description                      period                                                         Write-Offs        of period

                                                 For the Year Ended December 31, 1997
<S>                                  <C>              <C>                     <C>                <C>               <C>
Allowances deducted from
assets to which they
apply:
Trade accounts receivable           $92.0             $9.2                                        $56.7              $44.5

Deferred tax assets                 139.0            (12.2)                    $3.7                 6.3              124.2


                                                 For the Year Ended December 31, 1996
Allowances deducted from
assets to which they
apply:
Trade accounts receivable            10.0              9.5                     90.5*               18.0               92.0

Deferred tax assets                  22.8             (8.0)                   124.2*                                 139.0


                                                 For the Year Ended December 31, 1995
Allowances deducted from
assets to which they
apply:
Trade accounts receivable            10.6              4.9                                          5.5               10.0

Deferred tax assets                  29.2             (2.2)                                         4.2               22.8

<FN>
*    Acquisition of CarnaudMetalbox
</FN>
</TABLE>

                                      -49-
<PAGE>
                         Crown Cork & Seal Company, Inc.

ITEM 9.   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information called for by this Item, is set forth on pages 4, 5 and 6 of the
Company's  Proxy  Statement  dated  March  23,  1998,  in the  section  entitled
"Election of Directors"  and on page 15 in the section  entitled  "Section 16(a)
Beneficial  Ownership  Reporting  Compliance"  and  is  incorporated  herein  by
reference.

The following  table sets forth  certain  information  concerning  the principal
executive officers of the Company, including their ages and positions.


       Name                 Age            Present Title

William J. Avery             57          Chairman of the Board of Directors
                                         and Chief Executive Officer

Michael J. McKenna           63          President and
                                         Chief Operating Officer

Ian B. Carmichael            61          Executive Vice President -
                                         Corporate Technologies

John W. Conway               52          Executive Vice President and
                                         President-Americas Division

Mark W. Hartman              60          Executive Vice President -
                                         Office of the Chairman

Tommy H. Karlsson            51          Executive Vice President and
                                         President-European Division

Richard L. Krzyzanowski      65          Executive Vice President,
                                         Secretary and General Counsel

Alan W. Rutherford           54          Executive Vice President
                                         and Chief Financial Officer

Ronald R. Thoma              63          Executive Vice President -
                                         Procurement and Traffic

William H. Voss              52          Executive Vice President and
                                         President - Asia-Pacific Division

Craig R. L. Calle            38          Senior Vice President-
                                         Finance and Treasurer

Timothy J. Donahue           35          Senior Vice President
                                         and Corporate Controller

                                      -50-
<PAGE>
                         Crown Cork & Seal Company, Inc.

ITEM 11.   EXECUTIVE COMPENSATION

The information set forth on pages 8 through 11 of the Company's Proxy Statement
dated  March 23,  1998,  in the section  entitled  "Executive  Compensation"  is
incorporated herein by reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information  required by this Item is set forth on pages 2 through 6 of the
Company's Proxy Statement dated March 23, 1998, in the sections  entitled "Proxy
Statement-Meeting,   April  23,  1998"  and  "Election  of  Directors"   and  is
incorporated herein by reference.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required  by this Item is set forth on pages 4, 5 and 6 of the
Company's  Proxy  Statement  dated  March  23,  1998,  in the  section  entitled
"Election of Directors" and is incorporated herein by reference.



                                      -51-

<PAGE>
                         Crown Cork & Seal Company, Inc.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

a)   The following documents are filed as part of this report:

     (1)  All Financial Statements:

          Crown Cork & Seal Company, Inc. and Subsidiaries (see Part II pages 25
          through 48 of this Report).

     (2)  Financial Statement Schedules:

          Schedule Number

          II.-  Valuation and  Qualifying  Accounts and Reserves (see page 49 of
          this Report).

          All other  schedules have been omitted because they are not applicable
          or the required information is included in the Consolidated  Financial
          Statements.

     (3)  Exhibits

          2.    Stock  Purchase  Agreement,   dated  February  3,  1998  between
                Compagnie  Generale  d'Industrie et de Participations  and Crown
                Cork & Seal Company, Inc.  (incorporated by reference to Exhibit
                A of  Amendment  No.  4 of the  Company's  Schedule  13D,  dated
                February 3, 1998 (File No. 005-10521)).

          3.a   Amended and Restated  Articles of  Incorporation of Crown Cork &
                Seal Company, Inc.  (incorporated by reference to Exhibit 3.1 of
                the Company's  Registration Statement on Form 8-A dated February
                20, 1996 (File No. 1-2227)).

