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

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

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

                          Commission file number 1-2227

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

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

     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

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

 Common Stock Purchase Rights
                                 --------------

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

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

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

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

As of March 14,  1997,  128,505,232  shares of the  Registrant's  Common  Stock,
excluding  shares held in Treasury,  and 12,432,094  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 $7,571,765,310.

                       DOCUMENTS INCORPORATED BY REFERENCE

Notice  of  Annual  Meeting  and  Proxy   Statement  dated  March  24,  1997  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.

                          1996 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

                                     PART I

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

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

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

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


                                     PART II

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

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

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

Item 8    Financial Statements and Supplementary Data........................22

Item 9    Disagreements on Accounting and Financial Disclosure...............48


                                    PART III

Item 10   Directors and Executive Officers of the Registrant.................48

Item 11   Executive Compensation.............................................49

Item 12   Security Ownership of Certain Beneficial Owners and Management.....49

Item 13   Certain Relationships and Related Transactions.....................49


                                     PART IV

Item 14   Exhibits, Financial Statement Schedules and Reports
             on Form 8-K.....................................................50

SIGNATURES...................................................................55

<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 1996 consolidated
net sales of $8.3  billion.  More than 60% of 1996 net sales were  derived  from
operations  outside the United  States with  approximately  75% of the non- U.S.
revenues  derived in Europe.  The Company  believes  that it is well  positioned
within its  industry  having the ability to supply  food,  beverage  and aerosol
containers  to  multinational  consumer  marketers  on  a  global  basis.  As  a
multinational  packaging producer, the Company benefits from, but is exposed to,
the fluctuations of world trade. The Company  currently  operates 282 plants, as
well as sales and service  facilities in 59 countries and employs  approximately
45,000 people.  The Company  continually  reviews its operations,  especially in
terms of their  competitiveness and the appropriate number, size and location of
its plants, emphasizing service to customers and rate of return to investors.

Financial  information  concerning the Company's operations in its two principal
industry segments,  Metal Packaging and Plastic Packaging, and within geographic
areas is set forth in Part II of this  Report on pages 44 and 45 under Note S to
the Consolidated Financial Statements entitled "Segment Information by Industry
Segment and Geographic Area."

The  Company's  products  include  steel and aluminum  cans for food,  beverage,
brewing, household and other consumer products; plastic containers for beverage,
processed food, household,  personal care and other products;  metal and plastic
packaging products for health and beauty care applications  including cosmetics,
fragrances  and  pharmaceuticals;  metal  specialty  and  promotional  packaging
products;  a wide  variety  of caps,  crowns,  closures,  pumps  and  dispensing
systems;  and composite  containers.  The Company also manufactures  filling and
material handling machinery,  primarily for the beverage and brewing industries,
as well as machinery used in can-making.

Under current  management,  the Company has pursued a strategy of growth through
acquisition within the global packaging industry. Over the past seven years, the
Company has completed twenty  acquisitions of companies with aggregate net sales
of approximately $8 billion.  The largest  acquisitions over this period include
CarnaudMetalbox  ("CMB") (February 1996), Van Dorn Company (April 1993), CONSTAR
International   (October  1992),   Continental  Can  International  (May  1991),
Continental  Can's  U.S.  food and  beverage  can  businesses  (July  1990)  and
Continental  Can Canada  (December  1989).  This strategy has  contributed to an
increase in the Company's net sales from $1.9 billion in 1989 to $8.3 billion in
1996. The Company's  acquisition  strategy has resulted in numerous  benefits to
the  Company,  including  improved  market  positions,  product  and  geographic
diversification, and cost savings.

Information  about the Company's  acquisitions  over the most recent three years
appears  in Part II herein on pages 31 and 32 under  Note H to the  Consolidated
Financial Statements. Information about the Company's acquisition of CMB appears
in Part II  herein  on pages 17 and 18 under  "Acquisition  of  CarnaudMetalbox"
within Item 7, "Management's  Discussion and Analysis of Financial Condition and
Results of Operations."

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.

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

                                  DISTRIBUTION

As of December 31, 1996, the Company's  products were  manufactured in 87 plants
within the United States and 195 plants outside the U.S. The Company markets and
sells  products to customers  through its own sales and marketing  staff located
centrally  within each  division.  The  divisions'  sales staff are supported by
regional  sales  personnel.  Most of the  Company's  products are sold in highly
competitive markets, primarily based on price, service, quality and performance.
The majority of the Company's  sales are to companies  which have leading market
positions  in the  packaged  food,  beverage,  aerosol,  health  and  beauty and
specialty businesses.  Contracts with global suppliers are centrally negotiated,
although products are ordered through and distributed directly by each plant.

In each of the years in the period 1994  through  1996,  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 and new packaging shapes.

The Company  expended  $51.5  million,  $22.3 million and $21.1 million in 1996,
1995 and 1994, respectively,  on RD&E activities.  These activities are expected
to improve and expand the Company's  product  lines in the future.  Expenditures
were also made to improve  manufacturing  efficiencies  and reduce  unit  costs,
principally raw material  costs, by reducing the material  content of containers
while  improving  or  maintaining  other  physical  properties  such as material
strength.

                                    MATERIALS

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

The  raw  materials  used  in the  manufacture  of the  Company's  products  are
primarily  aluminum and tinplate for the Metal  Packaging  segment,  and various
types of resins, which are petrochemical derivatives,  for the Plastic Packaging
segment.  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 assurances that  sufficient  quantities will be available in the
future. The Company may be subject to adverse price fluctuations on the purchase
of such raw materials. See "Metal Packaging" below.

                                   SEASONALITY

The 1996  acquisition of CMB has increased the potential for seasonal effects on
the Company's results of operations.  Food packaging products accounted for $2.8
billion or approximately  34% of 1996 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.


                                       -2-

<PAGE>


                         Crown Cork & Seal Company, Inc.

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.

The Company's other businesses  include aerosol,  specialty,  health and beauty,
machinery  and  various  other  products  which  tend  not  to  be  affected  by
significant 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  financial  condition  or  results  of
operations.  Further  discussion  of  the  Company's  environmental  matters  is
contained in Part II, Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" of this Report on pages 19 and 20 under the
caption "Environmental Matters."

                                 WORKING CAPITAL

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

                                    EMPLOYEES

At December 31, 1996, the Company employed 44,611 people throughout the world. A
significant  number  of  the  Company's  employees  are  covered  by  collective
bargaining agreements with varying terms and expiration dates.

                        APPOINTMENT OF CORPORATE OFFICERS

The Company,  through its Board of  Directors,  appointed Mr. B. Nigel Gilson as
Executive  Vice President with  responsibility  for developing and  coordinating
business with the  Company's  global  customers.  Mr. Gilson joined Metal Box in
South Africa in 1965 and recently was  responsible  for CMB  operations in Asia,
Africa,  the  Middle  East and the  Caribbean.  He has held  several  management
positions in CMB's metal and plastic packaging operations in Europe,  Africa and
Asia.

                                 METAL PACKAGING

The  Metal  Packaging   segment,   which  accounted  for  approximately  80%  of
consolidated net sales and  approximately  68% of consolidated  operating income
(before net interest costs, foreign exchange adjustments and other non-operating
expenses) in 1996,  manufactures  and markets steel and aluminum cans as well as
composite  cans,  crowns  (also known as bottle  caps) and metal  closures.  The
segment also  includes the Machinery  Division  which  manufactures  filling and
material handling equipment,  primarily for the beverage and brewing industries,
as well as  machinery  used in the  can-making  process.  All  products are sold
through  the  Company's  sales  organization  to the soft drink,  food,  citrus,
brewing, household

                                       -3-
<PAGE>

                         Crown Cork & Seal Company, Inc.

products,  personal  care and various  other  industries.  The segment  employed
approximately 33,000 persons at December 31, 1996.

Global  beverage and food marketers  continue to increase the  consolidation  of
their supplier base under long-term arrangements and to qualify suppliers on the
basis of their  ability to provide  service  globally  and to create  innovative
designs and technologies in a cost-effective  manner.  The acquisition of CMB in
February 1996 has created a geographically  diversified and innovative packaging
company with significant operations in Europe, the Middle East, Africa, Asia and
an RD&E  center in England.  In  connection  with the  acquisition  of CMB,  the
European  Commission  required the Company to divest certain aerosol  operations
located in five European countries.  This requirement was satisfied in September
1996.

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

The Company's basic raw materials for its Metal Packaging segment's products are
tinplate  and  aluminum.  These  metals are  supplied  by the major mills in the
countries   within   which  the  Company   operates   plants.   Some  plants  in
less-developed countries, which do not have local mills, obtain their metal from
nearby more-developed countries. In 1996, approximately 85% of metal consumption
in Europe was for tinplate.  In the United  States,  approximately  63% of metal
consumption was for aluminum.  Although  sufficient  quantities of raw materials
have been  available in the past,  there can be no  assurances  that  sufficient
quantities will be available in the future.

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

Historically,  the Company has adjusted  the selling  prices for its products in
response  to changes in the cost of  tinplate  and  aluminum.  During  1995 when
aluminum costs increased, the Company announced price increases to its customers
but  due to  overcapacity  within  the  aluminum  beverage  can  market  and the
customers'  willingness to shift a portion of their packaging  requirements away
from aluminum, the Company was unable to fully recover the increases in the cost
of aluminum  from its  customers.  During  1996,  as aluminum  prices  declined,
selling  prices  to  customers  for  aluminum  beverage  cans and ends were also
reduced. In the future,  there can be no assurance that the Company will be able
to  recover  fully  any  increases  or  fluctuations  in metal  prices  from its
customers.

The  Company,  based on  sales,  is one of two  leading  producers  of  aluminum
beverage  cans and ends within the United  States.  Sales  dollars for  aluminum
beverage cans and ends in 1996  decreased from 1995 due to the  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.  Excess  beverage can capacity in North  America has been
redeployed to emerging markets,  and to a lesser extent,  retrofitted to produce
two-piece food cans.

                                       -4-

<PAGE>

                         Crown Cork & Seal Company, Inc.


As the Company has continued to integrate the  operations of CMB, it has made an
assessment  of  the  restructuring  and  exit  costs  to be  incurred  from  the
acquisition.  The plan of restructuring  which commenced at the end of the first
quarter of 1996 is expected to be  substantially  completed  during 1997.  Since
commencement  of  the  plan  of   restructuring,   the  Company  has  determined
alternative sites for manufacture and qualified the new manufacturing sites with
customers.  Further  discussion  of the  Company's  restructuring  activities is
contained in Part II hereof on pages 32 and 33 under Note I to the  Consolidated
Financial Statements and within Item 7, "Management's Discussion and Analysis of
Financial  Condition and Results of Operations" on page 18 under  "Provision for
Restructuring."

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

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

Machinery  Division  1996 net sales  represented  approximately  two  percent of
consolidated  net sales  and  include  sales  from the  Simplimatic  Engineering
operations  acquired in the CMB transaction.  The Machinery Division is included
in the Metal Packaging segment.

                                PLASTIC PACKAGING

The Plastic Packaging segment,  which in 1996 accounted for approximately 20% of
consolidated net sales and  approximately  32% of consolidated  operating income
(before net interest costs, foreign exchange adjustments and other non-operating
expenses),   manufactures  plastic  containers  and  plastic  closures  for  the
beverage, food, health and beauty,  household products,  personal care, chemical
and other industries. Within the U.S. the Company manufactures and sells plastic
bottles through its CONSTAR subsidiary and plastic closures through its plant in
Virginia and plants acquired in the CMB  acquisition.  Plastic closures are also
manufactured in various metal packaging  operations within Europe,  Asia and the
Middle East and South America.  CONSTAR,  based on net sales,  is one of the two
leading producers of plastic containers produced from PET and HDPE (high-density
polyethylene) within the United States.

The  combination  of  CMB's  Plastics  division  with  CONSTAR   International's
operations in Europe has resulted, the Company believes, in the leading European
producer  of  plastic  packaging.   This  combination  further  strengthens  the
Company's plastics marketing base in Europe and has added product and geographic
diversity to this segment.  The combination of CMB European  plastic  operations
with existing Company  operations has led to certain redundant  operations being
consolidated. The ultimate result of these actions represents the Company's best
efforts to react to industry  performance  and  general  business  and  economic
conditions.  Further  discussion  of the Company's  restructuring  activities is
contained in Part II hereof on pages 32 and 33 under Note I to the  Consolidated
Financial Statements and within Item 7, "Management's Discussion and Analysis of
Financial  Condition and Results of Operations" on page 18 under  "Provision for
Restructuring".

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

                                       -5-

<PAGE>

                         Crown Cork & Seal Company, Inc.

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

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

Capital  expenditures for the Plastic  Packaging  segment were  approximately 15
percent of total  capital  spending  for the  Company in 1996 as  compared to 34
percent in 1995.  The  decrease,  in  percentage  terms,  is  reflective  of the
capacity  expansion  program which the Company's  Plastic  segment  entered into
during the three year period  ended  December  31,  1995.  The  Company  remains
committed to servicing its global customers with plastic containers. Information
relating to the Company's capital  expenditures is set forth in Part II, Item 7,
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations,"  of this  Report  on  pages 18 and 19 under  the  caption  "Capital
Expenditures."

ITEM 2.   PROPERTIES

Crown Cork & Seal  Company,  Inc.,  and its worldwide  subsidiaries  operate 282
manufacturing facilities.  Within the United States there are 58 Metal Packaging
manufacturing  facilities  and 29 Plastic  Packaging  manufacturing  facilities.
Outside the United States there are 148 Metal Packaging manufacturing facilities
and 41 Plastic Packaging manufacturing  facilities.  There are six manufacturing
facilities  outside the United  States that  manufacture  both metal and plastic
products.

The geographic distribution of the manufacturing facilities is as follows:
<TABLE>
<CAPTION>
                                            Metal            Plastic             Both             No. of            No.
Geographic Area*                          Packaging         Packaging          Segments          Plants           Leased
<S>                                          <C>               <C>                <C>              <C>              <C>
United States                                58                29                   -               87               34

Canada                                       11                 1                   -               12                -

Central America                               8                 1                   -                9                1

South America                                16                 1                   1               18                2

Europe                                       72                31                   3              106               23

Africa                                       14                 1                   -               15                3

Middle East                                   5                 -                   1                6                1

Asia                                         22                 6                   1               29               15
                              -------------------------------------------------------------------------------------------

         Worldwide Total                    206                70                   6              282               79
                              ===========================================================================================
</TABLE>
* Excluded are  productive  facilities  in announced  restructurings  as well as
  service or support facilities.

The Company's manufacturing and support facilities are designed according to the
requirements  of  the  products  to be  manufactured,  therefore,  the  type  of
construction  varies from plant to plant.  Warehouse and delivery facilities are
generally provided at each of the manufacturing locations,  although the Company
does

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

lease  some  outside  warehouses.  Management  believes  that its  manufacturing
facilities,  taken as a whole,  are well  maintained and generally  adequate for
current operations.

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

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

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

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  within the United
Kingdom.

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

ITEM 3.   LEGAL PROCEEDINGS

In management's opinion, there are no pending claims or litigations, the adverse
determination  of which would have a material adverse effect on the consolidated
financial position or results of operations of the Company. The Company has been
identified by the Environmental  Protection Agency as a potentially  responsible
party (along with others,  in most cases) at a number of sites.  Information  on
this is presented in Part I, Item 1, entitled "Business"  appearing on page 3 of
this  Report  and in  Part  II Item 7,  entitled  "Management's  Discussion  and
Analysis of Financial Condition and Results of Operations" under  "Environmental
Matters" appearing on pages 19 and 20 of this Report.

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

None
                                     PART II

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

The  Registrant's  Common Stock and  Preferred  Stock are listed on the New York
Stock  Exchange  and the Paris  Bourse.  On March 14,  1997,  there  were  5,680
registered  shareholders  of the  Registrant's  Common  Stock  and 9  registered
shareholders of the  Registrant's  Preferred Stock. The market price at December
31, 1996, with respect to the Registrant's  Common Stock is set forth on page 46
in  Note T of  the  Notes  to the  Consolidated  Financial  Statements  entitled
"Quarterly Data (unaudited)".  The foregoing information regarding the number of
registered  shareholders  of Common Stock and  Preferred  Stock does not include
persons  holding  stock through  clearinghouse  systems in the United States and
France.  It is the present intention of the Company to continue paying dividends
on its  common  stock  on a  quarterly  basis.  Further  details  regarding  the
Company's  policy as to payment of cash dividends are set forth in Part II, Item
7, "Management's  Discussion and Analysis of Financial  Condition and Results of
Operations"   under   "Dividends/Issuance   of  Stock  in  Connection  with  CMB
Acquisition" appearing on pages 20 and 21 of this Report.

