SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-K





(Mark
        One)
 [X]Annual
        report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
        1934
        for the fiscal year ended
 September
                  29,
                  2007
 or
 
 [  ]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 333-138380


BERRY
      PLASTICS HOLDING CORPORATION


(Exact
      name of registrant as
      specified in its charter)





Delaware
            35-1814673(State
                or other jurisdiction
              of
                incorporation or organization)
            (IRS
                employer
              identification
                number)101
                Oakley Street
              Evansville,
                Indiana
            47710(Address
                of principal executive offices)
            (Zip
                code)





SEE
      TABLE OF ADDITIONAL REGISTRANT GUARANTORS





Registrant’s
      telephone number, including area code:  (812) 424-2904




Securities
      registered pursuant to Section 12(b) of the Act:  None





Securities
      registered pursuant to Section 12(g) of the Act:  None





Indicate
      by check mark if the
      registrant is a well-known seasoned issuer, as defined in Rule 405 of the
      Securities Act.  Yes [   ]  No
      [X]





Indicate
      by check mark if the
      registrant is not required to file reports pursuant to Section 13 or Section
      15(d) of the Securities Exchange Act of
      1934.              
Yes [X]  No [   ]





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 such shorter period that the registrant was required to file such
      reports), and (2) have been subject to such filing requirements for the past
      90
      days.  Yes [X]  No [   ]





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





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


Large
      accelerated filer
      [     ]                        Accelerated
      filer  [     ]                                   Non-accelerated
      filer [  X  ]





Indicate
      by check mark whether the
      registrant is a shell company (as defined in Rule 12b-2 of the Securities
      Exchange Act of 1934).  Yes [   ]  No
      [X]





As
      of
      December 10, 2007, all of the outstanding 100 shares of the Common Stock, $.01
      par value, of Berry Plastics Holding Corporation were held by Berry Plastics
      Group, Inc.





DOCUMENTS
      INCORPORATED BY
      REFERENCE


None





-1-





Table
      of Additional Registrant Guarantors


Exact
                  Name
              Jurisdiction
                  of Organization
              Primary
                Standard
                Industrial
                  Classification
                Code
                  Number
              I.R.S.
                Employer
                  Identification
                No.
              Name,
                  Address and
                Telephone
                  Number of
                Principal
                Executive
                  Offices(1)Berry
                  Plastics Corporation
              Delaware
              3089
              35-1813708
              (1)Aerocon,
                  Inc.
              Delaware
              3089
              35-1948748
              (1)Berry
                  Iowa Corporation
              Delaware
              3089
              42-1382173
              (1)Berry
                  Plastics Design Corporation
              Delaware
              3089
              62-1689708
              (1)Berry
                  Plastics Technical Services, Inc.
              Delaware
              3089
              57-1028638
              (1)Berry
                  Sterling Corporation
              Delaware
              3089
              54-1749681
              (1)CPI
                  Holding Corporation
              Delaware
              3089
              34-1820303
              (1)Knight
                  Plastics, Inc.
              Delaware
              3089
              35-2056610
              (1)Packerware
                  Corporation
              Delaware
              3089
              48-0759852
              (1)Pescor,
                  Inc.
              Delaware
              3089
              74-3002028
              (1)Poly-Seal
                  Corporation
              Delaware
              3089
              52-0892112
              (1)Venture
                  Packaging, Inc.
              Delaware
              3089
              51-0368479
              (1)Venture
                  Packaging Midwest, Inc.
              Delaware
              3089
              34-1809003
              (1)Berry
                  Plastics Acquisition Corporation III
              Delaware
              3089
              37-1445502
              (1)Berry
                  Plastics Acquisition Corporation V
              Delaware
              3089
              36-4509933
              (1)Berry
                  Plastics Acquisition Corporation VII
              Delaware
              3089
              30-0120989
              (1)Berry
                  Plastics Acquisition Corporation VIII
              Delaware
              3089
              32-0036809
              (1)Berry
                  Plastics Acquisition Corporation IX
              Delaware
              3089
              35-2184302
              (1)Berry
                  Plastics Acquisition Corporation X
              Delaware
              3089
              35-2184301
              (1)Berry
                  Plastics Acquisition Corporation XI
              Delaware
              3089
              35-2184300
              (1)Berry
                  Plastics Acquisition Corporation XII
              Delaware
              3089
              35-2184299
              (1)Berry
                  Plastics Acquisition Corporation XIII
              Delaware
              3089
              35-2184298
              (1)Berry
                  Plastics Acquisition Corporation XV, LLC
              Delaware
              3089
              35-2184293
              (1)Kerr
                  Group, Inc.
              Delaware
              3089
              95-0898810
              (1)Saffron
                  Acquisition Corporation
              Delaware
              3089
              94-3293114
              (1)Setco,
                  LLC
              Delaware
              3089
              56-2374074
              (1)Sun
                  Coast Industries, Inc.
              Delaware
              3089
              59-1952968
              (1)Tubed
                  Products, LLC
              Delaware
              3089
              56-2374082
              (1)Cardinal
                  Packaging, Inc.
              Ohio
              3089
              34-1396561
              (1)Landis
                  Plastics, Inc.
              Illinois
              3089
              36-2471333
              (1)Covalence
                  Specialty Adhesives LLC
              Delaware
              2672
              20-4104683
              (1)Covalence
                  Specialty Coatings LLC
              Delaware
              2672
              20-4104683
              (1)Rollpak
                  Acquisition Corporation
              Indiana
              3089
              03-0512845
              (1)Rollpak
                  Corporation
              Indiana
              3089
              35-1582626
              (1)




(1)All
                guarantors name, address, and telephone number of the principal executive
                office is 101 Oakley Street, Evansville, Indiana 47710, (812) 424-2904.





-2-


CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS





This
      Form 10-K includes
      "forward-looking statements," within the meaning of Section 27A of the
      Securities Act and Section 21E of the Securities Exchange Act of 1934, as
      amended (the "Exchange Act"), with respect to our financial condition, results
      of operations and business and our expectations or beliefs concerning future
      events.  Such statements include, in particular, statements about our
      plans, strategies and prospects under the headings "Management’s Discussion and
      Analysis of Financial Condition and Results of Operations" and
      "Business."  You can identify certain forward-looking statements by
      our use of forward-looking terminology such as, but not limited to, "believes,"
      "expects," "anticipates," "estimates," "intends," "plans," "targets," "likely,"
      "will," "would," "could" and similar expressions that identify forward-looking
      statements.  All forward-looking statements involve risks and
      uncertainties.  Many risks and uncertainties are inherent in our
      industry and markets. Others are more specific to our operations.  The
      occurrence of the events described and the achievement of the expected results
      depend on many events, some or all of which are not predictable or within our
      control. Actual results may differ materially from the forward-looking
      statements contained in this Form 10-K.  Factors that could cause
      actual results to differ materially from those expressed or implied by the
      forward-looking statements include:





·
            risks
                associated with our substantial indebtedness and debt service;




·
            changes
                in prices and availability of resin and other raw materials and our
                ability to pass on changes in raw material prices on a timely basis;




·
            risks
                of competition, including foreign competition, in our existing and
                future
                markets;




·
            risks
                related to our acquisition strategy and integration of acquired
                businesses;




·
            reliance
                on unpatented proprietary know-how and trade secrets;




·
            increases
                in the cost of compliance with laws and regulations, including
                environmental laws and regulations;




·
            catastrophic
                loss of one of our key manufacturing facilities;




·
            our
                ownership structure;




·
            reduction
                in our net worth; and




·
            the
                other factors discussed in the section of this Form 10-K titled “Risk
                Factors.”




We
      caution you that the foregoing list of important factors may not contain all
      of
      the material factors that are important to you. In addition, in light of these
      risks and uncertainties, the matters referred to in the forward-looking
      statements contained in this Form 10-K may not in fact occur. We undertake
      no
      obligation to publicly update or revise any forward-looking statement as a
      result of new information, future events or otherwise, except as otherwise
      required by law.







-3-


TABLE
      OF CONTENTS





BERRY
      PLASTICS HOLDING CORPORATION





FORM
      10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 29, 2007





PART
                  I
              PageItem
                  1.
              BUSINESS
              5Item
                  1A.
              RISK
                  FACTORS
              14Item
                  1B.
              UNRESOLVED
                  STAFF COMMENTS
              18Item
                  2.
              PROPERTIES
              19Item
                  3.
              LEGAL
                  PROCEEDINGS
              20Item
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              20PART
                  IIItem
                  5.
              MARKET
                  FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND
                ISSUER
                  PURCHASES OF EQUITY SECURITIES
              20Item
                  6.
              SELECTED
                  FINANCIAL DATA
              21Item
                  7.
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATIONS
              22Item
                  7A.
              QUANTITATIVE
                  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
              34Item
                  8.
              FINANCIAL
                  STATEMENTS AND SUPPLEMENTARY DATA
              35Item
                  9.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
              35Item
                  9A.
              CONTROLS
                  AND PROCEDURES
              35Item
                  9B.
              OTHER
                  INFORMATION
              37PART
                  IIIItem
                  10.
              DIRECTORS
                  AND EXECUTIVE OFFICERS OF THE REGISTRANT
              38Item
                  11.
              EXECUTIVE
                  COMPENSATION
              40Item
                  12.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS
              46Item
                  13.
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
                  INDEPENDENCE
              48Item
                  14.
              PRINCIPAL
                  ACCOUNTING FEES AND SERVICES
              49PART
                  IVItem
                  15.
              EXHIBITS
                  AND FINANCIAL STATEMENT SCHEDULES
              50
   -4-


Item
      1.  BUSINESS





General





We
      believe we are one of the world’s
      leading manufacturer and marketers of plastic packaging products.  We
      are a major producer of a wide range of products, including rigid open top
      and
      rigid closed top packaging, polyethylene-based plastic films, industrial tapes,
      medical specialties, packaging, heat-shrinkable coatings and specialty
      laminates.  We manufacture a broad range of innovative, high quality
      packaging solutions using our collection of over 1,700 proprietary molds and
      an
      extensive set of internally developed processes and technologies. Our principal
      products include containers, drink cups, bottles, closures and overcaps, tubes
      and prescription vials, trash bags, stretch films, plastic sheeting, and tapes
      which we sell into a diverse selection of attractive and stable end markets,
      including food and beverage, healthcare, personal care, quick service and family
      dining restaurants, custom and retail, agricultural, horticultural,
      institutional, industrial, construction, aerospace, and
      automotive.  We sell our packaging solutions to over 13,000 customers,
      ranging from large multinational corporations to small local businesses
      comprised of a favorable balance of leading national blue-chip customers as
      well
      as a collection of smaller local specialty businesses.  We believe
      that we are one of the largest global purchasers of polyethylene resin, our
      principal raw material, buying approximately 1.2 billion pounds
      annually.  We believe that our proprietary tools and technologies,
      low-cost manufacturing capabilities and significant operating and purchasing
      scale provide us with a competitive advantage in the marketplace. Our unique
      combination of leading market positions, proven management team, product and
      customer diversity and manufacturing and design innovation provides access
      to a
      variety of growth opportunities. Our top 10 customers represented approximately
      24% of our fiscal 2007 net sales with no customer accounting for more than
      6% of
      our fiscal 2007 net sales.  The average length of our relationship
      with these customers was 21 years. Additionally, we operate 55 strategically
      located manufacturing facilities and have extensive distribution
      capabilities.





Formation
      of Berry Holding





On
      April
      3, 2007, Berry Plastics Group, Inc. (“Old Berry Group”) completed a
      stock-for-stock merger (the “Merger”) with Covalence Specialty Materials Holding
      Corp. (“Old Covalence Holding”). The resulting company retained the name Berry
      Plastics Group, Inc. (“Berry Group”).  Immediately following the
      Merger, Berry Plastics Holding Corporation (“Old Berry Holding”) and Covalence
      Specialty Materials Corp. (“Old Covalence”) were combined as a direct subsidiary
      of Berry Group.  The resulting company retained the name Berry
      Plastics Holding Corporation (“Berry Holding”).  References herein to
“we”, “us”, the “Company”, “Berry”, and “Berry Plastics” refer to Berry Group
      and its consolidated subsidiaries, including Berry Holding, after giving effect
      to the transactions described in this paragraph.




Apollo
      V Acquisition of Old Covalence Holding





On
      February 16, 2006, Old Covalence Holding was formed through the acquisition
      of
      substantially all of the assets and liabilities of Tyco Plastics & Adhesives
      (“TP&A”) under a Stock and Asset Purchase Agreement dated December 20, 2005
      among an affiliate of Apollo Management V, L.P (“Apollo V”), Tyco International
      Group S.A. and Tyco Group S.a.r.l.  The total purchase price
      consideration paid at the closing of the acquisition was approximately $916.1
      million.  The acquisition was funded with the proceeds from (1) an
      equity investment of $197.5 million by affiliates of Apollo V and certain
      members of senior management, (2) the issuance of $265.0 million of senior
      subordinated notes, (3) term loan borrowings under senior secured credit
      facilities of $350.0 million (subsequently refinanced as described later in
      this
      Form 10-K), (4) borrowings under a floating rate loan of $175.0 million, and
      (5)
      pursuant to the terms of the Stock and Asset Purchase Agreement, a favorable
      net
      working capital adjustment of $59.1 million.





Apollo
      VI Acquisition of Old Berry Group





On
      September 20, 2006, BPC Acquisition
      Corp. merged with and into BPC Holding Corporation pursuant to an agreement
      and
      plan of merger (the “Apollo Berry Merger”), dated June 28, 2006, with BPC
      Holding Corporation continuing as the surviving
      corporation.  Following the consummation of the Apollo Berry Merger,
      BPC Holding Corporation changed its name to Berry Plastics Holding
      Corporation.  Pursuant to the Apollo Berry Merger, Old Berry Holding
      was a wholly owned subsidiary of Old Berry Group, the principal stockholders
      of
      which were Apollo Investment Fund VI, L.P. (Apollo VI), AP Berry Holdings,
      LLC,
      Graham Berry Holdings, L.P., and management.  Apollo VI and AP Berry
      Holdings, LLC are affiliates of Apollo Management, L.P., which is a private
      investment firm.  Graham Berry Holdings, L.P. is an affiliate of
      Graham Partners, Inc. (“Graham”), a private equity firm.  The total
      amount of funds required to consummate the Apollo Berry Merger and to pay
      related fees was $2.4 billion.  The Apollo Berry Merger was
      primarily


-5-


funded
      with (1) the issuance of $750.0 million aggregate principal amount of second
      priority senior secured notes, (2) new borrowings of $675.0 million in Term
      B loans, (3) the issuance of $425.0 million aggregate principal amount of senior
      subordinated notes, and (4) contributed equity.





History
      of Old Berry Holding





Imperial
      Plastics was established in
      1967 in Evansville, Indiana.  Berry Plastics, Inc. was formed in 1983
      to purchase substantially all of the assets of Imperial Plastics.  In
      1988, Berry Plastics, Inc. acquired Gilbert Plastics of New Brunswick, New
      Jersey, a leading manufacturer of aerosol overcaps, and subsequently relocated
      Gilbert Plastics’ production to Berry Plastics, Inc.’s Evansville, Indiana
      facility.  In 1990, Berry Plastics Corporation and BPC Holding
      Corporation were formed to purchase the assets of Berry Plastics,
      Inc.





We
      have continued to grow both
      organically and through acquisition by acquiring companies that we believed
      would improve our financial performance in the long-term, expand our product
      lines, or in some cases, provide us with a new or complementary product
      line.  In 1992, we acquired the assets of the Mammoth Containers
      division of Genpak Corporation. In 1995, we acquired substantially all of the
      assets of Sterling Products, Inc., a producer of injection-molded plastic drink
      cups and lids, and Tri-Plas, Inc., a manufacturer of injection-molded
      containers.  In 1997, we acquired (1) certain assets of Container
      Industries, Inc., a manufacturer and marketer of injection-molded industrial
      and
      pry-off containers, (2) PackerWare Corporation (“PackerWare”), a manufacturer
      and marketer of plastic containers, drink cups, housewares, and lawn and garden
      products, (3) substantially all of the assets of Virginia Design Packaging
      Corp., a manufacturer and marketer of injection-molded containers used primarily
      for food packaging, and (4) Venture Packaging, Inc., a manufacturer and marketer
      of injection-molded containers used in the food, dairy and various other
      markets.  In 1998, we acquired substantially all of the assets of the
      Knight Engineering and Plastics Division of Courtaulds Packaging Inc., a
      manufacturer of aerosol overcaps.  In 1999, we acquired all of the
      outstanding capital stock of CPI Holding Corporation, the parent company of
      Cardinal Packaging, Inc., a manufacturer and marketer of open-top
      containers.  In 2000, we acquired all of the outstanding capital stock
      of (1) Poly-Seal Corporation, a manufacturer and marketer of closures and (2)
      Capsol S.p.a. (now known as Capsol Berry Plastics S.p.a.), a manufacturer and
      marketer of aerosol overcaps and closures.  In 2001, we acquired all
      of the outstanding capital stock of Pescor Plastics, Inc., a manufacturer and
      marketer of drink cups, and in 2002, we acquired the injection molding assets
      from Mount Vernon Plastics Corporation.  In 2003, we acquired (1) the
      400 series continuous threaded injection molded closure assets from CCL Plastic
      Packaging, (2) the injection molded overcap lid assets from APM Inc., and (3)
      all of the outstanding capital stock of Landis Plastics, Inc. (the “Landis
      Acquisition”), a manufacturer and marketer of open-top containers.  In
      2005, (1) a subsidiary of Berry, Berry Plastics de México, S. de R.L. de C.V.,
      acquired all of the injection molding closure assets from Euromex Plastics,
      S.A.
      de C.V. (“Euromex), and (2) we acquired Kerr Group, Inc. (“Kerr”), a
      manufacturer and marketer of closures, bottles, vials, and tubes (the “Kerr
      Acquisition”).





Recent
      Acquisition





On
      April 11, 2007, we completed the
      acquisition of 100% of the outstanding common stock of Rollpak Acquisition
      Corporation, which is the sole stockholder of Rollpak
      Corporation.  Rollpak Corporation is a flexible film manufacturer
      located in Goshen, Indiana.  The purchase price was funded utilizing
      cash on hand.





Product
      Overview





We
      organize our business
      into four operating divisions: rigid open top, rigid closed top, flexible films,
      and tapes and coatings.Additional financial information about
      our business segments is provided in “Management's Discussion and Analysis of
      Financial Condition and Results of Operations” and the “Notes to Consolidated
      Financial Statements,” which are included elsewhere in this Form
      10-K.





Rigid
      Open Top





Our
      rigid
      open top division is comprised of three product categories: containers,
      foodservice items (drink cups, institutional catering, and cutlery) and
      housewares.  The largest end-uses for our containers are food
      products, building products, chemicals and dairy products.  We believe
      that we offer one of the broadest product lines among U.S.-based
      injection-molded plastic container and drink cup manufacturers and are a leader
      in thermoformed container and drink cup offerings, which provide a superior
      combination of value and quality relative to competing
      processes.  Many of our open top products are manufactured from
      proprietary molds that we develop and own, which results in significant
      switching costs to our customers.  In addition to a complete
      product line, we have sophisticated printing capabilities and


-6-


in-house
      graphic arts and tooling departments, which allow us to integrate ourselves
      into, and add material value to, our customers’ packaging design
      process.  Our product engineers work directly with customers to design
      and commercialize new drink cups and containers.  In order to identify
      new markets and applications for existing products and opportunities to create
      new products, we rely extensively on our national sales force.  Once
      these opportunities are identified, our sales force works with our product
      design engineers and artists to satisfy customers’ needs.  Our
      low-cost manufacturing capability with plants strategically located throughout
      the United States and a dedication to high-quality products and customer service
      have allowed us to further develop and maintain strong relationships with our
      attractive base of customers.  We have a diverse customer base for our
      open top products, and no single open top customer exceeded 6% of our total
      net
      sales in fiscal 2007.  Our primary competitors include Airlite,
      Huhtamaki, Letica, Polytainers, WinCup and Solo.  These competitors
      individually only compete on certain of our open top products, whereas we offer
      the entire selection of open top products described below.





Containers.We
      manufacture a collection
      of nationally branded container products and also seek to develop customized
      container products for niche applications by leveraging of our state-of-the-art
      design, decoration and graphic arts capabilities.  This mix allows us
      to both achieve significant economies of scale, while also maintaining an
      attractive portfolio of specialty products.  Our container capacities
      range from 4 ounces to 5 gallons and are offered in various styles with
      accompanying lids, bails and handles, some of which we produce, as well as
      a
      wide array of decorating options.  We have long-standing supply
      relationships with many of the nation’s leading food and consumer products
      companies, including Dean Foods, General Mills, Kraft, Kroger and
      Unilever.





Foodservice.We
      believe that
      we are the largest provider of large size thermoformed polypropylene (“PP”)
      and injection-molded plastic drink cups in the United States.  We
      are the leading producer of 32 ounce or larger thermoformed PP drink cups
      and offer a product line with sizes ranging from 12 to 44
      ounces.  Our thermoform process uses PP instead of more expensive
      polystyrene in producing deep draw drink cups to generate a cup of superior
      quality with a material competitive cost advantage versus thermoformed
      polystyrene drink cups.  Additionally, we produce injection-molded
      plastic cups that range in size from 12 to 64 ounces.  Primary markets
      for our plastic drink cups are quick service and family dining restaurants,
      convenience stores, stadiums and retail stores.  Many of our cups are
      decorated, often as promotional items, and we believe we have a reputation
      in
      the industry for innovative, state-of-the-art graphics.  Selected
      drink cup customers and end users include Hardee’s, McDonald’s, Quik Trip,
      Subway and Yum! Brands.





Housewares.  Our
      participation in the housewares
      market is focused on producing semi-disposable plastic housewares and plastic
      garden products.  Examples of our products include plates, bowls,
      pitchers, tumblers and outdoor flowerpots.  We sell virtually all of
      our products in this market through major national retail marketers and national
      chain stores, such as Wal-Mart.  PackerWare is our recognized brand
      name in these markets and PackerWare branded products are often co-branded
      by
      our customers.  Our strategy in this market has been to provide high
      value to consumers at a relatively modest price, consistent with the key price
      points of the retail marketers.  We believe outstanding service and
      the ability to deliver products with timely combination of color and design
      further enhance our position in this market.  This focus allowed
      PackerWare to be named Wal-Mart’s category manager for its entire seasonal
      housewares department.





Rigid
      Closed Top





Our
      rigid
      closed top division is comprised of three product categories; closures and
      overcaps, prescription vials and bottles, and tubes.  We believe that
      this line of products gives us a competitive advantage in being able to provide
      a complete plastic package to our customers.  We have a number of
      leading positions in which we have been able to leverage this capability such
      as
      prescription vial packages and Tab II® pharmaceutical packages.  Our
      innovative design center and product development engineers regularly work with
      our customers to develop differentiated packages that offer unique shelf
      presence, functionality, and cost competitiveness.  Combine our
      package design and engineering with our world class manufacturing facilities,
      and we are uniquely positioned to take projects from concept to end
      product.  We utilize the latest in manufacturing technology, offering
      several different manufacturing processes, including various forms of injection,
      extrusion, compression, and blow molding, as well as decoration and lining
      services.  This allows us to match the optimal manufacturing platform
      with each customer’s desired package design and volume.  Our state of
      the art mold designs, and our quality system, which includes the latest in
      vision systems and process control, allow us to meet the increasingly high
      standards of our customers.  We have a diverse customer base for our
      rigid closed top products, with no single customer exceeding 2% of our total
      net
      sales in fiscal 2007.  Our primary competitors include Alcoa, Cebal,
      Graham Packaging, Rexam/Owens-Illinois, Phoenix, Seaquist and
      Silgan.  With few exceptions, these competitors compete on certain of
      our products and market segments.  We believe that we are the only
      industry


-7-


participant
      that offers the entire product line of our rigid closed top products described
      below.  We have a strong reputation for quality and service, and have
      received numerous “Supplier Quality Achievement Awards” from customers, as well
      as “Distribution Industry Awards” from market associations.





Closures
      and
      Overcaps.  We are a leading producer of closures and overcaps
      in many of our product lines, including continuous thread and child resistant
      closures, as well as aerosol overcaps.  Our dispensing closure product
      line has been growing very rapidly, as more markets migrate towards functional
      closures.  We currently sell our closures into numerous end markets,
      including pharmaceutical, vitamin and nutritional, healthcare, food and beverage
      and personal care.  In addition to traditional closures, we are a
      provider of a wide selection of custom closure solutions including fitments
      and
      plugs for medical applications, cups and spouts for liquid laundry detergent,
      and dropper bulb assemblies for medical and personal care
      applications.  Further, we believe that we are the leading domestic
      producer of injection-molded aerosol overcaps.  Our aerosol overcaps
      are used in a wide variety of consumer goods including spray paints, household
      and personal care products, insecticides and numerous other commercial and
      consumer products.  We believe our technical capabilities, expertise
      and low cost position have allowed us to become the leading provider of closures
      and overcaps to a diverse set of leading companies in the markets we
      serve.  Our manufacturing advantage is driven by our position on the
      forefront of various processes including the latest in single and bi-injection
      technology, molding of thermoplastic and thermoset resins, compression molding
      of thermoplastic resins, accurate reproduction of colors and proprietary packing
      technology that minimizes freight cost and warehouse space.  Many of
      our overcaps and closures are manufactured from proprietary molds, which we
      develop and own.  This results in significant switching costs to our
      customers.  In addition, we utilize state of the art lining, assembly,
      and decorating equipment in secondary operations.  Our closures and
      aerosol overcaps customers include McCormick, Bayer, Diageo, Pepsico, Wyeth,
      Kraft, Sherwin-Williams and S.C. Johnson.





Prescription
      Vials and Bottles.Our prescription vial and bottle businesses target similar markets as
      our
      closure business.  We believe we are the leading supplier of spice
      containers in the United States and have a leadership position in various
      vitamin and nutritional markets, as well as selling bottles into prescription
      and pharmaceutical applications.  Additionally, we are a leading
      supplier in the prescription vial market, supplying a complete line of amber
      plastic vials with both one-piece and two-piece child-resistant
      closures.  We offer a variety of personal care packages, and see the
      personal care market as a strong opportunity to grow our
      business.  While offering a set of stock bottles in the vitamin and
      nutritional markets, our design capabilities, along with internal engineering
      strength give us the ability to compete on customized designs to provide
      differentiation from traditional packages.  We expect our bottle
      segment to experience continued growth in the healthcare product line, as the
      patented child resistant and senior friendly Tab II® product offering gains
      popularity.  Our strong product offerings in continuous threaded,
      child-resistant, and tamper-evident closures, make “one-stop” shopping available
      to many key customers.  We offer our customers decorated bottles with
      hot stamping, silk screening and labeling.  We sell these products to
      personal care, pharmaceutical, food and consumer product customers, including
      McCormick, Nature’s Bounty, Leiner, Target Stores, John Paul Mitchell and
      Novartis.





Tubes.  We
      believe
      that we are one of the largest suppliers of extruded plastic squeeze tubes
      in
      the United States.  We offer a complete line of tubes from 1/2” to 2
      3/16” in diameter.  In fiscal 2007, we also introduced laminate
      tubes.  Our focus has been to ensure that we are able to meet the
      increasing trend towards large diameter tubes with high-end
      decoration.  We have recently introduced proprietary designs in this
      market that have already won prestigious package awards, and are viewed as
      very
      innovative both in appearance, functionality, and from a sustainability
      standpoint.  The majority of our tubes are sold in the personal care
      market, focusing on products like facial/cold creams, shampoos, conditioners,
      bath/shower gels, lotions, sun care, hair gels and anti-aging
      creams.  We also sell our tubes into the pharmaceutical and household
      chemical markets.  We believe that our ability to provide creative
      package designs, with state of the art decorating, combined with a complementary
      line of closures, makes us a preferred supplier for many customers in our target
      markets including Kao Brands, L’Oreal, Avon, and Procter &
Gamble.


-8-


Flexible
      Films





Our
      flexible films division manufactures and sells primarily polyethylene-based
      film
      products. Our principal products include trash bags, drop cloths, agricultural
      film, stretch film, shrink film and custom packaging film. We are one of the
      largest producers of plastic trash bags, stretch film and plastic sheeting
      in
      the United States. Our Ruffies trash bags are a leading value brand of retail
      trash bags in the United States. Plastics products are used principally in
      the
      agricultural, horticultural, institutional, foodservice and retail
      markets.  We manufacture and sell a diversified portfolio of
      polyethylene-based film products, including trash bags, sheeting, can liners,
      stretch wrap and custom films, under brand names or private
      labels.  We have a diverse customer base, with no single customer
      accounting for more than 6% of our total net sales in fiscal
      2007.  The flexible film division includes the following product
      groups:





Do-It-Yourself—We
      sell
      branded and private label plastic sheeting for construction, consumer, and
      agricultural end users.  These products are sold under leading brands
      such as Film-Gard® and Tufflite®.  Our products also include drop
      cloths, painters’ plastics, greenhouse films, irrigation tubing, Ruffies®,
      Ruffies Pro® and private label trash bags.  Our do-it-yourself
      products are sold primarily through wholesale outlets, hardware stores and
      home
      centers, paint stores and mass merchandisers, as well as agricultural
      distributors.





Institutional—We
      sell
      trash-can liners, food bags and meal kits for “away from home” locations such as
      offices, restaurants, schools, hospitals, hotels, municipalities and
      manufacturing facilities.  We also sell products under the Big City®,
      Hospi-Tuff®, Plas-Tuff®, Rhino-X® and Steel-Flex® brands.





Custom
      Films—We manufacture a
      diverse group of niche custom films, including shrink-bundling film, used to
      wrap and consolidate sets of products, and barrier films for food, beverage
      and
      industrial packaging.  These products are sold directly to converters
      and end users, as well as through distributors.





Stretch
      Films—We produce both
      hand and machine-wrap stretch films, which are used by end users to wrap
      products and packages for storage and shipping.  We sell stretch film
      products to distributors and retail and industrial end users under the MaxTech®
and PalleTech® brands.





Retail—We
      primarily sell
      branded and private label retail trash bags.  Our Ruffies® brand of
      trash bags is a leading value brand in the United States.  Private
      label products are manufactured to the specifications of retailers and carry
      their customers’ brands.  Retail products are sold to mass
      merchandisers, grocery stores, and drug stores.





Tapes
      and
      Coatings





Our
      tapes
      and coatings division manufactures and sells tape, adhesive and corrosion
      protective products to a diverse base of customers around the
      world.  We offer a broad product portfolio of key product groups to a
      wide range of global end markets that include corrosion protection, HVAC,
      building and construction, industrial, retail, automotive medical and
      aerospace.  Our principal products include heat shrinkable and
      polyethylene-based tape coatings, PE coated cloth tapes, splicing/laminating
      tapes, flame-retardant tapes, vinyl-coated tapes, and a variety of other
      specialty tapes, including carton sealing, masking, mounting and OEM medical
      tapes.  We
      specialize in manufacturing laminated and coated products for a diverse range
      of
      applications, including flexible packaging, products for the housing
      construction and woven polypropylene flexible intermediate bulk containers
      (“FIBC”).  We use a wide range of substrates and basic weights of
      paper, film, foil and woven and non-woven fabrics to service the residential
      building, industrial, food packaging, healthcare and military
      markets.For fiscal 2007, no single customer accounted for
      more than 4% of our total net sales.




Tapes.We
      produce
      and sell a diverse portfolio of specialty adhesive products and provide products
      to end users in the industrial, oil, gas and water supply, HVAC, building and
      construction, retail, automotive, and medical markets.  We sell our
      products to over 4,700 customers, including retailers, distributors and end
      users.  We manufacture our products primarily under eight brands,
      including Nashua® and Polyken® and include the following product
      groups:




Tape
      Products—We
      are the leading
      North American manufacturer of cloth and foil tape products.  Other
      tape products include high-quality, high performance liners of splicing and
      laminating tapes, flame-retardant tapes, vinyl-coated and carton sealing tapes,
      electrical, double-faced cloth, masking, mounting, OEM medical and other
      specialty tapes.  These products are sold under the NationalTM,
      Nashua®, and Polyken® brands in the United States.  Tape products are
      sold primarily through distributors and directly to end users and are used
      predominantly in industrial, HVAC, automotive, construction and retail market
      applications.  In addition to


-9-




serving
      our core tape end markets, we are also a leading producer of tapes in the niche
      aerospace, construction and medical end markets.  We believe that our
      success in serving these additional markets is principally due to a combination
      of technical and manufacturing expertise leveraged in favor of customized
      applications.




Corrosion
      Protection Products—- We are the leading global producer of adhesive
      products to infrastructure, rehabilitation and new pipeline projects throughout
      the world.  Our products deliver superior performance across all
      climates and terrains for the purpose of sealing, coupling, rehabilitation
      and
      corrosion protection of pipelines.  Products include heat-shrinkable
      coatings, single- and multi-layer sleeves, pipeline coating tapes, anode systems
      for cathodic protection and epoxy coatings.  Our products are sold
      under a number of brands, including Polyken®, Powercrete®, Raychem® and Raychem
      Anodeflex®.  These products are used in oil, gas and water supply and
      construction applications.  Our customers primarily include
      contractors managing discrete construction projects around the world as well
      as
      distributors and applicators.




Specialty
      Adhesives—Our
      Specialty
      Adhesives manufacturing and design capabilities support many applications in
      virtually every industry.  We produce single and double coated
      transfer tapes for bonding applications for the medical, aerospace, specialty
      industrial and automotive assembly end markets.  Our products are
      primarily sold under its PatcoTM and STGTM brand names and the vast majority of
      them are sold directly to end-use customers with whom we work to develop
      products for application-specific uses.





Coatings.We
      manufacture and sell a diversified portfolio of coated and laminated products,
      including flexible packaging, multi-wall bags, fiber-drum packaging, housewrap,
      and polypropylene-based storage containers.  These products are sold
      for use in packaging, construction, and material handling
      applications.  We sell our coated products under a number of brands,
      including Barricade® and R-Wrap®.  In addition, a number of our
      construction-related products are also sold under private labels.  Our
      customers include converters, distributors, contractors and
      manufacturers.  We provide products to a diverse group of end users in
      the food, consumer, building and construction, medical, chemical, agriculture,
      mining and military markets under the following product lines:





Flexible
      Packaging–We manufacture specialty coated and laminated products for a wide variety
      of packaging applications.  The key end-markets and applications for
      our products include food, consumer, healthcare, industrial and military
      pouches, roll wrap, multi-wall bags and fiber drum packaging.  Our
      products are sold under the MarvelGuardTM and MarvelSealTM brands and are
      predominately sold to converters who transform them into finished goods.





Building
      Products –We
      produce
      exterior linerboard and foil laminated sheathing, housewrap and exterior window
      and door flashings for the building and construction end-markets.  Our
      products are sold under a number of market leading brands, including Barricade®,
      ContourTM, Energy-Wrap®, Opti-Flash®, R-Wrap®, Thermo-Ply®, and WeatherTrek®.
      These products are sold to wholesale distributors, lumberyards and directly
      to
      building contractors.





FIBC
–We
      manufacture
      customized polypropylene-based, woven and sewn containers for the transportation
      and storage of raw materials such as seeds, titanium dioxide, clay and resin
      pellets.





Marketing
      and Sales





We
      reach
      our large and diversified base of over 13,000 customers through our direct
      field
      sales force of dedicated professionals and the strategic use of
      distributors.  Our field sales, production and support staff meet with
      customers to understand their needs and improve our product offerings and
      services.  Our scale enables us to dedicate certain sales and
      marketing efforts to particular products, customers or geographic regions,
      when
      applicable, which enables us to develop expertise that is valued by our
      customers.  In addition, because we serve common customers across
      segments, we have the ability to efficiently utilize our sales and marketing
      resources to minimize costs.  Highly skilled customer service
      representatives are strategically located throughout our facilities to support
      the national field sales force.  In addition, telemarketing
      representatives, marketing managers and sales/marketing executives oversee
      the
      marketing and sales efforts.  Manufacturing and engineering personnel
      work closely with field sales personnel and customer service representatives
      to
      satisfy customers’ needs through the production of high-quality, value-added
      products and on-time deliveries.





Our
      sales
      force is also supported by technical specialists and our in-house graphics
      and
      design personnel.  Our creative services department includes
      computer-assisted graphic design capabilities and in-house production
      of


-10-


photopolymer
      printing plates.  We also have a centralized color matching and
      materials blending department that utilizes a computerized spectrophotometer
      to
      insure that colors match those requested by customers.




We
      believe that we have differentiated ourselves from competitors by building
      a
      reputation for high-quality products, customer service, and
      innovation.  Our sales team monitors customer service in an effort to
      ensure that we remain the primary supplier for our key accounts.  This
      strategy requires us to develop and maintain strong relationships with our
      customers, including end users as well as distributors and
      converters.  We have a technical sales team with significant knowledge
      of our products and processes, particularly in specialized
      products.  This knowledge enables our sales and marketing team to work
      closely with our research and development organization and our customers to
      co-develop products and formulations to meet specific performance
      requirements.  This partnership approach enables us to further expand
      our relationships with our existing customer base, develop relationships with
      new customers and increase sales of new products.




We
      market
      our products both under their brand names, as well as under our customers’
private labels.  We produce the leading value brand of retail trash
      bags (Ruffies®), and we also produce the Film-Gard® brand of plastic
      sheeting.  We are also a leading U.S. manufacturer of cloth tape,
      through the Nashua® and Polyken® brands.  We sell coated products
      under a number of leading brands including Barricade® and R-Wrap®.





Manufacturing





We
      manufacture our rigid open top and rigid closed top products utilizing several
      primary molding methods including: injection, thermoforming, compression, tube
      extrusion and blow molding.  These processes begin with raw plastic
      pellets, which are then converted into finished products.  In the
      injection process, the raw pellets are melted to a liquid state and injected
      into a multi-cavity steel mold where the resin is allowed to solidify to take
      the final shape of the part.  In the thermoform process, the raw resin
      is softened to the point where sheets of material are drawn into multi-cavity
      molds and formed over the molds to form the desired
      shape.  Compression molding is a high-speed process that begins with a
      continuously extruded plastic melt stream that is cut while remaining at molding
      temperature and carried to the mold cavity.  Independent mold cavities
      close around the molten plastic, compressing it to form the part, which is
      cooled and ejected. In the tube extrusion process, we extrude resin that is
      solidified in the shape of a tube and then cut to length.  The tube
      then has the head added by using another extruder that extrudes molten resin
      into a steel die where the cut tube is inserted into the steel
      die.  In blow molding we use three blow molding systems: injection,
      extrusion, and stretch blow.  Injection blow molding involves
      injecting molten resin into a multiple cavity steel die and allowing it to
      solidify into a preform.  The parts are then indexed to a blow station
      where high-pressure air is used to form the preform into the
      bottle.  In extrusion blow molding, we extrude molten plastic into a
      long tube and then aluminum dies clamp around the tube and high-pressure air
      is
      used to form the bottle.  In stretch blow molding, we inject molten
      plastic into a multi-cavity steel mold where the parts are allowed to cool
      in
      the mold until they are solidified.  The parts are then brought to a
      stretch blow molding machine where they are reheated and then placed in aluminum
      dies where high pressure air is used to form the bottle.




The
      final
      cured parts are transferred from the primary molding process to corrugated
      containers for shipment to customers or for post-molding secondary operations
      (offset printing, labeling, lining, silkscreening, handle applications,
      etc.).  We believe that our molding, handling, and post-molding
      capabilities are among the best in the industry.  Our overall
      manufacturing philosophy is to be a low-cost producer by using
      (1) high-speed molding machines, (2) modern multi-cavity hot runner,
      cold runner and insulated runner molds, (3) extensive material handling
      automation and (4) sophisticated post-molding technology.  We
      utilize state-of-the-art robotic packaging processes for large volume products,
      which enable us to reduce breakage while lowering warehousing and shipping
      costs.




We
      continuously test raw material and finished-good shipments to ensure that both
      our inputs and outputs meet our quality specifications.  Additionally,
      we perform regular audits of our products and processes throughout
      fabrication.  Given the highly competitive industry in which we
      compete, product quality is important to maintaining our market
      positions.  Our national manufacturing capabilities and broad
      distribution network allow us to provide a high level of service to our
      customers in nearly every major population center in North America. Our customer
      base includes many national retailers, manufacturers, and distributors which
      rely on us to distribute to locations throughout North America.  Our
      broad distribution network enables us to work in conjunction with our customers
      to minimize their lead times and inventory levels.  Each plant has
      maintenance capabilities to support manufacturing operations.  We have
      historically made, and intend to continue to make, significant capital
      investments in plant and equipment because of our objectives to improve
      productivity, maintain competitive advantages and foster continued
      growth.  Capital expenditures for 2007 were $99.3 million which
      includes a significant amount of


-11-




expenditures
      for capacity additions and other growth opportunities across our business as
      well as expenditures related to cost-saving opportunities and our estimated
      annual level of maintenance capital expenditures of approximately $37.3
      million.





Research,
      Product Development and Design





We
      believe our technology base and
      research and development support are among the best in the plastics packaging
      industry.  Using three-dimensional computer aided design technology,
      our full time product designers develop innovative product designs and models
      for the packaging market.  We can simulate the molding environment by
      running unit-cavity prototype molds in small injection-molding, thermoform,
      compression and blow molding machines for research and development of new
      products.  Production molds are then designed and outsourced for
      production by various companies with which we have extensive experience and
      established relationships or built by one of our two in-house tooling divisions
      located in Evansville and Chicago.  Our engineers oversee the
      mold-building process from start to finish.  We currently have a
      collection of over 1,700 proprietary molds.  Many of our customers
      work in partnership with our technical representatives to develop new, more
      competitive products.  We have enhanced our relationships with these
      customers by providing the technical service needed to develop products combined
      with our internal graphic arts support.  We also utilize our in-house
      graphic design department to develop color and styles for new rigid
      products.  Our design professionals work directly with our customers
      to develop new styles and use computer-generated graphics to enable our
      customers to visualize the finished product.




Additionally,
      at our technical centers in Lancaster, Pennsylvania, Lexington, Massachusetts,
      and Homer, Louisiana, we prototype new ideas, conduct research and development
      of new products and processes, and qualify production systems that go directly
      to our facilities and into production.  We also have a complete
      product testing and quality laboratory at our Lancaster, Pennsylvania, technical
      center.  Our research and development team also maintains pilot plants
      in our technical centers in Lexington, Massachusetts and Homer, Louisiana,
      where
      we are able to experiment with new compositions and processes with a focus
      on
      minimizing waste and improving productivity.  With this combination of
      manufacturing simulation and quality systems support we are able to improve
      time
      to market and reduce cost.  We spent $11.2 million on research and
      development in fiscal 2007.




Quality
      Assurance





Total
      Quality Management philosophies, including the use of statistical process
      control and extensive involvement of employee teams are used to increase
      productivity and reduce cost.  We use the guidelines of ISO 9001/2000
      to build a strong foundation that encourages employee involvement and team
      work.  Teamwork is the approach to problem-solving, increases
      continuous improvement and total employee participation.  Training is
      provided in Six Sigma and developing teamwork at all levels.





Teams
      utilize the Six Sigma methodology to improve internal processes and provide
      a
      systematic approach to problem solving resulting in improved customer
      service.  The drive for team work and continuous improvement is an
      ongoing quality focus.  All of our facilities are ISO9001/2000
      certified or have ISO Certification as a key goal to be
      accomplished.





Certification
      requires a demonstrated compliance by a company with a set of shipping, trading
      and technology standards promulgated by the International Organization for
      Standardization (“ISO”).  ISO 9001/2000 is the discipline that
      encourages continuous improvement throughout the
      organization.  Extensive testing of parts for size, color, strength
      and material quality using statistical process control techniques and
      sophisticated technology is also an ongoing part of our quality assurance
      activities.





Systems





We
      have
      launched a project to migrate multiple legacy management information and
      accounting systems to a single, company wide, management information and
      accounting system.  The migration began in the third quarter of 2007
      and is scheduled to be completed in the first quarter of 2009.  Once
      fully implemented, this change to a shared services business model (for certain
      processes) along with a single, company wide, management information and
      accounting system is intended to further enhance our internal control over
      financial reporting and our operating efficiencies.


