The CREATE OBJECT statement creates a new object to which the reference in CREF3 is pointing. In the internal administration, the object adopts the name C_COUNTER<2>, which had become free. Event without the statement CLEAR CREF3, the program would have been in the state shown on the right-hand side, since the CREATE OBJECT statement always creates a new object and overwrites the previous contents of the used class reference variables with the new reference.