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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, 1998

          [   ]     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                 (Employer Identification No.)
of 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. [ ]

As of March 12,  1999,  122,304,150  shares of the  Registrant's  Common  Stock,
excluding shares held in Treasury, and 8,376,451 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 $3,638,385,766.

                       DOCUMENTS INCORPORATED BY REFERENCE

Notice  of  Annual  Meeting  and  Proxy   Statement  dated  March  22,  1999  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..........................................................7

Item 3    Legal Proceedings...................................................8

Item 4    Submission of Matters to a Vote of Security Holders.................8


                                    PART II

Item 5    Market for Registrant's Common Stock and Related 
          Stockholder Matters.................................................8

Item 6    Selected Financial Data.............................................9

Item 7    Management's Discussion and Analysis of Financial Condition
          and Results of Operations..........................................11

Item 8    Financial Statements and Supplementary Data........................28

Item 9    Disagreements on Accounting and Financial Disclosure...............56


                                    PART III

Item 10   Directors and Executive Officers of the Registrant.................56

Item 11   Executive Compensation.............................................57

Item 12   Security Ownership of Certain Beneficial Owners and Management.....57

Item 13   Certain Relationships and Related Transactions.....................57


                                    PART IV

Item 14   Exhibits, Financial Statement Schedules and Reports
             on Form 8-K.....................................................58

SIGNATURES...................................................................62

<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 1998 consolidated
net sales of $8.3 billion. Approximately 60% of 1998 net sales were derived from
operations  outside the United  States with  approximately  72% 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 223 plants,
along with sales and service  facilities  in 49  countries  and  employs  38,459
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 three operating
segments,  Americas,  Europe and  Asia-Pacific,  and within selected  geographic
areas is set forth later in this  section on pages 3 through 6 under  "Operating
Segments",  in Part II herein on pages 12 and 13 under "Net  Sales" and pages 13
and 14 under  "Operating  Income"  within Item 7,  "Management's  Discussion and
Analysis of Financial  Condition  and Results of  Operations"  and within Item 8
herein  on  pages  51  through  53 under  Note T to the  Consolidated  Financial
Statements  entitled  "Segment  Information",  which information is incorporated
herein by reference.

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 included
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 $8.3 billion in
1998. 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 within  Item 8 of this Report on pages 37 and 38 under Note I
to the  Consolidated  Financial  Statements,  which  information is incorporated
herein by reference.

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, 1998, the Company's  products were  manufactured in 69 plants
within the United States and 154 plants outside the U.S. The Company markets and
sells  products to customers  through its own sales and marketing  staff located
centrally within each operating segment  (division).  The segments' sales staffs
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 1996  through  1998,  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  million in each of 1998 and 1997 and $52 million in
1996, 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.  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.

                                   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 1998 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  months  of the year.  Consequently,  sales and
earnings  have  generally  been  higher in the second and third  quarters of the
calendar year.

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


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,  liquidity
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 pages 20 and
21 under the caption  "Environmental  Matters",  which is incorporated herein by
reference.

                                 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",  which is incorporated herein by
reference.

                                    EMPLOYEES

At December 31, 1998, the Company employed 38,459 people throughout the world. A
significant  number  of  the  Company's  employees  are  covered  by  collective
bargaining agreements with varying terms and expiration dates.

                               OPERATING SEGMENTS

The  Company  is  organized  on the  basis  of  geographic  regions  with  three
reportable segments:  Americas,  Europe and Asia-Pacific.  The Americas includes
the United States, Canada and Central and South America. Europe includes Europe,
Africa and the Middle East.  Asia-Pacific  includes  China and  Southeast  Asia.
Although the economic  environments within each of these reportable segments are
diverse,  they are  similar  in the  nature of their  products,  production  and
distribution processes and types and classes of customers.

Global  marketers  continue to demand 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 and Asia and an RD&E
center in England.

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


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 packaging in which it competes;
however, the Company encounters  competition from a number of companies offering
similar products.

During 1998, the Company provided  restructuring costs associated with a plan to
close 13 plants and to reorganize 3 additional plants. These actions reflect the
Company's   continued   commitment   to  realign  its   Americas'  and  European
manufacturing facilities with the objective of enhancing operating efficiencies.
Further  discussion of the Company's 1998  restructuring  action is contained in
Part II hereof within Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of  Operations"  on pages 18 and 19 under  "Provision  for
Restructuring"  and  within  Item 8 herein on pages 39  through 41 Note L to the
Consolidated  Financial  Statements,  which discussion is incorporated herein by
reference.

The Company's  basic raw  materials for its products are tinplate,  aluminum and
resins.  These  materials are obtained from the major suppliers in the countries
within  which  the  Company  operates  plants.  Some  plants  in  less-developed
countries, which do not have local mills, obtain their raw materials from nearby
more- developed countries. In 1998, consumption of tinplate,  aluminum and resin
represented 28.2%, 23.5%, and 4.6%, respectively, of consolidated cost of sales.
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.

                                    AMERICAS

For 1998, the Company's Americas segment had net sales of $4,077  (approximately
49% of consolidated net sales) and operating income of $289  (approximately  52%
of consolidated operating income). Excluding the provision for restructuring and
other charges, Americas operating income in 1998 was $374 or 43% of consolidated
operating  income.  Approximately 82% of Americas segment sales are derived from
within the United States.  The Americas segment  manufactures  beer and beverage
cans and ends, steel and aluminum  containers for vegetable,  fruit, meat, fish,
seafood,  tomato based products and other various food products.  Steel cans for
aerosol,  motor oil, paint and other household and industrial  items and plastic
containers  for  beverage,   food,   household   products,   personal  care  and
pharmaceutical products.

The  Company,  based on sales,  is one of three  leading  producers  of aluminum
beverage cans and ends within the Americas.  Sales dollars for aluminum beverage
cans and ends in 1998  increased over 1997 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.  The Company
has also  redeployed  excess  beverage can capacity in North America to emerging
markets, and to a lesser extent, retrofitted to produce two-piece food cans.

The  Company,  based on sales,  is one of three  leading  producers of steel and
aluminum  food cans and ends in North  America.  Sales dollars for food cans and
ends in 1998 increased over 1997 due to the  pass-through  of higher steel costs
to customers which was partially offset by lower sales unit volumes.

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 1998. During 1998, 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. 

                                       -4-
<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.

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 1998, as aluminum prices fluctuated,
selling  prices  to  customers  for  aluminum  beverage  cans and ends were also
adjusted. 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  plastic
containers produced from PET (polyethylene terephthalate) and HDPE (high-density
polyethylene)  within the United States.  The Company is also a leading producer
of plastic closures for beverage containers and a leading producer of health and
beauty  care  products  in the  United  States.  Plastic  products  continue  to
represent a larger portion of Americas segment dollar sales,  despite  decreases
in PET  pricing  which  was  passed-through  to  customers  in the form of lower
selling  prices.  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.

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.  Further  discussion  of the  Company's  1997
restructuring action 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 page 40
under Note L to the  Consolidated  Financial  Statements,  which  information is
incorporated herein by reference.

At December 31, 1998, the Company operated 98 plants and employed  approximately
14,700 persons in the Americas.

                                     EUROPE

The European segment had net sales of $3,888  (approximately 47% of consolidated
net  sales)  in  1998  and  operating  income  of  $479  (approximately  86%  of
consolidated  operating  income).  Excluding the provision for restructuring and
other  charges,  operating  income  was  $556 or 65% of  consolidated  operating
income. Net sales in the United Kingdom of $1,112 and France of $832 represented
29%  and  21%,   respectively, of  segment  net  sales.   The  European  segment
manufactures  steel and  aluminum  beer and  beverage  cans and ends,  steel and
aluminum food cans,  steel cans for aerosol,  motor oil, paint,  other household
products and specialty  packaged  products,  plastic containers and closures for
beverage, food, household products and health, beauty and personal care products
as well as metal crowns and closures for beverage and food products.

In 1996, the Company acquired CMB, a leading multinational manufacturer of metal
and plastic  packaging  materials and equipment.  CMB,  headquartered  in Paris,
France,  had  approximately  28,000  employees  located in 175 facilities and 38
countries as of the date of acquisition.  CMB derived  approximately  90% of its
pre-acquisition  net  sales  of  $4,900  from  its  European   operations.   The
acquisition of CMB positions the Company as a leading  European  manufacturer of
steel and  aluminum  food and  beverage  containers,  aerosol  containers  and a
variety of plastic packaging products including PET beverage bottles and plastic
closures for beverage, household and personal care applications.

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

At December 31, 1998, the Company operated 107 plants and employed approximately
21,000 persons throughout the European segment.

Discussion of the Company's  European  restructuring  activities with respect to
the   acquisition  of  CMB,   including  the  closure  of  plants  and  regional
administrative  offices and other plant  reorganizations is contained in Part II
hereof  within  Item 7,  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of  Operations"  on pages 18 and 19 under  "Provision  for
Restructuring"  and  within  Item 8 of this  Report on pages 39 through 41 under
Note  L  to  the  Consolidated   Financial   Statements,   which  discussion  is
incorporated herein by reference.

                                 ASIA - PACIFIC

The Asia-Pacific segment had net sales of $335 (approximately 4% of consolidated
net sales in 1998) and operating income, before restructuring and other charges,
of $3.  While  below  reportable  segment  thresholds,  the  Company has defined
Asia-Pacific  as a reportable  segment as this  segment is a separate  operating
division  within the Company.  The Company  reviews  results of  operations  and
allocates  resources  to  Asia-Pacific   separately  from  its  other  operating
divisions.  The  Asia-Pacific  segment  manufactures  aluminum beer and beverage
cans,  steel food cans,  PET beverage  bottles,  plastic  closures for beverage,
food,  household  products and personal care  applications  and metal crowns and
closures for beverage and food products.

With the acquisition of CMB, the Company  expanded its presence in Asia-Pacific,
primarily in the  manufacture  of two-piece  aluminum  beer and beverage cans in
Southeast  Asia.  Overcapacity  in China and Southeast Asia has resulted in very
competitive  selling price pressures.  Recent economic and political  turmoil in
several Southeast Asian countries has not only lowered demand in Southeast Asia,
but has also resulted in a decrease in exports from Company operations in China.
In connection  with the CMB  acquisition,  the Company,  through its  subsidiary
CarnaudMetalbox  Asia,  Ltd.,  provided  for the closure of eight  acquired  CMB
operations  since 1996.  The Company also closed two existing  operations  since
1997. The Company  believes it is well  positioned to benefit from future demand
growth in China and Southeast Asia and has  restructured its cost base to remain
competitive in the near-term.

At December 31, 1998, the Company operated 18 plants and employed  approximately
2,200 persons in Asia- Pacific.



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


ITEM 2.   PROPERTIES

Crown Cork & Seal  Company,  Inc. and its  worldwide  consolidated  subsidiaries
operate 223  manufacturing  facilities.  Within the United  States  there are 69
manufacturing  facilities.  Generally,  there are more individual  facilities in
which multiple  product lines are produced in the United States than outside the
United States. The Company has three operating segments, defined geographically,
within which it manufactures and markets its products.

The  geographic  breakdown  of  the  Company's  manufacturing  facilities  is as
follows:

<TABLE>
<CAPTION>
                                                                                                     No.                No.
Geographic Area*                       Americas           Europe             Asia-Pacific        of Plants            Leased
<S>                                      <C>             <C>                     <C>               <C>                <C>
United States                              69                                                        69                 26
Canada                                     10                                                        10
Central America                             9                                                         9                  4
South America                              10                                                        10
United Kingdom                                              20                                       20                  2
France                                                      21                                       21                  9
Other Europe                                                51                                       51                 11
Africa                                                      13                                       13                  2
Middle East                                                  2                                        2
Asia-Pacific                                                                       18                18                 14
                              --------------------------------------------------------------------------------------------
Worldwide Total                            98              107                     18               223                 68
                              ============================================================================================
</TABLE>

* Excluded  are  productive  facilities  in announced  restructuring  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  in the  operating  segments,  the
Company has various support  facilities.  Such  facilities  include machine shop
operations, printing for cans and crowns, coil shearing, coil coating and RD&E.

                                       -7-
<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 in the United States.

ITEM 3.   LEGAL PROCEEDINGS

In management's opinion, there are no pending claims or litigation,  the adverse
determination  of which would have a material adverse effect on the consolidated
financial position or liquidity of the Company.

The Company is one of a number of defendants in a substantial number of lawsuits
filed by persons alleging bodily injury as a result of exposure to asbestos.

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.

During the fourth quarter of 1998, the Company recorded a charge of $78 million,
net of tax, to provide for an estimated  liability for lawsuits  alleging injury
as a result  of  exposure  to  asbestos.  Further  discussion  of the  Company's
provision  for  litigation  is  contained  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  "Provision  for  Litigation",
which is incorporated herein by reference.

Further information on these matters is presented in this Report in (i) Part II,
Item 7 entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations" under the headings "Provision for Litigation" on pages 19
and 20 and  "Environmental  Matters" on pages 20 and 21 and (ii) Part II, Item 8
of this  Report on pages 38 and 39 under  Note K to the  Consolidated  Financial
Statements entitled "Commitments and Contingent Liabilities",  which information
is incorporated herein by reference.

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

None

EXECUTIVE OFFICERS OF THE REGISTRANT

Information   concerning  the  principal  executive  officers  of  the  Company,
including  their ages and positions,  is set forth in a table found in Part III,
Item 10, "Directors and Executive  Officers of the Registrant" of this Report on
page 56, which table is incorporated herein by reference.

                                     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 12,  1999,  there  were  5,497
registered  shareholders  of the  Registrant's  Common  Stock and 50  registered
shareholders of the Registrant's  4.5% Cumulative  Convertible  Preferred Stock.
The market price at December 31, 1998, with respect to the  Registrant's  Common
Stock is set  forth  in Item 8 of this  Report  on page 54  under  Note U to the
Consolidated  Financial Statements entitled "Quarterly Data (unaudited)",  which
is incorporated  herein by reference.  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 21 and 22 of this Report, which is incorporated herein by reference.