          3.b   By-laws  of  Crown  Cork  &  Seal  Company,  Inc.,  as  amended,
                (incorporated  by  reference  to  Exhibit  3.3 of the  Company's
                Registration Statement on Form 8-A dated February 20, 1996 (File
                No. 1-2227)).

          3.c   Resolution fixing the terms of the Registrant's 4.5% Convertible
                Preferred Stock (incorporated by reference to Exhibit 3.2 of the
                Company's Registration Statement on Form 8-A, dated February 20,
                1996 (File No. 1-2227)).

          4.a   Specimen  certificate of Registrant's Common Stock (incorporated
                by reference to Exhibit 4.a of the  Company's  Annual  Report on
                Form  10-K  for the year  ended  December  31,  1995  (File  No.
                1-2227)).

          4.b   Specimen certificate of Registrant's 4.5% Convertible  Preferred
                Stock  (incorporated  by reference to Exhibit 4 of the Company's
                Registration Statement on Form 8-A dated February 20, 1996 (File
                No. 1-2227)).

          4.c   Form of the  Company's  6-3/4% Notes Due 2003  (incorporated  by
                reference to Exhibit 23 of  Registrant's  Current Report on Form
                8-K dated April 12, 1993 (File No. 1-2227)).

          4.d   Form of the Company's 8% Debentures  Due 2023  (incorporated  by
                reference to Exhibit 24 of  Registrant's  Current Report on Form
                8-K dated April 12, 1993 (File No. 1-2227)).

          4.e   Officers'  Certificate of the Company (incorporated by reference
                to Exhibit 4.3 of the Registrant's Quarterly Report on Form 10-Q
                for the quarter ended March 31, 1993 (File No. 1-2227)).

                                      -52-
<PAGE>
                         Crown Cork & Seal Company, Inc.

          4.f   Indenture  dated as of April 1, 1993  between  the  Company  and
                Chemical Bank, as  Trustee(incorporated  by reference to Exhibit
                26 of the  Registrant's  Current  Report on Form 8-K dated April
                12, 1993 (File No 1-2227)).

          4.g   Terms Agreement dated March 31, 1993  (incorporated by reference
                to Exhibit  27 of the  Registrant's  Current  Report on Form 8-K
                dated April 12, 1993 (File No. 1-2227)).

          4.h   Form  of the  Company's  7%  Notes  Due  1999  (incorporated  by
                reference to Exhibit 99.1 of the Registrant's  Current Report on
                Form 8-K dated June 16, 1994 (File No. 1-2227)).

          4.i   Officers'  Certificate  of  the  Company  dated  June  16,  1994
                (incorporated  by reference to Exhibit 99.2 of the  Registrant's
                Current  Report  on Form 8-K  dated  June  16,  1994  (File  No.
                1-2227)).

          4.j   Terms Agreement dated June 9, 1994 (incorporated by reference to
                Exhibit 99.3 of  Registrant's  Current  Report on Form 8-K dated
                June 16, 1994 (File No. 1-2227)).

          4.k   Indenture  dated as of January 15, 1995  between the Company and
                Chemical Bank, as Trustee  (incorporated by reference to Exhibit
                4 of the  Registrant's  Current Report on Form 8-K dated January
                25, 1995 (File No. 1-2227)).

          4.l   Form of the  Company's  8-3/8% Notes Due 2005  (incorporated  by
                reference to Exhibit 99a of the  Registrant's  Current Report on
                Form 8-K dated January 25, 1995 (File No. 1-2227)).

          4.m   Officers'  Certificate  of the  Company  dated  January 25, 1995
                (incorporated  by reference  to Exhibit 99b of the  Registrant's
                Current  Report on Form 8-K dated  January  25,  1995  (File No.
                1-2227)).

          4.n   Terms  Agreement  dated  January  18,  1995   (incorporated   by
                reference to Exhibit 99c of the  Registrant's  Current Report on
                Form 8-K dated January 25, 1995 (File No. 1-2227)).

          4.o   Revolving  Credit and Competitive  Advance  Facility  Agreement,
                dated  as  of  February  4,  1997,  among  the  Registrant,  the
                Subsidiary  Borrowers referred to therein,  the Lenders referred
                to therein,  the Chase Manhattan Bank, as Administrative  Agent,
                Societe  Generale,  as Documentation  Agent, and Bank of America
                Illinois,  as Syndication  Agent  (incorporated  by reference to
                Exhibit 4.o of the  Registrant's  Annual Report on Form 10-K for
                the year ended December 31, 1996 (File No. 1-2227)).

