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, 2009

[      ]                      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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ___   No  ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.   (Check one)

Large accelerated filer  X                                                               Accelerated filer  __                                           Smaller reporting company __

Non-accelerated filer  __  (Do not check if a smaller reporting company)

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

There were 160,127,281 shares of Common Stock outstanding as of July 28, 2009.

Crown Holdings, Inc.

FORM 10-Q

FOR QUARTER ENDED JUNE 30, 2009

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

	Page Number
Item 1   Financial Statements
Consolidated Statements of Operations - Three Months	2
Consolidated Statements of Operations - Six Months	3
Consolidated Balance Sheets	4
Consolidated Statements of Cash Flows	5
Consolidated Statements of Changes in Equity and Comprehensive Income	6
Notes to Consolidated Financial Statements	7
A.  Statement of Information Furnished	7
B.  Recent Accounting and Reporting Pronouncements	7
C.  Stock-Based Compensation	9
D.  Inventories	9
E.  Goodwill	10
F.  Fair Value Measurements	10
G.  Derivative Financial Instruments	11
H.  Restructuring	13
I.  Asbestos-Related Liabilities	13
J.  Commitments and Contingent Liabilities	15
K.  Debt	16
L.  Acquisition	16
M. Earnings Per Share	16
N. Pension and Other Postretirement Benefits	17
O. Segment Information	17
P. Condensed Combining Financial Information	19
Item 2   Management's Discussion and Analysis of Financial Condition and Results of Operations
Introduction	43
Executive Overview	43
Results of Operations	43
Liquidity and Capital Resources	47
Forward Looking Statements	49
Item 3    Quantitative and Qualitative Disclosures About Market Risk	50
Item 4    Controls and Procedures	50
PART II - OTHER INFORMATION
Item 1    Legal Proceedings	51
Item 1A Risk Factors	51
Item 2    Unregistered Sales of Equity Securities and use of Proceeds	51
Item 6    Exhibits	51
Signature	53

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			2009			2008
Net sales		$	2,055		$	2,196
Cost of products sold, excluding depreciation and amortization			1,676			1,789
Depreciation and amortization			46			56
Gross profit			333			351
Selling and administrative expense			90			105
Gain on sale of assets			(1)			(2)
Provision for restructuring			1			1
Interest expense			62			79
Interest income			(1)			(2)
Translation and foreign exchange						1
Income before income taxes and equity earnings			182			169
Provision for income taxes			44			42
Equity earnings in affiliates			1			3
Net income			139			130
Net income attributable to noncontrolling interests			(34)			(31)
Net income attributable to Crown Holdings		$	105		$	99
Earnings per share attributable to Crown Holdings common shareholders:
Basic		$	0.66		$	0.62
Diluted		$	0.65		$	0.61
Weighted average common shares outstanding:
Basic	158,920,842			159,631,670
Diluted	161,728,278			163,298,467

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

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Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions except share and per share data)

(Unaudited)

Six months ended June 30			2009			2008
Net sales		$	3,739		$	4,059
Cost of products sold, excluding depreciation and amortization			3,068			3,347
Depreciation and amortization			93			109
Gross profit			578			603
Selling and administrative expense			179			207
Gain on sale of assets			(1)			(2)
Provision for restructuring			2			1
Loss from early extinguishment of debt						2
Interest expense			123			156
Interest income			(3)			(5)
Translation and foreign exchange			4			1
Income before income taxes and equity earnings			274			243
Provision for income taxes			68			68
Equity (loss)/earnings in affiliates			(4)			3
Net income			202			178
Net income attributable to noncontrolling interests			(57)			(52)
Net income attributable to Crown Holdings		$	145		$	126
Earnings per share attributable to Crown Holdings common shareholders:
Basic		$	0.91		$	0.79
Diluted		$	0.90		$	0.77
Weighted average common shares outstanding:
Basic	158,707,472			159,409,493
Diluted	161,508,765			163,037,370

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

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Crown Holdings, Inc.

CONSOLIDATED BALANCE SHEETS (Condensed)

(In millions)

(Unaudited)

	June 30, 2009			December 31, 2008
Assets
Current assets
Cash and cash equivalents		$	706		$	596
Receivables, net			939			734
Inventories			1,209			979
Prepaid expenses and other current assets			115			148
Total current assets			2,969			2,457
Goodwill			2,031			1,956
Property, plant and equipment, net			1,490			1,473
Other non-current assets			900			888
Total		$	7,390		$	6,774
Liabilities and equity
Current liabilities
Short-term debt		$	62		$	59
Current maturities of long-term debt			27			31
Accounts payable and accrued liabilities			1,850			1,982
Total current liabilities			1,939			2,072
Long-term debt, excluding current maturities			3,646			3,247
Postretirement and pension liabilities			903			893
Other non-current liabilities			538			526
Commitments and contingent liabilities (Note J)
Noncontrolling interests			386			353
Crown Holdings shareholders' deficit			(22)			(317)
Total equity			364			36
Total		$	7,390		$	6,774

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

4

Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed)

(In millions)

(Unaudited)

Six months ended June 30		2009		2008
Net cash used for operating activities	$	(163)	$	(354)
Cash flows from investing activities
Capital expenditures		(75)		(71)
Proceeds from sale of property, plant and equipment		1		6
Other		(4)		(21)
Net cash used for investing activities		(78)		(86)
Cash flows from financing activities
Proceeds from long-term debt		396
Payments of long-term debt		(6)		(59)
Net change in revolving credit facility and short-term debt		(15)		328
Common stock issued		4		7
Common stock repurchased		(4)		(3)
Dividends paid to noncontrolling interests		(27)		(27)
Other		(4)		29
Net cash provided by financing activities		344		275
Effect of exchange rate changes on cash and cash equivalents		7		19
Net change in cash and cash equivalents		110		(146)
Cash and cash equivalents at January 1		596		457
Cash and cash equivalents at June 30	$	706	$	311

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

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Crown Holdings, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND COMPREHENSIVE INCOME

(In millions)

(Unaudited)

		2009		2008
Comprehensive income
Net income	$	202	$	178
Net other adjustments:
Attributable to Crown Holdings		141		49
Attributable to noncontrolling interests		1		13
Comprehensive income		344		240
Comprehensive income attributable to noncontrolling interests		(58)		(65)
Comprehensive income attributable to Crown Holdings	$	286	$	175
Common stock	$	929	$	929
Paid-in capital
Balance – January 1	$	1,510	$	1,516
Restricted stock awarded		(3)		(2)
Stock-based compensation		9		9
Stock issued – benefit plans		2		3
Stock repurchased		(3)		(2)
Balance - June 30	$	1,515	$	1,524
Accumulated deficit
Balance – January 1	$	(428)	$	(654)
Net income attributable to Crown Holdings		145		126
Balance – June 30	$	(283)	$	(528)
Accumulated other comprehensive loss
Balance – January 1	$	(2,195)	$	(1,646)
Translation adjustments		78		(8)
Amortization of net loss and prior service cost included in pension and postretirement cost		31		18
Derivatives qualifying as hedges		32		41
Available for sale securities				(2)
Net other comprehensive income adjustments		141		49
Balance – June 30	$	(2,054)	$	(1,597)
Treasury stock
Balance – January 1	$	(133)	$	(130)
Restricted stock awarded		3		2
Stock issued – benefit plans		2		4
Stock repurchased		(1)		(1)
Balance – June 30	$	(129)	$	(125)
Noncontrolling interests
Balance – January 1	$	353	$	323
Net income attributable to noncontrolling interests		57		52
Translation adjustments (other comprehensive income)		1		13
Dividends paid to noncontrolling interests		(27)		(27)
Purchase of noncontrolling interests				(13)
Acquisition of business		2
Balance – June 30	$	386	$	348
Total equity – June 30	$	364	$	551

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

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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, 2009 and the results of its operations and its cash flows for the three and six month periods ended June 30, 2009 and 2008.  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, 2008 balance sheet data was derived from the audited consolidated financial statements as of December 31, 2008.  The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Current Report on Form 8-K filed May 5, 2009. The Company has performed an evaluation of subsequent events through July 31, 2009, the date these financial statements were issued.

B.   Recent Accounting and Reporting Pronouncements

Effective January 1, 2009, the Company adopted SFAS No. 141 (revised 2007) (“FAS 141(R)”), “Business Combinations,” which replaces FAS 141. FAS 141(R) retains the requirement of FAS 141 that business combinations be accounted for at fair value using the acquisition method, but changes the accounting for acquisitions in certain areas.   Under   FAS  141(R)  acquisition  costs  are  expensed   as  incurred; noncontrolling (minority) interests are valued at fair value at the  acquisition date;  in-process  research and development is recorded at  fair  value as an indefinite-lived  intangible  asset at  the  acquisition date; restructuring costs associated with a business combination are generally expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. FAS 141(R) is effective for the Company for all business combinations for which the acquisition date is on or after January 1, 2009, and its adoption had no impact on the Company’s financial statements at the date of adoption.

Effective January 1, 2009, the Company adopted FASB Staff Position FAS 142-3 (“FSP FAS 142-3”), “Determination of the Useful Life of Intangible Assets.”  FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142 (“FAS 142”), “Goodwill and Other Intangible Assets.” The FSP attempts to improve the consistency between the useful life of a recognized intangible asset under FAS 142 and the period of expected cash flows used to measure the fair value of the asset under FAS 141(R) and other generally accepted accounting principles. The FSP requires disclosure of information that enables users of financial statements to assess the extent to which expected future cash flows associated with an asset are affected by the company’s intent and/or ability to renew or extend the arrangement. The guidance for determining the useful life of a recognized intangible asset in the FSP is to be applied prospectively to intangible assets acquired after the effective date. The adoption of the FSP had no impact on the Company’s financial statements at the date of adoption.

In September 2006, the FASB issued SFAS No. 157 (“FAS 157”), “Fair Value Measurements.”  FAS 157 establishes a common definition for fair value to be applied to U.S. GAAP requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. In February 2008,  FSP 157-2, “Partial Deferral of the Effective Date of Statement 157,” deferred the effective date of FAS 157 for all nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008. The adoption of FAS 157 for nonfinancial assets and liabilities on January 1, 2009 had no impact on the Company’s financial statements at the date of adoption.

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Crown Holdings, Inc.

Effective January 1, 2009, the Company adopted SFAS No. 160 (“FAS 160”), “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51.”  FAS 160 requires the recognition of noncontrolling (minority) interests as equity in the consolidated financial statements, but separate from the parent’s equity. The statement also requires that the amount of net income attributable to minority interests be included in consolidated net income on the face of the income statement.  The financial statements included in this report are presented in accordance with FAS 160 and all prior period information has been retrospectively adjusted.

