Crown (CCK) 10-Q 2007 Q1 Quarterly report

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 ENDEDMARCH 31, 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 163,509,135 shares of Common Stock outstanding as of April 30, 2007.

Crown Holdings, Inc.

FORM 10-Q
FOR QUARTER ENDED MARCH 31, 2007

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

			Page Number
Item 1	Financial Statements
Consolidated Statements of Operations			2
Consolidated Balance Sheets			3
Consolidated Statements of Cash Flows			4
Consolidated Statements of Changes in Shareholders’ Deficit and Comprehensive Income / (Loss)			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		8
F.	Inventories		8
G.	Restructuring		8
H.	Asbestos-Related Liabilities		8
I	Commitments and Contingent Liabilities		10
J.	Earnings Per Share		11
K.	Pension and Postretirement Benefits		12
L.	Income Taxes		12
M.	Segment Information		13
N.	Condensed Combining Financial Information		14
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Introduction		32
	Executive Overview		32
	Results of Operations		32
	Liquidity and Capital Resources		34
	Forward Looking Statements		36
Item 3	Quantitative and Qualitative Disclosures About Market Risk		36
Item 4	Controls and Procedures		36
		PART II – OTHER INFORMATION
Item 1	Legal Proceedings		37
Item 1A	Risk Factors		37
Item 2	Unregistered Sale of Equity Securities and Use of Proceeds		37
Item 4	Submission of Matters to Vote of Security Holders		37
Item 5	Other Information		38
Item 6	Exhibits		38
Signature			40

Crown Holdings, Inc.

PART I - FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three months ended March 31
	2007				2006
Net sales		$	1,713			$	1,524
Cost of products sold, excluding depreciation and amortization			1,445				1,284
Depreciation and amortization			55				54
Gross profit			213				186
Selling and administrative expense			95				81
Provision for restructuring							9
Gain on sale of assets					(		1	)
Interest expense			76				67
Interest income	(		3	)	(		3	)
Translation and exchange adjustments	(		1	)
Income from continuing operations before income taxes,      minority interests and equity earnings			46				33
Provision for income taxes			18				7
Minority interests and equity earnings	(		12	)	(		14	)
Income from continuing operations			16				12
Loss from discontinued operations					(		2	)
Net income		$	16			$	10
Basic earnings/(loss) per average common share:
Continuing operations		$	0.10			$	0.07
Discontinued operations					(		0.01	)
Net income		$	0.10			$	0.06
Diluted earnings/(loss) per average common share:
Continuing operations		$	0.10		(	$	0.07
Discontinued operations					(		0.01	)
Net income		$	0.10			$	0.06
Weighted average common shares outstanding:
Basic			162,273,457				167,075,638
Diluted			166,681,273				171,640,555

The accompanyingnotes are an integral part of these consolidated financial statements.

2

Crown Holdings, Inc.

CONSOLIDATED BALANCE SHEETS (Condensed)

(In millions)

(Unaudited)

		March 31, 2007				December 31, 2006
Assets
Current assets
Cash and cash equivalents		$	278			$	407
Receivables, net			861				689
Inventories			1,060				906
Prepaid expenses and other current assets			68				60
Total current assets			2,267				2,062
Goodwill			2,200				2,185
Property, plant and equipment, net			1,594				1,608
Other non-current assets			521				503
Total		$	6,582			$	6,358
Liabilities and shareholders’ deficit
Current liabilities
Short-term debt		$	90			$	78
Current maturities of long-term debt			41				43
Accounts payable and accrued liabilities			1,800				1,796
Income taxes payable			26				39
Total current liabilities			1,957				1,956
Long-term debt, excluding current maturities			3,578				3,420
Postretirement and pension liabilities			740				749
Other non-current liabilities			532				499
Minority interests			288				279
Commitments and contingent liabilities(Note I)
Shareholders’ deficit	(		513	)	(		545	)
Total		$	6,582			$	6,358

The accompanyingnotes are an integral part of these consolidated financial statements.

3

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)

(In millions)
(Unaudited)

Three months ended March 31		2007				2006
Net cash used for operating activities	(	$	234	)	(	$	178	)
Cash flows from investing activities
Capital expenditures	(		44	)	(		54	)
Other	(		2	)			14
Net cash used for investing activities	(		46	)	(		40	)
Cash flows from financing activities
Proceeds from long-term debt			5				9
Payments of long-term debt	(		9	)	(		4	)
Net change in short-term debt			151				208
Common stock issued			3				10
Common stock repurchased					(		9	)
Dividends paid to minority interests	(		4	)	(		3	)
Net cash provided by financing activities			146				211
Effect of exchange rate changes on cash and cash equivalents			5				6
Net change in cash and cash equivalents	(		129	)	(		1	)
Cash and cash equivalents at January 1			407				294
Cash and cash equivalents at March 31		$	278			$	293

The accompanyingnotes are an integral part of these consolidated financial statements.