          4.p   Rights  Agreement,  dated August 7, 1995,  between  Crown Cork &
                Seal  Company,   Inc.  and  First  Chicago  Trust  of  New  York
                (incorporated  by reference to Exhibits 1 and 2 to the Company's
                Registration  Statement on Form 8-A, dated August 10, 1995 (File
                No. 1-2227)).

          4.q   Indenture,  dated  December 17, 1996,  among the Company,  Crown
                Cork & Seal Finance PLC,  Crown Cork & Deal Finance S.A. and The
                Bank of New York,  as  trustee  (incorporated  by  reference  to
                Exhibit 4.1 of the Registrant's Current Report on Form 8-K dated
                December 17, 1996 (File No. 1-2227)).

          4.r   Form of the Company's 7-3/8%  Debentures Due 2026  (incorporated
                by reference to Exhibit 99.1 of the Registrant's  Current Report
                on Form 8-K dated December 17, 1996 (File No. 1- 2227)).

          4.s   Form of the Company's 7-1/2%  Debentures Due 2026  (incorporated
                by reference to Exhibit 99.2 of the Registrant's  Current Report
                on Form 8-K dated December 17, 1996 (File No. 1- 2227)).

                                      -53-
<PAGE>
                         Crown Cork & Seal Company, Inc.

          4.t   Form of UK 6-3/4% Notes Due 2003  (incorporated  by reference to
                Exhibit  99.3 of the  Registrant's  Current  Report  on Form 8-K
                dated December 17, 1996 (File No. 1-2227)).

          4.u   Form of UK 7%  Notes  Due 2006  (incorporated  by  reference  to
                Exhibit  99.4 of the  Registrant's  Current  Report  on Form 8-K
                dated December 17, 1996 (File No. 1-2227)).

          4.v   Form of French 6-3/4% Notes Due 2003  (incorporated by reference
                to Exhibit 99.5 of the  Registrant's  Current Report on Form 8-K
                dated December 17, 1996 (File No. 1-2227)).

          4.w   Officers'   Certificate   for   7-3/4%   Debentures   Due   2026
                (incorporated  by reference to Exhibit 99.6 of the  Registrant's
                Current  Report on Form 8-K dated December 17, 1996 (File No. 1-
                2227)).

          4.x   Officers'   Certificate   for   7-1/2%   Debentures   Due   2096
                (incorporated  by  reference  to  Exhibit  99.7 of  Registrant's
                Current  Report on Form 8-K dated December 17, 1996 (file No. 1-
                2227)).

          4.y   Officers' Certificate for 6-3/4% Notes Due 2003 (incorporated by
                reference to Exhibit 99.8 of the Registrant's  Current Report on
                Form 8-K dated December 17, 1996 (File No. 1- 2227)).

          4.z   Officers'  Certificate  for 7% Notes Due 2006  (incorporated  by
                reference to Exhibit 99.9 of the Registrant's  Current Report on
                Form 8-K dated December 17, 1996 (File No. 1-2227)).

          4.aa  Officers'  Certificate  6-3/4% Notes Due 2003  (incorporated  by
                reference to Exhibit 99.10 of the Registrant's Current Report on
                Form 8-K dated December 17, 1996 (File No. 1-2227)).

          4.bb  Terms  Agreement  dated  December  12,  1996   (incorporated  by
                reference to Exhibit 1.1 of the  Registrant's  Current Report on
                Form 8-K dated December 12, 1996 (File No. 1-2227)).

          4.cc  Form of Bearer Security  Depositary  Agreement  (incorporated by
                reference  to  Exhibit  4.2  of  the  Registrant's  Registration
                Statement on Form S-3 dated November 26, 1996 amended December 5
                and 10, 1996, (File No. 333-16869)).

                Other  long-term  agreements  of the  Registrant  are not  filed
                pursuant to Item  601(b)(4)(iii)(A)  of regulation  S-K, and the
                Registrant  agrees to furnish  copies of such  agreements to the
                Securities and Exchange Commission upon its request.

          10.a  Crown Cork & Seal Company,  Inc. Executive Deferred Compensation
                Plan   (incorporated   by   reference   to  Exhibit  10  of  the
                Registrant's  Annual  Report  on Form  10-K for the  year  ended
                December 31, 1991 (No. 1-2227)).

          10.b  1990 Stock-Based  Incentive  Compensation Plan  (incorporated by
                reference to Exhibit 10.2 of the  Registrant's  Annual Report on
                Form  10-K  for the year  ended  December  31,  1992  (File  No.
                1-2227)).

