UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q


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


	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007


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


	FOR THE TRANSITION PERIOD FROM ________ TO _________

COMMISSION FILE NUMBER 0-50189

CROWN HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Pennsylvania		75-3099507
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


One Crown Way, Philadelphia, PA		19154-4599
(Address of principal executive offices)		(Zip Code)

	215-698-5100
	(Registrant’s telephone number, including area code)

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 filing requirements for the past 90 days. Yes X No __

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer X Accelerated filer __ Non-accelerated filer __

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2).
Yes __ No X

There were 164,277,913 shares of Common Stock outstanding as of July 25, 2007.

Crown Holdings, Inc.

FORM 10-Q
FOR QUARTER ENDED JUNE 30, 2007

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION


			Page Number

Item 1	Financial Statements

Consolidated Statements of Operations - Three Months			1

Consolidated Statements of Operations - Six Months			2

Consolidated Balance Sheets			3

Consolidated Statements of Cash Flows			4

Consolidated Statements of Changes in Shareholders’ Deficit and Comprehensive Income			5

Notes To Consolidated Financial Statements

A.	Statement of Information Furnished		6

B.	Recent Accounting and Reporting Pronouncements		6

C.	Discontinued Operations		7

D.	Stock-Based Compensation		7

E.	Goodwill		7

F.	Inventories		8

G.	Derivative Financial Instruments		8

H.	Restructuring		8

I.	Asbestos-Related Liabilities		9

J.	Commitments and Contingent Liabilities		10

K.	Earnings Per Share		11

L.	Pension and Postretirement Benefits		12

M.	Income Taxes		12

N.	Segment Information		13

O.	Condensed Combining Financial Information		15

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Introduction		39

	Executive Overview		39

	Results of Operations		39

	Liquidity and Capital Resources		42

	Forward Looking Statements		44

Item 3	Quantitative and Qualitative Disclosures About Market Risk		44

Item 4	Controls and Procedures		44



		PART II – OTHER INFORMATION

Item 1	Legal Proceedings		45

Item 1A	Risk Factors		45

Item 2	Unregistered Sale of Equity Securities and Use of Proceeds		45

Item 6	Exhibits		45

Signature			46

Crown Holdings, Inc.

PART I - FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions except share and per share data)
(Unaudited)

	Three months ended June 30

	2007				2006

Net sales		$	1,990			$	1,781

Cost of products sold, excluding depreciation and amortization			1,650				1,478
Depreciation and amortization			57				58

Gross profit			283				245

Selling and administrative expense			93				74
Gain on sale of assets	(		10	)
Provision for restructuring			5				5
Interest expense			77				70
Interest income	(		4	)	(		3	)
Translation and exchange adjustments	(		7	)	(		9	)

Income from continuing operations before income taxes, minority interests and equity earnings			129				108
Provision for income taxes			22				19
Minority interests and equity earnings	(		19	)	(		15	)

Income from continuing operations			88				74

Loss from discontinued operations					(		24	)

Net income		$	88			$	50


Basic earnings/(loss) per average common share:
Continuing operations		$	0.54			$	0.44
Discontinued operations					(		0.14	)

Net income		$	0.54			$	0.30

Diluted earnings/(loss) per average common share:
Continuing operations		$	0.53			$	0.43
Discontinued operations					(		0.14	)

Net income		$	0.53			$	0.29

Weighted average common shares outstanding:
Basic			162,900,139				167,085,962
Diluted			167,182,198				170,917,175

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

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions except share and per share data)
(Unaudited)

	Six months ended June 30

	2007				2006

Net sales		$	3,703			$	3,305

Cost of products sold, excluding depreciation and amortization			3,095				2,762
Depreciation and amortization			112				112

Gross profit			496				431

Selling and administrative expense			188				155
Gain on sale of assets	(		10	)	(		1	)
Provision for restructuring			5				14
Interest expense			153				137
Interest income	(		7	)	(		6	)
Translation and exchange adjustments	(		8	)	(		9	)

Income from continuing operations before income taxes, minority interests and equity earnings			175				141
Provision for income taxes			40				26
Minority interests and equity earnings	(		31	)	(		29	)

Income from continuing operations			104				86

Loss from discontinued operations					(		26	)

Net income		$	104			$	60


Basic earnings/(loss) per average common share:
Continuing operations		$	0.64			$	0.51
Discontinued operations					(		0.15	)

Net income		$	0.64			$	0.36

Diluted earnings/(loss) per average common share:
Continuing operations		$	0.62			$	0.50
Discontinued operations					(		0.15	)

Net income		$	0.62			$	0.35

Weighted average common shares outstanding:
Basic			162,588,529				167,080,828
Diluted			166,933,467				171,278,893

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

Crown Holdings, Inc.

CONSOLIDATED BALANCE SHEETS (Condensed)

(In millions)

(Unaudited)

		June 30, 2007				December 31, 2006

Assets
Current assets
Cash and cash equivalents		$	304			$	407
Receivables, net			993				689
Inventories			1,106				906
Other current assets			70				60

Total current assets			2,473				2,062


Goodwill			2,236				2,185
Property, plant and equipment, net			1,580				1,608
Other non-current assets			504				503

Total		$	6,793			$	6,358


Liabilities and shareholders’ deficit
Current liabilities
Short-term debt		$	94			$	78
Current maturities of long-term debt			40				43
Accounts payable and accrued liabilities			1,883				1,796
Income taxes payable			28				39

Total current liabilities			2,045				1,956


Long-term debt, excluding current maturities			3,567				3,420
Postretirement and pension liabilities			727				749
Other non-current liabilities			544				499
Minority interests			298				279
Commitments and contingent liabilities (Note J)
Shareholders’ deficit	(		388	)	(		545	)

Total		$	6,793			$	6,358

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

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)

(In millions)
(Unaudited)

Six months ended June 30		2007				2006


Net cash used for operating activities	(	$	210	)	(	$	109	)


Cash flows from investing activities
Capital expenditures	(		76	)	(		101	)
Proceeds from sale of property, plant and equipment			58				1
Other	(		4	)			15

Net cash used for investing activities	(		22	)	(		85	)


Cash flows from financing activities
Proceeds from long-term debt			6				17
Payments of long-term debt	(		16	)	(		7	)
Net change in revolving credit facility and short-term debt			134				203
Common stock repurchased					(		17	)
Common stock issued			9				11
Dividends paid to minority interests	(		14	)	(		12	)

Net cash provided by financing activities			119				195


Effect of exchange rate changes on cash and cash equivalents			10				13


Net change in cash and cash equivalents	(		103	)			14

Cash and cash equivalents at January 1			407				294

Cash and cash equivalents at June 30		$	304			$	308

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

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
AND COMPREHENSIVE INCOME

(In millions)
(Unaudited)


	Comprehensive Income					\|	Common	Paid-In		Accumulated		Treasury		Accumulated Other Comprehensive
		Quarter		Year–To–Date		\|	Stock	Capital		Deficit		Stock		Loss		Total

Balance at January 1, 2006						\|	$929	$1,674		($1,526	)	($ 94	)	($1,219	)	($236	)
Net income		$ 50		$ 60		\|				60						60
Translation adjustments		50		60		\|								60		60
Derivatives qualifying as hedges		( 7	)	( 5	)	\|								( 5	)	( 5	)
						\|
Comprehensive income		$ 93		$115		\|
						\|
Restricted stock awarded						\|		( 2	)			2
Stock-based compensation						\|		6								6
Common stock repurchased						\|		( 12	)			( 5	)			( 17	)
Common stock issued — benefit plans						\|		2				9				11

Balance at June 30, 2006						\|	$929	$1,668		($1,466	)	($ 88	)	($1,164	)	($121	)

Balance at January 1, 2007						\|	$929	$1,589		($1,217	)	($115	)	($1,731	)	($545	)
Net income		$ 88		$104		\|				104						104
Translation adjustments		16		19		\|								19		19
Amortization of net loss and prior service cost included in net periodic pension and postretirement cost, net of tax		17		33		\|								33		33
Derivatives qualifying as hedges		( 2	)	1		\|								1		1
Available for sale securities		( 3	)	( 1	)	\|								( 1	)	( 1	)
						\|
Comprehensive income		$116		$156		\|
						\|
Adoption of FIN 48 - Note M						\|				( 16	)					( 16	)
Restricted stock awarded						\|		( 2	)			2
Stock-based compensation						\|		9								9
Common stock issued — benefit plans						\|		3				5				8

Balance at June 30, 2007						\|	$929	$1,599		($1,129	)	($108	)	($1,679	)	($388	)

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

Crown Holdings, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share and statistical data)
(Unaudited)

A.	Statement of Information Furnished

	The consolidated financial statements include the accounts of Crown Holdings, Inc. and its consolidated subsidiaries (the “Company”). The accompanying unaudited interim consolidated financial statements have been prepared by the Company in accordance with Form 10-Q instructions. In the opinion of management, these consolidated financial statements contain all adjustments of a normal and recurring nature necessary for a fair statement of the financial position of Crown Holdings, Inc. as of June 30, 2007, the results of its operations for the three and six month periods ended June 30, 2007 and 2006, and its cash flows for the six month periods ended June 30, 2007 and 2006. These results have been determined on the basis of U.S. generally accepted accounting principles and practices consistently applied.

	Certain information and footnote disclosures, normally included in financial statements presented in accordance with U.S. generally accepted accounting principles, have been condensed or omitted. The December 31, 2006 balance sheet data was derived from the audited consolidated financial statements as of December 31, 2006. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

B.	Recent Accounting and Reporting Pronouncements

	Effective January 1, 2007, the Company adopted the following accounting and reporting standards:

	FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109,” which requires that the impact of a tax position be recognized if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Adoption of FIN 48 resulted in a charge of $16 to accumulated deficit as of January 1, 2007. See Note M for additional information.