-12-


Sources
      and Availability of Raw Materials





The
      most
      important raw material purchased by us is plastic resin.  We purchased
      approximately $977.7 million of resin in fiscal 2007 with approximately 68%
      of
      our resin pounds being polyethylene (“PE”), 29% polypropylene (“PP”), and 3%
      other.  Our plastic resin purchasing strategy is to deal with only
      high-quality, dependable suppliers, such as Basell, Chevron, Dow, ExxonMobil,
      Flint Hills Resources, LP, Lyondell, Nova, Sunoco, Equistar, Westlake and
      Total.  We believe that we have maintained strong relationships with
      these key suppliers and expect that such relationships will continue into the
      foreseeable future.  The resin market is a global market and, based on
      our experience, we believe that adequate quantities of plastic resins will
      be
      available at market prices, but we can give you no assurances as to such
      availability or the prices thereof.




We
      also purchase various other
      materials, including natural and butyl rubber, tackifying resins, chemicals
      and
      adhesives, paper and packaging materials, polyester staple, raw cotton,
      linerboard and kraft, woven and non-woven cloth and foil.  These
      materials are generally available from a number of suppliers.





Employees





At
      the end of fiscal 2007, we had
      approximately 12,700 employees.  We are party to the following
      collective bargaining agreements with the:





·
            United
                Steelworkers of America (290 employees in Baltimore, MD), which expires
                in
                April 2009


·
            United
                Steelworkers of America (28 employees in Vancouver, WA), which expires
                in
                January 2008


·
            Unite
                Here Local 150 (127 employees in Bloomington, MN), which expires
                in March
                2008


·
            United
                Association of Workers of America (77 employees in Elizabeth, NJ),
                which
                expires in May 2008


·
            United
                Automobile, Aerospace, and Agricultural Implement Workers of America,
                Local 882 (69 employees in Columbus, GA) which expires in October
                2009 and


·
            United
                Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Ally Industrial
                and Service Workers International Union, Local 1008 (102 employees
                in
                Constantine, MI) which expires in December 2009





None
      of our other domestic employees
      are covered by collective bargaining agreements.  We believe our
      relations with our employees are good.





Patents
      and Trademarks





We
      rely on a combination of patents,
      trade secrets, unpatented know-how, trademarks, copyrights and other
      intellectual property rights, nondisclosure agreements and other protective
      measures to protect our proprietary rights.  We do not believe that
      any individual item of our intellectual property portfolio is material to our
      current business.  We employ various methods, including
      confidentiality and non-disclosure agreements with third parties, employees
      and
      consultants, to protect our trade secrets and know-how.  We have
      licensed, and may license in the future, patents, trademarks, trade secrets,
      and
      similar proprietary rights to and from third parties.







Environmental
      Matters and Government Regulation





Our
      past
      and present operations and our past and present ownership and operations of
      real
      property are subject to extensive and changing federal, state, local and foreign
      environmental laws and regulations pertaining to the discharge of materials
      into
      the environment, the handling and disposition of wastes, and cleanup of
      contaminated soil and ground water, or otherwise relating to the protection
      of
      the environment.  We believe that we are in substantial compliance
      with applicable environmental laws and regulations.  However, we
      cannot predict with any certainty that we will not in the future incur
      liability, which could be significant under environmental statutes and
      regulations with respect to non-compliance with environmental laws,
      contamination of sites formerly or currently owned or operated by us (including
      contamination caused by prior owners and operators of such sites) or the
      off-site disposal of regulated materials, which could be material.




We
      may
      from time to time be required to conduct remediation of releases of regulated
      materials at our owned or operated facilities.  None of our pending
      remediation projects are expected to result in material costs.  Like
      any manufacturer, we are also subject to the possibility that we may receive
      notices of potential liability in connection with materials that were sent
      to
      third-party recycling, treatment, and/or disposal facilities under the Federal
      Comprehensive Environmental Response, Compensation and Liability Act of 1980,
      as
      amended, (“CERCLA”), and comparable state statutes, which impose liability for
      investigation and remediation of contamination without regard to fault or the
      legality of




-13-


the
      conduct that contributed to the contamination, and for damages to natural
      resources.  Liability under CERCLA is retroactive, and, under certain
      circumstances, liability for the entire cost of a cleanup can be imposed on
      any
      responsible party.  No such notices are currently pending which are
      expected to result in material costs.




The
      Food
      and Drug Administration (“FDA”) regulates the material content of direct-contact
      food and drug packages, including certain packages we manufacture pursuant
      to
      the Federal Food, Drug and Cosmetics Act.  Certain of our products are
      also regulated by the Consumer Product Safety Commission (“CPSC”) pursuant to
      various federal laws, including the Consumer Product Safety Act and the Poison
      Prevention Packaging Act.  Both the FDA and the CPSC can require the
      manufacturer of defective products to repurchase or recall such products and
      may
      also impose fines or penalties on the manufacturer.  Similar laws
      exist in some states, cities and other countries in which we sell our
      products.  In addition, laws exist in certain states restricting the
      sale of packaging with certain levels of heavy metals, imposing fines and
      penalties for non-compliance.  Although we use FDA approved resins and
      pigments in our products that directly contact food and drug products and
      believe they are in material compliance with all such applicable FDA
      regulations, and we believe our products are in material compliance with all
      applicable requirements, we remain subject to the risk that our products could
      be found not to be in compliance with such requirements.




The
      plastics industry, including us, is subject to existing and potential federal,
      state, local and foreign legislation designed to reduce solid wastes by
      requiring, among other things, plastics to be degradable in landfills, minimum
      levels of recycled content, various recycling requirements, disposal fees and
      limits on the use of plastic products.  In particular, certain states
      have enacted legislation requiring products packaged in plastic containers
      to
      comply with standards intended to encourage recycling and increased use of
      recycled materials.  In addition, various consumer and special
      interest groups have lobbied from time to time for the implementation of these
      and other similar measures.  We believe that the legislation
      promulgated to date and such initiatives to date have not had a material adverse
      effect on us.  There can be no assurance that any such future
      legislative or regulatory efforts or future initiatives would not have a
      material adverse effect on us.







Available
      Information





We
      make available, free of charge, our
      annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
      on
      Form 8-K and amendments, if any, to those reports through our Internet website
      as soon as practicable after they have been electronically filed with or
      furnished to the SEC.  Our internet address is
      www.berryplastics.com.  The information contained on our website is
      not being incorporated herein.  We are currently in the process of
      finalizing our Code of Ethics.





Item
      1A. RISK
      FACTORS




Our
      substantial indebtedness could affect our ability to meet our obligations and
      may otherwise restrict our activities.




We
      have a
      significant amount of indebtedness.  On September 29, 2007, we had a
      total indebtedness of $2,710.7 million and we would have been able to borrow
      a
      further $320.7 million under the revolving portion of our senior secured credit
      facilities.  We are permitted by the terms of our debt instruments to
      incur substantial additional indebtedness, subject to the restrictions
      therein.  Our inability to generate sufficient cash flow to satisfy
      our debt obligations, or to refinance our obligations on commercially reasonable
      terms, would have a material adverse effect on our business, financial condition
      and results of operations.




Our
      substantial indebtedness could have important consequences.  For
      example, it could:




·
            make
                it more difficult for us to satisfy our obligations under our
                indebtedness;




·
            limit
                our ability to borrow money for our working capital, capital expenditures,
                debt service requirements or other corporate purposes;




·
            require
                us to dedicate a substantial portion of our cash flow to payments
                on our
                indebtedness, which would reduce the amount of cash flow available
                to fund
                working capital, capital expenditures, product development and other
                corporate requirements;




·
            increase
                our vulnerability to general adverse economic and industry conditions;




·
            limit
                our ability to respond to business opportunities; and




·
            subject
                us to financial and other restrictive covenants, which, if we fail
                to
                comply with these covenants and our failure is not waived or cured,
                could
                result in an event of default under our debt.




-14-


Increases
      in resin prices or a shortage of available resin could harm our financial
      condition and results of operations.




To
      produce our products, we use large quantities of plastic resins, which accounted
      for 38% of our cost of goods sold in fiscal 2007.  Plastic resins are
      subject to price fluctuations, including those arising from supply shortages
      and
      changes in the prices of natural gas, crude oil and other petrochemical
      intermediates from which resins are produced.  Over the past several
      years, we have at times experienced rapidly increasing resin
      prices.  If rapid increases in resin prices continue, our revenue and
      profitability may be materially and adversely affected, both in the short-term
      as we attempt to pass through changes in the price of resin to customers under
      current agreements and in the long-term as we negotiate new agreements or if
      our
      customers seek product substitution.




We
      source
      plastic resin primarily from major industry suppliers such as Basell, Chevron,
      Dow, ExxonMobil, Flint Hills Resources, LP, Lyondell, Nova, Sunoco, Equistar,
      Westlake and Total.  We have long-standing relationships with certain
      of these suppliers but have not entered into a firm supply contract with any
      of
      them.  We may not be able to arrange for other sources of resin in the
      event of an industry-wide general shortage of resins used by us, or a shortage
      or discontinuation of certain types of grades of resin purchased from one or
      more of our suppliers.  Any such shortage may materially negatively
      impact our competitive position versus companies that are able to better or
      more
      cheaply source resin.




We
      may not be able to compete successfully and our customers may not continue
      to
      purchase our products.




We
      face
      intense competition in the sale of our products and compete with multiple
      companies in each of our product lines.  We compete on the basis of a
      number of considerations, including price, service, quality, product
      characteristics and the ability to supply products to customers in a timely
      manner.  Our products also compete with metal, glass, paper and other
      packaging materials as well as plastic packaging materials made through
      different manufacturing processes.  Some of these competitive products
      are not subject to the impact of changes in resin prices which may have a
      significant and negative impact on our competitive position versus substitute
      products.  Our competitors may have financial and other resources that
      are substantially greater than ours and may be better able than us to withstand
      price competition.  In addition, some of our customers do and could in
      the future choose to manufacture the products they require for
      themselves.  Each of our product lines faces a different competitive
      landscape.  Competition could result in our products losing market
      share or our having to reduce our prices, either of which would have a material
      adverse effect on our business and results of operations and financial
      condition.  In addition, since we do not have long-term
      arrangements


with
      many
      of our customers these competitive factors could cause our customers to shift
      suppliers and/or packaging material quickly.




We
      may pursue and execute acquisitions, which could adversely affect our
      business.




As
      part
      of our growth strategy, we plan to consider the acquisition of other companies,
      assets and product lines that either complement or expand our existing business
      and create economic value.  We cannot assure you that we will be able
      to consummate any such transactions or that any future acquisitions will be
      consummated at acceptable prices and terms.  We continually evaluate
      potential acquisition opportunities in the ordinary course of business,
      including those that could be material in size and
      scope.  Acquisitions involve a number of special risks,
      including:




·
            the
                diversion of management’s attention to the assimilation of the acquired
                companies and their employees and on the management of expanding
                operations;




·
            the
                incorporation of acquired products into our product line;




·
            the
                increasing demands on our operational systems;




·
            possible
                adverse effects on our reported operating results, particularly during
                the
                first several reporting periods after such acquisitions are completed;
                and




·
            the
                loss of key employees and the difficulty of presenting a unified
                corporate
                image.




We
      may
      become responsible for unexpected liabilities that we failed or were unable
      to
      discover in the course of performing due diligence in connection with historical
      acquisitions and any future acquisitions.  We have typically required
      selling stockholders to indemnify us against certain undisclosed
      liabilities.  However, we cannot assure you that indemnification
      rights we have obtained, or will in the future obtain, will be enforceable,
      collectible or sufficient in amount, scope or duration to fully offset the
      possible liabilities associated with the business or property
      acquired.  Any of these liabilities,
      individually or in the
      aggregate, could have a material adverse effect on our business, financial
      condition and results of operations.


-15-




In
      addition, we may not be able to successfully integrate future acquisitions
      without substantial costs, delays or other problems.  The costs of
      such integration could have a material adverse effect on our operating results
      and financial condition.  Although we conduct what we believe to be a
      prudent level of investigation regarding the businesses we purchase, in light
      of
      the circumstances of each transaction, an unavoidable level of risk remains
      regarding the actual condition of these businesses.  Until we actually
      assume operating control of such business assets and their operations, we may
      not be able to ascertain the actual value or understand the potential
      liabilities of the acquired entities and their operations.






We
      may not be successful in protecting our intellectual property rights, including
      our unpatented proprietary know-how and trade secrets, or in avoiding claims
      that we infringed on the intellectual property rights of others.




In
      addition to relying on patent and trademark rights, we rely on unpatented
      proprietary know-how and trade secrets, and employ various methods, including
      confidentiality agreements with employees and consultants, to protect our
      know-how and trade secrets.  However, these methods and our patents
      and trademarks may not afford complete protection and there can be no assurance
      that others will not independently develop the know-how and trade secrets or
      develop better production methods than us.  Further, we may not be
      able to deter current and former employees, contractors and other parties from
      breaching confidentiality agreements and misappropriating proprietary
      information and it is possible that third parties may copy or otherwise obtain
      and use our information and proprietary technology without authorization or
      otherwise infringe on our intellectual property rights.  Additionally,
      we have licensed, and may license in the future, patents, trademarks, trade
      secrets, and similar proprietary rights to third parties.  While we
      attempt to ensure that our intellectual property and similar proprietary rights
      are protected when entering into business relationships, third parties may
      take
      actions that could materially and adversely affect our rights or the value
      of
      our intellectual property, similar proprietary rights or
      reputation.  In the future, we may also rely on litigation to enforce
      our intellectual property rights and contractual rights, and, if not successful,
      we may not be able to protect the value of our intellectual
      property.  Any litigation could be protracted and costly and could
      have a material adverse effect on our business and results of operations
      regardless of its outcome.




Our
      success depends in part on our ability to obtain, or license from third parties,
      patents, trademarks, trade secrets and similar proprietary rights without
      infringing on the proprietary rights of third parties.  Although we
      believe our intellectual property rights are sufficient to allow us to conduct
      our business without incurring liability to third parties, our products may
      infringe on the intellectual property rights of such
      persons.  Furthermore, no assurance can be given that we will not be
      subject to claims asserting the infringement of the intellectual property rights
      of third parties seeking damages, the payment of royalties or licensing fees
      and/or injunctions against the sale of our products.  Any such
      litigation could be protracted and costly and could have a material adverse
      effect on our business and results of operations.




Current
      and future environmental and other governmental requirements could adversely
      affect our financial condition and our ability to conduct our
      business.




Our
      operations are subject to federal, state, local and foreign environmental laws
      and regulations that impose limitations on the discharge of pollutants into
      the
      air and water and establish standards for the treatment, storage and disposal
      of
      solid and hazardous wastes and require clean up of contaminated
      sites.  While we have not been required historically to make
      significant capital expenditures in order to comply with applicable
      environmental laws and regulations, we cannot predict with any certainty our
      future capital expenditure requirements because of continually changing
      compliance standards and environmental technology.  Furthermore,
      violations or contaminated sites that we do not know about (including
      contamination caused by prior owners and operators of such sites) (or newly
      discovered information) could result in additional compliance or remediation
      costs or other liabilities, which could be material.  We have limited
      insurance coverage for potential environmental liabilities associated with
      historic and current operations and we do not anticipate increasing such
      coverage in the future.  We may also assume significant environmental
      liabilities in acquisitions.  In addition, federal, state, local and
      foreign governments could enact laws or regulations concerning environmental
      matters that increase the cost of producing, or otherwise adversely affect
      the
      demand for, plastic products.  Legislation that would prohibit, tax or
      restrict the sale or use of certain types of plastic and other containers,
      and
      would require diversion of solid wastes such as packaging materials from
      disposal in landfills, has been or may be introduced in the U.S. Congress,
      in
      state legislatures and other legislative bodies.  While container
      legislation has been adopted in a few jurisdictions, similar legislation has
      been defeated in public referenda in several states, local elections and many
      state and local legislative




-16-


sessions.  Although
      we believe that the laws promulgated to date have not had a material adverse
      effect on us, there can be no assurance that future legislation or regulation
      would not have a material adverse effect on us.  Furthermore, a
      decline in consumer preference for plastic products due to environmental
      considerations could have a negative effect on our business.




The
      Food
      and Drug Administration (“FDA”) regulates the material content of direct-contact
      food and drug packages we manufacture pursuant to the Federal Food, Drug and
      Cosmetic Act.  Furthermore, some of our products are regulated by the
      Consumer Product Safety Commission (“CPSC”) pursuant to various federal laws,
      including the Consumer Product Safety Act and the Poison Prevention Packaging
      Act.  Both the FDA and the CPSC can require the manufacturer of
      defective products to repurchase or recall these products and may also impose
      fines or penalties on the manufacturer.  Similar laws exist in some
      states, cities and other countries in which we sell products.  In
      addition, laws exist in certain states restricting the sale of packaging with
      certain levels of heavy metals and imposing fines and penalties for
      noncompliance.  Although we use FDA-approved resins and pigments in
      our products that directly contact food and drug products and we believe our
      products are in material compliance with all applicable requirements, we remain
      subject to the risk that our products could be found not to be in compliance
      with these and other requirements.  A recall of any of our products or
      any fines and penalties imposed in connection with non-compliance could have
      a
      materially adverse effect on us.  See “Business—Environmental Matters
      and Government Regulation.”




In
      the event of a catastrophic loss of one of our key manufacturing facilities,
      our
      business would be adversely affected.




While
      we
      manufacture our products in a large number of diversified facilities and
      maintain insurance covering our facilities, including business interruption
      insurance, a catastrophic loss of the use of all or a portion of one of our
      key
      manufacturing facilities due to accident, labor issues, weather conditions,
      natural disaster or otherwise, whether short or long-term, could have a material
      adverse effect on us.




Our
      business operations could be significantly disrupted if members of our senior
      management team were to leave.




Our
      success depends to a significant degree upon the continued contributions of
      our
      senior management team.  Our senior management team has extensive
      manufacturing, finance and engineering experience, and we believe that the
      depth
      of our management team is instrumental to our continued
      success.  While we have entered into employment agreements with
      certain executive officers, the loss of any of our key executive officers in
      the
      future could significantly impede our ability to successfully implement our
      business strategy, financial plans, expansion of services, marketing and other
      objectives.




Goodwill
      and other intangibles represent a significant amount of our net worth, and
      a
      write-off could result in lower reported net income and a reduction of our
      net
      worth.




At
      the
      end of fiscal 2007, the net value of our goodwill and other intangibles was
      $2,242.1 million.In July 2001, the
      Financial Accounting Standards Board issued Statements of Financial Accounting
      Standards No. 142, Goodwill and Other Intangible Assets.  Under this
      accounting standard, we are no longer required or permitted to amortize goodwill
      reflected on our balance sheet.  We are, however, required to evaluate
      goodwill reflected on our balance sheet when circumstances indicate a potential
      impairment, or at least annually, under the impairment testing guidelines
      outlined in the standard.  Future changes in the cost of capital,
      expected cash flows, or other factors may cause our goodwill to be impaired,
      resulting in a non-cash charge against results of operations to write-off
      goodwill for the amount of impairment.  If a significant write-off is
      required, the charge would have a material adverse effect on our reported
      results of operations and net worth in the period of any such
      write-off.




We
      are controlled by funds affiliated with Apollo Management and its interests
      as
      an equity holder may conflict with yours.




A
      majority of the common stock of our
      parent company, Berry Group, on a fully-diluted basis, is held by funds
      affiliated with Apollo Management.  Funds affiliated with Apollo
      Management control Berry Group and therefore us as a wholly owned subsidiary
      of
      Berry Group.  As a result, Apollo has the power to elect a majority of
      the members of our board of directors, appoint new management and approve any
      action requiring the approval of the holders of Berry Group’s stock, including
      approving acquisitions or sales of all or substantially all of our
      assets.  The directors elected by Apollo have the ability to control
      decisions affecting our capital structure, including the issuance of additional
      capital stock, the


-17-


implementation
      of stock repurchase programs and the declaration of
      dividends.  Apollo’s interests may not in all cases be aligned with
      your interests.  For example, if we encounter financial difficulties
      or are unable to pay our debts as they mature, Apollo’s interests, as equity
      holders, might conflict with your interests.  Affiliates of Apollo may
      also have an interest in pursuing acquisitions, divestitures, financings and
      other transactions that, in their judgment, could enhance their equity
      investments, even though such transactions might involve risks to
      you.  Additionally, Apollo is in the business of investing in
      companies and may, from time to time, acquire and hold interests in businesses
      that compete directly or indirectly with us.  Furthermore, Apollo has
      no continuing obligation to provide us with debt or equity financing or to
      provide us with joint purchasing or similar opportunities with its other
      portfolio companies.  Apollo may also pursue acquisition opportunities
      that may be complementary to our business and, as a result, those acquisition
      opportunities may not be available to us.





Item
      1B. UNRESOLVED
      STAFF COMMENTS





None


-18-


Item
      2.  PROPERTIES





We
      believe that our property and
      equipment is well-maintained, in good operating condition and adequate for
      our
      present needs.  The following table sets forth our principal
      manufacturing facilities as of September 29, 2007:





Location
            Square
                Footage
            Use
            Owned/LeasedAarschot,
                Belgium
            70,611
            Manufacturing
            LeasedAhoskie,
                NC
            150,000
            Manufacturing
            OwnedAlbertville,
                AL
            318,000
            Manufacturing
            OwnedAltacomulco,
                Mexico
            116,250
            Manufacturing
            OwnedAnaheim,
                CA
            248,000
            Manufacturing
            LeasedAurora,
                IL
            66,900
            Manufacturing
            LeasedBaltimore,
                MD
            244,000
            Manufacturing
            OwnedBaroda,
                India
            24,196
            Manufacturing
            OwnedBattleboro,
                NC
            390,654
            Manufacturing
            OwnedBeaumont,
                TX
            42,300
            Manufacturing
            OwnedBelleville,
                Canada
            46,000
            Manufacturing
            OwnedBowling
                Green, KY
            168,000
            Manufacturing
            LeasedBremen,
                GA
            140,000
            Manufacturing
            OwnedBristol,
                RI
            23,000
            Manufacturing
            OwnedCharlotte,
                NC
            150,000
            Manufacturing
            OwnedCharlotte,
                NC
            53,095
            Manufacturing
            LeasedChicago,
                IL
            472,000
            Manufacturing
            LeasedColumbus,
                GA
            70,000
            Manufacturing
            OwnedConstantine,
                MI
            144,000
            Manufacturing
            OwnedCoon
                Rapids, MN
            64,890
            Manufacturing
            OwnedCovington,
                GA
            306,889
            Manufacturing
            OwnedCranbury,
                NJ
            204,000
            Manufacturing
            LeasedDoswell,
                VA
            249,456
            Manufacturing
            OwnedEasthampton,
                MA
            210,000
            Manufacturing
            LeasedElizabeth,
                NJ
            46,258
            Manufacturing
            LeasedEvansville,
                IN
            552,000
            Headquarters
                and manufacturing
            OwnedEvansville,
                IN
            223,000
            Manufacturing
            LeasedFranklin,
                KY
            513,000
            Manufacturing
            OwnedGreenville,
                SC
            70,000
            Manufacturing
            OwnedGoshen,
                IN
            125,000
            Manufacturing
            OwnedHenderson,
                NV
            175,000
            Manufacturing
            OwnedHomer,
                LA
            186,000
            Manufacturing
            OwnedHouston,
                TX
            18,000
            Manufacturing
            OwnedIowa
                Falls, IA
            100,000
            Manufacturing
            OwnedJackson,
                TN
            211,000
            Manufacturing
            LeasedLakeville,
                MN
            200,000
            Manufacturing
            OwnedLawrence,
                KS
            424,000
            Manufacturing
            OwnedMiddlesex,
                NJ
            29,020
            Manufacturing
            OwnedMilan,
                Italy
            125,000
            Manufacturing
            LeasedMinneapolis,
                MN
            200,645
            Manufacturing
            OwnedMonroe,
                LA
            452,500
            Manufacturing
            OwnedMonroeville,
                OH
            350,000
            Manufacturing
            OwnedPhoenix,
                AZ
            266,000
            Manufacturing
            LeasedPryor,
                OK
            198,000
            Manufacturing
            OwnedRichmond,
                IN
            160,000
            Manufacturing
            OwnedSan
                Luis Potosi, Mexico
            114,000
            Manufacturing
            LeasedSarasota,
                FL
            74,000
            Manufacturing
            OwnedSioux
                Falls, SD
            230,000
            Manufacturing
            OwnedStreetsboro,
                OH
            140,000
            Manufacturing
            OwnedSuffolk,
                VA
            110,000
            Manufacturing
            OwnedSyracuse,
                NY
            215,000
            Manufacturing
            LeasedTijuana,
                Mexico
            260,831
            Manufacturing
            OwnedToluca,
                Mexico
            172,000
            Manufacturing
            LeasedVancouver,
                WA
            23,000
            Manufacturing
            LeasedVictoria,
                TX
            190,000
            Manufacturing
            OwnedWoodstock,
                IL
            170,000
            Manufacturing
            Owned10,295,495


-19-


Item
      3.  LEGAL PROCEEDINGS





We
      are party to various legal
      proceedings involving routine claims which are incidental to our business.
      Although our legal and financial liability with respect to such proceedings
      cannot be estimated with certainty, we believe that any ultimate liability
      would
      not be material to our financial condition.





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





None.





PART
      II





Item
      5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
      STOCKHOLDER


MATTERS,
      AND ISSUER PURCHASES OF
      EQUITY SECURITIES





There
      is no established public trading
      market for any class of common stock of Berry Plastics Holding Corporation
      or
      Berry Plastics Group, Inc.   All of the issued and outstanding
      common stock of the Berry Plastics Holding Corporation is held by Berry Plastics
      Group, Inc.  With respect to the capital stock of Berry Group, as of
      December 10, 2007, there were approximately 366 holders of the common
      stock.  On June 7, 2007, Berry Group’s Board of Directors declared a
      special one-time dividend of $77 per common share to shareholders of record
      as
      of June 6, 2007.  The dividend was paid June 8, 2007.  In
      connection with this dividend, Berry Holding paid a dividend of approximately
      $87.0 million to Group.  See Item 12 of this Form 10-K entitled
“Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters” and Footnote 10 to our consolidated financial statements
      regarding equity compensation plan information.





-20-


Item
      6. SELECTED
      FINANCIAL DATA





The
      following table presents selected
      historical financial data for Berry Holding, Old Covalence, and Tyco Plastics
      & Adhesives (Predecessor) and should be read in conjunction with, and is
      qualified by reference to, “Management’s Discussion and Analysis of Financial
      Condition and Results of Operations” and the respective financial statements and
      notes to the financial statements included elsewhere in this Form 10-K and
      the
      Form S-4 filed by Berry Holding on May 4, 2007.





The
      selected historical financial data of Tyco Plastics & Adhesives have been
      derived from the audited financial statements that were prepared in accordance
      with GAAP.  These financial statements have been prepared on a
      going-concern basis, as if certain assets of Tyco Plastics & Adhesives,
      which was acquired by Old Covalence on February 16, 2006, had existed as an
      entity separate from Tyco during the periods presented.  Tyco charged
      the predecessor operations a portion of its corporate support costs, including
      engineering, legal, treasury, planning, environmental, tax, auditing,
      information technology and other corporate services, based on usage, actual
      costs or other allocation methods considered reasonable by Tyco
      management.  Accordingly, expenses included in the financial
      statements may not be indicative of the level of expenses which might have
      been
      incurred had the predecessor been operating as a separate stand-alone
      company.







Successor
            
            
            Predecessor($
                in millions)
            
            Year
                  ended September 29, 2007
            
            
            Period
                  from February 17
                to
                  September 30, 2006
            
            
            Period
                  from October 1, 2005 to February 16, 2006
            
            
            Year
                  ended September 29, 2005
            
            
            Year
                  ended September 29, 2004
            
            
            Year
                  ended September 29, 2003Statement
                of Operations Data:Net
                revenue(1)
            
            $
            3,055.0
            
            
            $
            1,138.8
            
            
            $
            666.9
            
            
            $
            1,725.2
            
            
            $
            1,658.8
            
            
            $
            1,597.8Cost
                of sales
            
            
            2,583.4
            
            
            
            1,022.9
            
            
            
            579.0
            
            
            
            1,477.4
            
            
            
            1,366.2
            
            
            
            1,344.1Gross
                profit
            
            
            471.6
            
            
            
            115.9
            
            
            
            87.9
            
            
            
            247.8
            
            
            
            292.6
            
            
            
            253.7Charges
                and allocations from Tyco and affiliates
            
            
            —
            
            
            
            —
            
            
            
            10.4
            
            
            
            56.4
            
            
            
            65.0
            
            
            
            95.3Selling,
                general and administrative expenses
            
            
            321.5
            
            
            
            107.6
            
            
            
            50.0
            
            
            
            124.6
            
            
            
            130.2
            
            
            
            108.3Restructuring
                and impairment charges (credits), net
            
            
            39.1
            
            
            
            0.6
            
            
            
            0.6
            
            
            
            3.3
            
            
            
            57.9
            
            
            
            (0.8
            )Other
                operating expenses
            
            
            43.6
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Operating
                income
            
            
            67.4
            
            
            
            7.7
            
            
            
            26.9
            
            
            
            63.5
            
            
            
            39.5
            
            
            
            50.9Other
                expense
            
            
            37.3
            
            
            
            12.3
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Interest
                expense, net
            
            
            237.6
            
            
            
            46.5
            
            
            
            2.1
            
            
            
            4.5
            
            
            
            6.3
            
            
            
            6.5Interest
                expense (income), net—Tyco and affiliates
            
            
            —
            
            
            
            —
            
            
            
            5.5
            
            
            
            11.2
            
            
            
            (1.7
            )
            
            
            3.6Income
                (loss) before income taxes
            
            
            (207.5
            )
            
            
            (51.1
            )
            
            
            19.3
            
            
            
            47.8
            
            
            
            34.9
            
            
            
            40.8Income
                tax expense (benefit)
            
            
            (88.6
            )
            
            
            (18.1
            )
            
            
            1.6
            
            
            
            3.8
            
            
            
            2.4
            
            
            
            2.9Minority
                interest
            
            
            (2.7
            )
            
            
            (1.8
            )
            
            
            —
            
            
            
            —
            
            
            
            0.2
            
            
            
            0.2Cumulative
                effect of accounting change
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            17.8Net
                income (loss)
            
            $
            (116.2
            )
            
            $
            (31.2
            )
            
            $
            17.7
            
            
            $
            44.0
            
            
            $
            32.3
            
            
            $
            19.9Balance
                Sheet Data (at period end):Cash
                and cash equivalents
            
            $
            14.6
            
            
            $
            83.1
            
            
            $
            4.9
            
            
            $
            2.7
            
            
            $
            3.7
            
            
            $
            7.9Property,
                plant and equipment, net
            
            
            785.0
            
            
            
            816.6
            
            
            
            275.6
            
            
            
            283.1
            
            
            
            291.1
            
            
            
            342.8Total
                assets
            
            
            3,869.4
            
            
            
            3,821.4
            
            
            
            1,279.5
            
            
            
            1,206.7
            
            
            
            1,215.0
            
            
            
            1,283.3Total
                long-term obligations (at end of period)
            
            
            2,693.3
            
            
            
            2,612.3
            
            
            
            —
            
            
            
            —
            
            
            
            79.5
            
            
            
            136.5Shareholders’
                equity
            
            
            450.0
            
            
            
            409.6
            
            
            
            877.7
            
            
            
            855.1
            
            
            
            822.8
            
            
            
            877.0Cash
                Flow and other Financial Data:


Net
                  cash provided by (used in) operating activities
              
              $
              137.3
              
              
              $
              96.7
              
              
              $
              (119.2
              )
              
              $
              117.3
              
              
              $
              89.2
              
              
              $
              123.8Net
                  cash used in investing activities
              
              
              (164.3
              )
              
              
              (3,252.0
              )
              
              
              (9.1
              )
              
              
              (29.2
              )
              
              
              (15.5
              )
              
              
              (13.2
              )Net
                  cash provided by (used in) financing activities
              
              
              (40.4
              )
              
              
              3,212.5
              
              
              
              130.6
              
              
              
              (89.2
              )
              
              
              (77.7
              )
              
              
              (106.8
              )Capital
                  expenditures
              
              
              99.3
              
              
              
              34.8
              
              
              
              12.2
              
              
              
              32.1
              
              
              
              16.5
              
              
              
              14.6


(1)
            Net
                revenue includes related party revenue of $11.6 million for the period
                from October 1, 2005 to February 16, 2006 and $23.4 million, 26.0
                million
                and $25.8 million for the years ended September 30, 2005, 2004 and
                2003,
                respectively. Additionally, revenue is presented net of certain rebates
                paid to customers.








-21-


Item
                  7.
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 Formation
        of Berry Holding
 
 On
        April
        3, 2007, Berry Plastics Group, Inc. (“Old Berry Group”) completed a
        stock-for-stock merger (the “Merger”) with Covalence Specialty Materials Holding
        Corp. (“Old Covalence Holding”). The resulting company retained the name Berry
        Plastics Group, Inc. (“Berry Group”).  Immediately following the
        Merger, Berry Plastics Holding Corporation (“Old Berry Holding”) and Covalence
        Specialty Materials Corp. (“Old Covalence”) were combined as a direct subsidiary
        of Berry Group.  The resulting company retained the name Berry
        Plastics Holding Corporation (“Berry Holding”).  Unless the context
        requires otherwise, references in this Management's Discussion and Analysis
        of
        Financial Condition and Results of Operations to “we”, “us”, the “Company”,
“Berry”, and “Berry Plastics” refer to Berry Group and its consolidated
        subsidiaries, including Berry Holding, after giving effect to the transactions
        described in this paragraph.  The combination was accounted for as a
        merger of entities under common control.  We believe the combination
        of these entities will provide us with significant opportunities for growth
        through increasing operational efficiencies, reducing fixed costs, optimizing
        manufacturing assets and improving the efficiency of capital
        spending.
  Apollo
        V Acquisition of Old Covalence Holding
 
 On
        February 16, 2006, Old Covalence Holding was formed through the acquisition
        of
        substantially all of the assets and liabilities of Tyco Plastics & Adhesives
        (“TP&A”) under a Stock and Asset Purchase Agreement dated December 20, 2005
        among an affiliate of Apollo Management V, L.P (“Apollo V”), Tyco International
        Group S.A. and Tyco Group S.a.r.l.
 
 Apollo
        VI Acquisition of Old Berry Group
 
 On
        September 20, 2006, BPC Acquisition
        Corp. merged with and into BPC Holding Corporation pursuant to an agreement
        and
        plan of merger (the “Apollo Berry Merger”), dated June 28, 2006, with BPC
        Holding Corporation continuing as the surviving
        corporation.  Following the consummation of the Apollo Berry Merger,
        BPC Holding Corporation changed its name to Berry Plastics Holding
        Corporation.  Pursuant to the Apollo Berry Merger, Old Berry Holding
        was a wholly-owned subsidiary of Old Berry Group, the principal stockholders
        of
        which were Apollo Investment Fund VI, L.P., AP Berry Holdings, LLC, an affiliate
        of Graham Berry Holdings, L.P., and management.  Apollo Investment
        Fund VI, L.P. (“Apollo VI”) and AP Berry Holdings, LLC are affiliates of Apollo
        Management, L.P. (“Apollo Management”), which is a private investment
        firm.  Graham Berry Holdings, L.P. is an affiliate of Graham Partners,
        Inc. (“Graham”), a private equity firm.
 
 Overview
 
 You
        should read the following
        discussion in conjunction with the consolidated financial statements of Berry
        Holding and its subsidiaries and the accompanying notes thereto, which
        information is included elsewhere herein.  This discussion contains
        forward-looking statements and involves numerous risks and uncertainties,
        including, but not limited to, those described in the “Risk Factors”
section.  Our actual results may differ materially from those
        contained in any forward-looking statements.
  -22-
  
 We
        believe we are one of the world’s leading manufacturer and marketers of plastic
        packaging products.  We are a major producer of a wide range of
        products, including rigid open top and rigid closed top packaging,
        polyethylene-based plastic films, industrial tapes, medical specialties,
        packaging, heat-shrinkable coatings and specialty laminates.  We
        manufacture a broad range of innovative, high quality packaging solutions
        using
        our collection of over 1,700 proprietary molds and an extensive set of
        internally developed processes and technologies. Our principal products include
        containers, drink cups, bottles, closures and overcaps, tubes, prescription
        vials, trash bags, stretch films, plastic sheeting and tapes which we sell
        into
        a diverse selection of attractive and stable end markets, including food
        and
        beverage, healthcare, personal care, quick service and family dining
        restaurants, custom and retail, agricultural, horticultural, institutional,
        industrial, construction, aerospace and automotive.  We sell our
        packaging solutions to over 13,000 customers, ranging from large multinational
        corporations to small local businesses comprised of a favorable balance of
        leading national blue-chip customers as well as a collection of smaller local
        specialty businesses.  We believe that we are one of the largest
        global purchasers of polyethylene resin, our principal raw material, buying
        approximately 1.2 billion pounds annually.  We believe that our
        proprietary tools and technologies, low-cost manufacturing capabilities and
        significant operating and purchasing scale provide us with a competitive
        advantage in the marketplace. Our unique combination of leading market
        positions, proven management team, product and customer diversity and
        manufacturing and design innovation provides access to a variety of growth
        opportunities. Our top 10 customers represented approximately 24% of our
        fiscal
        2007 net sales with no customer accounting for more than 6% of our fiscal
        2007
        net sales.  The average length of our relationship with these
        customers was 21 years. Additionally, we operate 55 strategically located
        manufacturing facilities and have extensive distribution
        capabilities.  At the end of fiscal 2007, we had approximately 12,700
        employees.
 
 Recent
        Developments
 
 On
        December 19, 2007, Holding and certain of it subsidiaries entered into a
        sale
        lease back transaction pursuant to which Holding sold its manufacturing
        facilities located in Baltimore, Maryland; Evansville, Indiana; and Lawrence,
        Kansas for approximately $83 million resulting in net proceeds of $73.3 million
        after repayment of $7.9 million on capital lease obligations and transaction
        expenses.  Holding's lease of these facilities is for a term of 20
        years, and initial annual rent expense is approximately $6.6 million
        annually.
 
 On
        December 20, 2007, Holding acquired all of the outstanding shares of MAC
        Closures, Inc., a Canadian corporation, through its newly formed subsidiary
        BerryMac Acquisition Limited for approximately CN$72 million.  MAC
        Closures has manufacturing locations in Waterloo, Quebec and Oakville, Ontario.
        MAC Closures has approximately CN$41 million in annual revenue and 180
        employees.  The acquisition was funded with proceeds from the sale
        lease back transaction mentioned above.
 
 On
        December 21, 2007, Holding announced that it entered into a definitive agreement
        to acquire Captive Holdings, Inc., the parent company of Captive Plastics,
        Inc.,
        a leading manufacturer of blow molded plastic bottles for approximately $500
        million.  Captive Plastics, Inc. and Berry's rigid business have
        significant customer overlap, similar processes and similar
        products.  Subject to customary closing conditions, the parties expect
        to close the acquisition in the first quarter of 2008.
 
 Acquisitions,
        Disposition and Facility Rationalizations
 
 We
        maintain a selective and disciplined acquisition strategy, which is focused
        on
        improving our financial performance in the long-term, enhancing our market
        positions and expanding our product lines or, in some cases, providing us
        with a
        new or complementary product line.  We have historically achieved
        significant reductions in manufacturing and overhead costs of acquired companies
        by introducing advanced manufacturing processes, exiting low-margin businesses
        or product lines, reducing headcount, rationalizing facilities and machinery,
        applying best practices and capitalizing on economies of scale.  In
        connection with our acquisitions, we have in the past and may in the future
        incur charges related to these reductions and rationalizations.
   -23-
  Rollpak
        Acquisition
 
 On
        April
        11, 2007, Berry Plastics completed its acquisition of 100% of the outstanding
        common stock of Rollpak Acquisition Corporation, which is the sole stockholder
        of Rollpak Corporation.  Rollpak Corporation is a flexible film
        manufacturer located in Goshen, Indiana.  The purchase price was
        funded utilizing cash on hand.
 
 Sale
        of UK Operations
 
 On
        April
        10, 2007, the Company sold its wholly owned subsidiary, Berry Plastics UK
        Ltd.,
        to Plasticum Group N.V. for approximately $10.0 million.  At the
        time of the sale, the annual net sales of this business were less than
        $9.0 million.
 
 Plant
        Rationalizations
 
 On
        February 6, 2007, Old Covalence announced a restructuring program in its
        Coatings division.  The plannedactions
        relate to the exiting of two product lines, the closure of a manufacturing
        facility, the termination of certain employees and the relocation of certain
        operations.  The business that is in the process of being exited
        accounts for less than $25.0 million of annual net sales.  During
        fiscal 2007, the Company recorded charges of $6.2 million which was comprised
        of
        $3.4 million of asset impairments, $0.8 million of severance and $2.0 million
        of
        relocation and other restructuring charges.
 
 On
        April
        26, 2007, the Company announced its intention to shut down its manufacturing
        facility located in Oxnard, California.  The Company has stopped all
        production in the facility and is in the process of moving the equipment
        and
        inventory to other Berry locations.  The Company intends to complete
        this move by December 31, 2007.  The Company had previously
        established a reserve of $1.2 million for the shutdown of the Oxnard facility
        in
        connection with the Kerr Group acquisition.  This accrual included
        estimates for severance and lease termination costs.  The Company
        recorded an additional charge of $4.0 million for severance and lease
        termination costs in fiscal 2007.  In addition, the Company recorded
        other restructuring charges related to equipment and inventory relocation
        and
        other operating costs of the facility of $1.5 million in fiscal
        2007.
 
 In
        connection with the Merger on April 3, 2007, the Company announced that it
        would
        close the Old Covalence corporate headquarters in Bedminster, NJ and the
        Company’s coatings division headquarters in Shreveport, LA.  The
        reorganization was part of the integration plan to consolidate certain corporate
        functions at the Company’s headquarters in Evansville, Indiana and to
        consolidate the adhesives and coatings segment into one new segment called
        tapes
        and coatings.  In connection with these changes, the Company recorded
        severance charges in fiscal 2007 of $3.5 million and lease termination charges
        of $1.9 million.  The Company has substantially completed this
        reorganization as of September 29, 2007.
 
 On
        July
        10, 2007, we announced a restructuring of the operations within our flexible
        films division.  The restructuring will include the closing of four
        manufacturing locations: Yonkers, New York; Columbus, Georgia; City of Industry,
        California and Santa Fe Springs, California.  We intend to complete
        each of the closings prior to December 31, 2007.  The business at each
        facility being closed will be transferred to other Company
        facilities.  The affected business accounted for less than $100
        million of annual net sales.  On September 27, 2007, we announced our
        plans to rationalize our Sparks, Nevada manufacturing location.  We
        intend to complete the closing prior to August 1, 2008.  The business
        will be transferred to other Company facilities.  The affected
        business accounted for approximately $10 million of annual net sales. The
        Company recorded an expense of $22.1 million in fiscal 2007 related to these
        restructuring activities.
 
 Critical
        Accounting Policies and Estimates
 
 We
        disclose those accounting policies that we consider to be significant in
        determining the amounts to be utilized for communicating our consolidated
        financial position, results of operations and cash flows in the second note
        to
        our consolidated financial statements included elsewhere herein.  Our
        discussion and analysis of our financial condition and results of operations
        are
        based on our consolidated financial statements, which have been prepared
        in
        accordance with accounting principles generally accepted in the United
        States.  The preparation of financial statements in conformity with
        these principles requires management to make estimates and assumptions that
        affect amounts reported in the financial statements and accompanying
        notes.  Actual results are likely to differ from these estimates, but
        management does not believe such differences will materially affect our
        financial position or results of operations.  We believe that the
        following accounting policies are the most critical because they have the
        greatest impact on the presentation of our financial condition and results
        of
        operations.
  -24-
  
 Allowance
        for Doubtful
        Accounts.We evaluate our allowance for doubtful accounts on a
        quarterly basis and review any significant customers with delinquent balances
        to
        determine future collectibility.  We base our determinations on legal
        issues (such as bankruptcy status), past history, current financial and credit
        agency reports, and the experience of our credit representatives.  We
        reserve accounts that we deem to be uncollectible in the quarter in which
        we
        make the determination. We maintain additional reserves based on our historical
        bad debt experience.  Additionally, our allowance for doubtful
        accounts includes a reserve for cash discounts that are offered to some of
        our
        customers for prompt payment.  We believe, based on past history and
        our credit policies, that our net accounts receivable are of good
        quality.  A ten percent increase or decrease in our bad debt
        experience would not have a material impact on the results of operations
        of the
        Company.  Our allowance for doubtful accounts was $11.3 million and
        $9.6 million as of September 29, 2007 and September 30, 2006,
        respectively.
 