Effective January 1, 2009, the Company adopted SFAS No. 161 (“FAS 161”), “Disclosures about Derivative Instruments and Hedging Activities, an amendment to FASB Statement 133.”  FAS 161 amends and expands the disclosure requirements of SFAS No. 133 (“FAS 133”), “Accounting for Derivative Instruments and Hedging Activities,” with the intent to provide users of financial statements with an enhanced understanding of how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for under FAS 133 and its related interpretations; and how derivative instruments and related hedged items affect a company’s financial position, financial performance and cash flows. The Company has applied the requirements of FAS 161 on a prospective basis and disclosures related to interim periods prior to the date of adoption have not been presented. See Note G for the required disclosures.

Effective January 1, 2009, the Company adopted FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities.”  FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (“EPS”) under the two-class method described in FAS 128, “Earnings per Share.” The guidance in the FSP requires that  unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) be treated as participating securities and included in the computation of EPS pursuant to the two-class method. The adoption of the FSP had no impact on the Company’s basic or diluted earnings per share in the second quarter and first six months of 2009.

During the second quarter of 2009 and effective for the Company on April 1, 2009, the following accounting and reporting guidelines were issued by the FASB:

• FSP FAS 157-4 (“FSP 157-4”), “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,”

• FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary-Impairments,”

• FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” and

• SFAS No. 165 (“FAS 165”), “Subsequent Events.”

FSP 157-4 provides additional guidance on estimating fair value when the volume and level of activity for an asset or liability have significantly decreased in relation to normal market activity, as well as additional guidance on circumstances which may indicate a transaction is not orderly. The FSP amends FAS 157 to require interim disclosures of the inputs and valuation techniques used to measure fair value reflecting changes in the valuation techniques and related inputs. The adoption of the FSP had no impact on the Company’s financial statements at the date of adoption.

FSP FAS 115-2 and FAS 124-2 provides guidance on the recognition and presentation of other-than-temporary impairments (“OTTI”) of debt securities classified as available-for-sale and held-to-maturity. It also expands and increases the frequency of disclosures about other-than-temporary impairments in both debt and equity securities. The standard changes the recognition threshold of an OTTI for debt securities and provides some income statement relief by permitting the non-credit portion of the OTTI loss to be excluded from earnings and reported in other comprehensive income. The adoption of the FSP had no impact on the Company’s  financial statements at the date of adoption.

FSP FAS 107-1 and APB 28-1 extends the requirements of SFAS No. 107 (“FAS 107”), “Disclosures about Fair Value of Financial Instruments” to interim financial statements. The FSP requires that disclosures provide quantitative and qualitative information about fair value estimates for all financial instruments not measured on the balance sheet at fair value, when practicable, with the exception of certain financial instruments listed in FAS 107. In accordance with the FSP, the Company has disclosed the fair value of its debt in Note F.

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Crown Holdings, Inc.

FAS 165 establishes (1) the period after the balance sheet date during which management shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosure of the date through which subsequent events have been evaluated, as well as whether that date is the date the financial statements were issued or the date the financial statements were available to be issued.  Some unrecognized subsequent events may be of such a nature that they must be disclosed to keep the financial statements from being misleading. For such an event, the nature of the event and an estimate of the financial effect, or a statement that such an estimate cannot be made, must be disclosed. The adoption of this standard had no impact on the Company’s financial statements.  

C.          Stock-Based Compensation

As of June 30, 2009, the Company had five active stock-based compensation plans – the 1990, 1997, 2001, 2004 and 2006 plans, all of which have been approved by the Company’s shareholders.  With the April 2009 expiration of the 2004 plan, approximately 0.5 million shares available for grants and awards were no longer reserved for such purposes.  No further shares can be awarded from this plan.  Shares amounting to 2.8 million are available for grants and awards under the 2006 plan, which expires in April 2016.

During the first quarter of 2009, the Company awarded 564,344 shares of restricted stock to certain senior executives, including 308,115 shares with time-vesting requirements and 256,229 shares containing a market performance feature.  The time-vested awards vest ratably over three years on the anniversary date of the grant and had a grant-date fair value of $18.87 per share.  The performance shares vest at the end of three years based on the results of a market performance criterion. The number of performance shares that will ultimately vest in 2012 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 $23.10 using a Monte Carlo valuation model.  During the first quarter, 254,528 shares of previously issued service-based awards were released from restriction and 145,144 shares of previously issued performance-based shares vested and were released.  The weighted average fair value of these shares on the date of release was $19.45 per share.  Also during the first quarter, 51,495 performance-based shares were issued because the Company exceeded the level of performance established on the original date of the related awards in 2006 by approximately 35%.  These shares were issued without restriction.

Unrecognized compensation cost related to unvested stock options and restricted stock was $18 and $13, respectively, at June 30, 2009.  The weighted average period over which the expense is expected to be recognized is 3.6 years for stock options and 1.9 years for restricted stock.

As of June 30, 2009, outstanding stock options included 7,160,460 shares that were fully vested or expected to vest of which 4,645,735 were exercisable.  The weighted average exercise price of the options that were fully vested or expected to vest was $15.85, the aggregate intrinsic value was $59, and the weighted average remaining contractual life was 5.2 years.  The weighted average exercise price of options that were currently exercisable was $11.73, the aggregate intrinsic value was $58, and the weighted average remaining contractual life was 3.9 years.

The Company received cash proceeds of $1 from the exercise of stock options in the second quarter of 2009 compared to $5 during the same period in 2008.

D.          Inventories

	June 30,		December 31,
	2009		2008
Finished goods	$	501	$	324
Work in process		167		117
Raw material and supplies		541		538
	$	1,209	$	979

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Crown Holdings, Inc.

E.         Goodwill

Changes in the carrying amount of goodwill by reportable segment for the six month period ended June 30, 2009 were as follows:

	Americas		North America		European		European		Non-reportable
	Beverage		Food		Beverage		Food		segments		Total
Balance at January 1, 2009	$	418	$	148	$	660	$	587	$	143	$	1,956
Foreign currency translation		2		3		40		17		13		75
Balance at June 30, 2009	$	420	$	151	$	700	$	604	$	156	$	2,031

F.   Fair Value Measurements

Under U.S. GAAP a framework exists for measuring fair value, providing a three-tier fair value hierarchy of pricing inputs used to report assets and liabilities that are adjusted to fair value. Level 1 includes inputs such as quoted prices which are available in active markets for identical assets or liabilities as of the report date.  Level 2 includes inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the report date.  Level 3 includes unobservable pricing inputs that are not corroborated by market data or other objective sources.  The Company has no items valued using Level 3 inputs.

The following table sets forth the fair value hierarchy of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2009:

		June 30, 2009
				Fair Value
		Assets/liabilities		Measurements Using
		at fair value		Level 1		Level 2
Assets
	Derivative instruments	$	29	$	6	$	23
	Available for sale securities		3		3
	Total assets	$	32	$	9	$	23
Liabilities
	Derivative instruments	$	146	$	38	$	108

The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability.  The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy.

The Company applies a market approach to value its exchange-traded available for sale securities and commodity price hedge contracts.  Prices from observable markets are used to develop the fair value of these financial instruments and they are reported under Level 1.  The Company uses an income approach to value its outstanding cross-currency swaps and foreign exchange forward contracts.  These contracts are valued using a discounted  cash  flow  model  that  calculates  the  present  value of  future cash flows under the terms of the contracts using market information as of the reporting  date,  such  as  prevailing  interest  rates  and  foreign  exchange  spot  and  forward  rates, and are reported under Level 2 of the fair value hierarchy.  

Estimated fair value of the Company’s long-term borrowings, based on quoted market prices for the same or similar issues was approximately $3.5 billion at June 30, 2009.

See Note G for further discussion of the Company’s use of derivative instruments and their fair values at June 30, 2009.

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Crown Holdings, Inc.

G. Derivative Financial Instruments

In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange and interest rates and commodity prices. The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions.  The Company is exposed to credit loss in the event of nonperformance by these counterparties.  The Company does not use derivative instruments for trading or speculative purposes.

The Company’s objective in managing exposure to market risk is to limit the impact on earnings and cash flow.  The extent to which the Company uses such instruments is dependent upon its access to these contracts in the financial markets and its success using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk and using sales agreements that permit the pass-through of commodity price and foreign exchange rate risk to customers.

For derivative financial instruments accounted for as hedging instruments in accordance with the provisions of FAS 133, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the manner in which effectiveness of the hedge will be assessed.  The Company formally assesses, both at inception and at least quarterly thereafter, whether the derivative financial instruments used in hedging transactions are effective in offsetting changes in fair value or cash flows of the related underlying exposures.  Any ineffective portion of the change in fair value of the instruments is recognized immediately in earnings.

Cash Flow Hedges

The Company designates certain derivative financial instruments as cash flow hedges.  No components of the hedging instruments are excluded from the assessment of hedge effectiveness.  All changes in fair value of outstanding derivatives in cash flow hedges, except any ineffective portion, are recorded in other comprehensive income until earnings are impacted by the hedged transaction.  Classification of the gain or loss in the Consolidated Statements of Operations upon release from comprehensive income is the same as that of the underlying exposure.

When the Company discontinues hedge accounting because it is no longer probable that an anticipated transaction will occur in the originally expected period or within an additional two-month period thereafter,  changes to fair value accumulated in other comprehensive income are recognized immediately in earnings.

The Company may use cross-currency and interest rate swaps to manage its portfolio of fixed and variable debt, including foreign currency denominated intercompany debt, and to manage the impact of debt on local cash flows.  Currently the Company has two cross-currency swaps outstanding, which mature in November 2009 and 2010, with a combined notional value of $460.  These swaps are effective in mitigating the risk of changes in foreign exchange and interest rates because the critical terms of the swaps, including notional amounts, interest reset dates, maturity dates and underlying market indices, match those of the foreign currency denominated debt.

The Company uses commodity forwards to hedge anticipated purchases of various commodities, including aluminum, fuel oil and natural gas.  Information about commodity price exposure is derived from supply forecasts submitted by customers.  These exposures are hedged by a central treasury unit.  The U.S. dollar-equivalent notional value of commodity contracts designated as cash flow hedges at June 30, 2009 was $118.

The Company also designates certain foreign exchange contracts as cash flow hedges of anticipated foreign-currency-denominated sales or purchases.  The Company manages these risks at the operating unit level.  Often the hedging of foreign currency risk is performed in concert with related commodity price hedges.  The U.S. dollar-equivalent notional value of foreign exchange contracts designated as cash flow hedges at June 30, 2009 was $551.

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Crown Holdings, Inc.

Changes in the fair value of cash flow hedges in accumulated other comprehensive income/(loss) were:

Balance at January 1, 2009		($56)
Current period changes in fair value, net of tax:
	Cross-currency swaps	(2)
	Commodities	0
	Foreign exchange	6
Reclassifications to income:
	Cross-currency swaps	(2)	(1)
	Commodities	35	(2)
	Foreign exchange	(3)	(3)
Balance at June 30, 2009		($22)

(1)   $4 charged to foreign exchange and $6 credited to interest expense

(2)   $50 charged to cost of products sold and $15 credited to income tax expense

(3)   $2 charged to sales and $5 credited to cost of products sold

During the twelve months ending June 30, 2010, a net loss of $30 ($22, net of tax) is expected to be reclassified to earnings.  The actual amount that will be reclassified may differ from this amount due to changing market conditions.  No amounts were reclassified during the six months ended June 30, 2009 in connection with anticipated transactions that were no longer considered probable.