	FASB Staff Position No. AUG AIR-1 (“FSP AUG AIR-1”), which prohibits the use of the accrue-in-advance method of accounting for planned major maintenance activities in annual and interim financial statements, and permits the use of the direct expensing and deferral methods. Effective January 1, 2007, the Company is using the direct expensing method in its annual and interim financial statements. The Company expensed annual planned major maintenance costs on a straight-line basis over the course of the year under its previous policy. The adoption of FSP AUG AIR-1 will have no impact on the Company’s annual financial statements, but will result in a decrease of $3 and an increase of $3, respectively, in cost of products sold from the amounts reported in the consolidated statements of operations in the first and fourth quarters of 2006.

	SFAS 155 (“FAS 155”), “Accounting for Certain Hybrid Financial Instruments,” which amends the guidance in FAS 133, “Accounting for Derivative Instruments and Hedging Activities” and FAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” The standard allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. The adoption of FAS 155 had no effect on the results of operations or financial position of the Company.

	SFAS No. 156 (“FAS 156”), “Accounting for Servicing of Financial Assets – An Amendment of FASB Statement No. 140,” which among other things, requires a company to recognize a servicing asset or servicing liability when it undertakes an obligation to service a financial asset by entering into a servicing contract under certain situations. The adoption of FAS 156 did not have a material impact on the results of operations or financial position of the Company.

Crown Holdings, Inc.

C.	Discontinued Operations

	During 2006, the Company sold its remaining European plastics operations and its Americas health and beauty care operations. The results of operations for 2006 have been recast to report the divested businesses within discontinued operations in the accompanying statement of operations. The divested businesses had net sales of $113 in the first six months of 2006. The segment results in Note N and the Condensed Combining Statements of Operations in Note O also reflect the reclassification of the divested businesses to discontinued operations. The Consolidated Statements of Cash Flows, including those in Note O, were not recast to separately report the cash flows of the discontinued operations. No interest expense was allocated to discontinued operations and, therefore, all of the Company’s interest expense was included within continuing operations.


	The components of loss from discontinued operations for the three and six months ended June 30, 2006 are presented below.

		Three Months				Six Months

Loss from operations	(	$	5	)	(	$	7	)
Tax on operations			0				0
Loss on disposal	(		20	)	(		18	)
Tax on disposal			1		(		1	)

	(	$	24	)	(	$	26	)

D.	Stock-Based Compensation

	During the first six months of 2007, the Company granted approximately 3.7 million stock options to employees. The options have a ten-year contractual life and vest ratably over six years at 20% per year with the initial vesting scheduled on the second anniversary of the grant. During the first quarter of 2007, the Company awarded 394,221 shares of restricted stock to certain senior executives, including 136,003 shares that contain a market performance feature. The service-based shares of restricted stock vest ratably over three years on the anniversary date of the grant and had a grant-date fair value of $21.64 per share. The performance shares vest at the end of three years based on the results of a market performance criterion. The market performance criterion is the median Total Shareholder Return (“TSR”), which includes share price appreciation and dividends paid, of the Company during the three-year term of the grant measured against a peer group of companies. The number of shares which ultimately vest in 2010 is based on the level of performance achieved, ranges between 0% and 200% of the shares awarded, and will be settled in stock. The estimated fair value of each performance share was calculated as $25.36 using a Monte Carlo valuation model.

	Unrecognized compensation cost related to unvested stock options and restricted stock was $31 and $12, respectively, at June 30, 2007. The weighted average period over which the expense is expected to be recognized is 5.6 years for stock options and 1.8 years for restricted stock.

	As of June 30, 2007, there were 10,354,534 options that were fully vested or expected to vest of which 6,948,887 were exercisable. The weighted average exercise price of options fully vested or expected to vest and options exercisable was $16.61 and $13.28, respectively; the aggregate intrinsic value was $98 and $92, respectively; and the weighted average remaining contractual life was 6.4 years and 4.8 years, respectively.

	The Company received cash proceeds of $8 from the exercise of stock options in the first six months of 2007.

E.	Goodwill

	Changes in the carrying amount of goodwill by reportable segment for the six-month period ended June 30, 2007 were as follows:

	Americas	North America	European	European	Non-reportable
	Beverage	Food	Beverage	Food	segments	Total

Balance as of January 1, 2007	$420	$151	$750	703	$161	$2,185
Foreign currency translation	4	7	12	14	14	51

Balance as of June 30, 2007	$424	$158	$762	$717	$175	$2,236

Crown Holdings, Inc.

F.	Inventories

	June 30,		December 31,
	2007		2006

Finished goods	$	457	$	308
Work in process		143		122
Raw material and supplies		506		476

	$	1,106	$	906

G.	Derivative Financial Instruments

	At June 30, 2007, the Company had three outstanding cross-currency swaps with a combined notional value of $580 that were designated as cash flow hedges and effectively convert fixed rate U.S. dollar intercompany debt into fixed rate euro intercompany debt. One swap with a notional value of $120 matures in November 2007 and the other swaps of $225 and $235 mature in November 2009 and 2010, respectively. The aggregate fair value of these swaps at June 30, 2007 was a loss of $83 and was reported within accrued liabilities and within non-current liabilities.

	The Company designates certain foreign currency forward exchange contracts as fair value hedges of recognized foreign-denominated assets and liabilities and unrecognized foreign-denominated firm commitments. At June 30, 2007, the aggregate fair value of the outstanding contracts was a loss of $6 and was reported within accrued liabilities.

	At June 30, 2007, the Company’s affiliate, Crown European Holdings (“CEH”), a euro functional currency subsidiary, had three outstanding foreign currency forward exchange contracts with an aggregate notional value of $116 Canadian dollars. These contracts were not designated as hedges. Changes in their fair value are reported currently in earnings as translation and exchange adjustments, and are offset by foreign exchange gains or losses reported by CEH from the remeasurement of its related $116 Canadian dollar intercompany receivable. The aggregate fair value of these contracts at June 30, 2007 was a loss of $2 and was reported within accrued liabilities.

H.	Restructuring

	The components of the outstanding restructuring reserve and movements within these components during the six months ended June 30, 2007 and 2006, respectively, were as follows:

	Termination		Other Exit
	Benefits		Costs		Total

Balance as of January 1, 2006	$12		$ 1		$13
Provision	9		5		14
Payments	( 3	)	( 1	)	( 4	)
Foreign currency translation	1				1

Balance as of June 30, 2006	$19		$ 5		$24



Balance as of January 1, 2007	$ 7		$ 4		$11
Provision	4		1		5
Payments	( 8	)			( 8	)

Balance as of June 30, 2007	$ 3		$ 5		$ 8

	The charge of $5 in 2007 included $2 of corporate costs for the settlement of a labor dispute related to prior restructurings, $1 for severance costs in the European food segment to reduce headcount, and $2 of other severance costs in South America and Europe.

	The charge of $14 in 2006 included $5 for severance costs in the European Food segment to close a plant, $4 of corporate charges for the estimated settlement costs of a labor dispute related to prior restructurings, $3 for severance costs in the European Specialty Packaging segment to reduce headcount, and $1 each in South America and Asia for severance related to plant consolidations.

Crown Holdings, Inc.

I.	Asbestos–Related Liabilities

	Crown Cork & Seal Company, Inc. (“Crown Cork”) is one of many defendants in a substantial number of lawsuits filed throughout the United States by persons alleging bodily injury as a result of exposure to asbestos. These claims arose from the insulation operations of a U.S. company, the majority of whose stock Crown Cork purchased in 1963. Approximately ninety days after the stock purchase, this U.S. company sold its insulation assets and was later merged into Crown Cork.

	Prior to 1998, the amounts paid to asbestos claimants were covered by a fund made available to Crown Cork under a 1985 settlement with carriers insuring Crown Cork through 1976, when Crown Cork became self-insured. The fund was depleted in 1998 and the Company has no remaining coverage for asbestos-related costs.

	In April 2007, May 2006, May 2005, January 2005 and April 2004, the States of Georgia, South Carolina, Florida, Ohio and Mississippi, respectively, enacted legislation that limits the asbestos-related liabilities under state law of companies such as Crown Cork that allegedly incurred these liabilities because they are successors by corporate merger to companies that had been involved with asbestos. The new legislation, which applies to future and, with the exception of Georgia and South Carolina, pending claims, caps asbestos-related liabilities at the fair market value of the predecessor’s total gross assets adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the total value of its predecessor’s assets adjusted for inflation. Crown Cork has integrated the legislation into its claims defense strategy. The Company cautions, however, that the legislation may be challenged and there can be no assurance regarding the ultimate effect of the legislation on Crown Cork.

	In June 2003, the State of Texas enacted legislation that limits the asbestos-related liabilities in Texas courts of companies such as Crown Cork that allegedly incurred these liabilities because they are successors by corporate merger to companies that had been involved with asbestos. The Texas legislation, which applies to future claims and pending claims, caps asbestos-related liabilities at the total gross value of the predecessor’s assets adjusted for inflation. Crown Cork has paid significantly more for asbestos-related claims than the total adjusted value of its predecessor’s assets. On October 31, 2003, Crown Cork received a favorable ruling on its motion for summary judgment in two asbestos-related cases pending against it in the district court of Harris County, Texas (in Re Asbestos Litigation No. 90-23333, District Court, Harris County, Texas), which were appealed. On May 4, 2006, the Texas Fourteenth Court of Appeals upheld the favorable ruling in one of the two cases (Barbara Robinson v. Crown Cork & Seal Company, Inc., No. 14-04-00658-CV, Fourteenth Court of Appeals, Texas). The Appeals Court decision has been appealed by the plaintiff. In addition, a favorable ruling for summary judgment in an asbestos case pending against Crown Cork in the district court of Travis County, Texas (in Re Rosemarie Satterfield as Representative of the Estate of Jerrold Braley Deceased v. Crown Cork & Seal Company, Inc. District Court Travis County, 98th Judicial District Cause No. GN-203572) has been appealed. Although the Company believes that the rulings of the District Court and Appeals Court are correct, there can be no assurance that the legislation will be upheld by the Texas courts on appeal or in other cases that may challenge the legislation.