4

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT
AND COMPREHENSIVE INCOME / (LOSS)

(In millions)
(Unaudited)

	Comprehensive		| | |	Common	Paid-In		Accumulated		Treasury		Accumulated Other Comprehensive
	Income		|	Stock	Capital		Deficit		Stock		Loss		Total
			|
Balance at January 1, 2006			|	$929	$1,674		($1,526	)	($94	)	($1,219	)	($236	)
Net income	$10		|				10						10
Translation adjustments	10		|								10		10
Derivatives qualifying as hedges	2		|								2		2
Available for sale securities	0		|
			|
Comprehensive income	$22		|
			|
Restricted stock awarded			|		(         2	)			2
Stock-based compensation			|		3								3
Stock repurchased			|		(         7	)			(    2	)			(      9	)
Common stock issued —benefit plans			|		2				8				10
			|
			|
Balance at March 31, 2006			|	$929	$1,670		($1,516	)	($86	)	($1,207	)	($210	)
Balance at January 1, 2007			|	$929	$1,589		($1,217	)	($115	)	($1,731	)	($545	)
Net income	$16		|				16						16
Translation adjustments	3		|								3		3
Amortization of prior service cost - pension	(    1	)	|								(         1	)	(      1	)
Amortization of net loss - pension, net of tax	18		|								18		18
Amortization of prior service credit - postretirement	(    4	)	|								(         4	)	(      4	)
Amortization of net loss - postretirement	3		|								3		3
Derivatives qualifying as hedges	3		|								3		3
Available for sale securities	2		|								2		2
			|
Comprehensive income	$40		|
			|
Adoption of FIN 48 -Note L			|				(       16	)					(    16	)
Restricted stock awarded			|		(         2	)			2
Stock-based compensation			|		5								5
Common stock issued —benefit plans			|		2				1				3
			|
			|
Balance at March 31, 2007			|	$929	$1,594		($1,217	)	($112	)	($1,707	)	($513	)

The accompanyingnotes are an integral part of these consolidated financial statements.

5

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 March 31, 2007 and the results of its operations and cash flows for the three month periods ended March 31, 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. SeeNote L 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.

6

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 $55 in the first quarter of 2006. The segment results inNote M and the Condensed Combining Statements of Operations inNote N also reflect the reclassification of the divested businesses to discontinued operations. The Consolidated Statements of Cash Flows, including those in Note N, 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 are presented below.

		2006
Loss before tax	(	$	2	)
Income tax on operations			0
Gain on disposal			2
Tax on disposal	(		2	)
	(	$	2	)

The activity in discontinued operations included the effect of certain purchase price adjustments from the sale of the Company’s plastic closures busineses in 2005.

D.	Stock-Based Compensation
	During the first quarter 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 after the grant. Also 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. 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 $35 and $14, respectively, at March 31, 2007. The weighted average period over which the expense is expected to be recognized is 5.9 years for stock options and 1.9 years for restricted stock.
	As of March 31, 2007, there were 11,071,482 options that were fully vested or expected to vest of which 7,658,045 were exercisable. The weighted average exercise price of options fully vested or expected to vest and options exercisable was $16.06 and $12.79, respectively; the aggregate intrinsic value was $105 and $101, respectively; and the weighted average remaining contractual life was 6.5 years and 4.9 years, respectively.

7

Crown Holdings, Inc.

E.	Goodwill
	The changes in the carrying amount of goodwill by reportable segment for the three-month period ended March 31, 2007 were as follows:

	Americas	North America	European	European	Non-reportable
	Beverage	Food	Beverage	Food	segments	Total
Balance at January 1, 2007	$420	$151	$750	$703	$161	$2,185
Foreign currency translation      and other		1		2	12	15
Balance at March 31, 2007	$420	$152	$750	$705	$173	$2,200

F. Inventories

	March 31,		December 31,
	2007		2006
Finished goods	$	440	$	308
Work in process		139		122
Raw materials and supplies		481		476
	$	1,060	$	906

G. Restructuring

The components of the outstanding restructuring reserve and movements within these components during the three months ended March 31, 2007 and 2006, respectively, were as follows:

	Termination		Other Exit
	Benefits		Costs	Total
Balance at January 1, 2006	$12		$  1	$13
Provision	5		4	9
Balance at March 31, 2006	$17		$  5	$22
Balance at January 1, 2007	$  7		$  4	$11
Payments	(    5	)		(    5	)
Balance at March 31, 2007	$  2		$  4	$  6

The charge of $9 in 2006 included $5 for severance costs in the European Food segment to close a plant, and $4 of corporate charges for the estimated settlement costs of a labor dispute related to prior restructurings.

H. 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.

8

Crown Holdings, Inc.

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. The Company believes that the ruling by the court was limited only to cases which were pending at the time the legislation was enacted. 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). These decisions remain subject to potential appeal by the plaintiffs and, in five cases, a notice of appeal to the Superior Court of Pennsylvania has been filed by the plaintiffs. The Company cautions that the Company’s position regarding the limitation of the Pennsylvania Supreme Court ruling may not be upheld.

In recent years, certain other state and federal legislators have considered legislation to reform the treatment of asbestos-related personal injury claims. The Fairness in Asbestos Injury Resolution Act of 2005 (the “FAIR Bill”) was introduced in the United States Senate in April 2005, and was defeated in a procedural vote in the Senate in February 2006 and motion for reconsideration was filed. The FAIR Bill would create a national trust fund in lieu of state and federal litigation to compensate people with asbestos-related diseases. The trust fund would require contributions from companies, such as Crown Cork, that have made past payments for asbestos-related personal injury claims and would limit the payments made by such companies relating to asbestos-related liabilities during the life of the fund. There can be no assurance that federal asbestos legislation, such as the FAIR Bill, will be passed into law or the form that any such legislation will take. Due to this uncertainty, the Company has not considered possible federal legislation in evaluating the adequacy of the Company’s reserve for asbestos-related claims.