 Inventory
        Obsolescence.  We evaluate our reserve for inventory
        obsolescence on a quarterly basis and review inventory on-hand to determine
        future salability.  We base our determinations on the age of the
        inventory and the experience of our personnel.  We reserve inventory
        that we deem to be not salable in the quarter in which we make the
        determination.  We believe, based on past history and our policies and
        procedures, that our net inventory is salable.  A ten percent increase
        or decrease in our inventory obsolescence experience would not have a material
        impact on the results of operations of the Company.  Our reserve for
        inventory obsolescence was $14.9 million and $16.6 million as of September
        29,
        2007 and September 30, 2006, respectively.
 
 Medical
        Insurance.We offer our employees medical insurance that is
        primarily self-insured by us.  As a result, we accrue a liability for
        known claims as well as the estimated amount of expected claims incurred
        but not
        reported.  We evaluate our medical claims liability on a quarterly
        basis, obtain an independent actuarial analysis on an annual basis and perform
        payment lag analysis.  Based on our analysis, we believe that our
        recorded medical claims liability should be sufficient.  A ten percent
        increase or decrease in our medical claims experience would not have a material
        impact on the results of operations of the Company.  Our accrued
        liability for medical claims was $6.7 million and $9.1 million, including
        reserves for expected medical claims incurred but not reported, as of September
        29, 2007 and September 30, 2006, respectively.
 
 Workers’
Compensation
        Insurance.The majority of our facilities are covered under a
        large deductible program for workers’ compensation insurance.  On a
        quarterly basis, we evaluate our liability based on third-party adjusters’
independent analyses by claim.  Based on our analysis, we believe that
        our recorded workers’ compensation liability should be sufficient.  A
        ten percent increase or decrease in our workers’ compensations claims experience
        would not have a material impact on the results of operations of the
        Company.  Our accrued liability for workers’ compensation claims was
        $6.7 million and $5.9 million as of September 29, 2007 and September 30,
        2006,
        respectively.
 
 Revenue
        Recognition.  Revenue from sales of products is recognized at
        the time product is shipped to the customer and title and risk of ownership
        transfer to the purchaser.
 
 Impairments
        of Long-Lived
        Assets.  In accordance with the methodology described in
        Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the
        Impairment or Disposal of Long-Lived Assets, we review long-lived assets
        for
        impairment whenever events or changes in circumstances indicate the carrying
        amount of such assets may not be recoverable.  Impairment losses are
        recorded on long-lived assets used in operations when indicators of impairment
        are present and the undiscounted cash flows estimated to be generated by
        those
        assets are less than the assets’ carrying amounts.  The impairment
        loss is measured by comparing the fair value of the asset to its carrying
        amount.  Based on our review, we recorded on impairment of $18.1
        million in fiscal 2007.
 
 Goodwill
        and Other Indefinite Lived
        Intangible Assets.  In accordance with the methodology
        described in SFAS No. 142, Goodwill and Other Intangible Assets, we review
        our
        goodwill and other indefinite lived intangible assets for impairment whenever
        events or changes in circumstances indicate the carrying amount of such assets
        may not be recoverable.  Impairment losses are recorded when
        indicators of impairment are present and the undiscounted cash flows estimated
        to be generated by those assets are less than the assets’ carrying
        amounts.  The impairment loss is measured by comparing the fair value
        of the asset to its carrying amount.  In addition, we annually review
        our goodwill and other indefinite lived intangible assets for
        impairment.  No impairments were recorded in the financial statements
        included in this Form 10-K.
 
 Deferred
        Taxes and Effective Tax
        Rates.We estimate the effective tax rates and associated
        liabilities or assets for each legal entity of ours in accordance with SFAS
        No.
        109.  We use tax-planning to minimize or defer tax liabilities
        to
  -25-
  future
        periods. In recording effective tax rates and related liabilities and assets,
        we
        rely upon estimates, which are based upon our interpretation of United States
        and local tax laws as they apply to our legal entities and our overall tax
        structure.  Audits by local tax jurisdictions, including the United
        States Government, could yield different interpretations from our own and
        cause
        the Company to owe more taxes than originally recorded.  For interim
        periods, we accrue our tax provision at the effective tax rate that we expect
        for the full year.  As the actual results from our various businesses
        vary from our estimates earlier in the year, we adjust the succeeding interim
        periods’ effective tax rates to reflect our best estimate for the year-to-date
        results and for the full year.  As part of the effective tax rate, if
        we determine that a deferred tax asset arising from temporary differences
        is not
        likely to be utilized, we will establish a valuation allowance against that
        asset to record it at its expected realizable value.  Our valuation
        allowance against deferred tax assets was $3.1 million and $11.5 million
        as of
        September 29, 2007 and September 30, 2006, respectively.
 
 Accrued
        Rebates.
        We offer various rebates to our customers in exchange for their purchases.
        These
        rebate programs are individually negotiated with our customers and contain
        a
        variety of different terms and conditions. Certain rebates are calculated
        as
        flat percentages of purchases, while others included tiered volume incentives.
        These rebates may be payable monthly, quarterly, or annually. The calculation
        of
        the accrued rebate balance involves significant management estimates, especially
        where the terms of the rebate involve tiered volume levels that require
        estimates of expected annual sales. These provisions are based on estimates
        derived from current program requirements and historical experience. We use
        all
        available information when calculating these reserves. Our accrual for customer
        rebates was $35.9 million and $36.9 million as of September 29, 2007 and
        September 30, 2006, respectively.
 
 Pension.  Pension
        benefit costs include assumptions for the discount rate, retirement age,
        and
        expected return on plan assets.  Retiree medical plan costs include
        assumptions for the discount rate, retirement age, and health-care-cost trend
        rates.  These assumptions have a significant effect on the amounts
        reported.  In addition to the analysis below, see the notes to the
        consolidated financial statements for additional information regarding our
        retirement benefits.  Periodically, we evaluate the discount rate and
        the expected return on plan assets in our defined benefit pension and retiree
        health benefit plans.  In evaluating these assumptions, we consider
        many factors, including an evaluation of the discount rates, expected return
        on
        plan assets and the health-care-cost trend rates of other companies; our
        historical assumptions compared with actual results; an analysis of current
        market conditions and asset allocations; and the views of
        advisers.  In evaluating our expected retirement age assumption, we
        consider the retirement ages of our past employees eligible for pension and
        medical benefits together with our expectations of future retirement
        ages.  We believe our pension and retiree medical plan assumptions are
        appropriate based upon the above factors.  A one percent increase or
        decrease in our health-care-cost trend rates would not have a material impact
        on
        the results of operations of the Company.  Also, a one quarter
        percentage point change in our discount rate or expected return on plan assets
        would not have a material impact on the results of operations of the
        Company.
 
 Based
        on
        a critical assessment of our accounting policies and the underlying judgments
        and uncertainties affecting the application of those policies, we believe
        that
        our consolidated financial statements provide a meaningful and fair perspective
        of Holding and its consolidated subsidiaries.  This is not to suggest
        that other risk factors such as changes in economic conditions, changes in
        material costs, our ability to pass through changes in material costs, and
        others could not materially adversely impact our consolidated financial
        position, results of operations and cash flows in future periods.
 
 Recently
        Issued Accounting Standards
 
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements”, which is an amendment of Accounting Research
        Bulletin (“ARB”) No. 51.  This statement clarifies that a
        noncontrolling interest in a subsidiary is an ownership interest in the
        consolidated entity that should be reported as equity in the consolidated
        financial statements.  This statement changes the way the consolidated
        income statement is presented, thus requiring consolidated net income to
        be
        reported at amounts that include the amounts attributable to both parent
        and the
        noncontrolling interest.  This statement is effective for the fiscal
        years, and interim periods within those fiscal years, beginning on or after
        December 15, 2008.  Based on current conditions, we do not expect the
        adoption of SFAS 160 to have a significant impact on the Company’s results of
        operations or financial position.
 
 In
        December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
        Combinations.”  This statement replaces FASB Statement No. 141,
“Business Combinations.” This statement retains the fundamental requirements in
        SFAS 141 that the acquisition method of accounting (which SFAS 141 called
        the purchase method) be used for all business combinations and for an acquirer
        to be identified for each business combination. This statement defines the
        acquirer as the entity that obtains control of one or more businesses in
        the
        business combination and establishes the acquisition date as the date
        that
  -26-
  the
        acquirer achieves control. This statement requires an acquirer to recognize
        the
        assets acquired, the liabilities assumed, and any noncontrolling interest
        in the
        acquiree at the acquisition date, measured at their fair values as of that
        date,
        with limited exceptions specified in the statement.  This statement
        applies prospectively to business combinations for which the acquisition
        date is
        on or after the beginning of the first annual reporting period beginning
        on or
        after December 15, 2008. The Company is currently assessing the impact of
        the
        statement.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities”, which includes an amendment of FASB
        Statement No. 51.  This statement permits entities to choose to
        measure many financial instruments and certain other items at fair
        value.  This statement allows entities to report unrealized gains and
        losses at fair value for those selected items.  This statement is
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007.  The Company is currently assessing the impact of
        the statement.
 
 In
        June 2006, the FASB issued
        Interpretation No. 48, Accounting for “Uncertainty in Income Taxes, an
        Interpretation of FASB Statement No. 109” (“FIN 48”).  FIN 48
        clarifies the accounting for uncertainty in income taxes recognized in a
        company’s financial statements and prescribes a recognition threshold and
        measurement attribute for the financial statement recognition and measurement
        of
        a tax position taken or expected to be taken in a tax return.  FIN 48
        also provides guidance on description, classification, interest and penalties,
        accounting in interim periods, disclosure and transition.  FIN 48 will
        be effective in fiscal 2008, and the Company is currently assessing the impact
        of the statement.
 
 The
        Company adopted SFAS No. 154,
        Accounting Changes and Error Corrections—a replacement of APB Opinion
        No. 20 and FASB Statement No. 3, on January 1,
        2006.  SFAS No. 154 requires retrospective application to prior
        periods’ financial statements of changes in accounting principle, unless it is
        impracticable to determine either the period-specific effects or the cumulative
        effect of the change or unless specific transition provisions are proscribed
        in
        the accounting pronouncements. SFAS No. 154 does not change the accounting
        guidance for reporting a correction of an error in previously issued financial
        statements or a change in accounting estimate.  The adoption of SFAS
        No. 154 did not have an impact on our consolidated financial
        statements.
 
 In
        September 2006, the Securities and Exchange Commission released Staff
        Accounting Bulletin No. 108 (“SAB 108”) which provides guidance on how the
        effects of the carryover or reversal of prior year misstatements should be
        considered in quantifying a current year misstatement.  SAB 108
        requires entities to quantify the effects of unadjusted errors using both
        a
        balance sheet and an income statement approach.  Entities are required
        to evaluate whether either approach results in a quantifying misstatement
        that
        is material.  The Company adopted SAB 108 effective in fiscal
        2006.  The adoption of SAB 108 did not have an impact on our
        consolidated financial statements.
 
 In
        September 2006, the FASB issued
        FASB No. 157, “Fair Value Measurements” (“FAS
        157”).  FAS 157 is definitional and disclosure oriented and
        addresses how companies should approach measuring fair value when required
        by
        GAAP; it does not create or modify any current GAAP requirements to apply
        fair
        value accounting. The standard provides a single definition for fair value
        that
        is to be applied consistently for all accounting applications, and also
        generally describes and prioritizes according to reliability the methods
        and
        inputs used in valuations. FAS 157 prescribes various disclosures about
        financial statement categories and amounts which are measured at fair value,
        if
        such disclosures are not already specified elsewhere in GAAP.  The new
        measurement and disclosure requirements of FAS 157 are currently planned
        to be
        effective for the Company in the first quarter of 2008, though a recently
        proposed FASB staff position may delay certain portions of the
        Statement.  We do not expect the adoption of FAS 157 to have a
        significant impact on the Company’s results of operations or financial
        position.
 
 In
        September 2006, the Financial Accounting Standards Board issued FAS 158,
        “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
        Plans–an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. FAS 158
        requires employers to recognize the over- or under-funded status of defined
        benefit plans and other postretirement plans in the statement of financial
        position and to recognize changes in the funded status in the year in which
        the
        changes occur through comprehensive income. In addition, FAS 158 requires
        employers to measure the funded status of plans as of the date of the year-end
        statement of financial position. The recognition and disclosure provisions
        of
        FAS 158 are effective for fiscal years ending after December 15, 2006, while
        the
        requirement to measure plan assets and benefit obligations as of a company’s
        year-end date is effective for fiscal years ending after December 15,
        2008.  The adoption of the recognition and disclosure provisions of
        FAS 158 resulted in the recognition of a decrease to other long-term liabilities
        of $4.4 million.  The Company does not expect the adoption of the
        remaining provisions to have a material affect on the Company’s results of
        operations or financial position.
   -27-
  Discussion
        of Results of Operations for the Fiscal Year Ended September 29,
        2007
 
 Net
        Revenue.Net revenue for the
        fiscal
        year ended September 29, 2007 was $3,055.0 million.Net sales in the
        rigid open top business were $881.3 million primarily driven by solid volume
        from containers and continued strong volume in the thermoformed polypropylene
        drink cup product line.  Net sales in the rigid closed top business
        ended at $598.0 million primarily as a result of solid volume from closures,
        bottles, and prescription vials.  The flexible film business generated
        net revenue of $1,042.8 million.  Net sales in the tapes and coatings
        business of $536.7 million were negatively impacted by softness in the new
        home
        construction market.
 
 Cost
        of
        Sales.Cost of goods sold for the fiscal year ended September
        29, 2007 was $2,583.4 million. Cost of goods sold was adversely impacted
        by the
        non-cash write-up of finished goods inventory $11.2 million partially offset
        by
        cost reduction programs.
 
 Gross
        Profit.Gross profit for the
        fiscal year ended September 29, 2007 was $471.6 million (15.4% of net revenue).Significant productivity improvements were made in the fiscal year
        ended
        September 29, 2007, including the installation of state-of-the-art equipment
        at
        several of our facilities.  These productivity improvements were
        partially offset by increased costs from inflation such as higher energy
        prices
        and wage inflation.
 
 Selling,
        General and Administrative
        expenses.Selling, general and administrative expenses for the fiscal
        year ended September 29, 2007 was $321.5 million (10.5 % of net
        revenues).  Items favorably impacting selling, general and
        administrative expenses included synergies generated from the Merger, partially
        offset by stock compensation expense of $19.6 million.  Intangible
        asset amortization represented $77.6 million of the total.
 
 Restructuring
        and impairment charges
        (credit), net.Restructuring and impairment charges (credit), net for the
        fiscal year ended September 29, 2007 were $39.1 million consisting of $7.5
        million for severance and termination benefits, $11.3 million of facility
        exit
        costs, $18.1 million of non-cash asset impairment charges, and $2.2 million
        of
        other costs as a result of the plant rationalizations and corporate headquarter
        consolidations discussed above.
 
 Other
        Operating
        Expenses.  Other operating expenses for the fiscal year ended
        September 29, 2007 were $43.6 million which primarily consisted of expenses
        incurred in connection with the closing of the Merger and subsequent integration
        costs, management fees to our sponsors of $5.9 million, and other non-recurring
        expenses.
 
 Operating
        Income.Operating
        income for the fiscal year ended September 29, 2007 was $67.4 million driven
        by
        the items noted above.
 
 Discussion
        of Results of Operations for the period from February 17, 2006 to September
        29,
        2006
 
 Net
        Revenue.  Net
        revenue for the period February 17, 2006 to September 29, 2006 was $1,138.8
        million. Net revenue for the period was impacted by pricing actions, which
        had
        been implemented to offset inflation in raw materials, particularly in
        polyethylene resin, in our Plastics operating segment partially offset by
        lower
        volumes driven by a mild hurricane season and continued efforts by customers
        to
        structurally reduce inventories. Included as a reduction of net revenue is
        $79.4
        million attributable to customer rebates, sales incentives, trade promotions
        and
        coupons and $20.6 million attributable to discounts to customers and product
        returns.
 
 Cost
        of
        Sales.  Cost of goods sold for the period February 17, 2006 to
        September 29, 2006 was $1,022.9 million. Cost of goods sold was adversely
        impacted by inflation in raw materials of $65.9 million experienced in our
        Plastics segment partially offset by lower volumes.  In addition, cost
        of sales was impacted by step up in value of inventory of $6.8 million and
        increased depreciation costs of $8.4 million as a result of purchase price
        allocations in connection with Apollo V’s acquisition and increased freight
        resulting from higher fuel prices.  The effect of these items was
        partially offset by the favorable impact of our cost reduction and manufacturing
        efficiency programs.  Included as a reduction of cost of goods sold
        was $8.7 million attributable to rebates from vendors.
 
 Gross
        Profit. Gross profit
        for the period February 17, 2006 to September 29, 2006 was $115.9 million.
        Gross
        profit was negatively impacted by raw material inflation, experienced by
        our
        Plastics segment, and the impact of purchase method of accounting attributable
        to the Acquisition. Partially offsetting these costs were the continuing
        benefits of the Company’s cost reduction programs and the pricing actions
        previously mentioned.
  -28-
  
 Selling,
        General and Administration
        Expenses. Selling, general and administrative expenses for the period
        February 17, 2006 to September 29, 2006 were $107.6 million. Items negatively
        impacting selling, general and administrative expense included the increased
        impact of depreciation and amortization of $16.5 million from the purchase
        method of accounting attributable to the Acquisition executive severance
        expense
        of $3.6 million, additional corporate support costs.
 
 Operating
        Income.Operating income for the period February 17, 2006 to
        September 29, 2006 was $7.7 million. Operating income was negatively impacted
        by
        raw material inflation experienced by our Plastics segment, increase in
        inventory cost, higher depreciation and amortization costs resulting from
        purchase price allocation in connection with Apollo V’s acquisition, executive
        severance and additional corporate support costs, partially offset by the
        favorable impact of our cost reduction and manufacturing efficiency
        programs.
 
 Discussion
        of Results of Operations for the period from October 1, 2005 to February
        16,
        2006
 
 Net
        Revenue.Net revenue for
        the period from October 1, 2005 to February 16, 2006 was $666.9 million.
        Net
        revenue for the period reflects pricing actions, implemented to offset
        polyethylene resin inflation experienced primarily in TP&A’s Plastics
        division. Included as a reduction of Net revenue is $54.8 million attributable
        to customer rebates, sales incentives, trade promotions and coupons and $15.4
        million attributable to discounts to customers and product returns.
 
 Cost
        of
        Sales.Cost of goods sold for the period from October 1, 2005
        to February 16, 2006 was $579.0 million. Cost of goods sold was adversely
        impacted by inflation in polyethylene resin of $41.2 million and increased
        freight rates of $1.8 million resulting from higher fuel prices. The effects
        of
        these items were partially offset by the favorable impact of cost reduction
        and
        manufacturing efficiency programs. Included as a reduction of cost of goods
        sold
        was $5.2 million attributable to rebates from vendors.
 
 Gross
        Profit.Gross profit
        for the period from October 1, 2005 through February 16, 2006 was $87.9 million.
        Gross profit was negatively impacted by resin raw material inflation experienced
        by the Plastics division and increased freight rates resulting from higher
        fuel
        prices partially offset by the pricing actions previously mentioned and the
        continuing benefits of cost reduction programs.
 
 Selling,
        General and Administrative
        expenses.Selling, general and administrative expenses for the period
        from October 1, 2005 to February 16, 2006 were $50.0 million. Items favorably
        impacting selling, general and administrative expenses included lower Tyco
        administrative fees of $12.2 million as a result of the elimination of the
        receivables factoring and resin purchasing programs, partially offset by
        stock
        option expense of $1.7 million following Tyco’s adoption of Statement of
        Financial Accounting Standards No. 123R.
 
 Operating
        Income.Operating
        income for the period from October 1, 2005 to February 16, 2006 was $26.9
        million. Operating income was negatively impacted by resin raw material
        inflation experienced by the Plastics division and increased freight rates
        resulting from higher fuel prices, partially offset by pricing actions
        previously mentioned, the continuing benefits of cost reduction programs
        and
        lower Tyco administrative fees in selling, general and administrative
        expenses.
 
 Discussion
        of Results of Operations for the Year Ended September 30, 2005
 
 Net
        Revenue.Net revenue
        during the twelve month period ending September 30, 2005 was $1,725.2 million.
        Net revenue for the period was impacted by increases in pricing to offset
        inflation in polyethylene resin in the Plastics division and higher volume
        in
        the Adhesives segment driven by successful introduction of new products,
        partially offset by lower volumes in the Plastics and Coated Products division.
        These lower volumes resulted from a reduction in non-profitable products
        as well
        as completion of a plant rationalization program in the Plastics division.
        The
        plant rationalization program was started during the first quarter of fiscal
        2004 and substantially completed in the fiscal first quarter of 2005. This
        program was undertaken as part of the 2004 restructuring activities and was
        focused on consolidating and reducing the number of production facilities.
        This
        program required the closure of less productive facilities, moving of equipment,
        production capability and the hiring and training of direct labor employees.
        Additional learning curve issues continued into the second and third fiscal
        quarters of 2005. Included as a reduction of net revenue is $141.9 million
        attributable to customer rebates, sales incentives, trade promotions and
        coupons
        and $34.8 million attributable to discounts to customers and product
        returns.
  -29-
  Cost
        of Sales.Cost of Sales
        during the twelve month period ending September 30, 2005 was $1,477.4 million.
        Cost of Sales was impacted by inflation in raw materials in the Plastics
        division due to increase prices from polyethylene resin, higher sales volume
        from the Adhesives division as wells as increased freight rates and unfavorable
        manufacturing results as a result of completion of the plant rationalization
        plan, partially offset by the positive impact of cost reduction and
        manufacturing efficiency plans and lower sales volume in Plastics and Coated
        Products divisions. Included as a reduction of cost of goods sold was $14.6
        million attributable to rebates from vendors.
 
 Gross
        Profit. Gross Profit
        decreased 15.1 percent during the twelve month period ending September 30,
        2005
        to $247.8 million from the previous year. Decrease in Gross Profit was primarily
        driven by raw material inflation experienced by the Plastics division, higher
        freight rates, unfavorable manufacturing results, partially offset by favorable
        impact from TP&A’s cost reduction and manufacturing efficiency
        plans.
 
 Selling,
        General and Administrative
        expenses. Selling, general and administrative expenses during the twelve
        month period ended September 30, 2005 were $124.6 million. Selling, general
        and
        administrative expenses were impacted by general inflation and an increase
        in
        sales and technical marketing headcount in the Adhesives division.
 
 Restructuring
        expenses.
        Restructuring expenses were $3.3 million during the twelve month period ending
        September 30, 2005. This was a result of the completion of the restructuring
        program that was started in fiscal year 2004 and completed early fiscal year
        2005.
 
 Operating
        Income. Operating
        income during the twelve month period ending September 30, 2005 was $63.5
        million. and was driven by items previously addressed.
 
 Income
        Tax Matters
 
 As
        of September 29, 2007, The Company
        has unused operating loss carryforwards of $399.6 million for federal and
        $524.9
        million for state income tax purposes which begin to expire in 2021 and $9.0
        million for foreign operating loss carryforwards.  Alternative minimum
        tax credit carryforwards of approximately $7.4 million are available to Berry
        Group indefinitely to reduce future years’ federal income taxes.  The
        Company is in the process of determining whether the Covalence operating
        loss
        carry forward of $30.4 million may be subject to an annual limitation due
        to the
        merger. As a result of the Apollo acquisition of Old Berry Group, the unused
        non-Covalence operating loss carryforward is subject to an annual limitation
        of
        $208.0 million under Sec. 382 of the Internal Revenue Code.  Due to
        prior year Sec. 382 limit carryforwards, substantially all Federal operating
        loss carryforwards are available for immediate use.  As part of the
        effective tax rate calculation, if we determine that a deferred tax asset
        arising from temporary differences is not likely to be utilized, we will
        establish a valuation allowance against that asset to record it at its expected
        realizable value.  Our valuation allowance against deferred tax assets
        was $3.1 million and $11.5 million as of September 29, 2007 and September
        29,
        2006, respectively, related to the foreign operating loss
        carryforwards.
 
 Liquidity
        and Capital Resources
 
 Senior
        Secured Credit Facility
 
 In
        connection with the Merger, the
        Company entered into senior secured credit facilities that include a term
        loan
        in the principal amount of $1,200.0 million and a revolving credit facility
        which provides borrowing availability equal to the lesser of (a) $400.0 million
        or (b) the borrowing base, which is a function, among other things, of the
        Company’s accounts receivable and inventory.  The term loan matures on
        April 3, 2015 and the revolving credit facility matures on April 3,
        2013.
 
 The
        borrowings under the senior secured
        credit facilities bear interest at a rate equal to an applicable margin plus,
        as
        determined at our option, either (a) a base rate (“Base Rate”) determined by
        reference to the higher of (1) the prime rate of Credit Suisse, Cayman Islands
        Branch, as administrative agent, in the case of the term loan facility or
        Bank
        of America, N.A., as administrative agent, in the case of the revolving credit
        facility and (2) the U.S. federal funds rate plus 1/2 of 1% or (b) a eurodollar
        rate (“LIBOR”) determined by reference to the costs of funds for eurodollar
        deposits in dollars in the London interbank market for the interest period
        relevant to such borrowing Bank Compliance for certain additional
        costs.  The applicable margin for LIBOR rate borrowings under the
        revolving credit facility ranges from 1.00% to 1.75% and for the term loan
        is
        2.00%.  The applicable margin for base rate borrowings under the
        revolving credit facility is 0% and the term loan is 1.00%.
  -30-
  The
        term loan facility requires minimum
        quarterly principal payments of $3.0 million for the first eight years, which
        commenced in June 2007, with the remaining amount payable on April 3, 2015.
        In
        addition, the Company must prepay the outstanding term loan, subject to certain
        exceptions, with (1) beginning with the Company’s first fiscal year after the
        closing, 50% (which percentage is subject to a minimum of 0% upon the
        achievement of certain leverage ratios) of excess cash flow (as defined in
        the
        credit agreement); and (2) 100% of the net cash proceeds of all non-ordinary
        course asset sales and casualty and condemnation events, if the Company does
        not
        reinvest or commit to reinvest those proceeds in assets to be used in its
        business or to make certain other permitted investments within 15 months,
        subject to certain limitations.
 
 In
        addition to paying interest on outstanding principal under the senior secured
        credit facilities, the Company is required to pay a commitment fee to the
        lenders under the revolving credit facilities in respect of the unutilized
        commitments thereunder at a rate equal to 0.25% to 0.35% per annum depending
        on
        the average daily available unused borrowing capacity. The Company also pays
        a
        customary letter of credit fee, including a fronting fee of 0.125% per annum
        of
        the stated amount of each outstanding letter of credit, and customary agency
        fees.
 
 The
        Company may voluntarily repay
        outstanding loans under the senior secured credit facilities at any time
        without
        premium or penalty, other than customary “breakage” costs with respect to
        eurodollar loans.  The senior secured credit facilities contain
        various restrictive covenants that, among other things and subject to specified
        exceptions, prohibit the Company from prepaying other indebtedness, and restrict
        its ability to incur indebtedness or liens, make investments or declare or
        pay
        any dividends.  All obligations under the senior secured credit
        facilities are unconditionally guaranteed by Berry Group and, subject to
        certain
        exceptions, each of the Company’s existing and future direct and indirect
        domestic subsidiaries. The guarantees of those obligations are secured by
        substantially all of the Company’s assets as well as those of each domestic
        subsidiary guarantor.  The Company was in compliance with all the
        financial and operating covenants at September 29, 2007.
 
 At
        September 29, 2007, $50.0 million
        was outstanding on the revolving line of credit.  The revolving credit
        facility allows up to $100.0 million of letters of credit to be issued instead
        of borrowings under the revolving credit facility. At September 29, 2007,
        the
        Company had $29.3 million under the revolving line of credit in letters of
        credit outstanding.  At September 29, 2007, the Company had
        unused borrowing capacity of $320.7 million under the revolving line of
        credit.  A key financial metric utilized in the calculation of the
        first lien leverage ratio is bank compliance EBITDA.  The following
        table reconciles our bank compliance EBITDA of $491.7 million for fiscal
        2007 to
        net loss.
 
 Year
                  Ended
                September
                  29,
                2007Bank
                  compliance
                  EBITDA
              
              $
              491.7Net
                  interest
                  expense
              
              
              (237.6
              )Depreciation
                  and
                  amortization
              
              
              (220.2
              )Income
                  tax
                  benefit
              
              
              88.6Loss
                  on extinguished
                  debt
              
              
              (37.3
              )Non-cash
                  inventory
                  write-up
              
              
              (13.9
              )Stock
                  compensation
                  expense
              
              
              (19.6
              )Business
                  optimization
                  expenses
              
              
              (37.7
              )Restructuring
                  and impairment
                  charges
              
              
              (39.1
              )Management
                  fees
              
              
              (5.9
              )Minority
                  interest
              
              
              2.7Pro
                  forma synergies (Oxnard and
                  Norwich)
              
              
              (3.7
              )Pro
                  forma synergies (Old
                  Covalence and Rollpak)
              
              
              (84.2
              )Net
                  loss
              
              $
              (116.2
              )
 
 While
        the
        determination of appropriate adjustments in the calculation of bank compliance
        EBITDA is subject to interpretation under the terms of the Credit Facility,
        management believes the adjustments described above are in accordance with
        the
        covenants in the Credit Facility.  Bank compliance EBITDA should not
        be considered in isolation or construed as an alternative to our net income
        (loss) or other measures as determined in accordance with GAAP.  In
        addition, other companies in our industry or across different industries
        may
        calculate bank covenants and related definitions differently than we do,
        limiting the usefulness of our calculation of bank compliance EBITDA as a
        comparative measure.
  -31-
  
 Second
        Priority Senior Secured Notes
 
 On
        September 20, 2006, Old Berry
        Holding issued $750.0 million of second priority senior secured notes (“Second
        Priority Notes”) comprised of (1) $525.0 million aggregate principal amount of 8
        7/8%  second priority fixed rate notes (“Fixed Rate Notes”) and (2)
        $225.0 million aggregate principal amount of second priority senior secured
        floating rate notes (“Floating Rate Notes”).  The Second Priority
        Notes mature on September 15, 2014.  Interest on the Fixed Rate Notes
        is due semi-annually on March 15 and September 15. The Floating Rate Notes
        bear
        interest at a rate of LIBOR plus 3.875% per annum, which resets
        quarterly.  Interest on the Floating Rate Notes is payable quarterly
        on March 15, June 15, September 15 and December 15 of each
        year.
 
 The
        Second Priority Notes are secured
        by a second priority security interest in the collateral granted to the
        collateral agent under the senior secured credit facilities for the benefit
        of
        the holders and other future parity lien debt that may be issued pursuant
        to the
        terms of the indenture.  These liens will be junior in priority to the
        liens on the same collateral securing the senior secured credit facilities
        and
        to all other permitted prior liens.  The Second Priority Notes are
        guaranteed, jointly and severally, on a second priority senior secured basis,
        by
        each domestic subsidiary that guarantees the senior secured credit
        facilities.  The Second Priority Notes contain customary covenants
        that, among other things, restrict, subject to certain exceptions, our ability,
        and the ability of subsidiaries, to incur indebtedness, sell assets, make
        investments, engage in acquisitions, mergers or consolidations and make dividend
        and other restricted payments.
 
 On
        or after September 15, 2010 and
        2008, the Company may redeem some or all of the Fixed Rate Notes and Floating
        Rate Notes, respectively, at specified redemption
        prices.  Additionally, on or prior to September 15, 2009 and 2008, we
        may redeem up to 35% of the aggregate principal amount of the Fixed Rate
        Notes
        and Floating Rate Notes, respectively, with the net proceeds of specified
        equity
        offerings at specified redemption prices.  If a change of control
        occurs, the Company must give holders of the Second Priority Notes an
        opportunity to sell their notes at a purchase price of 101% of the principal
        amount plus accrued and unpaid interest.  The Company was in
        compliance with all covenants at September 29, 2007.
  11%
        Senior Subordinated Notes
 
 On
        September 20, 2006, Old Berry
        Holding issued $425.0 million in aggregate principal amount of senior
        subordinated notes (“Senior Subordinated Notes”) to Goldman, Sachs and Co. in a
        private placement that is exempt from registration under the Securities
        Act.  The Senior Subordinated Notes are unsecured, senior subordinated
        obligations and are guaranteed on an unsecured, senior subordinated basis
        by
        each of our subsidiaries that guarantee the senior secured credit facilities
        and
        the Second Priority Notes.  The Senior Subordinated Notes mature in
        2016 and bear interest at a rate of 11% per annum.  Such interest is
        payable quarterly in cash; provided, however, that on any quarterly interest
        payment date on or prior to the third anniversary of the issuance, the Company
        can satisfy up to 3% of the interest payable on such date by capitalizing
        such
        interest and adding it to the outstanding principal amount of the Senior
        Subordinated Notes.  The Company issued an additional $3.2 million
        aggregate principal amount of outstanding notes in the year ended September
        29,
        2007 in satisfaction of its interest obligations.
  The
        Senior Subordinated Notes may be
        redeemed at the Company’s option under circumstances and at redemption prices
        set forth in the indenture.  Upon the occurrence of a change of
        control, the Company is required to offer to repurchase all of the Senior
        Subordinated Notes.  The indenture sets forth covenants and events of
        default that are substantially similar to those set forth in the indenture
        governing the Second Priority Notes.  The Senior Subordinated Notes
        contain additional affirmative covenants and certain customary representations,
        warranties and conditions.  The Company was in compliance with all
        covenants at September 29, 2007.
  10
        1⁄4% Senior Subordinated Notes
 
 In
        connection with Apollo V’s
        acquisition of Old Covalence Holding, Old Covalence issued $265.0 million
        of 10
1⁄4% senior subordinated notes due March 1, 2016.  The notes are senior
        subordinated obligations of the Company and rank junior to all other senior
        indebtedness that does not contain similar subordination
        provisions.  No principal payments are required with respect to the
        senior subordinated notes prior to maturity.
  The
        indenture relating to the notes
        contain a number of covenants that, among other things and subject to certain
        exceptions, restrict the Company’s ability and the ability of its restricted
        subsidiaries to incur indebtedness or issue disqualified stock or preferred
        stock, pay dividends or redeem or repurchase stock, make certain types of
        investments, sell
   -32-
  assets,
        incur certain liens, restrict dividends or other payments from subsidiaries,
        enter into transactions with affiliates and consolidate, merge or sell all
        or
        substantially all of the Company’s assets.  The Company was in
        compliance with all covenants at September 29, 2007.
  Contractual
        Obligations and Off Balance Sheet Transactions
 
 Our
        contractual cash obligations as of September 29, 2007 are summarized in the
        following table.
 Payments
                    Due by Period at September 29, 2007Total
                
                
                <
1
                    year
                
                
                1-3
                    years
                
                
                4-5
                    years
                
                
                >
5
                    yearsLong-term
                    debt, excluding capital leases
                
                $
                1,661.8
                
                
                $
                97.1
                
                
                $
                194.1
                
                
                $
                194.1
                
                
                $
                1,176.5Capital
                    leases
                
                
                27.2
                
                
                
                8.1
                
                
                
                9.8
                
                
                
                9.3
                
                
                
                —Fixed
                    interest rate payments
                
                
                1,604.9
                
                
                
                226.8
                
                
                
                453.5
                
                
                
                453.5
                
                
                
                471.1Operating
                    leases
                
                
                233.2
                
                
                
                33.7
                
                
                
                63.7
                
                
                
                50.8
                
                
                
                85.0Total
                    contractual cash obligations
                
                $
                3,527.1
                
                
                
                365.7
                
                
                
                721.1
                
                
                
                707.7
                
                
                
                1,732.6
  Cash
        Flows from Operating Activities
 
 Net
        cash provided by operating
        activities was $137.3 million for the fiscal year ended September 29,
        2007.  Cash flow provided by operating activities was negatively
        impacted by costs incurred as a result of Apollo’s acquisition of Old Berry
        Holding, the Merger, and the restructuring activities noted above.
 
 During
        the period from February 17,
        2006 to September 29, 2006, we generated $96.7 million of net cash from
        operating activities principally due to improved inventory turnover and accounts
        payable terms.
 
 TP&A
        net cash usage during the
        period from October 1, 2005 to February 16, 2006 was $119.2 million, principally
        due to changes in raw material purchases and payment terms as a result of
        the
        discontinuance of the resin purchasing agreement with Tyco prior to the Apollo’s
        purchase of Old Covalence.  During the period from October 1, 2005 to
        February 16, 2006, accounts payable and inventory experienced a one-time
        change
        due to the discontinuance of the raw materials resin purchasing program the
        Predecessor had with an affiliate of Tyco. Under that program, amounts payable
        for raw materials purchases was classified as “Due to Tyco International”. Upon
        termination of the program, Tyco loaned the Predecessor an amount equal to
        the
        amount classified in “Due to Tyco International” to pay the affiliate for the
        remaining balance due for the raw materials purchases. Following the
        discontinuance of this program, raw material purchases are now included as
        a
        component of “Accounts payable”.
 
 Net
        cash
        provided by TP&A operating activities increased to $117.3 million for the
        year ended September 30, 2005, including a reduction in cash payments made
        for
        the fiscal 2005 restructuring plan of $7.6 million, as well as decreases
        in
        working capital (exclusive of cash). Working capital was reduced in fiscal
        2005
        through efforts to improve receivable and payable days outstanding, offset
        by an
        increase in the average cost of polyethylene resin. In addition, due to supply
        chain disruptions as a result of the hurricanes in the fall of 2005, TP&A’s
        inventory volume was lower than normal.
 
 Cash
        Flows from Investing Activities
 
 Net
        cash
        used for investing activities was $164.3 million for the fiscal year ended
        September 29, 2007.  Our investments in capital expenditures totaled
        $99.3 million partially offset by $10.8 million of cash received from
        disposition of assets which was primarily the sale of Berry Plastics UK Ltd.
        in
        April 2007.  In addition, we used $75.8 million primarily for (1) the
        acquisition of Rollpak Corporation and (2) a $30.0 million payment to Tyco
        as
        finalization of the working capital settlement.
 
 During
        the period from February 17, 2006 to September 29, 2006, we used $3,252.0
        million of net cash in investing activities, primarily due to Apollo’s
        acquisition of Old Berry Holding and Old Covalence Holding and investments
        in
        capital expenditures of $34.8 million during the period.  During the
        period from October 1, 2005 to February 16, 2006, TP&A used $12.2 million of
        net cash in investing activities for capital expenditures.
 
 Net
        cash
        used for TP&A’s investing activities was $29.2 million for the year ended
        September 30, 2005 primarily due to investments in new products in TP&A’s
        Plastics and Adhesives segments, safety upgrades in manufacturing facilities
        and
        replacement and upgrades to certain aged equipment.
  -33-
  
 Cash
        Flows from Financing Activities
 
 Net
        cash
        used for financing activities was $40.4 million for the fiscal year ended
        September 29, 2007.In the period, we generated cash of
        $1,233.2 million from long-term borrowing in connection with the Merger and
        paid
        $9.7 million of debt financing costs associated with closing these
        borrowings.  We paid $1,161.2 million of long-term borrowings
        primarily as a result of the Merger and had net equity distributions of $102.7
        million primarily a result of the dividend to Berry Group in June 2007 described
        above.
 
 During
        the period from February 17, 2006 to September 29, 2006, we generated net
        cash
        of $3,212.5 million in our financing activities due principally to the issuance
        of long-term debt of $2,653.4 million and net equity contributions of $680.8
        million in connection with Apollo’s acquisitions of Old Berry Holding and Old
        Covalence Holding partially offset by payments on long-term debt totaling
        $50.7
        million and debt financing costs of $71.0 million.
 
 During
        the period from October 1, 2005 to February 16, 2006, cash generated from
        TP&A’s financing activities was $130.6 million due to the change in the
        resin purchasing arrangement with an affiliate of Tyco prior to Apollo’s
        acquisition of Old Covalence Holding, partially offset by the retirement
        of
        outstanding capital lease obligations.  In fiscal 2005, TP&A used
        $89.2 million in financing activities. These activities primarily resulted
        from
        a reduction in capital lease obligations of $61.1 million.
 
 Increased
        working capital needs occur
        whenever we experience strong incremental demand or a significant rise in
        the
        cost of raw material, particularly plastic resin.  However, based on
        our current level of operations, we believe that cash flow from operations
        and
        available cash, together with available borrowings under our senior secured
        credit facilities, will be adequate to meet our short-term liquidity
        needs.  We base such belief on historical experience and the funds
        available under the Credit Facility.  However, we cannot predict our
        future results of operations and our ability to meet our obligations involves
        numerous risks and uncertainties, including, but not limited to, those described
        in the “Risk Factors” section of our Form S-4 filed with the Securities and
        Exchange Commission on May 4, 2007.  In particular, increases in the
        cost of resin which we are unable to pass through to our customers on a timely
        basis or significant acquisitions could severely impact our
        liquidity.  At September 29, 2007, our cash balance was $14.6 million,
        and we had unused borrowing capacity under the Credit Facility’s borrowing base
        of $320.7 million.
 
 Item
        7A. QUANTITATIVE
        AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 Interest
        Rate Sensitivity
 
 We
        are exposed to market risk from
        changes in interest rates primarily through our senior secured credit facilities
        and second priority senior secured notes.  Our senior secured credit
        facilities are comprised of (i) a $1,200.0 million term loan and
        (ii) a $400.0 million revolving credit facility.  At September
        29, 2007, $50.0 million was outstanding on the revolving credit
        facility.  The net outstanding balance of the term loan at September
        29, 2007 was $1,194.0 million.  Borrowings under our senior secured
        credit facilities bear interest, at our option, at either an alternate base
        rate or an adjusted LIBOR rate for a one-, two-, three- or six month interest
        period, or a nine- or twelve-month period, if available to all relevant lenders,
        in each case, plus an applicable margin.  The alternate base rate is
        the mean the greater of (i) Credit Suisse’s prime rate and
        (ii) one-half of 1.0% over the weighted average of rates on overnight
        Federal Funds as published by the Federal Reserve Bank of New York.
  In
        August
        2007, Berry entered into two separate interest rate swap transactions to
        protect
        $600.0 million of the outstanding variable rate term loan debt from future
        interest rate volatility.  The swap agreements are effective in
        November 2007.  The first agreement had a notional amount of $300.0
        million and became effective November 5, 2007 and swaps three month variable
        LIBOR contracts for a fixed two year rate of 4.875% and expires on November
        5,
        2009.  The second agreement had a notional amount of $300.0 million
        and became effective November 5, 2007 and swaps three month variable LIBOR
        contracts for a fixed three year rate of 4.920% and expires on November 5,
        2010.  The adjusted LIBOR rate is determined by reference to
        settlement rates established for deposits in dollars in the London interbank
        market for a period equal to the interest period of the applicable loan and
        the
        maximum reserve percentages established by the Board of Governors of the
        U.S.
        Federal Reserve to which our lenders are subject.  Our second priority
        senior secured notes are comprised of (i) $525.0 million fixed rate notes
        and
        (ii) $225.0 million floating rate notes.  The floating rate notes bear
        interest at a rate of LIBOR plus 3.875% per annum, which resets
        quarterly.   At September 29, 2007, the LIBOR rate
   -34-
  applicable
        to the term loan and floating rate notes was 5.36%.  At September 29,
        2007, the LIBOR rate applicable to the revolving line of credit was
        5.80%.  If the LIBOR rate increases 0.25% and 0.5%, we estimate an
        annual increase in our interest expense of $2.2 million and $4.4 million,
        respectively.
 