	In December 2001, the Commonwealth of Pennsylvania enacted legislation that limits the asbestos-related liabilities of Pennsylvania corporations that are successors by corporate merger to companies involved with asbestos. The legislation limits the successor’s liability for asbestos to the acquired company’s asset value adjusted for inflation. Crown Cork has already paid significantly more for asbestos-related claims than the acquired company’s adjusted asset value. On February 20, 2004, the Supreme Court of Pennsylvania reversed the June 11, 2002 order of the Philadelphia Court of Common Pleas, in which the Court of Common Pleas ruled favorably on a motion by Crown Cork for summary judgment regarding 376 pending asbestos-related cases against Crown Cork in Philadelphia and remanded the cases to the Philadelphia Court of Common Pleas (Ieropoli v. AC&S Corporation, et. al., No. 117 EM 2002). The Court ruled that the new statute, as applied, violated the Pennsylvania Constitution because it retroactively extinguished the plaintiffs’ pre-existing and accrued causes of action. In November 2004, the Commonwealth of Pennsylvania enacted legislation amending the 2001 successor liability statute providing that the 2001 statute applies only to asbestos-related claims with respect to which the two-year statute of limitations for asbestos-related claims began to run after the statute was enacted on December 17, 2001. On July 28, 2005, the Philadelphia Court of Common Pleas granted Crown Cork’s global motion for summary judgment to dismiss all pending asbestos-related cases filed in the court after December 17, 2003 (In re: Asbestos-Litigation October term 1986, No. 001). Additional cases have been dismissed subsequent to July 28, 2005 by the Philadelphia Court of Common Pleas. These decisions remain subject to potential appeal by the plaintiffs and, in some cases, appeals to the Superior Court of Pennsylvania have been filed by the plaintiffs in connection with these decisions. The Company cautions that the limitation of the statute may not be upheld.

Crown Holdings, Inc.

	During the six months ended June 30, 2007, Crown Cork received approximately 2,000 new claims, settled or dismissed approximately 2,000 claims for a total of $4, and had approximately 79,000 claims outstanding at the end of the period. Settlement amounts include amounts committed to be paid in future periods.

	As of June 30, 2007, the Company’s accrual for pending and future asbestos-related claims was $188. The Company estimates that its probable and estimable liability for pending and future asbestos-related claims will range between $188 and $237. The accrual balance of $188 includes $113 for unasserted claims and $5 for committed settlements that will be paid over time.

	Historically (1977-2006), Crown Cork estimates that approximately one-quarter of all asbestos-related claims made against it have been asserted by claimants who claim first exposure to asbestos after 1964. However, because of Crown Cork’s settlement experience to date and the increased difficulty of establishing identification of the subsidiary’s insulation products as the cause of injury by persons alleging first exposure to asbestos after 1964, the Company has not included in its accrual and range of potential liability any amounts for settlements by persons alleging first exposure to asbestos after 1964.

	Underlying the accrual and the range of potential liability are assumptiions that claims for exposure to asbestos that occurred after the sale of the U.S. company’s insulation business in 1964 would not be entitled to settlement payouts and that the Georgia, South Carolina, Florida, Ohio, Mississippi, Texas and Pennsylvania asbestos legislation described above are expected to have a highly favorable impact on Crown Cork’s ability to settle or defend against asbestos-related claims in those states, and other states where Pennsylvania law may apply. The Company’s accrual includes estimates for probable costs for claims through the year 2016. The upper end of the Company’s estimated range of possible asbestos-related costs of $237 includes claims beyond that date.

	While it is not possible to predict the ultimate outcome of the asbestos-related claims and settlements, the Company believes that resolution of these matters is not expected to have a material adverse effect on the Company’s financial position. The Company cautions, however, that estimates for asbestos cases and settlements are difficult to predict and may be influenced by many factors. In addition, there can be no assurance regarding the validity or correctness of the Company’s assumptions or beliefs underlying its accrual and the estimated range of potential liability. Unfavorable court decisions or other adverse developments may require the Company to substantially increase its accrual or change its estimate. Accordingly, these matters, if resolved in a manner different from the estimate, could have a material effect on the Company’s results of operations, financial position and cash flow.

J.	Commitments and Contingent Liabilities

In 2003, Crown Cork amended the retiree medical benefits that it had been providing to approximately 10,000 retirees pursuant to a series of collective bargaining agreements between Crown Cork and certain unions. The amendments increased maximum coverage, required additional retiree contributions for medical and prescription drug costs and reduced other coverage benefits. Crown Cork is a party to litigation in which the USWA and IAM unions and retirees claim that the retiree medical benefits were vested and that the amendments breached the applicable collective bargaining agreements in violation of ERISA and the Labor Management Relations Act. In binding arbitration regarding the USWA matter the arbitrator ruled in favor of the USWA parties with respect to employees who retired prior to the 1993 collective bargaining agreement and in favor of Crown Cork with respect to employees who retired under the 1993 and 1998 collective bargaining agreements. The parties are in the remedy stage of the arbitration with respect to employees who retired prior to the 1993 agreement and the ultimate remedy is uncertain. The Company believes the remedy is not expected to have a material adverse effect on its financial position and cash flow.

Crown Holdings, Inc.

	With respect to litigation involving Crown Cork and the IAM parties, a federal district court in Nebraska ruled that, pursuant to the collective bargaining agreement, the matter should be resolved through arbitration. Crown Cork has appealed that decision to the Eighth Circuit Court of Appeals. The Company believes that it had the right to make such amendments and intends to contest the matter vigorously. However, the ultimate outcome of the IAM case is uncertain and if it is decided adversely, the Company could be required to restore all or a portion of the retiree medical benefits to their pre-amendment levels. Restoration of the IAM retiree medical benefits to their pre-amendment levels would increase the accumulated postretirement obligation by approximately $49, the annual charge to income by approximately $8, and the annual payments to retirees by approximately $2 in the initial years after restoration.

	The Company is subject to various other lawsuits and claims with respect to labor, environmental, securities, vendor and other matters 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 that the ultimate liabilities resulting from such lawsuits and claims will not materially affect the results of operations, financial position or cash flow of the Company.

	The Company has various commitments to purchase materials and supplies as part of the ordinary conduct of business. The Company’s basic raw materials for its products are tinplate and aluminum, both of which are purchased from multiple sources. The Company is subject to fluctuations in the cost of these raw materials and has periodically adjusted its selling prices to certain customers to reflect these movements. There can be no assurances, however, that the Company will be able to fully recover any increases or fluctuations in raw material costs from its customers. The Company also has commitments for standby letters of credit and for purchases of capital assets.

	At June 30, 2007, the Company had certain indemnification agreements covering environmental remediation and other potential costs associated with properties sold or businesses divested. The Company accrues for costs associated with such indemnifications and potential costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. At June 30, 2007, the Company also had guarantees of $24 related to the residual values of leased assets.

K.	Earnings Per Share

The following table summarizes the basic and diluted earnings per share computations for the periods ended June 30, 2007 and 2006, respectively:

		Three Months Ended		Six Months Ended
		June 30		June 30

		2007	2006	2007	2006

Earnings:
	Income from continuing operations	$ 88	$ 74	$ 104	$ 86


Weighted average common shares outstanding:
	Basic	162.9	167.1	162.6	167.1
	Add: dilutive stock options and restricted stock	4.3	3.8	4.3	4.2

	Diluted	167.2	170.9	166.9	171.3


Basic earnings per share - continuing operations		$ 0.54	$ 0.44	$ 0.64	$ 0.51

Diluted earnings per share - continuing operations		$ 0.53	$ 0.43	$ 0.62	$ 0.50

Crown Holdings, Inc.

Excluded from the computation of diluted earnings per share were common shares contingently issuable upon the exercise of outstanding stock options, amounting to 4.6 million and 3.6 million shares for the three and six month periods ended June 30, 2007, and 2.5 million shares and 2.9 million shares for the three and six month periods ended June 30, 2006. These shares were excluded because the assumed proceeds of the then outstanding options were above the average market prices for the related periods.

L.	Pension and Other Postretirement Benefits

Components of Net Periodic Benefit Cost


		Three Months Ended								Six Months Ended
		June 30								June 30

Pension Benefits - U.S. Plans		2007				2006				2007				2006


Service cost		$	2			$	3			$	4			$	5
Interest cost			20				20				39				39
Expected return on plan assets	(		28	)	(		27	)	(		56	)	(		54	)
Recognized prior service cost											1				1
Recognized net loss			12				14				24				29

Net periodic cost		$	6			$	10			$	12			$	20


		Three Months Ended								Six Months Ended
		June 30								June 30

Pension Benefits - Non-U.S. Plans		2007				2006				2007				2006


Service cost		$	10			$	9			$	19			$	18
Interest cost			42				38				83				74
Expected return on plan assets	(		61	)	(		54	)	(		120	)	(		105	)
Recognized prior service credit	(		1	)	(		1	)	(		3	)	(		3	)
Recognized net loss			7				9				14				18

Net periodic cost/(credit)	(	$	3	)		$	1		(	$	7	)		$	2


		Three Months Ended								Six Months Ended
		June 30								June 30

Other Postretirement Benefits		2007				2006				2007				2006


Service cost		$	1			$	1			$	2			$	2
Interest cost			8				9				17				18
Recognized prior service credit	(		4	)	(		4	)	(		8	)	(		8	)
Recognized net loss			4				5				7				9

Net periodic cost		$	9			$	11			$	18			$	21

M.	Income Taxes

	As discussed in Note B, the Company adopted FIN 48 effective January 1, 2007, and recorded a charge of $16 to its accumulated deficit.