9

Crown Holdings, Inc.

During the three months ended March 31, 2007, Crown Cork received approximately 1,000 new claims, settled or dismissed approximately 1,000 claims for a total of $2 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 March 31, 2007, the Company’s accrual for pending and future asbestos-related claims was $194. The Company estimates that its probable and estimable liability for pending and future asbestos-related claims will range between $194 and $243. The accrual balance of $194 includes $115 for unasserted claims and $6 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.

Assumptions underlying the accrual and the range of potential liability include 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 costs of $243 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.

I. 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 or cash flow.

10

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 March 31, 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 March 31, 2007, the Company also had guarantees of $24 related to the residual values of leased assets.

J. Earnings Per Share

The following table summarizes the basic and diluted earnings per share computations for the periods ended March 31, 2007 and 2006, respectively:

	Three Months Ended March 31,
Earnings	2007		2006
Income from continuing operations	$	16	$	12
Weighted average shares outstanding:
Basic		162.3		167.1
Add: dilutive stock options and restricted stock		4.4		4.5
Diluted		166.7		171.6
Basic and diluted earnings per share - continuing operations	$	0.10	$	0.07

Excluded from the computation of diluted earnings per share were common shares contingently issuable upon the exercise of outstanding stock options, amounting to 2.6 million shares for the three months ended March 31, 2007 and 3.4 million shares for the same period in 2006. These shares were excluded because the exercise prices of the then outstanding options were above the average market prices for the related periods.

11

Crown Holdings, Inc.

K. Pension and Other Postretirement Benefits

The components of net periodic pension and other postretirement benefits costs for the three months ended March 31 were as follows:

Pension Benefits		U.S. Plans								Non-U.S. Plans
		2007				2006				2007				2006
Service cost		$	2			$	2			$	9			$	9
Interest cost			19				19				41				36
Expected return on plan assets	(		28	)	(		27	)	(		59	)	(		51	)
Recognized prior service cost/(credit)			1				1		(		2	)	(		2	)
Recognized net loss			12				15				7				9
Net periodic cost/(credit)		$	6			$	10		(	$	4	)		$	1

Other Postretirement Benefits
		2007				2006
Service cost		$	1			$	1
Interest cost			9				9
Recognized prior service credit	(		4	)	(		4	)
Recognized net loss			3				4
Net periodic cost		$	9			$	10

L. Income Taxes

As discussed inNote 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.

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 first 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 have no effect 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.

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).

12

Crown Holdings, Inc.

M. 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 gross profit less 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 months ended March 31, 2007 and 2006:

2007	External sales	Segment income
Americas Beverage	$   393	$  37
North America Food	185	10
European Beverage	281	30
European Food	446	38
European Specialty Packaging	103	1
Total reportable segments	1,408	$116
Non-reportable segments	305
Total	$1,713

2006	External sales	Segment income
Americas Beverage	$   347	$  28
North America Food	182	8
European Beverage	238	25
European Food	411	42
European Specialty Packaging	86	2
Total reportable segments	1,264	$105
Non-reportable segments	260
Total	$1,524

A reconciliation of segment income of reportable segments to consolidated income from continuing operations before income taxes, minority interests and equity earnings for the three months ended March 31, 2007 and 2006 follows:

	2007		2006
Segment income of reportable segments	$116		$105
Segment income of non-reportable segments	34		31
Corporate and unallocated items	(    32	)	(    31	)
Provision for restructuring			(      9	)
Gain on sale of assets			1
Interest expense	(    76	)	(    67	)
Interest income	3		3
Translation and exchange adjustments	1
Income from continuing operations before income       taxes, minority interests and equity earnings	$  46		$  33

“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.

13

Crown Holdings, Inc.

N. 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 and cash flows for the three months ended March 31, 2007 and 2006, and

•     balance sheets as of March 31, 2007 and December 31, 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 March 31, 2007
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net sales				$1,058		$655				$1,713
Cost of products sold, excluding depreciation
and amortization		($3	)	899		549				1,445
Depreciation and amortization				34		21				55
Gross profit		3		125		85				213
Selling and administrative expense				70		25				95
Net interest expense		23		47		3				73
Technology royalty				(7	)	7
Translation and exchange adjustments				(1	)					(1	)
Income/(loss) before income taxes, minority interests       and equity earnings		(20	)	16		50				46
Provision for income taxes				6		12				18
Equity earnings	$16	35		6				($57	)
Income before minority interests and equity earnings	16	15		16		38		(57	)	28
Minority interests and equity earnings						(12	)			(12	)
Net income	$16	$15		$16		$26		($57	)	$16

14

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended March 31, 2006
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net sales				$955		$569				$1,524
Cost of products sold, excluding depreciation
and amortization		($5	)	817		472				1,284
Depreciation and amortization				35		19				54
Gross profit		5		103		78				186
Selling and administrative expense				59		22				81
Provision for restructuring				4		5				9
(Gain)/loss on sale of assets		(7	)	7		(1	)			(1	)
Net interest expense		14		50						64
Technology royalty				(6	)	6
Translation and exchange adjustments		2		(2	)
Income/(loss) from continuing operations before
income taxes, minority interests and equity earnings		(4	)	(9	)	46				33
Provision/(benefit) for income taxes				(4	)	11				7
Equity earnings	$10	13		18				($41	)
Income from continuing operations before
minority interests and equity earnings	10	9		13		35		(41	)	26
Minority interests and equity earnings						(14	)			(14	)
Income from continuing operations	10	9		13		21		(41	)	12
Discontinued operations
Loss before income taxes				(1	)					(1	)
Provision/(benefit) for income taxes				2		(1	)			1
Net income	$10	$9		$10		$22		($41	)	$10