Fair Value Hedges and Contracts Not Designated as Hedges

The Company designates certain derivative financial instruments as fair value hedges of recognized foreign-denominated assets and liabilities, generally trade accounts receivable and payable, intercompany debt and unrecognized firm commitments. The notional values and maturity dates of the derivative instruments coincide with those of the hedged items. Changes in fair value of the derivative financial instruments, excluding time value, are offset by changes in fair value of the related hedged item.  Other than for firm commitments, amounts related to time value are excluded from the assessment and measurement of hedge effectiveness and are reported in earnings, including $1 before income taxes for the six months ended June 30, 2009. The U.S. dollar-equivalent notional value of foreign exchange contracts designated as fair value hedges at June 30, 2009 was $549.

In certain circumstances, the Company has not designated certain foreign exchange contracts related to intercompany debt as fair value hedges. The terms of the debt were not fixed and cannot effectively be matched to those of the derivative financial instruments. Although these derivative financial instruments were not designated and did not qualify for hedge accounting in accordance with the provisions of FAS 133, they are effective economic hedges as the changes in their fair value, except for time value, are offset by changes in the fair value of the related hedged items. The Company’s primary use of economic hedges is to offset the earnings impact that fluctuations in foreign exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies. Changes in fair value of these derivative instruments are immediately recognized in earnings as foreign exchange adjustments. The U.S dollar-equivalent notional value of these derivative instruments at June 30, 2009 was  $279. 

The impact on earnings of foreign exchange contracts designated as fair value hedges was a gain of $26.  The impact on earnings of foreign exchange contracts not designated as hedges was a gain of $21.  These gains were reported as translation and foreign exchange and were offset by changes in the fair value of the related hedged items.

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Crown Holdings, Inc.

The fair values of outstanding derivative instruments in the Consolidated Balance Sheet at June 30, 2009 were:

Assets
	Derivatives designated as hedges:
	Foreign exchange	$14	(4)
	Commodities	6	(4)
	Derivatives not designated as hedges:
	Foreign exchange	9	(4)
	Total	$29
Liabilities
	Derivatives designated as hedges:
	Cross-currency swaps	$84	(5)
	Foreign exchange	11	(6)
	Commodities	38	(6)
	Derivatives not designated as hedges:
	Foreign exchange	13	(6)
	Total	$146

(4)  reported in other current assets

(5)  $42 reported in accrued liabilities and $42 in other non-current liabilities

(6)  reported in accrued liabilities

H.         Restructuring

The components of the outstanding restructuring reserve and movements within these components during the six months ended June 30, 2009 and 2008,

respectively, were as follows:

		Termination		Other Exit
		Benefits		Costs		Total
Balance at January 1, 2008	$	8	$	7	$	15
Provision				1		1
Payments		(2)		(7)		(9)
Balance at June 30, 2008	$	6	$	1	$	7
Balance at January 1, 2009	$	11	$	1	$	12
Provision				2		2
Payments		(6)		(2)		(8)
Balance at June 30, 2009	$	5	$	1	$	6

The provision of $2 in 2009 was for maintenance and closing costs for a Canadian food can plant that ceased operations in 2008.

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 later merged into Crown Cork.

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Crown Holdings, Inc.

Prior to 1998, 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.

During 2009, the States of Indiana, North Dakota, Oklahoma and Wisconsin enacted legislation that limits  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.  Similar legislation was enacted in Florida, Georgia, Mississippi, Ohio and South Carolina in recent years.  The 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.  In May 2006 the Texas Fourteenth Court of Appeals upheld a grant of summary judgment to Crown Cork and upheld the state constitutionality of the statute (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 to the Texas Supreme Court.  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., No. 03-04-00518-CV, Texas Court of Appeals, Third District, at Austin) has been reversed on appeal on state constitutional grounds due to retroactive application of the statute. Although the Company believes that the Texas legislation is constitutional, there can be no assurance that the legislation will be upheld by the Texas Supreme Court on appeal. An adverse ruling by the Texas Supreme Court could have a material impact on the Company.

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 paid significantly more for asbestos-related claims than the acquired  company’s adjusted asset value. In November 2004, the legislation was amended to address a Pennsylvania Supreme Court decision (Ieropoli v. AC&S Corporation, et. al., No. 117 EM 2002) which held that the statute violated the Pennsylvania Constitution due to retroactive application.  On February 6, 2009, the Superior Court of Pennsylvania affirmed, due to the plaintiff’s lack of standing, the Philadelphia Court of Common Pleas’ dismissal of three cases against Crown Cork raising federal and state constitutional challenges to the amended statute (Stea v. A.W. Chesterton, Inc., et. al, No. 2956 EDA 2006). The plaintiff has requested that the Pennsylvania Supreme Court accept the appeal of this decision.  The Company cautions that the limitations of the statute, as amended, are subject to litigation and may not be upheld.  Adverse rulings in cases challenging the constitutionality of the Pennsylvania statute could have a material impact on the Company.

During the six months ended June 30, 2009, Crown Cork received approximately 1,000 new claims, settled or dismissed approximately 1,000 claims for a total of $5, and had approximately 50,000 claims outstanding at the end of the period. Settlement amounts include amounts committed to be paid in future periods.  The outstanding claims at June 30, 2009 exclude 33,000 pending claims involving plaintiffs who allege that they are, or were, maritime workers subject to exposure to asbestos, but whose claims the Company believes will not have a material effect on the Company’s consolidated results of operations, financial position or cash flow.  The outstanding claims also exclude approximately 19,000 inactive claims.  Due to the passage of time, the Company considers it unlikely that the plaintiffs in these cases will pursue further action.  The exclusion of these inactive claims had no effect on the calculation of the Company’s accrual as the claims were filed in states, as described above, where the Company’s liability is limited by statute.

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Crown Holdings, Inc.

Of the 50,000 claims outstanding at the end of 2008, approximately 96% were filed by plaintiffs who do not claim a specific amount of damages or claim a minimum amount as established by court rules relating to jurisdiction; approximately 2% were filed by plaintiffs who claim damages of less than $5; approximately 2% were filed by plaintiffs who claim damages from $5 to less than $100 (90% of whom claim damages from $10 to less than $25) and one was filed by a plaintiff who claims damages of $111.

As of June 30, 2009, the Company’s accrual for pending and future asbestos-related claims and related legal costs was $192, including $134 for unasserted claims and $1 for committed settlements that will be paid over time.

Historically (1977-2008), 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 any amounts for settlements by persons alleging first exposure to asbestos after 1964.

Underlying the accrual are assumptions 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 state asbestos legislation  described above is 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 of $192 includes estimates for probable costs for claims through the year 2018.  Potential estimated additional claims costs of $38 beyond 2018 have not been included in the Company’s accrual, as the Company believes cost projections beyond ten years are inherently unreliable due to potential changes in the litigation environment and other factors whose impact cannot be known or reasonably estimated.

While it is not possible to predict the ultimate outcome of 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. 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 or cash flow.

J.           Commitments and Contingent Liabilities

The Company and its subsidiaries are subject to various lawsuits and claims with respect to labor, environmental, securities, vendor, tax and other matters.  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, along with others in most cases, has been identified by the EPA or a comparable state environmental agency as a Potentially Responsible Party (“PRP”) at a number of sites and has recorded aggregate accruals of $6 for its share of estimated future remediation costs at these sites. The Company has been identified as having either directly or indirectly disposed of commercial or industrial waste at the sites subject to the accrual, and where appropriate and supported by available information, generally has agreed to be responsible for a percentage of future remediation costs based on an estimated volume of materials disposed in proportion to the total materials disposed at each site.  The Company has not had monetary sanctions imposed nor has the Company been notified of any potential monetary sanctions at any of the sites.  The Company has also recorded aggregate accruals of $12 for remediation activities at various worldwide locations that are owned by the Company and for which the Company is not a member of a PRP group.  Although the Company believes its accruals are adequate to cover its portion of future remediation costs, there can be no assurance that the ultimate payments will not exceed the amount of the Company’s accruals and will not have a material effect on its results of operations, financial position and cash flow.  Any possible loss or range of potential loss that may be incurred in excess of the recorded accruals cannot be estimated.

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Crown Holdings, Inc.

The Company has various commitments to purchase materials, supplies and utilities as part of the ordinary conduct of business.  The Company’s basic raw materials for its products include 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, 2009, 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 related to these items when it is probable that a liability has been incurred and the amount can be reasonably estimated.  At June 30, 2009, the Company also had guarantees of $29 related to the residual values of leased assets.

K. Debt

In May 2009, the Company sold $400 principal amount of 7.625% senior unsecured notes due 2017 in a private placement.  The notes were priced at 97.092% to yield 8.125% and the Company received proceeds of $388.  The notes were issued by Crown Americas, LLC and Crown Americas Capital Corp. II.  The notes are senior obligations of the issuers, ranking senior in right of payment to all subordinated indebtedness of Crown Americas, LLC and Crown Americas Capital Corp. II, and are unconditionally guaranteed on a senior basis by the Company and substantially all of its U.S. subsidiaries.  The proceeds from the notes have been temporarily applied to fully pay down borrowings under the Company’s revolving credit facility.

L. Acquisition

In June 2009, the Company acquired a 70% interest in a beverage can production facility near Ho Chi Minh City, Vietnam for $4 in cash, net of cash acquired, and the assumption of $18 in debt.  The facility had not commenced commercial production at the time it was acquired by the Company.  The Company expects to complete equipment installation and start-up and begin selling beverage cans produced by the facility in the fourth quarter of 2009.  The overall purchase price allocation included $28 to property, plant and equipment, $18 to debt, $4 to other liabilities, and $2 to noncontrolling interests.  

M.        Earnings Per Share

The following table summarizes the computations of basic and diluted earnings per share attributable to Crown Holdings for the three and six month periods ended June 30, 2009 and 2008, respectively:

	Three Months Ended				Six Months Ended
	June 30				June 30
		2009		2008		2009		2008
Earnings:
Net income attributable to Crown Holdings	$	105	$	99	$	145	$	126
Weighted average common shares outstanding:
Basic		158.9		159.6		158.7		159.4
Add: dilutive stock options and restricted stock		2.8		3.7		2.8		3.6
Diluted		161.7		163.3		161.5		163.0
Basic earnings per share	$	0.66	$	0.62	$	0.91	$	0.79
Diluted earnings per share	$	0.65	$	0.61	$	0.90	$	0.77

Excluded from the computation of diluted earnings per share were common shares contingently issuable upon the exercise of outstanding stock options, amounting to 3.4 million and 4.1 million shares for the three and six months ended June 30, 2009 and 3.7 million and 4.3 million shares for the same periods in 2008.  These shares were excluded because the exercise prices of the then outstanding options were above the average market prices for the related periods.