	As of January 1, 2007, after the adoption of FIN 48, total unrecognized tax benefits were $64 and the reserve for related interest and penalties was $3. The $64 of unrecognized benefits included $36 related to a claim filed by the Company in the United States Court of Federal Claims to recover U.S. federal taxes paid in prior years. The Company’s claim relates to the timing of the deductibility of certain payments made in 1993 to 1995. In addition to the $36, the $64 also included reserves for potential liabilities related to transfer pricing, withholding taxes and deductibility of losses.

Crown Holdings, Inc.

	Interest and penalties are recorded in the statement of operations as interest expense and provision for income taxes, respectively. The total interest and penalties recorded in the statement of operations was less than $1 in the second quarter of 2007.

	The unrecognized benefits of $64 as of January 1, 2007 included $57 that, if recognized, would affect the effective tax rate. Of the $7 of remaining unrecognized benefits, $5 would not affect the effective tax rate due to valuation allowances in certain jurisdictions, and $2 would reduce goodwill if recognized. The Company’s unrecognized tax benefits are expected to increase in the next twelve months as it continues its current transfer pricing policies, and are expected to decrease as open tax years or claims are settled. The Company is unable to estimate a range of reasonably possible changes in its unrecognized tax benefits in the next twelve months as it is unable to predict when, or if, the tax authorities will commence their audits, the time needed for the audits, and the audit findings that will require settlement with the applicable tax authorities, if any. In addition, the Company is unable to estimate the timing of the resolution of its U.S. tax claim discussed above.

	The tax years that remained subject to examination by major tax jurisdiction as of January 1, 2007 were the United States (2003 onward), United Kingdom (2001 onward), France (2004 onward), Germany (2001 onward), Italy (2003 onward), Spain (2002 onward) and Canada (2002 onward).

N.	Segment Information

	The Company’s business is organized geographically within three divisions, Americas, Europe and Asia-Pacific. Within the Americas and Europe, the Company has determined that it has the following reportable segments organized along a combination of product lines and geographic areas: Americas Beverage and North America Food within the Americas, and European Beverage, European Food and European Specialty Packaging within Europe.

	The Company evaluates performance and allocates resources based on segment income. Segment income, which is not a defined term under U.S. generally accepted accounting principles, is defined by the Company as net sales less cost of products sold, depreciation and amortization, and selling and administrative expenses. Segment income should not be considered in isolation or as a substitute for net income data prepared in accordance with GAAP and may not be comparable to calculations of similarly titled measures by other companies.

The tables below present information about operating segments for the three and six months ended June 30, 2007 and 2006:


	External Sales				External Sales

	Three Months Ended				Six Months Ended
	June 30				June 30

	2007		2006		2007		2006


Americas Beverage	$	488	$	426	$	881	$	773
North America Food		205		198		390		380
European Beverage		401		339		682		577
European Food		469		450		915		861
European Specialty Packaging		117		106		220		192

Total reportable segments		1,680		1,519		3,088		2,783
Non-reportable segments		310		262		615		522

Total	$	1,990	$	1,781	$	3,703	$	3,305

Crown Holdings, Inc.


	Segment Income				Segment Income

	Three Months Ended				Six Months Ended
	June 30				June 30

	2007		2006		2007		2006


Americas Beverage	$	57	$	40	$	94	$	68
North America Food		20		18		30		26
European Beverage		58		40		88		65
European Food		45		49		83		91
European Specialty Packaging		9		12		10		14

Total reportable segments	$	189	$	159	$	305	$	264

The following table reconciles the Company’s segment income of reportable segments to consolidated income from continuing operations before income taxes, minority interests and equity earnings:


		Three Months Ended								Six Months Ended
		June 30								June 30

		2007				2006				2007				2006


Segment income of reportable segments		$	189			$	159			$	305			$	264
Segment income of non-reportable segments			31				31				65				62
Corporate and unallocated items	(		30	)	(		19	)	(		62	)	(		50	)
Provision for restructuring	(		5	)	(		5	)	(		5	)	(		14	)
Gain on sale of assets			10								10				1
Interest expense	(		77	)	(		70	)	(		153	)	(		137	)
Interest income			4				3				7				6
Translation and exchange adjustments			7				9				8				9

Income from continuing operations before income taxes, minority interests and equity earnings		$	129			$	108			$	175			$	141

“Corporate and unallocated items” includes corporate and division administrative costs, technology costs, and unallocated items such as the U.S. and U.K. pension plan costs or income.

Crown Holdings, Inc.

O.	Condensed Combining Financial Information

	Crown European Holdings (Issuer), a 100% owned subsidiary of the Company, has outstanding senior notes that are fully and unconditionally guaranteed by Crown Holdings, Inc. and certain subsidiaries. The guarantors are 100% owned by the Company and the guarantees are made on a joint and several basis. The guarantor column includes financial information for all subsidiaries in the United States (except for an insurance subsidiary and a receivable securitization subsidiary), and substantially all subsidiaries in the United Kingdom, France, Germany, Belgium, Canada, Mexico and Switzerland. The following condensed combining financial statements:

	• statements of operations for the three and six months ended June 30, 2007 and 2006,

	• balance sheets as of June 30, 2007 and December 31, 2006, and

	• statements of cash flows for the six months ended June 30, 2007 and 2006

	are presented on the following pages to comply with the Company’s requirements under Rule 3-10 of Regulation S-X.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2007
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$1,197		$793				$1,990

Cost of products sold, excluding depreciation
and amortization		($3	)	993		660				1,650
Depreciation and amortization				34		23				57

Gross profit		3		170		110				283


Selling and administrative expense		(1	)	71		23				93
Gain on sale of assets				(2	)	(8	)			(10	)
Provision for restructuring				1		4				5
Net interest expense		25		48						73
Technology royalty				(8	)	8
Translation and exchange adjustments				(5	)	(2	)			(7	)

Income/(loss) before income taxes,
minority interests and equity earnings		(21	)	65		85				129
Provision for income taxes				2		20				22
Equity earnings	$88	78		25				($191	)

Income before minority interests and equity earnings	88	57		88		65		(191	)	107
Minority interests and equity earnings						(19	)			(19	)

Net income	$88	$57		$88		$46		($191	)	$88

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2006
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$1,090		$691				$1,781

Cost of products sold, excluding depreciation
and amortization		($6	)	912		572				1,478
Depreciation and amortization				37		21				58

Gross profit		6		141		98				245


Selling and administrative expense				59		15				74
(Gain)/loss on sale of assets				(1	)	1
Provision for restructuring				3		2				5
Net interest expense		18		48		1				67
Technology royalty				(8	)	8
Translation and exchange adjustments		1		(11	)	1				(9	)

Income/(loss) from continuing operations before
income taxes, minority interests and equity earnings		(13	)	51		70				108
Provision for income taxes				8		11				19
Equity earnings	$50	61		28				($139	)

Income from continuing operations before
minority interests and equity earnings	50	48		71		59		(139	)	89
Minority interests and equity earnings						(15	)			(15	)

Income from continuing operations	50	48		71		44		(139	)	74

Discontinued operations
Loss before income taxes				(23	)	(2	)			(25	)
Provision/(benefit) for income taxes				(2	)	1				(1	)

Net income	$50	$48		$50		$41		($139	)	$50

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2007
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$2,255		$1,448				$3,703

Cost of products sold, excluding depreciation
and amortization		($6	)	1,892		1,209				3,095
Depreciation and amortization				68		44				112

Gross profit		6		295		195				496


Selling and administrative expense		(1	)	141		48				188
Gain on sale of assets				(2	)	(8	)			(10	)
Provision for restructuring				1		4				5
Net interest expense		48		95		3				146
Technology royalty				(15	)	15
Translation and exchange adjustments				(6	)	(2	)			(8	)

Income/(loss) before income taxes,
minority interests and equity earnings		(41	)	81		135				175
Provision for income taxes				8		32				40
Equity earnings	$104	113		31				($248	)

Income before minority interests and equity earnings	104	72		104		103		(248	)	135
Minority interests and equity earnings						(31	)			(31	)

Net income	$104	$72		$104		$72		($248	)	$104

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2006
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$2,045		$1,260				$3,305

Cost of products sold, excluding depreciation
and amortization		($11	)	1,729		1,044				2,762
Depreciation and amortization				72		40				112

Gross profit		11		244		176				431


Selling and administrative expense				118		37				155
(Gain)/loss on sale of assets		(7	)	6						(1	)
Provision for restructuring				7		7				14
Net interest expense		32		98		1				131
Technology royalty				(14	)	14
Translation and exchange adjustments		3		(13	)	1				(9	)

Income/(loss) from continuing operations before
income taxes, minority interests and equity earnings		(17	)	42		116				141
Provision for income taxes				4		22				26
Equity earnings	$60	74		46				($180	)

Income from continuing operations before
minority interests and equity earnings	60	57		84		94		(180	)	115
Minority interests and equity earnings						(29	)			(29	)

Income from continuing operations	60	57		84		65		(180	)	86

Discontinued operations
Loss before income taxes				(23	)	(2	)			(25	)
Provision for income taxes				1						1

Net income	$60	$57		$60		$63		($180	)	$60

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of June 30, 2007
(in millions)

	Parent		Issuer	Guarantors		Non Guarantors	Eliminations		Total Company



Assets
Current assets
Cash and cash equivalents				$52		$252			$304
Receivables, net			$68	205		720			993
Intercompany receivables			2	73		40	($115	)
Inventories				574		532			1,106
Other current assets	$2		2	51		15			70

Total current assets	2		72	955		1,559	(115	)	2,473


Intercompany debt receivables			1,495	1,525		326	(3,346	)
Investments	(285	)	2,843	(405	)		(2,153	)
Goodwill				1,585		651			2,236
Property, plant and equipment, net				866		714			1,580
Other non-current assets			9	442		53			504

Total	($283	)	$4,419	$4,968		$3,303	($5,614	)	$6,793


Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt			$5	$37		$52			$94
Current maturities of long-term debt			4	6		30			40
Accounts payable and accrued liabilities	$17		37	1,063		766			1,883
Intercompany payables				40		75	($115	)
Income taxes payable				12		16			28