 Resin
        Cost Sensitivity
  We
        are
        exposed to market risk from changes in plastic resin prices that could impact
        our results of operations and financial condition.  We purchased
        approximately $977.5 million of resin in fiscal 2007 with approximately 68%
        of
        our resin pounds being PE, 29% PP, and 3% other.  Our plastic resin
        purchasing strategy is to deal with only high-quality, dependable suppliers,
        such as Basell, Chevron, Dow, ExxonMobil, Flint Hills Resources, LP, Lyondell,
        Nova, Sunoco and Total.  We believe that we have maintained strong
        relationships with these key suppliers and expect that such relationships
        will
        continue into the foreseeable future.  The resin market is a global
        market and, based on our experience, we believe that adequate quantities
        of
        plastic resins will be available at market prices, but we can give you no
        assurances as to such availability or the prices thereof.
 
 Item
        8.FINANCIAL STATEMENTS
        AND SUPPLEMENTARY DATA
 
 Index
                  to Financial StatementsReports
                  of Independent Registered Public Accounting Firms
              F-
                  1Consolidated
                  or Combined Balance Sheets at September 29, 2007 and September
                  30,
                  2006
              F-
                  3Consolidated
                  or Combined Statements of Operations for the year ended September
                  29,
                  2007, period from February 17 to September 30, 2006, period from
                  October
                  1, 2005 to February 16, 2006 and the year ended September 30,
                  2005
              F-
                  5Consolidated
                  or Combined Statements of Changes in Stockholders' Equity and
                  Comprehensive Income (Loss) for the year ended September 29, 2007,
                  period
                  from February 17 to September 30, 2006, period from October 1,
                  2005 to
                  February 16, 2006 and the year ended September 30,
                  2005
              F-
                  6Consolidated
                  or Combined Statements of Cash Flows for year ended September 29,
                  2007,
                  period from February 17 to September 30, 2006, period from October
                  1, 2005
                  to February 16, 2006 and the year ended September 30,
                  2005
              F-
                  7Notes
                  to Consolidated or Combined Financial Statements
              F-
                  8Index
                  to Financial Statement SchedulesAll
                  schedules have been omitted
                  because they are not applicable or not required or because the
                  required
                  information is included in the consolidated financial statements
                  or notes
                  thereto.
  Item
          9.       CHANGES IN AND DISAGREEMENTS WITH
          ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 None.
  Item
        9A.    CONTROLS AND
        PROCEDURES
 
 (a)
              Evaluation
                  of disclosure controls and procedures.
 
 Our
        management team is responsible for the preparation and integrity of the
        consolidated financial statements appearing in this Form 10-K.  We
        have established disclosure controls and procedures to ensure that
        material
  -35-
  information
        relating to the Company, including consolidated subsidiaries, is made known
        to
        members of senior management and the Board of Directors.  As required
        by Rule 13a-15 under the Securities Exchange Act of 1934, within the 90 days
        prior to the date of this report, we carried out an evaluation under the
        supervision and with the participation of our management team, including
        our
        Chief Executive Officer and Chief Financial Officer, of the effectiveness
        of the
        design and operation of our disclosure controls and procedures.  In
        connection with the preparation of this Annual Report, the Company's management,
        with the participation of the Chief Executive Officer and the Chief Financial
        Officer, carried out an evaluation of the effectiveness of the design and
        operation of the disclosure controls and procedures as of September 29,
        2007.  Based on this evaluation, the Chief Executive Officer and the
        Chief Financial Officer concluded that due to the timing of completing the
        income tax provision and the processes within one of the Old Covalence operating
        units, the disclosure controls and procedures were not effective as of September
        29, 2007.
 
 A
        material weakness is defined as a significant deficiency, or combination
        of
        significant deficiencies, in our internal controls over financial reporting,
        that results in more than a remote likelihood that a material misstatement
        of
        our annual or interim financial statements will not be presented or detected
        by
        our employees. A significant deficiency is in turn defined as a control
        deficiency, or a combination of control deficiencies, that adversely affects
        our
        ability to initiate, authorize, record, process, or report external financial
        data reliably in accordance with generally accepted accounting principles
        such
        that there is more than a remote likelihood that a misstatement of our annual
        or
        interim financial statements that is more than inconsequential will not be
        prevented or detected. A control deficiency exists when the design or operation
        of a control does not allow management or employees, in the normal course
        of
        performing their assigned functions, to prevent or detect misstatements on
        a
        timely basis. A design deficiency exists when a control necessary to meet
        the
        control objective is missing or an existing control is not properly designed
        so
        that, even if the control operates as designed, the control objective is
        not
        always met.
 
 In
        connection with the merger and integration of Old Berry Group and Old Covalence
        Holding, the Company did not fully complete the transition from Old Covalence’s
        financial system to Berry’s new financial system.  This resulted in a
        not fully implemented installation of disclosure controls and procedures
        in one
        specific area of one of the Old Covalence operating units as well as one
        area of
        income tax accounting as it relates to the combination of the two businesses;
        therefore, management’s oversight and review related to certain accounts and
        analyses at one of its operating segments and the income tax provision process
        was not timely or effective.  In light of the material weaknesses
        described above, the Company performed additional analyses and other procedures
        to ensure that the consolidated financial statements included in this Annual
        Report were prepared in accordance with accounting principles generally accepted
        in the United States ("GAAP").  These procedures included additional
        testing of certain balances and accounts as of September 29, 2007 to ensure
        the
        accuracy of the annual financial statements. Additionally, the Company performed
        a review of its tax provision model.  As a result of these and other
        expanded procedures, the Company concluded that the consolidated financial
        statements included in this Annual Report present fairly, in all material
        respects, the Company's financial position, results of operations and cash
        flows
        for the periods presented in conformity with U.S. GAAP.
 
 The
        Company is currently transitioning and converting the legacy Old Covalence
        Holding systems to the Old Berry Group systems and shared service
        center.  Management believes that this conversion and the transition
        to the Old Berry Group accounting systems and controls will remediate the
        material weakness in the operating segment financial statement close
        process.  The Company expects to have this complete during fiscal
        2008.  In addition, the Company has implemented additional levels of
        review to ensure that their financial statements are accurate and prepared
        in a
        timely fashion.
   -36-
  (b)   Changes
        in internal controls.
 
 As
        a
        result of the formation of Berry Holding and recent acquisitions, management
        continues to evaluate resources, change and expand roles and responsibilities
        of
        key personnel and make changes to certain processes related to financial
        close,
        shared services and financial reporting. In connection with the above
        activities, the Company continues the process of consolidating some of its
        transaction processing and general accounting activities into a common shared
        services transaction-processing environment. We have launched a project to
        migrate multiple legacy management information and accounting systems to
        a
        single, company wide, management information and accounting system. The
        migration began in the third quarter of 2007 and is scheduled to be completed
        in
        the first quarter of 2009. Once fully implemented, this change to a shared
        services business model (for certain processes) along with a single, company
        wide, management information and accounting system is intended to further
        enhance our internal control over financial reporting and our operating
        efficiencies. No other changes occurred in the Company’s internal control over
        financial reporting during the Company’s most recent fiscal quarter that
        materially affected, or are reasonably likely to materially affect, the
        Company’s internal control over financial reporting, except as discussed in Item
        9A. (a).
 
 Item
                  9B.     OTHER INFORMATION
 
 None
 
  -37-
  PART
        III
 
 Item
        10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
 The
        following table provides information regarding the executive officers, officers
        and members of the board of directors of Berry Group, of which we are a wholly
        owned subsidiary.
 Name
                Age
                TitleIra
                    G. Boots (1) (3)
                53
                Chairman,
                    Chief Executive Officer and DirectorR.
                    Brent Beeler
                54
                President
                    and Chief Operating OfficerJames
                    M. Kratochvil
                51
                Executive
                    Vice President, Chief Financial Officer, Treasurer and
                    SecretaryAnthony
                    M. Civale (1) (2)
                33
                DirectorPatrick
                    J. Dalton
                39
                DirectorDonald
                    C. Graham (1)
                74
                DirectorSteven
                    C. Graham (2)
                48
                DirectorJoshua
                    J. Harris
                42
                DirectorRobert
                    V. Seminara  (1) (2) (3)
                35
                Director
 (1) Member
                  of the Compensation Committee.
 (2) Member
                  of the Audit Committee.
 (3) Member
                  of the Executive Committee.
 
 The
        following table provides
        information regarding the executive officers, officers and members of the
        board
        of directors of Berry Plastics Holding Corporation.
 Name
                Age
                TitleIra
                    G. Boots (1) (3)
                53
                Chairman,
                    Chief Executive Officer and DirectorR.
                    Brent Beeler
                54
                President
                    and Chief Operating OfficerJames
                    M. Kratochvil
                51
                Executive
                    Vice President, Chief Financial Officer, Treasurer and
                    SecretaryAnthony
                    M. Civale (1) (2)
                33
                DirectorRobert
                    V. Seminara (1) (2) (3)
                35
                Director
 (1) Member
                  of the Compensation Committee.
 (2) Member
                  of the Audit Committee.
 (3) Member
                  of the Executive Committee.
 
 Ira
        G. Bootshas
        been Chairman of the Board and Chief Executive Officer since June 2001 of
        Holding and Berry Plastics Corporation, and a Director of Holding and Berry
        Plastics Corporation since April 1992.  Prior to that, Mr. Boots
        served as Chief Operating Officer of Berry Plastics Corporation since August
        2000 and Vice President of Operations, Engineering and Product Development
        of
        Berry Plastics Corporation since April 1992.  Mr. Boots was employed
        by our predecessor company from 1984 to December 1990 as Vice President,
        Operations.
 
 R.
        Brent Beeler was named
        President and Chief Operating Officer of Holding and Berry Plastics Corporation
        in May 2005.  He formerly served as President—Containers and Consumer
        Products of Berry Plastics Corporation since October 2003 and has been an
        Executive Vice President of Holding since July 2002.  He had been
        Executive Vice President and General Manager—Containers and Consumer Products of
        Berry Plastics Corporation since October 2002 and was Executive Vice President
        and General Manager—Containers since August 2000.  Prior to that, Mr.
        Beeler was Executive Vice President, Sales and Marketing of Berry Plastics
        Corporation since February 1996 and Vice President, Sales and Marketing of
        Berry
        Plastics Corporation since December 1990.  Mr. Beeler was employed by
        our predecessor company from October 1988 to December 1990 as Vice President,
        Sales and Marketing and from 1985 to 1988 as National Sales
        Manager.
 
 James
        M. Kratochvil has been
        Executive Vice President, Chief Financial Officer, Treasurer and Secretary
        of
        Holding and Berry Plastics Corporation since December 1997.  He
        formerly served as Vice President, Chief Financial Officer and Secretary
        of
        Berry Plastics Corporation since 1991, and as Treasurer of Berry Plastics
        Corporation since May 1996.  He
  -38-
  formerly
        served as Vice President, Chief Financial Officer and Secretary of Holding
        since
        1991.  Mr. Kratochvil was employed by our predecessor company from
        1985 to 1991 as Controller.
 
 Anthony M.
        Civale has
        been a member of our Board of Directors since the consummation of the
        Merger.  Mr. Civale is a Partner at Apollo Management, where he has
        worked since 1999.  Prior to that time, Mr. Civale was employed by
        Deutsche Bank Securities in the Corporate Finance Department.  Mr.
        Civale also serves on the board of directors of Goodman Global Holdings,
        Inc.
 
 Patrick
        J. Dalton has been a
        member of our Board of Directors since the consummation of the
        Merger.  Mr. Dalton joined Apollo Management
        in June 2004 as a partner and as a member of Apollo Investment Management's
        ("AIM") Investment Committee. Mr. Dalton is also the Chief Investment Officer
        of
        AIM and a member of the Investment Committees of Apollo Investment Europe,
        Apollo Credit Liquidity Fund and Artus/Apollo Loan Fund. Before joining Apollo,
        Mr. Dalton was a vice president with Goldman, Sachs & Co.'s Principal
        Investment Area with a focus on mezzanine investing since 2000.  From
        1990 to 2000, Mr. Dalton was a Vice President with the Chase Manhattan Bank
        where he worked most recently in the Acquisition Finance
        Department.  Mr. Dalton graduated from Boston College with a BS in
        Finance and received his MBA from Columbia Business
        School.
 
 Donald
        C. Graham founded the
        Graham Group, an industrial and investment concern, and has been a member
        of our
        Board of Directors since the consummation of the Merger.  The Graham
        Group is engaged in a broad array of businesses, including industrial process
        technology development, capital equipment production, and consumer and
        industrial products manufacturing.  Mr. Graham founded Graham
        Packaging Company, in which he sold a controlling interest in
        1998.  The Graham Group’s three legacy industrial businesses operate
        in more than 80 locations worldwide, with combined sales of more than $2.75
        billion.  Mr. Graham currently serves on the board of directors of
        Western Industries, Inc., Supreme Corq LLC, National Diversified Sales, Inc.,
        Infiltrator Systems, Inc., Touchstone Wireless Repair and Logistics LP, Nurture,
        Inc., Graham Engineering Corporation and Graham Architectural Products
        Corporation.
 
 Steven
        C. Graham founded
        Graham Partners and has been a member of our Board of Directors since the
        consummation of the Merger.  Prior to founding Graham Partners in
        1998, Mr. Graham oversaw the Graham Group’s corporate finance division starting
        in 1988.  Prior to 1988, Mr. Graham was a member of the investment
        banking division of Goldman, Sachs & Co., and was an Acquisition
        Officer for the RAF Group, a private equity investment group.  Mr.
        Graham currently serves on the board of directors of Graham Architectural
        Products Corporation, Western Industries, Inc., National Diversified Sales,
        Inc., HB&G Building Products, Inc., Nailite International, Inc., Dynojet,
        Inc., Supreme Corq LLC, Line-X, LLC, Abrisa Industrial Glass, Inc., Infiltrator
        Systems, Inc., The Masonry Group LLC, Aerostructures Acquisition, LLC, Transaxle
        LLC, and ICG Commerce Holdings, Inc.
 
 Joshua J.
        Harrishas been
        a member of our Board of Directors since the consummation of the
        Merger.  Mr. Harris is a founding Senior Partner at Apollo Management
        and has served as an officer of certain affiliates of Apollo since
        1990.  Prior to that time, Mr. Harris was a member of the Mergers and
        Acquisitions Department of Drexel Burnham Lambert Incorporated.  Mr.
        Harris is also a director of Hexion Specialty Chemicals, Inc., Allied Waste
        Industries, Inc., Metals USA, Inc., Nalco Corporation, Quality Distribution
        Inc., United Agri Products and Verso Paper Inc.
 
 Robert V.
        Seminara has
        been a member of our Board of Directors since the consummation of the
        Merger.  Mr. Seminara is a Partner at Apollo Management, where he has
        worked since 2003.  Prior to that time, Mr. Seminara was a managing
        director of Evercore Partners LLC.  Mr. Seminara also serves on the
        boards of directors of Hexion Specialty Chemicals, Inc. and World Kitchen
        Inc.
 
 Board
        Committees
 
 Our
        Board
        of Directors has a Compensation Committee, an Audit Committee and Executive
        Committee.  The Compensation Committee makes recommendations
        concerning salaries and incentive compensation for our employees and
        consultants.  The Audit Committee, which consists of at least one
        financial expert, recommends the annual appointment of auditors with whom
        the
        Audit Committee reviews the scope of audit and non-audit assignments and
        related
        fees, accounting principles we use in financial reporting, internal auditing
        procedures and the adequacy of our internal control procedures.
   -39-
  Item
        11.  EXECUTIVE COMPENSATION
 
 Compensation
        Discussion and Analysis
 
 The
        Company has a Compensation Committee comprised of Messrs. Boots, Seminara,
        Civale, and Donald Graham.  The annual salary and bonus paid to
        Messrs. Boots, Kratochvil, Beeler, Hobson, Unfried, and all other vice president
        and above, (collectively, the “Senior Management Group”) for fiscal 2007 were
        determined by the Compensation Committee in accordance with their respective
        employment agreements.  The Committee makes all final compensation
        decisions for our executive officers.   Below are the principles
        outlining our executive compensation principles and practices.
 
 Compensation
        Philosophy and
        Analysis
 
 Our
        goal
        as an employer is to ensure that our pay practices are equitable with regard
        to
        market wages, facilitate appropriate retention, and to reward exceptional
        performance.  The Human Resources Team obtains regional and national
        compensation survey data.  In the past we have conducted studies with
        Mercer, Clark Consulting, The Conference Board and Salary.com to study other
        manufacturing companies similar in size.  The objective is to
        understand how our executives compare to similarly situated people in other
        companies.  Our study includes base salary, bonus, and a time based
        option value for one year. It ignores value of 401(k) match and medical
        insurance as compared to market. Those benefits are generally below market.
        As
        an executive team, in regards to base wage we are near the 50th percentile
        and
        near the 65th percentile for total cash compensation.
 
 The
        Company believes that executive compensation should be designed to align
        closely
        the interest of the Company, the executive officers, and its stockholders
        and
        attract, motivate reward and retain superior management talent.  Berry
        utilizes the following guidelines pertaining to executive
        compensation:
 
 ·
              Pay
                  compensation that is competitive with the practices of other manufacturing
                  businesses similar in size. We used Covalence as a guideline in
                  wage
                  comparisons this year to better align our executive team to the
                  higher
                  base wages paid by Covalence. In some instances, the Covalence
                  Vice
                  Presidents had their base lowered to support a higher Berry bonus
                  structure.
 
 ·
              Wage
                  enhancements aligned with the performance of the company
 
 ·
              Pay
                  for performance by:
 
 ·
              Setting
                  performance goals determined by the Chairman of the Board and CEO
                  along
                  with the Board for our officers and providing a short-term incentive
                  through a bonus plan that is based upon achievement of these goals.
                  In a
                  year of increased resin and raw material prices, the EBITDA targets
                  were a
                  challenge to the executive team.
 
 ·
              Providing
                  long-term incentives in the form of stock options, in order to
                  retain
                  those individuals with the leadership abilities necessary for increasing
                  long-term shareholder value while aligning with the interests of
                  our
                  investors. The Compensation Committee recommends to the Board the
                  equity
                  grant values for the executives.
 
 Role
        of Compensation Committee
  The
        Compensation Committee’s specific
        roles are:
 
 ·
              to
                  approve and recommend to our Board of Directors all compensation
                  plans for
                  (1) the CEO of the Company, (2) all employees of the Company and
                  its
                  subsidiaries who report directly to the CEO, and (3) other members
                  of the
                  Senior Management Group, as well as all compensation for our Board
                  of
                  Directors;
  ·
              to
                  approve the short-term compensation of the Senior Management Group
                  and to
                  recommend short-term compensation for members of our Board of Directors;
   -40-
  ·
              to
                  approve and authorize grants under the Company’s or its subsidiaries’
                  incentive plans, including all equity plans and long-term incentive
                  plans;
                  and
  ·
              to
                  prepare any report on executive compensation required by Securities
                  and
                  Exchange Commission rules and regulations for inclusion in our
                  annual
                  proxy statement, if any.
  Role
        of Executives Officers
 
 Ira
        Boots, Chairman and Chief Executive Officer, Brent Beeler, Chief Operating
        Officer, Jim Kratochvil, Chief Financial Officer and Marcia Jochem, Executive
        Vice President of Human Resources annually review the performance of each
        of our
        executive officers.  Together they review annual goals and the
        performance of each individual executive officer.  This information,
        along with the performance of the company and market data determines the
        wage
        adjustment recommendation presented to the Compensation
        Committee.   All other compensation decisions with respect to
        officers of the Company are made by Mr. Boots pursuant to policies established
        in consultation with the Compensation Committee and recommendations from
        the
        Human Resource Department.
 
 The
        Compensation Committee evaluates the performance of the CEO and determines
        the
        CEO’s compensation in light of the goals and objectives of the compensation
        program. On at least an annual basis, the Compensation Committee expects
        to
        review the performance of the CEO as compared with the achievement of the
        Company’s goals and any individual goals. The CEO together with the Human
        Resource Department will assess the performance and compensation of the other
        named executives. The Human Resource Department, together with the CEO, annually
        will review the performance of each member of the Senior Management Group
        as
        compared with the achievement of Company or operating division goals, as
        the
        case may be, together with each executive’s individual goals. The Compensation
        Committee can exercise its discretion in modifying any recommended adjustments
        or awards to the executives. Both performance and compensation are evaluated
        to
        ensure that the Company is able to attract and retain high quality executives
        in
        vital positions and that the compensation, taken as a whole, is competitive
        and
        appropriate compared to that of similarly situated executives in other
        corporations within the industry.
 
 Executive
        Compensation Program
 
 The
        compensation for our executive officers is primarily in the following three
        categories:  (1) salary, (2) bonus, and (3) stock
        options.  Berry has selected these elements because each is considered
        useful and/or necessary to meet one or more of the principal objectives of
        the
        business.  Base salary and bonus targets are set with the goal of
        motivating employees and adequately compensating and rewarding them on a
        day-to-day basis for the time spent and the services they perform while our
        equity programs are geared toward providing an incentive and reward for the
        achievement of long-term business objectives and retaining key talent and
        more
        closely aligning the interests of management with our shareholders.
        .  In light of the merger with Covalence, the company determined that
        it was appropriate to increase compensation of the executives to reflect
        the
        increase in duties and to better align the base salaries of the two
        companies.  Berry believes that these elements of compensation, when
        combined, are effective, and will continue to be effective.
 
 The
        compensation program is reviewed on an annual basis.  In setting
        individual compensation levels for a particular executive, the total
        compensation package is considered as well as each element individually,
        and the
        executive’s past and expected future contributions to our business.
 
 Base
        Salary
 
 Our
        executive officers’ base salaries depend on their position within the Company
        and its subsidiaries, the scope of their responsibilities and the period
        during
        which they have been performing those responsibilities and their overall
        performance.  Base salaries are reviewed on a regular basis annually,
        and will be adjusted from time to time to realign salaries with market levels
        after taking into account individual responsibilities and performance and
        experience, as well as the terms of any agreements we have in place with
        such
        executive officer.
 
 Annual
        Bonus
 
 Berry
        has
        a long history of sharing profits with employees. This philosophy is imbedded
        in
        the corporate culture and is one of many practices that have enabled the
        company
        to continually focus on improvement and be
  -41-
  successful.
        Below is the calculation, funding and annual payment practice for the Executive
        program which is subject to approval every year by the Board of
        Directors.  It is our goal to exceed our commitments year after year.
        Our executive officers participate in our Executive Profit Sharing Bonus
        Program.  Depending on our overall business performance specifically
        related to EBITDA and Company growth and each executive’s individual
        performance, he or she would be eligible to receive a bonus ranging from
        zero to
        108% his or her base salary.  These target ranges are the same for all
        of the Vice Presidents and above positions.   Performance
        objectives are generally set on an annualized basis.
 
 1.    
        Calculation:
 75%
        -
        based on achieving 100% of annual EBITDA target
 25%
        -
        based on growing the equity value of the company
 
 2.     Funding:
 By
        meeting both targets, executives qualify to earn 68.5% of their annualized
        salary in a bonus payment.  This target slides up of down depending on
        the performance of the company.
 
 3.
              Payment:
 With
        Board approval, bonus is paid on an annual basis, which normally happens
        at the
        end of February.  In February 2007, executive bonus payout included
        only those months of Apollo ownership in 2006 as the first nine months were
        paid
        at the time of the sale of the company.
 
 The
        Compensation Committee is currently working with Apollo to determine the
        performance metrics to apply to our 2008 bonus plan year, and we expect that
        our
        executive officers will continue to be subject to the same financial performance
        metrics as other salaried employees of the Company.
 
 Stock
        Options
 
 In
        connection with the completion of the Apollo Berry Merger, Berry adopted
        the
        Berry Plastics Group, Inc., 2006 Equity Incentive Plan which permits us to
        grant
        stock options, rights to purchase shares, restricted stock, restricted stock
        units, and other-stock based rights to employees or directors of, or consultants
        to, us, or any of our subsidiaries. The Berry Plastics Group, Inc. 2006 Equity
        Incentive Plan is administered by our board of directors or, if determined
        by
        such board, by the Compensation Committee of the board. Approximately
        618.6 million shares of our common stock have been reserved for issuance
        under the Equity Incentive Plan.
 
 As
        discussed below, we have awarded stock options to members of our
        management.  However, the Compensation Committee has not established
        any formal program, plan or practice for the issuance of equity awards to
        employees.  We do not have any program, plan or practice in place for
        selecting grant dates for awards under the Equity Incentive Plan in coordination
        with the release of material non-public information. Under the Equity Incentive
        Plan, the exercise price for the option awards is the fair market value of
        the
        stock of Berry on the date of grant. The fair market value was determined
        by the
        Board of Directors by applying industry appropriate multiples to our current
        EBITDA, and this valuation took into account a level of net debt that excluded
        cash required for working capital purposes.  The Compensation
        Committee is not prohibited from granting awards at times when it is in
        possession of material non-public information. However, no inside information
        was taken into account in determining the number of options previously awarded
        or the exercise price for those awards, and we did not “time” the release of any
        material non-public information to affect the value of those
        awards.
 
 The
        Compensation Committee believes that the granting of awards under the Berry
        Plastics Group, Inc., 2006 Equity Incentive Plan promotes, on a short-term
        and
        long-term basis, an enhanced personal interest and alignment of interests
        of
        those executives receiving equity awards with the goals and strategies of
        the
        Company. The Compensation Committee also believes that the equity grants
        provide
        not only financial rewards to such executives for achieving Company goals
        but
        also provide additional incentives for executives to remain with the
        Company.
 
 Immediately
        following the completion of the Apollo Berry Merger, we granted management
        participants stock options that will be subject to the terms of the Berry
        Plastics Group, Inc. 2006 Equity Incentive Plan.  In connection with
        the grants, we entered into stock option award agreements with the management
        participants.
  -42-
  
 The
        exercise price per share of our common stock subject to the options granted
        to
        the management participants was $100.00 per share on the date of grant, the
        same
        price as paid by Apollo in connection with the Apollo Berry Merger.
 
 Generally,
        the options will become vested and exercisable over a five year
        period.  The time based options vest 20% each year and the performance
        based option grants vest over a five year period when certain EBITDA targets
        are
        met. In each case, the vesting of options is generally subject to the
        grantee’s continued provision of services to the Company or one of its
        subsidiaries as of the applicable vesting date.
 
 Berry
        also clarified the anti-dilution provisions of its stock option plans to
        require
        payment to holders of outstanding stock options of special dividends and
        a
        pro-rata share of transaction fees that may be paid to Apollo and Graham
        in
        connection with future transactions, re-financings, etc.   In
        connection with the $77 per share dividend paid, holders of vested stock
        options
        received $13.7 million, while an additional $34.5 million will be paid to
        nonvested option holders on the second anniversary of the dividend grant
        date
        (assuming the nonvested option holders remain employed by the
        Company).
 
 The
        maximum term of these options will be ten years. However, subject to
        certain exceptions set forth in the applicable stock option award agreement,
        unvested options will automatically expire 90 days after the date of a grantee’s
        termination of employment, or one year in the case of termination due to
        death
        or disability. In the case of a termination of employment due to death or
        disability, an additional 20% of an individual’s options will
        vest.  20% of outstanding options may become vested earlier
        upon  a “change in control” of Berry, and 40% of outstanding options
        become vested earlier if such change in control results in the achievement
        of
        Apollo’s targeted internal rate of return. We believe that the grant of stock
        options to the executive officers contributes significantly to the alignment
        of
        their interests and those of the Company.
 
 Shares
        of
        Company common stock acquired under the Berry Plastics Group, Inc., 2006
        Equity
        Incentive Plan will be subject to restrictions on transfer, repurchase rights,
        and other limitations set forth in a securityholders
        agreement.
 
 Post-Employment
        Compensation.
 
 We
        provide post-employment compensation to our employees, including our named
        executive officers, as a continuance of the post-retirement programs sponsored
        by prior owners and applicable to our employees prior to the Apollo Berry
        Merger. The Compensation Committee believes that offering such compensation
        allows us to attract and retain qualified employees and executives in a highly
        competitive marketplace and rewards our employees and executives for their
        contribution to the Company during their employment. The principal components
        of
        our post-employment executive officer compensation program include a qualified
        defined contribution 401(k) plan and a retirement health plan.
 
 ·      
        401(k)
        Plan.Our
        executive officers are eligible to
        participate in our company-wide 401(k) qualified plan for
        employees.  The Company awards a $200 lump sum contribution annually
        for participating in the plan and matches dollar for dollar the first $300
        dollars, and a 10% match thereafter.  Participants who contribute at
        least $1,000 will also receive an addition $150 lump sum deposit at the end
        of
        the year.  Company matching contributions are 100% vested
        immediately.
  Perquisites
        and Other Personal
        Benefits.
 
 While
        we
        believe that perquisites should be a minor part of executive compensation,
        we
        recognize the need to provide our executive officers with perquisites and
        other
        personal benefits that are reasonable, competitive and consistent with the
        overall compensation program in order to enable us to attract and retain
        qualified employees for key positions.  Accordingly, we provide our
        executive officers with leased company vehicles including maintenance and
        operational cost.  The Compensation Committee periodically reviews the
        perquisites provided to our executive officers.
  -43-
  Messrs. Seminara and Civale are partners in Apollo Management.  Donald
        Graham is the founder of the Graham Group.  See the section of this
        Form 10-K titled “Certain Relationships and Related Transactions” for a
        description of these transactions between us and various affiliates of Apollo
        and Graham.
 
 The
        following table sets forth a summary of the compensation paid by us to our
        Chief
        Executive Officer and our four other most highly compensated executive officers
        (collectively, the “Named Executive Officers”) for services rendered in all
        capacities to us during fiscal 2007, 2006 and 2005.
 
 Summary
        Compensation Table
 Name
                    and Principal Position
                Fiscal
                  Year
                Salary
                Option
                  Awards
                    ($)
                Bonus
                    (1)
                All
                    Other
                  Compensation
                Total
                    ($)Ira
                    G. Boots
                  Chairman
                    and Chief Executive
                    Officer
                2007
                  2006
                  2005
                $760,434
                  589,031
                  452,058
                $—
                  704,178
                  —
                $649,431
                  9,840,217
                  299,323
                $
                    —
                  —
                  —
                $1,409,865
                  11,133,426
                  751,381James
                    M. Kratochvil
                  Executive
                    Vice President, Chief
                    Financial Officer, Treasurer and Secretary
                2007
                  2006
                  2005
                $406,602
                  333,817
                  291,229
                $—
                  403,332
                  —
                $349,694
                  4,300,854
                  192,422
                $
                    —
                  —
                  —
                $756,296
                  5,038,003
                  483,651R.
                    Brent Beeler
                  President
                    and Chief Operating
                    Officer
                2007
                  2006
                  2005
                $605,119
                  501,432
                  368,640
                $—
                  403,332
                  135,000
                $549,519
                  3,977,444
                  236,325
                $
                    —
                  —
                  —
                $1,154,638
                  4,882,208
                  739,965Randall
                    J. Hobson
                  President
–
Rigid
                    Closed Top
                    Division
                2007
                  2006
                  2005
                $259,940
                  237,006
                  162,707
                $—
                  264,480
                  56,520
                $249,781
                  850,424
                  95,900
                $
                    —
                  —
                  —
                $509,721
                  1,351,910
                  315,127G.
                    Adam Unfried
                  President
–
Rigid
                    Open Top
                    Division
                2007
                  2006
                  2005
                $259,953
                  237,087
                  166,449
                $—
                  264,480
                  56,520
                $249,781
                  856,060
                  90,420
                $
                    —
                  —
                  —
                $509,734
                  1,357,627
                  313,389
 (1)Amounts
                  shown
                  include amounts paid to Messrs. Boots, Kratochvil, Beeler, Hobson,
                  and
                  Unfried at the time of Merger of $9,450,000, $4,050,000, $3,650,000,
                  $700,000, and $700,000, respectively.
 
 Employment
        Agreements
 
 In
        connection with the Merger, Berry entered into employment agreements with
        each
        of Messrs. Boots, Beeler and Kratochvil that supersede their previous employment
        agreements with Berry and that expire on December 31, 2011.  In
        addition, Messrs. Hobson and Unfried entered into amendments to their existing
        employment agreements with Berry that extend the terms of such agreements
        through December 31, 2011 (each of the agreements with Messrs. Boots, Beeler,
        Kratochvil, Hobson and Unfried, as amended, an “Employment Agreement” and,
        collectively, the “Employment Agreements”). The Employment Agreements provided
        for fiscal 2007 base compensation as disclosed in the “Summary Compensation
        Table” above.  Salaries are subject in each case to annual adjustment
        at the discretion of the Compensation Committee of the Board of Directors
        of
        Berry Plastics Corporation.  The Employment Agreements entitle each
        executive to participate in all other incentive compensation plans established
        for executive officers of Berry.  Berry may terminate each Employment
        Agreement for “cause” or a “disability” (as such terms are defined in the
        Employment Agreements). Specifically, if any of Messrs. Boots, Beeler,
        Kratochvil, Hobson, and Unfried is terminated by Berry without ‘‘cause’’ or
        resigns for ‘‘good reason’’ (as such terms are defined in the Employment
        Agreements), that individual is entitled to: (1) the greater of (a) base
        salary
        until the later of one year after termination or (b) 1/12 of 1 year’s base
        salary for each year of employment up to 30 years with Berry Plastics
        Corporation or a predecessor in interest (excluding Messrs. Hobson and Unfried
        which would be entitled to (a) only) and (2) the pro rata portion of his
        annual
        bonus. Each Employment Agreement also includes customary noncompetition,
        nondisclosure and nonsolicitation provisions.
 
 Grants
        of Plan-Based Awards for Fiscal 2007
 
 In
        connection with Apollo V’s acquisition of Berry Group, we have adopted an equity
        incentive plan for the benefit of certain of our employees, which we refer
        to as
        the 2006 Equity Incentive Plan.  The purpose of the 2006 Equity
        Incentive Plan is to further our growth and success, to enable our directors,
        executive officers and employees to acquire shares of our common stock, thereby
        increasing their personal interest in our growth and success, and to provide
        a
        means of rewarding outstanding performance by such persons.  No
        options were granted to our named executive officers in fiscal
        2007.
  -44-
  Outstanding
        Equity Awards at Fiscal Year-End Table
 Name
                Number
                    of
                  Securities
                  Underlying
                  Unexercised
                  Options
                    (#)
                  Exercisable
                Number
                    of
                  Securities
                  Underlying
                  Unexercised
                  Options
                    (#)
                  Unexercisable
                Option
                    Exercise
                  Price
                Option
                    Expiration
                  DateIra
                    G. Boots
                10,563
                25,860
                $100
                9/20/16James
                    M. Kratochvil
                6,051
                14,811
                $100
                9/20/16R.
                    Brent Beeler
                6,051
                14,811
                $100
                9/20/16Randall
                    J. Hobson
                3,966
                9,714
                $100
                9/20/16G.
                    Adam Unfried
                3,966
                9,714
                $100
                9/20/16
 Option
        Exercises and Stock Vested for2007
 
 No
        options were exercised by our named executive officers in fiscal
        2007.
 
 Compensation
        for Directors
 
 Non-employee
        directors receive $12,500 per quarter plus $2,000 for each meeting they attend
        and are reimbursed for out-of-pocket expenses incurred in connection with
        their
        duties as directors.  In addition, directors of Old Covalence received
        $12,500 per quarter plus $2,000 for each meeting they attend and were reimbursed
        for out-of-pocket expenses incurred in connection with their duties as
        directors.  For the fiscal year ended September 29, 2007, we paid
        non-employee directors’ fees on a combined basis as shown in the following
        table.
 
 Director
        Compensation Table for Fiscal 2007
 Name
                Fees
                    Earned
                  or
                    Paid in
                  Cash
                    ($)
                Option
                  Awards
                    ($)
                Total
                    ($)Anthony
                    M. Civale
                $124,000
                $—
                $124,000Patrick
                    J. Dalton
                50,000
                —
                50,000Donald
                    C. Graham
                62,500
                —
                62,500Steven
                    C. Graham
                62,500
                —
                62,500Joshua
                    J. Harris
                108,000
                —
                108,000Robert
                    V. Seminara
                116,000
                —
                116,000
  -45-
  Item
                  12.
                  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                  AND RELATED
                  STOCKHOLDER MATTERS
 
 Stock
        Ownership
 
 We
        are a
        wholly-owned subsidiary of Berry Group.  The following table sets
        forth certain information regarding the beneficial ownership of the common
        stock, of Berry Group with respect to each person that is a beneficial owner
        of
        more than 5% of its outstanding common stock and beneficial ownership of
        its
        common stock by each director and each executive officer named in the Summary
        Compensation Table and all directors and executive officers as a group as
        of
        September 29, 2007.
 
 Name
                  and Address of
                  Owner(1)
              
              Number
                  of Shares
                of
                Common
                  Stock(1)
              Percent
                  of ClassApollo
                  Investment Fund VI, L.P. (2)
              
              3,559,930
              
              51.2
              %Apollo
                  Investment Fund V, L.P. (3)
              
              1,902,558
              
              27.4
              %AP
                  Berry Holdings, L. P (4)
              
              1,641,269
              
              23.6
              %Graham
                  Berry Holdings, LP (5)
              
              500,000
              
              7.2
              %Ira
                  G. Boots (6)
              
              129,958
              
              1.9
              %James
                  M. Kratochvil (6)
              
              73,838
              
              1.1
              %R.
                  Brent Beeler (6)
              
              74,061
              
              1.1
              %G.
                  Adam Unfried (6)
              
              16,084
              
              *Randall
                  J. Hobson (6)
              
              19,212
              
              *Anthony
                  M. Civale (7),(8)
              
              3,531
              
              *Patrick
                  J. Dalton (7),(8)
              
              2,000
              
              *Donald
                  C. Graham (7),(9)
              
              2,000
              
              *Steven
                  C. Graham (7),(9)
              
              2,000
              
              *Joshua
                  J. Harris (7),(8)
              
              3,531
              
              *Robert
                  V. Seminara (7),(8)
              
              3,531
              
              *All
                  directors and executive officers as a group (11 persons)
              
              329,746
              
              4.7
              %
 *
        Less
        than 1% of common stock outstanding.
 
 (1)   The
        amounts and percentages of common stock beneficially owned are reported on
        the
        basis of regulations of the SEC governing the determination of beneficial
        ownership of securities.  Under the rules of the SEC, a person is
        deemed to be a “beneficial owner” of a security if that person has or shares
        voting power, which includes the power to vote or direct the voting of such
        security, or investment power, which includes the power to dispose of or
        to
        direct the disposition of such security.  A person is also deemed to
        be a beneficial owner of any securities of which that person has a right
        to
        acquire beneficial ownership within 60 days.  Securities that can be
        so acquired are deemed to be outstanding for purposes of computing such person’s
        ownership percentage, but not for purposes of computing any other person’s
        percentage.  Under these rules, more than one person may be deemed
        beneficial owner of the same securities and a person may be deemed to be
        a
        beneficial owner of securities as to which such person has no economic
        interest.  Except as otherwise indicated in these footnotes, each of
        the beneficial owners has, to our knowledge, sole voting and investment power
        with respect to the indicated shares of common stock.
 
 (2)   Represents
        all equity interests of Berry Group held of record by controlled affiliates
        of
        Apollo Investment Fund VI, L.P., including AP Berry Holdings, LLC and BPC
        Co-Investment Holdings, LLC.  Apollo Management VI, L.P. has the
        voting and investment power over the shares held on behalf of
        Apollo.  Each of Messrs. Civale, Dalton, Harris, and Seminara, who
        have relationships with Apollo, disclaim beneficial ownership of any shares
        of
        Berry Group that may be deemed beneficially owned by Apollo Management VI,
        L.P.,
        except to the extent of any pecuniary interest therein.  Each of
        Apollo Management VI, L.P., AP Berry Holdings, LLC and its affiliated investment
        funds disclaims beneficial ownership of any such shares in which it does
        not
        have a pecuniary interest.  The address of Apollo Management VI, L.P.,
        Apollo Investment Fund VI, L.P., and AP Berry Holdings LLC is c/o Apollo
        Management, L.P., 9 West 57th Street, New York, New York 10019.
  -46-
  (3)   Represents
        all equity interests of Berry Group held of record by controlled affiliates
        of
        Apollo Investment Fund V, L.P., including Apollo V Covalence Holdings, LLC
        and
        Covalence Co-Investment Holdings, L.P.  Apollo Management V, L.P. has
        the voting and investment power over the shares held on behalf of
        Apollo.  Each of Messrs. Civale, Dalton, Harris, and Seminara, who
        have relationships with Apollo, disclaim beneficial ownership of any shares
        of
        Berry Group that may be deemed beneficially owned by Apollo Management V,
        L.P.,
        except to the extent of any pecuniary interest therein.  Each of
        Apollo Management V, L.P., Apollo V Covalence Holdings, LLC and its affiliated
        investment funds disclaims beneficial ownership of any such shares in which
        it
        does not have a pecuniary interest.  The address of Apollo Management
        V, L.P., Apollo Investment Fund V, L.P., and Apollo V Covalence Holdings,
        LLC is
        c/o Apollo Management, L.P., 9 West 57th Street, New York, New York
        10019.
 
 (4)   The
        address of AP Berry Holdings LLC is c/o Apollo Management, L.P., 9 West 57th
        Street, New York, New York 10019.
 
 (5)   Graham
        Partners II, L.P., as the sole member of the general partner of Graham Berry
        Holdings, L.P., has the voting and investment power over the shares held
        by
        Graham Berry Holdings, L.P.  Each of Messrs. Steven Graham and Donald
        Graham, who have relationships with Graham Partners II, L.P. and/or Graham
        Berry
        Holdings L.P., disclaim beneficial ownership of any shares of Berry Group
        that
        may be deemed beneficially owned by Graham Partners II, L.P. or Graham Berry
        Holdings L.P. except to the extent of any pecuniary interest
        therein.  Each of Graham Partners II, L.P. and its affiliates
        disclaims beneficial ownership of any such shares in which it does not have
        a
        pecuniary interest.  The address of Graham Partners II, L.P. and
        Graham Berry Holdings, L.P. is 3811 West Chester Pike, Building 2, Suite
        200
        Newton Square, Pennsylvania 19073.
 
 (6)   The
        address of Messrs. Boots, Beeler, Kratochvil, Unfried, and Hobson is c/o
        Berry
        Plastics Holding Corporation, 101 Oakley Street,  Evansville, Indiana
        47710.  Total includes underlying options that are vested or scheduled
        to vest within 60 days of December 10, 2007
 
 (7)   Total
        represents underlying options that are vested or scheduled to vest within
        60
        days of December 10, 2007 for each of Messrs. Civale, Dalton, Donald Graham,
        Steven Graham, Harris and Seminara.
 
 (8)   The
        address of Messrs. Civale, Harris, Seminara and Dalton is c/o Apollo Management,
        L.P., 9 West 57th Street, New York, New York 10019.
 
 (9)   The
        address of Messrs. Steven Graham and Donald Graham is c/o Graham Partners
        II,
        L.P. is 3811 West Chester Pike, Building 2, Suite 200 Newtown Square,
        Pennsylvania 19073.
  -47-
  Equity
        Compensation Plan Information
 
 The
        following table provides information as of September 29, 2007 regarding shares
        of common stock of Berry Group that may be issued under our existing equity
        compensation plan.
 
 Plan
                    category
              Number
                    of securities to be
                  issued
                    upon exercise of
                  outstanding
                    options,
                  warrants
                    and rights
              Weighted
                    Average
                  exercise
                    price of
                  outstanding
                    options,
                  warrants
                    and rights
              Number
                    of securities
                  remaining
                    available for
                  future
                    issuance under
                  equity
                    compensation plan
                  (excluding
                    securities
                  referenced
                    in column (a))(a)
              (b)
              (c)Equity
                  compensation plans
                approved
                  by security holders
              —
              —
              —Equity
                  compensation plans not
                approved
                  by security holders (1)
              618,620(2)
              100
              3,632Total
              618,620
              100
              3,632
 
 (1)Consists
                  of the
                  2006 Equity Incentive Plan which our Board adopted in September
                  2006.
 (2)Does
                  not include
                  shares of Berry Group Common Stock already purchased as such shares
                  are
                  already reflected in the Company’s outstanding shares.
 