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Crown Holdings, Inc.

N.        Pension and Other Postretirement Benefits

The components of net periodic pension and other postretirement benefits costs for the three and six months ended June 30 were as follows:

	Three Months Ended				Six Months Ended
	June 30				June 30
Pension Benefits – U.S. Plans	2009		2008		2009		2008
Service cost	$	2	$	2	$	4	$	4
Interest cost		20		21		40		40
Expected return on plan assets		(17)		(30)		(35)		(59)
Recognized prior service cost						1		1
Recognized net loss		19		7		39		15
Settlement				3				3
Net periodic cost	$	24	$	3	$	49	$	4

	Three Months Ended				Six Months Ended
	June 30				June 30
Pension Benefits – Non-U.S. Plans	2009		2008		2009		2008
Service cost	$	4	$	10	$	9	$	20
Interest cost		36		46		70		92
Expected return on plan assets		(40)		(62)		(77)		(123)
Recognized prior service credit		(2)		(1)		(3)		(3)
Recognized net loss		8		9		14		18
Net periodic cost	$	6	$	2	$	13	$	4

	Three Months Ended				Six Months Ended
	June 30				June 30
Other Postretirement Benefits	2009		2008		2009		2008
Service cost	$	2	$	2	$	4	$	4
Interest cost		8		7		15		15
Recognized prior service credit		(5)		(5)		(11)		(11)
Recognized net loss		1		2		4		4
Net periodic cost	$	6	$	6	$	12	$	12

O.       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 in the Americas, and European Beverage, European Food and European Specialty Packaging in 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.

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Crown Holdings, Inc.

The tables below present information about operating segments for the three and six months ended June 30, 2009 and 2008:

	External Sales				External Sales
	Three Months Ended				Six Months Ended
	June 30				June 30
		2009		2008		2009		2008
Americas Beverage	$	478	$	519	$	887	$	952
North America Food		250		220		447		405
European Beverage		453		476		792		824
European Food		466		557		855		1,045
European Specialty Packaging		108		125		189		230
Total reportable segments		1,755		1,897		3,170		3,456
Non-reportable segments		300		299		569		603
Total	$	2,055	$	2,196	$	3,739	$	4,059

	Segment Income				Segment Income
	Three Months Ended				Six Months Ended
	June 30				June 30
		2009		2008		2009		2008
Americas Beverage	$	62	$	62	$	103	$	105
North America Food		29		20		47		31
European Beverage		88		84		145		133
European Food		71		63		123		103
European Specialty Packaging		8		11		9		12
Total reportable segments	$	258	$	240	$	427	$	384

A reconciliation of segment income of reportable segments to income before income taxes and equity earnings for the three and six months ended June 30, 2009 and 2008 follows:

	Three Months Ended				Six Months Ended
	June 30				June 30
	2009		2008		2009		2008
Segment income of reportable segments	$	258	$	240	$	427	$	384
Segment income of non-reportable segments		46		42		88		82
Corporate and unallocated items		(61)		(36)		(116)		(70)
Provision for restructuring		(1)		(1)		(2)		(1)
Gain on sale of assets		1		2		1		2
Loss from early extinguishment of debt								(2)
Interest expense		(62)		(79)		(123)		(156)
Interest income		1		2		3		5
Translation and foreign exchange				(1)		(4)		(1)
Income before income taxes and equity earnings	$	182	$	169	$	274	$	243

 “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.  The increase in 2009 was primarily due to increased pension costs in the Company’s U.S. and U.K. plans.

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Crown Holdings, Inc.

P.        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. (Parent) 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 Belgium, Canada, France, Germany, Mexico, Switzerland and the United Kingdom, and a subsidiary in the Netherlands.  The following condensed combining financial statements:

·   statements of operations for the three and six months ended June 30, 2009 and 2008,

·   balance sheets as of June 30, 2009 and December 31, 2008, and

  ·   statements of cash flows for the six months ended June 30, 2009 and 2008

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, 2009

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	1,189	$	866			$	2,055
Cost of products sold, excluding depreciation and amortization			$	(2)		983		695				1,676
Depreciation and amortization						25		21				46
Gross profit				2		181		150				333
Selling and administrative expense				(1)		68		23				90
Gain on sale of assets						(1)						(1)
Provision for restructuring						1						1
Net interest expense				6		50		5				61
Technology royalty						(10)		10
Translation and foreign exchange				4		(3)		(1)
Income/(loss) before income taxes				(7)		76		113				182
Provision for income taxes						23		21				44
Equity earnings in affiliates	$	105		76		52		1	$	(233)		1
Net income		105		69		105		93		(233)		139
Net income attributable to noncontrolling interests								(34)				(34)
Net income attributable to Crown Holdings	$	105	$	69	$	105	$	59	$	(233)	$	105

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Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2008

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	1,268	$	928			$	2,196
Cost of products sold, excluding depreciation and amortization			$	(5)		1,045		749				1,789
Depreciation and amortization						31		25				56
Gross profit				5		192		154				351
Selling and administrative expense				(1)		76		30				105
(Gain)/loss on sale of assets				(6)		7		(3)				(2)
Provision for restructuring								1				1
Net interest expense				26		47		4				77
Technology royalty						(10)		10
Translation and foreign exchange						(1)		2				1
Income/(loss) before income taxes				(14)		73		110				169
Provision for income taxes						23		19				42
Equity earnings in affiliates	$	99		77		49			$	(222)		3
Net income		99		63		99		91		(222)		130
Net income attributable to noncontrolling interests								(31)				(31)
Net income attributable to Crown Holdings	$	99	$	63	$	99	$	60	$	(222)	$	99

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Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2009

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	2,179	$	1,560			$	3,739
Cost of products sold, excluding depreciation and amortization			$	(5)		1,819		1,254				3,068
Depreciation and amortization						48		45				93
Gross profit				5		312		261				578
Selling and administrative expense				(2)		134		47				179
Gain on sale of assets						(1)						(1)
Provision for restructuring						2						2
Net interest expense				14		96		10				120
Technology royalty						(17)		17
Translation and foreign exchange				4		(2)		2				4
Income/(loss) before income taxes				(11)		100		185				274
Provision for income taxes						28		40				68
Equity earnings/(loss) in affiliates	$	145		125		73			$	(347)		(4)
Net income		145		114		145		145		(347)		202
Net income attributable to noncontrolling interests								(57)				(57)
Net income attributable to Crown Holdings	$	145	$	114	$	145	$	88	$	(347)	$	145

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Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2008

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	2,366	$	1,693			$	4,059
Cost of products sold, excluding depreciation and amortization			$	(10)		1,970		1,387				3,347
Depreciation and amortization						62		47				109
Gross profit				10		334		259				603
Selling and administrative expense				(1)		153		55				207
(Gain)/loss on sale of assets				(6)		7		(3)				(2)
Provision for restructuring								1				1
Loss from early extinguishment of debt				2								2
Net interest expense				51		92		8				151
Technology royalty						(18)		18
Translation and foreign exchange						1						1
Income/(loss) before income taxes				(36)		99		180				243
Provision for income taxes						29		39				68
Equity earnings in affiliates	$	126		110		56			$	(289)		3
Net income		126		74		126		141		(289)		178
Net income attributable to noncontrolling interests								(52)				(52)
Net income attributable to Crown Holdings	$	126	$	74	$	126	$	89	$	(289)	$	126

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Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of June 30, 2009

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents			$	92	$	236	$	378			$	706
Receivables, net				75		192		672				939
Intercompany receivables				2		75		29	$	(106)
Inventories						650		559				1,209
Prepaid expenses and other current assets	$	3		1		89		22				115
Total current assets		3		170		1,242		1,660		(106)		2,969
Intercompany debt receivables				2,107		2,282		190		(4,579)
Investments		186		2,474		(191)				(2,469)
Goodwill						1,435		596				2,031
Property, plant and equipment, net						691		799				1,490
Other non-current assets				4		884		12				900
Total	$	189	$	4,755	$	6,343	$	3,257	$	(7,154)	$	7,390
Liabilities and equity
Current liabilities
Short-term debt			$	1	$	3	$	58			$	62
Current maturities of long-term debt				4		6		17				27
Accounts payable and accrued liabilities	$	11		58		1,061		720				1,850
Intercompany payables						29		77	$	(106)
Total current liabilities		11		63		1,099		872		(106)		1,939
Long-term debt, excluding current maturities				1,031		2,540		75				3,646
Long-term intercompany debt		200		2,729		1,278		372		(4,579)
Postretirement and pension liabilities						885		18				903
Other non-current liabilities				44		355		139				538
Commitments and contingent liabilities
Noncontrolling interests								386				386
Crown Holdings shareholders’ equity/(deficit)		(22)		888		186		1,395		(2,469)		(22)
Total equity/(deficit)		(22)		888		186		1,781		(2,469)		364
Total	$	189	$	4,755	$	6,343	$	3,257	$	(7,154)	$	7,390

23

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of December 31, 2008

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents			$	77	$	138	$	381			$	596
Receivables, net				67		116		551				734
Intercompany receivables				2		66		31	$	(99)
Inventories						514		465				979
Prepaid expenses and other current assets	$	2		2		137		7				148
Total current assets		2		148		971		1,435		(99)		2,457
Intercompany debt receivables				1,935		2,168		245		(4,348)
Investments		(99)		2,260		(209)				(1,952)
Goodwill						1,362		594				1,956
Property, plant and equipment, net						697		776				1,473
Other non-current assets				6		861		21				888
Total	$	(97)	$	4,349	$	5,850	$	3,071	$	(6,399)	$	6,774
Liabilities and equity
Current liabilities
Short-term debt			$	1	$	2	$	56			$	59
Current maturities of long-term debt				4		5		22				31
Accounts payable and accrued liabilities	$	22		53		1,067		840				1,982
Intercompany payables				1		30		68	$	(99)
Total current liabilities		22		59		1,104		986		(99)		2,072
Long-term debt, excluding current maturities				1,026		2,152		69				3,247
Long-term intercompany debt		198		2,523		1,458		169		(4,348)
Postretirement and pension liabilities						875		18				893
Other non-current liabilities				40		360		126				526
Commitments and contingent liabilities
Noncontrolling interests								353				353
Crown Holdings shareholders’ equity/(deficit)		(317)		701		(99)		1,350		(1,952)		(317)
Total equity/(deficit)		(317)		701		(99)		1,703		(1,952)		36
Total	$	(97)	$	4,349	$	5,850	$	3,071	$	(6,399)	$	6,774