Total current liabilities	17		46	1,158		939	(115	)	2,045


Long-term debt, excluding current maturities			1,217	2,286		64			3,567
Long-term intercompany debt	88		2,186	775		297	(3,346	)
Postretirement and pension liabilities				724		3			727
Other non-current liabilities			64	310		170			544
Minority interests						298			298
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(388	)	906	(285	)	1,532	(2,153	)	(388	)

Total	($283	)	$4,419	$4,968		$3,303	($5,614	)	$6,793

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of December 31, 2006
(in millions)

	Parent		Issuer	Guarantors		Non Guarantors	Eliminations		Total Company



Assets
Current assets
Cash and cash equivalents				$97		$310			$407
Receivables, net			$98	109		482			689
Intercompany receivables			1	55		31	($87	)
Inventories				489		417			906
Other current assets	$1		23	34		2			60

Total current assets	1		122	784		1,242	(87	)	2,062


Intercompany debt receivables			1,308	1,468		257	(3,033	)
Investments in subsidiaries	(425	)	2,696	(425	)		(1,846	)
Goodwill				1,547		638			2,185
Property, plant and equipment, net				888		720			1,608
Other non-current assets			25	398		80			503

Total	($424	)	$4,151	$4,660		$2,937	($4,966	)	$6,358


Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt			$12	$5		$61			$78
Current maturities of long-term debt			4	5		34			43
Accounts payable and accrued liabilities	$4		39	1,059		694			1,796
Intercompany payables			2	29		56	($87	)
Income taxes payable			3	36					39

Total current liabilities	4		60	1,134		845	(87	)	1,956


Long-term debt, excluding current maturities			1,096	2,256		68			3,420
Long-term intercompany debt	117		2,107	631		178	(3,033	)
Postretirement and pension liabilities				735		14			749
Other non-current liabilities			55	329		115			499
Minority interests						279			279
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(545	)	833	(425	)	1,438	(1,846	)	(545	)

Total	($424	)	$4,151	$4,660		$2,937	($4,966	)	$6,358

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2007
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net cash provided by/(used for) operating activities	$20		($19	)	($107	)	($104	)			($210	)


Cash flows from investing activities
Capital expenditures					(40	)	(36	)			(76	)
Proceeds from sale of property,plant and equipment					2		56				58
Intercompany investing activities			2		12				($14	)
Other							(4	)			(4	)

Net cash provided by/(used for) investing activities			2		(26	)	16		(14	)	(22	)


Cash flows from financing activities
Proceeds from long–term debt							6				6
Payments of long–term debt					(1	)	(15	)			(16	)
Net change in revolving credit facility and short-term debt			69		66		(1	)			134
Net change in long-term intercompany balances	(29	)	(52	)	21		60
Common stock issued	9										9
Dividends paid							(14	)	14
Dividends paid to minority interests							(14	)			(14	)


Net cash provided by/(used for) financing activities	(20	)	17		86		22		14		119


Effect of exchange rate changes on cash and cash equivalents					2		8				10


Net change in cash and cash equivalents					(45	)	(58	)			(103	)

Cash and cash equivalents at January 1					97		310				407


Cash and cash equivalents at June 30	$0		$0		$52		$252		$0		$304

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2006
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net cash provided by/(used for) operating activities	($2	)	($34	)	($142	)	$69				($109	)


Cash flows from investing activities
Capital expenditures					(36	)	(65	)			(101	)
Proceeds from sale of property,plant and equipment					1						1
Intercompany investing activities			(77	)	185				($108	)
Other							15				15

Net cash provided by/(used for) investing activities			(77	)	150		(50	)	(108	)	(85	)


Cash flows from financing activities
Proceeds from long–term debt							17				17
Payments of long–term debt							(7	)			(7	)
Net change in revolving credit facility and short-term debt			84		111		8				203
Net change in long-term intercompany balances	8		27		(52	)	17
Common stock repurchased	(17	)									(17	)
Common stock issued	11										11
Dividends paid					(87	)	(21	)	108
Dividends paid to minority interests							(12	)			(12	)


Net cash provided by/(used for) financing activities	2		111		(28	)	2		108		195


Effect of exchange rate changes on cash and cash equivalents					1		12				13


Net change in cash and cash equivalents					(19	)	33				14

Cash and cash equivalents at January 1					67		227				294


Cash and cash equivalents at June 30	$0		$0		$48		$260		$0		$308

Crown Holdings, Inc.

	Crown Cork & Seal Company, Inc. (Issuer), a 100% owned subsidiary, has outstanding registered debt that is fully and unconditionally guaranteed by Crown Holdings, Inc. (Parent). No other subsidiary guarantees the debt. The following condensed combining financial statements:

	• statements of operations for the three and six months ended June 30, 2007 and 2006,

	• balance sheets as of June 30, 2007 and December 31, 2006, and

	• statements of cash flows for the six months ended June 30, 2007 and 2006

	are presented on the following pages to comply with the Company’s requirements under Rule 3-10 of Regulation S-X.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2007
(in millions)

	Parent	Issuer		Non Guarantors		Eliminations		Total Company



Net sales				$1,990				$1,990

Cost of products sold, excluding depreciation and amortization				1,650				1,650
Depreciation and amortization				57				57

Gross profit				283				283

Selling and administrative expense		$2		91				93
Gain on sale of assets				(10	)			(10	)
Provision for restructuring				5				5
Net interest expense		17		56				73
Translation and exchange adjustments				(7	)			(7	)

Income/(loss) before income taxes, minority interests and equity earnings		(19	)	148				129
Provision/(benefit) for income taxes		(2	)	24				22
Equity earnings	$88	105				($193	)

Income before minority interests and equity earnings	88	88		124		(193	)	107
Minority interests and equity earnings				(19	)			(19	)

Net income	$88	$88		$105		($193	)	$88

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2006
(in millions)

	Parent	Issuer		Non Guarantors		Eliminations		Total Company



Net sales				$1,781				$1,781

Cost of products sold, excluding depreciation and amortization				1,478				1,478
Depreciation and amortization				58				58

Gross profit				245				245

Selling and administrative expense		$2		72				74
Provision for restructuring				5				5
Net interest expense		15		52				67
Translation and exchange adjustments				(9	)			(9	)

Income/(loss) from continuing operations before income taxes, minority interests and equity earnings		(17	)	125				108
Provision/(benefit) for income taxes		(15	)	34				19
Equity earnings	$50	51				($101	)

Income from continuing operations before minority interests and equity earnings	50	49		91		(101	)	89
Minority interests and equity earnings		1		(16	)			(15	)

Income from continuing operations	50	50		75		(101	)	74

Discontinued operations
Loss before income taxes				(25	)			(25	)
Benefit for income taxes				(1	)			(1	)

Net income	$50	$50		$51		($101	)	$50

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2007
(in millions)

	Parent	Issuer		Non Guarantors		Eliminations		Total Company



Net sales				$3,703				$3,703

Cost of products sold, excluding depreciation and amortization				3,095				3,095
Depreciation and amortization				112				112

Gross profit				496				496

Selling and administrative expense		$5		183				188
Gain on sale of assets				(10	)			(10	)
Provision for restructuring				5				5
Net interest expense		33		113				146
Translation and exchange adjustments				(8	)			(8	)

Income/(loss) before income taxes, minority interests and equity earnings		(38	)	213				175
Provision/(benefit) for income taxes		(7	)	47				40
Equity earnings	$104	135				($239	)

Income before minority interests and equity earnings	104	104		166		(239	)	135
Minority interests and equity earnings				(31	)			(31	)

Net income	$104	$104		$135		($239	)	$104

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2006
(in millions)

	Parent	Issuer		Non Guarantors		Eliminations		Total Company



Net sales				$3,305				$3,305

Cost of products sold, excluding depreciation and amortization				2,762				2,762
Depreciation and amortization				112				112

Gross profit				431				431

Selling and administrative expense		$4		151				155
Gain on sale of assets				(1	)			(1	)
Provision for restructuring				14				14
Net interest expense		31		100				131
Translation and exchange adjustments				(9	)			(9	)

Income/(loss) from continuing operations before income taxes, minority interests and equity earnings		(35	)	176				141
Provision/(benefit) for income taxes		(15	)	41				26
Equity earnings	$60	79				($139	)

Income from continuing operations before minority interests and equity earnings	60	59		135		(139	)	115
Minority interests and equity earnings		1		(30	)			(29	)

Income from continuing operations	60	60		105		(139	)	86

Discontinued operations
Loss before income taxes				(25	)			(25	)
Provision for income taxes				1				1

Net income	$60	$60		$79		($139	)	$60

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of June 30, 2007
(in millions)

	Parent		Issuer		Non Guarantors	Eliminations		Total Company



Assets
Current assets
Cash and cash equivalents					$304			$304
Receivables, net					993			993
Inventories					1,106			1,106
Other current assets	$2				68			70

Total current assets	2				2,471			2,473


Intercompany debt receivables					273	($273	)
Investments	(285	)	$787			(502	)
Goodwill					2,236			2,236
Property, plant and equipment, net					1,580			1,580
Other non-current assets			31		473			504

Total	($283	)	$818		$7,033	($775	)	$6,793


Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt					$94			$94
Current maturities of long-term debt			$1		39			40
Accounts payable and accrued liabilities	$17		30		1,836			1,883
Income taxes payable					28			28

Total current liabilities	17		31		1,997			2,045


Long-term debt, excluding current maturities			698		2,869			3,567
Long-term intercompany debt	88		185			($273	)
Postretirement and pension liabilities					727			727
Other non-current liabilities			189		355			544
Minority interests					298			298
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(388	)	(285	)	787	(502	)	(388	)

Total	($283	)	$818		$7,033	($775	)	$6,793

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of December 31, 2006
(in millions)

	Parent		Issuer		Non Guarantors	Eliminations		Total Company



Assets
Current assets
Cash and cash equivalents					$407			$407
Receivables, net					689			689
Inventories					906			906
Other current assets	$1				59			60