                                       -8-
<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)                                      1998         1997         1996         1995          1994
--------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>           <C>         <C>           <C>    
Summary of Operations

Net sales........................................      $ 8,300      $ 8,495       $8,332      $ 5,054       $ 4,452
                                                       -------------------------------------------------------------
Cost of products sold............................        6,527        6,708        6,733        4,319         3,706
Depreciation and amortization....................          533          540          496          256           218
Selling and administrative expense...............          379          414          387          139           135
   % to net sales................................          4.6%         4.9%         4.6%         2.8%          3.0%
Provision for restructuring and
   other charges.................................          304           67           40          103           115
Gain on sale of assets...........................                       (38)         (24)          (8)           (7)
Interest expense, net of interest income.........          363          340          306         136             92
Translation and exchange adjustments.............           14            7          (37)          (1)           10
                                                       -------------------------------------------------------------
Income before income taxes and
   cumulative effect of accounting changes ......          180          457          431           110          183
   % to net sales................................          2.2%         5.4%         5.2%         2.2%          4.1%
Provision for income taxes.......................           74          148          134           25            56
Minority interests, net of equity earnings.......           (1)          (7)         (13)         (10)            4
                                                       -------------------------------------------------------------
Net income before cumulative effect of
   accounting changes............................          105          302          284           75           131
   % to net sales................................          1.3%         3.6%         3.4%         1.5%          2.9%
Cumulative effect of accounting changes (1) .....                        (8)
                                                       -------------------------------------------------------------
Net income (2)...................................          105          294          284           75           131
Preferred stock dividends........................           17           23           20
                                                       -------------------------------------------------------------
Net income available to common
   shareholders..................................      $    88      $   271      $   264       $   75        $  131
                                                       ==============================================================

Return on average shareholders' equity (3) ......          3.2%         8.3%        11.3%          5.3%       10.0%
--------------------------------------------------------------------------------------------------------------------

Financial Position at December 31
Working capital..................................     ($ 1,542)    ($   902)    ($   371)      $  430        $  123
Total assets.....................................       12,469       12,306       12,590        5,052         4,781
Short-term debt plus current long-term
   debt maturities...............................        2,466        1,784        1,154          608           736
Long-term debt...................................        3,188        3,301        3,924        1,490         1,090
Total debt to total capitalization...............         62.3%        56.1%        56.4%        56.2%         55.3%
Minority interests...............................          280          283          244          119            75
Shareholders' equity.............................        2,975        3,529        3,563        1,461         1,365
--------------------------------------------------------------------------------------------------------------------
</TABLE>

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

<TABLE>
<CAPTION>
FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA (Continued)
--------------------------------------------------------------------------------------------------------------------
(in millions, except per share, ratios and
  other statistics)                                       1998         1997         1996         1995         1994
--------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>          <C>          <C>           <C>    
Common Share Data (dollars per share)
Earnings per average common share
   Basic -    before cumulative effect of
              accounting change..................         $.71        $2.17        $2.16         $.83         $1.47
              after cumulative effect of
              accounting change .................                      2.11
   Diluted -  before cumulative effect of
              accounting change .................          .71         2.15         2.14          .83          1.46
              after cumulative effect of
              accounting change .................                      2.10
Cash Dividends...................................         1.00         1.00         1.00
Market price on December 31......................        30.81        50.13        54.38        41.75         37.75
Book value (based on year-end
   outstanding shares plus assumed
   conversion of preference shares)..............        22.89        25.26        25.50        16.13         15.27
Number of shares outstanding
   at year-end...................................        122.3        128.4        128.4         90.6          89.4
Average shares outstanding
   Basic.........................................        124.4        128.4        122.5         90.2          89.1
   Diluted.......................................        132.9        140.3        132.4         90.6          89.9
Shareholders (on record).........................        5,644        5,763        5,736        5,976         6,011
--------------------------------------------------------------------------------------------------------------------
Other Statistics
Capital expenditures.............................      $   487      $   515      $   631      $   434       $   440
Number of Employees..............................       38,459       40,985       44,611       20,409        22,373
Actual preferred shares outstanding..............          8.4         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.
(2)    Figures for 1998, 1997, 1996, 1995 and 1994 include after-tax adjustments
       for  restructuring,  $127 or $1.02 per basic  share and $.95 per  diluted
       share;  $43 or $.33 per basic  share and $.31 per diluted  share;  $32 or
       $.26 per basic  share and $.24 per diluted  share;  $67 or $.74 per basic
       share and  diluted  share;  and $73 or $.82 per basic  share and $.81 per
       diluted  share,  respectively.  Net  income  for 1998  also  includes  an
       after-tax charge for litigation, $78 or $.63 per basic share and $.59 per
       diluted share.
(3)    Excluding the adjustment for restructuring, litigation and the cumulative
       effect of accounting changes, the return on average  shareholders' equity
       in 1998,  1997,  1996, 1995 and 1994 would have been 9.2%,  9.7%,  12.6%,
       10.0% and 15.6%, respectively.

                                      -10-
<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; per
share earnings are quoted as diluted)

                                  INTRODUCTION

This  discussion  summarizes the  significant  factors  affecting the results of
operations  and  financial  condition of Crown Cork & Seal  Company,  Inc.  (the
"Company") during the three-year period ended December 31, 1998. This discussion
should  be  read  in  conjunction  with  the  letter  to  Shareholders  and  the
Consolidated Financial Statements included in this annual report.

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, pre-tax income, net income and earnings per
share) for 1998, 1997 and 1996 were impacted by restructuring  and other charges
or accounting changes. These items are summarized below:

                         RESTRUCTURING AND OTHER CHARGES

Pre-tax  income was charged for $304 ($205 after taxes or $1.54 per share),  $67
($43 after  taxes or $.31 per share) and $40 ($32 after taxes or $.24 per share)
in 1998, 1997 and 1996, respectively.

Further information concerning the details of the restructuring plans, including
a  reconciliation  of the  restructuring  accrual is  included  in Note L to the
Consolidated  Financial  Statements  and under  Provision for  Restructuring  as
provided later in this discussion. Further information concerning the details of
the other charge is included in Note K to the Consolidated  Financial Statements
and under Provision for Litigation 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 $8 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

The  Company  is  organized  on the  basis  of  geographic  regions  with  three
reportable segments:  Americas,  Europe and Asia-Pacific.  The Americas includes
the United States, Canada and South and Central America. Europe includes Europe,
Africa and the Middle East.  Although the economic  environments  within each of
these reportable  segments are quite diverse,  they are similar in the nature of
their products, the production processes,  the types or classes of customers for
products and the methods used to  distribute  products.  Asia-Pacific,  although
below reportable segment thresholds, has been designated as a reportable segment
because  considerable  review  is made  of this  region  for the  allocation  of
resources.  Each reportable  segment is an operating division within the Company
and has a President  reporting  directly to the Chief Executive  Officer and the
Chief  Operating  Officer.  "Other"  includes  Corporate  activities,   such  as
Corporate  Technology  and,  prior  to 1998,  included  the  divested  machinery
operations of Crown-Simplimatic.

The Company  evaluates  performance  and allocates  resources based on operating
income, that is, income before net interest,  foreign exchange and gain(loss) on
sale of assets. The accounting policies for each reportable segment are the same
as those described in Note A, "Summary of Significant Accounting Policies."

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


NET SALES

Net sales during 1998 were  $8,300,  a decrease of $195 versus 1997 net sales of
$8,495. Net sales during 1996 were $8,332. Sales from U. S. operations decreased
1.7% in 1998 compared with a 2.0% increase in 1997.  Non-U.  S. sales  decreased
2.7% in 1998 following a 1.9% increase in 1997. U. S. sales  accounted for 40.2%
of consolidated net sales in 1998, 40.0% in 1997 and 39.9% in 1996.

<TABLE>
<CAPTION>
                                                                                               % Increase/
                                                            Net Sales                           (Decrease)
                                               ------------------------------             ------------------------
DIVISION                                         1998        1997       1996               1998/1997    1997/1996
------------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>        <C>                 <C>          <C>
Americas....................................    $4,077      $4,021     $3,823                1.4          5.2
Europe......................................     3,888       4,045      3,987               (3.9)         1.5
Asia-Pacific................................       335         369        384               (9.2)        (3.9)
Other.......................................                    60        138                           (56.5)
                                               ------------------------------
                                                $8,300      $8,495     $8,332               (2.3)         2.0
                                               ==============================
</TABLE>

The increase in 1998  Americas  Division net sales is a result of (i) sales unit
volume  increases  across most U.S. and  Canadian  product  lines,  most notably
beverage cans,  aerosol cans, PET beverage bottles and beverage  closures,  (ii)
increased  sales unit volumes of beverage cans in  Argentina,  Brazil and Mexico
and (iii)  initial sales unit volumes at the Company's new beverage can plant in
Colombia;  offsetting  (i) sales unit volume  decreases of food cans in the U.S.
and Canada and (ii)  decreased  raw material  prices  which forced  decreases in
selling prices, primarily in PET bottles. The increase in 1997 Americas Division
net  sales is a result of (i)  sales  unit  volume  increases  across  most U.S.
product  lines and (ii) initial  sales volumes at the Company's new beverage can
and end  plants in  Brazil;  offsetting  decreased  raw  material  prices  which
resulted in decreased selling prices, primarily in PET bottles and aluminum cans
and ends. U.S. sales accounted for approximately  81.8% of division net sales in
1998, 84.4% in 1997 and 87.0% in 1996.

Excluding the unfavorable  impact of foreign  currency  translation and business
divestitures,  net sales in the European Division  decreased 2.1% in 1998 versus
1997.  The  decrease  is a result  of (i) lower  PET  resin  costs  passed on to
customers in the form of lower  selling  prices,  (ii) lower food can volumes in
the United  Kingdom and Spain,  (iii) lower  beverage  can volumes in the United
Kingdom and Turkey and (iv) lower aerosol volumes in the United Kingdom;  offset
by (i) increased food can volumes in France and Italy,  (ii) increased  beverage
closure volumes throughout the division and (iii) increased beverage can volumes
in Spain and the  United  Arab  Emirates.  Demand for  several of the  Company's
products  in the United  Kingdom  was  adversely  affected  by the strong  pound
sterling during 1998. Not only was it more difficult for our customers to export
filled  products,  but their local  market was made more  competitive  by filled
imports.  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 and (ii) sales unit volume decreases of
food and beverage cans.  Pricing  remained very  competitive  across all product
lines.

Net sales in 1998 as compared to 1997 for 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 $20, (ii) lower food can sales
unit volumes  primarily  reflecting the  restructuring of operations in Malaysia
and  Singapore  in 1997,  (iii)  competitive  pricing  across all product  lines
throughout the division due mainly to excess capacity and (iv) political  unrest
which hampered economic growth in several  Southeast Asian countries;  offset by
increased  sales  unit  volumes of (i)  beverage  cans in China,  Singapore  and
Vietnam and (ii) food cans in Thailand.  Net sales in the Asia-Pacific  Division
decreased  in 1997 as  compared  to 1996 as a  result  of (i)  foreign  currency
translation  which reduced  division net sales by $25, (ii) excess  beverage can
capacity and aggressive  competition which eroded selling prices in China, (iii)
the closure of several

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


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  throughout  the
division and (b) food cans in Thailand.

COST OF PRODUCTS SOLD

Cost of products sold,  excluding  depreciation and  amortization,  for 1998 was
$6,527; a 2.7% decrease from $6,708 in 1997, following a decrease of .4% in 1997
and an  increase  of 55.9%  in  1996.  The  decreases  in 1998 and 1997  cost of
products sold are attributable to cost savings from restructuring  programs, the
appreciation  of the U.S.  dollar against many foreign  currencies and decreased
PET resin prices, offsetting increased sales unit volumes in many product lines.
The increase in 1996 cost of products sold was attributable to the increased net
sales level in 1996 partially offset by decreased raw material prices.

As a  percentage  of net  sales,  cost of  products  sold  was  78.6% in 1998 as
compared  to 79.0% in 1997 and  80.8% in 1996.  The  improvement  in 1998  gross
margin is due primarily to the benefits  derived from the  Company's  continuing
cost  containment and  restructuring  programs  partially  offset by competitive
influences on selling prices.

SELLING AND ADMINISTRATIVE

Selling and administrative  expenses for 1998 were $379, a decrease of 8.5% from
1997 compared to increases of 7.0% for 1997 and 178.0% for 1996. The decrease in
1998 costs is primarily related to the restructuring  activities within acquired
CMB operations.  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.  As a  percentage  of net sales,
selling and administrative  expenses were 4.6% in 1998, 4.9% in 1997 and 4.6% in
1996.

OPERATING INCOME

The Company  views  operating  income as the  principal  measure of  performance
before interest costs and other nonoperating  expenses.  Operating income, after
restructuring and other charges, was $557, $766 and $676 in 1998, 1997 and 1996,
respectively.  Operating income, before restructuring and other charges, at $861
in  1998,  was  $28  greater  than  in  1997.   Operating  income,   before  the
restructuring  charge, at $833 in 1997, was $117 greater than in 1996. Operating
income, before restructuring and other charges, as a percentage of net sales was
10.4% in 1998 as compared to 9.8% in 1997 and 8.6% in 1996.

An analysis of operating  income,  before  restructuring  and other charges,  by
operating division follows:

<TABLE>
<CAPTION>
                                                                                               % Increase/
                                                        Operating Income                        (Decrease)
                                                  ---------------------------            ------------------------
DIVISION                                           1998       1997       1996            1998/1997     1997/1996
-----------------------------------------------------------------------------------------------------------------
<S>                                              <C>        <C>        <C>                <C>          <C> 
Americas....................................       $374       $335       $293               11.6         14.3
Europe......................................        556        565        480               (1.6)        17.7
Asia-Pacific................................          3          7         14              (57.1)       (50.0)
Other.......................................        (72)       (74)       (71)               2.7         (4.2)
                                                  ---------------------------
                                                   $861       $833       $716                3.4         16.3
                                                  ===========================
</TABLE>

Operating  income in the Americas  Division was 9.2% of net sales in 1998 versus
8.3% in 1997 and 7.7% in 1996. The increase in 1998 operating income and margins
is due to (i)  increased  sales unit volumes in the U.S. and Canada  across most
product lines, (ii) increased  manufacturing  efficiencies in the U.S. and (iii)
the benefits  derived from  restructuring,  capital  expenditure  and other cost
improvement programs initiated

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


in recent years;  offsetting (i) continued U.S.  pricing  pressures in food cans
and in both metal and  plastic  beverage  containers,  (ii) lower  beverage  can
pricing in  Argentina  and Brazil and (iii) sales unit volume  decreases of food
cans in the U.S. and Canada.  The increase in 1997  operating  margins is due to
(i)  increased  sales unit  volumes in the U.S.  and Canada  across most product
lines,  (ii)  increased  manufacturing  efficiencies  in most U.S.  and Canadian
plants due to the completion of the 202 diameter conversion programs in 1996 and
(iii) the startup 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
Company has 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.

European  Division  operating  income was 14.3% as a percentage  of net sales in
1998  compared  to 14.0%  in 1997 and  12.0%  in  1996.  The  decrease  of $9 in
operating  income in 1998 is a result of (i) the appreciation of the U.S. dollar
against most  European  currencies,  (ii) very  competitive  food can pricing in
France and Italy and (iii)  decreased  sales unit volumes in the United  Kingdom
across several product lines. However,  operating income, as a percentage to net
sales,  increased over 1997 due to cost savings  achieved by  restructuring  and
modernizing  acquired  CMB and  existing  Company  operations.  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) foreign exchange  translation 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  and (iii)  decreased  sales  unit
volumes of beverage cans and ends.

Operating  income  in the  Asia-Pacific  Division  was .9% of net  sales in 1998
versus 1.9% in 1997 and 3.6% in 1996.  The  decrease in 1998 and 1997  operating
margins is due to (i)  competitive  pricing across all product lines  throughout
the division and (ii) the ongoing  appreciation  of the U.S. dollar against most
Southeast Asian currencies  offsetting (i) strong sales unit volumes of beverage
cans in China,  Singapore,  and Vietnam,  (ii) strong sales unit volumes of food
cans in Thailand and (iii) the benefits accruing to the Company from the closure
of ten plants since the second quarter of 1996.

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
included $90 in cash and $15 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, were realized
from the sales of the  machinery  operations  and surplus  properties in 1997 as
compared to gains of $24 in 1996.

NET INTEREST EXPENSE/INCOME

Net interest  expense was $363 in 1998, an increase of $23 when compared to 1997
net  interest  expense  of $340.  Net  interest  expense  was $306 in 1996.  The
increase in 1998 net  interest  expense is due  primarily to the  repurchase  of
common and preferred stock made in March 1998. 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.   Further   information   regarding
acquisitions is found in Note I to the Consolidated Financial Statements,  while
information  specific  to  Company  financing  and  repurchases  of  common  and
preferred stock is presented in the Liquidity and Capital  Resources  section of
this discussion and Note M to the Consolidated Financial Statements.