24

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2009

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Net cash used for operating activities	$	(2)	$	(7)	$	(58)	$	(96)			$	(163)
Cash flows from investing activities
Capital expenditures						(30)		(45)				(75)
Proceeds from sale of property, plant and equipment						1						1
Intercompany investing activities						107		(77)	$	(30)
Other								(4)				(4)
Net cash provided by/(used for) investing activities						78		(126)		(30)		(78)
Cash flows from financing activities
Proceeds from long-term debt						388		8				396
Payments of long-term debt						(1)		(5)				(6)
Net change in revolving credit facility and short-term debt								(15)				(15)
Net change in long-term intercompany balances		2		39		(327)		286
Common stock issued		4										4
Common stock repurchased		(4)										(4)
Dividends paid								(30)		30
Dividends paid to noncontrolling interests								(27)				(27)
Other				(17)		13						(4)
Net cash provided by financing activities		2		22		73		217		30		344
Effect of exchange rate changes on cash and cash equivalents						5		2				7
Net change in cash and cash equivalents				15		98		(3)				110
Cash and cash equivalents at January 1				77		138		381				596
Cash and cash equivalents at June 30	$	0	$	92	$	236	$	378	$	0	$	706

25

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2008

(in millions)

	Parent		Issuer		Guarantors		Non- Guarantors		Eliminations		Total Company
Net cash used for operating activities			$	(40)	$	(202)	$	(112)			$	(354)
Cash flows from investing activities
Capital expenditures						(20)		(51)				(71)
Proceeds from sale of property, plant and equipment						1		5				6
Intercompany investing activities				429		(410)			$	(19)
Other						(19)		(2)				(21)
Net cash provided by/(used for) investing activities				429		(448)		(48)		(19)		(86)
Cash flows from financing activities
Payments of long-term debt				(41)		(1)		(17)				(59)
Net change in revolving credit facility and short-term debt				113		193		22				328
Net change in long-term intercompany balances	$	(4)		(499)		405		98
Common stock issued		7										7
Common stock repurchased		(3)										(3)
Dividends paid								(19)		19
Dividends paid to noncontrolling interests								(27)				(27)
Other				25		4						29
Net cash provided by/(used for) financing activities				(402)		601		57		19		275
Effect of exchange rate changes on cash and cash equivalents						1		18				19
Net change in cash and cash equivalents				(13)		(48)		(85)				(146)
Cash and cash equivalents at January 1				13		81		363				457
Cash and cash equivalents at June 30	$	0	$	0	$	33	$	278	$	0	$	311

26

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, 2009 and 2008,

              ·    balance sheets as of June 30, 2009 and December 31, 2008 and

              ·   statements of cash flows for the six months ended June 30, 2009 and 2008 

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, 2009

(in millions)

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Net sales					$	2,055			$	2,055
Cost of products sold, excluding depreciation and amortization						1,676				1,676
Depreciation and amortization						46				46
Gross profit						333				333
Selling and administrative expense			$	3		87				90
Gain on sale of assets						(1)				(1)
Provision for restructuring						1				1
Net interest expense				20		42				62
Translation and foreign exchange						(1)				(1)
Income/(loss) before income taxes				(23)		205				182
Provision/(benefit) for income taxes				(9)		53				44
Equity earnings in affiliates	$	105		119		1	$	(224)		1
Net income		105		105		153		(224)		139
Net income attributable to noncontrolling interests						(34)				(34)
Net income attributable to Crown Holdings	$	105	$	105	$	119	$	(224)	$	105

27

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2008

(in millions)

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Net sales					$	2,196			$	2,196
Cost of products sold, excluding depreciation and amortization						1,789				1,789
Depreciation and amortization						56				56
Gross profit						351				351
Selling and administrative expense			$	5		100				105
Gain on sale of assets						(2)				(2)
Provision for restructuring						1				1
Net interest expense				17		60				77
Translation and foreign exchange						1				1
Income/(loss) before income taxes				(22)		191				169
Provision/(benefit) for income taxes				(8)		50				42
Equity earnings in affiliates	$	99		113		3	$	(212)		3
Net income		99		99		144		(212)		130
Net income attributable to noncontrolling interests						(31)				(31)
Net income attributable to Crown Holdings	$	99	$	99	$	113	$	(212)	$	99

28

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2009

(in millions)

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Net sales					$	3,739			$	3,739
Cost of products sold, excluding depreciation and amortization						3,068				3,068
Depreciation and amortization						93				93
Gross profit						578				578
Selling and administrative expense			$	6		173				179
Gain on sale of assets						(1)				(1)
Provision for restructuring						2				2
Net interest expense				41		79				120
Translation and foreign exchange						4				4
Income/(loss) before income taxes				(47)		321				274
Provision/(benefit) for income taxes				(18)		86				68
Equity earnings/(loss) in affiliates	$	145		174		(4)	$	(319)		(4)
Net income		145		145		231		(319)		202
Net income attributable to noncontrolling interests						(57)				(57)
Net income attributable to Crown Holdings	$	145	$	145	$	174	$	(319)	$	145

29

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2008

(in millions)

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Net sales					$	4,059			$	4,059
Cost of products sold, excluding depreciation and amortization						3,347				3,347
Depreciation and amortization						109				109
Gross profit						603				603
Selling and administrative expense			$	8		199				207
Gain on sale of assets						(2)				(2)
Provision for restructuring						1				1
Loss from early extinguishment of debt						2				2
Net interest expense				34		117				151
Translation and foreign exchange						1				1
Income/(loss) before income taxes				(42)		285				243
Provision/(benefit) for income taxes				(16)		84				68
Equity earnings in affiliates	$	126		152		3	$	(278)		3
Net income		126		126		204		(278)		178
Net income attributable to noncontrolling interests						(52)				(52)
Net income attributable to Crown Holdings	$	126	$	126	$	152	$	(278)	$	126

30

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of June 30, 2009

(in millions)

 

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents					$	706			$	706
Receivables, net						939				939
Inventories						1,209				1,209
Prepaid expenses and other current assets	$	3				112				115
Total current assets		3				2,966				2,969
Intercompany debt receivables						564	$	(564)
Investments		186	$	970				(1,156)
Goodwill						2,031				2,031
Property, plant and equipment, net						1,490				1,490
Other non-current assets				514		386				900
Total	$	189	$	1,484	$	7,437	$	(1,720)	$	7,390
Liabilities and equity
Current liabilities
Short-term debt					$	62			$	62
Current maturities of long-term debt						27				27
Accounts payable and accrued liabilities	$	11	$	40		1,799				1,850
Total current liabilities		11		40		1,888				1,939
Long-term debt, excluding current maturities				697		2,949				3,646
Long-term intercompany debt		200		364			$	(564)
Postretirement and pension liabilities						903				903
Other non-current liabilities				197		341				538
Commitments and contingent liabilities
Noncontrolling interests						386				386
Crown Holdings shareholders’ equity/(deficit)		(22)		186		970		(1,156)		(22)
Total equity/(deficit)		(22)		186		1,356		(1,156)		364
Total	$	189	$	1,484	$	7,437	$	(1,720)	$	7,390

31

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of December 31, 2008

(in millions)

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents					$	596			$	596
Receivables, net						734				734
Inventories						979				979
Prepaid expenses and other current assets	$	2				146				148
Total current assets		2				2,455				2,457
Intercompany debt receivables						570	$	(570)
Investments		(99)	$	696				(597)
Goodwill						1,956				1,956
Property, plant and equipment, net						1,473				1,473
Other non-current assets				523		365				888
Total	$	(97)	$	1,219	$	6,819	$	(1,167)	$	6,774
Liabilities and equity
Current liabilities
Short-term debt					$	59			$	59
Current maturities of long-term debt						31				31
Accounts payable and accrued liabilities	$	22	$	41		1,919				1,982
Total current liabilities		22		41		2,009				2,072
Long-term debt, excluding current maturities				697		2,550				3,247
Long-term intercompany debt		198		372			$	(570)
Postretirement and pension liabilities						893				893
Other non-current liabilities				208		318				526
Commitments and contingent liabilities
Noncontrolling interests						353				353
Crown Holdings shareholders’ equity/(deficit)		(317)		(99)		696		(597)		(317)
Total equity/(deficit)		(317)		(99)		1,049		(597)		36
Total	$	(97)	$	1,219	$	6,819	$	(1,167)	$	6,774

32

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2009

(in millions)

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Net cash used for operating activities	$	(2)	$	(23)	$	(138)			$	(163)
Cash flows from investing activities
Capital expenditures						(75)				(75)
Proceeds from sale of property, plant and equipment						1				1
Other				23		(4)	$	(23)		(4)
Net cash provided by/(used for) investing activities				23		(78)		(23)		(78)
Cash flows from financing activities
Proceeds from long-term debt						396				396
Payments of long-term debt						(6)				(6)
Net change in revolving credit facility and short-term debt						(15)				(15)
Net change in long-term intercompany balances		2				(2)
Common stock issued		4								4
Common stock repurchased		(4)								(4)
Dividends paid						(23)		23
Dividends paid to noncontrolling interests						(27)				(27)
Other						(4)				(4)
Net cash provided by financing activities		2				319		23		344
Effect of exchange rate changes on cash and cash equivalents						7				7
Net change in cash and cash equivalents						110				110
Cash and cash equivalents at January 1						596				596
Cash and cash equivalents at June 30	$	0	$	0	$	706	$	0	$	706

33

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2008

(in millions)

	Parent		Issuer		Non- Guarantors		Eliminations		Total Company
Net cash used for operating activities			$	(23)	$	(331)			$	(354)
Cash flows from investing activities
Capital expenditures						(71)				(71)
Proceeds from sale of property, plant and equipment						6				6
Intercompany investing activities				12			$	12
Other						(21)				(21)
Net cash provided by/(used for) investing activities				12		(86)		(12)		(86)
Cash flows from financing activities
Payments of long-term debt						(59)				(59)
Net change in revolving credit facility and short-term debt						328				328
Net change in long-term intercompany balances	$	(4)		11		(7)
Common stock issued		7								7
Common stock repurchased		(3)								(3)
Dividends paid						(12)		12
Dividends paid to noncontrolling interests						(27)				(27)
Other						29				29
Net cash provided by financing activities				11		252		12		275
Effect of exchange rate changes on cash and cash equivalents						19				19
Net change in cash and cash equivalents						(146)				(146)
Cash and cash equivalents at January 1						457				457
Cash and cash equivalents at June 30	$	0	$	0	$	311	$	0	$	311

34

Crown Holdings, Inc.