Total current assets	1				2,061			2,062


Intercompany debt receivables					262	($262	)
Investments	(425	)	$618			(193	)
Goodwill					2,185			2,185
Property, plant and equipment, net					1,608			1,608
Other non-current assets			34		469			503

Total	($424	)	$652		$6,585	($455	)	$6,358


Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt					$78			$78
Current maturities of long-term debt			$1		42			43
Accounts payable and accrued liabilities	$4		36		1,756			1,796
Income taxes payable					39			39

Total current liabilities	4		37		1,915			1,956


Long-term debt, excluding current maturities			698		2,722			3,420
Long-term intercompany debt	117		145			($262	)
Postretirement and pension liabilities					749			749
Other non-current liabilities			197		302			499
Minority interests					279			279
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(545	)	(425	)	618	(193	)	(545	)

Total	($424	)	$652		$6,585	($455	)	$6,358

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2007
(in millions)

	Parent		Issuer		Non Guarantors		Eliminations		Total Company



Net cash provided by/(used for) operating activities	$20		($43	)	($187	)			($210	)


Cash flows from investing activities
Capital expenditures					(76	)			(76	)
Proceeds from sale of property, plant and equipment					58				58
Intercompany investing activities			3				($3	)
Other					(4	)			(4	)

Net cash provided by/(used for) investing activities			3		(22	)	(3	)	(22	)


Cash flows from financing activities
Proceeds from long-term debt					6				6
Payments of long-term debt					(16	)			(16	)
Net change in revolving credit facility and short-term debt					134				134
Net change in long-term intercompany balances	(29	)	40		(11	)
Common stock issued	9								9
Dividends paid					(3	)	3
Dividends paid to minority interests					(14	)			(14	)

Net cash provided by financing activities	(20	)	40		96		3		119


Effects of exchange rate changes on cash and cash equivalents					10				10


Net change in cash and cash equivalents					(103	)			(103	)

Cash and cash equivalents at January 1					407				407


Cash and cash equivalents at June 30	$0		$0		$304		$0		$304

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2006
(in millions)

	Parent		Issuer		Non Guarantors		Eliminations		Total Company



Net cash used for operating activities	($2	)	($25	)	($82	)			($109	)


Cash flows from investing activities
Capital expenditures					(101	)			(101	)
Proceeds from sale of property, plant and equipment					1				1
Intercompany investing activities			2				($2	)
Other					15				15

Net cash provided by/(used for) investing activities			2		(85	)	(2	)	(85	)


Cash flows from financing activities
Proceeds from long-term debt					17				17
Payments of long-term debt					(7	)			(7	)
Net change in revolving credit facility and short-term debt					203				203
Net change in long-term intercompany balances	8		23		(31	)
Common stock repurchased	(17	)							(17	)
Common stock issued	11								11
Dividends paid					(2	)	2
Dividends paid to minority interests					(12	)			(12	)

Net cash provided by financing activities	2		23		168		2		195


Effects of exchange rate changes on cash and cash equivalents					13				13


Net change in cash and cash equivalents					14				14

Cash and cash equivalents at January 1					294				294


Cash and cash equivalents at June 30	$0		$0		$308		$0		$308

Crown Holdings, Inc.

	Crown Americas, LLC and Crown Americas Capital Corp., 100% owned subsidiaries of the Company, have outstanding senior unsecured notes that are fully and unconditionally guaranteed by Crown Holdings, Inc. and substantially all subsidiaries in the United States. The guarantors are 100% owned by the Company and the guarantees are made on a joint and several basis. The following condensed combining financial statements:

	• statements of operations for the three and six months ended June 30, 2007 and 2006,

	• balance sheets as of June 30, 2007 and December 31, 2006, and

	• statements of cash flows for the six months ended June 30, 2007 and 2006

	are presented on the following pages to comply with the Company’s requirements under Rule 3-10 of Regulation S-X.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2007
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$564		$1,426				$1,990

Cost of products sold, excluding depreciation
and amortization				469		1,181				1,650
Depreciation and amortization				15		42				57

Gross profit				80		203				283


Selling and administrative expense		$2		31		60				93
Gain on sale of assets						(10	)			(10	)
Provision for restructuring				1		4				5
Net interest expense		15		19		39				73
Technology royalty				(8	)	8
Translation and exchange adjustments						(7	)			(7	)

Income/(loss) before income taxes,
minority interests and equity earnings		(17	)	37		109				129
Provision/(benefit) for income taxes		(6	)	8		20				22
Equity earnings	$88	46		59				($193	)

Income from continuing operations before
Income before minority interests and equity earnings	88	35		88		89		(193	)	107
Minority interests and equity earnings						(19	)			(19	)

Net income	$88	$35		$88		$70		($193	)	$88

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2006
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$466		$1,315				$1,781

Cost of products sold, excluding depreciation
and amortization				392		1,086				1,478
Depreciation and amortization				16		42				58

Gross profit				58		187				245


Selling and administrative expense		$2		18		54				74
Provision for restructuring						5				5
Net interest expense		14		18		35				67
Technology royalty				(9	)	9
Translation and exchange adjustments				(1	)	(8	)			(9	)

Income/(loss) from continuing operations before
income taxes, minority interests and equity earnings		(16	)	32		92				108
Provision/(benefit) for income taxes		(6	)	5		20				19
Equity earnings	$50	46		21				($117	)

Income from continuing operations before
minority interests and equity earnings	50	36		48		72		(117	)	89
Minority interests and equity earnings						(15	)			(15	)

Income from continuing operations	50	36		48		57		(117	)	74

Discontinued operations
Loss before income taxes						(25	)			(25	)
Provision/(benefit) for income taxes				(2	)	1				(1	)

Net income	$50	$36		$50		$31		($117	)	$50

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2007
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$1,043		$2,660				$3,703

Cost of products sold, excluding depreciation
and amortization				880		2,215				3,095
Depreciation and amortization				30		82				112

Gross profit				133		363				496


Selling and administrative expense		$4		63		121				188
Gain on sale of assets						(10	)			(10	)
Provision for restructuring				1		4				5
Net interest expense		30		37		79				146
Technology royalty				(16	)	16
Translation and exchange adjustments						(8	)			(8	)

Income/(loss) before income taxes,
minority interests and equity earnings		(34	)	48		161				175
Provision/(benefit) for income taxes		(12	)	16		36				40
Equity earnings	$104	65		72				($241	)

Income before minority interests and equity earnings	104	43		104		125		(241	)	135
Minority interests and equity earnings						(31	)			(31	)

Net income	$104	$43		$104		$94		($241	)	$104

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2006
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net sales				$949		$2,356				$3,305

Cost of products sold, excluding depreciation
and amortization				823		1,939				2,762
Depreciation and amortization				32		80				112

Gross profit				94		337				431


Selling and administrative expense		$4		46		105				155
Gain on sale of assets				(1	)					(1	)
Provision for restructuring				4		10				14
Net interest expense		27		35		69				131
Technology royalty				(17	)	17
Translation and exchange adjustments				(1	)	(8	)			(9	)

Income/(loss) from continuing operations before
income taxes, minority interests and equity earnings		(31	)	28		144				141
Provision/(benefit) for income taxes		(11	)	7		30				26
Equity earnings	$60	59		38				($157	)

Income from continuing operations before
minority interests and equity earnings	60	39		59		114		(157	)	115
Minority interests and equity earnings						(29	)			(29	)

Income from continuing operations	60	39		59		85		(157	)	86

Discontinued operations
Income/(loss) before income taxes				1		(26	)			(25	)
Provision for income taxes						1				1

Net income	$60	$39		$60		$58		($157	)	$60

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of June 30, 2007
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors	Eliminations		Total Company



Assets
Current assets
Cash and cash equivalents			$16		$2		$286			$304
Receivables, net					11		982			993
Intercompany receivables					65		10	($75	)
Inventories					193		913			1,106
Other current assets	$2		1		7		60			70

Total current assets	2		17		278		2,251	(75	)	2,473


Intercompany debt receivables			1,169		610		26	(1,805	)
Investments	(285	)	400		226			(341	)
Goodwill					453		1,783			2,236
Property, plant and equipment, net			2		350		1,228			1,580
Other non-current assets			49		58		397			504

Total	($283	)	$1,637		$1,975		$5,685	($2,221	)	$6,793


Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt							$94			$94
Current maturities of long-term debt					$5		35			40
Accounts payable and accrued liabilities	$17		$16		364		1,486			1,883
Intercompany payables					10		65	($75	)
Income taxes payable					3		25			28

Total current liabilities	17		16		382		1,705	(75	)	2,045


Long-term debt, excluding current maturities			1,572		697		1,298			3,567
Long-term intercompany debt	88		358		431		928	(1,805	)
Postretirement and pension liabilities					524		203			727
Other non-current liabilities					226		318			544
Minority interests							298			298
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(388	)	(309	)	(285	)	935	(341	)	(388	)

Total	($283	)	$1,637		$1,975		$5,685	($2,221	)	$6,793

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of December 31, 2006
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors	Eliminations		Total Company



Assets
Current assets
Cash and cash equivalents			$60		$4		$343			$407
Receivables, net					8		681			689
Intercompany receivables					72		8	($80	)
Inventories					172		734			906
Other current assets	$1		2		3		54			60

Total current assets	1		62		259		1,820	(80	)	2,062


Intercompany debt receivables			1,090		528		34	(1,652	)
Investments in subsidiaries	(425	)	324		169			(68	)
Goodwill					445		1,740			2,185
Property, plant and equipment, net			3		360		1,245			1,608
Other non-current assets			38		63		402			503

Total	($424	)	$1,517		1,824		$5,241	($1,800	)	$6,358


Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt							$78			$78
Current maturities of long-term debt					$5		38			43
Accounts payable and accrued liabilities	$4				361		1,431			1,796
Intercompany payables			$16				64	($80	)
Income taxes payable					4		35			39