 2006
        Equity Incentive Plan
 
 In
        connection with the Apollo’s acquisition of Berry Group, we have adopted an
        equity incentive plan for the benefit of certain of our employees, which
        we
        refer to as the 2006 Equity Incentive Plan.  The purpose of the 2006
        Equity Incentive Plan is to further our growth and success, to enable our
        directors, executive officers and employees to acquire shares of our common
        stock, thereby increasing their personal interest in our growth and success,
        and
        to provide a means of rewarding outstanding performance by such
        persons.  Options granted under the 2006 Equity Incentive Plan may not
        be assigned or transferred, except to us or by will or the laws of descent
        or
        distribution.  The 2006 Equity Incentive Plan terminates ten years
        after adoption and no options may be granted under the plan
        thereafter.  The 2006 Equity Incentive Plan allows for the issuance of
        non-qualified options, options intended to qualify as “incentive stock options”
within the meaning of the Internal Revenue Code of 1986, as amended, and
        stock
        appreciation rights.
  The
        employees participating in the 2006 Equity Incentive Plan receive options
        and
        stock appreciation rights under the 2006 Equity Incentive Plan pursuant to
        individual option and stock appreciation rights agreements, the terms and
        conditions of which are substantially identical.  Each option
        agreement provides for the issuance of options to purchase common stock of
        Berry
        Group.
  As
        of
        September 29, 2007, there were outstanding options to purchase 612,928 shares
        of
        Berry Group’s common stock and stock appreciation rights with respect to 5,692
        shares of Berry Group’s common stock.
  
 Item
        13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
        DIRECTOR INDEPENDENCE
 
 Stockholders
        Agreement with Management
 
 We
        make
        cash payments to Berry Group to enable it to pay any (i) federal, state or
        local income taxes to the extent that such income taxes are directly
        attributable to our and our subsidiaries’ income, (ii) franchise taxes and
        other fees required to maintain Berry Group’s legal existence and
        (iii) corporate overhead expenses incurred in the ordinary course of
        business and salaries or other compensation of employees who perform services
        for both Berry Group and us.
 
 In
        connection with the Merger, Apollo and Graham and certain of our employees
        who
        invested in Berry Group entered into a stockholders agreement.  The
        stockholders agreement provides for, among other things, a restriction on
        the
        transferability of each such person’s equity ownership in us, tag-along rights,
        drag-along rights, piggyback registration rights and repurchase rights by
        us in
        certain circumstances.
  -48-
  The
        Company is charged a management fee by Apollo Management VI, L.P., an affiliate
        of its principal stockholder and Graham Partners, for the provision of
        management consulting and advisory services provided throughout the
        year.  The management fee is the greater of $3.0 million or 1.25% of
        adjusted EBITDA.  In addition, Apollo and Graham have the right to
        terminate the agreement at any time, in which case Apollo and Graham will
        receive additional consideration equal to the present value of $21 million
        less
        the aggregate amount of annual management fees previously paid to Apollo
        and
        Graham, and the employee stockholders will receive a pro rata payment based
        on
        such amount.
 
 Old
        Covalence was charged a management fee by Apollo Management V, L.P., an
        affiliate of its principal stockholder, for the provision of management
        consulting and advisory services provided throughout the year.  The
        annual management fee is the greater of $2.5 million or 1.5% of adjusted
        EBITDA.  This agreement was terminated effective with the
        Merger.
 
 The
        Old
        Covalence fee was payable at the beginning of each fiscal year and the Berry
        Holding fee is paid quarterly.  Old Covalence paid $2.5 million in
        fiscal 2007.  Old Berry Holding and the Company paid $2.5 million to
        entities affiliated with Apollo Management, L.P. and $0.5 million to entities
        affiliated with Graham Partners, Inc. collectively for fiscal 2007.
  Item
        14.  PRINCIPAL ACCOUNTING FEES AND SERVICES
 
 Prior
        to
        the formation of Berry Holding through the merger of Old Berry Group and
        Old
        Covalence Holding, Old Berry Group’s principal accounting firm was Ernst &
Young, LLP (“E&Y”) and Old Covalence Holding’s principal accounting firm was
        Deloitte & Touche LLP  (“Deloitte”).  After the date of
        the Berry Holding formation, the combined company filed on Form 8-K which
        stated
        that E&Y would become the principal accounting firm of the combined
        company.  The following table sets forth fees billed by E&Y and
        Deloitte to Berry Holding, Old Berry Group and Old Covalence Holding for
        fiscal
        2007 and 2006.
 
 E&Y
              
              
              Deloitte
              
              
              Total2007
              
              
              2006
              
              
              2007
              
              
              2006
              
              
              2007
              
              
              2006Audit
                  fees
              
              
              (1
              )
              
              $
              2.3
              
              
              $
              1.4
              
              
              $
              0.3
              
              
              $
              2.5
              
              
              $
              2.6
              
              
              $
              3.9Audit-related
                  fees
              
              
              (2
              )
              
              
              0.7
              
              
              
              0.1
              
              
              
              —
              
              
              
              0.5
              
              
              
              0.7
              
              
              
              0.6Tax
                  fees
              
              
              (3
              )
              
              
              0.5
              
              
              
              0.4
              
              
              
              —
              
              
              
              —
              
              
              
              0.5
              
              
              
              0.4All
                  other fees
              
              
              
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —$
              3.5
              
              
              $
              1.9
              
              
              $
              0.3
              
              
              $
              3.0
              
              
              $
              3.8
              
              
              $
              4.9
 
 (1)Audit
                  Fees.  This category includes fees and expenses billed by
                  E&Y and Deloitte for the audits of the Company’s financial statements
                  and for the reviews of the financial statements included in the
                  Company’s
                  Quarterly Reports on Form 10-Q. This category also includes services
                  associated with SEC registration statements, periodic reports,
                  and other
                  documents issued in connection with securities offerings.
 (2) Audit
                  Related
                  Fees. This category includes fees and expenses billed by E&Y
                  and Deloitte for assurance and related services that are reasonably
                  related to the performance of the audit or review of the Company’s
                  financial statements. This category includes fees for due diligence,
                  other
                  audit-related accounting and SEC reporting services and certain
                  agreed
                  upon services.
 (3) Tax
                  Fees.  This category includes fees and expenses billed by
                  E&Y and Deloitte for domestic and international tax compliance and
                  planning services and tax advice.
 (4)All
                  Other
                  Fees.  There were no other fees billed by E&Y or
                  Deloitte.
 
 The
        Audit
        Committee has established its pre-approval policies and procedures, pursuant
        to
        which the Audit Committee approved the foregoing audit and permissible non-audit
        services provided by our principal accounting firms in fiscal 2007 and
        2006.  Consistent with the Audit Committee’s responsibility for
        engaging our independent auditors, all audit and permitted non-audit services
        require pre-approval by the Audit Committee.  All requests or
        applications for services to be provided by the independent auditor that
        do not
        require specific approval by the Audit Committee will be submitted to the
        Chief
        Financial Officer and must include a detailed description of the services
        to be
        rendered.  The Chief Financial Officer will determine whether such
        services are included within the services that have received pre-approval
        of the
        Audit Committee.  The Audit Committee will be informed on a timely
        basis of any such services rendered by the independent
        auditor.  Request or applications to provide services that require
        specific approval by the Audit Committee will be submitted to the Audit
        Committee by both the independent auditor and the Chief Financial
        Officer.  The Chief Financial Officer and management will immediately
        report to the Audit Committee any breach of this policy that comes to
        the
  -49-
  attention
        of the Chief Financial Officer or any member of management.  Pursuant
        to these procedures the Audit Committee approved the audit and permissible
        non-audit services provided by the principalaccounting
        firms in
        fiscal 2007 and 2006.
 
 PART
        IV
 
 Item
        15.    EXHIBITS AND FINANCIAL
        STATEMENT
        SCHEDULES
 1.
                Financial
                    Statements
 
 The
                    financial statements listed under Item 8 are filed as part of
                    this report.
 
 2.
                Financial
                    Statement
                    Schedules
 
 Schedules
                    have been omitted because they are either not applicable or the
                    required
                    information has been
 disclosed
                    in the financial statements or notes thereto.
 3.
              Exhibits
 
 The
                  exhibits listed on the accompanying Exhibit Index are filed as
                  part of
                  this report.
 
 
  -50-
  REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
        FIRM
 
 The
        Board
        of Directors and Stockholders
 Berry
        Plastics Holding Corporation
  We
        have
        audited the accompanying consolidated balance sheet of Berry Plastics Holding
        Corporation (a wholly owned subsidiary of Berry Plastics Group, Inc.) as
        of
        September 29, 2007, and the related consolidated statements of operations,
        changes in stockholders' equity and comprehensive income (loss), and cash
        flows
        for the year then ended.  We have also audited the accompanying
        combined balance sheet of Berry Plastics Holding Corporation as of September
        30,
        2006, and the related combined statement of operations, stockholders’ equity,
        and cash flows for the period from February 17, 2006 to September 30, 2006.
        These financial statements are the responsibility of the Company’s management.
        Our responsibility is to express an opinion on these financial statements
        based
        on our audits. We did not audit the 2006 financial statements of Covalence
        Specialty Materials Corp., a combined entity, which statements as of September
        29, 2006 and for the period from February 17, 2006 to September 29, 2006,
        reflect total assets constituting 31%, and net loss constituting 80% of the
        related combined totals. Those statements were audited by other auditors
        whose
        report has been furnished to us, and our opinion, insofar as it relates to
        the
        amounts included for Covalence Specialty Materials Corp., is based solely
        on the
        report of the other auditors.
  We
        conducted our audits in accordance with the standards of the Public
        Company Accounting Oversight Board (United States). Those standards require
        that we plan and perform the audit to obtain reasonable assurance about whether
        the financial statements are free of material misstatement. We were not engaged
        to perform an audit of the Company’s internal control over financial reporting.
        Our audit included consideration of internal control over financial reporting
        as
        a basis for designing audit procedures that are appropriate in the
        circumstances, but not for the purpose of expressing an opinion on the
        effectiveness of the Company’s internal control over financial reporting.
        Accordingly, we express no such opinion. An audit also includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements, assessing the accounting principles used and significant estimates
        made by management, and evaluating the overall financial statement presentation.
        We believe that our audits and the report of other auditors provide a reasonable
        basis for our opinion.
  In
        our
        opinion, based on our audits and, for 2006, the report of other auditors,
        the
        financial statements referred to above present fairly, in all material respects,
        the consolidated financial position of Berry Plastics Holding Corporation
        at
        September 29, 2007, the combined financial position of Berry Plastics Holding
        Corporation at September 30, 2006, the consolidated results of its operations
        and its cash flows for the year ended September 29, 2007 and the combined
        results of its operations and its cash flows for the period from February
        17,
        2006 to September 30, 2006, in conformity with U.S. generally accepted
        accounting principles.
 
 As
        discussed in Note 2 to the consolidated financial statements, effective
        September 29, 2007 the Company adopted Statement of Financial Accounting
        Standards No. 158, Employers’
Accounting for Defined
        Benefit Pension and Other Post-Retirement Plans, an
        amendment of FASB Statements No. 87, 88, 106, and 132(R).
 
 /s/
        Ernst
        and Young LLP
 Indianapolis,
        Indiana
 December
        21, 2007
 
  F-1
  REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To
                  the Directors of
 Covalence
                  Specialty Materials Corp.
 Bedminster,
                  New Jersey
  We
        have
        audited the accompanying combined statements of operations, parent company
        equity and comprehensive income and cash flows of Tyco Plastics and Adhesives
        (the “Predecessor Company”) for the period October 1, 2005 through February 16,
        2006, and the year ended September 30, 2005.  These financial
        statements are the responsibility of Berry Plastics Holding Corporation’s
        management.  Our responsibility is to express an opinion on these
        financial statements based on our audits.
  We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States).  Those standards require
        that we plan and perform the audit to obtain reasonable assurance about whether
        the financial statements are free of material misstatement.  The
        Predecessor Company is not required to have, nor were we engaged to perform,
        an
        audit of its internal control over financial reporting.  Our audits
        included consideration of internal control over financial reporting as a
        basis
        for designing audit procedures that are appropriate in the circumstances,
        but
        not for the purpose of expressing an opinion on the effectiveness of the
        Predecessor Company’s internal control over financial
        reporting.  Accordingly, we express no such opinion.  An
        audit also includes examining, on a test basis, evidence supporting the amounts
        and disclosures in the financial statements, assessing the accounting principles
        used and significant estimates made by management, as well as evaluating
        the
        overall financial statement presentation.  We believe that our audits
        provide a reasonable basis for our opinion.
  In
        our
        opinion, such combined financial statements present fairly, in all material
        respects, the combined results of the operations of Tyco Plastics and Adhesives
        and their cash flows for the period October 1, 2005 through February 16,
        2006,
        and the year ended September 30, 2005, in conformity with accounting principles
        generally accepted in the United States of America.
  Certain
        expenses of the Predecessor Company represent allocations made from Tyco
        International Ltd. The accompanying combined financial statements of the
        Predecessor Company were prepared from the separate records maintained by
        the
        Predecessor Company and may not necessarily be indicative of the conditions
        that
        would have existed or the results of operations if the Predecessor Company
        had
        been operated as an unaffiliated company.
  As
        discussed in Note 12 to the financial statements, the accompanying guarantor
        and
        non-guarantor financial information has been restated.
  /s/
        DELOITTE & TOUCHE LLP
 Parsippany,
        New Jersey
 December
        22, 2006
 (February
        7, 2007 as to the effects of the restatement discussed in Note 12)
   F-2
 
 
 Berry
        Plastics Holding
        Corporation
 Consolidated
        or Combined Balance
        Sheets
 (In
        Millions of Dollars, except per
        share information)
 September
                    29,
                  2007
                
                
                September
                    30,
                  2006AssetsCurrent
                    assets:Cash
                    and cash
                    equivalents
                
                $
                14.6
                
                
                $
                83.1Accounts
                    receivable (less allowance for doubtful accounts
                  of
                    $11.3 at September 29, 2007 and $9.6 at September 30,
                    2006)
                
                
                372.5
                
                
                
                357.1Inventories:Finished
                    goods
                
                
                227.3
                
                
                
                238.3Raw
                    materials and supplies
                
                
                158.0
                
                
                
                166.8385.3
                
                
                
                405.1Deferred
                    income
                    taxes
                
                
                31.7
                
                
                
                17.0Prepaid
                    expenses and other
                    current assets
                
                
                35.7
                
                
                
                41.6Total
                    current assets
                
                
                839.8
                
                
                
                903.9Property
                    and equipment:Land
                
                
                42.2
                
                
                
                32.6Buildings
                    and
                    improvements
                
                
                178.7
                
                
                
                177.1Equipment
                    and construction in
                    progress
                
                
                735.1
                
                
                
                638.6956.0
                
                
                
                848.3Less
                    accumulated
                    depreciation
                
                
                171.0
                
                
                
                31.7785.0
                
                
                
                816.6Intangible
                    assets and other long-term assets:Deferred
                    financing fees,
                    net
                
                
                38.0
                
                
                
                64.8Goodwill
                
                
                1,132.0
                
                
                
                989.2Other
                    intangibles,
                    net
                
                
                1,072.1
                
                
                
                1,046.2Other
                    long-term
                    assets
                
                
                2.5
                
                
                
                0.72,244.6
                
                
                
                2,100.9Total
                    assets
                
                $
                3,869.4
                
                
                $
                3,821.4
  F-3
  Berry
          Plastics Holding
          Corporation
 Consolidated
          Balance Sheets
          (continued)
  September
                    29,
                  2007
                
                
                September
                    30,
                  2006Liabilities
                    and stockholders' equityCurrent
                    liabilities:Accounts
                    payable
                
                $
                263.2
                
                
                $
                272.1Accrued
                    expenses and other
                    current liabilities
                
                
                189.4
                
                
                
                173.5Current
                    portion of long-term
                    debt
                
                
                17.4
                
                
                
                16.0Total
                    current liabilities
                
                
                470.0
                
                
                
                461.6Long-term
                    debt, less current portion
                
                
                2,693.3
                
                
                
                2,612.3Deferred
                    income taxes
                
                
                217.7
                
                
                
                249.6Other
                    long-term liabilities
                
                
                38.4
                
                
                
                23.1Total
                    liabilities
                
                
                3,419.4
                
                
                
                3,346.6Commitments
                    and contingencies
                
                
                —
                
                
                
                —Minority
                    interest
                
                
                —
                
                
                
                65.2Stockholders'
                    equity:Contributed
                    equity from parent,
                    net
                
                
                598.1
                
                
                
                440.6Accumulated
                    deficit
                
                
                (151.9
                )
                
                
                (31.2
                )Accumulated
                    other comprehensive
                    income
                
                
                3.8
                
                
                
                0.2Total
                    stockholders’ equity
                
                
                450.0
                
                
                
                409.6Total
                    liabilities and stockholders' equity
                
                $
                3,869.4
                
                
                $
                3,821.4
 See
        notes to consolidated or combined financial statements.
  F-4
 
 Berry
          Plastics Holding Corporation
  Consolidated
        or Combined Statements of Operations
 (In
        Millions of Dollars)
 Successor
                
                
                PredecessorYear
                    ended September 29, 2007
                
                
                Period
                    from February 17 to September 30, 2006
                
                
                Period
                    from
                  October
                    1, 2005 to February 16, 2006
                
                
                Year
                    ended
                  September
                    30,
                  2005Net
                    sales
                
                $
                3,055.0
                
                
                $
                1,138.8
                
                
                $
                666.9
                
                
                $
                1,725.2Cost
                    of goods sold
                
                
                2,583.4
                
                
                
                1,022.9
                
                
                
                579.0
                
                
                
                1,477.4Gross
                    profit
                
                
                471.6
                
                
                
                115.9
                
                
                
                87.9
                
                
                
                247.8Operating
                    expenses:Selling,
                    general and
                    administrative
                
                
                321.5
                
                
                
                107.6
                
                
                
                50.0
                
                
                
                124.6Restructuring
                    and impairment
                    charges, net
                
                
                39.1
                
                
                
                —
                
                
                
                0.6
                
                
                
                3.3Other
                    operating expenses
                
                
                43.6
                
                
                
                0.6
                
                
                
                —
                
                
                
                —Charges
                    and allocations from Tyco
                  International,
                    Ltd. and affiliates
                
                
                —
                
                
                
                —
                
                
                
                10.4
                
                
                
                56.4Operating
                    income
                
                
                67.4
                
                
                
                7.7
                
                
                
                26.9
                
                
                
                63.5Other
                    income
                
                
                —
                
                
                
                (1.3
                )
                
                
                —
                
                
                
                —Loss
                    on extinguished debt
                
                
                37.3
                
                
                
                13.6
                
                
                
                —
                
                
                
                —Interest
                    expense, net
                
                
                237.6
                
                
                
                46.5
                
                
                
                2.1
                
                
                
                4.5Interest
                    expense, net – Tyco International, Ltd. and affiliates
                
                
                —
                
                
                
                —
                
                
                
                5.5
                
                
                
                11.2Income
                    (loss) before income taxes and minority interest
                
                
                (207.5
                )
                
                
                (51.1
                )
                
                
                19.3
                
                
                
                47.8Income
                    tax expense (benefit)
                
                
                (88.6
                )
                
                
                (18.1
                )
                
                
                1.6
                
                
                
                3.8Minority
                    interest
                
                
                (2.7
                )
                
                
                (1.8
                )
                
                
                —
                
                
                
                —Net
                    income (loss)
                
                $
                (116.2
                )
                
                $
                (31.2
                )
                
                $
                17.7
                
                
                $
                44.0
 See
        notes to consolidated or combined financial statements.
  F-5
 
 Berry
          Plastics Holding Corporation
  Consolidated
        or Combined Statements of Changes in Stockholders'
 Equity
        and Comprehensive Income (Loss)
 (In
        Millions of Dollars)
 Parent
                    Company Investment
                
                
                Accumulated
                    Other Comprehensive Income
                
                
                Retained
                    Earnings (Deficit)
                
                
                Total
                
                
                Comprehensive
                    Income (Loss)Predecessor:Balance
                    at September 30, 2004
                
                $
                863.9
                
                
                $
                (41.1
                )
                
                $
                —
                
                
                $
                822.8Net
                    transfers to parent
                
                
                (12.9
                )
                
                
                —
                
                
                
                —
                
                
                
                (12.9
                )Net
                    income
                
                
                44.0
                
                
                
                —
                
                
                
                —
                
                
                
                44.0
                
                
                $
                44.0Currency
                    translation
                
                
                —
                
                
                
                3.6
                
                
                
                —
                
                
                
                3.6
                
                
                
                3.6Minimum
                    pension liability
                
                
                —
                
                
                
                (2.4
                )
                
                
                —
                
                
                
                (2.4
                )
                
                
                (2.4
                )Balance
                    at September 30, 2005
                
                
                895.0
                
                
                
                (39.9
                )
                
                
                —
                
                
                
                855.1
                
                
                $
                45.2Net
                    transfers from parent
                
                
                224.2
                
                
                
                —
                
                
                
                —
                
                
                
                224.2Net
                    income
                
                
                17.7
                
                
                
                —
                
                
                
                —
                
                
                
                17.7
                
                
                $
                17.7Currency
                    translation
                
                
                —
                
                
                
                1.7
                
                
                
                —
                
                
                
                1.7
                
                
                
                1.7Minimum
                    pension liability
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —Balance
                    at February 16, 2006
                
                $
                1,136.9
                
                
                $
                (38.2
                )
                
                $
                —
                
                
                $
                1,098.7
                
                
                $
                19.4Successor:Contributions
                    of equity- Old Covalence
                
                $
                190.5
                
                
                $
                —
                
                
                $
                —
                
                
                $
                190.5Contributions
                    of equity-Old Berry
                
                
                356.0
                
                
                
                —
                
                
                
                —
                
                
                
                356.0Stock
                    compensation expense
                
                
                0.3
                
                
                
                —
                
                
                
                —
                
                
                
                0.3Adjustment
                    for negative minority interest
                
                
                (106.2
                )
                
                
                —
                
                
                
                —
                
                
                
                (106.2
                )Net
                    loss
                
                
                —
                
                
                
                —
                
                
                
                (31.2
                )
                
                
                (31.2
                )
                
                $
                (31.2
                )Currency
                    translation
                
                
                —
                
                
                
                0.2
                
                
                
                —
                
                
                
                0.2
                
                
                
                0.2Balance
                    at September 30, 2006
                
                
                440.6
                
                
                
                0.2
                
                
                
                (31.2
                )
                
                
                409.6
                
                
                $
                (31.0
                )Stock
                    compensation expense
                
                
                19.6
                
                
                
                —
                
                
                
                —
                
                
                
                19.6Net
                    transfers to parent
                
                
                (102.5
                )
                
                
                —
                
                
                
                —
                
                
                
                (102.5
                )Minority
                    interest acquisition
                
                
                240.4
                
                
                
                0.2
                
                
                
                (4.5
                )
                
                
                236.1Net
                    loss
                
                
                —
                
                
                
                —
                
                
                
                (116.2
                )
                
                
                (116.2
                )
                
                $
                (116.2
                )Currency
                    translation
                
                
                —
                
                
                
                3.7
                
                
                
                —
                
                
                
                3.7
                
                
                
                3.7Interest
                    rate hedges
                
                
                —
                
                
                
                (3.0
                )
                
                
                —
                
                
                
                (3.0
                )
                
                
                (3.0
                )Adoption
                    of SFAS No. 158
                
                
                —
                
                
                
                2.7
                
                
                
                —
                
                
                
                2.7
                
                
                
                —Balance
                    at September 29, 2007
                
                $
                598.1
                
                
                $
                3.8
                
                
                $
                (151.9
                )
                
                $
                450.0
                
                
                $
                (110.1
                )
 See
        notes to consolidated or combined financial statements.
  F-6
 
 Berry
          Plastics Holding Corporation
  Consolidated
        or Combined Statements of Cash Flows
 (In
        Millions of Dollars)
 Successor
                
                
                PredecessorYear
                    ended September 29,
                  2007
                
                
                Period
                    from February 17 to September 30, 2006
                
                
                Period
                    from October 1, 2005 to February 16, 2006
                
                
                Year
                    ended
                  September
                    30,
                  2005Cash
                    Flows from Operating Activities:Net
                    income (loss)
                
                $
                (116.2
                )
                
                $
                (31.2
                )
                
                $
                17.7
                
                
                $
                44.0Adjustments
                    to reconcile net cash from operating activities:Depreciation
                    and
                    amortization
                
                
                220.2
                
                
                
                54.6
                
                
                
                15.6
                
                
                
                41.6Non-cash
                    interest
                    expense
                
                
                7.3
                
                
                
                2.2
                
                
                
                —
                
                
                
                —Write-off
                    of deferred financing
                    fees
                
                
                35.5
                
                
                
                13.6
                
                
                
                —
                
                
                
                —Non-cash
                    restructuring
                
                
                —
                
                
                
                —
                
                
                
                0.3
                
                
                
                (1.2
                )Stock
                    compensation
                    expense
                
                
                19.6
                
                
                
                0.3
                
                
                
                —
                
                
                
                —Other
                    non-cash
                    items
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                0.9Deferred
                    income taxes
                    (benefit)
                
                
                (90.4
                )
                
                
                (20.7
                )
                
                
                1.2
                
                
                
                —Loss
                    (gain) on disposal and
                    impairment of fixed assets
                
                
                18.1
                
                
                
                —
                
                
                
                (3.0
                )
                
                
                0.5Minority
                    interest
                
                
                (2.7
                )
                
                
                (1.8
                )
                
                
                —
                
                
                
                —Changes
                    in operating assets and
                    liabilities:Accounts
                    receivable,
                    net
                
                
                2.9
                
                
                
                (26.1
                )
                
                
                20.5
                
                
                
                (5.8
                )Inventories
                
                
                17.6
                
                
                
                27.5
                
                
                
                (94.3
                )
                
                
                3.3Prepaid
                    expenses and
                    other assets
                
                
                3.8
                
                
                
                8.0
                
                
                
                (11.0
                )
                
                
                —Due to Tyco International, Ltd and affiliates
                
                
                —
                
                
                
                —
                
                
                
                (106.7
                )
                
                
                28.1Accounts
                    payable and other
                    current liabilities
                
                
                21.6
                
                
                
                70.3
                
                
                
                40.5
                
                
                
                5.9Net
                    cash provided by (used for) operating activities
                
                
                137.3
                
                
                
                96.7
                
                
                
                (119.2
                )
                
                
                117..3Cash
                    Flows from Investing Activities:Purchase
                    of property, plant and equipment
                
                
                (99.3
                )
                
                
                (34.8
                )
                
                
                (12.2
                )
                
                
                (32.1
                )Proceeds
                    from disposal of assets
                
                
                10.8
                
                
                
                0.8
                
                
                
                3.1
                
                
                
                2.9Acquisitions
                    of business, net of cash acquired
                
                
                (75.8
                )
                
                
                (3,218.0
                )
                
                
                —
                
                
                
                —Net
                    cash used for investing activities
                
                
                (164.3
                )
                
                
                (3,252.0
                )
                
                
                (9.1
                )
                
                
                (29.2
                )Cash
                    Flows from Financing Activities:Proceeds
                    from long-term borrowings
                
                
                1,233.0
                
                
                
                2,653.4
                
                
                
                —
                
                
                
                —Equity
                    contributions (distributions), net
                
                
                (102.5
                )
                
                
                680.8
                
                
                
                —
                
                
                
                —Repayment
                    of long-term debt
                
                
                (1,161.2
                )
                
                
                (50.7
                )
                
                
                (79.4
                )
                
                
                (61.1
                )Debt
                    financing costs
                
                
                (9.7
                )
                
                
                (71.0
                )
                
                
                —
                
                
                
                —Change
                    in book overdraft
                
                
                —
                
                
                
                —
                
                
                
                (14.2
                )
                
                
                (12.1
                )Change
                    in Predecessor parent company investment
                
                
                —
                
                
                
                —
                
                
                
                224.2
                
                
                
                (13.2
                )Other,
                    net
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (2.8
                )Net
                    cash provided by (used for) financing activities
                
                
                (40.4
                )
                
                
                3,212.5
                
                
                
                130.6
                
                
                
                (89.2
                )Effect
                    of currency translation on cash
                
                
                (1.1
                )
                
                
                (1.1
                )
                
                
                (0.2
                )
                
                
                0.1Net
                    increase (decrease) in cash and cash equivalents
                
                
                (68.6
                )
                
                
                56.1
                
                
                
                2.1
                
                
                
                (1.0
                )Cash
                    and cash equivalents at beginning of period
                
                
                83.1
                
                
                
                27.0
                
                
                
                2.7
                
                
                
                3.7Cash
                    and cash equivalents at end of period
                
                $
                14.6
                
                
                $
                83.1
                
                
                $
                4.8
                
                
                $
                2.7
 See
        notes to consolidated or combined financial statements.
  F-7
  Berry
        Plastics Holding Corporation
 Notes
        to Consolidated or Combined Financial Statements
 (In
        millions of dollars, except as otherwise noted)
 
 1.  Basis
        of Presentation and Summary of Significant Accounting Policies
 
 Background
 
 Berry
        Plastics Holding Corporation (“Berry Holding” or the “Company”) is a leading
        manufacturer and marketer of plastic packaging products in several sectors
        including, rigid open top and closed top packaging, polyethylene-based plastic
        films, industrial tapes, medical specialties, packaging, heat-shrinkable
        coatings and specialty laminates.  The Company’s key products include
        containers, drink cups, bottles, closures and overcaps, tubes and prescription
        vials, trash bags, stretch films, plastics sheeting and tapes.  At
        September 29, 2007, the Company had 55 production and manufacturing facilities,
        with 47 located in the United States.
 
 On
        April
        3, 2007, Berry Plastics Group, Inc. (“Old Berry Group”) completed a
        stock-for-stock merger (the “Merger”) with Covalence Specialty Materials Holding
        Corp. (“Old Covalence Holding”). The resulting company retained the name Berry
        Plastics Group, Inc. (“Berry Group”).  Immediately following the
        Merger, Berry Plastics Holding Corporation (“Old Berry Holding”) and Covalence
        Specialty Materials Corp. (“Old Covalence”) were combined as a direct subsidiary
        of Berry Group.  The resulting company retained the name Berry
        Plastics Holding Corporation.
 
 In
        connection with the closing of the merger, Berry Holding Corporation adopted
        the
        fiscal year-end of the accounting acquirer (Covalence Specialty Materials
        Corp).  The Company has adopted a September year-end and commencing
        with periodic reports after the consummation of the merger on April 3, 2007,
        began filing its periodic reports on a combined basis.
 
 Apollo
        Acquisition of Old Covalence Holding
 
 As
        further described in Note 2, on February 16, 2006, Old Covalence Holding
        was
        formed through the acquisition of substantially all of the assets and
        liabilities of Tyco Plastics & Adhesives (“TP&A” or the “Predecessor”)
        under a Stock and Asset Purchase Agreement dated December 20, 2005 among
        an
        affiliate of Apollo Management V, L.P (“Apollo”), Tyco International Group S.A.
        and Tyco Group S.a.r.l.
 
 Apollo
        Acquisition of Old Berry Group
 
 As
        further described in Note 2, on September 20, 2006, BPC Acquisition Corp.
        merged
        with and into BPC Holding Corporation pursuant to an agreement and plan of
        merger (the “Apollo Berry Merger”), dated June 28, 2006, with BPC Holding
        Corporation continuing as the surviving corporation.  Following the
        consummation of the Apollo Berry Merger, BPC Holding Corporation changed
        its
        name to Berry Plastics Holding Corporation.  Pursuant to the Apollo
        Berry Merger, Old Berry Holding was a wholly-owned subsidiary of Old Berry
        Group, the principal stockholders of which were Apollo Investment Fund VI,
        L.P.,
        AP Berry Holdings, LLC, an affiliate of Graham Partners II, L.P., and
        management.  Apollo Investment Fund VI, L.P. and AP Berry Holdings,
        LLC are affiliates of Apollo Management, L.P., which is a private investment
        firm.  Graham Partners II, L.P. is an affiliate of Graham Partners,
        Inc. (“Graham”), a private equity firm.
 
 Basis
        of Presentation
  Prior
        to
        the Merger, Old Berry Holding and Old Covalence were considered entities
        under
        the common control of Apollo affiliates as defined in Emerging Issues Task
        Force
        (“EITF”) Issue No. 02-5, Definition of Common Control in Relation to FASB
        Statement of Financial Accounting Standards No. 141, Business
        Combinations.  As a result of the Merger, the financial statements of
        these entities are being presented retroactively on a combined basis through
        the
        date of the Merger in a manner similar to a pooling of interests, and include
        the results of operations of each business from the date of acquisition by
        the
        Apollo affiliates.  The accompanying financial statements for Tyco
        Plastics & Adhesives (the “Predecessor”) are presented on a combined basis
        and consist of the combined operations of the formerly wholly-owned operating
        units of Tyco:  Tyco Plastics, Tyco Adhesives and Ludlow Coated
        Products.  The Predecessor financial statements presented may not be
        indicative of the results that would have been achieved had the Predecessor
        operated as a separate, stand-alone entity.
 
 The
        acquisitions by affiliates of Apollo of Old Covalence Holding and Old Berry
        Group have both been accounted for by the purchase method of
        accounting.  All intercompany transactions have been
        eliminated.  In connection with the closing of the
  F-8
  Merger
        on
        April 3, 2007, Berry replaced its existing credit facility with a new credit
        facility comprised of a $400 million asset based revolving line of credit
        and a
        $1.2 billion term loan.
 
 Contributed
        equity from Parent in the combined company includes the capital stock (common
        stock and perpetual preferred stock) that was invested in Old Berry Group
        and
        Old Covalence Holding by Apollo.  All other capital stock contributed
        by the minority shareholders is reflected in minority interest, to the extent
        that it was a positive equity balance up until the date of the Merger at
        which
        time the shareholders exchanged shares of Old Berry Group and Old Covalence
        Holding for shares in Berry Group.  Berry Holding, through its
        wholly-owned subsidiaries operates in four primary segments:  rigid
        open top, rigid closed top, flexible films, and tapes and
        coatings.  The Company’s customers are located principally throughout
        the United States, without significant concentration in any one region or
        with
        any one customer.  The Company performs periodic credit evaluations of
        its customers’ financial condition and generally does not require
        collateral.
 
 The
        Company has recorded a minority interest liability for the equity interests
        in
        the combined company that are not owned by funds affiliated and controlled
        by
        Apollo up until the date of the Merger on April 3, 2007.  At September
        30, 2006, the minority interest liability reflects the equity interests in
        Berry
        Group held by management and other third parties.  In connection with
        the acquisition of Old Berry Group by Apollo on September 20, 2006, management
        elected to rollover shares that were owned prior to the acquisition by Apollo
        into the new Company and accordingly, there was no step up applied under
        purchase accounting for management’s ownership in accordance with EITF 88-16,
        Basis in Leveraged Buyout Transactions.  The application of EITF 88-16
        produced a negative equity balance for management.  Since that
        negative balance is not recoverable from the management shareholders, this
        amount has been reflected as a reduction of Apollo’s equity in Old Berry Holding
        at September 30, 2006.  All losses that are allocable to management
        are being absorbed by Apollo due to the negative equity of Old Berry Holding’s
        management.  In connection with the closing of the Merger on April 3,
        2007, the minority ownership interests were acquired.
 
 On
        April
        3, 2007, in connection with the merger of Berry and Covalence, shares of
        Berry
        Plastics Group, Inc., the former parent of Berry Plastics Holding Corporation,
        and Covalence Specialty Materials Holding Corporation held by minority
        shareholders and management were exchanged for shares in the new merged
        company.  The minority shareholders and management held ownership
        interests of 28% and 5% for Berry and Covalence, respectively.  The
        acquisition of these ownership interests occurred on April 3, 2007 in connection
        with the closing of the transaction and was accounted for under the purchase
        method of accounting and pushed-down to the Company.
 
 Revenue
        Recognition
 
 Revenue
        from the sales of products is recognized at the time title and risks and
        rewards
        of ownership pass (either when the products reach the free-on-board shipping
        point or destination depending on the contractual terms), the sales price
        is
        fixed and determinable and collection is reasonably
        assured.  Provisions for certain rebates, sales incentives, trade
        promotions, coupons, product returns and discounts to customers are accounted
        for as reductions in gross sales to arrive at net sales in the same period
        that
        the related sales are recorded.  In accordance with EITF 01-9,
“Accounting for Consideration Given By a Vendor to a Customer”, the Company
        provides for these items as reductions of revenue at the later of the date
        of
        the sale or the date the incentive is offered.  These provisions are
        based on estimates derived from current program requirements and historical
        experience.  Shipping, handling, purchasing, receiving, inspecting,
        warehousing, and other costs of distribution are presented in cost of sales
        in
        the statements of operations.  The Company classifies amounts charged
        to its customers for shipping and handling in net revenues in its statement
        of
        operations.
 
 Vendor
        Rebates and Purchases of Raw Materials
 
 The
        Company receives consideration in the form of rebates from certain vendors
        and
        in accordance with EITF 02-16, “Accounting by a Customer (Including a Reseller)
        for Certain Consideration Received from a Vendor”, the Company accrues these as
        a reduction of inventory cost as earned under existing programs, and reflects
        as
        a reduction of cost of goods sold at the time that the related underlying
        inventory is sold to customers.
 
 Purchases
        of various densities of plastic resin used in the manufacture of the Company’s
        products aggregated approximately $977.7 million, $400.7 million, $271.6
        million
        and $462.7 million for the fiscal year ended September 29, 2007, for the
        period
        from February 17, 2006 to September 30, 2006, the period from October 1,
        2005 to
        February 16, 2006, and fiscal 2005.  The largest supplier of the
        Company’s total resin material requirements represented approximately 31% of
        purchases in fiscal 2007.  The Company uses suppliers such as Dow
        Chemical, Basell, Nova, Total, Lyondell, Chevron, ExxonMobil, Sunoco, and
        Flint
        Hills Resources, LP to meet its resin requirements.
  F-9
  Research
        and Development
 
 Research
        and development costs are expensed when incurred.  The Company
        incurred research and development expenditures of $11.2 million for fiscal
        2007,
        $5.0 million for the period February 17 to September 30, 2006, $3.1 million
        for
        the period October 1, 2005 to February 16, 2006 and $8.0 million for fiscal
        2005.
 
 Advertising
 
 Advertising
        costs are expensed when incurred and are included in operating
        expenses.  The Company incurred advertising costs of $1.1 million in
        fiscal 2007, $2.5 million for the period February 17 to September 30, 2006,
        $1.1
        million for the period October 1, 2005 to February 16, 2006 and $3.1 million
        for
        fiscal 2005.
 
 Stock-Based
        Compensation
 
 In
        December 2004, the FASB issued SFAS No. 123 (Revised 2004), Share-Based Payment
        (“SFAS 123R”), which requires that the compensation cost relating to share-based
        payment transactions be recognized in financial statements based on alternative
        fair value models.  The share-based compensation cost is measured
        based on the fair value of the equity or liability instruments
        issued.  As of September 29, 2007, the Company has one share-based
        compensation plan (“2006 Equity Incentive Plan”) which is more fully described
        in Note 10.  Under the plan, members of management were granted stock
        options throughout the fiscal year ended September 29, 2007.  Prior to
        the granting of the special one-time dividend discussed in Note 10, the Company
        amended the terms of the plan to allow both vested and nonvested option holders
        to receive the dividend either immediately (in the case of vested holders)
        or
        after a two-year vesting period (in the case of nonvested
        holders).  In connection with this amendment and the special one-time
        dividend granted to option holders, the Company recognized non cash compensation
        expense of $18.2 million during the year ended September 29, 2007.  In
        addition, the Company recognized $0.8 million in non cash compensation expense
        primarily related to stock option awards granted prior to the amendment and
        special one-time dividend.  An additional $0.6 million was recognized
        as compensation expense related to escrowed funds held in a rabbi trust for
        the
        benefit of nonvested option holders who were granted the special one-time
        dividend, resulting in total noncash compensation of $19.6 million for the
        year
        ended September 29, 2007.  The Company recorded $0.3 million in
        noncash compensation expense for the period February 17 to September 30,
        2006.
 
 The
        Predecessor had granted options to purchase Tyco common shares to certain
        of the
        TP&A’s employees. Following the formation of Old Covalence, the expense and
        liability related to these stock options have remained with Tyco. Effective
        October 1, 2005, the TP&A adopted SFAS No. 123R using the modified
        prospective application transition method. Under this method, compensation
        cost
        is recognized for the unvested portion of share-based payments granted prior
        to
        October 1, 2005 and all share-based payments granted subsequent to September
        30,
        2005 over the related vesting period. Prior to the first fiscal quarter of
        2006,
        the TP&A applied the intrinsic value based method prescribed in Accounting
        Principles Board Opinion No. 25 in accounting for employee stock based
        compensation. Prior period results have not been restated. Due to the adoption
        of SFAS No. 123R, the results from October 1, 2005 to February 16, 2006 include
        incremental share-based compensation expense totaling $1.7 million.
 
 The
        Company and Predecessor utilized a combination of the Black-Scholes and
        lattice-based option valuation models for estimating the fair value of the
        stock
        options.  The models allow for the use of a range of
        assumptions.  Expected volatilities utilized in the lattice model and
        Black-Scholes models are based on implied volatilities from traded stocks
        of
        peer companies.  Similarly, the dividend yield is based on historical
        experience and the estimate of future dividend yields.  The risk-free
        interest rate is derived from the U.S. Treasury yield curve in effect at
        the time of grant.  The lattice model incorporates exercise and
        post-vesting forfeiture assumptions based on an analysis of historical
        data.  The expected lives of the grants are derived from historical
        experience and expected behavior.  The fair value for options granted
        have been estimated at the date of grant using a Black-Scholes or lattice
        option
        pricing model, generally with the following weighted average
        assumptions:
 
 Company
              PredecessorYear
                  ended
                September
                  29,
                2007
              Period
                  from
                February
                  17 to
                September
                  30, 2006
              
              Period
                  from
                October
                  1, 2005 to February 16, 2006
              Year
                  ended
                September
                  30,
                2005Risk-free
                  interest rate
              4.5
                  – 4.9%
              4.5
                  – 4.9%
              
              4.5
                  – 4.9%
              4.5
                  – 4.9%Dividend
                  yield
              0.0%
              0.0%
              
              0.0%
              0.0%Volatility
                  factor
              .20
                  - .45
              .45
              
              .45
              .45Expected
                  option life
              3.73
                  – 6.86 years
              3.73
                  – 6.86  years
              
              3.73
                  – 6.86 years
              3.73
                  – 6.86  years
 
  F-10
  Foreign
        Currency
 
 For
        the
        non-U.S. subsidiaries that account in a functional currency other than U.S.
        Dollars, assets and liabilities are translated into U.S. Dollars using
        period-end exchange rates.  Sales and expenses are translated at the
        average exchange rates in effect during the period.  Foreign currency
        translation gains and losses are included as a component of accumulated other
        comprehensive income within stockholders’ equity.  Gains and losses
        resulting from foreign currency transactions, the amounts of which are not
        material in any period presented are included in net income.
 
 Cash
        and Cash Equivalents
 
 All
        highly liquid investments purchased with a maturity of three months or less
        from
        the time of purchase are considered to be cash equivalents.
 
 Allowance
        for Doubtful Accounts
 
 The
        allowance for doubtful accounts is analyzed in detail on a quarterly basis
        and
        all significant customers with delinquent balances are reviewed to determine
        future collectibility.  The determinations are based on legal issues
        (such as bankruptcy status), past history, current financial and credit agency
        reports, and the experience of the credit representatives.  Reserves
        are established in the quarter in which the Company makes the determination
        that
        the account is deemed uncollectible.  The Company maintains additional
        reserves based on its historical bad debt experience.  Additionally,
        the allowance for doubtful accounts includes a reserve for cash discounts
        that
        are offered to some customers for prompt payment.  The following table
        summarizes the activity for the years ended September 29, 2007 and September
        30,
        2006 for the allowance for doubtful accounts, excluding the activity related
        to
        cash discounts due to its volume.
 