                                      -7-

<PAGE>

                         Crown Cork & Seal Company, Inc.

ITEM 6.   SELECTED FINANCIAL DATA

FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(in millions, except per share, ratios and
  other statistics)                                         1996         1995         1994         1993          1992

Summary of Operations
<S>                                           <C>       <C>          <C>          <C>          <C>           <C>
Net sales.....................................(3)       $8,331.9     $5,053.8     $4,452.2     $4,162.6      $3,780.7
                                                        --------     --------     --------     --------      --------


Cost of products sold............................        6,732.5      4,319.4      3,706.2      3,474.7       3,203.0
Depreciation and amortization....................          495.9        256.3        218.3        191.7         142.4
Selling and administrative expense...............          387.2        139.3        135.4        126.6         112.1
  % to net sales.................................            4.6%         2.8%         3.0%         3.0%          3.0%
Provision for restructuring......................           39.8        102.7        114.6
Gain on sale of assets ..........................          (23.8)        (8.4)        (6.7)         (.7)         (5.6)
Interest expense, net of interest income.........          305.8        136.1         91.6         79.7          63.9
Translation and exchange adjustments ............          (36.5)        (1.1)        10.1         10.8          10.2
                                                        --------     --------     --------     --------      --------


Income before income taxes
  and cumulative effect of accounting changes              431.0        109.5        182.7        279.8         254.7
    % to net sales...............................            5.2%         2.2%         4.1%         6.7%          6.7%
Provision for income taxes.......................          134.4         24.9         55.6         97.4         101.0
Minority interests, net of equity earnings ......          (12.6)        (9.7)         3.9         (1.5)          1.7
                                                        --------     --------     --------     --------      --------


Net income before cumulative effect of
  accounting changes.............................          284.0         74.9        131.0        180.9         155.4
    % to net sales ..............................            3.4%         1.5%         2.9%         4.3%          4.1%
Cumulative effect of accounting changes.......(1)                                                 (81.8)
                                                        --------     --------     --------     --------      --------


Net income....................................(2)          284.0         74.9        131.0         99.1         155.4
                                                        ========     ========     ========     ========      ========
Preferred stock dividends .......................           19.8
                                                        --------     --------     --------     --------      --------


Net income available to common
  shareholders...................................         $264.2        $74.9       $131.0        $99.1        $155.4


Return on average shareholders' equity...........           10.5%         5.3%        10.0%         8.3%         13.9%

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

Financial Position at December 31

Working capital .................................        ($370.6)      $429.9       $122.6        $43.8        $174.5
Total assets.....................................       12,590.2      5,051.7      4,781.3      4,236.3       3,825.1
Short-term debt plus current long-term debt
  maturities.....................................        1,154.3        608.1        735.8        474.8         379.4
Long-term debt...................................        3,923.5      1,490.1      1,089.5        891.5         939.9
  Total debt to total capitalization.............           56.4%        56.2%        55.3%        50.1%         52.1%
Minority interests...............................          243.8        118.6         75.4         53.7          45.6
Shareholders' equity.............................        3,563.3      1,461.2      1,365.2      1,251.8       1,143.6

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

                                       -8-
<PAGE>

                         Crown Cork & Seal Company, Inc.

FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA (Continued)
-----------------------------------------------------------------------------------------------------------------------------------

(in millions, except per share, ratios and
  other statistics)                                      1996         1995         1994         1993         1992
-----------------------------------------------------------------------------------------------------------------------------------

Common Share Data (dollars per share)
Earnings per average common share before
  cumulative effect of accounting changes........        $2.16         $.83        $1.47        $2.08         $1.79
Earnings per average common share................         2.16          .83         1.47         1.14          1.79
Cash dividends...................................         1.00
Market price on December 31......................        54.38        41.75        37.75        41.88         39.88
Book value (based on year-end
  outstanding shares)............................        23.69        16.12        15.28        14.09         13.24
Number of shares outstanding at year-end.........  128,410,797   90,650,814   89,360,040   88,814,533    86,348,180
Average shares outstanding.......................  122,468,206   90,233,518   89,086,999   87,086,553    86,895,574
Shareholders (on record).........................        5,736        5,976        6,011        6,168         4,193

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

Other Statistics

Capital expenditures.............................       $631.2       $433.5       $439.8       $271.3        $150.6

Number of Employees..............................       44,611       20,409       22,373       21,254        20,378
Actual preferred shares outstanding..............   12,432,622

-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
</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)    In 1993, the Company adopted SFAS No's 106, 109 and 112 which resulted in
       an  after-tax  charge  from  the  cumulative  effect  of  adopting  these
       pronouncements.
(2)    Figures  for  1996,  1995  and 1994  include  after-tax  adjustments  for
       restructuring, $31.7 or $.26 per share, $67.0 or $.74 per share and $73.2
       or $.82 per share,  respectively,  and for 1993 the cumulative  effect of
       accounting changes of $81.8 or $.94 per share. Without these adjustments,
       the return on average  shareholders'  equity in 1996, 1995, 1994 and 1993
       would have been 11.7%, 9.6%, 14.7% and 14.6%, respectively.
(3)    The  significant  sales growth since 1992 is attributed  primarily to the
       acquisitions  of  CMB  (2/96),   Van  Dorn  Company  (4/93)  and  CONSTAR
       International (10/92).

                                       -9-
<PAGE>

                         Crown Cork & Seal Company, Inc.

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

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

                                  INTRODUCTION

This  discussion  summarizes the  significant  factors  affecting the results of
operations  and  financial  position  of Crown Cork & Seal  Company,  Inc.  (the
"Company") during the three-year period ended December 31, 1996. 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.

The financial  results for 1996 were impacted by restructuring  charges totaling
pre-tax $39.8 ($31.7 after taxes or $.26 per share).

The  financial   results  for  1995  and  1994  were  impacted  by  a  two-phase
restructuring  plan  outlined by the Company in March 1994.  Pre-tax  income was
charged for $102.7 ($67.0 after taxes or $.74 per share) and $114.6 ($73.2 after
taxes or $.82 per share), in 1995 and 1994, respectively.

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

                              RESULTS OF OPERATIONS

NET SALES

Net sales  during 1996 were  $8,331.9,  an increase of $3,278.1 or 64.9%  versus
1995 net sales of  $5,053.8.  Net sales  during 1994 were  $4,452.2.  Sales from
domestic  operations  decreased  1.5% in 1996 compared with a 13.7%  increase in
1995.  Foreign sales  increased  198.3%,  in 1996  following a 13.2% increase in
1995. Domestic sales accounted for 39.9% of consolidated sales in 1996, 66.8% in
1995 and 66.7% in 1994.
<TABLE>
<CAPTION>
                                                                                         % Increase/
                                                         Net Sales                        (Decrease)
DIVISION                                         1996       1995       1994       1996/1995    1995/1994
<S>                                           <C>        <C>        <C>              <C>          <C>
Americas....................................  $3,625.9   $3,903.8   $3,479.7         (7.1)        12.2
Europe......................................   4,165.9      914.3      758.1        355.6         20.6
Asia-Pacific................................     376.2      151.9      126.5        147.7         20.1
Other.......................................     163.9       83.8       87.9         95.6         (4.7)
                                              --------   --------   --------
                                              $8,331.9   $5,053.8   $4,452.2         64.9         13.5
                                              ========   ========   ========
</TABLE>

The decrease in 1996  Americas  Division net sales is a result of (i)  decreased
raw material prices which forced  decreases in selling prices,  primarily in PET
bottles and aluminum  beverage cans and ends, (ii) a seven week work stoppage at
eight  plants and (iii) weaker  economic  conditions  in  Argentina  and Brazil;
partially  offset by (i) the inclusion of Anchor Hocking  Packaging  acquired as
part of the CMB  transaction  and (ii) sales unit volume  increases  in aluminum
beverage ends,  food cans,  aerosol cans and plastic  closures.  The increase in
1995  Americas  Division  net sales is a result of (i)  increased  raw  material
prices which forced  increases in selling  prices,  primarily in PET bottles and
aluminum cans and ends (ii) sales unit volume  increases in PET bottles and food
cans and (iii) a full year's sales from the Company's  food can plants  acquired
from Tri-Valley Growers in June 1994;  partially offset by (i) sales unit volume
decreases  in  aerosol  cans and  aluminum  beverage  cans and ends and (ii) the
weakening of the Mexican peso against

                                      -10-
<PAGE>

                         Crown Cork & Seal Company, Inc.


the U.S.  dollar during 1995. U.S. sales  accounted for  approximately  84.2% of
division net sales in 1996, 85.4% in 1995 and 83.9% 1994.

Net sales in the European Division, which includes Europe, Africa and the Middle
East,  increased in 1996 over 1995 due to the  acquisition of CMB. Net sales for
the Company's  existing  European  Division  operations  were down 18.4% in 1996
compared to 1995 due  primarily  to: (i)  decreased  PET resin prices which were
passed on to customers  in the form of lower  selling  prices,  (ii) lower sales
unit volumes of PET bottles,  (iii)  aggressive  pricing  from  competition  for
beverage  closures,  (iv) the closure of an aluminum  beverage end plant and (v)
the  divestiture  of  aerosol  operations  in Italy and the  United  Kingdom  as
required by the European  Commission  in  connection  with the CMB  acquisition.
Comparable  sales from CMB's  historical  operations were marginally  lower than
1995 due to: (i) lower volumes and selling  prices for plastic  packaging,  (ii)
soft market  conditions  for specialty  packaging led by the shift from metal to
plastic in the industrial  specialty sector, and (iii) the required  divestiture
of CMB aerosol operations in France,  Germany and Spain. The appreciation of the
U.S.  dollar  against most European and African  currencies  decreased  division
sales by $121 compared to 1995.  Excluding the  translation  effect on sales and
the impact of the  aerosol  divestiture,  sales in  aerosol  and  beverage  cans
increased  while  plastic and  specialty  packaging  sales were down compared to
1995. Food can sales in 1996 were up marginally as growth in Eastern Europe, the
United  Kingdom  and  Belgium  offset  declines  in Germany  and Italy.  Pricing
remained  very  competitive  across all  product  lines.  The  increase  in 1995
European Division net sales is primarily a result of (i) increased  aluminum and
PET resin costs passed on to customers in the form of increased  selling prices,
(ii) continued expansion of operations at the Company's beverage can and plastic
cap operations in the United Arab Emirates, (iii) increased sales volumes at the
Company's  dedicated aerosol plant in Mijdrecht,  The Netherlands,  (iv) plastic
closure  expansion  in  Italy,  and  (iv)  the  strengthening  of many  European
currencies against the U.S. dollar which increased division sales by $47.

Net sales in the Asia-Pacific Division have increased due to the addition of CMB
operations.  On a  comparative  basis to 1995,  net sales in the  division  were
adversely impacted by the Company's decision to close four three-piece plants in
China acquired as part of the CMB acquisition. Additionally, excess beverage can
capacity and aggressive competitive pricing depressed volumes and eroded selling
prices in China.  These factors were partially  offset by increased sales at new
Company beverage plants in Beijing and Shanghai. Net sales outside of China were
in line with 1995 as sales  unit  volumes  of  beverage  cans and food cans were
strong in Thailand and  increased  sales  contributions  from new  operations in
Vietnam  offset  lower sales in Malaysia  and  Singapore.  The  increase in 1995
Asia-Pacific  Division  net sales was  primarily  a result  of the  start-up  of
beverage can operations in Shanghai,  China,  the  acquisition of a beverage can
and end plant in Huizhou,  China,  plastic closure expansion in Thailand and the
increase in aluminum can and end sheet prices which forced  increases in selling
prices.

COST OF PRODUCTS SOLD

Cost of products sold,  excluding  depreciation  and  amortization  for 1996 was
$6,732.5,  a 55.9%  increase from the $4,319.4 in 1995,  following  increases of
16.5%  and 6.5% in 1995 and 1994,  respectively.  The  increase  in 1996 cost of
products sold is directly  attributable to the increased net sales level in 1996
partially offset by decreased raw material prices, particularly aluminum and PET
resin.  The  increase  in 1995 cost of  products  sold  primarily  reflects  (i)
increased  raw  material  prices,  particularly  aluminum  and PET  resin,  (ii)
increased  unit sales in PET bottles in the U.S. and Europe and (iii)  increased
unit sales in aluminum beverage cans and ends in South America,  the Middle East
and China.  The increase in 1994 cost of products sold was primarily a result of
increased sales levels offset by lower raw material costs and company-wide  cost
containment programs.

As a  percentage  of net  sales,  cost of  products  sold  was  80.8% in 1996 as
compared to 85.5% in 1995 and 83.2% in 1994.

                                      -11-

<PAGE>

                         Crown Cork & Seal Company, Inc.

SELLING AND ADMINISTRATIVE

Selling and administrative  expenses for 1996 were $387.2, an increase of 178.0%
over 1995  compared to increases  of 2.9% for 1995 and 7.0% for 1994.  The large
increase  in 1996 is  directly  attributable  to the  acquisition  of CMB  whose
general  and  administrative  activities  are  highly  decentralized  and  which
operates many  business  units in countries in which social costs are very high.
As a percentage of net sales,  selling and administrative  expenses were 4.6% in
1996, 2.8% in 1995 and 3.0% in 1994.

OPERATING INCOME

The Company  views  operating  income as the  principal  measure of  performance
before interest costs and other non-operating expenses.  Operating income, after
restructuring  charges,  was $676.5,  $236.1 and $277.7 in 1996,  1995 and 1994,
respectively.  Operating  income  of $716.3 in 1996,  before  the  restructuring
charge of $39.8, was $377.5 or 111.4% greater than in 1995.  Operating income of
$338.8 in 1995,  before the restructuring  charge of $102.7,  was $53.5 or 13.6%
less than in 1994. Operating income,  before  restructuring,  as a percentage of
net sales was 8.6% in 1996 as compared to 6.7% in 1995 and 8.8% in 1994.

An analysis of operating income,  before  restructuring,  by operating  division
follows:
<TABLE>
<CAPTION>
                                                                                           % Increase/
                                                       Operating Income                    (Decrease)
DIVISION                                         1996       1995       1994          1996/1995    1996/1995
<S>                                             <C>        <C>        <C>              <C>          <C>
Americas....................................    $200.3     $227.1     $295.6           (11.8)       (23.2)
Europe......................................     490.0       70.7       64.2           593.1         10.1
Asia-Pacific................................      10.7       31.0       25.8           (65.5)        20.2
Other.......................................      15.3       10.0        6.7            53.0         49.3
                                                ------     ------     ------
                                                $716.3     $338.8     $392.3           111.4        (13.6)
                                                ======     ======     ======
</TABLE>

Operating  income in the Americas  Division was 5.5% of net sales in 1996 versus
5.8% in 1995 and 8.5% in 1994.  The decrease in 1996  operating  margins was due
to:  (i)  continued  pricing  pressures  in  both  metal  and  plastic  beverage
containers,  (ii) a seven week work stoppage at eight plants;  (iii) lower sales
unit volumes of PET bottles and (iv) weaker economic conditions in Argentina and
Brazil,  partially offset by; (i) the benefits  accruing from the  restructuring
programs  initiated  in the U.S.  in 1995  and  1994,  (ii)  sales  unit  volume
increases  in  aluminum  beverage  ends,  food cans,  aerosol  cans and  plastic
closures,  (iii) increased sales volumes and improved productivity in Canada and
Mexico and (iv) the inclusion of Anchor Hocking  Packaging,  acquired as part of
the CMB transaction.  Operating income in 1995 decreased compared to 1994 due to
increases in raw material costs,  principally steel and aluminum, which were not
fully passed  through to  customers,  and sales unit volume  declines in aerosol
cans and aluminum beverage cans and ends;  partially offset by sales unit volume
increases in food cans, as the division benefited from a full year of operations
of the  Tri-Valley  container  plants  acquired  in June  1994 and the  benefits
associated  with  the  Company's   three-piece  steel  food  and  aerosol  plant
restructuring program initiated in 1994. The Company's suppliers of aluminum can
and end sheet implemented a new pricing structure for 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 1996.  During 1996, the Company entered into contracts with its suppliers
of aluminum can and end sheet which, by formula,  guarantees prices for a period
of six months.  This pricing  structure is directly tied to a rolling average of
the prior six months'  market price of aluminum on the LME.  Further,  "ceiling"
prices have been established under these contracts which set maximum prices that
the Company would pay for aluminum.