Crown Americas, LLC, Crown Americas Capital Corp. and Crown Americas Capital Corp. II (collectively, the Issuers), 100% owned subsidiaries of the Company, have outstanding senior unsecured notes that are fully and unconditionally guaranteed by Crown Holdings, Inc. (Parent) 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, 2009 and 2008,

●balance sheets as of June 30, 2009 and December 31, 2008 and

●    statements of cash flows for the six months ended June 30, 2009 and 2008

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, 2009

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	589	$	1,466			$	2,055
Cost of products sold, excluding depreciation and amortization						504		1,172				1,676
Depreciation and amortization						11		35				46
Gross profit						74		259				333
Selling and administrative expense			$	1		34		55				90
Gain on sale of assets						(1)						(1)
Provision for restructuring								1				1
Net interest expense				13		28		20				61
Technology royalty						(12)		12
Translation and foreign exchange
Income/(loss) before income taxes				(14)		25		171				182
Provision/(benefit) for income taxes				(5)		16		33				44
Equity earnings in affiliates	$	105		32		96			$	(232)		1
Net income		105		23		105		138		(232)		139
Net income attributable to noncontrolling interests								(34)				(34)
Net income attributable to Crown Holdings	$	105	$	23	$	105	$	104	$	(232)	$	105

35

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the three months ended June 30, 2008

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	578	$	1,618			$	2,196
Cost of products sold, excluding depreciation and amortization			$	1		479		1,309				1,789
Depreciation and amortization						13		43				56
Gross profit				(1)		86		266				351
Selling and administrative expense				2		33		70				105
Gain on sale of assets								(2)				(2)
Provision for restructuring								1				1
Net interest expense				10		24		43				77
Technology royalty						(13)		13
Translation and foreign exchange								1				1
Income/(loss) before income taxes				(13)		42		140				169
Provision/(benefit) for income taxes				(5)		20		27				42
Equity earnings in affiliates	$	99		42		77			$	(215)		3
Net income		99		34		99		113		(215)		130
Net income attributable to noncontrolling interests								(31)				(31)
Net income attributable to Crown Holdings	$	99	$	34	$	99	$	82	$	(215)	$	99

36

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2009

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	1,085	$	2,654			$	3,739
Cost of products sold, excluding depreciation and amortization						941		2,127				3,068
Depreciation and amortization						22		71				93
Gross profit						122		456				578
Selling and administrative expense			$	2		68		109				179
Gain on sale of assets						(1)						(1)
Provision for restructuring								2				2
Net interest expense				22		56		42				120
Technology royalty						(22)		22
Translation and foreign exchange								4				4
Income/(loss) before income taxes				(24)		21		277				274
Provision/(benefit) for income taxes				(9)		27		50				68
Equity earnings/(loss) in affiliates	$	145		26		151			$	(326)		(4)
Net income		145		11		145		227		(326)		202
Net income attributable to noncontrolling interests								(57)				(57)
Net income attributable to Crown Holdings	$	145	$	11	$	145	$	170	$	(326)	$	145

37

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF OPERATIONS

For the six months ended June 30, 2008

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Net sales					$	1,062	$	2,997			$	4,059
Cost of products sold, excluding depreciation and amortization			$	1		882		2,464				3,347
Depreciation and amortization						27		82				109
Gross profit				(1)		153		451				603
Selling and administrative expense				4		67		136				207
Gain on sale of assets								(2)				(2)
Provision for restructuring								1				1
Loss from early extinguishment of debt								2				2
Net interest expense				22		45		84				151
Technology royalty						(24)		24
Translation and foreign exchange								1				1
Income/(loss) before income taxes				(27)		65		205				243
Provision/(benefit) for income taxes				(10)		32		46				68
Equity earnings in affiliates	$	126		70		93			$	(286)		3
Net income		126		53		126		159		(286)		178
Net income attributable to noncontrolling interests								(52)				(52)
Net income attributable to Crown Holdings	$	126	$	53	$	126	$	107	$	(286)	$	126

38

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of June 30, 2009

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents			$	162	$	1	$	543			$	706
Receivables, net						2		937				939
Intercompany receivables						46		9	$	(55)
Inventories						289		920				1,209
Prepaid expenses and other current assets	$	3		1		7		104				115
Total current assets		3		163		345		2,513		(55)		2,969
Intercompany debt receivables				1,575		1,007		448		(3,030)
Investments		186		927		679				(1,792)
Goodwill						453		1,578				2,031
Property, plant and equipment, net				2		304		1,184				1,490
Other non-current assets				33		533		334				900
Total	$	189	$	2,700	$	3,321	$	6,057	$	(4,877)	$	7,390
Liabilities and equity
Current liabilities
Short-term debt							$	62			$	62
Current maturities of long-term debt			$	4	$	1		22				27
Accounts payable and accrued liabilities	$	11		22		352		1,465				1,850
Intercompany payables						9		46	$	(55)
Total current liabilities		11		26		362		1,595		(55)		1,939
Long-term debt, excluding current maturities				1,838		700		1,108				3,646
Long-term intercompany debt		200		697		1,085		1,048		(3,030)
Postretirement and pension liabilities						733		170				903
Other non-current liabilities						255		283				538
Commitments and contingent liabilities
Noncontrolling interests								386				386
Crown Holdings shareholders’ equity/(deficit)		(22)		139		186		1,467		(1,792)		(22)
Total equity/(deficit)		(22)		139		186		1,853		(1,792)		364
Total	$	189	$	2,700	$	3,321	$	6,057	$	(4,877)	$	7,390

39

Crown Holdings, Inc.

CONDENSED COMBINING BALANCE SHEET

As of December 31, 2008

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Assets
Current assets
Cash and cash equivalents			$	92	$	3	$	501			$	596
Receivables, net						6		728				734
Intercompany receivables						56		6	$	(62)
Inventories						224		755				979
Prepaid expenses and other current assets	$	2		1		3		142				148
Total current assets		2		93		292		2,132		(62)		2,457
Intercompany debt receivables				1,302		961		454		(2,717)
Investments		(99)		896		449				(1,246)
Goodwill						453		1,503				1,956
Property, plant and equipment, net				2		312		1,159				1,473
Other non-current assets				29		558		301				888
Total	$	(97)	$	2,322	$	3,025	$	5,549	$	(4,025)	$	6,774
Liabilities and equity
Current liabilities
Short-term debt							$	59			$	59
Current maturities of long-term debt			$	4	$	1		26				31
Accounts payable and accrued liabilities	$	22		18		328		1,614				1,982
Intercompany payables						6		56	$	(62)
Total current liabilities		22		22		335		1,755		(62)		2,072
Long-term debt, excluding current maturities				1,450		700		1,097				3,247
Long-term intercompany debt		198		722		1,079		718		(2,717)
Postretirement and pension liabilities						747		146				893
Other non-current liabilities						263		263				526
Commitments and contingent liabilities
Noncontrolling interests								353				353
Crown Holdings shareholders’ equity/(deficit)		(317)		128		(99)		1,217		(1,246)		(317)
Total equity/(deficit)		(317)		128		(99)		1,570		(1,246)		36
Total	$	(97)	$	2,322	$	3,025	$	5,549	$	(4,025)	$	6,774

40

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2009

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Net cash provided by/(used for) operating activities	$	(2)	$	(12)	$	31	$	(180)			$	(163)
Cash flows from investing activities
Capital expenditures						(15)		(60)				(75)
Proceeds from sale of property, plant and equipment						1						1
Intercompany investing activities						22			$	(22)
Other								(4)				(4)
Net cash provided by/(used for) investing activities						8		(64)		(22)		(78)
Cash flows from financing activities
Proceeds from long-term debt				388				8				396
Payments of long-term debt						(1)		(5)				(6)
Net change in revolving credit facility and short-term debt								(15)				(15)
Net change in long-term intercompany balances		2		(298)		(40)		336
Common stock issued		4										4
Common stock repurchased		(4)										(4)
Dividends paid								(22)		22
Dividends paid to noncontrolling interests								(27)				(27)
Other				(8)				4				(4)
Net cash provided by/(used for) financing activities		2		82		(41)		279		22		344
Effect of exchange rate changes on cash and cash equivalents								7				7
Net change in cash and cash equivalents				70		(2)		42				110
Cash and cash equivalents at January 1				92		3		501				596
Cash and cash equivalents at June 30	$	0	$	162	$	1	$	543	$	0	$	706

41

Crown Holdings, Inc.

CONDENSED COMBINING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2008

(in millions)

	Parent		Issuers		Guarantors		Non- Guarantors		Eliminations		Total Company
Net cash provided by/(used for) operating activities			$	(13)	$	58	$	(399)			$	(354)
Cash flows from investing activities
Capital expenditures						(12)		(59)				(71)
Proceeds from sale of property, plant and equipment						1		5				6
Intercompany investing activities				5		(517)		528	$	(16)
Other				(6)				(15)				(21)
Net cash provided by/(used for) investing activities				(1)		(528)		459		(16)		(86)
Cash flows from financing activities
Payments of long-term debt						(1)		(58)				(59)
Net change in revolving credit facility and short-term debt				145				183				328
Net change in long-term intercompany balances	$	(4)		(158)		467		(305)
Common stock issued		7										7
Common stock repurchased		(3)										(3)
Dividends paid								(16)		16
Dividends paid to noncontrolling interests								(27)				(27)
Other								29				29
Net cash provided by/(used for) financing activities				(13)		466		(194)		16		275
Effect of exchange rate changes on cash and cash equivalents								19				19
Net change in cash and cash equivalents				(27)		(4)		(115)				(146)
Cash and cash equivalents at January 1				42		5		410				457
Cash and cash equivalents at June 30	$	0	$	15	$	1	$	295	$	0	$	311

42

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, 2009 compared to the corresponding period in 2008 and the changes in financial condition and liquidity from December 31, 2008.  This discussion should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Current Report on Form 8-K filed May 5, 2009, along with the consolidated financial statements and related notes included in and referred to within this report.

Executive Overview

The Company’s principal areas of focus include improving segment income and cash flow from operations and reducing debt. See Note O 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 sales include targeting geographic markets with strong growth potential, such as the Middle East, Asia, South 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 other 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 $3,735 at June 30, 2009 decreased $64 from $3,799 at June 30, 2008, including $137 of decrease due to foreign currency translation.  The Company’s cash balances increased from $311 to $706 during the same period, net of a decrease of $32 due to foreign currency translation.

The Company considers possible transactions such as acquisitions (which, if effected, may increase the Company’s indebtedness or involve the issuance of Company securities), dispositions, refinancings or the repurchase of Company common stock pursuant to Board approved repurchase authorizations (under which $467 was available at June 30, 2009). Such transactions would be subject to compliance with the Company’s debt agreements.

The cost of aluminum and steel, the primary raw materials used to manufacture the Company’s products, has increased significantly in recent years.  The Company attempts to pass-through these increased costs to its customers through provisions that adjust the selling prices to certain customers based on changes in the market price of the applicable raw material, or through surcharges where no such provision exists.  The Company recognizes revenue related to its selling price increases when all of the revenue recognition criteria has been met.  There can be no assurance that the Company will be able to fully recover from its customers the impact of increased aluminum and steel costs.

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.

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Crown Holdings, Inc.