15

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of March 31, 2007
(in millions)

	Parent		Issuer	Guarantors		Non Guarantors	Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents				$45		$233			$278
Receivables, net			$71	164		626			861
Intercompany receivables			2	70		38	($110	)
Inventories				559		501			1,060
Prepaid expenses and other current assets	$3		9	54		2			68
Total current assets	3		82	892		1,400	(110	)	2,267
Intercompany debt receivables			1,407	1,475		255	(3,137	)
Investments in subsidiaries	(399	)	2,715	(424	)		(1,892	)
Goodwill				1,557		643			2,200
Property, plant and equipment, net				874		720			1,594
Other non-current assets			10	427		84			521
Total	($396	)	$4,214	$4,801		$3,102	($5,139	)	$6,582
Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt			$15	$17		$58			$90
Current maturities of long-term debt			4	5		32			41
Accounts payable and accrued liabilities	$11		24	1,088		677			1,800
Intercompany payables				38		72	($110	)
Income taxes payable				21		5			26
Total current liabilities	11		43	1,169		844	(110	)	1,957
Long-term debt, excluding current maturities			1,205	2,306		67			3,578
Long-term intercompany debt	106		2,083	676		272	(3,137	)
Postretirement and pension liabilities				723		17			740
Other non-current liabilities			58	326		148			532
Minority interests						288			288
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(513	)	825	(399	)	1,466	(1,892	)	(513	)
Total	($396	)	$4,214	$4,801		$3,102	($5,139	)	$6,582

16

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
Prepaid expenses and 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

17

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2007
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net cash provided by/(used for) operating activities	$7		($41	)	($159	)	($41	)			($234	)
Cash flows from investing activities
Capital expenditures					(25	)	(19	)			(44	)
Intercompany investing activities					6				($6	)
Other, net					(2	)					(2	)
Net cash used for investing activities					(21	)	(19	)	(6	)	(46	)
Cash flows from financing activities
Proceeds from long–term debt							5				5
Payments of long–term debt							(9	)			(9	)
Net change in short-term debt			96		57		(2	)			151
Net change in long-term intercompany balances	(10	)	(55	)	70		(5	)
Dividends paid							(6	)	6
Common stock issued	3										3
Dividends paid to minority interests							(4	)			(4	)
Net cash provided by/(used for) financing activities	(7	)	41		127		(21	)	6		146
Effect of exchange rate changes on cash and cash equivalents							5				5
Net change in cash and cash equivalents					(53	)	(76	)			(129	)
Cash and cash equivalents at January 1					97		310				407
Cash and cash equivalents at March 31	$0		$0		$44		$234		$0		$278

18

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2006
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net cash provided by / (used for) operating activities	($1	)	($25	)	($181	)	$29				($178	)
Cash flows from investing activities
Capital expenditures					(19	)	(35	)			(54	)
Intercompany investing activities			(157	)	162				($5	)
Other, net							14				14
Net cash provided by/(used for) investing activities			(157	)	143		(21	)	(5	)	(40	)
Cash flows from financing activities
Proceeds from long-term debt							9				9
Payments of long-term debt							(4	)			(4	)
Net change in short-term debt			101		108		(1	)			208
Net change in long-term intercompany balances			81		(99	)	18
Dividends paid							(5	)	5
Common stock issued	10										10
Common stock repurchased	(9	)									(9	)
Dividends paid to minority interests							(3	)			(3	)
Net cash provided by financing activities	1		182		9		14		5		211
Effect of exchange rate changes on cash and cash equivalents							6				6
Net change in cash and cash equivalents					(29	)	28				(1	)
Cash and cash equivalents at January 1					67		227				294
Cash and cash equivalents at March 31	$0		$8		$38		$255		$0		$293

19

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 and cash flows for the three months ended March 31, 2007 and 2006, and

•     balance sheets as of March 31, 2007 and December 31, 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 March 31, 2007
(in millions)

	Parent	Issuer		Non Guarantors		Eliminations		Total Company
Net sales				$1,713				$1,713
Cost of products sold, excluding depreciation and amortization				1,445				1,445
Depreciation and amortization				55				55
Gross profit				213				213
Selling and administrative expense		$3		92				95
Net interest expense		16		57				73
Translation and exchange adjustments				(1	)			(1	)
Income/(loss) before income taxes, minority interests       and equity earnings		(19	)	65				46
Provision/(benefit) for income taxes		(5	)	23				18
Equity earnings	$16	30				($46	)
Income before minority interests and equity earnings	16	16		42		(46	)	28
Minority interests and equity earnings				(12	)			(12	)
Net income	$16	$16		$30		($46	)	$16

20

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended March 31, 2006
(in millions)