 September
                  29, 2007
              
              
              September
                  30, 2006Fair
                  value of allowance for doubtful accounts from acquisition
                  dates
              
              $
              9.6
              
              
              $
              10.1Charged
                  to costs and expenses
              
              
              0.1
              
              
              
              (0.2
              )Deductions
                  and currency translation
              
              
              1.6
              
              
              
              (0.3
              )Balance
                  at end of period
              
              $
              11.3
              
              
              $
              9.6
 
 Inventories
 
 Inventories
        are stated at the lower of cost or market and are valued using the first-in,
        first-out method.  Management periodically reviews inventory balances,
        using recent and future expected sales to identify slow-moving and/or obsolete
        items. The cost of spare parts inventory is charged to manufacturing overhead
        expense when incurred.
 
 Property,
        Plant and Equipment
 
 Property
        and equipment are stated at cost.  Depreciation is computed primarily
        by the straight-line method over the estimated useful lives of the assets
        ranging from 15 to 25 years for buildings and improvements and two to 10
        years
        for machinery, equipment, and tooling.  Leasehold improvements are
        depreciated over the shorter of the useful life of the improvement or the
        lease
        term.  Repairs and maintenance costs are charged to expense as
        incurred.  Depreciation expense totaled $142.6 million in fiscal 2007,
        $31.9 million for the period February 17 to September 30, 2006, $14.6 million
        for the period October 1, 2005 to February 16, 2006, and $39.0 million for
        fiscal 2005.
 
 Long-lived
        Assets
 
 Long-lived
        assets, including property, plant and equipment and definite lived intangible
        assets are reviewed for impairment in accordance with SFAS No. 144 whenever
        facts and circumstances indicate that the carrying amount may not be
        recoverable.  Specifically, this process involves comparing an asset’s
        carrying value to the estimated undiscounted future cash flows the asset
        is
        expected to generate over its remaining life.  If this process were to
        result in the conclusion that the carrying value of a long-lived asset would
        not
        be recoverable, a write-down of the asset to fair value would be recorded
        through a charge to operations.  Fair value is determined based upon
        discounted cash flows or appraisals as appropriate.  Long-lived assets
        that are held for sale are reported at the lower of the assets’ carrying amount
        or fair value less costs related to the assets’ disposition.  In
        connection with our facility rationalization program in our Flex Films and
        Tapes/Coatings segments, we recorded impairment charges totaling $18.1 million
        to write-down fixed assets to their net realizable valuables.
  F-11
  Goodwill,
        Intangible Assets and Deferred Costs
 
 Deferred
        financing fees are being amortized to interest expense using the effective
        interest method over the lives of the respective debt agreements.
 
 Customer
        relationships are being amortized using an accelerated amortization method
        which
        corresponds with the customer attrition rates used in the initial valuation
        of
        the intangibles over the estimated life of the relationships which range
        from 11
        to 20 years.  Technology intangibles are being amortized using the
        straight-line method over the estimated life of the technology which is 11
        years.  License intangibles are being amortized using the
        straight-line method over the life of the license which is 10
        years.  Patent intangibles are being amortized using the straight-line
        method over the shorter of the estimated life of the technology or the patent
        expiration date ranging from ten to twenty years, with a weighted-average
        life
        of 15 years.  The Company evaluates the remaining useful life of
        intangible assets on a periodic basis to determine whether events and
        circumstances warrant a revision to the remaining useful life.
 
 The
        goodwill acquired represents the excess purchase price over the fair value
        of
        the net assets acquired.  These costs are reviewed annually for
        impairment pursuant to Statement of Financial Accounting Standards (“SFAS”) No.
        142, Goodwill and Other Intangible Assets.  Assets were allocated to
        the reporting units based on the assets in the respective segments. Trademarks
        that are expected to remain in use, which are indefinite lived intangible
        assets, are reviewed for impairment annually pursuant to SFAS No.
        142.
 
 Financial
        Instruments and Derivative Financial Instruments
 
 The
        Company’s financial instruments consist primarily of cash and cash equivalents,
        accounts receivable, accounts payable, long-term debt and capital lease
        obligations.  The fair value of such instruments approximated book
        value at September 29, 2007 except our carrying amounts for our 8 7/8% Second
        Priority Senior Notes for which the fair value exceeded the carrying value
        by
        $16.9 million and the Company’s 11% Senior Subordinated Notes and 10 1/4% Senior
        Subordinated Notes for which the carrying value exceeded the fair value by
        $4.3
        million and $5.3 million, respectively.
 
 Under
        the
        provisions of Statement of Financial Accounting Standards No. 133, as
        amended and interpreted (“SFAS No. 133”), the Company recognizes at fair
        value all derivatives, whether designated as hedging relationships or not,
        in
        the balance sheet as either an asset or liability. The accounting for changes
        in
        the fair value of a derivative, including certain derivative instruments
        embedded in other contracts, depends on the intended use of the derivative
        and
        the resulting designation. If the derivative is designated as a fair value
        hedge, the changes in the fair value of the derivative and the hedged item
        are
        recognized in the statement of operations. If the derivative is designated
        as a
        cash flow hedge, changes in the fair value of the derivative are recorded
        in
        other comprehensive income and are recognized in the statement of operations
        when the hedged item affects net income. If a derivative does not qualify
        as a
        hedge, it is marked to fair value through the statement of operations. Any
        fees
        associated with these derivatives are amortized over their term. Under these
        derivatives, the differentials to be received or paid are recognized as an
        adjustment to interest expense over the life of the contract. Gains and losses
        on termination of these instruments are recognized as interest expense when
        terminated.
 
 SFAS
        No. 133 defines requirements for designation and documentation of hedging
        relationships, as well as on-going effectiveness assessments, in order to
        use
        hedge accounting under this standard. The Company formally documents all
        relationships between hedging instruments and hedged items, as well as its
        risk-management objective and strategy for undertaking various hedge
        transactions. This process includes relating all derivatives that are designated
        as fair value or cash flow hedges to specific assets and liabilities on the
        balance sheet or to specific firm commitments or forecasted transactions.
        The
        Company’s derivative activities, all of which are for purposes other than
        trading, are initiated within the guidelines of corporate risk-management
        policies. The Company formally assesses, both at inception and at least
        quarterly thereafter, whether the derivatives that are used in hedging
        transactions are highly effective in offsetting changes in either the fair
        value
        or cash flows of the hedged item. If a derivative ceases to be a highly
        effective hedge, the Company discontinues hedge accounting.
 
 Insurable
        Liabilities
 
 The
        Company records liabilities for the self-insured portion of workers’
compensation, health, product, general and auto liabilities.  The
        determination of these liabilities and related expenses is dependent on claims
        experience.  For most of these
  F-12
  liabilities,
        claims incurred but not yet reported are estimated by utilizing actuarial
        valuations based upon historical claims experience.
 
 Income
        Taxes
 
 The
        Company accounts for income taxes under the asset and liability approach,
        which
        requires the recognition of deferred tax assets and liabilities for the expected
        future tax consequence of events that have been recognized in the Company’s
        financial statements or income tax returns.  Income taxes are
        recognized during the period in which the underlying transactions are
        recorded.  Deferred taxes, with the exception of non-deductible
        goodwill, are provided for temporary differences between amounts of assets
        and
        liabilities as recorded for financial reporting purposes and such amounts
        as
        measured by tax laws.  If the Company determines that a deferred tax
        asset arising from temporary differences is not likely to be utilized, the
        Company will establish a valuation allowance against that asset to record
        it at
        its expected realizable value.  Deferred taxes have been provided
        related to the tax effects of the repatriation of foreign
        earnings.  The Company’s effective tax rate (“ETR”) is dependent on
        many factors including:  the impact of enacted tax laws in
        jurisdictions in which the Company operates; the amount of earnings by
        jurisdiction, due to varying tax rates in each country; and the Company’s
        ability to utilize foreign tax credits related to foreign taxes paid on foreign
        earnings that will be remitted to the U.S.
 
 Comprehensive
        Income (Loss)
 
 Comprehensive
        income (loss) is comprised of net income (loss) and other comprehensive income
        (losses).  Other comprehensive income (losses) includes unrealized
        gains or losses resulting from currency translations of foreign investments
        and
        adjustments to record the minimum pension liability prior to the adoption
        of
        SFAS No. 158.
 
 Accrued
        Rebates
 
 The
        Company offers various rebates to customers in exchange for
        purchases.  These rebate programs are individually negotiated with
        customers and contain a variety of different terms and
        conditions.  Certain rebates are calculated as flat percentages of
        purchases, while others included tiered volume incentives.  These
        rebates may be payable monthly, quarterly, or annually.  The
        calculation of the accrued rebate balance involves significant management
        estimates, especially where the terms of the rebate involve tiered volume
        levels
        that require estimates of expected annual sales.  These provisions are
        based on estimates derived from current program requirements and historical
        experience.  The Company uses all available information when
        calculating these reserves.  The accrual for customer rebates was
        $35.9 million and $36.9 million as of September 29, 2007 and September 30,
        2006, respectively.
 
 Pension
 
 Pension
          benefit costs include assumptions for the discount rate, retirement age,
          and
          expected return on plan assets.  Retiree medical plan costs include
          assumptions for the discount rate, retirement age, and health-care-cost
          trend
          rates.  Periodically, the Company evaluates the discount rate and the
          expected return on plan assets in its defined benefit pension and retiree
          health
          benefit plans.  In evaluating these assumptions, the Company considers
          many factors, including an evaluation of the discount rates, expected return
          on
          plan assets and the health-care-cost trend rates of other companies; historical
          assumptions compared with actual results; an analysis of current market
          conditions and asset allocations; and the views of advisers.  As
          further discussed in Note 7, the Company has adopted SFAS No. 158 effective
          September 29, 2007.
 
 Use
        of Estimates
 
 The
        preparation of the financial statements in conformity with accounting principles
        generally accepted in the United States requires management to make extensive
        use of estimates and assumptions that affect the reported amount of assets
        and
        liabilities and disclosure of contingent assets and liabilities and the reported
        amounts of sales and expenses.  Significant estimates in these
        financial statements include restructuring charges and credits, allowances
        for
        doubtful accounts receivable, estimates of future cash flows associated with
        long-lived assets, useful lives for depreciation and amortization, loss
        contingencies and net realizable value of inventories, revenue credits, vendor
        rebates, income taxes and tax valuation reserves and the determination of
        discount and other rate assumptions for pension and postretirement employee
        benefit expenses.  Actual results could differ materially from these
        estimates.  Changes in estimates are recorded in results of operations
        in the period that the event or circumstances giving rise to such changes
        occur.
  F-13
  Recently
        Issued Accounting Pronouncements
 
 In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements”, which is an amendment of Accounting Research
        Bulletin (“ARB”) No. 51.  This statement clarifies that a
        noncontrolling interest in a subsidiary is an ownership interest in the
        consolidated entity that should be reported as equity in the consolidated
        financial statements.  This statement changes the way the consolidated
        income statement is presented, thus requiring consolidated net income to
        be
        reported at amounts that include the amounts attributable to both parent
        and the
        noncontrolling interest.  This statement is effective for the fiscal
        years, and interim periods within those fiscal years, beginning on or after
        December 15, 2008.  Based on current conditions, we do not expect the
        adoption of SFAS 160 to have a significant impact on the Company’s results of
        operations or financial position.
 
 In
        December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
        Combinations.”  This statement replaces FASB Statement No. 141,
“Business Combinations.” This statement retains the fundamental requirements in
        SFAS 141 that the acquisition method of accounting (which SFAS 141 called
        the purchase method) be used for all business combinations and for an acquirer
        to be identified for each business combination. This statement defines the
        acquirer as the entity that obtains control of one or more businesses in
        the
        business combination and establishes the acquisition date as the date that
        the
        acquirer achieves control. This statement requires an acquirer to recognize
        the
        assets acquired, the liabilities assumed, and any noncontrolling interest
        in the
        acquiree at the acquisition date, measured at their fair values as of that
        date,
        with limited exceptions specified in the statement.  This statement
        applies prospectively to business combinations for which the acquisition
        date is
        on or after the beginning of the first annual reporting period beginning
        on or
        after December 15, 2008. The Company is currently assessing the impact of
        the
        statement.
 
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities”, which includes an amendment of FASB
        Statement No. 51.  This statement permits entities to choose to
        measure many financial instruments and certain other items at fair
        value.  This statement allows entities to report unrealized gains and
        losses at fair value for those selected items.  This statement is
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007.  The Company is currently assessing the impact of
        the statement.
 
 In
        June 2006, the FASB issued Interpretation No. 48, Accounting for
“Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109”
(“FIN 48”).  FIN 48 clarifies the accounting for uncertainty in income
        taxes recognized in a company’s financial statements and prescribes a
        recognition threshold and measurement attribute for the financial statement
        recognition and measurement of a tax position taken or expected to be taken
        in a
        tax return.  FIN 48 also provides guidance on description,
        classification, interest and penalties, accounting in interim periods,
        disclosure and transition.  FIN 48 will be effective in fiscal 2008,
        and the Company does not expect the adoption of FIN 48 to have a significant
        impact on its financial position or results of operations.
 
 The
        Company adopted SFAS No. 154, Accounting Changes and Error Corrections—a
        replacement of APB Opinion No. 20 and FASB Statement No. 3, on
        January 1, 2006.  SFAS No. 154 requires retrospective
        application to prior periods’ financial statements of changes in accounting
        principle, unless it is impracticable to determine either the period-specific
        effects or the cumulative effect of the change or unless specific transition
        provisions are proscribed in the accounting pronouncements. SFAS No. 154
        does not change the accounting guidance for reporting a correction of an
        error
        in previously issued financial statements or a change in accounting
        estimate.  The adoption of SFAS No. 154 did not have an impact on our
        consolidated financial statements.
 
 In
        September 2006, the Securities and Exchange Commission released Staff
        Accounting Bulletin No. 108 (“SAB 108”) which provides guidance on how the
        effects of the carryover or reversal of prior year misstatements should be
        considered in quantifying a current year misstatement.  SAB 108
        requires entities to quantify the effects of unadjusted errors using both
        a
        balance sheet and an income statement approach.  Entities are required
        to evaluate whether either approach results in a quantifying misstatement
        that
        is material.  The Company adopted SAB 108 effective in fiscal
        2006.  The adoption of SAB 108 did not have an impact on our
        consolidated financial statements.
   F-14
 
  In
        September 2006, the FASB issued FASB No. 157, “Fair Value
        Measurements” (“FAS 157”).  FAS 157 is definitional and
        disclosure oriented and addresses how companies should approach measuring
        fair
        value when required by GAAP; it does not create or modify any current GAAP
        requirements to apply fair value accounting. The standard provides a single
        definition for fair value that is to be applied consistently for all accounting
        applications, and also generally describes and prioritizes according to
        reliability the methods and inputs used in valuations. FAS 157 prescribes
        various disclosures about financial statement categories and amounts which
        are
        measured at fair value, if such disclosures are not already specified elsewhere
        in GAAP.  The new measurement and disclosure requirements of FAS 157
        are currently planned to be effective for the Company in the first quarter
        of
        2008, though a recently proposed FASB staff position may delay certain portions
        of the Statement. The Company is currently assessing the impact FAS 157 will
        have on its results of operations and financial position.
 
 In
        September 2006, the Financial Accounting Standards Board issued FAS 158,
        “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
        Plans–an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. FAS 158
        requires employers to recognize the over- or under-funded status of defined
        benefit plans and other postretirement plans in the statement of financial
        position and to recognize changes in the funded status in the year in which
        the
        changes occur through comprehensive income. In addition, FAS 158 requires
        employers to measure the funded status of plans as of the date of the year-end
        statement of financial position. The recognition and disclosure provisions
        of
        FAS 158 are effective for fiscal years ending after December 15, 2006, while
        the
        requirement to measure plan assets and benefit obligations as of a company’s
        year-end date is effective for fiscal years ending after December 15,
        2008.  The adoption of the recognition and disclosure provisions of
        FAS 158 resulted in the recognition of a decrease to other long-term liabilities
        of $4.4 million.  The Company does not expect the adoption of the
        remaining provisions to have a material effect on the Company’s results of
        operations or financial position.
 
 2.
        Acquisitions and Disposition
 
 Old
        Covalence Holding
        (Successor to Tyco Plastics & Adhesives)
 
 On
        February 16, 2006, substantially all of the assets and liabilities of Tyco
        Plastics & Adhesives were acquired by Old Covalence, under a Stock and Asset
        Purchase Agreement dated December 20, 2005 and entered into among Old Covalence
        Holding, an affiliate of Apollo Management V, L.P. and the direct parent
        of Old
        Covalence, Tyco International S.A. and Tyco Group S.a.r.l.  Under the
        agreement, Old Covalence acquired Tyco’s businesses through the acquisition of
        certain equity interests of, and certain assets and liabilities held by direct
        and indirect operating subsidiaries of, Tyco International Ltd.
        (“Tyco”).  The initial purchase price was $975.2 million, subject to
        working capital adjustments and was funded with a new $350.0 million term
        loan,
        $175.0 million of Second Priority Floating Rate Notes, $265.0 million of
        10 1⁄4%
        Senior Subordinated Notes and an equity contribution of $197.5
        million.  The Company has performed an evaluation of the fair values
        of the real and personal property, inventory and certain identifiable intangible
        assets in connection with the purchase price allocation related to the
        Acquisition.  A valuation study was undertaken, which supports the
        purchase price allocation.  The valuation study resulted in a fair
        value step-up to real and personal property, inventory and certain identifiable
        intangible assets.  The Company recognized $6.8 million as a charge to
        cost of sales relating to the sale of inventory that was stepped-up to fair
        value for this acquisition.  The Company has recorded a purchase price
        of $916.1 million, which includes $975.2 million of original purchase price
        partially offset by favorable working capital adjustments from Tyco of $63.6
        million and $25.5 million and an unfavorable post-closing working capital
        adjustment of $30.0 million that was paid to Tyco.  The excess of the
        fair value of the net assets acquired over the purchase price paid has been
        allocated to non current assets on a prorated basis.  Old Covalence
        incurred a $3.7 million charge in the period from February 17, 2006 to September
        30, 2006 related to a loss on extinguished debt for bridge financing fees
        arranged to fund the acquisition that was not utilized.  The following
        table summarizes the allocation of fair values of the Company’s assets acquired
        and liabilities assumed at the date of acquisition.
 
 F-15
  Allocation
                    of
                  Purchase
                    Price at
                  February
                    16, 2006Current
                    assets
                
                
                
                $
                429.0Property,
                    plant and equipment
                
                
                
                
                359.8Goodwill
                
                
                
                
                14.0Intangible
                    assets
                
                
                
                
                346.6Deferred
                    financing fees and other non-current assets
                
                
                
                
                24.1Assets
                    acquired
                
                
                
                
                1,173.5Current
                    liabilities
                
                
                
                
                183.7Non
                    current liabilities
                
                
                
                
                73.7Liabilities
                    assumed
                
                
                
                
                257.4$
                916.1
 Acquisition
        of Old Berry Holding
 
 On
          September 20, 2006, BPC Acquisition Corp. merged with and into BPC Holding
          Corporation pursuant to an agreement and plan of merger, dated June 28,
          2006,
          with BPC Holding Corporation continuing as the surviving
          corporation.  Following the consummation of the merger, BPC Holding
          Corporation changed its name to Berry Plastics Holding
          Corporation.  Pursuant to the Merger, Berry is a wholly-owned
          subsidiary of Group, the principal stockholders of which were Apollo Investment
          Fund VI, L.P., AP Berry Holdings, LLC, an affiliate of Graham Partners
          II, L.P.,
          and management.  Apollo Investment Fund VI, L.P. and AP Berry
          Holdings, LLC are affiliates of Apollo Management, L.P., which is a private
          investment firm.  Graham Partners II, L.P. is an affiliate of Graham
          Partners, Inc. (“Graham”), a private equity firm. The
          total
          amount of funds required to acquire Old Berry Holding and to pay fees related
          to
          the acquisition was $2.4 billion.  The acquisition was primarily
          funded with (1) the issuance of $750.0 million aggregate principal amount
          of
          second priority senior secured notes, (2) new borrowings of $675.0 million
          in Term B loans, (3) the issuance of $425.0 million aggregate principal
          amount
          of senior subordinated notes, and (4) contributed equity.  Apollo and
          its affiliates acquired 72% of the common stock of Group.  The
          remaining common stock was primarily held by an affiliate of Graham Partners
          II,
          L.P., which owned 10% and members of Berry’s management which owned
          16%.
 
 The
        acquisition has been accounted for under the purchase method of accounting,
        and
        accordingly, the purchase price has been allocated to the identifiable assets
        and liabilities based on estimated fair values at the acquisition
        date.  The impact of writing up inventory to net realizable value was
        $10.1 million and resulted in a charge to cost of goods sold for the period
        from
        September 20 to September 30, 2006 of $2.9 million and $7.2 million in the
        fiscal year ended September 29, 2007.
   F-16
  Allocation
                    of
                  Purchase
                    Price at September 20, 2006Current
                    assets
                
                $
                389.3Property
                    and equipment
                
                
                470.1Goodwill
                
                
                996.1Customer
                    relationships
                
                
                511.9Trademarks
                
                
                182.2Other
                    intangibles and deferred financing fees
                
                
                59.0Total
                    assets
                
                
                2,608.6Current
                    liabilities
                
                
                202.3Long-term
                    liabilities
                
                
                2,102.4Liabilities
                    assumed
                
                
                2,304.7Net
                    assets acquired
                
                $
                303.9
  Acquisition
        of Minority
        Interest of Old Berry and Covalence
 
 On
        April
        3, 2007, shares of Old Group and CSM Holding were exchanged for shares in
        Group.  The minority shareholders and management held ownership
        interests of 28% and 4% for Old Group and CSM Holding, respectively. The
        acquisition of these ownership interests was accounted for under the purchase
        method of accounting and pushed-down to the Company.  The following
        table summarizes the step-up to fair value of the assets acquired and
        liabilities assumed at the date of acquisition based upon the percentage
        ownership acquired from the minority shareholders.
 
 April
                  3,2007Current
                  assets
              
              $
              2.6Fixed
                  assets
              
              
              7.9Intangible
                  assets
              
              
              101.0Goodwill
              
              
              106.2Total
                  assets
              
              
              217.7Deferred
                  income taxes
              
              
              (44.8
              )Other
                  liabilities
              
              
              0.5Total
                  liabilities
              
              
              (44.3
              )Net
                  assets stepped-up
              
              $
              173.4
 
  F-17
  As
        a
        result of the exchange of minority interest shares, stockholders’ equity was
        adjusted by $236.1 million, consisting of the $173.4 million step-up to fair
        value of net assets and a $62.7 million reclassification from minority interest
        to stockholders’ equity.  Additionally, $0.2 million and $4.5 million
        of accumulated other comprehensive income and accumulated deficit, respectively,
        were reclassified to recognize an accumulated negative basis by minority
        interest holders whose shares were exchanged.
 
 Of
        the
        $101.0 million of acquired intangible assets, $67.4 million was assigned
        to
        customer relationships, $34.8 million to tradenames and a $1.2 million reduction
        was assigned to patents.  The acquired definite-lived intangible
        assets will be amortized over a weighted average useful life of 20
        years.  The Company allocated the goodwill between its rigid open top
        and rigid closed top segments.  None of this goodwill is expected to
        be deductible for tax purposes.
 
 Rollpak
        Acquisition
 
 On
        April
        11, 2007, the Company completed its acquisition of 100% of the outstanding
        common stock of Rollpak Acquisition Corporation, which is the sole stockholder
        of Rollpak Corporation.  Rollpak Corporation is a flexible film
        manufacturer located in Goshen, Indiana with annual net sales of approximately
        $50.0 million in calendar 2006 sales.  The purchase price was funded
        utilizing cash on hand.  The Rollpak acquisition has been accounted
        for under the purchase method of accounting, and accordingly, the purchase
        price
        has been allocated to the identifiable assets and liabilities based on estimated
        fair values at the acquisition date.  The allocation is preliminary
        and subject to change.
 
 Sale
        of UK Operations
 
 On
        April
        10, 2007, the Company sold its wholly owned subsidiary, Berry Plastics UK
        Ltd.,
        to Plasticum Group N.V. for approximately $10.0 million.  At the
        time of the sale, the annual net sales of this business were less than
        $9.0 million.
 
 3.  Long-Term
        Debt
 
 Long-term
        debt consists of the following:
 
 September
                  29, 2007
              
              
              September
                  30, 2006Term
                  loan
              
              $
              1,194.0
              
              
              $
              675.0Revolving
                  line of credit
              
              
              50.0
              
              
              
              20.0Second
                  Priority Senior Secured Fixed Rate Notes
              
              
              525.0
              
              
              
              525.0Second
                  Priority Senior Secured Floating Rate Notes
              
              
              225.0
              
              
              
              225.011%
                  Senior Subordinated Notes
              
              
              428.2
              
              
              
              425.010
                  1⁄4% Senior Subordinated Notes
              
              
              265.0
              
              
              
              265.0Capital
                  leases and other
              
              
              23.5
              
              
              
              19.0Term
                  loan (retired)
              
              
              —
              
              
              
              299.3Second
                  Priority Floating Rate Notes (retired)
              
              
              —
              
              
              
              175.02,710.7
              
              
              
              2,628.3Less
                  current portion of long-term debt
              
              
              (17.4
              )
              
              
              (16.0
              )$
              2,693.3
              
              
              $
              2,612.3
 
 Senior
        Secured Credit Facility
 
 In
        connection with the Merger, the Company entered into senior secured credit
        facilities that include a term loan in the principal amount of $1,200.0 million
        and a revolving credit facility which provides borrowing availability equal
        to
        the lesser of (a) $400.0 million or (b) the borrowing base, which is a function,
        among other things, of the Company’s accounts receivable and
        inventory.  The term loan matures on April 3, 2015 and the revolving
        credit facility matures on April 3, 2013.
 
 The
        borrowings under the senior secured credit facilities bear interest at a
        rate
        equal to an applicable margin plus, as determined at our option, either (a)
        a
        base rate (“Base Rate”) determined by reference to the higher of (1) the prime
        rate of Credit Suisse, Cayman Islands Branch, as administrative agent, in
        the
        case of the term loan facility or Bank of America, N.A., as administrative
        agent, in the case of the revolving credit facility and (2) the U.S. federal
        funds rate plus 1/2 of 1% or (b) a
  F-18
  eurodollar
        rate (“LIBOR”) (5.36% and 5.80% for the term loan and the revolving line of
        credit, respectively, at September 29, 2007) determined by reference to the
        costs of funds for eurodollar deposits in dollars in the London interbank
        market
        for the interest period relevant to such borrowing Bank Compliance for certain
        additional costs.  The applicable margin for LIBOR rate borrowings
        under the revolving credit facility ranges from 1.00% to 1.75% and for the
        term
        loan is 2.00%.  The initial applicable margin for base rate borrowings
        under the revolving credit facility is 0% and under the term loan is
        1.00%.
 
 The
        term
        loan facility requires minimum quarterly principal payments of $3.0 million
        for
        the first eight years, which commenced in June 2007, with the remaining amount
        payable on April 3, 2015. In addition, the Company must prepay the outstanding
        term loan, subject to certain exceptions, with (1) beginning with the Company’s
        first fiscal year after the closing, 50% (which percentage is subject to
        a
        minimum of 0% upon the achievement of certain leverage ratios) of excess
        cash
        flow (as defined in the credit agreement); and (2) 100% of the net cash proceeds
        of all non-ordinary course asset sales and casualty and condemnation events,
        if
        the Company does not reinvest or commit to reinvest those proceeds in assets
        to
        be used in its business or to make certain other permitted investments within
        15
        months, subject to certain limitations.
 
 In
        addition to paying interest on outstanding principal under the senior secured
        credit facilities, the Company is required to pay a commitment fee to the
        lenders under the revolving credit facilities in respect of the unutilized
        commitments thereunder at a rate equal to 0.25% to 0.35% per annum depending
        on
        the average daily available unused borrowing capacity. The Company also pays
        a
        customary letter of credit fee, including a fronting fee of 0.125% per annum
        of
        the stated amount of each outstanding letter of credit, and customary agency
        fees.
 
 The
        Company may voluntarily repay outstanding loans under the senior secured
        credit
        facilities at any time without premium or penalty, other than customary
“breakage” costs with respect to eurodollar loans.  The senior secured
        credit facilities contain various restrictive covenants that, among other
        things
        and subject to specified exceptions, prohibit the Company from prepaying
        other
        indebtedness, and restrict its ability to incur indebtedness or liens, make
        investments or declare or pay any dividends.  All obligations under
        the senior secured credit facilities are unconditionally guaranteed by Berry
        Group and, subject to certain exceptions, each of the Company’s existing and
        future direct and indirect domestic subsidiaries. The guarantees of those
        obligations are secured by substantially all of the Company’s assets as well as
        those of each domestic subsidiary guarantor.  The Company was in
        compliance with all the financial and operating covenants at September 29,
        2007.
 
 At
        September 29, 2007, there were $50.0 million outstanding on the revolving
        credit
        facility.  The revolving credit facility allows up to $100.0 million
        of letters of credit to be issued instead of borrowings under the revolving
        credit facility. At September 29, 2007, the Company had $29.3 million under
        the
        Credit Facility in letters of credit outstanding.  At
        September 29, 2007, the Company had unused borrowing capacity of $320.7
        million under the revolving line of credit.
 
 Second
        Priority Senior Secured Notes
 
 On
        September 20, 2006, Old Berry Holding issued $750.0 million of second priority
        senior secured notes (“Second Priority Notes”) comprised of (1) $525.0 million
        aggregate principal amount of 8 7/8%  second priority fixed rate notes
        (“Fixed Rate Notes”) and (2) $225.0 million aggregate principal amount of second
        priority senior secured floating rate notes (“Floating Rate
        Notes”).  The Second Priority Notes mature on September 15,
        2014.  Interest on the Fixed Rate Notes is due semi-annually on March
        15 and September 15. The Floating Rate Notes bear interest at a rate of LIBOR
        (5.36% at September 29, 2007) plus 3.875% per annum, which resets
        quarterly.  Interest on the Floating Rate Notes is payable quarterly
        on March 15, June 15, September 15 and December 15 of each
        year.
 
 The
        Second Priority Notes are secured by a second priority security interest
        in the
        collateral granted to the collateral agent under the Credit Facility for
        the
        benefit of the holders and other future parity lien debt that may be issued
        pursuant to the terms of the indenture.  These liens will be junior in
        priority to the liens on the same collateral securing the Credit Facility
        and to
        all other permitted prior liens.  The Second Priority Notes are
        guaranteed, jointly and severally, on a second priority senior secured basis,
        by
        each domestic subsidiary that guarantees the Credit Facility.  The
        Second Priority Notes contain customary covenants that, among other things,
        restrict, subject to certain exceptions, our ability, and the ability of
        subsidiaries, to incur indebtedness, sell assets, make investments, engage
        in
        acquisitions, mergers or consolidations and make dividend and other restricted
        payments.
 
 On
        or
        after September 15, 2010 and 2008, the Company may redeem some or all of
        the
        Fixed Rate Notes and Floating Rate Notes, respectively, at specified redemption
        prices.  Additionally, on or prior to September 15, 2009 and 2008, we
        may redeem up to 35% of the aggregate principal amount of the Fixed Rate
        Notes
        and Floating Rate Notes, respectively, with the net proceeds of specified
        equity
        offerings at specified redemption prices.  If a change of control
        occurs, the Company must
   F-19
  give
        holders of the Second Priority Notes an opportunity to sell their notes at
        a
        purchase price of 101% of the principal amount plus accrued and unpaid
        interest.  The Company was in compliance with all covenants at
        September 29, 2007.
  11%
        Senior Subordinated Notes
 
 On
        September 20, 2006, Old Berry Holding issued $425.0 million in aggregate
        principal amount of senior subordinated notes (“Senior Subordinated Notes”) to
        Goldman, Sachs and Co. in a private placement that is exempt from registration
        under the Securities Act.  The Senior Subordinated Notes are
        unsecured, senior subordinated obligations and are guaranteed on an unsecured,
        senior subordinated basis by each of our subsidiaries that guarantee the
        Credit
        Facility and the Second Priority Notes.  The Senior Subordinated Notes
        mature in 2016 and bear interest at a rate of 11% per annum.  Such
        interest is payable quarterly in cash; provided, however, that on any quarterly
        interest payment date on or prior to the third anniversary of the issuance,
        the
        Company can satisfy up to 3% of the interest payable on such date by
        capitalizing such interest and adding it to the outstanding principal amount
        of
        the Senior Subordinated Notes.  The
        Company issued an additional $3.2 million aggregate principal amount of
        outstanding notes in the year ended September 29, 2007 in satisfaction of
        its
        interest obligations.
  The
        Senior Subordinated Notes may be redeemed at the Company’s option under
        circumstances and at redemption prices set forth in the
        indenture.  Upon the occurrence of a change of control, the Company is
        required to offer to repurchase all of the Senior Subordinated
        Notes.  The indenture sets forth covenants and events of default that
        are substantially similar to those set forth in the indenture governing the
        Second Priority Notes.  The Senior Subordinated Notes contain
        additional affirmative covenants and certain customary representations,
        warranties and conditions.  The Company was in compliance with all
        covenants at September 29, 2007.
  10
        1⁄4% Senior Subordinated Notes
 
 In
        connection with Apollo’s acquisition of Old Covalence Holding, Old Covalence
        issued $265.0 million of 10 1⁄4% senior subordinated notes due March 1,
        2016.  The notes are senior subordinated obligations of the Company
        and rank junior to all other senior indebtedness that does not contain similar
        subordination provisions.  No principal payments are required with
        respect to the senior subordinated notes prior to maturity.
  The
        indenture relating to the notes contain a number of covenants that, among
        other
        things and subject to certain exceptions, restrict the Company’s ability and the
        ability of its restricted subsidiaries to incur indebtedness or issue
        disqualified stock or preferred stock, pay dividends or redeem or repurchase
        stock, make certain types of investments, sell assets, incur certain liens,
        restrict dividends or other payments from subsidiaries, enter into transactions
        with affiliates and consolidate, merge or sell all or substantially all of
        the
        Company’s assets.  The Company was in compliance with all covenants at
        September 29, 2007.
  Senior
        Secured Credit Facility (retired)
 
 In
        connection with Apollo’s acquisition, Old Covalence entered into a senior
        secured credit facility, which included a term loan in the amount of $350.0
        million with a maturity date of February 16, 2013.  On May 18, 2006,
        Old Covalence refinanced its senior secured credit facilities, which then
        consisted of a new term loan in the principal amount of $300.0 million and
        a new
        revolving credit facility which provided borrowing availability equal to
        the
        lesser of (a) $200.0 million or (b) the borrowing base, which is a function,
        among other things, of Old Covalence’s accounts receivable and
        inventory.  The borrowings under the senior secured credit facilities
        accrued interest at a rate equal to an applicable margin plus, as determined
        at
        our option, either (a) a base rate (“Base Rate”) determined by reference to the
        higher of (1) the prime rate of Bank of America, N.A., as administrative
        agent,
        and (2) the U.S. federal funds rate plus 1/2 of 1% or (b) a eurodollar rate
        (“LIBOR”) determined by reference to the costs of funds for eurodollar deposits
        in dollars in the London interbank market for the interest period relevant
        to
        such borrowing adjusted for certain additional costs.  The initial
        applicable margin for LIBOR rate borrowings under the revolving credit facility
        was 1.50% and under the term loan was 2.00%.  The initial applicable
        margin for base rate borrowings under the revolving credit facility was 0%
        and
        under the term loan was 1.00%.
 
 The
        senior secured credit facilities required minimum quarterly principal payments
        of $0.750 million on the term loan for the first six years and nine months,
        which commenced in September 2006.  The credit facility was repaid and
        retired in connection with the Merger.
  Second
        Priority Floating Rate Notes (retired)
 
 Also
        in
        connection with Apollo’s acquisition, Old Covalence entered into a $175.0
        million second priority floating rate loan.  The second priority
        floating rate note matured on August 16, 2013, and accrued interest at a
        rate
        per annum, reset at the end of each interest period, equal to LIBOR plus
        3.25%
        or Base Rate plus 2.25%.  The note was repaid and retired in
        connection with the Merger, and the Company also incurred a prepayment penalty
        of $1.8 million, which is included in loss on extinguished debt on the statement
        of operations for fiscal 2007.
   F-20
 
 Derivative
        Instruments
 
 In
        August
        2007, the Company entered into two interest rate exchange agreements (“Swaps”)
        that are effective on November 5, 2007.  The first agreement requires
        the Company to pay a fixed rate of 4.875% on $300 million of notional
        principal for two years to the counterparty.  The counterparty pays to
        the Company a variable rate on the same amount of notional principal based
        on
        the three-month London Interbank Offered Rate (“LIBOR”). The second swap
        agreement requires the Company to pay a fixed rate of 4.92% on $300 million
        of notional principal for three years to the same counterparty in exchange
        for
        the same floating receipt of three-month LIBOR.  The counterparty to
        this agreement is a global financial institution. The Company is exposed
        to
        credit loss in the event of nonperformance by the counterparty to the agreement.
        However, the Company considers this risk to be low.
 
 The
        Company concluded that it met the hedge accounting criteria for accounting
        for
        these swaps.  The Company estimates the fair value of the Swaps
        identified above to be a liability of $4.9 million as of September 29, 2007,
        which is reflected as a part of other long-term liabilities on the accompanying
        consolidated balance sheet with an offset, net of tax, to accumulated other
        comprehensive income. The fair value of the Swaps is estimated by obtaining
        quotations from the counterparty to the Company’s Swap agreement. The fair value
        is an estimate of the net amount that the Company would be required to pay
        on
        September 29, 2007, if the agreements were transferred to other parties or
        cancelled by the Company.
 
 Future
        maturities of long-term debt at September 29, 2007 are as follows:
 
 2008
              
              $
              17.32009
              
              
              16.22010
              
              
              15.42011
              
              
              20.62012
              
              
              12.6Thereafter
              
              
              2,628.6$
              2,710.7
 
 Interest
        paid was $227.0 million in fiscal 2007, $43.9 million for the period February
        17
        to September 30, 2006, $0.6 million for the period October 1, 2005 to February
        16, 2006, and $5.4 million for fiscal 2005.
 
 4.  Goodwill,
        Intangible Assets and Deferred Costs
 
 The
        following table sets forth the gross carrying amount and accumulated
        amortization of the Company’s goodwill, intangible assets and deferred
        costs:
 
 September
                    29, 2007
              
              
              September
                    30, 2006
              
              Amortization
                    PeriodDeferred
                  financing fees
              
              $
              43.0
              
              
              $
              67.0
              
              Respective
                  debtCustomer
                  relationships
              
              
              862.2
              
              
              
              624.6
              
              11
                  – 20 yearsGoodwill
              
              
              1,132.0
              
              
              
              989.2
              
              Indefinite
                  livedTrademarks
              
              
              256.7
              
              
              
              182.2
              
              Indefinite
                  livedOther
                  intangibles
              
              
              53.3
              
              
              
              262.0
              
              10-20
                  yearsAccumulated
                  amortization
              
              
              (105.1
              )
              
              
              (24.8
              )$
              2,242.1
              
              
              $
              2,100.2
 
 Future
        amortization expense for definite lived intangibles at September 29, 2007
        for
        the next five fiscal years is $76.2 million, $73.1
        million, $70.4 million, $67.4 million and $64.8 million each year for fiscal
        2008, 2009, 2010, 2011, and 2012, respectively.  Recognized
        amortization expense totaled $77.6 million in fiscal 2007, $22.7 million
        for the
        period February 17 to September 30, 2006, $1.0 million for the period October
        1,
        2005 to February 16, 2006, and $2.6 million for fiscal 2005.
  F-21
 5.
              Lease
                  and Other Commitments and Contingencies
 
 Certain
        property and equipment are leased using capital and operating
        leases.  Total capitalized lease property consists of a building and
        manufacturing equipment with a cost of $25.6 million and $21.9 million,
        respectively, and related accumulated amortization of $3.3 million and $0.1
        million at September 29, 2007 and September 30, 2006,
        respectively.  Capital lease amortization is included in depreciation
        expense.  Total rental expense from operating leases was $44.2 million
        for fiscal 2007, $6.7 million for the period February 17 to September 30,
        2006,
        $2.6 million for the period October 1, 2005 to February 16, 2006, and $10.2
        million for fiscal 2005.
 
 Future
        minimum lease payments for capital leases and
        noncancellable operating leases with initial terms in excess of one year
        are as
        follows:
 
 At
                  September 29, 2007Capital
                  Leases
              
              
              Operating
                  Leases2008
              
              $
              8.1
              
              
              $
              33.72009
              
              
              7.7
              
              
              
              32.72010
              
              
              2.1
              
              
              
              31.02011
              
              
              8.4
              
              
              
              28.12012
              
              
              0.9
              
              
              
              22.7Thereafter
              
              
              —
              
              
              
              85.027.2
              
              
              $
              233.2Less:  amount
                  representing interest
              
              
              (4.2
              )Present
                  value of net minimum lease payments
              
              $
              23.0
 
 At
        the
        time of Apollo’s acquisition of Old Covalence Holding, under the Covalence
        predecessor (Tyco Plastics & Adhesives, “TP&A”), various claims,
        lawsuits and administrative proceedings arising in the ordinary course of
        business with respect to commercial, product liability and environmental
        matters
        were pending or threatened against TP&A.  Additionally, TP&A
        was involved in various stages of investigation and cleanup related to
        environmental remediation matters at a number of sites.  As part of
        the acquisition, the selling Tyco entities which owned TP&A retained the
        liabilities associated with these known environmental matters, which relate
        to
        the offsite disposal of hazardous materials.  Old Covalence retained
        liabilities relating to environmental matters on the acquired
        properties.  Old Covalence also retained the liabilities associated
        with all known commercial and product liability matters.  In the
        opinion of management, the ultimate resolution of these matters is not known
        and
        an estimate cannot be made.  The Company has not recorded a reserve
        for these matters as they are not reasonably estimable and believes these
        will
        not have a material impact on the Company’s financial position, results of
        operations, or cash flows.
 
 The
        Company is party to various legal proceedings involving routine claims which
        are
        incidental to its business.  Although the Company’s legal and
        financial liability with respect to such proceedings cannot be estimated
        with
        certainty, the Company believes that any ultimate liability would not be
        material to its financial position or results of operations.  The
        Company has various purchase commitments for raw materials, supplies and
        property and equipment incidental to the ordinary conduct of
        business.
 
 6.  Income
        Taxes
 
 Successor
 
 The
        Company is being taxed at the U.S. corporate level as a C-Corporation and
        has
        provided U.S. federal and state income taxes.  The Company has been
        indemnified by Tyco for tax liabilities that may arise in the future that
        relate
        to the period prior to the Covalence Acquisition of the various entities
        from
        Tyco.  Deferred taxes have been provided related to the tax effects of
        the repatriation of foreign earnings.  The Company’s effective tax
        rate (“ETR”) is dependent on many factors including:  the impact of
        enacted tax laws in jurisdictions in which the Company operates; the amount
        of
        earnings by jurisdiction, due to varying tax rates
        in each
        country; and the Company’s ability to utilize foreign tax credits related to
        foreign taxes paid on foreign earnings that will be remitted to the
        U.S.
  F-22
  
 Significant
        components of income tax expense (benefit) are as follows:
 Year
                      ended
                    September
                      29, 2007
                  
                  
                  Period
                      from
                    February
                      17 to
                    September
                      30,
                    2006CurrentUnited
                      StatesFederal
                  
                  $
                  —
                  
                  
                  $
                  —State
                  
                  
                  0.7
                  
                  
                  
                  —Non-U.S.
                  
                  
                  1.0
                  
                  
                  
                  2.6Current
                      Income tax provision
                  
                  
                  1.7
                  
                  
                  
                  2.6Deferred:United
                      StatesFederal
                  
                  
                  (70.9
                  )
                  
                  
                  (17.5
                  )State
                  
                  
                  (19.8
                  )
                  
                  
                  (1.0
                  )Non-U.S.
                  