European  Division  operating  income was 11.8% as a percentage  of net sales in
1996 compared to 7.7% in 1995 and 8.5% in 1994. The increase in operating income
in 1996 is directly  attributable to the addition of CMB  operations,  primarily
its food, beverage and aerosol can businesses. Operating margins for the

                                      -12-

<PAGE>

                         Crown Cork & Seal Company, Inc.


Company's  existing  facilities  in  Europe  were  lower  than 1995  levels  due
primarily to competitive  pressures  resulting in reduced volumes and prices for
metal and plastic  packaging.  Comparable  operating  margins for  acquired  CMB
operations were ahead of 1995 levels due to (i) sales unit volume gains in food,
beverage and aerosol cans and (ii) cost reduction  programs in which the Company
began streamlining (a) inefficient plants, (b) excess  administrative  overheads
and (c) negative  contribution  products.  Partially offsetting these gains were
(i) increased  prices for tinplate and (ii) volume erosion and pricing  pressure
from soft markets in specialty packaging and plastics.  Operating income in 1995
increased over 1994 as a result of (i) increased  sales unit volumes in beverage
cans,   aerosol  cans,  plastic  closures  and  plastic  bottles  and  (ii)  the
strengthening  of  many  European  currencies  against  the  U.S.  dollar.  As a
percentage of net sales, operating income in 1995 decreased compared to 1994 due
primarily to product mix and increased raw material costs.

Operating  income  in the  Asia-Pacific  Division  was 2.8% of net sales in 1996
versus 20.4% in 1995 and 20.4% in 1994. The decrease in 1996  operating  margins
was due  primarily  to the  addition of CMB  operations  as excess  beverage can
capacity and  competitive  pricing has  significantly  eroded  profits in China.
Other  factors  affecting  operating  margins  were (i) lower sales  volumes and
competitive  pricing  in  Malaysia  (ii)  competitive  beverage  can  pricing in
Singapore, (iii) sales unit volume declines in three-piece cans in Singapore and
(iv) new plant start-ups in China,  Singapore and Vietnam;  partially  offset by
(i)  strong  beverage  and food  can  volumes  in  Thailand  and (ii)  increased
efficiencies  in Shanghai.  Operating  income in 1995 increased over 1994 due to
plastic  closure  expansion in Thailand and increased  efficiencies  at beverage
plants in China.

FOREIGN EXCHANGE

During 1996 the  Company  recorded a foreign  exchange  gain of $42.1 due to the
impact of a stronger U.S.  dollar on the Company's  CMB  acquisition  financing,
denominated  in  French  Francs.   This  French  Franc   acquisition   debt  was
subsequently   refinanced  into  several  functional   currencies  during  1996.
Unfavorable adjustments of $5.6 resulted primarily from the remeasurement of the
Company's operations in highly inflationary economies.

NET INTEREST EXPENSE/INCOME

Net interest  expense was $305.8 in 1996, an increase of $169.7 when compared to
1995 net interest expense of $136.1. Net interest expense was $91.6 in 1994. The
increase in 1996 net interest  expense is directly  attributable  to  borrowings
which funded the  acquisition of CMB. The increase in 1995 net interest  expense
was due primarily to (i) higher interest rates,  (ii) acquisition  financing for
recent companies  acquired and (iii) the substantial  capital investment program
that the Company had entered into during 1993 through 1995. Specific information
regarding  acquisitions  is  found  in  Note  H to  the  Consolidated  Financial
Statements,  while information specific to Company financing is presented in the
Liquidity and Capital  Resources section of this discussion and Notes J and K to
the Consolidated Financial Statements.

TAXES ON INCOME

The effective tax rates on income were 31.2%, 22.7% and 30.4% in 1996, 1995, and
1994, respectively.  The effective rate is lower than the U.S. statutory rate of
35% as a result of lower effective rates in non-U.S. operations, higher non-U.S.
income as a percentage of consolidated  income and the continuing  re-evaluation
of  reserve  and  valuation   allowance   requirements;   partially   offset  by
non-deductible  amortization of goodwill and other intangibles. A reconciliation
of the Company's effective tax rate from the U.S. statutory rate is presented in
Note O to the Consolidated Financial Statements.

MINORITY INTERESTS, NET OF EQUITY IN EARNINGS OF AFFILIATES

Minority  interests in net income of affiliates were $5.4,  $13.6,  and $12.4 in
1996, 1995, and 1994, respectively. The decrease in minority interests primarily
relates to  restructuring  losses in South Africa and start-up losses in Brazil,
Vietnam and Beijing partially offset by increased sales volumes and earnings in

                                      -13-

<PAGE>


                         Crown Cork & Seal Company, Inc.


the United Arab Emirates,  Hong Kong,  Turkey and from CMB operations in Greece,
Thailand and Singapore.

Equity in  (losses)/earnings  of affiliates  was a loss of $7.2, and earnings of
$3.9 and $16.3 for 1996,  1995, and 1994,  respectively.  The decrease in equity
earnings in 1996 is due  primarily to decreased  sales  volumes in the Company's
non-consolidated affiliates in Korea and Brazil.  Additionally,  start-up losses
in Jordan and the  devaluation  of the bolivar  which  resulted in losses in the
Company's  Venezuelan  joint venture were  partially  offset by increased  sales
volume and earnings in Saudi Arabia and CMB operations in Morocco.  The decrease
in equity  earnings in 1995 was due to both rising  aluminum costs and decreased
volumes in Saudi  Arabia and Korea.  The late 1995  devaluation  of the bolivar,
which eliminated  profits in the Company's  Venezuelan  joint-venture,  and slow
start-ups in the Company's new ventures in Jordan and Brazil also contributed to
the decrease in equity earnings.

The  Company  continues  to invest  in  emerging  market  projects  which  offer
substantial rewards as well as exposure to sometimes volatile  economies.  These
markets provide excellent future growth potential for the Company's products and
services.  The  Company  believes  that  the use of  business  partners  in many
overseas locations presents another means of entering new markets.

The  Company  has  presented  minority  interests,  net of equity in earnings of
affiliates  (the  components  of  which  can be  found  in  Notes D and P to the
Consolidated  Financial  Statements),  as a separate  component  of net  income.
Management  believes  that  presenting  such  earnings as a component of pre-tax
income  would  distort  the  Company's  effective  tax  rate,  and as such,  has
presented minority interests after the provision for income taxes.

NET INCOME AND EARNINGS PER SHARE

Net income for 1996 was $264.2  compared with $74.9 for 1995 and $131.0 in 1994.
Earnings per share for 1996 were $2.16  compared with $.83 and $1.47 in 1995 and
1994, respectively.  Excluding the provision for restructuring,  1996 net income
increased  108.5% to $295.9 and 1996 earnings per share increased 54.1% to $2.42
compared to 1995. Excluding the provision for restructuring, 1995 net income and
earnings  per share  decreased  30.5% and 31.4%,  respectively  compared to 1994
while 1994  increased  12.9% and 10.1%,  respectively  over 1993. The sum of per
share  earnings by quarter does not equal earnings per share for the years ended
December 31, 1996, 1995 and 1994 due to the effect of shares issued during 1996,
1995, and 1994.

INDUSTRY SEGMENT PERFORMANCE

This section presents  individual  segment results for the last three years. The
after-tax  charge of $31.7 or $.26 per share  related to 1996  restructuring  is
included  in the Metal  Packaging  segment  (Metals)  and is  excluded in making
comparisons  to 1996 results.  The  after-tax  charge of $67.0 or $.74 per share
related to the 1995  restructuring  charge is included as an after-tax charge in
Metals of $60.1 or $.67 per share  and an  after-tax  charge of $6.9 or $.07 per
share in the Plastics  Packaging  segment  (Plastics)  and is excluded in making
comparisons  to 1995 results.  The  after-tax  charge of $73.2 or $.82 per share
related to the 1994  restructuring  charge is included as an after-tax charge in
Metals and is excluded in making comparisons to 1994 results.

Net sales for Metals in 1996 were  $6,619.7,  an increase  of 73.7%  compared to
1995 net sales of  $3,811.1.  Net sales in 1994 were  $3,494.3.  Metals sales in
1996  increased  over  1995  due to the CMB  acquisition,  partially  offset  by
decreased aluminum prices which were passed on to customers in the form of lower
selling  prices.  Metals  sales in 1995  increased  over 1994 as a result of (i)
increased  raw material  prices,  particularly  aluminum,  which were  partially
passed on to  customers in the form of higher  selling  prices,  (ii)  increased
sales  unit  volumes  in food cans in the U.S.  and (iii)  increased  sales unit
volumes in Argentina, China, The Netherlands and the United Arab Emirates.


                                      -14-

<PAGE>


                         Crown Cork & Seal Company, Inc.


Metals  operating  income in 1996 was $497.6,  before  restructuring  charges of
$39.8 or 7.5% of net sales compared to 1995  operating  income of $253.6 or 6.7%
of net sales, before  restructuring  charges of $94.4.  Operating income in 1994
was $315.9 or 9.0% of net sales,  before  restructuring  charges of $114.6.  The
increase  in Metals  operating  income in 1996 is directly  attributable  to the
European food,  beverage and aerosol businesses  acquired with CMB and increased
margins in the North  American  food and  beverage  businesses  due to  improved
manufacturing  efficiencies,   a  result  of  prior  restructuring  and  capital
expenditure programs.

Net sales for Plastics  increased $469.5 or 37.8% in 1996 from $1,242.7 in 1995.
The increase in 1996  Plastics  net sales is due entirely to Plastic  businesses
acquired  with the CMB  transaction  offset by  decreased  PET prices which were
passed on to customers in the form of lower selling  prices.  Net sales for 1995
increased $284.8 or 29.7% against 1994 net sales of $957.9. The increase in 1995
was primarily a result of the increased  unit capacity in the Company's  CONSTAR
plants.  The increased capacity had been generated through  significant  capital
investments during the three years ending December 31, 1995.

Plastics  operating  income in 1996 was $218.7 or 12.8% of net sales as compared
to 1995  operating  income of $85.2 or 6.9% of net sales,  before  restructuring
charges of $8.3.  Operating  income in 1994 was $76.4 or 8.0% of net sales.  The
increase in Plastics  operating  income in 1996 is due to the CMB acquisition as
profits in all sectors of Plastics but PET beverage  bottles  offset  increasing
price competition in PET beverage bottles.  Additionally, as a percentage to net
sales,  Plastics  operating  income  increased  in 1996 due to the effect of PET
resin price decreases.  The decrease in Plastics  operating income in 1995 was a
result of  increased  PET resin  costs not fully  recovered  due to  competitive
pressures in the PET beverage bottle market.

                               FINANCIAL POSITION

LIQUIDITY AND CAPITAL RESOURCES

The Company's  financial  position  remains  strong.  Cash and cash  equivalents
totaled  $160.4 at December 31, 1996 compared to $68.1 and $43.5 at December 31,
1995 and 1994,  respectively.  The  Company's  primary  sources  of cash in 1996
consisted  of (i)  funds  provided  from  operations  $911.2;  (ii)  the sale of
businesses $107.9; and, (iii) proceeds from long-term borrowings  $2,075.1.  The
Company's  primary uses of cash in 1996 consisted of (i) the  acquisition of CMB
$1,537.5;  (ii) capital  expenditures of $631.2;  (iii) net change in short-term
debt $423.3; and, (iv) dividends paid $145.4.  Improved cash from operations has
resulted from (i) growth in net income before non-cash  charges for depreciation
and amortization,  (ii) the portion of the seasonal buildup of CMB's inventories
occurring  before  the  acquisition  date  and  (iii)  reduced  working  capital
requirements due to lower raw material costs.

The  Company  funds its  working  capital  requirements  on a  short-term  basis
primarily  through  issuances  of  commercial  paper.  At December  31, 1996 the
commercial  paper  program  was  supported  by a  $1,000  multi-currency  credit
facility which was  formalized in February 1995,  maturing in February 2000 with
interest at market rates.  The Company's use of the facility was not restricted.
At December 31, 1996 and December  31, 1995,  there were no funds drawn  against
this  facility.  Based on the  Company's  intention  and ability to maintain its
credit facility beyond 1997 and 1996, respectively,  $700 and $300 of commercial
paper  borrowings  were  classified  as long-term at December 31, 1996 and 1995,
respectively.  There was $932.1 and $761.2 in commercial  paper  outstanding  at
December 31, 1996 and 1995, respectively.

On February 4,1997, the Company's $1,000  multicurrency  credit facility and FRF
13,700 credit agreement were replaced with a new multicurrency  revolving credit
agreement  with a group of domestic and foreign banks.  The new agreement  makes
available $2,500 through 2002.  Borrowings under the new agreement are unsecured
and bear interest at variable  market rates.  Borrowings  outstanding  under the
prior FRF 13,700 credit agreement, amounting to $493.1 at December 31,1996, were
refinanced under this new agreement.


                                      -15-

<PAGE>

                         Crown Cork & Seal Company, Inc.

On December 1, 1995, the Company  entered into a Revolving  Credit and Term Loan
Agreement  (Credit  Agreement)  with  a  syndicate  of  financial  institutions.
Pursuant to the Credit  Agreement,  the lenders  made  available  to the Company
French Francs (FRF) 13,700 in a multi-currency revolving credit facility to fund
the  cash  portion  of the  consideration  to be paid  in  connection  with  the
Company's  proposed  Offer  (see  Acquisition  of   CarnaudMetalbox   below  for
description of the Offer) to purchase all of the  outstanding  shares of CMB, to
fund the costs and expenses of the Offer, to repurchase  shares of capital stock
of the  Company,  or,  following  the Offer,  to be used for  general  corporate
purposes.  Borrowings under the facility were permitted in FRF, U.S. Dollars and
British Pound Sterling and bear interest at variable market rates. There were no
borrowings  under this  facility  at  December  31,  1995.  A total of FRF 9,100
(approximately  $1,800) was drawn on February  22, 1996 to fund the  purchase of
shares from those CMB shareholders electing cash (approximately 40.1 million CMB
shares at FRF 225 per share).

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.

On  December  20,  1994,  the Company  filed with the  Securities  and  Exchange
Commission a shelf registration  statement for the possible offering and sale of
up to $500  aggregate  principal  amount of debt  securities of the Company.  On
January 15, 1995,  the Company sold $300 of public debt  securities.  This first
tranche of the shelf registration  includes $300 of 8.38% notes due 2005, priced
at  99.79%  to yield  8.4%.  Net  proceeds  from the  issue  were used to reduce
short-term indebtedness.  The Company's long-term debt securities are rated Baa1
by Moody's Investors Service and BBB+ by Standard & Poor's Corporation.

The Company has, when considered  appropriate,  hedged its currency exposures on
its  foreign   denominated   debt  through   various   agreements  with  lending
institutions.  The Company  also  utilizes a corporate  "netting"  system  which
enables resources and liabilities to be pooled and then netted. The Company also
enters into interest rate and currency swaps and forward  exchange  contracts in
its management of interest rate and foreign currency  exposure.  These financial
instruments  are  more  fully  described  in  Notes J and K to the  Consolidated
Financial Statements.

The Company's  ratio of total debt (net of cash and cash  equivalents)  to total
capitalization  was 56.4%,  56.2% and 55.3% at December 31, 1996, 1995 and 1994,
respectively.  Total  capitalization  is defined by the  Company as total  debt,
minority interests and shareholders' equity. The increase in the Company's total
debt in  recent  years is due to  acquisition  activity,  particularly  the 1996
acquisition of CMB and the  significant  capital  expenditure  program which the
Company has committed to in the last three years. As of December 31, 1996, $48.5
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.


                                      -16-

<PAGE>


                         Crown Cork & Seal Company, Inc.


ACQUISITION OF CARNAUDMETALBOX

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

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

The  financing for the cash portion of the  consideration  paid in the Offer was
obtained  pursuant to the Credit  Agreement as more fully  described  earlier in
this discussion.

In accordance  with the terms of the Exchange Offer  Agreement,  the Company has
adopted  Amended  and  Restated  Articles  of  Incorporation  and the  terms  of
preferred stock and has amended and restated its Bylaws.

Pursuant to the Exchange  Offer  Agreement,  the Company and CGIP entered into a
Shareholders  Agreement  dated as of February 22, 1996.  Subject to the terms of
the Shareholders  Agreement,  CGIP has agreed to certain  standstill  provisions
which prohibit CGIP from  acquiring  beneficial  ownership of voting  securities
representing  more than  19.95% of the  outstanding  total  voting  power of the
Company,  making a takeover  proposal  of the  Company or its  subsidiaries  and
taking certain other actions.