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


FOREIGN EXCHANGE

Unfavorable foreign exchange adjustments of $14 and $7 were recorded in 1998 and
1997, respectively, primarily from the remeasurement of the Company's operations
in highly inflationary economies.  Favorable foreign exchange adjustments of $37
were recorded in 1996. During 1996, the Company recorded a foreign exchange gain
of $42  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 41.1%,  32.4% and 31.1% in 1998, 1997 and
1996, respectively. Excluding restructuring and other charges, the effective tax
rates were  35.7%,  32.8% and 30.1% in 1998,  1997 and 1996,  respectively.  The
increase in the effective tax rate in 1998 is principally a result of the effect
of non-deductible  goodwill  amortization  having a greater percentage impact on
lower pre-tax income.  The effective rate was lower than the U.S. statutory rate
of 35% in 1997 and  1996 as a  result  of  lower  effective  rates  in  non-U.S.
operations and the continuing  reevaluation  of reserve and valuation  allowance
requirements;  partially  offset by  nondeductible  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 R to the  Consolidated  Financial
Statements.

MINORITY INTERESTS, NET OF EQUITY EARNINGS

Minority  interests'  share of net  income  was $5, $9 and $6 in 1998,  1997 and
1996, respectively.  The decrease in minority interests in 1998 is due primarily
to (i) decreased  profits in China,  (ii) start-up  losses in Colombia and (iii)
charges  incurred to close the Hong Kong plant  offset by  increased  profits in
Morocco.

Equity in  earnings/(losses) of affiliates was $4, $2 and ($7) in 1998, 1997 and
1996, respectively. The increase in equity earnings in 1998 primarily relates to
(i) improved earnings in the Company's non-consolidated affiliates in Mexico and
Venezuela  and  (ii)  no  further  losses  being  recognized  in  the  Company's
non-consolidated  joint venture in Korea as the  investment  has been reduced to
zero and the  Company  does not plan nor is  required  to inject  capital in the
future.

NET INCOME AND EARNINGS PER SHARE

Net income for 1998 was $88 compared with $271 in 1997 and $264 in 1996. Diluted
earnings per share for 1998 was $.71  compared with $2.10 and $2.14 for 1997 and
1996,  respectively.  Net income from  operations,  excluding  the provision for
restructuring  and  other  charges,  gain on sale of  assets,  the 1996  foreign
exchange gain of $42 referred to above and the  cumulative  effect of accounting
changes,  was $293,  $294 and $238 in 1998, 1997 and 1996,  respectively,  while
diluted  earnings per share were $2.33,  $2.26 and $1.94 in 1998, 1997 and 1996,
respectively.

                               FINANCIAL POSITION

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents totaled $284 at December 31, 1998 compared to $206 and
$161 at December 31, 1997 and 1996, respectively.  The Company's primary sources
of cash in 1998 consisted of (i) funds provided from  operations  $672; (ii) the
sale of assets and businesses  $82; and (iii) the net change in short-term  debt
$877.  The  Company's  primary  uses of cash in 1998  consisted  of (i)  capital
expenditures of $487; (ii) payments of long-term debt $443; (iii) repurchases of
Company  common and preferred  stock $467;  and (iv)  dividends  paid $143.  The
increase in funds  provided  from  operations in 1998 versus 1997 is a result of
lower increases in working capital and a 1998 refund of U.S. taxes paid in prior
years.

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


The  Company  funds its  working  capital  requirements  on a  short-term  basis
primarily  through  issuances  of  commercial  paper.  At December  31, 1998 the
commercial  paper  program  was  supported  by  a  $2,500  multicurrency  credit
agreement maturing in February 2002 with interest at market rates. The Company's
use of the facility is not  restricted.  At December  31,  1998,  $517 was drawn
against this facility.  Based on the Company's intention and ability to maintain
its credit  facility  beyond  1999,  $700 of  commercial  paper  borrowings  was
classified  as long-term  at December  31, 1998.  There was $2,074 and $1,248 in
commercial paper outstanding at December 31, 1998 and 1997, respectively.

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 are rated Baa2 by Moody's  Investor Service and BBB by
Standard and Poor's Corporation.

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  Compagnie  Generale  d'Industrie  et de
Participations (CGIP). The repurchased shares represented  approximately 5.3% of
the Company's then outstanding voting securities and left CGIP with 4.99% voting
power in the Company.  The repurchased shares included all of CGIP's acquisition
preferred  position which represented  approximately 30% of the then outstanding
shares of acquisition  preferred.  These repurchased preference shares have been
retired.  The  transaction  included an agreement to terminate the  Shareholders
Agreement  dated  February  22, 1996  between the Company and CGIP.  Among other
changes,  CGIP no longer retains the right to designate Company  directors.  The
transaction  value  of $369 was  financed  through  an  increase  in  short-term
indebtedness.

The Company's  ratio of total debt (net of cash and cash  equivalents)  to total
capitalization  was 62.3%,  56.1% and 56.4% at December 31, 1998, 1997 and 1996,
respectively.  Total capitalization is defined by the Company as total debt (net
of cash and cash equivalents),  minority interests and shareholders' equity. The
increase in the Company's  total debt in recent years is principally  due to the
repurchase of common and preferred  stock from CGIP referred to above,  the 1996
acquisition of CMB and the  significant  capital  expenditure  program which the
Company has  committed to in recent  years.  As of December  31,  1998,  $135 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  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.

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


International operations, principally European, constitute a significant portion
of the Company's 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, 1998. Fair values  included  herein have been  determined  based on
quoted  market  prices.  Further  information  specific to Company  financing is
presented in Notes M and N to the Consolidated Financial Statements.

The table below provides information as of December 31, 1998 about the Company's
forward  currency  exchange  contracts.  The majority of the contracts expire in
1999.

                                               Contract      Average Contractual
Buy/Sell                                        Amount          Exchange Rate

FRF/GBP....................................      $593             9.25
GBP/FRF....................................       576             9.30
USD/GBP....................................       532             1.67
DEM/GBP....................................       213             2.73
USD/FRF....................................       133             5.55
USD/CAD....................................       130             1.54

The Company has an additional $503 in a number of smaller  contracts to purchase
or sell various other currencies, principally European, as of December 31, 1998.

The  aggregate  cost to  settle  all  contracts,  which is not  material  to any
individual  contract,  was $4 at  December  31,  1998.  Total  forward  exchange
contracts outstanding as of December 31, 1997 were $2,902.

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, 1998.  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                                     1999         2000          2001         2002         2003     Thereafter
-------------------------------------------------------------------------------------------------------------------
<S>                                     <C>          <C>           <C>          <C>         <C>        <C>   
Fixed rate.....................            $124         $132          $39          $21         $617       $1,448
Average interest rate..........            7.2%         7.3%         7.9%         8.2%         6.9%         7.9%
-------------------------------------------------------------------------------------------------------------------
Variable rate (1)..............          $2,342          $29         $102         $774          $21           $5
Average interest rate..........            5.3%         8.5%         5.3%         6.1%         8.8%         8.2%
-------------------------------------------------------------------------------------------------------------------
Interest rate swaps:
Fixed to variable..............                                       $74
Average pay rate...............                                      4.0%
Average receive rate...........                                      6.9%
-------------------------------------------------------------------------------------------------------------------
<FN>
(1)  $700  of  commercial  paper  borrowings  due  in  1999  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>


At December 31, 1997,  fixed rate debt of $2,365 was outstanding with an average
interest rate of 7.6%, and variable rate debt of $2,721 with an average interest
rate of 5.8% was outstanding.  At December 31, 1997, fixed to variable  interest
rate  swaps of $553 were  outstanding  with an  average  pay rate of 5.3% and an
average receive rate of 6.9%.

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

PROVISION FOR RESTRUCTURING

During 1998,  the Company  provided $179 ($127  after-tax or $.95 per share) for
the costs  associated  with  closing  thirteen  plants  and  reorganizing  three
additional  plants.  Included in the restructuring  charge were costs to provide
severance and related  benefits,  write-down of assets and other exit costs. The
Company  anticipates  that this  restructuring  program will generate  after-tax
savings of approximately  $64 ($.48 per share) on an annualized basis when fully
implemented.  The cost of providing  severance and related benefits is estimated
at $99,  is a cash  expense,  and  covers a  reduction  of  approximately  2,900
employees,  1,900 of whom are involved in direct manufacturing operations.  Cash
requirements of this action will be funded from operations.

The employees identified in the restructuring  actions include personnel at each
plant to be closed or reorganized.  During 1998  approximately  2,200 employees,
including  1,800  involved  in  direct  manufacturing   operations,   have  been
terminated.   Of  those  terminated,   approximately  600  relate  to  the  1998
restructuring  action. The 1998 restructuring  action for employee reductions is
expected to be completed by the end of the third quarter of 1999.

Included in the 1998 action is a charge of $60,  reflecting  the  impairment  of
property,  plant and equipment principally located in the Americas Division. The
reserves for write-downs  have been reflected in the balance sheet as reductions
to the carrying values of the related assets. Write-downs of property, plant and
equipment were made where their carrying values exceeded the Company's  estimate
of proceeds from  abandonment  or disposal.  These  estimates  were  principally
determined  on the basis of past  experience  for  comparable  asset  disposals.
Disposition  of assets  identified  for disposal in the 1998  action,  including
certain machinery, land and buildings, is expected to be substantially completed
by the end of 1999.  Most of the revenue  generating  activities  related to the
assets held for disposal will continue as a result of more effective utilization
of other assets.  The carrying  value of the land and buildings held for sale is
approximately $22. Annual  depreciation  previously  recognized for the affected
assets was approximately $4.

Other  non-recurring  exit costs are  estimated at $20 and are  primarily a cash
expense, comprising the costs to effectively close and dispose of the facilities
identified in the 1998 plan. Exit costs include, but are not

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


limited to, lease  termination and other contract  cancellations,  dismantlement
costs and  brokers'  fees for assets to be sold.  These costs are expected to be
substantially incurred by the end of 1999.

During 1997, the Company  provided $67 ($43 after-tax 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.  This  restructuring  program
covered approximately 600 employees.

During  1996,  the  Company  provided   restructuring   costs  relative  to  the
acquisition of CarnaudMetalbox (CMB). Affected by the plan of restructuring were
forty  plants  and  regional  administrative  offices  that were  closed  and an
additional  fifty-two  plants  which  were  reorganized.   The  Company  accrued
approximately  $534 and  allocated  such costs to the  purchase  price of CMB in
accordance  with  purchase  accounting  requirements.   These  costs  comprised:
severance and related  benefits,  write-down of assets,  lease  termination  and
other exit costs.  The cost of providing  severance and related benefits for the
reduction of  approximately  6,500  employees  was $257 and was primarily a cash
expense.  The write-down of assets (principally  property,  plant and equipment)
was  approximately  $217 and has been  reflected  as a reduction in the carrying
value of the  Company's  assets.  Other  exit  costs,  primarily  repayments  of
government grants and subsidies,  were approximately $60 and were primarily cash
expenses.   The  restructuring   costs  recorded  in  connection  with  the  CMB
acquisition   included  a  $95   restructuring   charge  announced  in  1996  by
CarnaudMetalbox  Asia,  Ltd., a  subsidiary  of CMB.  Remaining  balances in the
restructuring reserve primarily relate to payment options available to employees
under termination agreements. Such agreements are made with the respective union
or with the local governmental body, whereby a portion of the employee severance
is paid when the employee is terminated  and the  remaining  portion is paid out
over an agreed period.

In 1996, the Company also provided $40 ($32 after-tax 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.

PROVISION FOR LITIGATION

The Company is one of a number of defendants in a substantial number of lawsuits
filed by persons  alleging  bodily  injury as a result of exposure to  asbestos.
This litigation  arose from the insulation  operations in the United States of a
company in which the Company acquired a majority  interest in 1963. That company
sold this insulation business less than three months later.

Prior to 1998, the amounts paid to asbestos litigation claimants were covered by
a fund  of $80  made  available  to the  Company  under a 1985  settlement  with
carriers   insuring  the  Company   through  1976,   when  the  Company   became
self-insured.  From 1985 through  1997,  the Company  disposed of  approximately
70,000 cases for amounts which aggregated approximately one-half of the original
fund.

Until  the  fourth  quarter  of 1998 the  Company  considered  that the fund was
adequate and that the  likelihood  of exposure for this  litigation in excess of
the amount of the fund was remote. This view was based on the Company's analysis
of its potential  exposure,  the balance  available  under the 1985  settlement,
historical trends and actual settlement ranges.

A change in Texas law which limits out-of-state  plaintiff filings in that state
and which will therefore be favorable in the long-term, caused, along with other
factors,  an unexpected  increase in claims  activity.  This, along with several
larger group settlements, caused the Company to reevaluate its position.

As a  consequence,  the Company has  provided a charge of $78 after taxes ($ .59
per share) to supplement the remaining fund and cover estimated liability claims
pending or to be filed through 2003.

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


At December 31, 1998,  approximately  65,000 asbestos personal injury cases were
pending  against the Company of which  approximately  27,000 cases were filed in
1998.  These figures,  and the charge noted above, do not include 25,000 pending
cases involving  plaintiffs who allege that they are, or were,  maritime workers
subject to exposure to asbestos,  but whose claims the Company  believes,  based
upon  counsel's  advice,  will  not,  in the  aggregate,  involve  any  material
liability.

The  liability  recorded  for  asbestos  claims  constitutes  management's  best
estimate  of  such  costs  for  pending  and  future  claims.   Because  of  the
uncertainties related to this kind of litigation, the Company believes it is not
possible to  estimate  the number of  personal  injury  claims that may be filed
after 2003. The Company believes,  however, that the number of claims against it
will slow  significantly  in the future as time elapses since 1963.  The Company
cautions,  however,  that inherent in its estimate of  liabilities  are expected
trends in claim  severity,  frequency and other factors which may vary as claims
are filed and settled or otherwise disposed of.  Accordingly,  these matters, if
resolved in a manner  different from the estimate,  could have a material effect
on the  operating  results  or cash  flows in  future  periods.  While it is not
possible to predict with  certainty the ultimate  outcome of these  lawsuits and
contingencies,  the Company  believes,  after  consultation  with counsel,  that
resolution of these matters is not expected to have a material adverse effect on
the Company's financial position or liquidity.

CAPITAL EXPENDITURES

Consolidated  capital expenditures totaled $487 in 1998 as compared with $515 in
1997. Minority partner  contributions to consolidated  capital expenditures were
approximately  $6 and $26 in 1998 and 1997,  respectively.  During the past five
years, capital expenditures totaled $2,507.

Expenditures in the Americas  Division  totaled $161 including the completion of
the construction of a beverage can plant in Colombia, the conversion of beverage
can lines in Canada and  Argentina to the 202 diameter from the 206 diameter and
several   single-serve   PET  preform   and  bottle   capacity   expansion   and
lightweighting projects in the U.S.

Spending in the European Division for 1998 totaled $300 as the Company continued
to invest in easy open food can end lines 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 ongoing restructuring programs, line speed programs
and in several new health and beauty care projects.

Investments  of $7 were made in the  Asia-Pacific  Division in 1998. The Company
invested in several modernization and productivity improvement programs.

The  Company  expects  its  capital  expenditures  in 1999 to  approximate  $300
including joint-venture partner contributions estimated at approximately $5. 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 1999 through
2003 are expected to approximate  $1,600,  including $50 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

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


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% 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 in
both 1998 and  1997.  The  Company's  balance  sheet  reflects  estimated  gross
remediation  liabilities  of  $18  and  $39  at  December  31,  1998  and  1997,
respectively,  and  estimated  recoveries  related to  indemnification  from the
sellers of acquired  companies and the Company's  insurance  carriers of $21 and
$19 at December 31, 1998 and 1997, 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 $2,975 at December 31, 1998 as compared with $3,529 at
December  31,  1997.  The  decrease in 1998 equity is due to the  repurchase  of
6,528,783 common shares and 4,055,300  preferred  shares, an $87 minimum pension
liability  adjustment  as more  fully  described  in Note S to the  Consolidated
Financial   Statements,   adjustments  for  currency   translation  in  non-U.S.
subsidiaries of $31 and dividends declared on common stock of $125 offset by $88
of earnings in the business and the issuance of 467,600 common shares, including
195,600  shares for various  employee  benefit plans and 272,000  shares to five
company  executive  officers.  The  officers,  four of whom are Directors of the
Company,  borrowed  money from the Company  and used the funds to  purchase  the
shares  directly from the Company.  The book value of each share of common stock
at December 31, 1998 was $22.89 as compared to $25.26 at December 31, 1997.