	Parent	Issuer		Non Guarantors		Eliminations		Total Company
Net sales				$1,524				$1,524
Cost of products sold, excluding depreciation and amortization				1,284				1,284
Depreciation and amortization				54				54
Gross profit				186				186
Selling and administrative expense		$2		79				81
Provision for restructuring				9				9
Gain on sale of assets				(1	)			(1	)
Net interest expense		16		48				64
Income/(loss) from continuing operations before income taxes,       minority interests and equity earnings		(18	)	51				33
Provision for income taxes				7				7
Equity earnings	$10	28				($38	)
Income from continuing operations before minority interests       and equity earnings	10	10		44		(38	)	26
Minority interests and equity earnings				(14	)			(14	)
Income from continuing operations	10	10		30		(38	)	12
Discontinued operations
Income before income taxes
Provision for income taxes				2				2
Net income	$10	$10		$28		($38	)	$10

21

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of March 31, 2007
(in millions)

	Parent		Issuer		Non Guarantors	Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents					$278			$278
Receivables, net					861			861
Inventories					1,060			1,060
Prepaid expenses and current assets	$3				65			68
Total current assets	3				2,264			2,267
Intercompany debt receivables					260	($260	)
Investments	(399	)	$656			(257	)
Goodwill					2,200			2,200
Property, plant and equipment, net					1,594			1,594
Other non-current assets			35		486			521
Total	($396	)	$691		$6,804	($517	)	$6,582
Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt					$90			$90
Current maturities of long-term debt			$1		40			41
Accounts payable and accrued liabilities	$11		44		1,745			1,800
Income taxes payable					26			26
Total current liabilities	11		45		1,901			1,957
Long-term debt, excluding current maturities			698		2,880			3,578
Long-term intercompany debt	106		154			($260	)
Postretirement and pension liabilities					740			740
Other non-current liabilities			193		339			532
Minority interests					288			288
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(513	)	(399	)	656	(257	)	(513	)
Total	($396	)	$691		$6,804	($517	)	$6,582

22

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
Prepaid expenses and 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

23

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2007
(in millions)

	Parent		Issuer		Non Guarantors		Eliminations	Total Company
Net cash provided by/(used for) operating activities	$7		($9	)	($232	)		($234	)
Cash flows from investing activities
Capital expenditures					(44	)		(44	)
Other, net					(2	)		(2	)
Net cash used for investing activities					(46	)		(46	)
Cash flows from financing activities
Proceeds from long-term debt					5			5
Payments of long-term debt					(9	)		(9	)
Net change in short-term debt					151			151
Net change in long-term intercompany balances	(10	)	9		1
Common stock issued	3							3
Dividends paid to minority interests					(4	)		(4	)
Net cash provided by/(used for) financing activities	(7	)	9		144			146
Effects of exchange rate changes on cash and cash equivalents					5			5
Net change in cash and cash equivalents					(129	)		(129	)
Cash and cash equivalents at January 1					407			407
Cash and cash equivalents at March 31	$0		$0		$278		$0	$278

24

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2006
(in millions)

	Parent		Issuer		Non Guarantors		Eliminations		Total Company
Net cash used for operating activities	($1	)	($6	)	($171	)			($178	)
Cash flows from investing activities
Capital expenditures					(54	)			(54	)
Intercompany investing activities			3				($3	)
Other, net					14				14
Net cash provided by/(used for) investing activities			3		(40	)	(3	)	(40	)
Cash flows from financing activities
Proceeds from long-term debt					9				9
Payments of long-term debt					(4	)			(4	)
Net change in short-term debt					208				208
Net change in long-term intercompany balances			3		(3	)
Dividends paid					(3	)	3
Common stock issued	10								10
Common stock repurchased	(9	)							(9	)
Dividends paid to minority interests					(3	)			(3	)
Net cash provided by financing activities	1		3		204		3		211
Effects of exchange rate changes on cash and cash equivalents					6				6
Net change in cash and cash equivalents					(1	)			(1	)
Cash and cash equivalents at January 1					294				294
Cash and cash equivalents at March 31	$0		$0		$293		$0		$293

25

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 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 and cash flows for the three months ended March 31, 2007 and 2006, and

•     balance sheets as of March 31, 2007 and December 31, 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 March 31, 2007
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net sales				$479		$1,234				$1,713
Cost of products sold, excluding depreciation
and amortization				411		1,034				1,445
Depreciation and amortization				15		40				55
Gross profit				53		160				213
Selling and administrative expense		$2		32		61				95
Net interest expense		15		18		40				73
Technology royalty				(8	)	8
Translation and exchange adjustments						(1	)			(1	)
Income/(loss) before income taxes,
minority interests and equity earnings		(17	)	11		52				46
Provision/(benefit) for income taxes		(6	)	8		16				18
Equity earnings	$16	19		13				($48	)
Income before minority interests and equity earnings	16	8		16		36		(48	)	28
Minority interests and equity earnings						(12	)			(12	)
Net income	$16	$8		$16		$24		($48	)	$16

26

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended March 31, 2006
(in millions)