The  Shareholders  Agreement  provides  that CGIP is entitled to designate up to
three  persons to be nominated  for election as directors of the Company at each
annual  meeting  of  Company  shareholders,  depending  on the amount of Company
voting  securities  beneficially  owned by  CGIP.  On  February  22,  1996,  the
Company's Board of Directors elected  Ernest-Antoine  Seilliere,  Guy de Wouters
and  Felix G.  Rohatyn,  who is not  standing  for  reelection  in 1997,  to the
Company's Board in accordance with this provision.

CGIP has also agreed to vote any Company voting securities beneficially owned by
CGIP during the standstill period (as defined in the Shareholders Agreement), in
the manner  recommended by the Company's  Board of Directors in connection  with
the election of directors of the Company and any question relating to a takeover
proposal. The standstill period began on February 22, 1996 and terminates under

                                      -17-

<PAGE>

                         Crown Cork & Seal Company, Inc.


certain  circumstances  upon the  earliest to occur of (i) the later of February
22, 1999 and the date on which CGIP  beneficially  owns voting securities of the
Company representing less than 3.5% of the outstanding total voting power of the
Company,  (ii) the date the  Company  breaches  certain  provisions  relating to
CGIP's board  representation  or the Company's  dividend  policy or debt rating,
(iii) the date the  Company  agrees to  recommend  (or  ceases  to  oppose)  the
consummation of a specified event (as defined in the Shareholders  Agreement) or
enters into, or takes  material  steps to solicit,  an agreement with respect to
certain  fundamental  corporate   transactions  involving  the  Company  or  its
subsidiaries,  (iv) the date a person other than CGIP  acquires 25% of the total
voting  power of the  Company,  or (v) the date  any CGIP  Designee  fails to be
elected to the Company's Board of Directors.

The Shareholders  Agreement also contains  provisions  relating to the Company's
dividend policy and debt rating, certain restrictions on CGIP's sale or transfer
of Company  stock and CGIP's  registration  rights with respect to its shares of
Company stock.

PROVISION FOR RESTRUCTURING

During 1996,  the Company  provided  $39.8 ($31.7 after taxes or $.26 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  Company
anticipates that the  restructuring  actions  referred to above,  when complete,
will  generate  approximately  $10.7 in after-tax  cost savings on an annualized
basis.

The Company has made an  assessment  of the  restructuring  and exit costs to be
incurred   relative  to  the  acquisition  of  CMB.  Affected  by  the  plan  of
restructuring are thirty-four regional  administrative  offices and plants to be
closed and  approximately  thirty-eight  plants to be  reorganized.  The cost of
providing  severance pay and benefits for the reduction of  approximately  6,800
employees  (approximately  3,100  positions  eliminated  by the end of  1996) is
approximately  $269 and is primarily a cash  expense.  Actual  expenditures  for
severance pay and benefits  through  December 31, 1996 amounted to approximately
$70.  Employees to be terminated  include  most,  if not all,  employees at each
plant to be closed or reorganized  including salaried employees and employees of
the respective  unions  represented at each plant site. The cost associated with
the  writedown  of  assets  (principally  property,   plant  and  equipment)  is
approximately  $185 and has been  reflected as a reduction in the carrying value
of the Company's assets at December 31, 1996.  Lease  termination and other exit
costs,  primarily repayments of government grants and subsidies approximates $49
of the  provision and is primarily a cash expense of which $25 had been expended
as of December 31, 1996. Details of the restructuring are also presented in Note
I to the Consolidated Financial Statements.

The  Company  estimates  that  the plan of  restructuring  CMB  operations  when
complete,  will  generate  annual  costs  savings  of  approximately  $160 ($105
after-tax) on a full year basis. It is also estimated that capital  expenditures
of  approximately  $125 will be made to expand and upgrade  other  facilities to
minimize  the adverse  effects of the  restructuring  on existing  business  and
customer relationships.

During 1995 and 1994,  the Company  recorded  pre-tax  restructuring  charges of
$102.7  ($67.0  after taxes or $.74 per share) and $114.6  ($73.2 after taxes or
$.82  per  share),  respectively,  as part  of a  two-phase  restructuring  plan
outlined in March 1994.  The combined plan was  implemented  to  streamline  the
Company's  North  American  operations  to improve  productivity  and to enhance
competitiveness. The 1995 and 1994 restructuring plans have been completed as of
December 31, 1996.

CAPITAL EXPENDITURES

Consolidated capital expenditures totaled $631.2 in 1996 as compared with $433.5
in 1995.  Minority partner  contributions to consolidated  capital  expenditures
were approximately $88 and $51 in 1996 and 1995,  respectively.  During the past
five years, capital expenditures totaled $1,926.4.


                                      -18-

<PAGE>

                         Crown Cork & Seal Company, Inc.


Expenditures in the Americas Division totaled $201 including ongoing projects to
convert  beverage can and end lines in the U.S. to the 202 diameter from the 206
diameter, the construction of a beverage can and end plant in Brazil and several
single-serve PET preform and bottle lines in the U.S.

Investments  of $296 were  made in the  European  Division.  The  Company  began
construction  of a new  beverage  can and end  plant in South  Africa as well as
installation  of additional  beverage can lines in existing  facilities in Spain
and Turkey.  The Company also began  conversion of 206 diameter lines to the 202
diameter in France, Greece and the UK. The Company also began the first phase of
a PET preform center in Italy as well as investing in several easy open food can
end lines.

Spending  in the  Asia-Pacific  Division  for 1996  totaled  $90 as the  Company
completed the  construction of beverage can plants in Hanoi,  Vietnam;  Beijing,
China and Tuas, Singapore.  The Company also began the expansion of its beverage
can and end plant in Huizhou,  China as well as  construction  of a PET plant in
Beijing, China.

The  Company  expects  its  capital  expenditures  in 1997 to  approximate  $520
including  joint-venture partner  contributions  estimated at approximately $20.
The Company  plans to continue  capital  expenditure  programs  designed to take
advantage of technological  developments which enhance  productivity and contain
costs, as well as those that provide growth opportunities. Capital expenditures,
exclusive of potential  acquisitions,  during the five-year  period 1997 through
2001 are expected to approximate  $2,500,  including $300 being contributed from
joint-venture partners. Cash flow from operating activities will provide support
for these  expenditures;  however,  depending  upon the Company's  evaluation of
growth  opportunities and other existing market  conditions,  external financing
may be required from time to time.

ENVIRONMENTAL MATTERS

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

The Company is dedicated to a long-term environmental protection program and has
initiated and implemented many pollution  preventing  programs with the emphasis
on source  reduction.  The Company  continues  to reduce the amount of metal and
plastic  used in the  manufacture  of steel,  aluminum  and  plastic  containers
through  "lightweighting"  programs.  The Company not only  recycles  nearly 100
percent of scrap aluminum,  steel,  plastic and copper used in its manufacturing
processes, but through its Nationwide Recyclers subsidiary, is directly involved
in  post-consumer  aluminum,  steel and plastics  recycling.  Additionally,  the
Company has exceeded the United States  Environmental  Protection Agency's (EPA)
1995 goals for its 33/50 program  which called for  companies,  voluntarily,  to
reduce  toxic air  emissions  by 33% by the end of 1992 and by 50% by the end of
1995,  compared to the base year of 1988. The cost to accomplish  this reduction
did not materially affect operating results.  Many of the Company's programs for
pollution prevention lower 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 $6.0
during 1996 and $3.3 in 1995.  The Company's  balance sheet  reflects  estimated
gross remediation  liabilities of $53.6 and $20.7 at December 31, 1996 and 1995,
respectively,  and  estimated  recoveries  related to  indemnification  from the
sellers of acquired companies and the Company's  insurance carriers of $16.6 and
$15.5 at December 31, 1996 and 1995, respectively.

                                      -19-

<PAGE>


                         Crown Cork & Seal Company, Inc.

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

COMMON STOCK AND OTHER SHAREHOLDERS' EQUITY

Shareholders'  equity was  $3,563.3  at December  31,  1996,  as  compared  with
$1,461.2 at December  31,  1995.  The  increase  in 1996 equity  represents  the
retention  of  $264.2 of  earnings  in the  business,  a $17.3  minimum  pension
liability  adjustment  as more  fully  described  in Note N to the  Consolidated
Financial  Statements,  the issuance of 37,300,818  common  shares  (common) and
12,432,622 shares of 4.5% cumulative  convertible  preferred stock  (acquisition
preferred) in connection with the acquisition of CMB and the issuance of 459,165
common shares for various  stock  purchase and savings plans offset by dividends
declared on common of $128.2 and equity adjustments for currency  translation in
non-U.S. subsidiaries of $145.4. The book value of each share of common stock at
December 31, 1996 was $23.69 as compared to $ 16.12 at December 31, 1995.

In 1996, the return on average  shareholders'  equity before  restructuring  was
11.7% as compared to 9.6% in 1995.  Including  the  restructuring  charges,  the
return on average  shareholders'  equity was 10.5% in 1996  compared  to 5.3% in
1995.

The Board of  Directors  has  approved  resolutions  authorizing  the Company to
repurchase shares of its common stock to meet the requirements for the Company's
various stock purchase and savings plans.  The Company acquired 7,401 shares and
347,360 shares of common stock in 1995 and 1994 for $.3 and $12.7, respectively.
There were no stock repurchases during 1996.

DIVIDENDS/ISSUANCE OF STOCK IN CONNECTION WITH CMB ACQUISITION

During 1996, the Company declared cash dividends totaling $128.2  representing a
quarterly dividend of $.25 per common share.

During 1995, the Company,  pursuant to a shareholder rights plan, authorized the
distribution  of one right per common share held, to be  exercisable  in certain
events  involving  the  acquisition  of 15 per  cent or  more  of the  Company's
outstanding  common  stock.  Upon the  completion  of the CMB  acquisition,  the
Company's  shareholders also authorized the Company to issue up to an additional
380 million  shares of its common stock,  up to 30 million  shares of additional
preferred  stock  (additional   preferred)  and  up  to  50  million  shares  of
acquisition preferred. In connection with the completion of the CMB acquisition,
the Company,  on February 26, 1996, issued  approximately 37.3 million shares of
its  common  stock  and  12.4  million  shares  of  its  acquisition  preferred.
Subsequent  to  the  issuance  of  the  acquisition  preferred,  the  number  of
authorized shares of acquisition  preferred was reduced and no further shares of
acquisition  preferred shall be issued.  The acquisition  preferred,  additional
preferred, and shareholder rights plan are more fully described in Note M to the
Consolidated Financial Statements.

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


                                      -20-

<PAGE>

                         Crown Cork & Seal Company, Inc.

At December 31, 1996, common shareholders of record numbered 5,736 compared with
5,976 at the end of 1995.  Total common shares  outstanding  were 128,410,797 at
December 31, 1996 compared to 90,650,814 at December 31, 1995. Total acquisition
preferred shares outstanding were 12,432,622 at December 31, 1996.

INFLATION

General 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.

FORWARD LOOKING STATEMENTS

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

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

Important factors that could cause the actual results of operations or financial
condition of the Company to differ include,  but are not necessarily limited to,
the Company's ability to integrate 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;  ability to realize
cost savings from its  restructuring  programs;  changes in raw material pricing
(including aluminum can sheet, steel tinplate, plastic resin, inks and coatings)
and the Company's  ability to pass raw material price  increases  through to its
customers or to otherwise  manage these commodity  pricing risks;  the Company's
ability to generate  significant free cash flow 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;  changes in U.S. or international  economic or
political conditions,  such as, inflation or fluctuations in interest or foreign
exchange rates;  the costs and other effects of legal and  administrative  cases
and proceedings,  settlements and investigations; and changes in labor relations
and 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 Crown periodically  reassesses material trends and uncertainties affecting
the Company's  results of operations and financial  condition in connection with
the preparation of Management's Discussion and Analysis of Results of Operations
and Financial  Condition and certain other  sections  contained in the Company's
quarterly,  annual or other  reports  filed with the SEC,  the Company  does not
intend to review or revise any particular  forward-looking statement in light of
future events.

                                      -21-

<PAGE>

                         Crown Cork & Seal Company, Inc.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

       Financial Statements

         Report of Independent Accountants..................................23

         Consolidated Statements of Income..................................24

         Consolidated Balance Sheets........................................25

         Consolidated Statements of Cash Flows..............................26

         Consolidated Statements of Shareholders' Equity....................27

         Notes to Consolidated Financial Statements.........................28

        Financial Statement Schedule

         Schedule II - Valuation and Qualifying Accounts
          and Reserves......................................................47

                                      -22-
<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, 1996 and 1995,
and the results of their  operations  and their cash flows for each of the three
years in the period ended  December  31,  1996,  in  conformity  with  generally
accepted   accounting   principles.   These   financial   statements   are   the
responsibility of the Company's management;  our responsibility is to express an
opinion on these  financial  statements  based on our audits.  We conducted  our
audits of these  statements  in  accordance  with  generally  accepted  auditing
standards which require that we plan and perform the audit to obtain  reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall financial statement  presentation.  We believe our audits
provide a reasonable basis for the opinion expressed above.


PRICE WATERHOUSE LLP

Thirty South Seventeenth Street
Philadelphia, PA 19103
March 17, 1997

                                      -23-

<PAGE>

                         Crown Cork & Seal Company, Inc.

CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                     1996             1995              1994
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>               <C>              <C>
Net sales.................................................         $8,331.9          $5,053.8         $4,452.2
                                                                   --------          --------         --------


Costs, expenses and other income
   Cost of products sold (excluding
     depreciation and amortization).......................          6,732.5           4,319.4          3,706.2
   Depreciation and amortization..........................            495.9             256.3            218.3
   Selling and administrative expense.....................            387.2             139.3            135.4
   Provision for restructuring . . Note I.................             39.8             102.7            114.6
   Gain on sale of assets.................................            (23.8)             (8.4)            (6.7)
   Interest expense, net of interest income...............            305.8             136.1             91.6
   Translation and exchange adjustments...................            (36.5)             (1.1)            10.1
                                                                   --------          --------         --------
                                                                    7,900.9           4,944.3          4,269.5
                                                                   --------          --------         --------

Income before income taxes................................            431.0             109.5            182.7

   Provision for income taxes . . Note O..................            134.4              24.9             55.6
                                                                   --------          --------         --------

Income from operations....................................            296.6              84.6            127.1
                                                                   --------          --------         --------

   Minority interests, net of
     equity earnings . . Notes P and D....................            (12.6)             (9.7)             3.9
                                                                   --------          --------         --------

Net income................................................            284.0              74.9            131.0

Preferred stock dividends . . Note M......................             19.8
                                                                   --------          --------         --------


Net income available to common
   shareholders...........................................           $264.2             $74.9           $131.0
                                                                   ========          ========         ========


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


Average common share data:

Earnings..................................................            $2.16              $.83            $1.47
                                                                   ========          ========         ========

Dividends.................................................            $1.00
                                                                   ========          ========         ========


-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

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

                                      -24-
<PAGE>


                         Crown Cork & Seal Company, Inc.


CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
December 31                                                                       1996                  1995
-----------------------------------------------------------------------------------------------------------------------------------

Assets
Current assets
<S>                                                                               <C>               <C>
   Cash and cash equivalents...........................................           $160.4                 $68.1
   Receivables . . Note B..............................................          1,349.3                 744.3
   Inventories . . Note C..............................................          1,423.8                 811.9
   Prepaid expenses and other current assets...........................            358.4                  84.6
                                                                               ---------              --------
          Total current assets.........................................          3,291.9               1,708.9
                                                                               ---------              --------
Long-term notes and receivables........................................             82.2                  63.5
Investments . . Note D.................................................             90.3                  57.5
Goodwill, net of amortization..........................................          4,809.9               1,095.7
Property, plant and equipment . . Note E...............................          3,717.3               2,005.9
Other non-current assets...............................................            598.6                 120.2
                                                                               ---------              --------
           Total.......................................................        $12,590.2              $5,051.7
                                                                               =========              ========

Liabilities & Shareholders' Equity
Current liabilities
   Short-term debt . . Note J..........................................         $1,105.8                $537.9
   Current portion of long-term debt . . Note J........................             48.5                  70.2
   Accounts payable and accrued liabilities . . Note F.................          2,460.9                 668.2
   United States and foreign income taxes..............................             47.3                   2.7
                                                                               ---------              --------
          Total current liabilities....................................          3,662.5               1,279.0
                                                                               ---------              --------
Long-term debt, excluding current maturities . . Note J................          3,923.5               1,490.1
Other non-current liabilities . . Note G...............................            458.2                 112.2
Postretirement and pension liabilities . . Note N......................            738.9                 590.6
Minority interests . . Note P..........................................            243.8                 118.6

Shareholders' equity
   Preferred stock, 4.5% cumulative convertible, par value:
      $41.8875 per share; authorized: 12,432,622; issued and
      outstanding: 1996 - 12,432,622; 1995 - None . . Note M...........            520.8
   Additional preferred stock, authorized: 30,000,000; none
      issued. . Note M.................................................
   Common stock with $5.00 par value per share;
      1996 - Authorized 500,000,000; issued 155,791,632
      1995 - Authorized 120,000,000; issued 118,490,814 . . Note M.....            779.0                 592.5
   Additional paid-in capital..........................................          1,567.3                 182.7
   Retained earnings...................................................          1,185.0               1,049.0
   Minimum pension liability . . Note N................................            (14.8)                (32.1)
   Cumulative translation adjustment...................................           (337.1)               (191.7)
   Treasury stock (1996 - 27,380,835 shares;
      1995 - 27,840,000 shares)........................................           (136.9)               (139.2)
                                                                               ---------              --------
          Total shareholders' equity ..................................          3,563.3               1,461.2
                                                                               ---------              --------
          Total........................................................        $12,590.2              $5,051.7
                                                                               =========              ========
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

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

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


CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------------
                                                                     1996             1995              1994
-----------------------------------------------------------------------------------------------------------------------------------

Cash flows from operating activities
<S>                                                               <C>               <C>              <C>
   Net income...................................................  $   284.0         $    74.9        $   131.0
   Adjustments to reconcile net income to
     net cash provided by operating activities:
     Depreciation and amortization..............................      495.9             256.3            218.3
     Provision for restructuring................................       31.7              67.0             73.2
     Foreign currency gain......................................      (42.1)
     Gain on sale of assets.....................................      (15.5)             (5.5)            (4.4)
     Deferred income taxes......................................       91.7              (3.2)           (14.0)
     Minority interests in earnings of subsidiaries.............        5.4              13.6             12.4
     Equity in earnings of joint ventures, net of
       dividends................................................       14.5               1.5             (9.0)
     Other, net.................................................       (6.9)             (4.2)             4.1
   Changes in assets and liabilities, net of businesses acquired:
     Receivables................................................      247.2             (24.7)          (185.5)
     Inventories................................................       20.3             (55.1)           (37.8)
     Accounts payable, accrued and other liabilities............     (193.8)           (172.5)          (162.8)
     Other, net.................................................      (21.2)             16.5            (18.7)
                                                                  ---------         ---------        ---------
         Net cash provided by operating activities..............      911.2             164.6              6.8
                                                                  ---------         ---------        ---------

Cash flows from investing activities
   Capital expenditures.........................................     (631.2)           (433.5)          (439.8)
   Acquisition of businesses, net of cash acquired..............   (1,537.5)            (14.2)           (65.7)
   Proceeds from sale of property, plant and
     equipment..................................................       32.6              26.8              7.7
   Proceeds from sale of businesses.............................      107.9
   Other, net...................................................       (6.5)            (17.1)            (1.5)
                                                                  ---------         ---------        ---------
         Net cash used for investing activities.................   (2,034.7)           (438.0)          (499.3)
                                                                  ---------         ---------        ---------


Cash flows from financing activities
   Proceeds from long-term debt.................................    2,075.1             365.4            154.8
   Payments of long-term debt...................................     (303.3)           (209.0)          (186.5)
   Net change in short-term debt................................     (423.3)             99.8            495.6
   Dividends paid...............................................     (145.4)
   Common stock:
     Repurchase for treasury....................................                          (.3)           (12.7)
     Issued under various employee benefit plans................       11.0              21.2             16.3
   Minority contributions, net of dividends paid................        3.7              21.5              9.0
                                                                  ---------         ---------        ---------
         Net cash provided by financing activities..............    1,217.8             298.6            476.5
                                                                  ---------         ---------        ---------

Effect of exchange rate changes on cash and
   cash equivalents.............................................       (2.0)              (.6)             5.3
                                                                  ---------         ---------        ---------
Net change in cash and cash equivalents.........................       92.3              24.6            (10.7)
Cash and cash equivalents at January 1..........................       68.1              43.5             54.2
                                                                  ---------         ---------        ---------
Cash and cash equivalents at December 31........................  $   160.4         $    68.1        $    43.5
                                                                  =========         =========        =========
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

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

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

                                      -26-
<PAGE>


                         Crown Cork & Seal Company, Inc.


CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in millions, except share data)
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------------
                                                                                         Minimum  Cumulative
                                             Preferred   Common    Paid-In   Retained    Pension  Translation Treasury
                                              Stock      Stock     Capital   Earnings   Liability Adjustment    Stock      Total
-----------------------------------------------------------------------------------------------------------------------------------

<S>                                          <C>         <C>        <C>        <C>        <C>       <C>        <C>       <C>
Balance December 31, 1993...................             $592.5     $167.4     $843.1     ($46.3)   ($156.5)   ($148.4)  $1,251.8

Net income - 1994...........................                                    131.0                                       131.0
Stock repurchased:
    347,360 shares..........................                         (10.9)                                       (1.8)     (12.7)
Stock issued under stock option
  and employee savings plans:
  892,867 shares............................                          11.9                                         4.4       16.3
Minimum pension liability
  adjustment................................                                                (1.8)                            (1.8)
Translation adjustments.....................                                                          (19.4)                (19.4)
                                              ------     ------   --------   --------     ------    -------    -------   --------

Balance December 31, 1994...................              592.5      168.4      974.1      (48.1)    (175.9)    (145.8)   1,365.2

Net income - 1995...........................                                     74.9                                        74.9
Stock repurchased:
  7,401 shares..............................                           (.3)                                                   (.3)
Stock issued under stock option
  and employee savings plans:
  1,298,175 shares..........................                          14.6                                         6.6       21.2
Minimum pension liability
  adjustment................................                                                16.0                             16.0
Translation adjustments.....................                                                          (15.8)                (15.8)
                                              ------     ------   --------   --------     ------    -------    -------   --------

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

Net income - 1996...........................                                    284.0                                       284.0
Stock issued in business
  combination:
  Common: 37,300,818 shares.................              186.5    1,375.9                                                1,562.4
  Preferred: 12,432,622 shares..............  $520.8                                                                        520.8
Dividends declared:
  Common: ..................................                                   (128.2)                                     (128.2)
  Preferred:................................                                    (19.8)                                      (19.8)
Stock issued under stock option
 and employee savings plans:
  459,165 shares............................                           8.7                                         2.3       11.0
Minimum pension liability
  adjustment................................                                                17.3                             17.3
Translation adjustments.....................                                                         (145.4)               (145.4)
                                              ------     ------   --------   --------     ------    -------    -------   --------
Balance December 31, 1996...................  $520.8     $779.0   $1,567.3   $1,185.0     ($14.8)   ($337.1)   ($136.9)  $3,563.3
                                              ======     ======   ========   ========     ======    =======    =======   ========


-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

                                      -27-
<PAGE>

                         Crown Cork & Seal Company, Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

A. Summary of Significant Accounting Policies

Business and Principles of Consolidation
The consolidated  financial statements include the accounts of Crown Cork & Seal
Company, Inc. (the "Company") and its wholly-owned and majority-owned subsidiary
companies.  The Company  manufactures  and sells  metal and plastic  containers,
aluminum  and  plastic  closures  and  crowns as well as  manufactures  filling,
packaging  and  handling  machinery.  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 rates  prevailing  during the
year.  Translation  adjustments  for these  subsidiaries  are  accumulated  in a
separate  component of Shareholders'  Equity.  For non-U.S.  subsidiaries  which
operate in U.S. dollars (functional  currency) or whose economic  environment is
highly inflationary, local currency inventories and plant and other property are
translated into U.S. dollars at approximate rates prevailing when acquired;  all
other  assets  and  liabilities  are  translated  at  year-end  exchange  rates.
Inventories  charged  to  cost of  sales  and  depreciation  are  remeasured  at
historical  rates;  all other income and expense items are translated at average
exchange rates  prevailing  during the year.  Gains and losses which result from
remeasurement are included in earnings.

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

Inventory Valuation
Inventories  are carried 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.  Machinery  Division and 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 $221.6 and $117.8 at December 31, 1996 and 1995, 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

                                      -28-

<PAGE>

                         Crown Cork & Seal Company, Inc.

includes  capitalized  interest incurred during the construction and development
period.  Maintenance,  repairs and minor renewals are expensed as incurred. When
properties are retired or otherwise disposed,  the 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 $51.5,
$22.3 and $21.1 in 1996, 1995 and 1994, respectively,  are expensed as incurred.
Substantially  all engineering  and development  costs are related to developing
new products or designing significant improvements to existing products.

Earnings Per Share
Primary  earnings  per average  common  share is computed by dividing net income
available to common  shareholders  by primary  weighted  average  common shares.
Primary weighted average common shares equal weighted average common shares plus
dilutive common share equivalents.  Fully diluted earnings per share is computed
assuming the conversion of the Company's 4.5% cumulative  convertible  preferred
stock.

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

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

B. Receivables

                                                 1996         1995
     Accounts and notes receivable ........   $1,266.2      $660.9
     Less: allowance for possible losses...      (92.0)      (10.0)
                                              --------      ------
       Net trade receivables ..............    1,174.2       650.9
     Miscellaneous receivables ............      175.1        93.4
                                              --------      ------
                                              $1,349.3      $744.3
                                              ========      ======


The  Company has  agreements  to sell  certain of its  non-U.S.  trade  accounts
receivable.   At  December  31,  1996  approximately  $134  (none  in  1995)  of
receivables had been sold with limited recourse under these arrangements and are
reflected  as a reduction of trade  accounts  receivable.  Fees and  discounting
expense related to these arrangements amounted to $5 in 1996 and are included in
interest expense.

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


                                      -29-

<PAGE>

                         Crown Cork & Seal Company, Inc.

C. Inventories

                                  1996        1995
Finished goods ..............    $529.8     $305.3
Work in process .............     210.7       94.3
Raw materials ...............     550.1      331.3
Supplies and repair parts....     133.2       81.0
                               --------     ------
                               $1,423.8     $811.9
                               ========     ======

Approximately  34% and 45% of  worldwide  inventories  at December  31, 1996 and
1995,  respectively,  were stated on the  last-in,  first-out  (LIFO)  method of
inventory valuation. Had average cost (which approximates replacement cost) been
applied to such  inventories  at December 31, 1996 and 1995,  total  inventories
would have been $18.5 and $45.4 higher, respectively.

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

D. Investments

                                                              1996      1995
January 1 .................................................  $57.5      $47.7
Acquisition of CMB ........................................   35.6
Acquisition of equity and investments in joint ventures....   12.6       13.3
Equity in earnings of joint ventures ......................   (7.2)       3.9
Dividends received from equity affiliates .................   (7.3)      (5.4)
Change in cumulative translation on net assets of
    equity affiliates .....................................    (.9)      (1.0)
Change in reporting entity ................................              (1.0)
                                                             -----      -----
December 31 ...............................................  $90.3      $57.5
                                                             =====      =====

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

E. Property, Plant and Equipment

                                                         1996          1995
Buildings and improvements .........................    $886.4        $511.6
Machinery and equipment ............................   3,744.0       2,434.8
                                                      --------      --------
                                                       4,630.4       2,946.4
Less:  accumulated depreciation and amortization....  (1,537.9)     (1,239.8)
                                                      --------      --------
                                                       3,092.5       1,706.6
Land and improvements ..............................     258.2          84.2
Construction in progress ...........................     366.6         215.1
                                                      --------      --------
                                                      $3,717.3      $2,005.9
                                                      ========      ========

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

                                      -30-
<PAGE>

                         Crown Cork & Seal Company, Inc.

F. Accounts Payable and Accrued Liabilities

                                                   1996        1995
Trade accounts payable ........................  $1,377.0     $387.5
Interest ......................................      78.2       21.3
Salaries, wages and other employee benefits....     214.5      154.6
Environmental .................................       6.7        4.2
Restructuring .................................     243.3       14.9
Deferred taxes ................................     101.5        9.1
Other .........................................     439.7       76.6
                                                 --------     ------
                                                 $2,460.9     $668.2
                                                 ========     ======


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

G. Other Non-Current Liabilities

                                                     1996       1995
Postemployment benefits........................     $36.3      $14.8
Restructuring .................................      16.4       10.3
Deferred taxes ................................     304.0       40.4
Environmental .................................      46.9       16.5
Other .........................................      54.6       30.2
                                                   ------     ------
                                                   $458.2     $112.2
                                                   ======     ======


Other non-current assets includes $16.6 and $15.5 at December 31, 1996 and 1995,
respectively, for estimated recoveries related to environmental liabilities.

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

H. Acquisitions

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
facility. This facility was subsequently refinanced. See Note J and Management's
Discussion and Analysis for further details on the refinancing. The Company also
acquired,  in  separate  transactions,  the  assets  of  a  tooling  company  in
Pennsylvania  for  approximately $1 in cash and the assets of a coil cutting and
coating facility in California for  approximately $5 in cash. Both  transactions
were financed through cash from operations.

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

On June 27, 1994,  the Company  acquired  the can  manufacturing  facilities  of
Tri-Valley Growers for approximately $61 in cash, which was financed principally
through cash from  operations.  The Company also acquired the stock of a tooling
company in Pennsylvania for approximately $3 in cash.

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


                                      -31-

<PAGE>


                         Crown Cork & Seal Company, Inc.


The following represents the non-cash impact of the acquisitions noted above:
<TABLE>
<CAPTION>
                                                          1996         1995       1994
<S>                                                     <C>           <C>        <C>
Fair value of assets acquired, including goodwill       $7,995.2      $14.2      $89.1
Liabilities assumed .............................       (4,003.5)                (25.1)
Issuance of common stock ........................       (1,562.4)
Issuance of 4.5% cumulative convertible
    preferred stock .............................         (520.8)
                                                        --------      -----      -----
Cash paid .......................................       $1,908.5      $14.2      $64.0
                                                        ========      =====      =====
</TABLE>

The following represents the unaudited pro forma results of operations as if the
above  noted  business  combinations  had  occurred  at  the  beginning  of  the
respective year in which the companies were acquired as well as at the beginning
of the immediately preceding year:
<TABLE>
<CAPTION>

(unaudited)                                                                         1996          1995
<S>                                                                              <C>           <C>
Net sales ...............................................................        $8,939.8      $10,013.7
Income before income taxes (1) ..........................................           401.1          134.6
Net income ..............................................................           267.3          124.4
Net income available to common shareholders .............................           243.9          101.0
Earnings per average common share .......................................           $1.90           $.79
</TABLE>

(1) Includes minority interests, net of equity in earnings of affiliates.

Adjustments  made in arriving at the pro forma  unaudited  results of operations
include  increased  interest  expense  on  acquisition  debt,   amortization  of
goodwill,  adjustments  to the fair  value of assets  acquired  and  depreciable
lives, preferred stock dividends and related tax adjustments.

The pro forma  information  given above does not purport to be indicative of the
results that actually would have been obtained if the  operations  were combined
during the periods  presented,  and is not intended to be a projection of future
results or trends.

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

I.  Restructuring

During 1996,  the Company  provided  $39.8 ($31.7 after taxes or $.26 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  Company
anticipates that the  restructuring  actions  referred to above,  when complete,
will  generate  approximately  $10.7 in after-tax  cost savings on an annualized
basis. Except for the restructuring costs associated with the acquisition of CMB
discussed below, the Company records  restructuring  charges against  operations
and provides a reserve or writes down assets, as appropriate,  based on the best
information available at the time that the decision is made to restructure.  The
balance  of these  reserves  (excluding  the  write-down  of  assets  which  are
reflected  as a reduction  of the  related  asset  account)  is included  within
accounts payable and accrued liabilities and other non-current liabilities.

The Company has made an  assessment  of the  restructuring  and exit costs to be
incurred   relative  to  the  acquisition  of  CMB.  Affected  by  the  plan  of
restructuring are thirty-four regional  administrative  offices and plants to be
closed and  approximately  thirty-eight  plants to be  reorganized.  The plan of
restructuring  which  commenced  at the  end of the  first  quarter  of  1996 is
expected to be substantially  completed  during 1997. Since  commencement of the
plan  of  restructuring,  the  Company  has  determined  alternative  sites  for
manufacture  and qualified the new  manufacturing  sites with  customers.  As of
December  31,  1996,  the Company had accrued  approximately  $503 for the costs
associated  with  restructuring  CMB  operations and allocated such costs to the
purchase price of CMB in accordance with purchase accounting requirements.