          10.c  Crown  Cork & Seal  Company,  Inc.  Restricted  Stock  Plan  for
                Non-Employee  Directors.   (incorporated  by  the  reference  to
                Exhibit 10.3 of the Registrant's Annual Report on Form 10- K for
                the year ended December 31, 1992 (File No. 1-2227)).

          10.d  Crown  Cork  &  Seal   Company,   Inc.   Stock   Purchase   Plan
                (incorporated  by  reference  to  Exhibit  4.3 of the  Company's
                Registration  Statement on Form S-8,  filed with the  Securities
                and  Exchange  Commission  on March 16, 1994  (Registration  No.
                33-52699)).

                                      -54-
<PAGE>
                         Crown Cork & Seal Company, Inc.

          10.e  Crown  Cork & Seal  Company,  Inc.  1994  Stock-Based  Incentive
                Compensation Plan  (incorporated by reference to Exhibit 10.g of
                the  Company's  Annual  Report on Form  10-K for the year  ended
                December 31, 1994 (File No. 1-2227)).

          10.f  Crown  Cork & Seal  Company,  Inc.  1997  Stock-Based  Incentive
                Compensation Plan.

          10.g  Crown Cork & Seal Company,  Inc. Deferred  Compensation Plan for
                Directors,  dated  as  of  October  27,  1994  (incorporated  by
                reference to Exhibit 10.b of  Registrant's  Quarterly  Report on
                Form  10-Q  for the  quarter  ended  June  30,  1995  (File  No.
                1-2227)).

          10.h  Crown  Cork  & Seal  Company,  Inc.  Pension  Plan  for  outside
                Directors,  dated  as  of  October  27,  1994  (incorporated  by
                reference to Exhibit 10.c of the  Registrant's  Quarterly Report
                on Form  10-Q for the  quarter  ended  June 30,  1995  (File No.
                1-2227)).

          10.i  Crown Cork & Seal Company,  Inc. Dividend Reinvestment and Stock
                Purchase  Plan  (incorporated  by  reference  to  the  Company's
                Prospectus  dated May 31, 1996  forming a part of the  Company's
                Registration  Statement on Form S-3 (No.  333-04971)  filed with
                the Securities and Exchange Commission on May 31, 1996).

                Exhibits 10.a through 10.i, inclusive,  are management contracts
                or compensatory  plans or  arrangements  required to be filed as
                exhibits pursuant to Item 14(c) of this Report.

          11.   Statement re Computation of Per Share Earnings

          12.   Computation of ratio of earnings to fixed charges

          21.   Subsidiaries of Registrant.

          23.   Consent of Independent Accountants.

          27.   Financial Data Schedule

     b)   Reports on Form 8-K

          There were no reports on Form 8-K filed by Crown Cork & Seal  Company,
          Inc. during the quarter for which this report is filed.

                                      -55-
<PAGE>
                         Crown Cork & Seal Company, Inc.

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                               Crown Cork & Seal Company, Inc.
                                               ---------------------------------
                                               Registrant


Date: March 31, 1998
      -------------------------------

                                           By: /s/ Timothy J. Donahue
                                               ---------------------------------
                                               Timothy J. Donahue
                                               Senior Vice President and
                                               Corporate Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated:

SIGNATURE                                TITLE

/s/ William J. Avery        3/31/98
-----------------------------------
William J. Avery                         Chairman of the Board
                                         and Chief Executive Officer

/s/ Alan W. Rutherford      3/31/98
-----------------------------------
Alan W. Rutherford                       Director, Executive Vice President
                                         and Chief Financial Officer


                                    DIRECTORS

/s/ Henry E. Butwel         3/31/98      /s/ Josephine C. Mandeville     3/31/98
-----------------------------------      ---------------------------------------
Henry E. Butwel                          Josephine C. Mandeville

/s/ Charles F. Casey        3/31/98      /s/ Michael J. McKenna          3/31/98
-----------------------------------      ---------------------------------------
Charles F. Casey                         Michael J. McKenna

/s/ John W. Conway          3/31/98      /s/ Jean-Pierre Rosso           3/31/98
-----------------------------------      ---------------------------------------
John W. Conway                           Jean-Pierre Rosso

                                         /s/ Harold A. Sorgenti          3/31/98
-----------------------------------      ---------------------------------------
Francis X. Dalton                        Harold A. Sorgenti

/s/ Richard L. Krzyzanowski 3/31/98      /s/ Guy de Wouters              3/31/98
-----------------------------------      ---------------------------------------
Richard L. Krzyzanowski                  Guy de Wouters

                                      -56-