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

Net Sales

Net sales in the second quarter of 2009 were $2,055, a decrease of $141 or 6.4% compared to net sales of $2,196 for the same period in 2008.  Net sales in the first six months of 2009 were $3,739, a decrease of $320 or 7.9% compared to net sales of $4,059 for the same period in 2008.  The decrease in net sales for the second quarter and first six months of 2009 included, among other items, $205 and $394, respectively, due to foreign currency translation.  Global beverage can volumes in the first six months increased approximately 2% from 2008.  Global food can volumes decreased from 2008 primarily due to destocking by customers, lower end user demand and the impact of fourth quarter 2008 buy-ahead due to higher steel costs and selling prices in 2009.  The pass-through to customers of higher steel costs in the form of increased selling prices was offset by the pass-through of lower aluminum costs.  Sales from U.S. operations accounted for 29.0% and 26.2% of consolidated net sales in the first six months of 2009 and 2008, respectively.  Sales of beverage cans and ends accounted for 50.1% and sales of food cans and ends accounted for 31.5% of consolidated net sales in the first six months of 2009 compared to 48.2% and 32.3%, respectively, in 2008.

Net sales in the Americas Beverage segment decreased $41 or 7.9% from $519 in the second quarter of 2008 to $478 in the second quarter of 2009.  Net sales in the first six months decreased $65 or 6.8% from $952 in 2008 to $887 in 2009.  The decreases in the quarter and first six months were primarily due to the pass-through of lower aluminum costs to customers in the form of decreased selling prices, and $21 of foreign currency impact in the quarter and $43 in the six months.

Net sales in the North America Food segment increased $30 or 13.6% from $220 in the second quarter of 2008 to $250 in the second quarter of 2009.  Net sales in the first six months increased $42 or 10.4% from $405 in 2008 to $447 in 2009. The increases in 2009 were primarily due to the pass-through to customers of higher steel costs, offset by lower sales unit volumes and $6 of foreign currency translation in the quarter and $15 for the six months.  The lower sales unit volumes were primarily due to destocking by customers, lower end user demand, and some buy-ahead in the fourth quarter of 2008 prior to 2009 price increases.

Net sales in the European Beverage segment decreased $23 or 4.8% from $476 in the second quarter of 2008 to $453 in the second quarter of 2009.  The decrease in 2009 included $53 from the impact of foreign currency translation, offset by increases due to the pass-through of increased steel costs to customers in the form of higher selling prices.  Net sales in the first six months decreased $32 or 3.9% from $824 in 2008 to $792 in 2009.  The decrease in 2009 included $100 from the impact of foreign currency translation, offset by the pass-through of increased material costs to customers and a 3% increase in sales unit volumes.

Net sales in the European Food segment decreased $91 or 16.3% from $557 in the second quarter of 2008 to $466 in the second quarter of 2009.  The decrease was primarily due to $81 from the impact of foreign currency translation, as higher selling prices from the pass-through of increased steel costs to customers were offset by lower sales unit volumes.  Net sales in the first six months decreased $190 or 18.2% from $1,045 in 2008 to $855 in 2009.  The decrease in 2009 included $158 from the impact of foreign currency translation and an additional $32 from sales volume decreases in excess of selling price increases.  The volume decreases in the quarter and first six months of 2009 were primarily due to destocking by customers, lower end user demand and some buy-ahead in the fourth quarter of 2008 prior to 2009 selling price increases.

Net sales in the European Specialty Packaging segment decreased $17 or 13.6% from $125 in the second quarter of 2008 to $108 in the second quarter of 2009.  The decrease was primarily due to $18 from the impact of foreign currency translation. Higher selling prices from the pass-through of increased steel costs to customers were offset by lower sales unit volumes.  Net sales in the first six months decreased $41 or 17.8% from $230 in 2008 to $189 in 2009, including $33 due to currency translation.

Cost of Products Sold (Excluding Depreciation and Amortization)

Cost of products sold, excluding depreciation and amortization, was $1,676 and $3,068 for the second quarter and first six months of 2009, decreases of $113 and $279 compared to $1,789 and $3,347 for the same periods in 2008.  The decreases included $166 and $321 due to the impact of foreign currency translation for the quarter and first six months.  Decreases due to lower aluminum costs and sales unit volumes largely offset increases due to higher steel costs and pension expense.  Pension expense for the Company's U.S. and U.K. plans is not allocated to specific reportable segments, but is included in segment income as part of  “corporate and unallocated items.”

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Crown Holdings, Inc.

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

As a percentage of net sales, cost of products sold, excluding depreciation and amortization, was 81.6% and 82.1% for the second quarter and first six months of 2009 compared to 81.5% and 82.5% for the same periods in 2008.

As a result of steel 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 or surcharges.  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 $46 and $93 in the second quarter and first six months of 2009, compared to $56 and $109 for the prior year periods.  The decreases in 2009 were primarily due to $5 and $10 of foreign currency translation impact for the quarter and six months and lower capital spending in recent years.

Selling and Administrative Expense

Selling and administrative expense was $90 in the second quarter of 2009 compared to $105 for the same period in 2008.  The decrease in 2009 was primarily due to $12 from the impact of foreign currency translation.  As a percentage of net sales, selling and administrative expense was 4.4% for the second quarter of 2009 and 4.8% for 2008. 

Selling and administrative expense was $179 in the first six months of 2009 compared to $207 for the same period in 2008.  The decrease in 2009 was primarily due to $22 of foreign currency translation and decreased incentive compensation costs.  As a percentage of net sales, selling and administrative expense was 4.8% and 5.1% for the first six months of 2009 and 2008.

Segment Income

As discussed under Note O to the consolidated financial statements, the Company defines segment income as gross profit less selling and administrative expense. See Note O to the consolidated financial statements for a reconciliation of segment income to income before income taxes and equity earnings.

Segment income decreased $3 or 1.2% from $246 in the second quarter of 2008 to $243 in the second quarter of 2009, including decreases of $22 due to foreign currency translation and $25 due to increased pension expense.  Pension expense is primarily recorded in “corporate and unallocated items” within the Company’s segment reporting. These decreases were partially offset by improvements due to inventory holding gains from the sale of inventory on hand at the end of the year, and ongoing cost reduction and efficiency improvement programs. Segment income for the first six months increased 0.8% from $396 in 2008 to $399 in 2009 as increases from inventory holding gains and cost reductions were offset by decreases of $41 due to foreign currency translation and $54 due to increased pension expense.

Segment income in the Americas Beverage segment of $62 in the second quarter of 2009 was unchanged from the second quarter of the prior year.  Segment income for the six months decreased $2 or 1.9% from $105 in 2008 to $103 in 2009. Sales unit volumes were approximately 2% higher for both the quarter and first six months, offset by $2 of foreign currency translation in the quarter and $4 for the six months.

Segment income in the North America Food segment increased $9 or 45.0% from $20 in the second quarter of 2008 to $29 in the second quarter of 2009. Segment income in the first six months increased $16 or 51.6% from $31 in 2008 to $47 in 2009.  The increases in segment income in 2009 were primarily due to inventory holding gains from the sale of inventory on hand at the end of the year and improvements in plant manufacturing performance, including benefits from the integration of a closed food can plant in Canada into the U.S. operations.

45

Crown Holdings, Inc.

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

Segment income in the European Beverage segment increased $4 or 4.8% from $84 in the second quarter of 2008 to $88 in the second quarter of 2009, as improvements due to costs savings and operating efficiencies were partially offset by decreases of $9 due to foreign currency translation.  Segment income in the first six months increased from $133 in 2008 to $145 in 2009 primarily due to cost savings and a 3% increase in sales unit volumes, partially offset by a decrease of $16 due to foreign currency translation.

Segment income in the European Food segment increased $8 or 12.7% from $63 in the second quarter of 2008 to $71 in the second quarter of 2009.  Segment income for the six months increased $20 or 19.4% from $103 in 2008 to $123 in 2009. The increases in 2009 were primarily due to cost containment initiatives, including improved manufacturing performance and inventory holding gains from the sale of inventory on hand at the end of the year, partially offset by lower sales unit volumes.  Foreign currency translation reduced segment income by $8 in the second quarter and $14 for the first six months.

Segment income in the European Specialty Packaging segment decreased $3 or 27.3% from $11 in the second quarter of 2008 to $8 in the second quarter of 2009. Segment income in the first six months decreased $3 or 25% from $12 in 2008 to $9 in 2009.  The decreases in 2009 included $2 of foreign currency translation for both the quarter and first six months.

Interest Expense

Interest expense decreased $17 from $79 in the second quarter of 2008 to $62 in the second quarter of 2009 due to $9 from lower interest rates, $4 from foreign currency translation and $4 from lower average debt outstanding.  Interest expense for the six months decreased $33 from $156 in 2008 to $123 in 2009 due to $18 from lower interest rates, $9 from foreign currency translation and $6 from lower average debt outstanding.

Taxes on Income

The second quarter of 2009 included net tax charges of $44 on pre-tax income of $182 for an effective rate of 24.2%.  The difference of $20 between pre-tax income at the U.S. statutory rate of 35% or $64, and the tax charge of $44, was primarily due to benefits of $23 from lower tax rates in certain non-U.S. jurisdictions and $6 for valuation allowance adjustments, partially offset by charges of $9 for withholding taxes, state taxes and other items.

The first six months of 2009 included net tax charges of $68 on pre-tax income of $274 for an effective rate 24.8%.  The difference of $28 between pre-tax income at the U.S. statutory rate of 35% or $96, and the tax charge of $68 was primarily due to benefits of $31 from lower tax rates in certain non-U.S. jurisdictions and $13 from valuation allowance adjustments, partially offset by charges of $16 for withholding taxes, state taxes and other items.

The second quarter of 2008 included net tax charges of $42 on pre-tax income of $169 for an effective rate of 24.9%.  The difference of $17 between pre-tax income at the U.S. statutory rate of 35% or $59, and the tax charge of $42, was primarily due to benefits of $16 from lower tax rates in certain non-U.S. jurisdictions and $4 for valuation allowance adjustments, partially offset by charges of $2 for withholding taxes and $1 for other items.

The first six months of 2008 included net tax charges of $68 on pre-tax income of $243 for an effective rate of 28.0%.  The difference of $17 between the pre-tax income at the U.S. statutory rate of 35% or $85, and the tax charge of $68, was primarily due to $29 of benefits from lower tax rates in certain non-U.S. jurisdictions, partially offset by charges of $4 for withholding taxes, $5 for valuation allowance adjustments, and $3 for other items.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests increased from $31 and $52 in the second quarter and first six months of 2008 to $34 and $57 in the second quarter and first six months of 2009, primarily due to increased profits in the Company's Middle East operations.

46

Crown Holdings, Inc.

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

Liquidity and Capital Resources

Cash from Operations

Cash of $163 was used for operating activities in the first six months of 2009 compared to $354 used for operating activities during the same period in 2008.  The decrease of $191 in cash used for operating activities was primarily due to an improvement in receivables of $169 in 2009 compared to 2008.  The improvement in receivables was primarily due to the collection of receivables from strong fourth quarter 2008 sales, and $25 of increased securitization.