Total current liabilities	4		16		370		1,646	(80	)	1,956


Long-term debt, excluding current maturities			1,522		697		1,201			3,420
Long-term intercompany debt	117		352		396		787	(1,652	)
Postretirement and pension liabilities					553		196			749
Other non-current liabilities					233		266			499
Minority interests							279			279
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(545	)	(373	)	(425	)	866	(68	)	(545	)

Total	($424	)	$1,517		$1,824		$5,241	($1,800	)	$6,358

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2007
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net cash provided by/(used for) operating activities	$20		($31	)	$37		($236	)			($210	)


Cash flows from investing activities
Capital expenditures					(20	)	(56	)			(76	)
Proceeds from sale of property, plant and equipment					1		57				58
Intercompany investing activities			10		3				($13	)
Other							(4	)			(4	)

Net cash provided by/(used for) investing activities			10		(16	)	(3	)	(13	)	(22	)


Cash flows from financing activities
Proceeds from long–term debt							6				6
Payments of long–term debt					(1	)	(15	)			(16	)
Net change in revolving credit facility and short-term debt			50				84				134
Net change in long-term intercompany balances	(29	)	(73	)	(22	)	124
Common stock issued	9										9
Dividends paid							(13	)	13
Dividends paid to minority interests							(14	)			(14	)


Net cash provided by financing activities	(20	)	(23	)	(23	)	172		13		119


Effect of exchange rate changes on cash and cash equivalents							10				10


Net change in cash and cash equivalents			(44	)	(2	)	(57	)			(103	)

Cash and cash equivalents at January 1			60		4		343				407


Cash and cash equivalents at June 30	$0		$16		$2		$286		$0		$304

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2006
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company



Net cash used for operating activities	($2	)	($19	)	($25	)	($63	)			($109	)


Cash flows from investing activities
Capital expenditures					(15	)	(86	)			(101	)
Proceeds from sale of property, plant and equipment					1						1
Intercompany investing activities			5		15				($20	)
Other							15				15

Net cash provided by/(used for) investing activities			5		1		(71	)	(20	)	(85	)


Cash flows from financing activities
Proceeds from long–term debt							17				17
Payments of long–term debt							(7	)			(7	)
Net change in revolving credit facility and short-term debt			105				98				203
Net change in long-term intercompany balances	8		(90	)	25		57
Common stock repurchased	(17	)									(17	)
Common stock issued	11										11
Dividends paid							(20	)	20
Dividends paid to minority interests							(12	)			(12	)


Net cash provided by financing activities	2		15		25		133		20		195


Effect of exchange rate changes on cash and cash equivalents							13				13


Net change in cash and cash equivalents			1		1		12				14

Cash and cash equivalents at January 1			18		1		275				294


Cash and cash equivalents at June 30	$0		$19		$2		$287		$0		$308

Crown Holdings, Inc.

PART I - FINANCIAL INFORMATION

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in millions)

Introduction

The following discussion presents management’s analysis of the results of operations for the three and six months ended June 30, 2007 compared to the corresponding periods in 2006 and the changes in financial condition and liquidity from December 31, 2006. This discussion should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, along with the consolidated financial statements and related notes included in and referred to within this report.

Executive Overview

As discussed in Note C to the consolidated financial statements, the Company sold its remaining European plastics operations and its Americas health and beauty care operations during 2006. The results of operations for prior periods used in the following discussion have been recast to report the divested businesses as discontinued operations.

The Company’s principal areas of focus include improving segment income and cash flow from operations, reducing debt and reducing asbestos-related costs. See Note N to the consolidated financial statements for information regarding segment income.

Improving segment income is primarily dependent on the Company’s ability to increase revenues and manage costs. Key strategies for expanding revenue include targeting geographic markets with strong growth potential, such as the Middle East, Asia, Latin America and southern and central Europe, improving selling prices in certain product lines and developing innovative packaging products using proprietary technology. The Company’s cost control efforts focus on improving operating efficiencies and managing material and labor costs, including pension and benefit costs.

The reduction of debt remains a principal strategic goal of the Company and is primarily dependent upon the Company’s ability to generate cash flow from operations. In addition, the Company may consider divestitures from time to time, the proceeds of which may be used to reduce debt. The Company’s total debt of $3,701 at June 30, 2007 decreased $9 from $3,710 at June 30, 2006, and was net of $67 of increase due to foreign currency translation.

The Company seeks to reduce its asbestos-related costs through prudent case management. Asbestos-related payments were $26 for the full year of 2006 and $10 for the first six months of 2007, and the Company expects to pay approximately $25 for the full year of 2007.

Results of Operations

Net Sales

Net sales in the second quarter of 2007 were $1,990, an increase of $209 or 11.7% compared to net sales of $1,781 for the same period in 2006. Net sales in the first six months of 2007 were $3,703, an increase of $398 or 12.0% compared to net sales of $3,305 for the same period in 2006. Sales from U.S. operations accounted for 28.5% of consolidated net sales in the first six months of 2007 compared to 29.1% for the same period in 2006. Sales of beverage cans and ends accounted for 47.2% and sales of food cans and ends accounted for 32.1% of consolidated net sales in the first six months of 2007 compared to 45.5% and 33.6%, respectively, in 2006.

Net sales in the Americas Beverage segment in the second quarter increased 14.6% from $426 in 2006 to $488 in 2007. Net sales in the first six months of 2007 increased 14.0% from $773 in 2006 to $881 in 2007. The increases in 2007 were primarily due to the pass-through of increased costs to customers and recovery of sales unit volumes.

Crown Holdings, Inc.

Item 2.

Management’s Discussion and Analysis (Continued)

Net sales in the North America Food segment in the second quarter increased 3.5% from $198 in 2006 to $205 in 2007, and in the first six months increased 2.6% from $380 in 2006 to $390 in 2007, primarily due to the pass-through of increased material costs to customers.

Net sales in the European Beverage segment increased 18.3% from $339 in the second quarter of 2006 to $401 in the same period in 2007. Net sales in the first six months of 2007 increased 18.2% from $577 in 2006 to $682 in 2007. The increases in the quarter and first six months of 2007 were primarily due to increased sales unit volumes and also included $18 of foreign currency translation for the quarter and $34 for the year.

Net sales in the European Food segment increased 4.2% from $450 in the second quarter of 2006 to $469 in the same period in 2007, and net sales in the first six months of 2007 increased 6.3% from $861 in 2006 to $915 in 2007, primarily due to the impact of foreign currency translation.

Net sales in the European Specialty Packaging segment increased 10.4% from $106 in the second quarter of 2006 to $117 in the same period in 2007, and net sales in the first six months of 2007 increased 14.6% from $192 in 2006 to $220 in 2007. The increases were primarily due to the impact of foreign currency translation.

Cost of Products Sold (Excluding Depreciation and Amortization)

Cost of products sold, excluding depreciation and amortization, was $1,650 and $3,095 for the second quarter and first six months of 2007, increases of $172 and $333 compared to $1,478 and $2,762 for the same periods in 2006. The increases were primarily due to the impact of higher material costs for aluminum and steel and also included $69 and $126 due to the impact of foreign currency translation for the quarter and six months.

As a percentage of net sales, cost of products sold, excluding depreciation and amortization, was 82.9% and 83.6% for the second quarter and first six months of 2007 compared to 83.0% and 83.6% for the same periods in 2006.

As a result of steel and aluminum price increases, the Company has implemented significant price increases to many of its customers. However, there can be no assurance that the Company will be able to fully recover from its customers the impact of price increases. In addition, if the Company is unable to purchase steel or aluminum for a significant period of time, the Company’s operations would be disrupted.

Depreciation and Amortization

Depreciation and amortization was $57 and $112 in the second quarter and first six months of 2007, compared to $58 and $112, respectively, for the prior year periods. Increases due to the impact of foreign currency translation from the strengthening of the euro and sterling against the U.S. dollar were offset by decreases due to lower capital spending in recent years.

Selling and Administrative Expense

Selling and administrative expense was $93 in the second quarter of 2007 compared to $74 for the same period in 2006. The increase was primarily due to increased incentive compensation costs and $3 of foreign currency translation. As a percentage of net sales, selling and administrative expense was 4.7% in the second quarter of 2007 compared to 4.2% for the same period in 2006.

Selling and administrative expense was $188 in the first six months of 2007 compared to $155 for the same period in 2006. The increase was primarily due to increased incentive compensation costs and $8 of foreign currency translation. As a percentage of net sales, selling and administrative expense was 5.1% for the first six months of 2007 compared to 4.7% for the same period in 2006.

Crown Holdings, Inc.

Item 2.

Management’s Discussion and Analysis (Continued)

Segment Income

Segment income in the Americas Beverage segment increased $17 from $40 in the second quarter of 2006 to $57 in the second quarter of 2007. Segment income in the first six months increased $26 from $68 in 2006 to $94 in 2007. The increases in 2007 were primarily due to recovery of sales unit volumes.

Segment income in the North America Food segment increased $2 from $18 in the second quarter of 2006 to $20 in the second quarter of 2007. Segment income in the first six months increased $4 from $26 in 2006 to $30 in 2007. The increases in 2007 were primarily due to cost reductions.

Segment income in the European Beverage segment increased $18 from $40 in the second quarter of 2006 to $58 in the second quarter of 2007. Segment income in the first six months increased $23 from $65 in 2006 to $88 in 2007. These increases were primarily due to increased sales unit volumes.

Segment income in the European Food segment decreased $4 from $49 in the second quarter of 2006 to $45 in the second quarter of 2007. Segment income in the first six months decreased $8 from $91 in 2006 to $83 in 2007. These decreases were primarily due to higher costs not recovered in selling prices.

Segment income in the European Specialty Packaging segment decreased $3 from $12 in the second quarter of 2006 to $9 in the second quarter of 2007. Segment income in the first six months decreased $4 from $14 in 2006 to $10 in 2007. The decreases in the quarter and first six months were primarily due to higher costs not recovered in selling prices.