In 1998, the return on average  shareholders'  equity before  restructuring  and
other charges and the 1997  cumulative  effect of accounting  change was 9.2% as
compared to 9.7% in 1997.  Including the  restructuring  and other charges,  but
excluding the 1997 cumulative effect of accounting change, the return on average
shareholders' equity was 3.2% in 1998 compared to 8.5% in 1997.

The Company  announced  a new share  repurchase  program in 1998 . This  program
allows for the repurchase of up to ten million shares of outstanding  common and
preferred stock, representing approximately 7.5% of then current combined shares
outstanding. Purchases may be made from time to time in open market transactions
at  prevailing  prices or in negotiated  private  transactions  at  management's
discretion.

The Board of Directors has also 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  6,528,783 shares
and 342,414 shares of common stock in 1998 and 1997 for $286 and

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


$17, respectively. There were no stock repurchases during 1996. The Company also
acquired 4,055,300 shares of acquisition preferred for $181 during 1998.

The Company  declared  cash  dividends  totaling $125 and $128 in 1998 and 1997,
respectively, representing a quarterly dividend of $.25 per common share.

During 1998 and 1997,  10,631 and 8,105  shares,  respectively,  of common stock
were issued under the Dividend Reinvestment and Stock Purchase Plan.

At December 31, 1998, common shareholders of record numbered 5,644 compared with
5,763 at the end of 1997.  Total common shares  outstanding  were 122,337,398 at
December  31,  1998  compared  to  128,398,543  at  December  31,  1997.   Total
acquisition  preferred  shares  outstanding  were 8,376,451 at December 31, 1998
compared to 12,431,793 at December 31, 1997.

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.

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 1998, the Financial  Accounting Standards Board ("FASB") issued SFAS No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities."  This
accounting  standard is  effective  for all fiscal  quarters of all fiscal years
beginning  after  June 15,  1999.  This  statement  establishes  accounting  and
reporting standards for derivative  instruments and for hedging activities.  The
statement  requires  that all  derivatives  are  recognized  as either assets or
liabilities  in the  statement of  financial  position and are measured at their
fair  values.  The Company is  currently  evaluating  the  requirements  of this
standard to determine its impact on the consolidated financial statements.

YEAR 2000

Computers and computer  dependent  equipment are used  throughout  the Company's
operations.  Certain  computerized  systems in use today were designed using two
digits rather than four digits to define the applicable year, which could result
in the systems  recognizing a date  containing "00" as the year 1900 rather than
the year 2000.  This could lead to  miscalculations  or system  failures  and is
generally referred to as the "Year 2000" or "Y2K" issue.

In order to address the Y2K issue, the Company  established a steering committee
that reports to senior  executive  management  and the Board of Directors of the
Company. The steering committee is responsible

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


for the  formulation of the Company's Y2K global plan and oversight of strategy,
risk  assessment,  coordination  and reporting.  Project  offices have also been
established within each division to roll out, monitor and manage  implementation
of the Company's global plan.

The Company's  global plan is divided into several  major phases:  Inventory and
Assessment, Remediation Analysis, Implementation and Contingency Planning.

Inventory and Assessment - The inventory  phase was  substantially  completed in
June 1998 including the  identification  of internal  mission-critical  business
systems   and  vendor  and  other  third   party   relationships.   The  Company
substantially completed its internal risk assessment of potentially Y2K impacted
information  technology (IT) and non-IT equipment and facilities  during October
1998.  In that  regard,  the Company  has  identified  Y2K issues  with  various
mid-range IT systems,  personal  computers  and servers,  telephone  systems and
embedded systems in manufacturing and related  equipment.  The assessment of the
Company's third-party risks involves the identification of critical vendors, Y2K
confirmation  correspondence,  evaluations  and  selected  vendor  reviews.  The
Company has completed the  identification  of its vendor  relationships  and has
received  approximately 60% of its requested Y2K confirmation  letters.  Certain
top- critical  vendors are being  subjected to follow-up  including  interviews,
on-site  visits and other  available  means.  In  addition,  the  Company has an
inadequate Y2K survey  response from utility  suppliers and is in the process of
evaluating its risk profile with respect to utility  service.  Accordingly,  the
Company has initiated alternate  follow-up  procedures and strategies to support
its risk  evaluation and contingency  planning  efforts.  These  assessments and
reviews are expected to be ongoing through June 1999. Despite these efforts, the
Company can provide no assurance that critical  suppliers of important goods and
services (including but not limited to utility service and communications)  will
complete their Year 2000 compliance plans in a timely manner.

Remediation Analysis - The Company substantially completed this project phase in
February 1999.  During this stage of the project,  remediation  strategies  were
evaluated  and  planned to correct  identified  Y2K  non-compliance.  Correction
strategies include vendor-supported upgrades, system or asset replacements,  and
correction of non-compliant code and systems consolidation.

Implementation  - This phase  involves the  correction and testing of identified
internal  Y2K risks in  accordance  with the  remediation  analysis  phase.  The
Company's   implementation  plan  established   priorities  for  remediation  or
replacement. The business systems considered most critical to ongoing operations
have been given the highest  priority.  Such  mission-critical  systems  include
business and operating systems such as sales order billing, production planning,
procurement and  disbursements,  logistics and embedded systems in manufacturing
and related  equipment that, if shut down or interrupted,  could have a material
adverse  impact on the  Company.  All other  systems  include  business  support
systems such as personal  computer  technology,  internal data  transmission and
voice communication that, if shut down or interrupted,  may have a less material
impact on the Company's operations.

Mission Critical IT Systems - Approximately 90% of the Company's  locations that
contain  mission-critical  IT systems  require  some form of  correction.  As of
December 31, 1998,  approximately 30% of mission-critical  business systems have
been  remediated,  50% are currently  being  remediated  and  remediation of the
remaining  20% is to be initiated as soon as possible.  The Company  anticipates
that approximately 75% of identified  non-compliant locations will be remediated
by June 30, 1999. Accordingly, we expect Y2K capable mission-critical systems to
cover  approximately 80% of the Company's  operation  revenues by that date. The
Company anticipates that the remaining mission-critical  implementations will be
completed  during the third  quarter 1999.  Certain of these  projects have been
delayed  awaiting the release of compliant  software  upgrades or have  modestly
extended project timelines to maximize the use of internal resources.

The Company's mission-critical system testing methods include obtaining hardware
and software certifications from critical vendors and consultants and performing
Y2K  compliance   tests  including  data  exchange  with  critical  vendors  and
customers. Testing of critical systems is expected to be completed on an ongoing
basis during the second half of the year.

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


Embedded Systems - During 1998, the Company performed a comprehensive evaluation
of embedded systems within its manufacturing and facilities infrastructure. This
evaluation  covered  approximately  27,000  inventoried  systems  and over 1,000
machinery  and systems  manufacturers.  Assessment  results  indicate a very low
non-compliant  rate.  Accordingly,  while  the  Company  cannot  rule  out  some
potential  impact,  overall  risk  in  this  area is  believed  to be low.  Unit
replacements  or  reprogramming  will  occur  as  part of the  Company's  normal
maintenance program in 1999. Such costs are not expected to be significant.  The
Company  anticipates   completing  detailed  testing  of  certain  manufacturing
processes during April 1999 to validate its current risk assessment.

Personal Computer Technology - The Company is currently implementing replacement
or  correction  methods to  address  Y2K  non-compliance  in both  hardware  and
software.  Modest  portions  of these  corrections  pertain to  mission-critical
systems,  which  should be  completed by June 1999.  The Company  considers  its
overall risk in this area to be low.

Telephone  Exchange  Systems  - The  Company  has  substantially  completed  its
assessment of telephone  exchange  systems within its facilities.  Approximately
20% of these  systems  will be  remediated  during 1999.  Notwithstanding  these
efforts, the Company believes that certain countries in which it operates may be
subject to broader regional communication system failures. Accordingly, extended
assessment  of this risk is in process to both evaluate the  reliability  of the
initial  assessment  and identify  contingency  options  including  the possible
utilization of satellite phone technology.

Contingency  Planning - The Company is developing  contingency  plans to address
potential disruptions that may result from unresolved Y2K issues. Because Y2K is
a date-driven risk, the Company is actively identifying  practicable  prevention
plans for its core  operations  to mitigate  risks,  especially in January 2000.
Prevention  plans may  include  temporary  deactivation  of certain  systems and
equipment  just  prior to  January 1,  2000,  targeted  supply-chain  management
measures to assure supply of certain key  commodities as well as customer supply
initiatives.  For instance,  facility and manufacturing supplies may be procured
in 1999 to support production requirements in early 2000. Additionally, in order
to address any isolated or wide spread  disruptions,  the Company is considering
help-desk and manufacturing support options as part of its planning scenarios.

Risks  of a less  controllable  nature,  such as  utility  service  outages  and
communication  systems  failure,  are being  addressed in contingency  planning.
Alternate site-manufacturing scenarios,  alternative vendors and other scenarios
are under  current  consideration.  The Company  intends to complete most of its
prevention and contingency plan development and design by June 1999. The rollout
of the contingency planning will be initiated in the second quarter of 1999. The
Company  is also  considering  potential  seasonality  effects  of Year  2000 on
consumer  demand and operating and working  capital,  particularly in the fourth
quarter of 1999 and first quarter of Year 2000.

The  Company's  Y2K  global  plan  could  be  adversely  affected  if any of the
Company's  factors  or  assumptions  are  incorrect  or if  its  ongoing  review
discovers  unanticipated  problems.  The Company  cannot give assurance that its
global plan will be completed on schedule or that it will not uncover Y2K issues
that could create a material impact on its performance.

The Company believes that the most reasonably likely worst-case scenario for the
Company  with  respect to the Y2K problem is the  failure of a critical  vendor,
such as a utility supplier, to provide required goods or services after December
31, 1999. Such a failure could result in temporary  production  outages and lost
sales and  profits.  The Company  believes  that,  because of the high degree of
geographic  dispersion  of  its  operations  (approximately  223  plants  in  49
countries), it is unlikely an isolated third-party failure would have a material
adverse effect on the Company's  results of operations,  financial  condition or
cash flow. The Company also believes that the  formulation of contingency  plans
should  reduce the  severity  and length of any such  possible  disruptions  and
losses. Nevertheless, because the Company's Y2K compliance is dependent upon key
third party Y2K  readiness,  there can be no assurance  that the  Company's  Y2K
compliance  efforts will prevent a Y2K problem  outside its direct  control from
adversely affecting the results

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


of its operations,  financial condition or cash flow. In addition,  although not
anticipated,  any failure by the Company to correct critical  internal  computer
systems before Year 2000 could have such an adverse affect.

The Company estimates that it will spend approximately $25-$30 (pre-tax) for its
Y2K  compliance  efforts.  To date, the Company has spent  approximately  $9, of
which $4 has been  expensed.  The Company  anticipates  that funding for its Y2K
compliance  program will be from operating  cash flows.  These cost estimates do
not include labor costs of employees  allocated to the Y2K compliance effort, as
it is not practicable to accumulate such costs.  The Company's total Y2K project
cost  estimate  is  based  on  presently  available  information  and  does  not
necessarily  include  all  potential  costs  related to ongoing  assessment  and
remediation or any execution of  contingency  plans brought about by internal or
external Y2K issues or cost estimate  changes related to replacement  systems or
code remediation efforts. Actual results could differ from these estimates.

EURO CONVERSION

On January 1, 1999,  eleven of the fifteen  member  nations ("the  participating
countries")  of the European Union ("EU")  established  fixed  conversion  rates
between their existing sovereign  currencies ( the "legacy  currencies") and the
Euro. For a period of three years, the transition period,  both the Euro and the
individual participants' currencies will remain in circulation.  Parties may pay
for goods and  services  using  either the Euro or the  participating  country's
sovereign currency.  Conversion rates will be computed through a "triangulation"
process which will convert one sovereign  currency into an amount denominated in
the Euro and then  convert the  Euro-denominated  amount into the second  legacy
currency.  After  January  1, 2002,  the Euro will be the sole legal  tender for
these  countries.  During the transition  period,  the adoption of the Euro will
affect a  multitude  of  financial  systems  and  business  applications  as the
commerce  of  these  nations  will be  transacted  in the  Euro  and the  legacy
currencies.  For the twelve months ended December 31, 1998, approximately 26% of
the Company's revenues were derived from EU participating countries.

The  participating  countries will issue sovereign debt  exclusively in Euro and
will  redenominate  outstanding  sovereign  debt.  As of January  1,  1999,  the
participating  countries will no longer  control their own monetary  policies by
directing  independent  interest rates for the legacy currencies.  Instead,  the
authority  to direct  monetary  policy,  including  money  supply  and  official
interest rates for the Euro, will be exercised by the new European Central Bank.

The EU has adopted  regulations  providing that the Euro  conversion  should not
enable one party  unilaterally to break or change its  contractual  obligations,
unless the parties have otherwise agreed.

The  largest  non-participating  country is the United  Kingdom  which  provides
approximately 13% of the Company's  revenues and is a major trading partner with
the  participating   countries.   Due  to  the  current  strength  of  sterling,
considerable  attention is being given to its impact on trading  activities with
participating countries and its impact on internal manufacturing operations.

The Company is  currently  addressing  Euro-related  issues and their  impact on
information  systems,  currency  exchange  rate risk,  employment  and benefits,
taxation, contracts,  competition and pricing. Under an action plan developed by
the  Company,  teams  have been  formed to  address  selling  prices  and costs,
personnel and communications, finance, administration and information technology
("IT").

The  Company  has  incurred  and expects to incur  expenses  for  Euro-compliant
technology and operations  staff to implement its Euro  conversion  plan.  These
costs will be  incurred  through  2003 to cover the costs of  preparing  for and
making  operational  changes to accommodate  the  introduction  of the Euro. The
costs for this conversion  involve updated  technology and have been included in
estimates provided for the Year 2000.

Approximately  5% of the outstanding  foreign exchange  contracts,  representing
approximately  5%  of  contract   notional  value,  are  between   participating
countries.  Conversion  to the Euro  may  reduce  the  amount  of the  Company's
exposure to exchange rate risk,  due to the netting  effect of having assets and
liabilities  denominated  in a single  currency as opposed to the various legacy
currencies. As a result, the Company's

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


foreign exchange hedging costs could be reduced. Conversely,  because there will
be less diversity in the Company's exposure to foreign currencies,  movements in
the Euro's value against the U.S.  dollar could have a more  pronounced  effect,
whether  positive or negative.  Decisions on the  functional  currencies for the
European  units is being  closely  evaluated so as to minimize the impact on the
Company's financial position.

As part of the  conversion  process,  the  Company is  establishing  contingency
plans. The contingency  plans will provide  mechanisms to assess and communicate
the impact of any  delays.  These  plans also  address  likely  problems  in the
aftermath of conversion with a view to maximizing the Company's ability to avoid
disruption.

The  company  does  not  expect  the Euro  conversion,  including  the  costs of
implementation,  to have a material adverse effect upon the Company's results of
operations,  financial  condition  or cash flow.  However,  the  Company  cannot
guarantee that,  with respect to the Euro  conversion,  all problems,  including
long-term  competitive  implications  of the  conversion,  will be foreseen  and
corrected,  that no material disruption of the Company's business will occur, or
that there will be no delays in the dates  targeted  by the Company for the Euro
conversion process.