Investing Activities

Investing activities used cash of $78 during the first six months of 2009 compared to cash used of $86 in the prior year period.  Primary investing activities were capital expenditures of $75 in the first six months of 2009 and $71 in 2008.  The Company expects its full year capital expenditures to be approximately $160 compared to $174 in 2008.  Other investing activities of $21 in 2008 included payments of $13 to repurchase a portion of the outstanding shares from minority shareholders in the Company’s operations in Greece.

Financing Activities

Financing activities provided cash of $344 during the first six months of 2009 compared to cash provided of $275 during the same period in 2008.  Cash provided by financing activities in the first six months of 2009 and 2008 was primarily from borrowings.  The 2009 borrowings included proceeds of $388 from the sale of senior unsecured notes and the 2008 borrowings were primarily under the Company’s revolving credit facility.  Other financing activities of $29 in 2008 represent payments received related to the settlement of foreign currency derivatives used to hedge intercompany debt obligations.

Liquidity

In May 2009, the Company sold $400 principal amount of 7.625% senior unsecured notes due 2017 in a private placement.  The notes were priced at 97.092% to yield 8.125% and the Company received proceeds of $388.  The notes were issued by Crown Americas, LLC and Crown Americas Capital Corp. II.  The notes are senior obligations of the issuers, ranking senior in right of payment to all subordinated indebtedness of Crown Americas, LLC and Crown Americas Capital Corp. II, and are unconditionally guaranteed on a senior basis by the Company and substantially all of its U.S. subsidiaries.  The proceeds from the notes have been temporarily applied to fully pay down borrowings under the Company’s revolving credit facility.

As of June 30, 2009, the Company had $687 of borrowing capacity available under its revolving credit facility, equal to the total facility of $758 less $71 of outstanding standby letters of credit.  There were no outstanding borrowings under the facility at June 30, 2009.

The Company’s debt agreements contain covenants that provide limits on the ability of the Company and its subsidiaries to, among other things, incur additional debt, pay dividends or repurchase capital stock, make certain other restricted payments, create liens, and engage in sale and leaseback transactions.  These restrictions are subject to a number of exceptions, however, allowing the Company to incur additional debt or make otherwise restricted payments. The Company’s debt agreements also contain various financial covenants.

Contractual Obligations

During the second quarter of 2009, purchase obligations covering new agreements for raw materials and other consumables increased $118 for 2010 and $110 for 2011 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, 2008.

47

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, 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.  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, 2008  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 2009.

The discussion below supplements the discussion from the Company's Annual Report on Form 10-K for the year ended December 31, 2008 with respect to the U.S. deferred tax valuation allowance and pension plan asset return assumptions.  The discussion below should be read in conjunction with 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, 2008.

Tax Valuation Allowances

As of December 31, 2008, the Company had a valuation allowance of $246 against certain U.S. deferred tax assets that management believes will not be realized. The U.S. operations are profitable and the Company expects to realize a significant portion of its U.S. deferred tax assets but does not believe, after considering all sources of potential future income that it is more likely than not that it will have sufficient taxable income to use certain of its deferred tax assets before they expire.  The valuation allowance of $246 includes $161 for benefits from state tax loss carryforwards, $54 for foreign tax credits, $26 for capital loss carryforwards, and $5 for research credits. The state tax loss carryforwards expire as follows: $7 in 2009 through 2015, $56 in 2016 through 2020, and $98 in 2021 through 2026.  The foreign tax credits expire in 2016 through 2018, the capital loss carryforwards expire in 2012 and 2013, and the research credits expire in 2014 through 2019.

Asset Return Assumptions

The U.S. plan’s 2009 assumed asset rate of return of 8.75% was based on a calculation using underlying assumed rates of return of 9.8% for equity securities and alternative investments, and 6.7% for debt securities and real estate.   An assumed rate of 9.8% was used for equity securities and alternative investments based on the total return of the S&P 500 for the 25 year period ended December 31, 2008.  The Company believes that the equity securities included in the S&P 500 are representative of the equity securities and alternative investments held by its U.S. plan, and that 25 years provides a sufficient time horizon as a basis for estimating future returns.  Included in the S&P 500 total return of 9.8% for the 25 year period was a loss of 37.0% in 2008.  The Company used a 6.7% assumed return for debt securities, consistent with the U.S. plan discount rate and the return on AA corporate bonds with duration equal to the plan’s liabilities.  The underlying debt securities in the plan are primarily invested in various corporate and government agency securities, have an aggregate yield of approximately 10% based on their fair values at December 31, 2008, and are benchmarked against returns on AA corporate bonds.

The U.K. plan’s 2009 assumed asset rate of return of 6.75% was based on a calculation using underlying assumed rates of return of 8.75% for equity securities and alternative investments, and 5.70% for debt securities and real estate. Equity securities in the U.K. plan as of December 31, 2008 were allocated approximately 50% to U.S. securities, 16% to U.K. securities, 19% to securities in European countries  other than the U.K., and 15% to securities in other countries. The assumed rate of 8.75% for equity securities and alternative investments represents the weighted average 25 year return of equity securities in these markets.

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Crown Holdings, Inc.

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

The Company believes that the equity securities included in the related market indexes are representative of the equity securities and alternative investments held by its U.K. plan, and that 25 years provides a sufficient time horizon as a basis for estimating future returns. Included in the total return of 8.75% for the 25 year period were 2008 losses of, for example, 37.0% in the S&P 500 and 29.9% in the UK FTSE All Share Index.  The U.K.  plan’s debt  securities  investments at  December 31 2008  were  approximately  one-third in U.K. gilts with an assumed return of 3.8%, and two-thirds in corporate debt securities with an assumed return of 6.75%, consistent with the U.K. plan discount rate and the return on AA corporate bonds with duration equal to the plan’s liabilities.

Recent Accounting and Reporting Pronouncements

In December 2008, the FASB issued FSP 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets.”  The FSP amends FAS 132(R), “Employers' Disclosure about Pensions and Other Postretirement Benefits.”  The FSP provides guidance on an employer's disclosures about plan assets of a defined benefit pension or other postretirement plan, investment policies and strategies, major categories of plan assets, inputs and valuation techniques used to measure the fair value of plan assets and significant concentration of risk within plan assets.  FSP 132(R) is effective for the Company as of December 31, 2009.  Upon initial application, the provisions of this FSP are not required for earlier periods that are presented for comparative purposes.  The Company is currently evaluating the disclosure requirements of this FSP.

In June 2009, the FASB issued SFAS No. 166 (“FAS 166”), “Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140.”  The Qualified Special Purpose Entities (QSPEs) concept, established to facilitate off-balance sheet treatment of certain securitizations, has been eliminated from the guidance. More stringent criteria must be met to qualify for sale accounting when only a portion of a financial asset is transferred. This guidance impacts new transfers of many types of financial assets (for example, receivables securitization and factoring arrangements) occurring after the effective date. The standard is effective for the Company on January 1, 2010. The Company is currently evaluating the requirements of this standard.

In June 2009, the FASB issued SFAS No. 167 (“FAS 167”), “Amendments to FASB Interpretation No. 46(R).” The standard requires an analysis to determine whether a variable interest gives a company a controlling financial interest in a variable interest entity. It also requires an ongoing reassessment and eliminates the quantitative approach previously required for determining whether the company is the primary beneficiary.  The standard is effective January 1, 2010. The Company is currently evaluating the requirements of this standard.

In June 2009, the FASB issued SFAS No. 168 (“FAS 168”), “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles – A Replacement of FASB Statement No. 162.”  FAS 168 establishes the FASB Accounting Standards Codification (Codification) as the source of authoritative generally accepted accounting principles (GAAP) to be applied in the preparation of financial statements.  FAS 168 explicitly recognizes rules and interpretive releases of the U.S. Securities and Exchange Commission (SEC) under federal securities laws as sources of authoritative GAAP for SEC registrants.  FAS 168 and the Codification are effective July 1, 2009 for financial statements issued for interim as well as annual periods.  The standard will have no impact on the Company’s consolidated financial statements.

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 I and 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, 2008, 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.”

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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 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, 2008 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

In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange and interest rates and commodity prices.  The Company manages these risks through a program that includes the use of derivative financial instruments, primarily swaps and forwards. Counterparties to these contracts are major financial institutions. The Company is exposed to credit loss in the event of nonperformance by the counterparties. These instruments are not used for trading or speculative purposes. The extent to which the Company uses such instruments is dependent upon its access to these contracts in the financial markets and its success in using other methods, such as netting exposures in the same currencies to mitigate foreign exchange risk and using sales agreements that permit the pass-through of commodity price and foreign exchange rate risk to customers.  The Company’s objective in managing its exposure to market risk is to limit the impact on earnings and cash flow. For further discussion of the Company’s use of derivative instruments and their fair values at June 30, 2009, see Note G to the consolidated financial statements included in this Quarterly Report on Form 10-Q.

As of June 30, 2009, the Company had approximately $0.9 billion principal floating interest rate debt. A change of 0.25% in these floating interest rates would change annual interest expense by approximately $2 million 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 ensure 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.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding the Company's potential asbestos-related liabilities and other litigation, See Note I entitled “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 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 II in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, which could materially affect the Company's business, financial condition or future results.  The risks described in the Company's Quarterly Report on Form 10-Q 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 June 30, 2009.

On February 28, 2008, the Company’s Board of Directors authorized the repurchase of up to $500 million of the Company’s outstanding common stock from time to time through December 31, 2010, 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.  This authorization replaces and supersedes all previous outstanding authorizations to repurchase shares.  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 for other general corporate purposes.  As of June 30, 2009, $33 million of shares had been repurchased under this authorization.

Item 6. Exhibits

a)	4.1.	Registration Rights Agreement, dated as of May 8, 2009, by and among the Company, Crown Americas, LLC and Crown Americas Capital Corp. II, Deutsche Bank Securities, Inc., as Representative of the several Initial Purchasers named therein and the Guarantors (as defined therein), relating to the $400 million 7 5/8% Senior Notes due 2017 (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K dated May 5, 2009 (File No. 000-50189)).
	4.2.	Indenture, dated as of May 8, 2009, by and among Crown Americas, LLC and Crown Americas Capital Corp. II, as Issuers, the Guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 7 5/8% Senior Notes due 2017 (incorporated by reference to Exhibit 4.2 of the Registrant’s Current Report on Form 8-K dated May 5, 2009 (File No. 000-50189)).
	10.1.	Purchase Agreement, dated as of May 5, 2009, by and among the Company, Crown Americas, LLC and Crown Americas Capital Corp. II, the Initial Purchasers named therein and the Guarantors (as defined therein), relating to the $400 million 7 5/8% Senior Notes due 2017 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K dated May 5, 2009 (File No. 000-50189)).

                 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.

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                 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.   Certifications 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 Timothy J. Donahue, Executive Vice President and  Chief Financial Officer of Crown Holdings, Inc.

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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

Senior Vice President and Corporate Controller

Date:  July 31, 2009

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