                                      -32-

<PAGE>
                         Crown Cork & Seal Company, Inc.


These costs  comprise  severance pay and benefits,  write-down of assets,  lease
termination  and other  exit  costs.  The cost of  providing  severance  pay and
benefits for the  reduction  of  approximately  6,800  employees is estimated at
approximately  $269 and is primarily a cash expense.  Employees to be terminated
include  most,  if not all,  employees  at each office or plant to be closed and
selected  employees  at  those  plants  to  be  reorganized  including  salaried
employees and employees of the respective unions represented at each plant site.
The  write-down  of  assets  (principally  property,  plant  and  equipment)  is
estimated  at  approximately  $185 and has been  reflected as a reduction in the
carrying value of the Company's assets.  Lease termination and other exit costs,
primarily  repayments  of  government  grants and  subsidies,  are  estimated at
approximately  $49  and  are  primarily  cash  expenses.  The  $503  million  in
restructuring costs recorded in connection with the CMB acquisition includes the
$95 million  restructuring  charge previously  announced by CarnaudMetalbox Asia
Ltd., a subsidiary of the Company.

The  Company  estimates  that the plan of  restructuring  CMB  operations,  when
complete,  will  generate  annual  cost  savings  of  approximately  $160  ($105
after-tax)on a full year basis.  It is also estimated that capital  expenditures
of  approximately  $125 will be made to expand and upgrade  other  facilities to
minimize  the adverse  effects of the  restructuring  on existing  business  and
customer relationships.

During 1995 and 1994,  the Company  recorded  pre-tax  restructuring  charges of
$102.7($67.0 after taxes or $.74 per share)and $114.6 ($73.2 after taxes or $.82
per share), respectively,  as part of a two-phase restructuring plan outlined in
March 1994. The combined plan was  implemented to streamline the Company's North
American operations, to improve productivity and to enhance competitiveness.

The components of restructuring are as follows:
<TABLE>
<CAPTION>

                                    Balance at   Provisions   Provisions                  Transfer    Balance at
                                   December 31, for existing    for CMB        1996        against   December 31,
                                       1995      businesses   businesses     activity      assets        1996
<S>                                    <C>          <C>          <C>         <C>          <C>           <C>
Employee costs ..................      $11.5        $18.6        $268.9      ($76.9)                    $222.1
Writedown of assets .............                    15.3         185.2                   ($200.5)
Lease termination and
  other exit costs ..............       13.7          5.9          48.6       (30.6)                      37.6
                                       -----        -----        ------     -------       -------      ------
                                       $25.2        $39.8        $502.7     ($107.5)      ($200.5)     $259.7
                                       =====        =====        ======     =======       =======      ======
</TABLE>

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

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


                                      -33-

<PAGE>


                         Crown Cork & Seal Company, Inc.


J. Short-Term Borrowings and Long-Term Debt
<TABLE>
<CAPTION>
                                                                                  1996             1995
<S>                                                                               <C>               <C>
Short-term borrowings (1)
   Commercial paper (2)(6).............................................           $232.1            $461.2
   U.S. dollar bank loans/overdrafts (6)...............................            164.9              17.9
   Other currency bank loans/overdrafts (6)............................            708.8              58.8
                                                                                --------          --------
     Total short-term borrowings.......................................         $1,105.8            $537.9
                                                                                ========          ========

Long-term debt (7)
   U.S. Dollars:
     Commercial Paper (2) (6)..........................................           $700.0            $300.0
     Private placements: average 1996 rate 7.3% due
       2000 through 2005...............................................            205.0              50.0
     Senior notes and debentures:
       5.88% due 1998..................................................            100.0             100.0
       7.00% due 1999..................................................            100.0             100.0
       6.75% due 2003 (3)..............................................            400.0
       6.75% due 2003..................................................            200.0             200.0
       8.38% due 2005..................................................            300.0             300.0
       7.00% due 2006 (3)..............................................            300.0
       8.00% due 2023..................................................            200.0             200.0
       7.38% due 2026 (3)..............................................            350.0
       7.50% due 2096 (3)..............................................            150.0
     Other indebtedness: rates  in 1996 ranging from
       6.1% to 10.1%, due 1996 through 2015............................            188.0             106.8
                                                                                --------          --------
                                                                                 3,193.0           1,356.8
                                                                                --------          --------

Other currencies (average interest rate at December 31, 1996 in parentheses):
     German Mark borrowings (5)........................................                              104.0
     Perpetual notes in French Francs (8.0%) (4).......................            232.5
     Preference shares in French Francs (8.5%), due 1998...............            283.9
     Other French Franc indebtedness (4.5% to 12.4%),
       due 1997 through 2001...........................................            147.9
     Capital lease obligations in various currencies ..................             40.0
     Other indebtedness in various currencies,rates in
       1996 ranging from 6.5% to 15.1%, due 1997
       through 2003....................................................             74.7              99.5
                                                                                --------          --------
           Total long-term debt........................................          3,972.0           1,560.3

Less: current maturities ..............................................            (48.5)            (70.2)
                                                                                --------          --------
           Total long-term debt........................................         $3,923.5          $1,490.1
                                                                                ========          ========

<FN>
(1)  The weighted average interest rates for commercial paper outstanding during
     1996, 1995 and 1994, were 5.5%, 6.1% and 4.8%,  respectively.  The weighted
     average  interest rates for notes and overdrafts  outstanding  during 1996,
     1995 and 1994, were 6.3%, 8.6% and 6.9%, respectively.
(2)  At December 31, 1996 and December 31, 1995, $700 and $300, respectively, of
     commercial  paper was  reclassified as long term,  reflecting the Company's
     intent and ability to  refinance  these  borrowings  on a  long-term  basis
     through committed credit facilities.
(3)  On November 26, 1996,  the Company filed with the  Securities  and Exchange
     Commission a shelf  registration  statement  for the possible  offering and
     sale of up to $1,300 aggregate principal amount of

                                      -34-
<PAGE>

                         Crown Cork & Seal Company, Inc.


     debt securities of the Company. This amount was combined with the remaining
     $200 from a December 1994  Registration  Statement,  providing an aggregate
     $1,500 funding  availability.  On December 12,1996, the Company sold $1,200
     of these public debt securities in five separate tranches,  with maturities
     ranging from seven to 100 years.  The issuers  included the Company and two
     wholly-owned finance subsidiaries located in the United Kingdom and France,
     whose borrowings are fully guaranteed by the Company. The face value of the
     notes bear interest rates ranging from 6.75% to 7.38%. The offerings by the
     subsidiaries,  amounting to $700, were simultaneously  converted into fixed
     rate,  8.28% Sterling and 5.75% French Franc  obligations  through interest
     rate and currency  swaps with  various  counterparties.  Proceeds  from the
     offering were used to repay acquisition  indebtedness  arising from the CMB
     acquisition.
(4)  On January 31, 1997, the perpetual  notes were terminated and refinanced by
     the Company's committed long-term credit facilities.
(5)  At December 31, 1995, the German Mark  borrowing,  a LIBOR-based  facility,
     was classified as long-term, reflecting the Company's intent and ability to
     refinance  this  borrowing on a long-term  basis through  committed  credit
     facilities.
(6)  On February 4, 1997, the Company's $1,000 multicurrency credit facility and
     FRF 13,700 credit agreement were replaced with a new multicurrency
     revolving credit agreement with a group of domestic and foreign banks. The
     new agreement makes available $2,500 through 2002. Borrowings under the new
     agreement are unsecured and bear interest at variable market rates. The
     agreement contains certain financial covenants related to leverage and
     interest coverage. Borrowings outstanding under the prior FRF 13,700 credit
     agreement, amounting to $493.1 at December 31, 1996, were refinanced under
     this new agreement.
(7)  The  Company is also party to other  interest  rate swap  agreements,  with
     remaining terms of between one to five years. The notional amounts of these
     agreements do not represent  amounts exchanged by the parties and are not a
     measure of the Company's  exposure to credit or market  risks.  At December
     31, 1996 and  December  31, 1995 the  notional  amounts of these swaps were
     $1,219 and $34, respectively.
</FN>
</TABLE>

Aggregate  maturities of total  long-term debt for the five years  subsequent to
December 31, 1996 are $48.5, $441.1,  $152.8,  $140.8 and $229.9,  respectively.
Cash  payments for interest  were $ 290.5 in 1996,  $113.4 in 1995 and $107.1 in
1994  (including  amounts  capitalized of $7.7 in 1996, $5.8 in 1995 and $5.5 in
1994, 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,  did not differ  materially  from carrying values at
December 31, 1996 and 1995, respectively.

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

K.  Financial Instruments

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

Foreign Currency Management
With respect to balance  sheet  exposures,  the Company has an internal  netting
strategy to match foreign  currency  assets and liabilities  wherever  possible.
This  is  achieved  through  the  individual   capital   structure  of  overseas
subsidiaries complemented by the use of financial instruments.  The Company also
enters into various types of foreign  exchange  contracts,  principally  forward
exchange contracts and swaps, in

                                      -35-
<PAGE>

                         Crown Cork & Seal Company, Inc.

managing  the foreign  exchange  risk  arising  from  certain  foreign  currency
transactions.  At December 31, 1996 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 $2,311 (1995
$237).  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, 1996 and December 31,  1995.  Gains and losses  resulting  from
contracts that are designated and effective as hedges are recognized in the same
period as the underlying hedged transaction.

Interest Rate Risk Management
The Company uses interest rate swaps,  interest rate caps, and currency swaps to
manage interest rate risk related to borrowings. Interest rate and currency swap
agreements  which hedge third party debt issues are  described  in Note J. 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 from the debt obligations.

Commodities
The  Company's  basic raw  materials  for  products  in its  metal  and  plastic
packaging  segments are subject to significant price  fluctuations.  In terms of
commodity risks,  the Company uses a combination of commercial  supply contracts
and financial  instruments,  including  forwards and options,  to minimize these
exposures.  The maturity of the commodity  instruments  correlates to the actual
purchases of the commodities. Commodity instruments are accounted for as hedges,
with any gains or losses  included  in  inventory,  to the extent  that they are
designated and are effective as hedges of anticipated  commodity  purchases.  At
December  31,  1996  and  December  31,1995  the fair  value of the  outstanding
commodity  contracts was not material to the Company's  earnings,  cash flows or
financial position.

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

L.  Stock Options

At December 31, 1996, the Company has four stock-based  compensation plans under
which  the  Company  has  granted  outstanding  options  to  executives  and key
employees to purchase  common stock:  the 1983 and 1984 Stock Option Plans,  the
1990 Stock-Based Incentive  Compensation Plan and the 1994 Stock-Based Incentive
Compensation  Plan. The number of shares  authorized for issuance were 9,180,000
under the 1983 and 1984 plans, 6,000,000 under the 1990 plan and 4,000,000 under
the 1994 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. Under the 1983, 1984 and 1990 plans, options generally become
exercisable  in  installments  of 25% per year on each of the first  through the
fourth  anniversaries  of the grant date and have a maximum  term of five to ten
years.  Options under the 1994 plan are exercisable in accordance with the terms
of each  grant but in no event may the term be less than six  months or  greater
than ten years.

In  1995,  the  Financial  Accounting  Standards  Board  issued  SFAS  No.  123,
"Accounting for Stock-Based Compensation". 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".  The  Company  applies  APB  No.  25 and  related
interpretations in accounting for its plans.  Accordingly,  no compensation cost
has been  recognized for those plans.  Had  compensation  cost for the Company's
stock-based  compensation plans been determined based upon the fair value of the
awards at the grant  dates,  pro forma net income and  earnings  per share would
have been $260.5 or $2.13 per share in 1996 and $74.7 or $.83 per share in 1995.
These results  include the effects of options  granted after January 1, 1995, as
required in SFAS No. 123. The pro forma results may not be representative of the
effects on reported income for future years (once the impact of SFAS No. 123 has
been fully implemented).

                                      -36-

<PAGE>

                         Crown Cork & Seal Company, Inc.


The fair values of options  granted during 1996 and 1995 were $11.01 and $13.01,
respectively.  The fair value of each option grant was  estimated on the date of
grant  using  the   Black-Scholes   option-pricing   model  with  the  following
assumptions:  (i) expected dividend yield of 2.2% in 1996 and none in 1995; (ii)
expected  stock  price  volatility  of 20.7% in 1996 and 1995;  (iii)  risk-free
interest rate of 6.2% in 1996 and 5.4% in 1995 and (iv) expected life of options
of 4.9 years in 1996 and 1995.

Stock option transactions were:
<TABLE>
<CAPTION>
                                                    1996                    1995                     1994

                                                        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..........................    1,836,452    $33.30     2,970,225    $25.67     3,622,315    $22.33
Granted.................................    3,544,750     44.35       326,600     40.32       357,196     37.57
Exercised...............................     (516,100)    25.58    (1,385,309)    17.56      (836,286)    17.29
Canceled................................     (239,394)    39.94       (75,064)    36.87      (173,000)    31.52
                                            ---------               ---------               ---------
Options outstanding
  at December 31........................    4,625,708    $42.28     1,836,452    $33.30     2,970,225    $25.67
                                            =========               =========               =========
Options exercisable
  at December 31........................      709,115                 591,351                 819,790
Options available for
  grant at December 31..................    1,303,833               4,609,189                 860,725
</TABLE>

The following table summarizes  information concerning currently outstanding and
exercisable options:
<TABLE>
<CAPTION>

                            Options Outstanding                                            Options Exercisable

                                              Weighted
                                               Average      Weighted                                    Weighted
             Range of                         Remaining      Average                                     Average
             Exercise            Number      Contractual    Exercise                       Number       Exercise
              Prices           Outstanding      Life          Price                      Exercisable      Price
         <S>                   <C>            <C>         <C>                           <C>           <C>
          $10.44  to $37.50      550,072        4.4         $32.11                        250,503       $30.85
           37.63  to  43.13      624,636        4.5          39.69                        316,612        39.28
           44.13  to  47.50    3,329,750        5.4          44.14                        142,000        44.13
           47.63  to  51.50      121,250        9.0          50.99
                               ---------                                                  -------
                               4,625,708        5.3         $42.28                        709,115       $37.27
                               =========                                                  =======
</TABLE>

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

M. 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 Crown  4.5%
cumulative convertible preferred stock (acquisition  preferred) to tendering CMB
shareholders.  Generally,  each share of acquisition preferred stock is entitled
to the number of votes equal to the number of shares of common  stock into which
such share of acquisition  preferred is convertible as of the applicable  record
date.  Dividends on shares  issued  accrue and are paid  quarterly in arrears on
February  20,  May 20,  August 20 and  November  20 each year.  The  acquisition
preferred  ranks  senior  to the  Company's  common  stock as to  dividends  and
liquidation  rights.  Each share of acquisition  preferred is  convertible  into
common  stock at a rate  equal to the  $41.8875  par  value of such  acquisition
preferred  divided by the applicable  conversion  price of $45.9715,  subject to
adjustment in

                                      -37-

<PAGE>


                         Crown Cork & Seal Company, Inc.


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  is  mandatorily
convertible February 26, 2000. The acquisition preferred has a liquidation value
equivalent to its par value plus accrued and unpaid dividends.

The Board of Directors have 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 a class. The additional  preferred stock would rank
on a parity with or junior to the  acquisition  preferred 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,  limitation  and
special  rights  are,  subject  to  the  terms  of  the  Company's  Articles  of
Incorporation, determined by the Board of Directors.

In 1996,  the Company for the first time since 1956 paid dividends on its common
stock.  Dividends  paid on the  outstanding  common  stock,  amounting to $1 per
share, and on the outstanding  acquisition preferred were $145.4. In conjunction
with the new dividend policy on common stock, the Company  registered 10 million
shares of common stock with the Securities  and Exchange  Commission in May 1996
for the  implementation  of a  Dividend  Reinvestment  and Stock  Purchase  Plan
("Plan").  The Plan covers all registered  shareholders of the Company's  common
stock as well as those beneficial owners who have either become  shareholders of
record by having shares  transferred  into their name or by making  arrangements
with their broker or other  nominees to  participate  on their behalf.  The Plan
allows for full or partial dividend reinvestment in the Company's common stock.