FORWARD LOOKING STATEMENTS

Statements included herein in "Management's Discussion and Analysis of Financial
Condition  and  Results of  Operations,"  including,  but not limited to, in the
"Year  2000" and  "Euro  conversion"  sections,  and in the  discussions  of the
restructuring  plans  and  provision  for  litigation  in  Notes  L and 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."  "Forward-looking  statements" can be identified by words,  such as
"believes",  "estimates",  "anticipates",  "expects"  and other words of similar
meaning  in  connection  with a  discussion  of future  operating  or  financial
performance.  These may include,  among others,  statements relating to: (i) the
impact of an economic downturn or growth in particular regions, (ii) anticipated
uses of cash,  (iii)  cost  reduction  efforts  and  expected  saving,  (iv) the
expected  outcome of  contingencies,  (v) the impact of the Year 2000 conversion
efforts and (vi) the transition to the use of the Euro.

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  the
availability and pricing of raw materials  (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  including  its effect on demand for beverages and on crop yields for
fruits and vegetables stored in food containers;  changes or differences in U.S.
or

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


international   economic  or  political   conditions,   such  as,  inflation  or
fluctuations in interest or foreign  exchange rates and tax rates; the costs and
other effects of legal and administrative cases and proceedings, settlements and
investigations;  the effects of the Year 2000 and Euro  conversion  issues,  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
Financial  Condition  and  Results of  Operations  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.

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


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

          Financial Statements

               Report of Independent Accountants...........................  29

               Consolidated Statements of Income...........................  30

               Consolidated Balance Sheets.................................  31

               Consolidated Statements of Cash Flows.......................  32

               Consolidated Statements of Shareholders' Equity.............  33

               Notes to Consolidated Financial Statements..................  34

          Financial Statement Schedule

          Schedule II -  Valuation and Qualifying Accounts
                         and Reserves......................................  55



                                      -28-
<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, 1998 and 1997,
and the results of their  operations  and cash flows for each of the three years
in the period ended  December 31, 1998, 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  that  our  audits  provide  a
reasonable basis for the opinion expressed above.



PricewaterhouseCoopers LLP

Thirty South Seventeenth Street
Philadelphia, Pennsylvania  19103
March 17, 1999



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


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

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                                                      1998             1997              1996
---------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>               <C>              <C>   
Net sales.................................................           $8,300            $8,495           $8,332
                                                                     ------            ------           ------
Costs, expenses and other income
   Cost of products sold (excluding
     depreciation and amortization).......................            6,527             6,708            6,733
   Depreciation and amortization..........................              533               540              496
   Selling and administrative expense.....................              379               414              387
   Provision for restructuring and other
     charges. . Notes K and L.............................              304                67               40
   Gain on sale of assets.................................                                (38)             (24)
   Interest expense.......................................              408               379              328
   Interest income........................................              (45)              (39)             (22)
   Translation and exchange adjustments...................               14                 7              (37)
                                                                     ------            ------           ------
                                                                      8,120             8,038            7,901
                                                                     ------            ------           ------
Income before income taxes and cumulative effect
   of accounting change...................................              180               457              431
   Provision for income taxes . . Note R..................               74               148              134
                                                                     ------            ------           ------

Income from operations before cumulative effect
   of accounting change...................................              106               309              297

   Minority interests, net of equity earnings.............               (1)               (7)             (13)
                                                                     ------            ------           ------

Net income before cumulative effect
   of accounting change...................................              105               302              284

   Cumulative effect of accounting change,
     net of tax . . Note B................................                                 (8)
                                                                     ------            ------           ------

Net income................................................              105               294              284

Preferred stock dividends.................................               17                23               20
                                                                     ------            ------           ------

Net income available to common shareholders...............           $   88            $  271           $  264
                                                                     ======            ======           ======

---------------------------------------------------------------------------------------------------------------
Average common share data:
Earnings per average common share . . Note P
Basic -    before cumulative effect of
           accounting change..............................           $  .71            $ 2.17           $ 2.16
                                                                     ======            ======           ======
           after cumulative effect of
           accounting change..............................                             $ 2.11
                                                                                       ======
Diluted -  before cumulative effect of
           accounting change..............................           $  .71            $ 2.15           $ 2.14
                                                                     ======            ======           ======
           after cumulative effect of
           accounting change..............................                             $ 2.10
                                                                                       ======
Dividends.................................................           $ 1.00            $ 1.00           $ 1.00
                                                                     ======            ======           ======
---------------------------------------------------------------------------------------------------------------
</TABLE>
The  accompanying  notes are an  integral  part of these  financial  statements.
Certain prior year balances have been reclassified to improve comparability.

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


CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
December 31                                                                       1998                  1997
--------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                   <C>    
Assets
Current assets
   Cash and cash equivalents...............................................       $  284               $   206
   Receivables . . Note D..................................................        1,359                 1,353
   Inventories . . Note E..................................................        1,421                 1,387
   Prepaid expenses and other current assets...............................          104                   201
                                                                                 -------               -------
       Total current assets................................................        3,168                 3,147
                                                                                 -------               -------
Long-term notes and receivables............................................           44                    65
Investments................................................................           91                    90
Goodwill, net of amortization..............................................        4,565                 4,625
Property, plant and equipment . . Note F...................................        3,743                 3,664
Other non-current assets...................................................          858                   715
                                                                                 -------               -------
       Total...............................................................      $12,469               $12,306
                                                                                 =======               =======
Liabilities & Shareholders' Equity
Current liabilities
   Short-term debt . . Note M..............................................      $ 2,331               $ 1,385
   Current portion of long-term debt . . Note M............................          135                   399
   Accounts payable and accrued liabilities . . Note G.....................        2,181                 2,237
   United States and foreign income taxes..................................           63                    28
                                                                                 -------               -------
       Total current liabilities...........................................        4,710                 4,049
                                                                                 -------               -------
Long-term debt, excluding current maturities . . Note M....................        3,188                 3,301
Other non-current liabilities . . Note H...................................          609                   432
Postretirement and pension liabilities . . Note S..........................          707                   712
Minority interests.........................................................          280                   283

Commitments and contingent liabilities . . Notes J and K

Shareholders' equity
   Preferred stock, 4.5% cumulative convertible,
     par value: $41.8875; authorized: 12,432,622 . . Note O
       1998 - outstanding  8,376,451.......................................          351
       1997 - outstanding 12,431,793.......................................                                521
   Additional preferred stock, authorized: 30,000,000;
     none issued . . Note O
   Common stock, par value: $5.00; authorized:
     500,000,000 . . Note O
     1998 - issued 155,792,424.............................................          779
     1997 - issued 155,792,386.............................................                                779
Additional paid-in capital.................................................        1,340                 1,561
Retained earnings..........................................................        1,250                 1,327
Accumulated other comprehensive income/(loss) . . Note C...................        ( 578)                ( 522)
Treasury stock (1998 - 33,455,026 shares; 1997 -
   27,393,843 shares)......................................................         (167)                 (137)
                                                                                 -------               -------
       Total shareholders' equity..........................................        2,975                 3,529
                                                                                 -------               -------
       Total...............................................................      $12,469               $12,306
                                                                                 =======               =======
--------------------------------------------------------------------------------------------------------------
</TABLE>

The  accompanying  notes are an  integral  part of these  financial  statements.
Certain prior year balances have been reclassified to improve comparability.

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


CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                     1998             1997              1996
-----------------------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>              <C>      
Cash flows from operating activities
   Net income................................................     $     105         $     294        $     284
   Adjustments to reconcile net income to
     net cash provided by operating activities:
       Depreciation and amortization ........................           533               540              496
       Provision for restructuring and other charges.........           205                43               32
       Foreign currency gain.................................                                              (42)
       Gain on sale of assets................................                             (28)             (16)
       Deferred income taxes.................................           113                93               92
   Changes in assets and liabilities, net of 
     businesses acquired:
       Receivables...........................................             1              (115)             247
       Inventories...........................................           (24)              (70)              20
       Accounts payable, accrued and other liabilities ......          (235)             (219)            (194)
       Other, net............................................           (26)             (136)              (8)
                                                                  ---------         ---------        ---------
         Net cash provided by operating activities...........           672               402              911
                                                                  ---------         ---------        ---------

Cash flows from investing activities
   Capital expenditures......................................          (487)             (515)            (631)
   Acquisition of businesses, net of cash acquired...........           (31)              (10)          (1,538)
   Proceeds from sale of property, plant and equipment ......            47                43               33
   Proceeds from sale of businesses..........................            35                90              108
   Other, net................................................           (16)               (6)              (7)
                                                                  ---------         ---------        ---------
         Net cash used for investing activities..............          (452)             (398)          (2,035)
                                                                  ---------         ---------        ---------

Cash flows from financing activities
   Proceeds from long-term debt..............................            23               124            2,075
   Payments of long-term debt................................          (443)             (269)            (303)
   Net change in short-term debt.............................           877               360             (423)
   Dividends paid............................................          (143)             (152)            (146)
   Stock repurchased.........................................          (467)              (17)
   Common stock issued - benefit plans.......................             6                11               11
   Minority contributions, net of dividends paid.............            (5)               10                4
                                                                  ---------         ---------        ---------
         Net cash (used for) provided by
           financing activities..............................          (152)               67            1,218
                                                                  ---------         ---------        ---------

Effect of exchange rate changes on cash
   and cash equivalents......................................            10               (26)              (2)
                                                                  ---------         ---------        ---------

Net change in cash and cash equivalents......................            78                45               92


Cash and cash equivalents at January 1.......................           206               161               69
                                                                  ---------         ---------        ---------


Cash and cash equivalents at December 31.....................     $     284         $     206        $     161
                                                                  =========         =========        =========
-----------------------------------------------------------------------------------------------------------------
</TABLE>

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

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


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

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                     |                                            Accumulated
                                              Compre-|                                                Other
                                              hensive| Preferred   Common    Paid-In   Retained   Comprehensive  Treasury
                                              Income |   Stock      Stock    Capital   Earnings   Income/(Loss)    Stock     Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>        <C>         <C>      <C>        <C>           <C>         <C>       <C>   
                                                     |
Balance December 31, 1995 ..................         |               $593     $  182     $1,049        ($224)      ($139)    $1,461
                                                     |
Net income - 1996...........................   $284  |                                      284                                 284
Translation adjustments.....................   (145) |                                                  (145)                  (145)
Minimum pension liability                            |
    adjustment, net of $9 tax...............     17  |                                                    17                     17
                                               ----  | 
Comprehensive income........................   $156  |
                                               ====  | 
Stock issued in business combination:                |
    Common: 37,300,818 shares...............         |                186      1,376                                          1,562
    Preferred: 12,432,622 shares............         |    $521                                                                  521
Dividends declared:                                  |
    Common..................................         |                                     (128)                               (128)
    Preferred ..............................         |                                      (20)                                (20)
Stock issued-benefit plans:                          |
    459,165 shares..........................         |                             9                                   2         11
                                                     |    ----       ----     ------     ------        -----       -----     ------
                                                     |
Balance December 31, 1996...................         |     521        779      1,567      1,185         (352)       (137)     3,563
                                                     |
Net income - 1997...........................   $294  |                                      294                                 294
Translation adjustments.....................   (168) |                                                  (168)                  (168)
Minimum pension liability                            |
    adjustment, net of $1 tax...............     (2) |                                                    (2)                    (2)
                                               ----  | 
Comprehensive income........................   $124  |
                                               ====  | 
Stock repurchased:                                   |
    342,414 shares..........................         |                           (15)                                 (2)       (17)
Dividends declared:                                  |
    Common..................................         |                                     (128)                               (128)
    Preferred...............................         |                                      (24)                                (24)
Stock issued-benefit plans                           |
    329,406 shares..........................         |                             9                                   2         11
                                                     |    ----       ----     ------     ------        -----       -----     ------
                                                     |
Balance December 31, 1997...................         |     521        779      1,561      1,327         (522)       (137)     3,529
                                                     |
Net income - 1998...........................   $105  |                                      105                                 105
Translation adjustments.....................     31  |                                                    31                     31
Minimum pension liability                            |
    adjustment, net of $47 tax..............    (87) |                                                   (87)                   (87)
                                               ----  | 
Comprehensive income........................    $49  |
                                               ====  | 
Stock repurchased:                                   |
    6,528,783 common shares.................         |                          (225)       (29)                     (32)      (286)
    4,055,300 preferred shares..............         |    (170)                             (11)                               (181)
Dividends declared:                                  |
    Common..................................         |                                     (125)                               (125)
    Preferred...............................         |                                      (17)                                (17)
Stock issued-benefit plans                           |
    467,600 shares..........................         |                             4                                   2          6
                                                     |    ----       ----     ------     ------        -----       -----     ------
                                                     |
Balance December 31, 1998...................         |    $351       $779     $1,340     $1,250        ($578)      ($167)    $2,975
                                                     |    ====       ====     ======     ======        =====       =====     ======
====================================================================================================================================
</TABLE>

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

Certain prior year balances have been reclassified upon adoption of SFAS No. 130
and to improve comparability.

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


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except per share, employee,  shareholder and statistical data; per
share earnings are quoted as diluted)

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 accumulated  other  comprehensive  income/(loss)  in
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 $452 and $334 at December 31, 1998 and 1997, 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

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


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 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, $53
and $52 in  1998,  1997  and  1996,  respectively,  are  expensed  as  incurred.
Substantially  all engineering  and development  costs are related to developing
new products or designing significant improvements to existing products.

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

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

In the fourth quarter of 1997 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 $8 or $.05 per share.

--------------------------------------------------------------------------------
C.   Comprehensive Income

Statement  of  Financial   Accounting  Standards  ("SFAS")  No.  130,  Reporting
Comprehensive  Income,  establishes  a standard  for  reporting  and  displaying
comprehensive  income  and  its  components  within  the  financial  statements.
Comprehensive  income  includes  charges  and credits to equity that are not the
result of transactions with  shareholders.  Comprehensive  income is composed of
two  subsets - net  income and other  comprehensive  income.  Included  in other
comprehensive income for the Company are cumulative translation  adjustments and
minimum pension liability adjustments.  These adjustments are accumulated within
the  Statement  of  Shareholders'  Equity  under the caption  Accumulated  Other

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


Comprehensive Income/(Loss).  As of December 31, accumulated other comprehensive
income/(loss),  as reflected  in the  consolidated  statement  of  shareholders'
equity, was comprised of the following:

                                                              1998         1997
                                                              ----         ----
Minimum pension liability adjustments........................($104)        ($17)
Cumulative translation adjustments........................... (474)        (505)
                                                             -----        ----- 
                                                             ($578)       ($522)
                                                             =====        ===== 

Cumulative  translation  adjustments  are not  adjusted for income taxes as they
relate to indefinite investments in non-U. S. subsidiaries.

--------------------------------------------------------------------------------
D.   Receivables
                                                             1998         1997
                                                            ------       ------
Accounts and notes receivable...........................    $1,161       $1,150
Less: allowance for possible losses.....................       (45)         (45)
                                                            ------       ------
     Net trade receivables..............................     1,116        1,105
Miscellaneous receivables...............................       243          248
                                                            ------       ------
                                                            $1,359       $1,353
                                                            ======       ======

The  Company has  agreements  to sell  certain of its  non-U.S.  trade  accounts
receivable. At December 31, 1998, approximately $201 ($149 at December 31, 1997)
of  receivables  had been sold with  limited  recourse  and are  reflected  as a
reduction of trade receivables.

--------------------------------------------------------------------------------
E.   Inventories
                                                   1998              1997
                                                  ------            ------
Finished goods................................... $  577            $  560
Work in process..................................    204               187
Raw materials and supplies.......................    640               640
                                                  ------            ------
                                                  $1,421            $1,387
                                                  ======            ======

Approximately  28% and 29% of  worldwide  inventories  at December  31, 1998 and
1997,  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, 1998 and 1997, total inventories would have been $15
and $25 higher, respectively.