Restructuring

The results for the six month periods ended June 30, 2007 and 2006 included restructuring charges of $5 and $14, respectively. See Note Hto the consolidated financial statements for additional information on these charges.

Interest Expense

Interest expense increased $7 and $16, respectively, for the three and six months ended June 30, 2007 versus the same periods in 2006. The increases were due to increased short-term borrowing rates and also included $2 of foreign currency translation for the second quarter and $5 for the first six months.

Translation and Exchange Adjustments

The results for the three and six month periods ended June 30, 2007 included net foreign exchange gains of $7 and $8, respectively, for certain subsidiaries that have unhedged currency exposures arising from intercompany debt obligations. These currency exposures may continue to result in future foreign exchange gains or losses. The Company may hedge or mitigate a portion of these exposures in the future through derivative instruments or intercompany loans.

Taxes on Income

The second quarter of 2007 included net tax charges of $22 on pre-tax income of $129 for an effective rate of 17.1%. The difference of $23 between the pre-tax income at the U.S. statutory rate of 35% or $45, and the tax charge of $22, was primarily due to benefits from lower tax rates in certain non-U.S. jurisdictions and valuation allowance adjustments.

The first six months of 2007 included net tax charges of $40 on pre-tax income of $175 for an effective rate of 22.9%. The difference of $21 between the pre-tax income at the U.S. statutory rate of 35% or $61, and the tax charge of $40, was primarily due to benefits from lower tax rates in certain non-U.S. jurisdictions.

Crown Holdings, Inc.

Item 2.

Management’s Discussion and Analysis (Continued)

The second quarter of 2006 included net tax charges of $19 on pre-tax income of $108 for an effective rate of 17.6%. The difference of $19 between the pre-tax income at the U.S. statutory rate of 35% or $38, and the tax charge of $19, was primarily due to benefits of $12 from lower non-U.S. tax rates in certain jurisdictions, and $7 for income in jurisdictions where the Company has a full valuation allowance against its deferred taxes.

The first six months of 2006 included net tax charges of $26 on pre-tax income of $141 for an effective rate of 18.4%. The difference of $23 between the pre-tax income at the statutory rate of 35% or $49, and the tax charge of $26, was primarily due to benefits of $20 from lower non-U.S. tax rates in certain jurisdictions, and $5 to reduce a provision for U.S. state tax contingencies due to the completion of an audit with a minor assessment, partially offset by other net items of $2.

Minority Interests, Net of Equity Earnings

The charge for minority interests, net of equity earnings, increased $4 and $2 in the second quarter and first six months of 2007, respectively, compared to the same periods in 2006. These increases were primarily due to increased profits in the Middle East beverage can operations.

Liquidity and Capital Resources

Cash from Operations

Cash of $210 was used for operating activities in the first six months of 2007 compared to $109 during the same period in 2006. The increase of $101 in cash used for operating activities was primarily due to an increase in working capital from higher material costs in 2007.

Investing Activities

Investing activities used cash of $22 during the first six months of 2007 compared to cash used of $85 in the prior year period. Primary investing activities were capital expenditures of $76 in the first six months of 2007 and $101 in the same period of 2006. In 2007, the Company received $58 of proceeds from asset sales, primarily land and buildings, including $39 from the sale of a note related to property sold in 2006.

Financing Activities

Financing activities provided cash of $119 during the first six months of 2007 compared to cash provided of $195 during the same period in 2006. The cash provided by financing activities in 2007 and 2006 was primarily related to short-term borrowings. Dividends paid to minority interests increased from $12 in 2006 to $14 in 2007 due to increased payments from the Company’s joint venture beverage can operations in the Middle East.

As of June 30, 2007, the Company had $432 of borrowing capacity available under its revolving credit facility, equal to the total facility of $800 less $303 of borrowings and $65 of outstanding standby letters of credit.

Contractual Obligations

During the first six months of 2007, purchase obligations covering new agreements for raw materials and other consumables increased by $314 for 2007, $122 for 2008, $32 for 2009 and $30 for 2010 above amounts provided within Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including, but not limited to, in the “Liquidity and Capital Resources” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. Also, as discussed in Note Mto the consolidated financial statements, the Company has $28 of contractual obligations for reserves for potential liabilities related to uncertain tax positions.

Crown Holdings, Inc.

Item 2.

Management’s Discussion and Analysis (Continued)

Commitments and Contingent Liabilities

Information regarding the Company’s commitments and contingent liabilities appears in Part I within Item 1 of this report under Note J, entitled “Commitments and Contingent Liabilities,” to the consolidated financial statements.

Critical Accounting Policies

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States which require that management make numerous estimates and assumptions. Actual results could differ from these estimates and assumptions, impacting the reported results of operations and financial condition of the Company. Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note A to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 describe the significant accounting estimates and policies used in the preparation of the consolidated financial statements. There have been no significant changes in the Company’s critical accounting policies during the first six months of 2007 other than as discussed below.

As required, the Company adopted FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109,” effective January 1, 2007. In accordance with FIN 48, the Company records the benefit of uncertain tax positions when, in the Company’s opinion, it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the taxing authorities. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that is greater than fifty percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether a position meets the more-likely-than-not criteria may involve significant judgment based on the Company’s review and interpretation of available evidence including published tax law, opinions from qualified experts, results of prior tax examinations, and legal precedent. The measurement of an uncertain tax position also involves significant judgment in assigning probabilities to various potential outcomes, including the assessment of interest and penalties. Final settlement of uncertain tax positions for amounts different than the recorded amounts could affect the Company’s results of operations, financial position, and cash flows. See Note M to the consolidated financial statements for additional information on the Company’s unrecognized tax benefits.

Recent Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159 (“FAS 159”), “The Fair Value Option for Financial Assets and Financial Liabilities, Including an Amendment to FASB Statement No. 115.” FAS 159 permits the measurement of many financial instruments and certain other assets and liabilities at fair value on an instrument-by-instrument basis (the fair value option). FAS 159 is effective for the Company on January 1, 2008. Management is currently evaluating the potential impact the adoption of this new standard will have on the Company’s consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157 (“FAS 157”), “Fair Value Measurements.” FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. Expanded disclosures include a tabular presentation of the fair value of a company’s outstanding financial instruments according to a fair value hierarchy (i.e., levels 1, 2, 3 and 4, as defined) as well as enhanced disclosures regarding instruments in the level 3 category, including a reconciliation of the beginning and ending balances for each major category of assets and liabilities. FAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and states that a fair value measurement should be determined based on assumptions that market participants would use in pricing the asset or liability. FAS 157 is effective for the Company as of January 1, 2008. The Company is currently evaluating the impact that FAS 157 may have on its financial statements.

Crown Holdings, Inc.

Item 2.

Management’s Discussion and Analysis (Continued)

Forward Looking Statements

Statements included herein in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” including, but not limited to, in the discussions of asbestos in Note Iand commitments and contingencies in Note J to the consolidated financial statements included in this Quarterly Report on Form 10-Q and also in Part I, Item 1: “Business” and Item 3: “Legal Proceedings” and in Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” within the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, 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 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.

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

A discussion of important factors that could cause the actual results of operations or financial condition of the Company to differ from expectations has been set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 within Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Forward Looking Statements” and is incorporated herein by reference. Some of the factors are also discussed elsewhere in this Form 10-Q and in prior Company filings with the SEC. In addition, other factors have been or may be discussed from time to time in the Company’s SEC filings.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

The Company has foreign currency exposure related to certain intercompany debt obligations, primarily between the U.S. and Canada, which may result in future foreign exchange adjustments to earnings. The Company may hedge or mitigate a portion of these exposures in the future through derivative instruments or intercompany loans.

As of June 30, 2007, the Company had approximately $1.2 billion principal floating interest rate debt. A change of 0.25% in these floating interest rates would change annual interest expense by approximately $3 before tax.

Item 4.

Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, management, including the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures. Based upon that evaluation and as of the end of the quarter for which this report is made, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective. Disclosure controls and procedures ensure that information to be disclosed in reports that the Company files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and terms of the Securities and Exchange Commission, and ensures that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There has been no change in internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Crown Holdings, Inc.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

For information regarding the Company’s potential asbestos-related liabilities and certain other matters, see Note Ientitled “Asbestos-Related Liabilities” and Note J entitled “Commitments and Contingent Liabilities,” respectively, to the consolidated financial statements within Item 1 of this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.

Item 1A.

Risk Factors

In addition to the other information set forth in this report, carefully consider the factors discussed in Item 1A to Part I in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, which could materially affect the Company’s business, financial condition or future results. The risks described in the Company’s Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds

The Company made no purchases or sales of its equity securities during the six months ended June 30, 2007.

As disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, the Company’s Board of Directors has authorized the repurchase of up to $400, of which $227 remained as of June 30, 2007, of the Company’s outstanding stock in the open market or through privately negotiated transactions, subject to the terms of the Company’s debt agreements, market conditions, the Company’s ability to generate operating cash flow, alternative uses of operating cash flow (including the reduction of indebtedness), and other factors. The Company is not obligated to acquire any shares of common stock and the share repurchase plan may be suspended or terminated at any time at the Company’s discretion. The repurchased shares are expected to be used for the Company’s stock-based benefit plans, as required, and to offset dilution resulting from the issuance of shares thereunder and for other general corporate purposes.

Item 6.

Exhibits

a)	31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


	31.2.	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


	32.	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by John W. Conway, Chairman of the Board, President and Chief Executive Officer of Crown Holdings, Inc. and Alan W. Rutherford, Vice Chairman of the Board, Executive Vice President and Chief Financial Officer of Crown Holdings, Inc.

Crown Holdings, Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Crown Holdings, Inc.
		Registrant

	By:	/s/ Thomas A. Kelly
		Thomas A. Kelly
		Vice President and Corporate Controller

Date: July 27, 2007

Crown Holdings - 10-Q quarterly report FY

FORM 10-Q

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