	Parent	Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net sales				$483		$1,041				$1,524
Cost of products sold, excluding depreciation
and amortization				431		853				1,284
Depreciation and amortization				16		38				54
Gross profit				36		150				186
Selling and administrative expense		$2		28		51				81
Provision for restructuring				4		5				9
(Gain)/loss on sale of assets				(1	)					(1	)
Net interest expense		13		17		34				64
Technology royalty				(8	)	8
Income/(loss) from continuing operations before
income taxes, minority interests and equity earnings		(15	)	(4	)	52				33
Provision/(benefit) for income taxes		(5	)	2		10				7
Equity earnings	$10	13		17				($40	)
Income from continuing operations before
minority interests and equity earnings	10	3		11		42		(40	)	26
Minority interests and equity earnings						(14	)			(14	)
Income from continuing operations	10	3		11		28		(40	)	12
Discontinued operations
Income/(loss) before income taxes				1		(2	)			(1	)
Provision/(benefit) for income taxes				2		(1	)			1
Net income	$10	$3		$10		$27		($40	)	$10

27

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of March 31, 2007
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors	Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents			$16		$2		$260			$278
Receivables, net					12		849			861
Intercompany receivables					61		8	($69	)
Inventories					206		854			1,060
Prepaid expenses and other current assets	$3		2		7		56			68
Total current assets	3		18		288		2,027	(69	)	2,267
Intercompany debt receivables			1,186		584		41	(1,811	)
Investments	(399	)	349		174			(124	)
Goodwill					453		1,747			2,200
Property, plant and equipment, net			2		359		1,233			1,594
Other non-current assets			51		64		406			521
Total	($396	)	$1,606		$1,922		$5,454	($2,004	)	$6,582
Liabilities and shareholders’ equity/(deficit)
Current liabilities
Short-term debt							$90			$90
Current maturities of long-term debt					$5		36			41
Accounts payable and accrued liabilities	$11		$37		377		1,375			1,800
Intercompany payables					8		61	($69	)
Income taxes payable					4		22			26
Total current liabilities	11		37		394		1,584	(69	)	1,957
Long-term debt, excluding current maturities			1,571		698		1,309			3,578
Long-term intercompany debt	106		352		462		891	(1,811	)
Postretirement and pension liabilities					538		202			740
Other non-current liabilities					229		303			532
Minority interests							288			288
Commitments and contingent liabilities
Shareholders’ equity/(deficit)	(513	)	(354	)	(399	)	877	(124	)	(513	)
Total	($396	)	$1,606		$1,922		$5,454	($2,004	)	$6,582

28

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
Prepaid expenses and 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

29

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2007
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net cash provided by/(used for) operating activities	$7		($3	)	($80	)	($158	)			($234	)
Cash flows from investing activities
Capital expenditures					(12	)	(32	)			(44	)
Intercompany investing activities			6						($6	)
Other, net							(2	)			(2	)
Net cash provided by/(used for) investing activities			6		(12	)	(34	)	(6	)	(46	)
Cash flows from financing activities
Proceeds from long–term debt							5				5
Payments of long–term debt							(9	)			(9	)
Net change in short-term debt			49				102				151
Net change in long-term intercompany balances	(10	)	(96	)	90		16
Dividends paid							(6	)	6
Common stock issued	3										3
Dividends paid to minority interests							(4	)			(4	)
Net cash provided by/(used for) financing activities	(7	)	(47	)	90		104		6		146
Effect of exchange rate changes on cash and cash equivalents							5				5
Net change in cash and cash equivalents			(44	)	(2	)	(83	)			(129	)
Cash and cash equivalents at January 1			60		4		343				407
Cash and cash equivalents at March 31	$0		$16		$2		$260		$0		$278

30

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the three months ended March 31, 2006
(in millions)

	Parent		Issuer		Guarantors		Non Guarantors		Eliminations		Total Company
Net cash provided by/(used for) operating activities	($1	)	$10		($35	)	($152	)			($178	)
Cash flows from investing activities
Capital expenditures					(8	)	(46	)			(54	)
Intercompany investing activities			3		3				($6	)
Other, net							14				14
Net cash provided by/(used for) investing activities			3		(5	)	(32	)	(6	)	(40	)
Cash flows from financing activities
Proceeds from long–term debt							9				9
Payments of long–term debt							(4	)			(4	)
Net change in short-term debt			100				108				208
Net change in long-term intercompany balances			(120	)	42		78
Dividends paid							(6	)	6
Common stock issued	10										10
Common stock repurchased	(9	)									(9	)
Dividends paid to minority interests							(3	)			(3	)
Net cash provided by/(used for) financing activities	1		(20	)	42		182		6		211
Effect of exchange rate changes on cash and cash equivalents							6				6
Net change in cash and cash equivalents			(7	)	2		4				(1	)
Cash and cash equivalents at January 1			18		1		275				294
Cash and cash equivalents at March 31	$0		$11		$3		$279		$0		$293

31

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 months ended March 31, 2007 compared to the corresponding period 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 inNote 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. SeeNote M 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 $3,709 at March 31, 2007 increased $66 from $3,643 at March 31, 2006, including $121 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 $4 for the first three months of 2007, and the Company expects to pay approximately $25 for the full year of 2007.

Results of Operations

The foreign currency translation impacts referred to below were primarily due to changes in the euro and pound sterling in the European Division operating segments and the Canadian dollar in the Americas Division operating segments.

Net Sales

Net sales in the first quarter of 2007 were $1,713, an increase of $189 or 12.4% compared to net sales of $1,524 for the same period in 2006. Sales from U.S. operations accounted for 28.2% and 29.0% of consolidated net sales in the first quarters of 2007 and 2006, respectively. Sales of beverage cans and ends accounted for 44.6% and sales of food cans and ends accounted for 33.6% of consolidated net sales in the first quarter of 2007 compared to 43.4% and 35.1%, respectively, in 2006.