--------------------------------------------------------------------------------
F.   Property, Plant and Equipment
<TABLE>
<CAPTION>
                                                                    1998             1997
                                                                  ------            ------
<S>                                                              <C>               <C>   
Buildings and improvements...................................     $  864            $  926
Machinery and equipment......................................      4,546             4,127
                                                                  ------            ------
                                                                   5,410             5,053
Less: accumulated depreciation and amortization..............     (2,153)           (1,921)
                                                                  ------            ------
                                                                   3,257             3,132
Land and improvements........................................        206               208
Construction in progress.....................................        280               324
                                                                  ------            ------
                                                                  $3,743            $3,664
                                                                  ======            ======
</TABLE>

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

                                      -36-
<PAGE>
                         Crown Cork & Seal Company, Inc.


G.   Accounts Payable and Accrued Liabilities
<TABLE>
<CAPTION>
                                                                                  1998              1997
                                                                                 ------            ------
<S>                                                                              <C>               <C>   
Trade accounts payable.................................................          $1,315            $1,343
Interest...............................................................              63                66
Salaries, wages and other employee benefits............................             261               255
Environmental..........................................................               3                 4
Litigation.............................................................              42
Restructuring..........................................................             128               152
Deferred taxes.........................................................              85                83
Other..................................................................             284               334
                                                                                 ------            ------
                                                                                 $2,181            $2,237
                                                                                 ======            ======
</TABLE>

Miscellaneous   current  receivables  include  $37  for  recoveries  related  to
litigation.

--------------------------------------------------------------------------------
H.   Other Non-Current Liabilities
<TABLE>
<CAPTION>
                                                                                  1998              1997
                                                                                  ----              ----
<S>                                                                               <C>               <C> 
Postemployment benefits................................................           $ 45              $ 37
Environmental..........................................................             15                35
Litigation.............................................................            129
Deferred taxes.........................................................            356               305
Other..................................................................             64                55
                                                                                  ----              ----
                                                                                  $609              $432
                                                                                  ====              ====
</TABLE>

Other  non-current  assets  include $21 and $19 at  December  31, 1998 and 1997,
respectively, for estimated recoveries related to environmental liabilities.

--------------------------------------------------------------------------------
I.   Acquisitions

During 1998, the Company acquired, in separate transactions,  the assets of food
can manufacturers in Portugal and Poland for cash payments of $31.

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.  Under the terms of the purchase,
the Company holds a put option enabling it to return GAC to ACX.

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  M  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.

For financial reporting purposes,  all of the acquisitions above were treated as
purchases. An excess purchase price of approximately $3,850 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.

                                      -37-
<PAGE>
                         Crown Cork & Seal Company, Inc.


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

<TABLE>
<CAPTION>
                                                                        1998              1997            1996
                                                                       ------            ------          ------
<S>                                                                     <C>               <C>            <C>   
Fair value of assets acquired, including goodwill.............          $ 75              $ 70           $7,995
Liabilities assumed...........................................           (44)                            (4,003)
Note payable..................................................                             (60)
Issuance of common stock......................................                                           (1,562)
Issuance of 4.5% cumulative convertible preferred stock                                                    (521)
                                                                        ----              ----           ------
     Cash paid................................................          $ 31              $ 10           $1,909
                                                                        ====              ====           ======
</TABLE>

--------------------------------------------------------------------------------
J.   Lease Commitments

The Company  and its  subsidiaries  lease  manufacturing,  warehouse  and office
facilities and certain equipment.  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,  1998  and  1997  was $54 and $46,
respectively.

Under long-term operating leases, minimum annual rentals are $26 in 1999, $18 in
2000,  $14 in  2001,  $11 in 2002,  $8 in  2003,  and a total of $38 in 2004 and
thereafter.  Under long-term  capital leases,  minimum annual rentals are $14 in
1999, $8 in 2000, $7 in 2001, $6 in 2002, $4 in 2003, and a total of $11 in 2004
and thereafter.  The present value of future minimum  payments on capital leases
is $43 with the current portion of the obligation being $12. Rental expense (net
of sublease  rental income of $5 in 1998, $4 in 1997 and $6 in 1996) amounted to
$42 in 1998, $38 in 1997 and $35 in 1996.

--------------------------------------------------------------------------------
K.   Commitments and Contingent Liabilities

The Company has various  commitments to purchase  materials and supplies as part
of the  ordinary  conduct of  business.  Such  commitments  are not at prices in
excess of current market. The Company's basic raw materials for its products are
tinplate, aluminum and resins, all of which are purchased from multiple sources.
The  Company  is  subject  to  material  fluctuations  in the cost of these  raw
materials  and has  periodically  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 one of a number of defendants in a substantial number of lawsuits
filed by persons  alleging  bodily  injury as a result of exposure to  asbestos.
This litigation  arose from the insulation  operations in the United States of a
company in which the Company acquired a majority  interest in 1963. That company
sold this insulation business less than three months later.

Prior to 1998, the amounts paid to asbestos litigation claimants were covered by
a fund  of $80  made  available  to the  Company  under a 1985  settlement  with
carriers   insuring  the  Company   through  1976,   when  the  Company   became
self-insured.  From 1985 through  1997,  the Company  disposed of  approximately
70,000 cases for amounts which aggregated approximately one-half of the original
fund.

Until  the  fourth  quarter  of 1998 the  Company  considered  that the fund was
adequate and that the  likelihood  of exposure for this  litigation in excess of
the amount of the fund was remote. This view was based on the Company's analysis
of its potential  exposure,  the balance  available  under the 1985  settlement,
historical trends and actual settlement ranges.

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


A change in Texas  law,  which  limits  out-of-state  plaintiff  filings in that
state,  and which will  therefore be favorable in the long-term,  caused,  along
with other factors, an unexpected increase in claims activity.  This, along with
several larger group settlements, caused the Company to reevaluate its position.

As a consequence,  the Company has provided a charge of $78 after taxes (or $.59
per share) to supplement the remaining fund and cover estimated liability claims
pending or to be filed through 2003.

The  liability  recorded  for  asbestos  claims  constitutes  management's  best
estimate  of  such  costs  for  pending  and  future  claims.   Because  of  the
uncertainties related to this kind of litigation, the Company believes it is not
possible to  estimate  the number of  personal  injury  claims that may be filed
after 2003. The Company believes,  however, that the number of claims against it
will slow  significantly  in the future as time elapses since 1963.  The Company
cautions,  however,  that inherent in its estimate of  liabilities  are expected
trends in claim  severity,  frequency and other factors which may vary as claims
are filed and settled or otherwise disposed of.  Accordingly,  these matters, if
resolved in a manner  different from the estimate,  could have a material effect
on the  operating  results  or cash  flows in  future  periods.  While it is not
possible to predict with  certainty the ultimate  outcome of these  lawsuits and
contingencies,  the Company  believes,  after  consultation  with counsel,  that
resolution of these matters is not expected to have a material adverse effect on
the Company's financial position or liquidity.

The Company is also subject to various other lawsuits and claims with respect to
matters such as  governmental  and  environmental  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, liquidity or financial position of the Company.

--------------------------------------------------------------------------------
L.   Restructuring

During 1998,  the Company  provided $179 ($127  after-tax or $.95 per share) for
the  costs   associated   with  the  plan  to  close  thirteen  plants  and  the
reorganization of three additional  plants.  These actions reflect the Company's
continued commitment to realign its manufacturing  facilities with the objective
of enhancing operating  efficiencies.  Included in the restructuring charge were
costs to provide severance and related benefits,  write-down of assets and other
exit  costs.  The  Company  anticipates  that this  restructuring  program  will
generate  after-tax  savings  of  approximately  $64  ($.48  per  share)  on  an
annualized basis when fully implemented.

The cost of providing  severance and related  benefits is estimated at $99, is a
cash expense, and covers a reduction of approximately 2,900 employees,  1,900 of
whom are involved in direct manufacturing operations.

Included  in this  restructuring  provision  is a charge of $60  reflecting  the
impairment of property,  plant and equipment principally located in the Americas
Division.  This charge has been reflected as a reduction in the carrying  values
of the related  assets.  Write-downs of property,  plant and equipment were made
where their  carrying  values  exceeded the Company's  estimate of proceeds from
abandonment  or  disposal.  These  estimates  were  based  principally  on  past
experience of comparable asset disposals.  Disposition of assets  identified for
disposal in the 1998 action, including certain machinery, land and buildings, is
expected to be substantially completed by the end of 1999. The carrying value of
the land and buildings held for sale is approximately  $22. Annual  depreciation
previously recognized for the affected assets was approximately $4.

Other  non-recurring  exit costs are  estimated at $20 and are  primarily a cash
expense, comprising the costs to effectively close and dispose of the facilities
identified in the 1998 plan.  Exit costs  include,  but are not limited to, fees
related to lease  termination  and other contract  cancellations,  dismantlement
costs and

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


brokers'  fees  for  assets  to  be  sold.   These  costs  are  expected  to  be
substantially incurred by the end of 1999.

During 1997, the Company  provided $67 ($43 after-tax 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.  This  restructuring  program
covered approximately 600 employees.

During  1996,  the  Company  provided   restructuring   costs  relative  to  the
acquisition of CarnaudMetalbox (CMB). Affected by the plan of restructuring were
forty  plants and  regional  administrative  offices  which  were  closed and an
additional  fifty-two  plants  which  were  reorganized.   The  Company  accrued
approximately  $534 and  allocated  such costs to the  purchase  price of CMB in
accordance  with  purchase  accounting  requirements.   These  costs  comprised:
severance and related  benefits,  write-down of assets and other exit costs. The
cost  of  providing   severance  and  related  benefits  for  the  reduction  of
approximately  6,500  employees was $257 and was  primarily a cash expense.  The
write-down  of  assets   (principally   property,   plant  and   equipment)  was
approximately  $217 and has been reflected as a reduction in the carrying values
of the Company's assets.  Other exit costs,  primarily  repayments of government
grants and subsidies,  were  approximately $60 and were primarily cash expenses.
The restructuring costs recorded in connection with the CMB acquisition included
a $95 restructuring  charge announced in 1996 by  CarnaudMetalbox  Asia, Ltd., a
subsidiary of CMB.  Remaining  balances in the  restructuring  reserve primarily
relate to payment options available to employees under  termination  agreements.
Such  agreements  were  made  with  the  respective  union  or  with  the  local
governmental  body  generally,  and  provide  that a  portion  of  the  employee
severance is paid when the employee is terminated  and the remaining  portion is
paid out over an agreed period.

In 1996,  the Company also provided $40 ($32  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.

The balance of the  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  components  of  the
restructuring  reserve and movements within these components during 1998 were as
follows:
<TABLE>
<CAPTION>
                                                                                Other
                                                                 Employee       Exit       Writedown     Total
(in millions)                                                    Severance      Costs      of Assets
                                                                 ---------    --------     ---------     ------
<S>                                                                <C>          <C>                      <C>  
Opening balance...............................................     $120         $ 35                     $ 155
Provisions accrued............................................       99           20         $ 60          179
Payments made.................................................     (107)         (23)                     (130)
Transfer against assets.......................................                                (60)         (60)
Other movements*..............................................      (15)          (1)                      (16)
                                                                   ----         ----                     -----
Closing balance...............................................     $ 97         $ 31                     $ 128
                                                                   ====         ====                     =====
</TABLE>

*Includes  provisions  under purchase  accounting for two 1998  acquisitions  in
Europe, sale of businesses and translation adjustments.

During  1998,  payments  of  $107  were  made  related  to  the  termination  of
approximately   2,200   employees,   1,800  of  whom  were  involved  in  direct
manufacturing  operations.  Payments  of $23 were  made for  other  exit  costs,
including property carrying costs,  dismantlement  costs,  equipment removal and
various contractual obligations.

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


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 material
and product pricing levels,  the timing of  implementation  of the restructuring
and related employee reductions and facility closings and other matters, many of
which are  outside  the  Company's  control.  The  Company's  estimates  of cost
savings,  which  are  unaudited,   are  not  necessarily  indicative  of  future
performance, which may be significantly more or less favorable than as set forth
above and are subject to the  considerations  described  under  "Forward-Looking
Statements" within "Management's  Discussion and Analysis of Financial Condition
and  Results of  Operations."  Shareholders  are  cautioned  not to place  undue
reliance on the estimates or the underlying  assumptions  and should  appreciate
that such  information may not  necessarily be updated to reflect  circumstances
existing  after the date hereof or to reflect the  occurrence  of  unanticipated
events.

--------------------------------------------------------------------------------
M.   Short-Term Borrowings and Long-Term Debt
<TABLE>
<CAPTION>
                                                                                  1998             1997
                                                                                 ------            ------
<S>                                                                             <C>                 <C> 
Short-term borrowings (1)
Commercial paper (2)...................................................          $1,374              $548
U.S. dollar bank loans/overdrafts......................................             123               155
Other currency bank loans/overdrafts...................................             834               682
                                                                                 ------            ------
           Total short-term borrowings.................................          $2,331            $1,385
                                                                                 ------            ------
Long-term debt
U.S. Dollars:
Commercial paper (2) (3)...............................................          $  700            $  700
Private placements: rates ranging
    from 7.0% to 7.54%, due 2000 through 2005..........................             205               205
Senior notes and debentures:
    5.88% due 1998.....................................................                               100
    7.00% due 1999.....................................................             100               100
    6.75% due 2003 (4).................................................             400               400
    6.75% due 2003.....................................................             200               200
    8.38% due 2005.....................................................             300               300
    7.00% due 2006 (4).................................................             300               300
    8.00% due 2023.....................................................             200               200
    7.38% due 2026.....................................................             350               350
    7.50% due 2096.....................................................             150               150
Other indebtedness: rates in 1998 ranging from
    5.5% to 8.62%, due 1999 through 2015...............................             222               202
                                                                                 ------            ------
                                                                                  3,127             3,207
                                                                                 ------            ------

Other currencies (average interest rate at December 31, 
    1998 in parentheses):
Preference shares in French Francs (6.7%), due 1998....................                               254
Other French Franc indebtedness (4.1% to 7.45%),
    due 1999 through 2015..............................................              85                98
Capital lease obligations in various currencies........................              43                43
Other indebtedness in various currencies (3.53% to 28.4%),
    due 1999 through 2004..............................................              68                98
                                                                                 ------            ------
           Total long-term debt (5)....................................           3,323             3,700

Less: current maturities...............................................            (135)             (399)
                                                                                 ------            ------
           Total long-term debt........................................          $3,188            $3,301
                                                                                 ======            ======
</TABLE>

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


(1)    The weighted  average  interest  rates for commercial  paper  outstanding
       during 1998, 1997 and 1996, were 5.2%, 5.3% and 5.5%,  respectively.  The
       weighted  average  interest  rates for notes and  overdrafts  outstanding
       during 1998, 1997 and 1996, were 5.6%, 6.4% and 6.3%, respectively.
(2)    At December 31, 1998 and December  31,1997,  $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)    A committed $2.5 billion  multicurrency  revolving credit facility with a
       maturity of February 4, 2002 is available to support the commercial paper
       programs and short-term  financing needs. The agreement  contains certain
       financial  covenants  related  to  leverage  and  interest  coverage.  At
       December  31,  1998 and  1997,  $517 and  $355,  respectively,  was drawn
       against the facility.
(4)    On December 12, 1996, two wholly-owned  finance  subsidiaries  located in
       the United  Kingdom and France,  sold public debt  securities  which were
       fully  guaranteed  by the Company.  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.
(5)    The Company is also party to other  interest  rate swaps which  mature in
       2001. 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, 1998,  the combined  notional
       values  of these  swaps was $74.  At  December  31,  1997,  the  combined
       notional values of other interest rate swaps was $553.