                  
                  0.3
                  
                  
                  
                  (2.2
                  )Deferred
                      income tax benefit
                  
                  
                  (90.4
                  )
                  
                  
                  (20.7
                  )Benefit
                      for income taxes
                  
                  $
                  (88.6
                  )
                  
                  $
                  (18.1
                  )  U.S.
            loss
            from continuing operations before income taxes was $(204.6) million for
            the year
            ended September 29, 2007, $(54.5)
            million for the
            period February 17 to September 30, 2006.Non-U.S. income from
            continuing operations before income taxes was $(2.9) million for the
            year ended
            September 29, 2007, and $3.4 million
            for the
            period February 17 to September 30, 2006.
 
 The
        reconciliation between U.S. federal income taxes at the statutory rate and
        the
        Company’s benefit for income taxes on continuing operations for the period ended
        September 29, 2007 are as follows:
 Year
                    ended September 29, 2007
                
                
                Period
                    from February 17 to September 30, 2006U.S.
                    Federal income tax benefit at the statutory rate
                
                $
                (72.6
                )
                
                $
                (17.9
                )Adjustments
                    to reconcile to the income tax provision:U.S.
                    state income tax benefit
                
                
                (10.4
                )
                
                
                (2.3
                )Permanent
                    differences
                
                
                0.5
                
                
                
                0.3Changes
                    in State ETR
                
                
                (10.9
                )
                
                
                —Changes
                    in Valuation Allowance – Foreign
                
                
                2.3
                
                
                
                1.8Rate
                    differences between U.S. and Foreign
                
                
                (0.4
                )
                
                
                (0.2
                )Other
                
                
                2.9
                
                
                
                0.2Benefit
                    for income taxes
                
                $
                (88.6
                )
                
                $
                (18.1
                )
 F-23
  Deferred
        income taxes result from temporary differences between the amount of assets
        and
        liabilities recognized for financial reporting and tax purposes.  The
        components of the net deferred income tax liability at September 29, 2007
        and
        September 30, 2006 are as follows:
 September
                    29,
                  2007
                
                September
                    30,
                  2006Deferred
                  tax assets:Allowance
                    for doubtful accounts
                
                $
                1.8
                
                $
                1.9Accrued
                    liabilities and reserves
                
                
                24.3
                
                
                17.6Inventories
                
                
                4.0
                
                
                0.3Net
                    operating loss carryforward
                
                
                156.9
                
                
                116.9Amortization
                    of tax deductible goodwill
                
                
                —
                
                
                2.0Alternative
                    minimum tax (AMT) credit carryforward
                
                
                7.4
                
                
                7.4Others
                
                
                11.4
                
                
                1.9Total
                    deferred tax assets
                
                
                205.8
                
                
                148.0Valuation
                    allowance
                
                
                (3.1
                )
                
                (11.5
                )Total
                    deferred taxes, net of valuation allowance
                
                
                202.7
                
                
                136.5Deferred
                    tax liabilities:Property
                    and equipment
                
                
                68.2
                
                
                38.4Intangible
                    assets
                
                
                316.0
                
                
                327.3Prepaid
                    expenses
                
                
                1.2
                
                
                1.3Foreign
                    earnings
                
                
                1.4
                
                
                1.3Others
                
                
                1.9
                
                
                0.8Total
                    deferred tax liabilities
                
                
                388.7
                
                
                369.1Net
                    deferred tax liability
                
                $
                (186.0
                )
                $
                (232.6
                )
  As
        of
        September 29, 2007, the Company had foreign net operating loss carryforwards
        of
        $8.8 million.  In the U.S. the company had approximately $399.6
        million of federal net operating loss carryforwards at September 29,
        2007.  The federal net operating loss carryforwards will expire in
        future years beginning 2021.  AMT credit carryforwards of $7.4 million
        are available to Berry Group indefinitely to reduce future years’ federal income
        taxes.
 
 With
        the
        exception of Covalence Canada, the Company believes that it will not generate
        sufficient future taxable income to realize the tax benefits in foreign
        jurisdictions related to the deferred tax assets.  Therefore, the
        company has provided a full valuation allowance against its foreign net
        operating losses included within the deferred tax assets other than the net
        operating losses related to Covalence Canada.
  F-24
  The
        Company is in the process of determining whether the Old Covalence operating
        loss carry forward of $30.4 million may be subject to an annual limitation
        due
        to the Merger.  As a result of the Apollo acquisition of Old Berry
        Group, the unused non-Covalence operating loss carryforward is subject to
        an
        annual limitation of $208.0 million under Sec. 382 of the Internal Revenue
        Code.  Due to prior year Sec. 382 limit carryforwards, substantially
        all Federal operating loss carryforwards are available for immediate
        use.  As part of the effective tax rate calculation, if we determine
        that a deferred tax asset arising from temporary differences is not likely
        to be
        utilized, we will establish a valuation allowance against that asset to record
        it at its expected realizable value.  Our valuation allowance against
        deferred tax assets was $3.1 million and $11.5 million as of September 29,
        2007
        and September 29, 2006, respectively, related to the foreign operating loss
        carryforwards.
 
 Predecessor
  Under
        the
        Predecessor, business activities in the U.S. were conducted through partnership
        entities.  The reconciliation between U.S. federal income taxes at the
        statutory rate and the Company’s provision for income taxes are as
        follows:
  October
                      1, 2005 to February 16,
                      2006
                
                
                Year
                      ended September
                      30,2005Notional
                    U.S. federal income tax
                    expense at the statutory rate
                
                $
                6.8
                
                
                $
                16.7Adjustments
                    to reconcile to the
                    Company’s income tax provision:U.S.
                    partnership income taxed at
                    the partner level
                
                
                (6.8
                )
                
                
                (15.4
                )Non-U.S.
                    earnings
                
                
                1.6
                
                
                
                0.6Other
                
                
                
                
                
                
                1.9Provision
                    for income
                    taxes
                
                
                1.6
                
                
                
                3.8Deferred
                    provision
                    (benefit)
                
                
                —
                
                
                
                2.0Current
                    provision
                
                $
                1.6
                
                
                $
                1.8
  For
        fiscal 2005, other is primarily related to routine reconciliations of the
        non-U.S. income taxes provided in prior years to the income tax returns actually
        filed.
  The
        provisions for income taxes for the period from October 1, 2005 to February
        16,
        2006, and fiscal 2005 include $1.6 million and $3.8 million, respectively,
        for
        non-U.S. income taxes. The non-U.S. component of income before income taxes
        was
        $3.9 million and $3.8 million for October 1, 2005 to February 16, 2006 and
        fiscal 2005, respectively.
 
 7.  Retirement
        Plans
 
 The
        Company maintains four defined benefit pension plans, three of which were
        acquired through former business combinations of Old Berry.  The
        fourth covers approximately 70 active and inactive employees of Old
        Covalence.  The Company also maintains a retiree health plan, which
        covers certain healthcare and life insurance benefits for certain retired
        employees and their spouses.  Two of the four defined benefit plans
        and the retiree health plan are all inactive plans.  The Company uses
        September 30th
        as a
        measurement date for the retirement plans.
 
 The
        Company sponsors two defined contribution 401(k) retirement plans covering
        substantially all employees of Old Berry.  Contributions are based
        upon a fixed dollar amount for employees who participate and percentages
        of
        employee contributions at specified thresholds.  Contribution expense
        for these plans was $6.8 million for the year ended September 29, 2007, $0.1 million
        for the
        period February 17 to September 30, 2006.  The Company also
        sponsors an additional defined contribution 401(k) retirement plan covering
        full-time employees of Old Covalence.  Contribution expense for this
        Old Covalence plan was $3.4 million for the period February 17, 2006 to
        September 29, 2006.
  The
        Company participates in one multiemployer plan. Contributions to the plan
        are
        based on specific percentages of employee compensation and are
        immaterial.
  The
        projected benefit obligations of the Company’s plans presented herein are
        materially consistent with the accumulated benefit obligations of such
        plans.
  F-25
   Defined
                Benefit Pension Plans
              
              
              Retiree
                Health PlanYear
                  ended
                September
                  29,
                2007
              
              
              Period
                  from
                February
                  17
                  to
                September
                  30,
                  2006
              
              
              Year
                  ended
                September
                  29,
                2007
              
              
              Period
                  from
                February
                  17
                  to
                September
                  30,
                  2006Change
                in Projected Benefit Obligation (PBO)PBO
                  at beginning of period
              
              $
              41.6
              
              
              $
              41.6
              
              
              $
              6.9
              
              
              $
              6.9Service
                  cost
              
              
              0.2
              
              
              
              0.1
              
              
              
              —
              
              
              
              0.1Interest
                  cost
              
              
              2.2
              
              
              
              0.1
              
              
              
              0.3
              
              
              
              —Participant
                  contributions
              
              
              0.3
              
              
              
              —
              
              
              
              —
              
              
              
              0.0Actuarial
                  loss (gain)
              
              
              (0.9
              )
              
              
              0.0
              
              
              
              0.4
              
              
              
              0.0Benefits
                  paid
              
              
              (3.2
              )
              
              
              (0.2
              )
              
              
              (1.1
              )
              
              
              (0.1
              )PBO
                  at end of period
              
              $
              40.2
              
              
              $
              41.6
              
              
              $
              6.6
              
              
              $
              6.9Change
                  in Fair Value of Plan AssetsPlan
                  assets at beginning of period
              
              $
              33.7
              
              
              $
              33.7
              
              
              $
              —
              
              
              $
              —Actual
                  return on plan assets
              
              
              4.2
              
              
              
              0.1
              
              
              
              —
              
              
              
              —Company
                  contributions
              
              
              1.5
              
              
              
              0.1
              
              
              
              1.1
              
              
              
              0.1Benefits
                  paid
              
              
              (3.2
              )
              
              
              (0.2
              )
              
              
              (1.1
              )
              
              
              (0.1
              )Plan
                  assets at end of period
              
              
              36.2
              
              
              
              33.7
              
              
              
              0.0
              
              
              
              —Funded
                  status
              
              $
              (4.0
              )
              
              $
              (7.9
              )
              
              $
              (6.6
              )
              
              $
              (6.9
              )Unrecognized
                  net actuarial loss/gain
              
              
              —
              
              
              
              (0.4
              )
              
              
              —
              
              
              
              —Net
                  amount recognized
              
              $
              (4.0
              )
              
              $
              (8.3
              )
              
              $
              (6.6
              )
              
              $
              (6.9
              )
 Amounts
                recognized in the Consolidated Balance Sheet consist of:Prepaid
                  pension
              
              $
              —
              
              
              $
              0.2
              
              
              
              
              
              $
              —Accrued
                  benefit liability
              
              
              (4.0
              )
              
              
              (8.5
              )
              
              
              (6.6
              )
              
              
              (6.9
              )Net
                  amount recognized
              
              $
              (4.0
              )
              
              $
              (8.3
              )
              
              $
              (6.6
              )
              
              $
              (6.9
              )
 
 As
          disclosed in Note 1, SFAS No. 158, adopted by the Company effective September
          29, 2007, requires the recognition of the overfunded or underfunded status
          of a
          defined benefit postretirement plan as an asset or liability in the balance
          sheet, with changes in the funded status recorded through other comprehensive
          income. Accordingly, the amounts presented in the table below utilize different
          accounting methodologies for the respective periods. The effect of adopting
          SFAS
          No. 158 was to reduce the accrued benefit liability by $4.4 million at
          September
          29, 2007, with an offsetting adjustment to ended accumulated other comprehensive
          income, net of tax.  The Company was not required to recognize a
          minimum pension liability adjustment during the year ended September 29,
          2007.
 
 The
          following table presents significant weighted-average assumptions used
          to
          determine benefit obligation and benefit cost for the periods
          indicated.
 Defined
                  Benefit Pension Plans
              
              
              Retiree
                  Health Plan(Percents)
              
              Year
                  ended September 29, 2007
              
              
              Period
                  from February 17 to September 30, 2006
              
              
              Year
                  ended September 29, 2007
              
              
              Period
                  from February 17 to September 30, 2006Weighted-average
                  assumptions:Discount
                  rate for benefit obligation
              
              
              5.6
              
              
              
              5.5
              
              
              
              5.75
              
              
              
              5.5Discount
                  rate for net benefit cost
              
              
              5.7
              
              
              
              5.6
              
              
              
              5.5
              
              
              
              5.0Expected
                  return on plan assets for net benefit costs
              
              
              8.0
              
              
              
              8.0
              
              
              
              8.0
              
              
              
              —
 
 In
          evaluating the expected return on plan assets, Berry considered its historical
          assumptions compared with actual results, an analysis of current market
          conditions, asset allocations, and the views of
          advisers.  Health-care-cost trend rates were assumed to increase at an
          annual rate of 7.5% in 2007 trending down to 4.5% in 2012 and
          thereafter.  The trend rate is a significant
   F-26
  factor
          in
          determining the amounts reported.  A one-percentage-point change in
          these assumed health care cost trend rates would have the following effects,
          in
          millions of dollars:
 
 One-Percentage
                  Point
              Increase
              DecreaseAccumulated
                  Postretirement benefit
                  obligation
              $
                  0.1
              $
                  (0.1)Sum
                  of service cost and interest
                  cost
              $
                  0.0
              $
                  (0.0)
 
 The
          following benefit payments, which
          reflect expected future service, as appropriate, are expected to be paid
          as
          follows:
 
 Defined
                  Benefit
                Pension
                  Plans
              
              Retiree
                  Health
                PlanYear
                  ended
                September
                  29,
                2007
              
              Year
                  ended
                September
                  29,
                20072008
              $                    3.4
              
              $                      1.22009
              3.3
              
              1.02010
              3.2
              
              0.82011
              3.2
              
              0.82012
              3.2
              
              0.72013-2015
              15.6
              
              2.7
 
 Infiscal2008,
        Berry expects to contributeapproximately $2.8
        million
        to itsretirement plans to
        satisfy minimum funding requirements for the year.
 
 Net
        pension and retiree health benefit expense included the following
        components:
 
 Year
                  ended September 29, 2007
              
              
              Period
                  from February 17 to September 30, 2006Components
                  of net period benefit cost:Defined
                  Benefit Pension PlansService
                  cost
              
              $
              0.2
              
              
              $
              0.1Interest
                  cost
              
              
              2.2
              
              
              
              0.1Expected
                  return on plan
                  assets
              
              
              (2.6
              )
              
              
              (0.1
              )Net
                  periodic benefit
                  cost
              
              $
              (0.2
              )
              
              $
              0.1Retiree
                  Health Benefit PlanInterest
                  cost
              
              
              0.3
              
              
              
              0.1Net
                  periodic benefit
                  cost
              
              $
              0.3
              
              
              $
              0.1
 
   F-27
  Our
          defined benefit pension plan asset
          allocations are as follows:
 
 September
                  29, 2007
              
              
              September
                  30, 2006Asset
                  CategoryEquity
                  securities and equity-like instruments
              
              
              51
              %
              
              
              51
              %Debt
                  securities
              
              
              46
              
              
              
              47Other
              
              
              3
              
              
              
              2Total
              
              
              100
              %
              
              
              100
              %
 
 The
        Company’s retirement plan assets are invested with the objective of providing
        the plans the ability to fund current and future benefit payment requirements
        while minimizing annual Company contributions.  The plans’ asset
        allocation strategy reflects a long-term growth strategy with approximately
        51%
        allocated to growth investments and 47% allocated to fixed income investments.
        The Company re-addresses the allocation of its investments on an annual
        basis.
 
 Tyco
        Plastics and Adhesives
        Retirement Plans (Predecessor)
 
 The
        Predecessor had a number of noncontributory and contributory defined benefit
        retirement plans covering certain of its U.S. and non-U.S. employees, designed
        in accordance with conditions and practices in the countries concerned. With
        the
        exception of one defined benefit plan and one multiemployer benefit plan
        that
        remain with the Company, these plans were not included as part of the net
        assets
        acquired in connection with the Apollo acquisition on February 16, 2006,
        and as
        such, remained with Tyco. For the period February 17, 2006 to September 29,
        2006
        the expense attributable to these plans, that remained with the Company,
        was
        less than $0.1 million.
  Measurement
        Date—In fiscal
        2005, the Predecessor changed the measurement date for its pension and
        postretirement benefit plans from September 30 to August 31 to allow management
        adequate time to evaluate and report the actuarial information in its Financial
        Statements. Accordingly, all amounts presented as of and for the year ended
        September 30, 2005 reflect an August 31 measurement date. The Predecessor
        had
        accounted for the change in measurement date as a change in accounting
        principle. The effects of this change in measurement date did not have a
        material effect on net periodic benefit costs.
  Defined
        Benefit Pension
        Plans—The Predecessor had a number of noncontributory and contributory
        defined benefit retirement plans covering certain of its U.S. and non-U.S.
        employees, designed in accordance with conditions and practices in the countries
        concerned. Net periodic pension benefit cost is based on periodic actuarial
        valuations which use the projected unit credit method of calculation and
        was
        charged to the Statements of Operations on a systematic basis over the expected
        average remaining service lives of current participants. Contribution amounts
        were determined based on the advice of professionally qualified actuaries
        in the
        countries concerned. The benefits under the defined benefit plans were based
        on
        various factors, such as years of service and compensation.
  The
        net
        periodic benefit cost for all U.S. and non-U.S. defined benefit pension plans
        for the year ended September 30, 2005 was as follows:
  U.S.
                  Plans
              
              Non-U.S.
                  Plans2005
              
              2005Service
                  Cost
              
              $
              0.3
              
              $
              0.3Interest
                  Cost
              
              
              2.0
              
              
              0.2Expected
                  return on plan assets
              
              
              (2.1)
              
              
              (0.1)Amortization
                  of net actuarial loss
              
              
              0.8
              
              
              —Curtailment/settlement
                  loss
              
              
              —
              
              
              0.3Net
                  periodic benefit costs
              
              $
              1.0
              
              $
              0.7Weighted-average
                  assumptions used to
                determine
                  net pension costs during the period:Discount
                  rate
              
              
              6.00%
              
              
              5.68%Expected
                  return on plan assets
              
              
              8.00%
              
              
              6.75%Rate
                  of compensation increase
              
              
              4.25%
              
              
              3.62%
 
  F-28
  In
        determining the expected return on plan assets, the Predecessor considered
        the
        relative weighting of plan assets by class and individual asset class
        performance expectations as provided by its external
        advisors.  Although the Predecessor did not buy or sell any Tyco stock
        as a direct investment for its pension funds, due to external investment
        management of the funds, the plans may have indirectly held Tyco stock. The
        aggregate amount of the shares would not be considered material relative
        to the
        total fund assets.  The Predecessor’s funding policy was to make
        contributions in accordance with the laws and customs of the various countries
        in which it operates as well as to make discretionary voluntary contributions
        from time-to-time.
  Defined
        Contribution Retirement
        Plans—Certain employees of the Predecessor that were employed full-time
        were eligible to participate in Tyco’s 401(k) retirement plan. Participants
        elected to defer a percentage of their salary through payroll deductions
        and
        direct their contributions into different funds established by Tyco. The
        Predecessor provided for matching contributions in the amount of 100% of
        up to
        5% of salary. The expense associated with the matching contribution was $6.1
        million for 2005. Certain employees of the Company were also eligible to
        participate in Tyco’s Supplemental Executive Retirement Plan (“SERP”). This plan
        was nonqualified and restored the employer match that certain employees lost
        due
        to IRS limits on eligible compensation under the defined contribution plan.
        Expense related to the SERP was $0.2 million for 2005.
  Deferred
        Compensation
        Plans—Certain employees of the Company participated in Tyco’s
        nonqualified deferred compensation plans, which permitted eligible employees
        to
        defer a portion of their compensation. A record keeping account was set up
        for
        each participant and the participant choose from a variety of measurement
        funds
        for the deemed investment of their accounts. The measurement funds corresponded
        to a number of funds in Tyco’s 401(k) plans and the account balance fluctuated
        with the investment returns on those funds. Deferred compensation expense
        was
        $0.3 million in fiscal 2005.
  Postretirement
        Benefit
        Plans—Net periodic postretirement benefit cost for the years ended
        September 30, 2005 was as follows:
  2005Interest
                  cost
              
              $
              0.1Amortization
                  of net actuarial loss
              
              
              —Net
                  periodic postretirement benefit cost
              
              $
              0.1Weighted-average
                  discount rate used to determine net postretirement benefit cost
                  during the
                  period
              
              
              5.50%
  For
        measurement purposes, for the year ended September 30, 2005, composite annual
        rates of increase in the per capita cost of covered health care benefits
        were
        assumed to be 11.6%. At September 30, 2005, the composite annual rate of
        increase in health care benefit costs was assumed to decrease gradually to
        5.0%
        by the year 2013 and remain at that level thereafter.
  A
        one-percentage-point change in assumed healthcare cost trend rates would
        have
        the following effects:
  1-Percentage-Point
                Increase
              
              1-Percentage-Point
                DecreaseEffect
                  on total of service and interest cost
              
              
              $
              —
              
              
              
              $
              —Effect
                  on postretirement benefit obligation
              
              
              
              0.5
              
              
              
              
              (0.2)
  In
        December 2003, the US enacted into law the “Medicare Prescription Drug,
        Improvement and Modernization Act of 2003” (the Act). The Act introduces a
        prescription drug benefit under Medicare (Medicare Part D), as well as a
        U.S.
        federal subsidy to sponsors of retiree health care benefit plans that provide
        a
        benefit that is at least actuarially equivalent to Medicare Part D. Certain
        of
        the Company’s retiree medical programs already provided prescription drug
        coverage for retirees over age 65 that were at least as generous as the benefits
        provided under Medicare. This Act reduced the Predecessor’s obligation in these
        instances. The Predecessor included the effects of the Act in its Financial
        Statements by reducing net periodic benefit cost by $0.3 million for the
        year
        ended September 30, 2005, and reflecting an actuarial gain which reduced
        its
        accumulated post retirement benefit obligation by approximately $2.7 million
        at
        September 30, 2005.
  F-29
  8.  Restructuring
        and Other Expenses
 
 During
        February 2007, the Company conducted a facilities utilization review and
        made
        the decision to close a manufacturing operation within its Coated Products
        division in Meridian, Mississippi. This facility was closed during the fourth
        quarter of 2007, with certain of its operations transferred to other
        facilities.
 
 During
        April 2007, the Company announced its intention to shut down a manufacturing
        facility within its Closed Top division located in Oxnard, California. The
        business from this facility has been moved to other existing facilities.
        Also
        during April 2007, the Company announced that it would close the Covalence
        corporate headquarters in Bedminster, NJ and the Company’s coatings division
        headquarters in Shreveport, LA. The reorganization was part of the integration
        plan to consolidate certain corporate functions at the Company’s headquarters in
        Evansville, Indiana and to consolidate the adhesives and coatings segment
        into
        one new segment called tapes/coatings.
 
 During
        July 2007 the Company announced a restructuring of the operations within
        its
        Flexible Films division, including the closure of five manufacturing facilities
        in Yonkers, California; Columbus, Georgia; City of Industry, California;
        and
        Santa Fe Springs, California.  The Company subsequently announced in
        September 2007 that they would close the Sparks, Nevada facility. The closure
        of
        these facilities is expected to be completed at the end of 2007.
 
 The
        table
        below sets forth the Company’s estimate of the total cost of the restructuring
        programs, the portion recognized through September 29, 2007 and the portion
        expected to be recognized in a future period:
 
 Expected
                  Total Costs
              
              
              Recognized
                  During Fiscal 2007
              
              
              To
                  be Recognized in FutureSeverance
                  and termination benefits
              
              $
              7.8
              
              
              $
              7.5
              
              
              $
              0.3Facility
                  exit costs
              
              
              16.3
              
              
              
              11.3
              
              
              
              5.0Asset
                  impairment
              
              
              18.1
              
              
              
              18.1
              
              
              
              —Other
              
              
              7.0
              
              
              
              2.2
              
              
              
              4.8Total
              
              $
              49.2
              
              
              $
              39.1
              
              
              $
              10.1
 
 The
        table
        below sets forth the significant components of the restructuring charges
        recognized through September 29, 2007, by segment:
 
 Tapes
                and
                Coatings
              
              
              Flexible
                Films
              
              
              Corporate
              
              
              Rigid
                Closed
                Top
              
              
              TotalSeverance
                  and termination benefits
              
              $
              0.8
              
              
              $
              3.0
              
              
              $
              3.5
              
              
              $
              0.2
              
              
              $
              7.5Facility
                  exit costs
              
              
              0.3
              
              
              
              4.2
              
              
              
              1.9
              
              
              
              4.9
              
              
              
              11.3Asset
                  impairment
              
              
              3.4
              
              
              
              14.7
              
              
              
              —
              
              
              
              —
              
              
              
              18.1Other
              
              
              1.6
              
              
              
              0.2
              
              
              
              —
              
              
              
              0.4
              
              
              
              2.2Total
              
              $
              6.1
              
              
              $
              22.1
              
              
              $
              5.4
              
              
              $
              5.5
              
              
              $
              39.1
 
 The
        table
        below sets forth the activity with respect to the restructuring accrual at
        September 30, 2006 and September 29, 2007:
 
 Employee
                Severance
                and
                  Benefits
              
              Facilities
                Exit
                Costs
              
              Other
              
              Non-cash
                Charges
              
              TotalBalance
                  at September 30, 2006
              
              $
              ―
              
              $
              1.2
              
              $
              ―
              
              $
              ―
              
              $
              1.2Charges
              
              
              7.5
              
              
              11.3
              
              
              2.2
              
              
              18.1
              
              
              39.1Non-cash
                  charges
              
              
              ―
              
              
              ―
              
              
              ―
              
              $
              (18.1)
              
              $
              (18.1)Cash
                  payments
              
              
              (4.5)
              
              
              (2.1
              )
              
              (2.2)
              
              
              ―
              
              
              (8.8
              )Balance
                  at September 29, 2007
              
              $
              3.0
              
              $
              10.4
              
              $
              ―
              
              $
              ―
              
              $
              13.4
 
 The
        employee severance and termination benefits relate to the elimination of
        approximately 430 employees from the various manufacturing and administrative
        facilities. The facilities exit costs include $10.8 million of lease termination
        costs related to the City of Industry, Santa Fe Springs, Yonkers, Bedminster,
        Shreveport and Oxnard facilities. The
  F-30
  estimated
        costs are net of expected sublease income. The asset impairment charge relates
        to land, building and equipment located at each of the facilities, determined
        to
        be impaired as a result of the decision to close those facilities.
 
 The
        restructuring costs accrued as of September 29, 2007 will result in future
        cash
        outflows. The charges recognized in the period ending September 29, 2007
        have
        been reported as restructuring expense in these Consolidated Statements of
        Operations. The remaining liability as of September 29, 2007 has been included
        within Accrued Expenses on the Consolidated Balance Sheet.
 
 9.  Related
        Party Transactions
 
 Apollo
        Management Fee
 
 The
        Company is charged a management fee by Apollo Management, L.P., an affiliate
        of
        its principal stockholder and Graham Partners, for the provision of management
        consulting and advisory services provided throughout the year.  The
        management fee is the greater of $3.0 million or 1.25% of adjusted
        EBITDA.  In addition, Apollo and Graham have the right to terminate
        the agreement at any time, in which case Apollo and Graham will receive
        additional consideration equal to the present value of $21 million less the
        aggregate amount of annual management fees previously paid to Apollo and
        Graham,
        and the employee stockholders will receive a pro rata payment based on such
        amount.
 
 Old
        Covalence was charged a management fee by Apollo Management V, L.P., an
        affiliate of its principal stockholder, for the provision of management
        consulting and advisory services provided throughout the year.  The
        annual management fee was the greater of $2.5 million or 1.5% of adjusted
        EBITDA.  This agreement was terminated effective with the
        Merger.
 
 The
        Old
        Covalence fee was payable at the beginning of each fiscal year and the Company’s
        fee is paid quarterly.  Old Covalence paid $2.5 million in the period
        from February 17 to September 30, 2006 and an additional $2.5 million during
        the
        year ended September 29, 2007.  Old Berry Holding paid $0.7 million to
        entities affiliated with Apollo Management, L.P. and $0.1 million to entities
        affiliated with Graham Partners, Inc. for the period from February 17 to
        September 30, 2006.  Old Berry Holding and the Company paid $2.5
        million to entities affiliated with Apollo Management, L.P. and $0.5 million
        to
        entities affiliated with Graham Partners, Inc. for the fiscal year ended
        September 29, 2007.
 
 Apollo
        Transaction Fees
 
 In
        connection with the acquisition of Old Covalence Holding, Old Covalence paid
        a
        $10 million fee to entities affiliated with Apollo Management, L.P. for various
        services performed by it and its affiliates in connection with the
        transaction.  In connection with the acquisition of Old Berry Group,
        the Company paid $18.1 million to entities affiliated with Apollo Management,
        L.P. and $2.3 million to entities affiliated with Graham Partners, Inc. for
        advisory and other services.
 
 12.  Stockholders’
        Equity
 
 In
        connection with the acquisition of BPC Holding Corporation, Apollo and Graham
        and certain employees who invested in Old Berry Group entered into a
        stockholders agreement.  The stockholders agreement provides for,
        among other things, a restriction on the transferability of each such person’s
        equity ownership in us, tag-along rights, drag-along rights, piggyback
        registration rights and repurchase rights by Berry Group in certain
        circumstances.
 
 On
        June
        7, 2007, Group’s Board of Directors declared a special one-time dividend of $77
        per common share to shareholders of record as of June 6, 2007.  The
        dividend was paid June 8, 2007, which reduced Group’s shareholders’ equity for
        owned shares by approximately $530.2 million.  In connection with
        this dividend, the Company paid a dividend of approximately $87.0 million
        to
        Berry Group.  This dividend is reflected as a reduction of Contributed
        equity from parent.
 
 Notes
        Receivable from Management
 
 Berry
        Group has adopted an employee stock purchase program pursuant to which a
        number
        of non-executive employees had the opportunity to invest in Berry Group on
        a
        leveraged basis. In the event that an employee defaults on a promissory note
        used to purchase such shares, Berry Group’s only recourse is to the shares of
        Berry Group securing the note. In this manner, non-executive management acquired
        98,052 shares in the aggregate at the time of the Apollo Berry
        Merger.  Certain of these amounts were repaid by the employees in
        connection with the special one-time dividend.
  F-31
  
 2006
        Equity Incentive Plan
 
 In
        connection with Apollo’s acquisition of Old Berry Holding, Berry Group adopted
        an equity incentive plan pursuant to which options to acquire up to 577,252
        shares of Group’s common stock may be granted (the “2006 Equity Incentive
        Plan”).  In fiscal 2007, the plan was amended to allow for an
        additional 45,000 options to be granted.  Options granted under the
        2006 Equity Incentive Plan may not be assigned or transferred, except to
        Berry
        Group or by will or the laws of descent or distribution.  The 2006
        Equity Incentive Plan terminates ten years after adoption and no options
        may be
        granted under the plan thereafter.  The 2006 Equity Incentive Plan
        allows for the issuance of non-qualified options, options intended to qualify
        as
“incentive stock options” within the meaning of the Internal Revenue Code of
        1986, as amended, and stock appreciation rights.  The employees
        participating in the 2006 Equity Incentive Plan receive options and stock
        appreciation rights under the 2006 Equity Incentive Plan pursuant to individual
        option and stock appreciation rights agreements, the terms and conditions
        of
        which are substantially identical.  Each option agreement provides for
        the issuance of options to purchase common stock of Berry
        Group.  Options granted under the 2006 Equity Incentive Plan prior to
        the Merger had an exercise price per share that either (1) was fixed at the
        fair
        market value of a share of common stock on the date of grant or (2) commenced
        at
        the fair market value of a share of common stock on the date of grant and
        increases at the rate of 15% per year during the term.  Some options
        granted under the plan become vested and exercisable over a five-year period
        based on continued service.  Other options become vested and
        exercisable based on the achievement by the Company of certain financial
        targets  Upon a change in control, the vesting schedule with respect
        to certain options accelerate for a portion of the shares subject to such
        options.  Since Berry Group’s common stock is not highly liquid,
        except in certain limited circumstances, the stock options may not be
        redeemable.
 
 In
        connection with the Merger, Group modified its outstanding stock options
        to
        provide for (i) the vesting of an additional twenty percent (20%) of the
        total
        number of shares underlying such outstanding options; (ii) the conversion
        of
        options with escalating exercise prices to a fixed priced option, with no
        increase in the exercise price as of the date of grant of such escalating
        priced
        option; and (iii) with respect to each outstanding option, the vesting of
        which
        was contingent upon the achievement of performance goals, the deemed achievement
        of all such performance goals.
 
 During
        fiscal 2007, the Group also clarified the anti-dilution provisions of its
        stock
        option plans to require payment of special dividends to holders of outstanding
        stock options.   In connection with the $77 per share dividend
        paid in fiscal 2007, holders of vested stock options received $13.7 million,
        while an additional $34.5 million will be paid to nonvested option holders
        on
        the second anniversary of the dividend grant date (assuming the nonvested
        option
        holders remain employed by the Company).
 
 This
        resulted in the immediate expensing of $13.7 million related to the payment
        of
        dividends on vested awards, less $0.8 million that was expensed in prior
        periods, and will result in $34.5 million of additional expense that will
        be
        recognized over the two-year service period beginning June 8,
        2007.  Of this $34.5 million, $5.3 million has been recognized as of
        September 29, 2007.  Berry Group recognizes the offset to this expense
        as a liability which is held pursuant to a rabbi trust
        arrangement.  Earnings on the rabbi trust are recognized by Berry
        Group and pushed down to the Company.  For the year-ended September
        29, 2007, the Company has recognized $0.6 million of compensation expense
        related to earnings on the rabbi trust holdings.
  F-32
  Information
        related to the 2006 Equity Incentive Plan is as follows:
 September
                    29, 2007
                
                September
                    30, 2006Number
                  Of
                  Shares
                Weighted
                  Average
                  Exercise
                  Price
                
                Number
                  Of
                  Shares
                Weighted
                  Average
                  Exercise
                  PriceOptions
                    outstanding, beginning of period
                500,184
                $
                    100
                
                —
                $
                    —Options
                    granted
                135,358
                100
                
                500,184
                100Options
                    exercised or cash settled
                —
                —
                
                —
                —Options
                    forfeited or cancelled
                (16,922)
                100
                
                —
                —Options
                    outstanding, end of period
                618,620
                $100
                
                500,184
                $100Option
                    price range at end of period
                $100
                
                $100Options
                    exercisable at end of period
                177,605
                
                12,000Options
                    available for grant at period end
                3,632
                
                77,068Weighted
                    average fair value of options granted during period
                $19
                
                $19
  The
        following table summarizes information about the options outstanding at
        September 29, 2007:
 
 Range
                  of
                Exercise
                Prices
              Number
                  Outstanding
                at
                  September 29, 2007
              Weighted
                  Average
                Remaining
                Contractual
                Life
              Weighted
                Average
                Exercise
                Price
              Number
                Exercisable
                  at
                September
                  29, 2007$100
              618,620
              9
                  years
              $100
              177,605
 
 Shares
        issued under the stock-based compensation plans are usually issued from shares
        of common stock held in treasury. Stock compensation is included in the General
        and administrative line on the Consolidated Statements of Operations. As
        of
        September 29, 2007, the total remaining unrecognized compensation cost related
        to nonvested stock options approximated $32.2 million, which will be
        amortized over the weighted-average remaining requisite service period of
        2
        years.
 
 2006
        Old Covalence Equity Incentive Plan
 
 Old
        Covalence had one share-based compensation plan, which is described
        below.  The compensation cost that has been charged against income for
        that plan was $0.3 million for the period February 17, 2006 through September
        30, 2006 and $0.1 million for the fiscal year ended September 29,
        2007.  No grants were made under this plan following the
        Merger.
 
 In
        February 2006, Old Covalence Holding adopted the 2006 Long Term Incentive
        Plan
        (“LTIP”).  Under the plan selected senior members of Old Covalence
        management were offered the right to purchase common and perpetual preferred
        stock of Old Covalence Holding.  In addition to this investment, this
        group received stock options in direct proportion to their
        investment.  Members of management that choose not to invest in the
        Company were granted 1,000 options as part of the LTIP.  In addition,
        under the plan Holdings may grant restricted stock to employees as well as
        allowing employees to purchase shares of Holdings common stock.  There
        are 900,000 authorized shares available for grant or purchase under this
        plan.
 
 In
        connection with the Merger substantially all options outstanding under the
        Old
        Covalence LTIP were forfeited.  Certain employees that continued as
        management in Berry Holding were granted options in the 2006 Equity Incentive
        Plan.  No options have been exercised under the Old Covalence
        LTIP.
  F-33
  11.  Segment
        and Geographic Data
 
 In
        connection with the closing of the Merger, Berry organized its operations
        into
        four reportable segments: rigid open top, rigid closed top, flexible films,
        and
        tapes and coatings.  Selected information by reportable
        segment is presented in the following table:
 Company
                
                
                PredecessorYear
                    ended
                  September
                    29,
                  2007
                
                
                Period
                    from
                  February
                    17
                    to
                  September
                    30,
                    2006
                
                
                Period
                    from
                  October
                    1,
                    2005
                  to
                    February
                    16,
                  2006
                
                
                Year
                    ended
                  September
                    30,
                  2005Net
                    RevenueFlexible
                    Films
                
                $
                1,042.8
                
                
                
                705.5
                
                
                
                449.5
                
                
                
                1,129.2Tapes
                    and Coatings
                
                
                536.7
                
                
                
                392.7
                
                
                
                221.4
                
                
                
                608.8Rigid
                    Open Top
                
                
                881.3
                
                
                
                27.0
                
                
                
                —
                
                
                
                —Rigid
                    Closed Top
                
                
                598.0
                
                
                
                19.4
                
                
                
                —
                
                
                
                —Less
                    intercompany revenue
                
                
                (3.8
                )
                
                
                (5.8
                )
                
                
                (4.0
                )
                
                
                (12.8
                )$
                3,055.0
                
                
                
                1,138.8
                
                
                
                666.9
                
                
                
                1,725.2
 Operating
                      incomeFlexible
                      Films
                  
                  $
                  (23.6
                  )
                  
                  
                  4.2
                  
                  
                  
                  22.8
                  
                  
                  
                  34.4Tapes
                      and Coatings
                  
                  
                  (10.6
                  )
                  
                  
                  21.2
                  
                  
                  
                  9.7
                  
                  
                  
                  37.8Rigid
                      Open Top
                  
                  
                  69.9
                  
                  
                  
                  (0.4
                  )
                  
                  
                  —
                  
                  
                  
                  —Rigid
                      Closed Top
                  
                  
                  31.7
                  
                  
                  
                  (0.4
                  )
                  
                  
                  —
                  
                  
                  
                  —Corporate-Covalence
                  
                  
                  —
                  
                  
                  
                  (16.8
                  )
                  
                  
                  (5.6
                  )
                  
                  
                  (8.7
                  )$
                  67.4
                  
                  
                  
                  7.7
                  
                  
                  
                  26.9
                  
                  
                  
                  63.5
 Depreciation
                      and amortizationFlexible
                      Films
                  
                  
                  51.2
                  
                  
                  
                  27.6
                  
                  
                  
                  9.6
                  
                  
                  
                  25.4Tapes
                      and Coatings
                  
                  
                  38.4
                  
                  
                  
                  22.6
                  
                  
                  
                  5.9
                  
                  
                  
                  16.0Rigid
                      Open Top
                  
                  
                  77.3
                  
                  
                  
                  2.1
                  
                  
                  
                  —
                  
                  
                  
                  —Rigid
                      Closed Top
                  
                  
                  53.3
                  
                  
                  
                  1.4
                  
                  
                  
                  —
                  
                  
                  
                  —Corporate-Covalence
                  
                  
                  —
                  
                  
                  
                  0.9
                  
                  
                  
                  0.1
                  
                  
                  
                  0.2220.2
                  
                  
                  
                  54.6
                  
                  
                  
                  15.6
                  
                  
                  
                  41.6
 F-34
 September
                    29,
                  2007
                
                
                September
                    30, 2006Total
                    AssetsFlexible
                    Films
                
                $
                683.5
                
                
                
                676.9Tapes
                    and Coatings
                
                
                414.8
                
                
                
                449.9Rigid
                    Open Top
                
                
                1,746.6
                
                
                
                1,950.8Rigid
                    Closed Top
                
                
                1,024.5
                
                
                
                666.9Corporate
                    – Covalence
                
                
                —
                
                
                
                76.9$
                3,869.4
                
                
                
                3,821.4GoodwillFlexible
                    Films
                
                $
                23.7
                
                
                
                —Tapes
                    and Coatings
                
                
                5.8
                
                
                
                —Rigid
                    Open Top
                
                
                646.3
                
                
                
                558.4Rigid
                    Closed Top
                
                
                456.2
                
                
                
                430.8$
                1,132.0
                
                
                
                989.2
 
 12.  Guarantor
        and Non-Guarantor Financial Information
 
 Berry
        Holding, a wholly owned subsidiary of Berry Plastics Group, Inc., has notes
        outstanding which are fully and unconditionally guaranteed by Berry Plastics
        Holding Corporation’s domestic subsidiaries.  Separate financial
        statements and other disclosures concerning the Parent Company and Guarantor
        Subsidiaries are not presented because they are 100% wholly-owned by the
        Parent
        Company and Guarantor Subsidiaries have fully and unconditionally guaranteed
        such debt on a joint and several basis.  The following tables present
        consolidating financial information for the Parent Company, Guarantor
        Subsidiaries and Non-Guarantor Subsidiaries of Berry Holding.  The
        equity method of accounting is used to reflect investments of the Parent
        Company
        in its Guarantor and Non-Guarantor Subsidiaries.  The principal
        elimination entries eliminate investments in subsidiaries and intercompany
        balances and transactions. More than 95% of the Company’s revenue is in North
        America.  In addition, more than 95% of the Company’s property and
        equipment is located in North America.  The Company has restated its
        previously reported financial information for the year ended September 30,
        2005
        and the period from October 1, 2005 through February 16, 2006, to correctly
        present the financial
        information of the Parent Company and Guarantor Subsidiaries separately in
        accordance with Rule 3-10(f) of Regulation S-X.
 
  F-35
  Condensed
        Supplemental Consolidated or Combined Statement of Operations
 
 
 (Company)
              
              Year
                  ended September 29, 2007Parent
                Company
              
              Guarantor
                Subsidiaries
              
              Non-
                Guarantor
                Subsidiaries
              
              Eliminations
              
              TotalNet
                  revenue, including related party revenue
              
              $
              973.4
              
              $
              1,910.4
              
              $
              187.0
              
              $
              (15.8)
              
              $
              3,055.0Cost
                  of sales
              
              
              888.1
              
              
              1,542.2
              
              
              168.9
              
              
              (15.8)
              
              
              2.583.4Gross
                  profit
              
              
              85.3
              
              
              368.2
              
              
              18.1
              
              
              —
              
              
              471.6Selling,
                  general and administrative expenses
              
              
              (78.6)
              
              
              388.0
              
              
              12.6
              
              
              (0.5)
              
              
              321.5Restructuring
                  and impairment charges, net
              
              
              39.1
              
              
              —
              
              
              —
              
              
              —
              
              
              39.1Other
                  operating expenses
              
              
              18.1
              
              
              23.6
              
              
              1.9
              
              
              —
              
              
              43.6Operating
                  income
              
              
              106.7
              
              
              (43.4)
              
              
              3.6
              
              
              0.5
              
              
              67.4Other
                  (income) expense
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Loss
                  on extinguished debt
              
              
              15.4
              
              
              21.9
              
              
              —
              
              
              —
              
              
              37.3Interest
                  expense, net
              
              
              266.5
              
              
              (10.9)
              
              
              2.2
              
              
              (20.2)
              
              
              237.6Equity
                  in net income  of subsidiaries
              
              
              (9.4)
              
              
              (2.0)
              
              
              —
              
              
              11.4
              
              
              —Income
                  (loss) before income taxes
              
              
              (165.8)
              
              
              (52.4)
              
              
              1.4
              
              
              9.3
              
              
              (207.5)Minority
                  interest
              
              
              (2.7)
              
              
              —
              
              
              —
              
              
              —
              
              
              (2.7)Income
                  tax expense (benefit)
              
              
              (18.0)
              
              
              (72.7)
              
              
              2.1
              
              
              —
              
              
              (88.6)Net
                  income (loss)
              
              $
              (145.1)
              
              $
              20.3
              
              $
              (0.7)
              
              $
              9.3
              
              $
              (116.2)
 (Company)
                
                Period
                    from February 17, 2006 to September 30, 2006Parent
                  Company
                
                Guarantor
                  Subsidiaries
                
                Non-
                  Guarantor
                  Subsidiaries
                
                Eliminations
                
                TotalNet
                    revenue, including related party revenue
                
                $
                666.8
                
                $
                385.8
                
                $
                109.4
                
                $
                (23.2)
                
                $
                1,138.8Cost
                    of sales
                
                
                619.6
                
                
                329.0
                
                
                93.1
                
                
                (18.8)
                
                
                1,022.9Gross
                    profit
                
                
                47.2
                
                
                56.8
                
                
                16.3
                
                
                (4.4)
                
                
                115.9Selling,
                    general and administrative expenses
                
                
                59.9
                
                
                41.0
                
                
                6.8
                
                
                —
                
                
                107.7Restructuring
                    and impairment charges, net
                
                
                —
                
                
                0.5
                
                
                —
                
                
                —
                
                
                0.5Operating
                    income
                
                
                (12.7)
                
                
                15.3
                
                
                9.5
                
                
                (4.4)
                
                
                7.7Other
                    (income) expense
                
                
                (1.4)
                
                
                (5.0)
                
                
                5.1
                
                
                —
                
                
                (1.3)Loss
                    on extinguished debt
                
                
                54.6
                
                
                —
                
                
                1.0
                
                
                —
                
                
                55.6Interest
                    expense, net.
                