Net sales in the Americas Beverage segment increased 13.3% from $347 in the first quarter of 2006 to $393 in 2007. The increase in the first quarter of 2007 was primarily due to higher sales unit volumes and the pass-through of increased costs to customers.

32

Crown Holdings, Inc.

Item 2. Management’s Discussion and Analysis (Continued)

Net sales in the North America Food segment increased 1.6% from $182 in the first quarter of 2006 to $185 in the same period in 2007, primarily due to the pass-through of increased material costs to customers.

Net sales in the European Beverage segment increased 18.1% from $238 in the first quarter of 2006 to $281 in the same period in 2007, due to improved selling prices and $16 of foreign currency translation.

Net sales in the European Food segment increased 8.5% from $411 in the first quarter of 2006 to $446 in the same period in 2007, primarily due to the impact of foreign currency translation.

Net sales in the European Specialty Packaging segment increased 19.8% from $86 in the first quarter of 2006 to $103 in the same period in 2007, primarily due to higher sales unit volumes and $8 of foreign currency translation.

Cost of Products Sold (Excluding Depreciation and Amortization)

Cost of products sold, excluding depreciation and amortization, was $1,445 for the first quarter of 2007, an increase of $161 compared to $1,284 for the same period in 2006. The increase was primarily due to higher costs for steel and aluminum, and also included $57 of foreign currency translation.

As a percentage of net sales, cost of products sold, excluding depreciation and amortization, was 84.4% for the first quarter of 2007 compared to 84.3% for the same period 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 $55 in the first quarter of 2007 compaared to $54 in the prior year period. The increase was primarily due to $2 of currency translation.

Selling and Administrative Expense

Selling and administrative expense was $95 in the first quarter of 2007 compared to $81 for the same period in 2006. The increase was primarily due to increased incentive compensation costs of $5 and foreign currency translation of $5. As a percentage of net sales, selling and administrative expense was 5.5% for the first quarter of 2007 compared to 5.3% for the same period in 2006.

Segment Income

Segment income in the Americas Beverage segment increased $9 from $28 in the first quarter of 2006 to $37 in the first quarter of 2007, primarily due to higher sales unit volumes.

Segment income in the North America Food segment increased $2 from $8 in the first quarter of 2006 to $10 in the first quarter of 2007, primarily due to cost reductions.

Segment income in the European Beverage segment increased $5 from $25 in the first quarter of 2006 to $30 in the first quarter of 2007, primarily due to improved selling prices.

Segment income in the European Food segment decreased $4 from $42 in the first quarter of 2006 to $38 in the first quarter of 2007, primarily due to higher costs not yet fully passed through to customers.

Segment income in the European Specialty Packaging segment decreased $1 from $2 in the first quarter of 2006 to $1 in the first quarter of 2007.

33

Crown Holdings, Inc.

Item 2. Management’s Discussion and Analysis (Continued)

Interest Expense

Interest expense increased $9 from $67 in the first quarter of 2006 to $76 in the first quarter of 2007, primarily due to increased interest rates and $2 of foreign currency translation.

Taxes on Income

The first quarter of 2007 included a tax charge of $18 on pre-tax income of $46. The difference of $2 between the pre-tax income at the U.S. statutory rate of 35% or a charge of $16, and the actual charge of $18 was primarily due to (i) charges of $7 for valuation allowance adjustments, primarily due to losses in France and Canada, and $2 for withholding taxes, offset by (ii) benefits from lower tax rates in certain non-U.S. jurisdictions.

The first quarter of 2006 included a tax charge of $7 on pre-tax income of $33. The difference of $5 between the pre-tax income at the U.S. statutory rate of 35% or $12, and the actual tax charge of $7 was primarily due to benefits of $7 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. These benefits were partially offset by charges of $5 for valuation allowance adjustments, primarily due to losses in the U.S. and Canada, and $2 for withholding taxes.

Minority Interests, Net of Equity Earnings

The charge for minority interests, net of equity earnings, decreased $2 in the first quarter of 2007 compared to the same period of 2006. The decrease for the first quarter of 2007 was primarily due to lower profits in the Middle East beverage can operations.

Liquidity and Capital Resources

Cash from Operations

Cash of $234 was used by operating activities in the first quarter of 2007 compared to $178 used by operating activities during the same period in 2006. The increase of $56 in cash used by operating activities was primarily due to higher material costs in 2007.

Investing Activities

Investing activities used cash of $46 during the first quarter of 2007 compared to cash used of $40 in the prior year period. Primary investing activities were capital expenditures of $44 in the first quarter of 2007 and $54 in the same period of 2006.

Financing Activities

Financing activities provided cash of $146 during the first quarter of 2007 compared to cash provided of $211 during the same period in 2006. The cash provided by financing activities in the first quarters of 2007 and 2006 was mainly from short-term borrowings and was used to fund operating and investing activities.

As of March 31, 2007, the Company had $411 of borrowing capacity available under its revolving credit facility, equal to the total facility of $800 less $324 of borrowings and $65 of outstanding standby letters of credit.

34

Crown Holdings, Inc.