Aggregate maturities of long-term debt for the five years subsequent to December
31, 1998 are $135,  $161, $141, $95, and $638,  respectively.  Cash payments for
interest  were  $377 in  1998,  $379  in 1997  and  $291 in  1996,  respectively
(including  amounts  capitalized  of $6 in  1998,  $6 in  1997  and $8 in  1996,
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 $3,437 and $3,791 at December 31, 1998 and 1997,
respectively.

--------------------------------------------------------------------------------
N.   Financial Instruments

In the normal course of business,  the  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, 1998, 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 $2,680 ($2,902 at December 31, 1997). 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, 1998 and December 31, 1997.
Gains and losses  resulting  from contracts that are designated and effective as
hedges are recognized in the same period as the underlying hedged transaction.

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


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 M. 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 its products 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, 1998 and December 31, 1997 the fair value
of the  outstanding  commodity  contracts  was  not  material  to the  Company's
earnings, cash flows or financial position.

--------------------------------------------------------------------------------
O.   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.  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.







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

                                      -43-

<PAGE>
                         Crown Cork & Seal Company, Inc.


P.   Earnings Per Share

The  following  table  summarizes  the  basic  and  diluted  earnings  per share
computations for 1998, 1997 and 1996:
<TABLE>
<CAPTION>
                                               1998                      1997                      1996
                                    ---------------------------------------------------------------------------
                                              Average                   Average                   Average
                                    Income    Shares    EPS     Income  Shares   EPS     Income   Shares    EPS
                                    ------    -------   ---     ------  -------  ---     ------   -------   ---
<S>                                   <C>     <C>      <C>       <C>    <C>      <C>       <C>     <C>      <C>  
Net Income.....................       $105                       $294                      $284
     Less: Preferred stock
       dividends...............        (17)                       (23)                      (20)
                                      ----                       ----                      ----
Basic EPS......................       $ 88    124.4     $.71     $271   128.4   $2.11       264    122.5    $2.16

Potentially dilutive securities:
     Stock options.............                  .1                        .6                         .3
     Assumed preferred stock
       conversion..............         17      8.4                23    11.3                20      9.6
                                      ----    -----              ----   -----              ----    -----
Diluted EPS....................       $105    132.9    $.71*     $294   140.3   $2.10      $284    132.4    $2.14
                                      ====    =====              ====   =====              ====    =====
</TABLE>

* 1998 Diluted EPS is the same as Basic EPS due to the anti-dilutive effect from
the  assumed  conversion  of  convertible  preferred  stock and the  addback  of
preferred dividends.

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.

--------------------------------------------------------------------------------
Q.   Stock Options

As of December 31, 1998, the Company currently has three  stock-based  incentive
compensation  plans under which the Company grants options to executives and key
employees to purchase common stock. 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.  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  ratably
over the first five  years  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 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.

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


Stock option transactions were:
<TABLE>
<CAPTION>
                                                    1998                    1997                     1996
                                            --------------------    --------------------    ---------------------
                                                        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.........................    4,745,796    $44.54     4,625,708    $42.28     1,836,452    $33.30
Granted.................................    1,109,032     47.56       877,350     52.27     3,544,750     44.35
Exercised...............................     (195,571)    33.81      (281,380)    33.36      (516,100)    25.58
Canceled................................     (360,551)    44.54      (475,882)    43.39      (239,394)    39.94
                                            ---------               ---------               ---------
Options outstanding
   at December 31.......................    5,298,706    $45.51     4,745,796    $44.54     4,625,708    $42.28
                                            =========               =========               =========
Options exercisable
   at December 31.......................    1,805,674               1,083,464                 709,115
Options available for
   grant at December 31.................    5,721,135               6,469,616               1,871,084
</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>   
        $20.53 to $38.50         616,742        6.0         $35.59                        358,084       $37.59
         38.63 to  43.13         268,016        3.0          40.76                        192,801        40.43
         44.13 to  52.75       3,654,448        5.1          45.96                      1,110,589        44.83
         53.00 to  54.38         759,500        8.2          53.13                        144,200        53.01
                              ----------                                                ---------
                               5,298,706        5.6         $45.51                      1,805,674       $43.58
                              ==========                                                =========
</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>
------------------------------------------------------------------------------------------------------------------
                                                                        1998             1997               1996
------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                <C>              <C>               <C>  
Net income                          As reported                         $ 88             $ 271             $ 264
                                    Pro forma                           $ 81             $ 264             $ 261


Basic earnings per share            As reported                         $.71             $2.11             $2.16
                                    Pro forma                           $.65             $2.05             $2.13


Diluted earnings per share          As reported                         $.71            $ 2.10             $2.14
                                    Pro forma                           $.65            $ 2.05             $2.12
</TABLE>

                                      -45-
<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 has been estimated
on the date of the grant using the  Black-Scholes  option pricing model with the
following weighted average assumptions:


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                       1998             1997              1996
--------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>              <C>      
Risk-free interest rate                                                  4.5%              5.7%             6.2%
Expected life of option                                             4.9 years         4.9 years        4.9 years
Expected stock price volatility                                         24.5%             21.7%            20.7%
Expected dividend yield                                                  3.2%              2.0%             2.2%
</TABLE>

The weighted  average  grant-date  fair values for options  granted during 1998,
1997 and 1996 were $9.96, $12.92, and $11.01, respectively.

--------------------------------------------------------------------------------
R.   Income Taxes

Pre-tax  income for the years ended  December  31 was taxed under the  following
jurisdictions:
<TABLE>
<CAPTION>
                                                                        1998              1997             1996
                                                                        ----              ----             ----
<S>                                                                    <C>                <C>              <C> 
Domestic......................................................         ($130)             $ 49             $ 67
Foreign.......................................................           310               408              364
                                                                        ----              ----             ----
                                                                        $180              $457             $431
                                                                        ====              ====             ====
The provision for income taxes consists of the following: 
Current tax provision:
     U.S. Federal.............................................          $  5              $ 14             $ 15
     State and foreign........................................            52                41               28
                                                                        ----              ----             ----
                                                                          57                55               43
                                                                        ----              ----             ----
Deferred tax provision:
     U.S. Federal.............................................           (31)               10               17
     State and foreign........................................            48                83               74
                                                                        ----              ----             ----
                                                                          17                93               91
                                                                        ----              ----             ----
                                                                        $ 74              $148             $134
                                                                        ====              ====             ====
</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 pre-tax
income as a result of the following differences:

<TABLE>
<CAPTION>
                                                                      1998              1997             1996
                                                                      ----              ----             ----
<S>                                                                   <C>               <C>              <C>  
U.S. statutory rate...........................................        35.0%             35.0%            35.0%
Non-U.S. operations at different rates........................       (12.6)             (6.6)            (7.7)
Effect of non-U.S. statutory rate changes.....................        (1.6)             (1.5)
Amortization of acquisition adjustments.......................        23.8               9.5              8.5
Valuation allowance...........................................        (2.5)             (2.7)            (4.0)
Other items, net..............................................        (1.0)             (1.3)             (.7)
                                                                      ----              ----             ---- 
     Effective income tax rate................................        41.1%             32.4%            31.1%
                                                                      ====              ====             ==== 
</TABLE>

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


The Company received federal,  state,  local and foreign income tax refunds (net
of  payments)  of $1 in 1998 and paid taxes (net of  refunds) of $51 in 1997 and
$41 in 1996. The  components of deferred tax assets and  liabilities at December
31, were:

<TABLE>
<CAPTION>
                                                                        1998                      1997
                                                                 ---------------------      --------------------
                                                                 Asset       Liability      Asset      Liability
                                                                 -----       ---------      -----      ---------
<S>                                                               <C>          <C>          <C>          <C>  
Depreciation..............................................                     $ 420                     $ 398
Postretirement and postemployment benefits................         $221                      $222
Pensions..................................................                        68                        91
Inventories...............................................                        27                        27
Tax loss and credit carryforwards.........................          232                       210
Restructuring.............................................           26                        41
Accruals and other........................................          120           55           88           26
                                                                  -----        -----        -----        -----
                                                                    599          570          561          542
Valuation allowance.......................................          (94)                     (125)
                                                                  -----        -----        -----        -----
                                                                  $ 505        $ 570        $ 436        $ 542
                                                                  =====        =====        =====        =====
</TABLE>

Prepaid  expenses and other current  assets  include $52 and $95 of deferred tax
assets at December 31, 1998 and 1997,  respectively.  Other  non-current  assets
include  $324 and $187 of  deferred  tax assets at  December  31, 1998 and 1997,
respectively.

The Company has recorded  $61 of deferred  tax assets  arising from tax loss and
credit  carryforwards  which will be realized  through future  operations and an
additional $77 which will be realized through the reversal of existing temporary
differences.  Future  recognition  of the remaining $94 will be achieved  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 $80 expire over the next five  years;  $49 expire in years six
through fifteen; and $103 can be utilized over an indefinite period.

The  valuation  allowance  of $94  includes  $61 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 $549 as
of December 31, 1998. Management has no plans to distribute such earnings in the
foreseeable future.

--------------------------------------------------------------------------------
S.   Pensions and Other Retirement Benefits

Pensions

The Company sponsors various pension plans, covering  substantially all U.S. and
Canadian and some non- U.S. and  non-Canadian  employees,  and  participates  in
certain  multi-employer  pension plans. The benefits under 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.

Plan assets of  company-sponsored  plans of $3,311 consist principally of common
stocks,  fixed income  securities and other  investments,  including $177 of the
Company's common stock.

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


The 1998, 1997 and 1996 components of pension (income)/cost were as follows:

<TABLE>
<CAPTION>
                                                      U.S.                                  Non-U.S.
                                         -------------------------------         ------------------------------
                                         1998         1997          1996         1998         1997         1996
                                         ----         ----          ----         ----         ----         ----
<S>                                      <C>           <C>          <C>          <C>          <C>          <C> 
Service cost..........................   $ 10          $  8         $ 12         $ 29         $ 26         $ 30
Interest cost.........................     88            93           89          140          136          111
Expected return on plan assets........   (145)         (147)        (128)        (233)        (206)        (160)
Recognized actuarial (gain)/loss .....     (1)           (2)           1            2                         1
Recognized prior service cost.........      1             1            1                         1            1
Cost/(income)attributable to
   plant closings.....................     12             1           (1)          (3)          (1)
                                        -----         -----        -----        -----        -----        ----- 
Total pension income..................  ($ 35)        ($ 46)       ($ 26)       ($ 65)       ($ 44)       ($ 17)
                                        =====         =====        =====        =====        =====        ===== 
</TABLE>

Additional  pension  expense of $8, $9 and $8 was  recognized in 1998,  1997 and
1996 for non-Company sponsored plans.

The projected benefit obligation,  accumulated benefit obligation and fair value
of plan assets for the U.S. pension plans with accumulated  benefit  obligations
in excess of plan assets were $823, $812 and $699, respectively,  as of December
31, 1998, and $23, $21, and $8, respectively, as of December 31, 1997.

The projected benefit obligation,  accumulated benefit obligation and fair value
of  plan  assets  for  the  non-U.S.  pension  plans  with  accumulated  benefit
obligations in excess of plan assets were $259, $220, and $104, respectively, as
of December 31, 1998, and $211, $184, and $64, respectively,  as of December 31,
1997.


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


Changes  in the  benefit  obligation  and plan  assets for 1998 and 1997 were as
follows:

<TABLE>
<CAPTION>
                                                                        U.S.                    Non-U.S.
                                                                 ------------------         -----------------
                                                                 1998          1997         1998         1997
                                                                 ----          ----         ----         ----
<S>                                                              <C>          <C>          <C>          <C>   
Change in Benefit Obligation

Benefit obligation at January 1...........................       $1,237       $1,191       $1,771       $1,685
Service cost..............................................           10            8           29           26
Interest cost.............................................           88           93          140          136
Plan participants' contributions..........................            1            1           10           11
Amendments................................................            8            4                         2
Settlements and curtailments..............................                                    (10)         (11)
Special termination benefits..............................           12            1
Actuarial loss............................................           50           64          121          101
Benefits paid.............................................         (119)        (125)        (113)        (102)
Foreign currency exchange rate changes....................                                      9          (77)
                                                                 ------       ------       ------       ------
   Benefit obligation at end of year......................       $1,287       $1,237       $1,957       $1,771
                                                                 ------       ------       ------       ------

Change in Plan Assets

Fair value of plan assets at January 1....................       $1,381       $1,337       $2,143       $1,958
Actual return on plan assets..............................          (39)         165           25          339
Employer contributions....................................            2            3           17           20
Plan participants' contributions..........................            1            1           10           11
Benefits paid.............................................         (119)        (125)        (113)        (102)
Settlement................................................                                                 (11)
Foreign currency exchange rate changes....................                                      3          (72)
                                                                 ------       ------       ------       ------
   Fair value of plan assets at December 31...............       $1,226       $1,381       $2,085       $2,143
                                                                 ------       ------       ------       ------

Plan assets(less than)/in excess of benefit
   obligation.............................................         ($61)        $144         $128         $372
Net transition obligation.................................            7            8
Unrecognized actuarial loss/(gain)........................          182          (53)         168         (148)
Unrecognized prior service cost...........................           16            8            3            4
                                                                 ------       ------       ------       ------
   Net amount recognized..................................       $  144       $  107       $  299       $  228
                                                                 ======       ======       ======       ======

Amounts recognized in the balance sheet consist of:

Prepaid benefit cost......................................       $  118       $  113       $  415       $  345
Accrued benefit liability.................................         (116)         (16)        (162)        (146)
Intangible asset..........................................           23           10            3            3
Accumulated other comprehensive income....................          119                        43           26
                                                                 ------       ------       ------       ------
   Net amount recognized..................................       $  144       $  107       $  299       $  228
                                                                 ======       ======       ======       ======
</TABLE>

                                      -49-
<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
----------------------------------------------------------------------------------------------------------------
                                   1998         1997         1996              1998         1997         1996
----------------------------------------------------------------------------------------------------------------
<S>                               <C>          <C>          <C>               <C>          <C>          <C> 
Discount rate..................     7.1%         7.4%         8.0%              7.2%         8.0%         8.8%
Compensation increase..........     3.5%         3.5%         3.5%              5.3%         6.0%         6.5%
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 components of the net postretirement benefit cost were as follows:

<TABLE>
<CAPTION>
                                                                                      1998       1997       1996
                                                                                      ----       ----       ----
<S>                                                                                    <C>        <C>        <C>
Service cost....................................................................       $ 4        $ 4        $ 4
Interest cost...................................................................        40         39         39
Recognized actuarial gain.......................................................        (1)        (1)        (1)
Recognized prior service cost...................................................        (1)        (2)
Loss attributable to plant closings.............................................         4
                                                                                       ---        ---        ---
     Net periodic benefit cost..................................................       $46        $40        $42
                                                                                       ===        ===        ===
</TABLE>

The following provides the components of the changes in the benefit  obligation,
and reconciles the obligation to the amount recognized:
<TABLE>
<CAPTION>
                                                                                  1998             1997
                                                                                  ----             ----
<S>                                                                             <C>               <C> 
Benefit obligations at January 1.......................................           $548              $504
Service cost...........................................................              4                 4
Interest cost..........................................................             40                39
Special termination benefits...........................................              4
Actuarial loss.........................................................             25                47
Benefits paid..........................................................            (51)              (46)
Foreign currency exchange rate changes.................................             (2)
                                                                                  ----              ----
Benefit obligation at December 31......................................            568               548
Unrecognized actuarial gain............................................             16                41
Unrecognized prior service cost........................................             11                12
                                                                                  ----              ----
     Net amount recognized.............................................           $595              $601
                                                                                  ====              ====
</TABLE>

The health care accumulated  postretirement benefit obligation was determined at
December  31,  1998 and 1997 using  health  care  trend  rates of 8.0% and 8.7%,
respectively, decreasing to 4.8% over seven years and eight years, respectively.
The assumed long-term rate of compensation  increase used for life insurance was
3.5% at both December 31, 1998 and 1997.  The discount rate was 7.1% and 7.4% at
December 31, 1998 and 1997, respectively.  Changing the assumed health care cost
trend rate by one  percentage  point in each year would  change the  accumulated
postretirement  benefit  obligation by $41 and the total of service and interest
cost by $3.