                
                1.0
                
                
                3.4
                
                
                0.1
                
                
                —
                
                
                4.5Equity
                    in net income of subsidiaries
                
                
                17.8
                
                
                (0.3)
                
                
                —
                
                
                (17.5)
                
                
                —Income
                    (loss) before income taxes
                
                
                (49.1)
                
                
                16.6
                
                
                3.3
                
                
                (21.9)
                
                
                (51.1)Minority
                    interest.
                
                
                (1.8)
                
                
                —
                
                
                —
                
                
                —
                
                
                (1.8)Income
                    tax expense (benefit)
                
                
                (16.1)
                
                
                (3.7)
                
                
                1.7
                
                
                —
                
                
                (18.1)Net
                    income (loss)
                
                $
                (31.2)
                
                $
                20.3
                
                $
                1.6
                $
                $
                (21.9)
                
                $
                (31.2)
 
  F-36
  (Predecessor)
                
                Period
                    from October 1, 2005 to February 16, 2006Parent
                  Company
                
                
                Guarantor
                  Subsidiaries
                
                
                Non-
                  Guarantor
                  Subsidiaries
                
                
                Eliminations
                
                
                TotalNet
                    revenue, including related party revenue
                
                $
                420.4
                
                
                $
                196.3
                
                
                $
                52.8
                
                
                $
                (2.6
                )
                
                $
                666.9Cost
                    of sales
                
                
                369.6
                
                
                
                168.5
                
                
                
                43.1
                
                
                
                (2.2
                )
                
                
                579.0Gross
                    profit
                
                
                50.8
                
                
                
                27.8
                
                
                
                9.7
                
                
                
                (0.4
                )
                
                
                87.9Charges
                    and allocations from Tyco International,
                  Ltd.
                    and affiliates
                
                
                1.3
                
                
                
                9.1
                
                
                
                —
                
                
                
                —
                
                
                
                10.4Selling,
                    general and administrative expenses
                
                
                28.7
                
                
                
                17.6
                
                
                
                3.7
                
                
                
                —
                
                
                
                50.0Restructuring
                    and impairment charges, net
                
                
                0.6
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                0.6Operating
                    income
                
                
                20.2
                
                
                
                1.1
                
                
                
                6.0
                
                
                
                (0.4
                )
                
                
                26.9Other
                    (income) expense
                
                
                7.9
                
                
                
                (9.6
                )
                
                
                1.7
                
                
                
                —
                
                
                
                —Interest
                    expense, net
                
                
                1.6
                
                
                
                0.1
                
                
                
                0.4
                
                
                
                —
                
                
                
                2.1Interest
                    expense (income), net – Tyco
                  International
                    Ltd. and affiliates
                
                
                7.8
                
                
                
                (2.3
                )
                
                
                —
                
                
                
                —
                
                
                
                5.5Equity
                    in net income of subsidiaries
                
                
                14.8
                
                
                
                —
                
                
                
                —
                
                
                
                (14.8
                )
                
                
                —Income
                    (loss) before income taxes
                
                
                17.7
                
                
                
                12.9
                
                
                
                3.9
                
                
                
                (15.2
                )
                
                
                19.3Income
                    tax expense (benefit)
                
                
                —
                
                
                
                —
                
                
                
                1.6
                
                
                
                —
                
                
                
                1.6Net
                    income (loss)
                
                $
                17.7
                
                
                $
                12.9
                
                
                $
                2.3
                
                
                $
                (15.2
                )
                
                $
                17.7
 (Predecessor)
                
                Year
                    ended September 30, 2005Parent
                  Company
                
                
                Guarantor
                  Subsidiaries
                
                
                Non-
                  Guarantor
                  Subsidiaries
                
                
                Eliminations
                
                
                TotalNet
                    revenue, including related party revenue
                
                $
                1053.1
                
                
                $
                549.4
                
                
                $
                129.1
                
                
                $
                (6.4
                )
                
                $
                1,725.2Cost
                    of sales
                
                
                914.6
                
                
                
                460.2
                
                
                
                107.9
                
                
                
                (5.3
                )
                
                
                1,477.4Gross
                    profit
                
                
                138.5
                
                
                
                89.2
                
                
                
                21.2
                
                
                
                (1.1
                )
                
                
                247.8Charges
                    and allocations from Tyco International,
                  Ltd.
                    and affiliates
                
                
                45.5
                
                
                
                10.0
                
                
                
                0.9
                
                
                
                —
                
                
                
                56.4Selling,
                    general and administrative expenses
                
                
                63.5
                
                
                
                51.5
                
                
                
                9.6
                
                
                
                —
                
                
                
                124.6Restructuring
                    and impairment charges, net
                
                
                2.9
                
                
                
                0.1
                
                
                
                0.3
                
                
                
                —
                
                
                
                3.3Operating
                    income
                
                
                26.6
                
                
                
                27.6
                
                
                
                10.4
                
                
                
                (1.1
                )
                
                
                63.5Other
                    (income) expense
                
                
                6.1
                
                
                
                (12.9
                )
                
                
                6.8
                
                
                
                —
                
                
                
                —Interest
                    expense, net
                
                
                (3.3
                )
                
                
                8.1
                
                
                
                (0.3
                )
                
                
                —
                
                
                
                4.5Interest
                    expense (income), net – Tyco
                  International
                    Ltd. and affiliates
                
                
                12.1
                
                
                
                (0.1
                )
                
                
                0.1
                
                
                
                —
                
                
                
                11.2Equity
                    in net income of subsidiaries
                
                
                35.2
                
                
                
                —
                
                
                
                —
                
                
                
                (35.2
                )
                
                
                —Income
                    (loss) before income taxes
                
                
                46.9
                
                
                
                33.4
                
                
                
                3.8
                
                
                
                (36.3
                )
                
                
                47.8Income
                    tax expense (benefit)
                
                
                2.9
                
                
                
                —
                
                
                
                0.9
                
                
                
                —
                
                
                
                3.8Net
                    income (loss)
                
                $
                44.0
                
                
                $
                33.4
                
                
                $
                2.9
                
                
                $
                (36.3
                )
                
                $
                44.0
    F-37
 Condensed
        Supplemental Consolidated Balance Sheet
 As
        of September 29, 2007
 ($
        in millions)
 Parent
                  Company
                
                
                Guarantor
                  Subsidiaries
                
                
                Non-
                  Guarantor
                  Subsidiaries
                
                
                Eliminations
                
                
                TotalAssetsCurrent
                    assets:Cash
                    and cash equivalents
                
                $
                0.9
                
                
                $
                7.7
                
                
                $
                6.0
                
                
                $
                —
                
                
                $
                14.6Accounts
                    receivable, net of allowance for doubtful accounts
                
                
                135.9
                
                
                
                207.9
                
                
                
                28.7
                
                
                
                —
                
                
                
                372.5Inventories
                
                
                138.4
                
                
                
                221.6
                
                
                
                25.3
                
                
                
                —
                
                
                
                385.3Prepaid
                    expenses and other current assets
                
                
                3.0
                
                
                
                52.4
                
                
                
                12.0
                
                
                
                —
                
                
                
                67.4Total
                    current assets
                
                
                278.2
                
                
                
                489.6
                
                
                
                72.0
                
                
                
                —
                
                
                
                839.8Property,
                    plant and equipment, net
                
                
                211.7
                
                
                
                538.9
                
                
                
                34.4
                
                
                
                —
                
                
                
                785.0Intangible
                    assets, net
                
                
                218.8
                
                
                
                2,007.1
                
                
                
                16.2
                
                
                
                —
                
                
                
                2,242.1Investment
                    in Subsidiaries
                
                
                1.588.6
                
                
                
                —
                
                
                
                —
                
                
                
                (1,588.6
                )
                
                
                —Other
                    assets
                
                
                2.3
                
                
                
                0.2
                
                
                
                —
                
                
                
                —
                
                
                
                2.5Total
                    Assets
                
                $
                2,299.6
                
                
                $
                3,035.8
                
                
                $
                122.6
                
                
                $
                (1,588.6
                )
                
                $
                3,869.4Liabilities
                    and EquityCurrent
                    liabilities:Accounts
                    payable
                
                $
                109.7
                
                
                $
                140.2
                
                
                $
                13.3
                
                
                $
                —
                
                
                $
                263.2Accrued
                    and other current liabilities
                
                
                78.4
                
                
                
                100.9
                
                
                
                10.1
                
                
                
                —
                
                
                
                189.4Long-term
                    debt—current portion
                
                
                12.0
                
                
                
                5.1
                
                
                
                0.3
                
                
                
                —
                
                
                
                17.4Intercompany
                    accounts, net
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —Total
                    current liabilities
                
                
                200.1
                
                
                
                246.2
                
                
                
                23.7
                
                
                
                —
                
                
                
                470.0Long-term
                    debt
                
                
                2,675.2
                
                
                
                16.9
                
                
                
                1.2
                
                
                
                —
                
                
                
                2,693.3Deferred
                    tax liabilities
                
                
                31.1
                
                
                
                183.9
                
                
                
                2.7
                
                
                
                —
                
                
                
                217.7Other
                    non current liabilities
                
                
                20.2
                
                
                
                15.2
                
                
                
                2.9
                
                
                
                —
                
                
                
                38.3Total
                    long-term liabilities
                
                
                2,726.5
                
                
                
                216.0
                
                
                
                6.8
                
                
                
                —
                
                
                
                2,949.3Total
                    Liabilities
                
                
                2,926.6
                
                
                
                462.2
                
                
                
                30.5
                
                
                
                —
                
                
                
                3,419.3Commitments
                    and contingenciesMinority
                    interest
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —Contributions
                    from Holdings
                
                
                
                
                
                
                2,142.2
                
                
                
                44.5
                
                
                
                (1,588.6
                )
                
                
                598.1Stock
                
                
                (409.2
                )
                
                
                368.5
                
                
                
                40.7
                
                
                
                —
                
                
                
                —Retained
                    earnings (deficit)
                
                
                (217.6
                )
                
                
                62.9
                
                
                
                2.8
                
                
                
                —
                
                
                
                (151.9
                )Cumulative
                    translation
                
                
                (0.3
                )
                
                
                —
                
                
                
                4.10.2
                
                
                
                —
                
                
                
                3.8Total
                    Equity
                
                
                (627.1
                )
                
                
                2,573.6
                
                
                
                92.1
                
                
                
                (1,588.6
                )
                
                
                450.0Total
                    Liabilities and Equity
                
                $
                2,299.6
                
                
                $
                3,035.8
                
                
                $
                122.6
                
                
                $
                (1,588.6
                )
                
                $
                3,869.4
  F-38
  Condensed
        Supplemental Combined Balance Sheet
 As
        of September 30, 2006
 Parent
                  Company
                
                
                Guarantor
                  Subsidiaries
                
                
                Non-
                  Guarantor
                  Subsidiaries
                
                
                Eliminations
                
                
                TotalAssetsCurrent
                    assets:Cash
                    and cash equivalents
                
                $
                62.3
                
                
                $
                15.0
                
                
                $
                5.8
                
                
                $
                —
                
                
                $
                83.1Accounts
                    receivable, net of allowance for doubtful accounts
                
                
                124.9
                
                
                
                204.7
                
                
                
                27.5
                
                
                
                —
                
                
                
                357.1Inventories
                
                
                158.3
                
                
                
                222.8
                
                
                
                24.0
                
                
                
                —
                
                
                
                405.1Prepaid
                    expenses and other current assets
                
                
                10.1
                
                
                
                35.8
                
                
                
                12.7
                
                
                
                —
                
                
                
                58.6Total
                    current assets
                
                
                355.6
                
                
                
                478.3
                
                
                
                70.0
                
                
                
                —
                
                
                
                903.9Property,
                    plant and equipment, net
                
                
                219.4
                
                
                
                556.5
                
                
                
                40.7
                
                
                
                —
                
                
                
                816.6Intangible
                    assets, net
                
                
                1,835.6
                
                
                
                192.1
                
                
                
                7.7
                
                
                
                —
                
                
                
                2,035.4Investment
                    in Subsidiaries
                
                
                353.2
                
                
                
                24.1
                
                
                
                —
                
                
                
                (377.3
                )
                
                
                —Other
                    assets
                
                
                64.9
                
                
                
                0.6
                
                
                
                —
                
                
                
                —
                
                
                
                65.5Total
                    Assets
                
                $
                2,828.7
                
                
                $
                1,251.6
                
                
                $
                118.4
                
                
                $
                (377.3
                )
                
                $
                3,821.4Liabilities
                    and EquityCurrent
                    liabilities:Accounts
                    payable
                
                $
                108.2
                
                
                $
                147.8
                
                
                $
                16.1
                
                
                $
                —
                
                
                $
                272.1Accrued
                    and other current liabilities
                
                
                63.2
                
                
                
                102.0
                
                
                
                8.3
                
                
                
                —
                
                
                
                173.5Long-term
                    debt—current portion
                
                
                9.8
                
                
                
                5.9
                
                
                
                0.3
                
                
                
                —
                
                
                
                16.0Intercompany
                    accounts, net
                
                
                (468.1
                )
                
                
                417.8
                
                
                
                45.9
                
                
                
                4.4
                
                
                
                —Total
                    current liabilities
                
                
                (286.9
                )
                
                
                673.5
                
                
                
                70.6
                
                
                
                4.4
                
                
                
                461.6Long-term
                    debt.
                
                
                2,593.2
                
                
                
                18.3
                
                
                
                0.8
                
                
                
                —
                
                
                
                2,612.3Deferred
                    tax liabilities
                
                
                47.4
                
                
                
                199.1
                
                
                
                3.1
                
                
                
                —
                
                
                
                249.6Other
                    non current liabilities
                
                
                0.3
                
                
                
                20.9
                
                
                
                1.9
                
                
                
                —
                
                
                
                23.1Total
                    long-term liabilities
                
                
                2,640.9
                
                
                
                238.3
                
                
                
                5.8
                
                
                
                —
                
                
                
                2,885.0Total
                    Liabilities
                
                
                2,354.0
                
                
                
                911.8
                
                
                
                76.4
                
                
                
                4.4
                
                
                
                3,346.6Commitments
                    and contingenciesMinority
                    interest
                
                
                65.2
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                65.2Contributions
                    from Holdings
                
                
                190.8
                
                
                
                368.5
                
                
                
                35.1
                
                
                
                (403.6
                )
                
                
                190.8Stock
                
                
                —
                
                
                
                —
                
                
                
                24.1
                
                
                
                (24.1
                )
                
                
                —Additional
                    paid-in capital
                
                
                249.8
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                249.8Retained
                    deficit
                
                
                (31.2
                )
                
                
                (28.7
                )
                
                
                (17.4
                )
                
                
                46.1
                
                
                
                (31.2
                )Cumulative
                    translation
                
                
                0.1
                
                
                
                —
                
                
                
                0.20.2
                
                
                
                (0.1
                )
                
                
                0.2Total
                    Equity
                
                
                409.5
                
                
                
                339.8
                
                
                
                42.0
                
                
                
                (381.7
                )
                
                
                409.6Total
                    Liabilities and Equity
                
                $
                2,828.7
                
                
                $
                1,251.6
                
                
                $
                118.4
                
                
                $
                (377.3
                )
                
                $
                3,821.4
 F-39
  Condensed
        Supplemental Consolidated or Combined Statement of Cash Flows
 (Company)
                
                Year
                    ended September 29, 2007Parent
                  Company
                
                
                Guarantor
                  Subsidiaries
                
                
                Non-
                  Guarantor
                  Subsidiaries
                
                
                Eliminations
                
                
                TotalCash
                    Flow from Operating Activities
                
                $
                23.6
                
                
                $
                115.6
                
                
                $
                (1.9
                )
                
                $
                —
                
                
                $
                137.3Cash
                    Flow from Investing ActivitiesPurchase
                    of property, plant, and equipment
                
                
                (16.4
                )
                
                
                (75.7
                )
                
                
                (7.2
                )
                
                
                —
                
                
                
                (99.3
                )Proceeds
                    from disposal of assets
                
                
                —
                
                
                
                0.8
                
                
                
                10.0
                
                
                
                —
                
                
                
                10.8Acquisition
                    of business net of cash acquired
                
                
                (30.0
                )
                
                
                (45.8
                )
                
                
                —
                
                
                
                —
                
                
                
                (75.8
                )Net
                    cash used in investing activities
                
                
                (46.4
                )
                
                
                (120.7
                )
                
                
                2.8
                
                
                
                —
                
                
                
                (164.3
                )Cash
                    Flow from Financing ActivitiesBorrowings
                    of long-term debt
                
                
                1.232.6
                
                
                
                —
                
                
                
                0.4
                
                
                
                —
                
                
                
                1,233.0Equity
                    contributions
                
                
                (102.5
                )
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (102.5
                )Repayment
                    of long-term debt
                
                
                (1,159.0
                )
                
                
                (2.2
                )
                
                
                —
                
                
                
                —
                
                
                
                (1,161.2
                )Debt
                    financing costs
                
                
                (9.7
                )
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (9.7
                )Net
                    cash provided by financing activities
                
                
                (38.6
                )
                
                
                (2.2
                )
                
                
                0.4
                
                
                
                —
                
                
                
                (40.4
                )Effect
                    of currency translation on cash
                
                
                —
                
                
                
                —
                
                
                
                (1.1
                )
                
                
                —
                
                
                
                (1.1
                )Net
                    increase in cash and cash equivalents
                
                
                (61.4
                )
                
                
                (7.3
                )
                
                
                0.2
                
                
                
                —
                
                
                
                (68.6
                )Cash
                    and cash equivalents at beginning of period
                
                
                62.3
                
                
                
                15.0
                
                
                
                5.8
                
                
                
                —
                
                
                
                83.1Cash
                    and cash equivalents at end of period
                
                $
                0.9
                
                
                $
                7.7
                
                
                $
                6.0
                
                
                $
                —
                
                
                $
                14.6
  (Company)
                
                Period
                    from February 17 to September 30, 2006Parent
                  Company
                
                
                Guarantor
                  Subsidiaries
                
                
                Non-
                  Guarantor
                  Subsidiaries
                
                
                Eliminations
                
                
                TotalCash
                    Flow from Operating Activities
                
                $
                50.8
                
                
                $
                45.1
                
                
                $
                0.8
                
                
                $
                —
                
                
                $
                96.7Cash
                    Flow from Investing ActivitiesPurchase
                    of property, plant, and equipment
                
                
                (18.7
                )
                
                
                (15.4
                )
                
                
                (0.7
                )
                
                
                —
                
                
                
                (34.8
                )Proceeds
                    from disposal of assets
                
                
                0.6
                
                
                
                —
                
                
                
                0.2
                
                
                
                —
                
                
                
                0.8Acquisition
                    of business net of cash acquired
                
                
                (3,205.7
                )
                
                
                (14.7
                )
                
                
                2.4
                
                
                
                —
                
                
                
                (3,218.0
                )Net
                    cash used in investing activities
                
                
                (3,223.80
                )
                
                
                (30.1
                )
                
                
                1.9
                
                
                
                —
                
                
                
                (3,252.0
                )Cash
                    Flow from Financing ActivitiesIssuance
                    of long-term debt
                
                
                2,653.4
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                2,653.4Equity
                    contributions
                
                
                680.8
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                680.8Repayment
                    of long-term debt
                
                
                (50.7
                )
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (50.7
                )Long-term
                    debt financing costs
                
                
                (25.2
                )
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (25.2
                )Long-term
                    debt refinancing costs
                
                
                (45.8
                )
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (45.8
                )Net
                    cash provided by financing activities
                
                
                3,212.5
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                3,212.5Effect
                    of currency translation on cash
                
                
                —
                
                
                
                —
                
                
                
                (1.1
                )
                
                
                —
                
                
                
                (1.1
                )Net
                    increase in cash and cash equivalents
                
                
                39.5
                
                
                
                15.0
                
                
                
                1.6
                
                
                
                —
                
                
                
                56.1Cash
                    and cash equivalents at beginning of period
                
                
                22.8
                
                
                
                —
                
                
                
                4.2
                
                
                
                —
                
                
                
                27.0Cash
                    and cash equivalents at end of period
                
                $
                62.3
                
                
                $
                15.0
                
                
                $
                5.8
                
                
                $
                —
                
                
                $
                83.1
 F-40
  (Predecessor)
                
                Period
                    from October 1, 2005 to February 16, 2006Parent
                  Company
                
                
                Guarantor
                  Subsidiaries
                
                
                Non-
                  Guarantor
                  Subsidiaries
                
                
                Eliminations
                
                
                TotalCash
                    Flow from Operating Activities
                
                $
                (126.2
                )
                
                $
                3.8
                
                
                $
                3.2
                
                
                $
                —
                
                
                $
                (119.2
                )Cash
                    Flow from Investing ActivitiesPurchase
                    of property, plant, and equipment
                
                
                (9.2
                )
                
                
                (2.8
                )
                
                
                (0.2
                )
                
                
                —
                
                
                
                (12.2
                )Proceeds
                    from disposal of assets
                
                
                3.0
                
                
                
                —
                
                
                
                0.1
                
                
                
                —
                
                
                
                3.1Acquisition
                    of business net of cash acquired
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —Net
                    cash used in investing activities
                
                
                (6.2
                )
                
                
                (2.8
                )
                
                
                (0.1
                )
                
                
                —
                
                
                
                (9.1
                )Cash
                    Flow from Financing ActivitiesChange
                    in book overdraft
                
                
                (9.8
                )
                
                
                (4.4
                )
                
                
                —
                
                
                
                —
                
                
                
                (14.2
                )Payments
                    of capital lease obligations
                
                
                (59.4
                )
                
                
                (20.0
                )
                
                
                —
                
                
                
                —
                
                
                
                (79.4
                )Distributions
                    to minority interests
                
                
                (2.2
                )
                
                
                (0.6
                )
                
                
                2.8
                
                
                
                —
                
                
                
                —Change
                    in Predecessor parent company investment
                
                
                203.8
                
                
                
                24.4
                
                
                
                (4.0
                )
                
                
                —
                
                
                
                224.2Net
                    cash provided by financing activities
                
                
                132.4
                
                
                
                (0.6
                )
                
                
                (1.2
                )
                
                
                —
                
                
                
                130.6Effect
                    of currency translation on cash
                
                
                —
                
                
                
                —
                
                
                
                (0.2
                )
                
                
                —
                
                
                
                (0.2
                )Net
                    increase in cash and cash equivalents
                
                
                —
                
                
                
                0.4
                
                
                
                1.7
                
                
                
                —
                
                
                
                2.1Cash
                    and cash equivalents at beginning of period
                
                
                —
                
                
                
                0.1
                
                
                
                2.6
                
                
                
                —
                
                
                
                2.7Cash
                    and cash equivalents at end of period
                
                $
                —
                
                
                $
                0.5
                
                
                $
                4.3
                
                
                $
                —
                
                
                $
                4.8
    (Predecessor)
                Year
                    ended September 30, 2005Parent
                  Company
                
                Guarantor
                  Subsidiaries
                
                Non-
                  Guarantor
                  Subsidiaries
                
                Eliminations
                
                TotalCash
                    Flow from Operating Activities
                
                $
                27.2
                
                $
                62.0
                
                $
                28.1
                
                $
                —
                
                $
                117.3Cash
                    Flow from Investing ActivitiesPurchase
                    of property, plant, and equipment
                
                
                (17.3)
                
                
                (11.8)
                
                
                (3.0)
                
                
                —
                
                
                (32.1)Proceeds
                    from disposal of assets
                
                
                2.9
                
                
                —
                
                
                —
                
                
                —
                
                
                2.9Acquisition
                    of business net of cash acquired
                
                
                —
                
                
                —
                
                
                —
                
                
                —
                
                
                —Net
                    cash used in investing activities
                
                
                (14.4)
                
                
                (11.8)
                
                
                3.0
                
                
                —
                
                
                (29.2)Cash
                    Flow from Financing ActivitiesChange
                    in book overdraft
                
                
                (13.2)
                
                
                1.1
                
                
                —
                
                
                —
                
                
                (12.1)Payments
                    of capital lease obligations
                
                
                (31.0)
                
                
                (30.0)
                
                
                (0.1)
                
                
                —
                
                
                (61.1)Change
                    in Predecessor parent company investment
                
                
                32.3
                
                
                (20.0)
                
                
                (25.5)
                
                
                
                
                
                (13.2)Distributions
                    to minority interests
                
                
                (1.4)
                
                
                (1.5)
                
                
                0.1
                
                
                —
                
                
                (2.8)Net
                    cash provided by financing activities
                
                
                (13.3)
                
                
                (50.4)
                
                
                (25.5)
                
                
                —
                
                
                (89.2)Effect
                    of currency translation on cash
                
                
                —
                
                
                —
                
                
                0.1
                
                
                —
                
                
                0.1Net
                    increase in cash and cash equivalents
                
                
                (0.5)
                
                
                (0.2)
                
                
                (0.3)
                
                
                —
                
                
                (1.0)Cash
                    and cash equivalents at beginning of period
                
                
                0.5
                
                
                0.3
                
                
                2.9
                
                
                —
                
                
                3.7Cash
                    and cash equivalents at end of period
                
                $
                —
                
                $
                0.1
                
                $
                2.6
                
                $
                —
                
                $
                2.7
   F-41
 13.
              Quarterly
                  Financial
                  Data (Unaudited)
 
 The
        following table contains selected unaudited quarterly financial data for
        fiscal
        years 2007 and 2006.
 2007
                
                
                2006Predecessor
                
                
                Predecessor
                
                
                Successor
                
                
                Successor
                
                
                SuccessorFirst
                
                
                Second
                
                
                Third
                
                
                Fourth
                
                
                First
                
                
                Second
                
                
                Second
                
                
                Third
                
                
                FourthNet
                    sales
                
                $
                703.6
                
                
                $
                741.6
                
                
                $
                807.3
                
                
                $
                802.5
                
                
                $
                450.2
                
                
                $
                216.7
                
                
                $
                205.8
                
                
                $
                442.5
                
                
                $
                490.5Cost
                    of sales
                
                
                617.2
                
                
                
                619.9
                
                
                
                667.9
                
                
                
                678.4
                
                
                
                385.5
                
                
                
                193.5
                
                
                
                183.4
                
                
                
                403.9
                
                
                
                435.6Gross
                    profit
                
                $
                86.4
                
                
                $
                121.7
                
                
                $
                139.4
                
                
                $
                124.1
                
                
                $
                64.7
                
                
                $
                23.2
                
                
                $
                22.4
                
                
                $
                38.6
                
                
                $
                54.9Net
                    income
                
                $
                (30.3
                )
                
                $
                (14.1
                )
                
                $
                (46.0
                )
                
                $
                (25.8
                )
                
                $
                16.4
                
                
                $
                1.3
                
                
                $
                (1.1
                )
                
                $
                (18.6
                )
                
                $
                (11.5
                )
   14.  Subsequent
        Events
 
 On
        December 19, 2007, Holding and certain of it subsidiaries entered into a
        sale
        lease back transaction pursuant to which Holding sold its manufacturing
        facilities located in Baltimore, Maryland; Evansville, Indiana; and Lawrence,
        Kansas.
 
 On
        December 20, 2007, Holding acquired all of the outstanding shares of MAC
        Closures, Inc., a Canadian corporation, through its newly formed Subsidiary
        BerryMac Acquisition Limited for approximately CN$72 million.  MAC
        Closures has manufacturing locations in Waterloo, Quebec and Oakville,
        Ontario.
 
 On
        December 21, 2007, Holding announced that it entered into a definitive agreement
        to acquire Captive Holdings, Inc., the parent company of Captive Plastics,
        Inc.,
        a leading manufacturer of blow molded plastic bottles for approximately $500
        million.  Captive Plastics, Inc. and Berry's rigid business have
        significant customer overlap, similar processes and similar
        products.  Subject to customary closing conditions, the parties expect
        to close the acquisition in the first quarter of 2008.
 
  F-42
  SIGNATURES
 
 Pursuant
        to the requirements of Section
        13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
        caused this report to be signed on its behalf by the undersigned, thereunto
        duly
        authorized, on the 26th day of December, 2007.
 
 BERRY
        PLASTICS HOLDING
        CORPORATION
 
 By/s/
        Ira G. Boots
 Ira
        G.
        Boots
 Chairman
        and Chief Executive Officer
 
 Pursuant
        to the requirements of the
        Securities Exchange Act of 1934, this report has been signed by the following
        persons on behalf of the registrant and in the capacities and on the dates
        indicated:
 
 Signature
              Title
              Date/s/
                  Ira G. Boots
              Chairman
                  of the Board of Directors, Chief
                Executive
                  Officer and Director (Principal
                Executive
                  Officer)
              December
                  26, 2007Ira
                  G. Boots/s/
                  James M. Kratochvil
              Executive
                  Vice President, Chief Financial
                Officer,
                  Treasurer and Secretary (Principal
                Financial
                  and Accounting Officer)
              December
                  26, 2007James
                  M. Kratochvil/s/
                  Robert V. Seminara
              Director
              December
                  26, 2007Robert
                  V. Seminara/s/
                  Anthony M. Civale
              Director
              December
                  26, 2007Anthony
                  M. Civale
  S-1
  Supplemental
        Information To Be
        Furnished With Reports Filed Pursuant To Section
 15(d)
        Of The Act By Registrant Which
        Has Not Registered Securities Pursuant To
 Section
        12 Of The
        Act
 
 
 The
        Registrant has not sent any annual report or proxy material to security
        holders.
 
  S-2
   EXHIBIT
                  INDEXIndex
                  No.
              Description
                  of Exhibit2.1
              Agreement
                  and Plan of Merger and Corporate Reorganization, dated as of March
                  9,
                  2007, between Covalence Specialty Materials Holding Corp. and Berry
                  Plastics Group, Inc. (incorporated herein by reference to our Registration
                  Statement Form S-4, filed on May 14,2007)4.1
              Indenture,
                  by and between BPC Acquisition Corp. (and following the merger
                  of BPC
                  Acquisition Corp. with and into BPC Holding Corporation, BPC Holding
                  Corporation, as Issuer, and certain Guarantors) and Wells Fargo
                  Bank,
                  National Association, as Trustee, relating to $525,000,000 87/8%
                  Second
                  Priority Senior Secured Fixed Rate Notes due 2014 and $225,000,000
                  Second
                  Priority Senior Secured Floating Rate Notes due 2014, dated as
                  of
                  September 20, 2006 (incorporated herein by reference to Exhibit
                  4.1 to our
                  Registration Statement Form S-4, filed on November 2,
                  2006)4.2
              First
                  Supplemental Indenture, by and among BPC Holding Corporation, certain
                  guarantors, BPC Acquisition Corp., and Wells Fargo Bank, National
                  Association, as Trustee, dated as of September 20, 2006 (incorporated
                  herein by reference to Exhibit 4.2 to our Registration Statement
                  Form S-4,
                  filed on November 2, 2006)4.3
              Registration
                  Rights Agreement, by and among BPC Acquisition Corp., BPC Holding
                  Corporation, the subsidiaries of BPC Holding Corporation, Deutsche
                  Bank
                  Securities Inc., Credit Suisse Securities (USA) LLC, Citigroup
                  Global
                  Markets Inc., J.P. Morgan Securities Inc., Banc of America Securities
                  LLC,
                  Lehman Brothers Inc., Bear, Stearns & Co., and GE Capital Markets,
                  Inc., dated as of September 20, 2006 (incorporated herein by reference
                  to
                  Exhibit 4.3 to our Registration Statement Form S-4, filed on
                  November 2, 2006)4.4
              Collateral
                  Agreement, by and among BPC Acquisition Corp., as Borrower, each
                  Subsidiary of the Borrower identified therein, and Wells Fargo
                  Bank, N.A.,
                  as Collateral Agent, dated as of September 20, 2006 (incorporated
                  herein
                  by reference to Exhibit 4.4 to our Registration Statement Form
                  S-4, filed
                  on November 2, 2006)10.1
              Note
                  Purchase Agreement, among BPC Acquisition Corp. and Goldman, Sachs
&
                  Co., as Initial Purchaser, and GSMP 2006 Onshore US, Ltd., GSMP
                  2006
                  Offshore US, Ltd., GSMP 2006 Institutional US, Ltd., GS Mezzanine
                  Partners
                  2006 Institutional, L.P., as Subsequent Purchasers, relating to
                  $425,000,000 Senior Subordinated Notes due 2016, dated as of September
                  20,
                  2006 (incorporated herein by reference to Exhibit 10.3 to our Registration
                  Statement Form S-4, filed on November 2,
                  2006)10.2
              Indenture,
                  by and between BPC Acquisition Corp. (and following the merger
                  of BPC
                  Acquisition Corp. with and into BPC Holding Corporation, BPC Holding
                  Corporation, as Issuer, and certain Guarantors) and Wells Fargo
                  Bank,
                  National Association, as Trustee, relating to 11% Senior Subordinated
                  Notes due 2016, dated as of September 20, 2006 (incorporated herein
                  by
                  reference to Exhibit 10.4 to our Registration Statement Form S-4,
                  filed on
                  November 2, 2006)10.3
              First
                  Supplemental Indenture, by and among BPC Holding Corporation, certain
                  guarantors, BPC Acquisition Corp., and Wells Fargo Bank, National
                  Association, as Trustee, dated as of September 20, 2006 (incorporated
                  herein by reference to Exhibit 10.5 to our Registration Statement
                  Form
                  S-4, filed on November 2, 2006)10.4
              Exchange
                  and Registration Rights Agreement, by and among BPC Acquisition
                  Corp. and
                  Goldman, Sachs & Co., GSMP 2006 Onshore US, Ltd., GSMP 2006 Offshore
                  US, Ltd., and GSMP 2006 Institutional US, Ltd., dated as of September
                  20,
                  2006 (incorporated herein by reference to Exhibit 10.6 to our Registration
                  Statement Form S-4, filed on November 2,
                  2006)10.5(a)
              U.S.
                  $400,000,000 Amended and Restated Credit Agreement, dated as of
                  April 3,
                  2007, by and among Covalence Specialty Materials Corp., Berry Plastics
                  Group, Inc., certain domestic subsidiaries party thereto from time
                  to
                  time, Bank of America, N.A., as collateral agent and administrative
                  agent,
                  the lenders party thereto from time to time, and the financial
                  institutions party thereto (incorporated herein by reference to
                  Exhibit
                  10.1(a) to our Current Report on Form 8-K, filed on April 10,
                  2007)10.5(b)
              U.S.
                  $1,200,000,000 Second Amended and Restated Credit Agreement, dated
                  as of
                  April 3, 2007, by and among Covalence Specialty Materials Corp.,
                  Berry
                  Plastics Group, Inc., Credit Suisse, Cayman Islands Branch, as
                  collateral
                  and administrative agent, the lenders party thereto from time to
                  time, and
                  the other financial institutions party thereto (incorporated herein
                  by
                  reference to Exhibit 10.1(b) to our Current Report on Form 8-K,
                  filed on
                  April 10, 2007).10.5(c)
              Amended
                  and Restated Intercreditor Agreement by and among Berry Plastics
                  Group,
                  Inc., Covalence Specialty Materials Corp., certain subsidiaries
                  identified
                  as parties thereto, Bank of America, N.A. and Credit Suisse, Cayman
                  Islands Branch  as first lien agents, and Wells Fargo Bank,
                  N.A., as trustee (incorporated herein by reference to Exhibit 10.1(d)
                  to
                  our Current Report on Form 8-K, filed on April 10, 2007).10.5(d)
              Indenture
                  dated as of  February 16, 2006, among Covalence Specialty
                  Materials Corp., the guarantors named therein and Wells Fargo Bank,
                  National Association, as trustee (incorporated herein by reference
                  to
                  Exhibit 10.1(e) to our Current Report on Form 8-K, filed on April
                  10,
                  2007).10.5(e)
              First
                  Supplemental Indenture dated as of  April 3, 2007, among
                  Covalence Specialty Materials Corp. (or its successor), the guarantors
                  identified on the signature pages thereto and Wells Fargo Bank,
                  National
                  Association, as trustee (incorporated herein by reference to Exhibit
                  10.1(f) to our Current Report on Form 8-K, filed on April 10,
                  2007).10.5(f)
              Second
                  Supplemental Indenture dated as of  April 3, 2007, among
                  Covalence Specialty Materials Corp. (or its successor), Berry Plastics
                  Holding Corporation, the guarantors identified on the signature
                  pages
                  thereto and Wells Fargo Bank, National Association, as trustee
                  (incorporated herein by reference to Exhibit 10.1(g) to our Current
                  Report
                  on Form 8-K, filed on April 10, 2007).10.5(g)
              Second
                  Supplemental Indenture dated as of April 3, 2007, among Berry Plastics
                  Holding Corporation (or its successor), the existing guarantors
                  identified
                  on the signature pages thereto, the new guarantors identified on
                  the
                  signature pages thereto and Wells Fargo Bank, National Association,
                  as
                  trustee (incorporated herein by reference to Exhibit 10.1(h) to
                  our
                  Current Report on Form 8-K, filed on April 10, 2007).10.5(h)
              Second
                  Supplemental Indenture dated as of April 3, 2007, among Berry Plastics
                  Holding Corporation (or its successor), the existing guarantors
                  identified
                  on the signature pages thereto, the new guarantors identified on
                  the
                  signature pages thereto and Wells Fargo Bank, National Association,
                  as
                  trustee (incorporated herein by reference to Exhibit 10.1(i) to
                  our
                  Current Report on Form 8-K, filed on April 10, 2007).10.5(i)
              Supplement
                  No. 1 dated as of April 3, 2007 to the Collateral Agreement dated
                  as of
                  September 20, 2006 among Berry Plastics Holding Corporation, each
                  subsidiary identified therein as a party and Wells Fargo Bank,
                  National
                  Association, as collateral agent (incorporated herein by reference
                  to
                  Exhibit 10.1(j) to our Current Report on Form 8-K, filed on April
                  10,
                  2007).10.5(j)
              Employment
                  Agreement dated May 26, 2006 between Covalence Specialty Materials
                  Corp.
                  and Layle K. Smith (incorporated herein by reference to Exhibit
                  10.1(k) to
                  our Current Report on Form 8-K, filed on April 10, 2007).10.6
              Management
                  Agreement, among Berry Plastics Corporation, Berry Plastics Group,
                  Inc.,
                  Apollo Management VI, L.P., and Graham Partners, Inc., dated as
                  of
                  September 20, 2006. (incorporated herein by reference to our Registration
                  Statement Form S-4, filed on May 14,2007)10.7
              Termination
                  Agreement, by and among Covalence Specialty Materials Holding Corp.,
                  Covalence Specialty Materials Corp., and Apollo Management V, L.P.,
                  dated
                  as of April 3, 2007. (incorporated herein by reference to our Registration
                  Statement Form S-4, filed on May 14,2007)10.8
              2006
                  Equity Incentive Plan (incorporated herein by reference to Exhibit
                  10.8 to
                  our Registration Statement Form S-4, filed on November 2,
                  2006)10.9
              Form
                  of Performance-Based Stock Option Agreement of Berry Plastics Group,
                  Inc.
                  (incorporated herein by reference to Exhibit 10.9 to our Registration
                  Statement Form S-4, filed on November 2, 2006)10.10
              Form
                  of Accreting Stock Option Agreement of Berry Plastics Group, Inc.
                  (incorporated herein by reference to Exhibit 10.10 to our Registration
                  Statement Form S-4, filed on November 2, 2006)10.11
              Form
                  of Time-Based Stock Option Agreement of Berry Plastics Group, Inc.
                  (incorporated herein by reference to Exhibit 10.11 to our Registration
                  Statement Form S-4, filed on November 2, 2006)10.12
              Form
                  of Performance-Based Stock Appreciation Rights Agreement of Berry
                  Plastics
                  Group, Inc. (incorporated herein by reference to Exhibit 10.12
                  to our
                  Registration Statement Form S-4, filed on November 2,
                  2006)10.13
              Employment
                  Agreement, dated September 20, 2006, between Berry Plastics Corporation
                  and Ira G. Boots (incorporated herein by reference to Exhibit 10.13
                  to our
                  Registration Statement Form S-4, filed on November 2,
                  2006)10.14
              Employment
                  Agreement, dated September 20, 2006, between Berry Plastics Corporation
                  and James M. Kratochvil (incorporated herein by reference to Exhibit
                  10.14
                  to our Registration Statement Form S-4, filed on November 2,
                  2006)10.15
              Employment
                  Agreement, dated September 20, 2006, between Berry Plastics Corporation
                  and R. Brent Beeler (incorporated herein by reference to Exhibit
                  10.15 to
                  our Registration Statement Form S-4, filed on November 2,
                  2006)10.16
              Employment
                  Agreement, dated November 22, 1999 between Berry Plastics Corporation
                  and
                  G. Adam Unfried (incorporated herein by reference to Exhibit 10.23
                  of the
                  Company’s Current Annual Report on Form 10-K filed with the SEC on March
                  22, 2006).10.17
              Amendment
                  No. 1 to Employment Agreement, dated November 22, 1999 between
                  Berry
                  Plastics Corporation and G. Adam Unfried dated November 23, 2004
                  (incorporated herein by reference to Exhibit 10.24 of the Company’s
                  Current Annual Report on Form 10-K filed with the SEC on March
                  22,
                  2006).10.18
              Amendment
                  No. 2 to Employment Agreement, dated November 22, 1999 between
                  Berry
                  Plastics Corporation and G. Adam Unfried dated March 10, 2006
                  (incorporated herein by reference to Exhibit 10.25 of the Company’s
                  Current Annual Report on Form 10-K filed with the SEC on March
                  22,
                  2006).10.19
              Amendment
                  No. 3 to Employment Agreement, dated November 22, 1999 between
                  Berry
                  Plastics Corporation and G. Adam Unfried dated September 20, 2006.
                  (incorporated herein by reference to our Registration Statement
                  Form S-4,
                  filed on May 14,2007)10.20
              Employment
                  Agreement, dated October 4, 1996 between Berry Plastics Corporation
                  and
                  Randall J. Hobson (incorporated herein by reference to Exhibit
                  10.21 of
                  the Company’s Current Annual Report on Form 10-K filed with the SEC on
                  March 22, 2006).10.21
              Amendment
                  No. 1 to Employment Agreement, dated October 4, 1996, between Berry
                  Plastics Corporation and Randall J. Hobson, dated June 30, 2001
                  (incorporated herein by reference to Exhibit 10.22 of the Company’s
                  Current Annual Report on Form 10-K filed with the SEC on March
                  22,
                  2006).12.1*
              Computation
                  of Ratio of Earnings to Fixed Charges21.1*
              Subsidiaries
                  of the Registrant31.1*
              Rule
                  13a-14(a)/15d-14(a) Certification of the Chief Executive Officer31.2*
              Rule
                  13a-14(a)/15d-14(a) Certification of the Chief Financial Officer32.1*
              Section
                  1350 Certification of the Chief Executive Officer32.2*
              Section
                  1350 Certification of the Chief Financial Officer