Item 2. Management’s Discussion and Analysis (Continued)

Contractual Obligations

During the first quarter of 2007, purchase obligations covering new agreements for raw materials and other consumables increased by $363 for 2007, $55 for 2008 and $4 for 2009 above amounts provided within Part I, 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.

Commitments and Contingent Liabilities

Information regarding the Company’s commitments and contingent liabilities appears in Part I within Item 1 of this report underNote I, entitled “Commitments and Contingent Liabilities,” to the consolidated financial statements, which information is incorporated herein by reference.

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. Management’s Discussion and Analysis 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 three 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. SeeNote L to the 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 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.

35

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 inNote H and commitments and contingencies inNote I 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

As of March 31, 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.

36

Crown Holdings, Inc.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding the Company’s potential asbestos-related liabilities and other litigation, seeNote H entitled “Asbestos-Related Liabilities” andNote I 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 of its equity securities during the quarter ended March 31, 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 April 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 4. Submission of Matters to Vote of Security Holders

The Company’s Annual Meeting of Shareholders was held on April 26, 2007. The matters voted upon and the results thereof are as follows:

(1)	Election of the Board of Directors	- - - - VOTES - - - -
		For	Withheld
	Jenne K. Britell	133,882,617	6,501,552
	John W. Conway	137,333,062	3,051,107
	Arnold W. Donald	138,377,477	2,006,692
	William G. Little	135,708,006	4,676,163
	Hans L. Löliger	134,513,757	5,870,412
	Thomas A. Ralph	139,849,174	534,995
	Hugues du Rouret	134,883,057	5,501,112
	Alan W. Rutherford	134,477,478	5,906,691
	Jim L. Turner	139,852,428	531,741
	William S. Urkiel	135,693,061	4,691,108

37

Crown Holdings, Inc.

(2) Ratification of the re-appointment by the AuditCommittee and the Board of Directors of PricewaterhouseCoopers LLP as independent auditors for the fiscal year ending December 31, 2007:

For	Against	Abstain
134,931,077	5,326,207	126,885

(3) A shareholder’s proposal to limit annual remuneration of the top five highly compensated executives to $500,000, plus any nominal perks:

For	Against	Abstain
3,116,807	110,180,732	1,467,031

Item 5.	Other Information
	On May 3, 2007, the Company entered into employment agreements with each of the following executive officers of the Company: John W. Conway, Chairman of the Board, President and Chief Executive Officer; Alan W. Rutherford, Vice Chairman of the Board, Executive Vice President and Chief Financial Officer; Frank J. Mechura, President – Americas Division; William H. Voss, Executive Vice President and Timothy J. Donahue, Senior Vice President – Finance. These agreements set forth the terms and conditions of each executive officer’s compensation and benefits and include, among other things, certain termination and severance provisions and confidentiality, non-competition and other restrictive covenants. Each of the respective employment agreements is attached as an exhibit to this Quarterly Report on Form 10-Q and is incorporated herein by reference.
	In addition, on May 3, 2007, the Company entered into senior executive retirement agreements with each of Mr. Conway, Mr. Rutherford, Mr. Mechura, Mr. Voss and Mr. Donahue and, in connection with such agreements, amended the Company’s Senior Executive Retirement Plan. The senior executive retirement agreements and the Company’s Senior Executive Retirement Plan set forth the terms of certain retirement and death benefits provided to senior executives under the Senior Executive Retirement Plan with respect to the benefit earned on and after January 1, 2005 and generally were made to bring the Senior Executive Retirement Plan into compliance with Code Section 409A and the regulations thereunder, and also to provide, among other things, that the normal form of retirement benefits payable under the Senior Executive Retirement Plan will be a lump sum. Each of the respective senior executive retirement agreements and Senior Executive Retirement Plan is attached as an exhibit to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Item 6. Exhibits

10.1 Employment Contracts:

(a)	Employment contract between Crown Holdings, Inc. and John W. Conway, dated May 3, 2007.
(b)	Employment contract between Crown Holdings, Inc. and Alan W. Rutherford, dated May 3, 2007.
(c)	Employment contract between Crown Holdings, Inc. and William H. Voss, dated May 3, 2007.
(d)	Employment contract between Crown Holdings, Inc. and Frank J. Mechura, dated May 3, 2007.
(e)	Employment contract between Crown Holdings, Inc. and Timothy J. Donahue, dated May 3, 2007.

10.2 Form of Agreement for Non-Qualified Stock Option Awards under Crown Holdings, Inc. 2006 Stock-Based Incentive Compensation Plan.

10.3	Crown Holdings, Inc. Senior Executive Retirement Plan, as amended and restated as of January 1, 2005.
10.4	Senior Executive Retirement Agreements:

(a)	Senior Executive Retirement Agreement between Crown Holdings, Inc. and John W. Conway, dated May 3, 2007.
(b)	Senior Executive Retirement Agreement between Crown Holdings, Inc. and Alan W. Rutherford, dated May 3, 2007.

38

Crown Holdings, Inc.

(c)	Senior Executive Retirement Agreement between Crown Holdings, Inc. and William H. Voss, dated May 3, 2007.
(d)	Senior Executive Retirement Agreement between Crown Holdings, Inc. and Frank J. Mechura, dated May 3, 2007.
(e)	Senior Executive Retirement Agreement between Crown Holdings, Inc. and Timothy J. Donahue, dated May 3, 2007.

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.

39

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:  May 3, 2007

40