                                      -50-
<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
1998  and  1997  were  112,471  and  89,392,  respectively,  and  the  Company's
contributions were approximately $1 for both years.

--------------------------------------------------------------------------------
T.   Segment Information

In 1998, the Company adopted Statement of Financial  Accounting Standards (SFAS)
No. 131,  "Disclosures about Segments of an Enterprise and Related Information."
SFAS 131  supersedes  SFAS 14,  "Financial  Reporting for Segments of a Business
Enterprise,"  replacing the  "industry  segment"  approach  with a  "management"
approach.  The prior years'  segment  information  has been  restated to the new
presentation.  The  management  approach  presents  segments  according  to  the
internal  organization  used by management  for making  operating  decisions and
assessing performance.  SFAS 131 also requires disclosures about enterprise-wide
products and services,  significant  geographic  operations and major customers.
The  adoption of SFAS 131 does not affect  results of  operations  or  financial
position but does affect the disclosures for segment information.

The  Company  is  organized  on the  basis  of  geographic  regions  with  three
reportable segments:  Americas,  Europe and Asia-Pacific.  The Americas includes
the United States, Canada and South and Central America. Europe includes Europe,
Africa and the Middle East.  Although the economic  environments  within each of
these reportable  segments are quite diverse,  they are similar in the nature of
their products, the production processes,  the types or classes of customers for
products and the methods used to  distribute  products.  Asia-Pacific,  although
below reportable segment thresholds, has been designated as a reportable segment
because  considerable  review  is made  of this  region  for the  allocation  of
resources.  Each reportable  segment is an operating division within the Company
and has a President  reporting  directly to the Chief Executive  Officer and the
Chief  Operating  Officer.  "Other"  includes  Corporate  activities,   such  as
Corporate  Technology  and,  prior  to 1998,  includes  the  divested  machinery
operations of Crown-Simplimatic.

The Company  evaluates  performance  and allocates  resources based on operating
income, that is, income before net interest, foreign exchange and gain/(loss) on
sale of assets. The accounting policies for each reportable segment are the same
as those described in the Summary of Significant Accounting Policies.

On an enterprise-wide basis, the Company's major products and their distribution
along geographic lines along with related long-lived assets are presented below.

                                      -51-
<PAGE>
                         Crown Cork & Seal Company, Inc.


<TABLE>
<CAPTION>
Sales for major products were:

PRODUCTS                                                                1998            1997              1996
                                                                       ------           ------           ------
<S>                                                                    <C>              <C>              <C>   
     Metal beverage cans and ends.............................         $2,554           $2,485           $2,299
     Metal food cans and ends.................................          2,562            2,590            2,540
     Other metal packaging....................................          1,478            1,548            1,494
     Plastic packaging........................................          1,535            1,554            1,712
     Other products...........................................            171              318              287
                                                                       ------           ------           ------
         Consolidated net sales...............................         $8,300           $8,495           $8,332
                                                                       ======           ======           ======
</TABLE>

Sales and  long-lived  assets  for the  major  countries  in which  the  Company
operates were:

<TABLE>
<CAPTION>
                                                   Net Sales                           Long-lived Assets
                                          ------------------------------         -----------------------------
                                          1998         1997         1996         1998         1997        1996
                                          ----         ----         ----         ----         ----        ----
<S>                                      <C>          <C>          <C>          <C>          <C>         <C>   
GEOGRAPHIC
     United States....................   $3,337       $3,394       $3,327       $1,351       $1,421      $1,436
     United Kingdom...................    1,112        1,241        1,225          522          474         461
     France...........................      832          839          882          332          306         296
     Other *..........................    3,019        3,021        2,898        1,538        1,463       1,524
                                         ------       ------       ------       ------       ------      ------
         Consolidated total...........   $8,300       $8,495       $8,332       $3,743       $3,664      $3,717
                                         ======       ======       ======       ======       ======      ======
</TABLE>

*"Other" includes Other Europe,  Africa,  Middle East, Canada, South and Central
America and Asia-Pacific.

For the years ended  December  31,  1998,  1997 and 1996,  respectively,  no one
customer accounted for more than 10% of the Company's consolidated net sales.

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


The tables below present  information  about  reportable  segments for the years
ending December 31, 1998, 1997, 1996:
<TABLE>
<CAPTION>
                                                                            December 31, 1998
                                                    Americas       Europe     Asia-Pacific     Other     Total
<S>                                                   <C>          <C>            <C>                   <C>    
External sales...................................     $4,077       $3,888         $335                  $ 8,300
Depreciation & Amortization......................        219          271           26          $17         533
Restructuring & other charges....................         85           77            3          139         304
Segment income...................................        289          479                      (211)        557
Capital expenditures.............................        161          300            7           19         487
Equity investments...............................         30           43                        18          91
Deferred tax assets..............................        137          186            5           48         376
Segment assets...................................      4,511        7,176          520          262      12,469
---------------------------------------------------------------------------------------------------------------------

                                                                            December 31, 1997
                                                    Americas       Europe     Asia-Pacific     Other     Total
External sales...................................     $4,021       $4,045         $369          $60      $8,495
Depreciation & Amortization......................        244          253           28           15         540
Restructuring & other charges....................         55           12                                    67
Segment income...................................        280          553            7          (74)        766
Capital expenditures.............................        176          301           19           19         515
Equity investments...............................         30           37                        23          90
Deferred tax assets..............................         81          196            4            1         282
Segment assets...................................      4,721        6,941          509          135      12,306
---------------------------------------------------------------------------------------------------------------------

                                                                            December 31, 1996
                                                    Americas       Europe     Asia-Pacific     Other     Total
External sales...................................     $3,823       $3,987         $384         $138      $8,332
Depreciation & Amortization......................        232          223           34            7         496
Restructuring & other charges....................          9           30            1                       40
Segment income...................................        284          450           13          (71)        676
Capital expenditures.............................        225          281           90           35         631
Equity investments...............................         29           48            6            7          90
Deferred tax assets..............................         52          339           15            2         408
Segment assets...................................      4,563        7,199          614          214      12,590
---------------------------------------------------------------------------------------------------------------------
</TABLE>

A reconciliation of segment income to consolidated  pre-tax income for the years
ended December 31, 1998, 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
INCOME                                                                  1998              1997             1996
                                                                        ----              ----             ----
<S>                                                                     <C>               <C>              <C> 
     Segment income...........................................          $557              $766             $676
     Interest expense.........................................           408               379              328
     Interest income..........................................           (45)              (39)             (22)
     Gain on sale of assets...................................                             (38)             (24)
     Translation & exchange adjustments.......................            14                 7              (37)
                                                                        ----              ----             ----
         Consolidated pre-tax income..........................          $180              $457             $431
                                                                        ====              ====             ====
---------------------------------------------------------------------------------------------------------------------
</TABLE>

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


U.   Quarterly Data (unaudited)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
(in millions)                                   1998                        |                    1997
----------------------------------------------------------------------------------------------------------------------------
                              First     Second       Third      Fourth      |  First      Second       Third      Fourth
----------------------------------------------------------------------------------------------------------------------------
<S>                           <C>        <C>         <C>         <C>          <C>         <C>         <C>         <C>   
Net sales..................   $1,892     $2,245      $2,291      $1,872     |  $1,938      $2,287      $2,341      $1,929
Gross profit*..............      285        412         199 (1)     288 (3) |     286         394         332 (4)     293
Net income (loss)                                                           |
   available to common                                                      |
   shareholders............       36        122         (25)(1)     (45)(2) |      33         126          80 (4)      32 (5)
----------------------------------------------------------------------------------------------------------------------------
                                                                            |
Earnings per average                                                        |
   common share:**                                                          |
   Basic ..................     $.29      $ .98       ($.20)(1)   ($.37)(2) |    $.26        $.98        $.62 (4)    $.25 (5)
   Diluted.................        +        .95           +           +     |      +          .94         .61 (4)       +
                                                                            |
Dividends per common                                                        |
   share ..................      .25        .25         .25         .25     |     .25        .25          .25         .25
                                                                            |
Average common shares                                                       |
   outstanding (in millions):                                               |
   Basic...................    127.1      124.4       123.7       122.3     |   128.5       128.6       128.3       128.4
   Diluted.................    137.8      132.8       131.6       130.0     |   140.5       140.6       140.1       140.0
                                                                            |
----------------------------------------------------------------------------------------------------------------------------
Common stock                                                                |
price range:***                                                             |
   High....................  $55 3/16   $54 11/16   $48 1/2     $35  3/4    | $59 3/4      $58 1/2     $56 7/8     $51 3/16
   Low.....................   46 1/2     45 9/16     25 5/8      24         |  51 5/8       51 1/8      44 7/8      43 9/16
   Close...................   53 1/2     47 1/2      26 3/4      30  13/16  |  51 5/8       53 7/16     46 1/8      50 1/8
----------------------------------------------------------------------------------------------------------------------------
<FN>
     + Diluted  earnings per share for the first,  third and fourth  quarters of
       1998 and the  first  and  fourth  quarters  of 1997 are the same as Basic
       because  the  assumed  conversion  of  convertible   preferred  stock  is
       anti-dilutive.
    *  The Company defines gross profit as net sales less cost of products sold,
       depreciation and amortization  (excluding goodwill  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 $187; $127 after taxes or $1.03
       per basic share and $.96 per diluted  share.  Excluding the impact of the
       restructuring  charges,  net income was $102 or $.82 per basic  share and
       $.80 per diluted share. See Note L for additional details.
  (2)  Includes  an  after-tax  charge for  litigation  of $78 or $.64 per basic
       share and $.60 per diluted share.  Excluding the impact of the litigation
       charge,  net income was $33 or $.27 per basic and diluted share. See Note
       K for additional details.
  (3)  Includes  an  adjustment  of  $8  to  the  third  quarter   restructuring
       provision.  The  reduction  in the  provision  was  offset  by lower  tax
       benefits expected from such charges.
  (4)  Includes  pre-tax  restructuring  charges of $67; $43 after taxes or $.34
       per basic  share and $.31 per  diluted  share.  Excluding  the  impact of
       restructuring  charges,  net income was $123 or $.96 per basic  share and
       $.92 per diluted share. See Note L for additional details.
  (5)  Includes the  after-tax  charge of $8 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 $40 or $.31 per  basic  and
       diluted share. See Note B for additional details.
</FN>
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

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


          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
<TABLE>
<CAPTION>
(In millions)
---------------------------------------------------------------------------------------------------------------------------------
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 of
Description                      period                                                       Write-Offs       period
---------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>              <C>                  <C>                     <C>             <C> 
                                                 For the Year Ended December 31, 1998

Allowances deducted from 
assets to which they apply:

Trade accounts receivable               $ 45            $ 14                                         $ 14             $ 45

Deferred tax assets                      125             ( 4)                                          27               94



                                                 For the Year Ended December 31, 1997
Allowances deducted from 
assets to which they apply:

Trade accounts receivable                 92               9                                           56               45

Deferred tax assets                      139             (12)                  4                        6              125



                                                 For the Year Ended December 31, 1996
Allowances deducted from 
assets to which they apply:

Trade accounts receivable                 10               9                  91*                      18               92

Deferred tax assets                       23             ( 8)                124*                                      139


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

                                      -55-
<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  22,  1999,  in the  section  entitled
"Election of Directors"  and on page 17 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.

<TABLE>
<CAPTION>
       Name                                    Age                   Present Title

<S>                                            <C>                <C>                 
William J. Avery                               58                 Chairman of the Board of Directors
                                                                  and Chief Executive Officer

Michael J. McKenna                             64                 Vice Chairman


John W. Conway                                 53                 President and Chief Operating Officer
                                                                  and President-Americas Division

Tommy H. Karlsson                              52                 Executive Vice President and
                                                                  President-European Division

Richard L. Krzyzanowski                        66                 Executive Vice President,
                                                                  Secretary and General Counsel

Alan W. Rutherford                             55                 Executive Vice President and
                                                                  Chief Financial Officer

Ronald R. Thoma                                64                 Executive Vice President -
                                                                  Procurement and Traffic

William H. Voss                                53                 Executive Vice President and
                                                                  President - Asia-Pacific Division

Craig R. L. Calle                              39                 Senior Vice President -
                                                                  Finance and Treasurer

Timothy J. Donahue                             36                 Senior Vice President
                                                                  and Corporate Controller
</TABLE>

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

ITEM 11.  EXECUTIVE COMPENSATION

The information set forth on pages 8 through 12 of the Company's Proxy Statement
dated  March 22,  1999,  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 22, 1999, in the sections  entitled "Proxy
Statement-Meeting,   April  22,  1999"  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  22,  1999,  in the  section  entitled
"Election of Directors" and is incorporated herein by reference.



                                      -57-
<PAGE>
                         Crown Cork & Seal Company, Inc.

                                     PART IV

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

          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.

          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)).

          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)).

                                      -58-
<PAGE>
                         Crown Cork & Seal Company, Inc.

          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 the 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 & Seal 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 2096 (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)).

          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)).

                                      -59-
<PAGE>
                         Crown Cork & Seal Company, Inc.

          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 the  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 for 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)).

          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)).

                                      -60-
<PAGE>
                         Crown Cork & Seal Company, Inc.

         10.f   Crown  Cork & Seal  Company,  Inc.  1997  Stock-Based  Incentive
                Compensation Plan  (incorporated by reference to Exhibit 10.f of
                the  Company's  Annual  Report on Form  10-K for the year  ended
                December 31, 1997 (File No. 1-2227)).

          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).

          10.j 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)).

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

          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 last quarter of the period for which this report is filed.

                                      -61-
<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, 1999

                              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        3/31/99
-----------------------------------
William J. Avery                      Chairman of the Board and Chief 
                                      Executive Officer

/s/ Alan W. Rutherford      3/31/99
-----------------------------------
Alan W. Rutherford                    Director, Executive Vice President and
                                      Chief Financial Officer

                                    DIRECTORS

/s/ Henry E. Butwel         3/31/99   /s/ Josephine C. Mandeville        3/31/99
-----------------------------------   ------------------------------------------
Henry E. Butwel                       Josephine C. Mandeville


/s/ Charles F. Casey        3/31/99   /s/ Michael J. McKenna             3/31/99
-----------------------------------   ------------------------------------------
Charles F. Casey                      Michael J. McKenna


/s/ John W. Conway          3/31/99   /s/ Thomas A. Ralph                3/31/99
-----------------------------------   ------------------------------------------
John W. Conway                        Thomas A. Ralph


/s/ Francis X. Dalton       3/31/99   /s/ Jean-Pierre Rosso              3/31/99
-----------------------------------   ------------------------------------------
Francis X. Dalton                     Jean-Pierre Rosso


/s/ Tommy H. Karlsson       3/31/99   /s/ Harold A. Sorgenti             3/31/99
-----------------------------------   ------------------------------------------
Tommy H. Karlsson                     Harold A. Sorgenti


/s/ Richard L. Krzyzanowski 3/31/99   /s/ Guy de Wouters                 3/31/99
-----------------------------------   ------------------------------------------
Richard L. Krzyzanowski               Guy de Wouters

                                      -62-