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;  except that the
Rights Plan provides that CGIP's  acquisition of shares of the Company  pursuant
to the  Company's  acquisition  of CMB does  not  cause  the  rights  to  become
exercisable.  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.

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

N. Pensions and Other Retirement Benefits

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


                                      -38-

<PAGE>


                         Crown Cork & Seal Company, Inc.


Plan assets of company-sponsored plans of $3,294.5 consist principally of common
stocks,  fixed income securities and other investments,  including $312.0 of the
Company's common stock.

The 1996, 1995 and 1994 components of pension cost for  company-sponsored  plans
were as follows:
<TABLE>
<CAPTION>

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

                                                                         1996              1995             1994
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>               <C>              <C>
Service cost-benefits earned during the year..................          $42.0             $11.3            $14.1
Interest cost on projected benefit obligations................          200.3              96.9             94.6
Return on assets:
     -actual..................................................         (353.9)           (200.7)            31.0
     -deferred gain/(loss)....................................           66.4              79.3           (163.5)
Amortization of net unrecognized loss
     at January 1, 1986.......................................             .1                .1               .1
Amortization of net unrecognized loss.........................            2.8               2.2               .7
(Income)/cost attributable to plant closings..................            (.8)              8.3             17.1
                                                                       ------            ------            -----
Total pension (income)........................................         ($43.1)            ($2.6)           ($5.9)
                                                                       ======            ======            =====
</TABLE>

The  funded  status  of  company-sponsored   plans,  including  the  assets  and
liabilities  assumed in connection with  acquisitions,  at December 31, 1996 and
1995 was as follows:
<TABLE>
<CAPTION>
                                                           1996                             1995
                                                U.S. Plans      Non-U.S. Plans    U.S. Plans     Non-U.S. Plans
                                             Over-    Under-    Over-  Under-   Over-    Under-   Over-    Under-
                                            funded    funded   funded  funded   funded   funded   funded  funded
<S>                                       <C>        <C>    <C>       <C>      <C>      <C>       <C>     <C>
Actuarial present value of:
   Vested benefit obligation............  ($1,138.1) ($17.7)($1,476.1)($155.6) ($370.2) ($781.7)  ($16.4) ($88.9)
   Non-vested benefits..................       (8.2)   (1.5)     (4.0)  (15.2)    (3.8)   (21.3)    (1.9)   (4.8)
                                          ---------  ------ --------- -------  -------  -------   ------  ------
   Accumulated benefit obligation.......  ($1,146.3) ($19.2)($1,480.1)($170.8) ($374.0) ($803.0)  ($18.3) ($93.7)
                                          =========  ====== ========= =======  =======  =======   ======  ======

Actuarial present value of projected
   benefit obligation...................  ($1,170.7) ($20.5)($1,484.9)($200.5) ($398.8) ($811.9)  ($21.7) ($93.7)
Plan assets at fair value...............    1,331.0     5.8   1,907.2    50.5    404.7    716.1     25.4    67.4
                                          ---------  ------ --------- -------  -------  -------   ------  ------
Plan assets in excess of (less than)
   projected benefit obligation.........      160.3   (14.7)    422.3  (150.0)     5.9    (95.8)     3.7   (26.3)
Unrecognized net (gain)/loss
   since 1986...........................      (99.5)   (1.8)   (131.2)    (.6)    34.2     41.1     (3.2)   29.5
Unrecognized (gain)/loss at
   January 1, 1986......................       (3.2)   11.0       (.4)            (4.3)    12.5      (.7)
Unrecognized prior service cost.........        5.4              (1.5)    3.1      2.6      4.3      4.7      .9
Minimum liability.......................              (10.8)            (25.8)            (48.9)           (30.5)
                                          ---------  ------ --------- -------  -------  -------   ------  ------
Prepaid (Accrued) pension cost
   at December 31.......................      $63.0  ($16.3)   $289.2 ($173.3)   $38.4   ($86.8)    $4.5  ($26.4)
                                          =========  ====== ========= =======  =======  =======   ======  ======
</TABLE>

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

The Company  recognizes a minimum pension  liability for underfunded  plans. The
minimum liability is equal to the excess of the accumulated  benefit  obligation
over plan assets.  A corresponding  amount is recognized as either an intangible
asset,  to  the  extent  of  previously  unrecognized  prior  service  cost  and
previously unrecognized  transition obligation,  or a reduction of shareholders'
equity. The Company had recorded additional liabilities of $36.6 and $79.4 as of
December 31, 1996 and 1995, respectively. An intangible asset of $13.7 and $17.7
and a shareholders'  equity  reduction,  net of income taxes, of $14.8 and $32.1
was recorded as of December 31, 1996 and 1995, respectively.

                                      -39-

<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
                                    1996         1995         1994              1996         1995         1994
<S>                                 <C>          <C>          <C>               <C>          <C>          <C>
Discount rate..................     8.0%         7.4%         8.5%              8.8%         8.5%         9.8%
Compensation increase..........     3.5%         5.0%         5.0%              6.5%         5.5%         7.0%
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.
<TABLE>
<CAPTION>
The net postretirement benefit cost was comprised of the following:                  1996       1995       1994
<S>                                                                                   <C>        <C>        <C>
     Service cost-benefits earned during the year...............................      $4.2       $4.0       $5.5
     Interest cost on accumulated postretirement benefit obligation.............      38.8       36.5       39.1
     Amortization of net unrecognized (gain)....................................      (1.4)      (5.0)
     Cost attributable to plant closings........................................                  4.2       10.8
                                                                                     -----      -----      -----
              Net postretirement benefit cost...................................     $41.6      $39.7      $55.4
                                                                                     =====      =====      =====
</TABLE>

Health care claims and life insurance benefits paid totaled $40.9 in 1996, $42.5
in 1995 and $36.3 in 1994.

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

                                                                                   1996              1995
<S>                                                                              <C>               <C>
     Retirees .........................................................          ($406.2)          ($418.2)
     Fully eligible active plan participants...........................            (50.3)            (41.7)
     Other active plan participants....................................            (47.8)            (47.0)
                                                                                 -------           -------
     Total accumulated obligation......................................           (504.3)           (506.9)
     Unrecognized net (gain)...........................................           (103.6)            (56.1)
                                                                                 -------           -------
     Accrued postretirement benefit obligation.........................          ($607.9)          ($563.0)
                                                                                 =======           =======
</TABLE>

The health care accumulated  postretirement benefit obligation was determined at
December  31,  1996 and 1995 using  health  care  trend  rates of 9.2% and 9.9%,
respectively,  decreasing to 4.9% over nine years. The assumed long-term rate of
compensation  increase used for life insurance was 3.5% and 5.0% at December 31,
1996 and 1995, respectively. The discount rate was 8.0% and 7.4% at December 31,
1996 and 1995, respectively. Changing the assumed health care cost trend rate by
one percentage  point in each year would change the  accumulated  postretirement
benefit obligation by $40.8 and the net postretirement benefit cost by $3.3.

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.

                                      -40-
<PAGE>

                         Crown Cork & Seal Company, Inc.

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
1996  and  1995  were  78,051  and  84,309,  respectively,   and  the  Company's
contributions were approximately $.6 and $.5 respectively.

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

O. Income Taxes

Pretax  income for the years ended  December  31 was taxed  under the  following
jurisdictions:
<TABLE>
<CAPTION>
                                                                                          1996          1995          1994
<S>                                                                                      <C>           <C>           <C>
Domestic .......................................................................         $66.8         $30.8         $88.5
Foreign ........................................................................         364.2          78.7          94.2
                                                                                        ------        ------        ------
                                                                                        $431.0        $109.5        $182.7
                                                                                        ======        ======        ======


The provision for income taxes consists of the following:
Current tax provision:
     U.S. Federal ..............................................................         $15.0         $16.2         $50.9
     State and foreign .........................................................          27.7          11.9          18.7
                                                                                        ------        ------        ------
                                                                                          42.7          28.1          69.6
                                                                                        ------        ------        ------
Deferred tax provision:
     U.S. Federal ..............................................................          17.5          (3.1)        (17.7)
     State and foreign .........................................................          74.2           (.1)          3.7
                                                                                        ------        ------        ------
                                                                                          91.7          (3.2)        (14.0)
                                                                                        ------        ------        ------
                                                                                        $134.4         $24.9         $55.6
                                                                                        ======        ======        ======


The provision for income taxes differs from the amount of income tax  determined
by applying the  applicable  U.S.  statutory  federal  income tax rate to pretax
income as a result of the following differences:

                                                                                          1996          1995          1994
U.S. Statutory rate ............................................................          35.0%         35.0%         35.0%
Non-U.S. operations at different rates .........................................          (7.7)        (14.5)         (8.4)
Amortization of acquisition adjustments ........................................           8.5           8.0           4.7
Valuation allowance ............................................................          (4.0)         (1.8)         (2.6)
Other items, net ...............................................................           (.6)         (4.0)          1.7
                                                                                        ------        ------        ------
     Effective income tax rate .................................................          31.2%         22.7%         30.4%
                                                                                        ======        ======        ======
</TABLE>

                                      -41-

<PAGE>

                         Crown Cork & Seal Company, Inc.


The Company paid federal,  state,  local and foreign (net) income taxes of $41.4
for 1996,  $28.0 for 1995 and $88.9 for 1994.  The  components  of deferred  tax
assets and liabilities at December 31, follow:
<TABLE>
<CAPTION>
                                                                        1996                      1995
                                                                 Asset       Liability      Asset      Liability
<S>                                                                <C>          <C>          <C>          <C>
Depreciation..............................................                    $421.5                    $227.1
Postretirement and postemployment benefits................       $208.3                    $206.5
Pensions .................................................                      46.9         19.7
Inventories ..............................................                      32.6                      34.2
Tax loss and credit carryforwards ........................        275.0                      31.1
Restructuring.............................................         90.0                      16.6
Accruals and other .......................................         85.6         16.8         46.6         10.8
                                                                 ------       ------       ------       ------
                                                                  658.9        517.8        320.5        272.1
Valuation allowance.......................................       (139.0)                    (22.8)
                                                                 ------       ------       ------       ------
                                                                 $519.9       $517.8       $297.7       $272.1
                                                                 ======       ======       ======       ======
</TABLE>


Prepaid  expenses and other current assets includes $237.1 and $47.2 of deferred
tax assets at December 31, 1996 and 1995, respectively. Other non-current assets
includes  $170.5 and $27.9 of deferred tax assets at December 31, 1996 and 1995,
respectively.

The Company has recorded  $34.3 of deferred tax assets arising from tax loss and
credit  carryforwards,  which will be realized through future  operations and an
additional  $127.0  which will be  realized  through  the  reversal  of existing
temporary  differences.  Future recognition of the remaining $113.7 will be made
either when the benefit is  realized or when it has been  determined  that it is
more likely than not that the benefit will be realized  through future earnings.
Carryforwards  of $34.4  expire  over the next  five  years,  $79.9 in years six
through fifteen and $160.7 can be utilized over an indefinite period.

The valuation  allowance of $139.0  includes $121.6 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 $607.2,
$467.3  and  $432.2  as of  December  31,  1996,  1995 and  1994,  respectively.
Management has no plans to distribute such earnings in the foreseeable future.

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

P. Minority Interests
<TABLE>
<CAPTION>
                                                                                   1996              1995
<S>     <C>                                                                       <C>                <C>
January 1..................................................................       $118.6             $75.4
Acquisition of CMB.........................................................        125.1
Investment by minority shareholders........................................         22.6              23.5
Formation of new jointly-owned subsidiaries................................                            8.3
Minority interest in net income of consolidated subsidiaries...............          5.4              13.6
Dividends paid to minority shareholders....................................        (18.9)             (2.0)
Change in cumulative translation adjustment................................         (2.5)              (.2)
Purchase of minority interests.............................................         (6.5)
                                                                                  ------            ------
December 31................................................................       $243.8            $118.6
                                                                                  ======            ======


-------------------------------------------------------------------------------------------------------------------
</TABLE>
Q. Commitments and Contingent Liabilities

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


                                      -42-

<PAGE>


                         Crown Cork & Seal Company, Inc.


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

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

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

R. Lease Commitments

The Company  and its  subsidiaries  lease  manufacturing,  warehouse  and office
facilities and certain  equipment,  a significant  portion of these  obligations
having been assumed with the acquisition of CMB. Certain  non-cancelable  leases
are  classified  as capital  leases,  and the  leased  assets  are  included  in
"Property,  plant and  equipment."  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, 1996 was $50.3.

Under  long-term  operating  leases,  minimum  annual rentals are $37.1 in 1997,
$29.9 in 1998, $21.4 in 1999, $14.2 in 2000, $10.4 in 2001, and a total of $48.1
for 2002 and thereafter.  Under long-term capital leases, minimum annual rentals
are $13.5 in 1997, $13.2 in 1998, $11.7 in 1999, $5.9 in 2000, $4.7 in 2001, and
a total of $11.7 for 2002 and  thereafter.  The present value of future  minimum
payments on capital  leases is $40.0 with the current  portion of the obligation
being $8.8.  Rental expense (net of sublease  rental income of $5.5 in 1996, $.8
in 1995 and $1.1 in 1994) amounted to $35.1 in 1996,  $22.7 in 1995 and $19.6 in
1994.

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


                                      -43-

<PAGE>


                         Crown Cork & Seal Company, Inc.


S. Segment Information by Industry Segment and Geographic Area
<TABLE>
<CAPTION>

A. Industry Segment
                                              Net      Operating   % To   Identifiable    Depreciation     Capital
1996                                         Sales      Income   Net Sales   Assets     & Amortization  Expenditures
<S>                     <C>                <C>        <C>            <C>    <C>              <C>          <C>
Metal Packaging & Other (1).............   $6,619.7   $457.8(2)      6.9    $9,877.1         $367.0       $534.1
Plastic Packaging.......................    1,712.2    218.7        12.8     2,552.7          128.9         97.1
                                           --------   ------                --------         ------       ------
Consolidated............................   $8,331.9   $676.5(5)      8.1   $12,429.8(6)      $495.9       $631.2
                                           ========   ======                ========         ======       ======

1995
Metal Packaging & Other (1).............   $3,811.1   $159.2(3)      4.2    $3,688.9         $177.9       $287.7
Plastic Packaging.......................    1,242.7     76.9(3)      6.2     1,294.7           78.4        145.8
                                           --------   ------                --------         ------       ------
Consolidated............................   $5,053.8   $236.1(5)      4.7    $4,983.6(6)      $256.3       $433.5
                                           ========   ======                ========         ======       ======
1994
Metal Packaging & Other (1).............   $3,494.3   $201.3(4)      5.8    $3,453.3         $157.0       $232.7
Plastic Packaging.......................      957.9     76.4         8.0     1,284.5           61.3        207.1
                                           --------   ------                --------         ------       ------
Consolidated............................   $4,452.2   $277.7(5)      6.2    $4,737.8(6)      $218.3       $439.8
                                           ========   ======                ========         ======       ======

B. Geographic Area

1996
United States...........................   $3,327.1   $205.1         6.2    $3,843.8         $204.0       $199.2
Europe..................................    3,745.2    427.8(2)     11.4     6,884.9          219.0        232.3
Asia-Pacific............................      383.9      5.9         1.5       619.8           34.6         90.9
Other...................................      875.7     37.7(2)      4.3     1,081.3           38.3        108.8
                                           --------   ------                --------         ------       ------
Consolidated............................   $8,331.9   $676.5(5)      8.1   $12,429.8(6)      $495.9       $631.2
                                           ========   ======                ========         ======       ======

1995
United States...........................   $3,376.2   $140.6(3)      4.2    $3,372.6         $175.4       $260.5
Europe..................................      785.2     58.3         7.4       606.1           38.6         50.9
Asia-Pacific............................      151.9     22.5        14.8       222.7            7.4         61.9
Other...................................      740.5     14.7(3)      2.0       782.2           34.9         60.2
                                           --------   ------                --------         ------       ------
Consolidated............................   $5,053.8   $236.1(5)      4.7    $4,983.6(6)      $256.3       $433.5
                                           ========   ======                ========         ======       ======

1994
United States...........................   $2,969.6   $168.7(4)      5.7    $3,291.1         $150.1       $335.1
Europe..................................      640.0     45.0         7.0       571.8           31.4         54.8
Asia-Pacific............................      110.3     24.7        22.4       109.0            3.9         22.3
Other...................................      732.3     39.3(4)      5.4       765.9           32.9         27.6
                                           --------   ------                --------         ------       ------
Consolidated............................   $4,452.2   $277.7(5)      6.2    $4,737.8(6)      $218.3       $439.8
                                           ========   ======                ========         ======       ======
<FN>
(1)  Within  "Metal  Packaging  & Other" is the  Company's  machinery  operation
     which,  along with other non-metal  packaging domestic  affiliates,  is not
     significant.
(2)  Operating income for 1996 includes restructuring charges of $30.1 for Europe Metal Packaging and
     $9.7 for Other Metal Packaging.
(3)  Operating income for 1995 includes restructuring charges of $81.4 for U.S. Metal Packaging, $3.9 for
     U.S. Plastic Packaging, $4.4 for Other Plastic Packaging and $13.0 for Other Metal Packaging.
</FN>
</TABLE>

                                      -44-
<PAGE>

                         Crown Cork & Seal Company, Inc.


(4)  Operating income for 1994 included restructuring charges of $102.3 for U.S.
     Metal Packaging and $12.3 for Other Metal Packaging.
(5) The following reconciles operating income to pre-tax income:
<TABLE>
<CAPTION>
                                                                  1996             1995              1994
<S>                                                              <C>              <C>               <C>
Operating income*.........................................       $676.5           $236.1            $277.7
Interest and other corporate
   expense**..............................................       (245.5)          (126.6)            (95.0)
                                                                 ------           ------            ------
Pre-tax income............................................       $431.0           $109.5            $182.7
                                                                 ======           ======            ======
</TABLE>


*    Has been restated for prior years to conform with the 1996  presentation of
     operating income.
**   Includes  interest expense net of interest  income,  gain on sale of assets
     and translation and exchange adjustments.
(6)  The following reconciles identifiable assets to total assets:
<TABLE>
<CAPTION>

                                                                 1996             1995              1994
<S>                                                           <C>               <C>               <C>
Identifiable assets.......................................    $12,429.8         $4,983.6          $4,737.8
Corporate assets..........................................        160.4             68.1              43.5
                                                              ---------         --------          --------
Total assets..............................................    $12,590.2         $5,051.7          $4,781.3
                                                              =========         ========          ========
</TABLE>


Figures  for 1996 are  generally  not  comparable  to  earlier  years due to the
February 1996 acquisition of CarnaudMetalbox.

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

For the years ended  December  31,  1996,  1995 and 1994,  respectively,  no one
customer accounted for more than 10% of the Company's net sales.

Total  non-U.S.  liabilities  were  $4,772.0,  $822.4 and $777.7 at December 31,
1996, 1995 and 1994, respectively.

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

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


                                      -45-

<PAGE>

                         Crown Cork & Seal Company, Inc.

T. Quarterly Data (unaudited)
<TABLE>
<CAPTION>

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

                                                  1996                                             1995
------------------------------------------------------------------------------------------------------------------------------

                               First      Second        Third      Fourth        First      Second       Third      Fourth
------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>         <C>          <C>         <C>          <C>         <C>         <C>         <C>
Net sales..................  $1,551.2    $2,353.7     $2,462.1    $1,964.9     $1,126.7    $1,385.8    $1,427.1    $1,114.2

Gross profit*..............     170.8       294.2(1)     343.5       255.2(2)     129.9       142.4(3)     24.5(4)     78.6

Net income available to
 common shareholders.......      29.1        98.3(1)     103.5        33.3(2)      36.5        52.2(3)    (19.9)(4)     6.1

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


Average common shares
 outstanding
 (in millions):............     105.1       128.1        128.5       128.3         89.6        90.2        90.5        90.6

Earnings(loss)per
 average common
 share**:

Primary....................        .28         .77(1)       .81         .26(2)       .41         .58(3)     (.22)(4)     .07

Fully diluted..............         +          .75(1)       .78         +            .41         .58(3)     (.22)(4)     .07

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

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

Common stock
price range***

  High.....................      51          49 1/8      49 1/2      55 1/2        45          50 1/4      50 5/8      44 5/8

  Low......................      40 5/8      43 5/8      41          45 1/2        37 3/4      41 3/8      36 7/8      34 1/2

  Close....................      48 3/4      45          46 1/8      54 3/8        43 7/8      50 1/8      38 3/4      41 3/4
</TABLE>

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

+    Fully diluted earnings per share are not presented for the first and fourth
     quarters because the effects would have been anti-dilutive.

*    Net sales less cost of products sold, depreciation and amortization and the
     provision for restructuring.

**   The sum of the quarters' 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 $29.6, $21.9 after taxes or $.17
     per share.  Excluding the effects of the restructuring  charges, net income
     was $120.2 or $.94 per primary share and $.90 per fully diluted share.
     See Note I for additional details.
(2)  Includes pre-tax  restructuring  charges of $10.2, $9.8 after taxes or $.08
     per share.  Excluding the effects of the restructuring  charges, net income
     was $43.1 or $.34 per share. See Note I for additional details.
(3)  Includes net pre-tax  restructuring  charges of $20.2, $12.8 after taxes or
     $.14 per share.  Excluding the effects of the  restructuring  charges,  net
     income was $65.0 or $.72 per share. See Note I for additional details.
(4)  Includes pre-tax  restructuring charges of $82.5, $54.2 after taxes or $.60
     per share.  Excluding the effects of the restructuring  charges, net income
     was $34.3 or $.38 per share. See Note I for additional details.

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

                                      -46-

<PAGE>

                         Crown Cork & Seal Company, Inc.

          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

(In millions)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
COLUMN A                          COLUMN B                            COLUMN C                       COLUMN D          COLUMN E
--------                          --------                            --------                       --------          --------

                                                                      Additions
                                                 ------------------------------------------------

                                  Balance at       Charged to costs        Charged to other
                                  beginning of     and expenses            accounts                  Deductions-      Balance at
Description                       period                                                             Write-Offs       end of period
-----------------------------------------------------------------------------------------------------------------------------------

                                                       For the Year Ended December 31, 1996

Allowances deducted from
assets to which they apply:
<S>                              <C>                      <C>                     <C>               <C>                    <C>
Trade accounts receivable        $10.0                    $9.5                    $90.5*               $18.0                $92.0

Deferred tax assets               22.8                    (8.0)                   124.2*                                    139.0



                                                       For the Year Ended December 31, 1995

Allowances deducted from
assets to which they apply:

Trade accounts receivable         10.6                     4.9                                           5.5                 10.0

Deferred tax assets               29.2                    (2.2)                                          4.2                 22.8



                                                       For the Year Ended December 31, 1994

Allowances deducted from
assets to which they apply:

Trade accounts receivable          6.2                     4.6                                            .2                 10.6

Deferred tax assets               31.3                    (2.1)                                                              29.2


*    Acquisition of CarnaudMetalbox
</TABLE>

                                      -47-

<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  24,  1997,  in the  section  entitled
"Election of Directors"  and on page 15 in the section  entitled  "Section 16(a)
Beneficial  Ownership  Reporting  Compliance"  and  is  incorporated  herein  by
reference.

The following  table sets forth  certain  information  concerning  the principal
executive officers of the Company, including their ages and positions.
<TABLE>
<CAPTION>
       Name                                    Age                   Present Title
<S>                                            <C>               <C>
William J. Avery                               56                 Chairman of the Board of Directors
                                                                  and Chief Executive Officer

Michael J. McKenna                             62                 President and
                                                                  Chief Operating Officer

Ian B. Carmichael                              60                 Executive Vice President -
                                                                  Corporate Technologies

John W. Conway                                 51                 Executive Vice President -
                                                                  President-Americas Division

B. Nigel Gilson                                56                 Executive Vice President -
                                                                  Global Customer Business

Mark W. Hartman                                59                 Executive Vice President -
                                                                  Office of the Chairman

Tommy H. Karlsson                              50                 Executive Vice President -
                                                                  President-European Division

Richard L. Krzyzanowski                        64                 Executive Vice President,
                                                                  Secretary and General Counsel

Alan W. Rutherford                             53                 Executive Vice President
                                                                  and Chief Financial Officer

Ronald R. Thoma                                62                 Executive Vice President -
                                                                  Procurement and Traffic

William H. Voss                                51                 Executive Vice President -
                                                                  President-Asia-Pacific Division

Craig R. L. Calle                              37                 Senior Vice President-
                                                                  Finance and Treasurer

Timothy J. Donahue                             34                 Vice President and Controller
</TABLE>

                                      -48-

<PAGE>


                         Crown Cork & Seal Company, Inc.


ITEM 11.   EXECUTIVE COMPENSATION

The information set forth on pages 8 through 11 of the Company's Proxy Statement
dated  March 24,  1997,  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 24, 1997, in the sections  entitled "Proxy
Statement-Meeting,   April  24,  1997"  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  24,  1997,  in the  section  entitled
"Election of Directors" and is incorporated herein by reference


                                      -49-

<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 24
         through 46 of this Report).

     (2) Financial Statement Schedules:

         Schedule Number

         II.-  Valuation  and  Qualifying  Accounts and Reserves (see page 47 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

        1.a   Form of U.S.  Underwriting  Agreement (Common Stock) (incorporated
              by  reference  to  Exhibit  1.1  of  the  Company's   Registration
              Statement  on Form S-3  filed  with the  Securities  and  Exchange
              Commission on November 26, 1996,  amended December 5 and 10, 1996,
              (File No. 333-16869)).

        1.b   Form  of  International   Underwriting  Agreement  (Common  Stock)
              (incorporated  by  reference  to  Exhibit  1.2  of  the  Company's
              Registration  Statement on Form S-3 filed with the  Securities and
              Exchange Commission  September 26, 1996, amended October 4 and 24,
              1996, (File No. 333-12787)).

        1.c   Form of Underwriting  Agreement (Preferred Stock) (incorporated by
              reference to Exhibit 1.3 of Registrant's Registration Statement on
              Form S-3 dated September 26, 1996, amended October 4 and 24, 1996,
              (File No. 333-12787)).

        1.d   Form of Agreement  between Selling  Shareholders  and Underwriters
              (incorporated   by  reference  to  Exhibit  1.4  of   Registrant's
              Registration  Statement  on Form S-3  dated  September  26,  1996,
              amended October 4 and 24, 1996, (File No. 333-12787)).

        1.e   Form of  Underwriting  Agreement  (incorporated  by  reference  to
              Exhibit 1.1 of the Registrant's Registration Statement on form S-3
              dated November 26, 1996, amended December 5 and 10, 1996 (File No.
              333-16869)).

        2.a   Exchange Offer Agreement, dated as of May 22, 1995, as amended,
              between Crown Cork & Seal Company, Inc. (the "Company") and
              Compagnie Generale d'Industrie et de Participations (CGIP)
              (incorporated by reference to Annex A of the Company's Proxy
              Statement/Prospectus dated November 14, 1995 forming a part of the
              Company's Amendment No.1 to its Registration Statement on Form S-4
              (No. 33-64167) filed with the Securities and Exchange Commission
              on November 14, 1995 and to Exhibit 2.1 of the Company's Current
              Report on Form 8-K dated December 28, 1995 (File No. 1-2227)).

        2.b   Shareholders Agreement dated February 22, 1996, between Crown Cork
              & Seal Company,  Inc. and  Compagnie  Generale  d'Industrie  et de
              Participation  (CGIP) (incorporated by reference to Exhibit 2.2 of
              the Company's  Current  Report on Form 8-K dated February 22, 1996
              (File No. 1-2227)).


                                      -50-

<PAGE>


                         Crown Cork & Seal Company, Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


                                      -51-

<PAGE>


                         Crown Cork & Seal Company, Inc.

        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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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


                                      -52-

<PAGE>


                         Crown Cork & Seal Company, Inc.

              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. 1984  Non-Qualified  Stock Option
              Plan  (incorporated  by reference  to Exhibit 28 of the  Company's
              Registration  Statement on Form S-8 filed with the  Securities and
              Exchange on June 6, 1986 (Registration No. 33-06261)).

       10.e   Crown  Cork  &  Seal   Company,   Inc.   Retirement   Thrift  Plan
              (incorporated  by  reference  to  Exhibit  4.3  of  the  Company's
              Registration  Statement on Form S-8 filed with the  Securities and
              Exchange on September 22, 1993 (File No. 33-50369)).

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

       10.h   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.i   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)).

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

        11.   Statement re Computation of Per Share Earnings

        12.   Computation of ratio of earnings to fixed charges

        19.   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).

        21.   Subsidiaries of Registrant.

        23.   Consent of Independent Accountants.

                                      -53-

<PAGE>


                         Crown Cork & Seal Company, Inc.


        27.   Financial Data Schedule

        99.   Letter of agreement between the Company and Compagnie  Generale d'
              Industrie et de Participations ("CGIP") (incorporated by reference
              to Exhibit 99.2 of the Company's  Current Report on Form 8-K dated
              September 26, 1996 (File No. 1-2227)).

b)   Reports on Form 8-K

     (1) On December 20, 1996,  the  Registrant  filed a Current Report Form 8-K
         for the following event:

             The Company reported under:

               Item 5. Other Events

               That on December 17, 1996,  the Company and two of the  Company's
               wholly-owned subsidiaries,  Crown Cork & Seal Finance PLC ("Crown
               UK") and Crown Cork & Seal Finance S.A. ("Crown France"),  issued
               $1.2 billion in public debt securities (the Debt Securities). The
               Debt Securities consist of: (i) $350 million aggregate  principal
               amount of 7-3/8%  Debentures  due 2026 issued by the Company (ii)
               $150 million aggregate  principal amount of 7-1/2% Debentures Due
               2096  issued  by  the  Company,   (iii)  $200  million  aggregate
               principal amount of 6-3/4% Notes Due 2003 issued by the Crown UK,
               (iv) $300 million aggregate principal amount of 7% Notes Due 2006
               issued by the Crown UK and (v) $200 million  aggregate  principal
               amount of Notes Due 2003 issued by Crown France.

     (2) On December 17, 1996, the Registrant filed a current Report on Form 8-K
         for the following event:

             The Company reported under:

               Item 5. Other Events

               That on December 12, 1996, the Company, Crown Cork & Seal Finance
               PLC, a public limited company organized under the laws of England
               and Wales and Crown cork & Seal Finance  S.A., a societe  anonyme
               organized  under  the  laws of the  Republic  of  France  ("Crown
               France"),  entered into a Terms  Agreement  with Salmon  Brothers
               Inc., CS First Boston  Corporation,  Chase Securities Inc. and JP
               Morgan Securities Inc. (collectively, the "Underwriters") for the
               issuance of debentures and notes referred to in (b) (1) above.

     (3) On October 15, 1996, the Registrant  filed a Current Report on Form 8-K
         for the following event:

             The Company reported under:

               Item 5.  Other Events

               On October 14, 1996, the Company issued a News Release announcing
               summary  results of  operations  for the  quarter and nine months
               ended September 30, 1996.


                                      -54-

<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, 1997
     -----------------

                            By: /s/ Timothy J. Donahue
                                ------------------------
                                Timothy J. Donahue
                                Vice President and 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         3/31/97
------------------------------------
William J. Avery                              Chairman of the Board
                                              and Chief Executive Officer

/s/ Alan W. Rutherford       3/31/97
------------------------------------
Alan W. Rutherford                            Director, Executive Vice President
                                              and Chief Financial Officer

                                    DIRECTORS
<TABLE>
<CAPTION>
<S>                          <C>             <C>                                <C>
/s/ Henry E. Butwel          3/31/97
------------------------------------          -----------------------------------------
Henry E. Butwel                               Jean-Pierre Rosso

/s/ Charles F. Casey         3/31/97          /s/ Ernest-Antoine Seilliere      3/31/97
------------------------------------          -----------------------------------------
Charles F. Casey                              Ernest-Antoine Seilliere

/s/ Francis X. Dalton        3/31/97          /s/ J. Douglass Scott             3/31/97
------------------------------------          -----------------------------------------
Francis X. Dalton                             J. Douglass Scott

/s/ Richard L. Krzyzanowski  3/31/97          /s/ Robert J. Siebert             3/31/97
------------------------------------          -----------------------------------------
Richard L. Krzyzanowski                       Robert J. Siebert

/s/ Josephine C. Mandeville  3/31/97          /s/ Harold A. Sorgenti            3/31/97
------------------------------------          -----------------------------------------
Josephine C. Mandeville                       Harold A. Sorgenti


/s/ Michael J. McKenna       3/31/97           /s/ Guy de Wouters               3/31/97
------------------------------------          -----------------------------------------
Michael J. McKenna                            Guy de Wouters

------------------------------------
Felix G. Rohatyn
</TABLE>


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