##### Table of Contents



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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

(Mark one)

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

For the quarterly period ended September 30, 2003


OR


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

ANCHOR GLASS CONTAINER CORPORATION

(Exact name of registrant as specified in its charter)


|                      
|----------------------
|0-23359               
|                      
|Commission file number

|                                |  |                    
|------------------------------- |  | -------------------
|Delaware                        |  | 59-3417812         
|                                |  |                    
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

|                                                       |  |           
|------------------------------------------------------ |  | ----------
|One Anchor Plaza, 4343 Anchor Plaza Parkway, Tampa, FL |  | 33634-7513
|                                                       |  |           
|(Address of principal executive offices)               |  | (Zip Code)

Registrants telephone number, including area code: 813-884-0000



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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [   ].

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [   ] No [X].

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.

Anchor Glass Container Corporation, common stock, $.10 par value,

24,507,343 shares at October 31, 2003






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TABLE OF CONTENTS



|                               |                                                                                               |                                                                    |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ |  |  |  |  |  | 
|PART I - FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                 
|                               |                                                                                               | CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|                               |                                                                                               | CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|                               |                                                                                               | CONDENSED BALANCE SHEETS                                          
|                               |                                                                                               | CONDENSED STATEMENTS OF CASH FLOWS                                
|                               |                                                                                               | STATEMENT OF STOCKHOLDERS EQUITY                                 
|                               |                                                                                               | NOTES TO CONDENSED FINANCIAL STATEMENTS                           
|                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                               | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|                               | Item 4. Controls and Procedures                                                              
|PART II  OTHER INFORMATION   
|                               | Item 1. Legal Proceedings                                                                    
|                               | Item 2. Changes in Securities and Use of Proceeds                                            
|                               | Item 3. Defaults Upon Senior Securities                                                      
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                               | Item 5. Other Information                                                                    
|                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                    
|Certification of CEO          
|Certification of CFO          
|Section 1350 Certifications   



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##### Table of Contents



ANCHOR GLASS CONTAINER CORPORATION

FORM 10-Q

For the Quarterly Period Ended September 30, 2003

INDEX

|                               |                                                                                               |                                                                                                                                                                                                                                  |    |          |   | 
|------------------------------ | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | -------- | - | 
|                               |                                                                                               |                                                                                                                                                                                                                                  |    | Page No.
|                               |                                                                                               |                                                                                                                                                                                                                                  |    |         
|PART I - FINANCIAL INFORMATION |                                                                                               |                                                                                                                                                                                                                                  |    |         
|                               | Item 1. Financial Statements:                                                                 |                                                                                                                                                                                                                                  |    |          |  
|                               |                                                                                               | Condensed Statements of Operations and Comprehensive Income (Loss) -
Nine Months Ended September 30, 2003,
One Month Ended September 30, 2002 (Reorganized Company) and
Eight Months Ended August 31, 2002 (Predecessor Company) |    |          | 3 | 
|                               |                                                                                               | Condensed Statements of Operations and Comprehensive Income (Loss) -
Three Months Ended September 30, 2003,
One Month Ended September 30, 2002 (Reorganized Company) and
Two Months Ended August 31, 2002 (Predecessor Company)  |    |          | 4 | 
|                               |                                                                                               | Condensed Balance Sheets -
September 30, 2003 and December 31, 2002-restated (Reorganized Company)                                                                                                                               |    |          | 5 | 
|                               |                                                                                               | Condensed Statements of Cash Flows -
Nine Months Ended September 30, 2003,
One Month Ended September 30, 2002 (Reorganized Company) and
Eight Months Ended August 31, 2002 (Predecessor Company)                                 |    |          | 6 | 
|                               |                                                                                               | Condensed Statement of Stockholders Equity -
Nine Months Ended September 30, 2003 (Reorganized Company)                                                                                                                         |    |          | 7 | 
|                               |                                                                                               | Notes to Condensed Financial Statements                                                                                                                                                                                          |    |          | 8 | 
|                               | Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations |                                                                                                                                                                                                                                  |    | 14       |  
|                               | Item 3. Quantitative and Qualitative Disclosures About
Market Risk                            |                                                                                                                                                                                                                                  |    | 21       |  
|                               | Item 4. Controls and Procedures                                                               |                                                                                                                                                                                                                                  |    | 21       |  
|PART II - OTHER INFORMATION    |                                                                                               |                                                                                                                                                                                                                                  | 22 |         
|                               | Item 1. Legal Proceedings                                                                     |                                                                                                                                                                                                                                  |    | 22       |  
|                               | Item 2. Changes in Securities and Use of Proceeds                                             |                                                                                                                                                                                                                                  |    | 22       |  
|                               | Item 3. Defaults Upon Senior Securities                                                       |                                                                                                                                                                                                                                  |    | 22       |  
|                               | Item 4. Submission of Matters to a Vote of Security Holders                                   |                                                                                                                                                                                                                                  |    | 22       |  
|                               | Item 5. Other Information                                                                     |                                                                                                                                                                                                                                  |    | 22       |  
|                               | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                                                                                                                                                  |    | 22       |  
|SIGNATURES                     |                                                                                               |                                                                                                                                                                                                                                  | 23 |         

2



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##### Table of Contents






PART I - FINANCIAL INFORMATION




Item 1. Financial Statements.




ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(dollars in thousands, except per share data)

|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |             |     | 
|-------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------ | ---------- | ------------------- | ---- | ------------- | ---------- | ------------ | --- | - | ---------- | ----------- | --- | 
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            | Predecessor
|                                                                                                               |                                     |                          |            | Reorganized Company |      | Company      
|                                                                                                               |                                     |                          |            |                     |      |              
|                                                                                                               |                                     |                          |            | Nine Months         |      | One Month     |            | Eight Months
|                                                                                                               |                                     |                          |            | Ended               |      | Ended         |            | Ended       
|                                                                                                               |                                     |                          |            | September 30,       |      | September 30, |            | August 30,  
|                                                                                                               |                                     |                          |            | 2003                |      | 2002          |            | 2002        
|                                                                                                               |                                     |                          |            |                     |      |               |            |             
|Net sales                                                                                                      |                                     | $                        | 542,771    |                     |      | $             | 54,480     |              |     | $ | 504,195    |            
|Costs and expenses:                                                                                            |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|                                                                                                               | Cost of products sold               |                          |            | 499,301             |      |               |            | 50,447       |     |   |            | 451,619     |    
|                                                                                                               | Selling and administrative expenses |                          |            | 20,093              |      |               |            | 1,942        |     |   |            | 19,262      |    
|                                                                                                               | Restructuring, net                  |                          |            |                    |      |               |            |             |     |   |            | (395        | )  
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Income from operations                                                                                         |                                     |                          | 23,377     |                     |      |               | 2,091      |              |     |   | 33,709     |            
|Reorganization items, net                                                                                      |                                     |                          |           |                     |      |               |           |              |     |   | 47,389     |            
|Other income (expense), net                                                                                    |                                     |                          | (1,416     | )                   |      |               | 445        |              |     |   | 673        |            
|Interest expense (eight months ended
August 31, 2002 contractual interest of
$19,800)                          |                                     |                          | (36,805    | )                   |      |               | (2,571     | )            |     |   | (17,948    | )          
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Net income (loss)                                                                                              |                                     | $                        | (14,844    | )                   |      | $             | (35        | )            |     | $ | 63,823     |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Series C preferred stock dividends                                                                             |                                     | $                        | (7,262     | )                   |      | $             | (750       | )            |     |   |            |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Excess fair value of consideration
transferred over carrying value of
Series C preferred stock upon
redemption |                                     | $                        | (38,118    | )                   |      | $             |           |              |     | $ |           |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Series A and B preferred stock dividends
(eight months ended August 31, 2002
contractual dividends of $9,371)  |                                     |                          |            |                     |      |               |            |              |     | $ | (4,100     | )          
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Income (loss) applicable to common stock                                                                       |                                     | $                        | (60,224    | )                   |      | $             | (785       | )            |     | $ | 59,723     |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Basic net income (loss) per share
applicable to common stock                                                   |                                     | $                        | (4.40      | )                   |      | $             | (0.06      | )            |     | $ | 11.37      |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Basic weighted average number of common
shares outstanding                                                     |                                     |                          | 13,673,557 |                     |      |               | 13,499,995 |              |     |   | 5,251,356  |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Diluted net income (loss) per share
applicable to common stock                                                 |                                     | $                        | (4.40      | )                   |      | $             | (0.06      | )            |     | $ | 1.89       |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Diluted weighted average number of
common shares outstanding                                                   |                                     |                          | 13,673,557 |                     |      |               | 13,499,995 |              |     |   | 33,805,651 |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Comprehensive income (loss):                                                                                   |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|                                                                                                               | Net income (loss)                   |                          | $          | (14,844             | )    |               | $          | (35          | )   |   | $          | 63,823      |    
|                                                                                                               | Other comprehensive income (loss):  |                          |            |                     |      |               |            |              |     |   |            |             |    
|                                                                                                               |                                     | Derivative income (loss) |            |                     | (434 | )             |            |              | 341 |   |            |             | 531 | 
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            
|Comprehensive income (loss)                                                                                    |                                     | $                        | (15,278    | )                   |      | $             | 306        |              |     | $ | 64,354     |            
|                                                                                                               |                                     |                          |            |                     |      |               |            |              |     |   |            |            

See Notes to Condensed Financial Statements.

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##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(dollars in thousands, except per share data)

|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |             |   | 
|-------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------------ | ---------- | ------------------- | ------ | ------------- | ---------- | ---------- | --- | - | ---------- | ----------- | - | 
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            | Predecessor
|                                                                                                               |                                     |                          |            | Reorganized Company |        | Company      
|                                                                                                               |                                     |                          |            |                     |        |              
|                                                                                                               |                                     |                          |            | Three Months        |        | One Month     |            | Two Months
|                                                                                                               |                                     |                          |            | Ended               |        | Ended         |            | Ended     
|                                                                                                               |                                     |                          |            | September 30,       |        | September 30, |            | August 30,
|                                                                                                               |                                     |                          |            | 2003                |        | 2002          |            | 2002      
|                                                                                                               |                                     |                          |            |                     |        |               |            |           
|Net sales                                                                                                      |                                     | $                        | 193,546    |                     |        | $             | 54,480     |            |     | $ | 125,935    |            
|Costs and expenses:                                                                                            |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|                                                                                                               | Cost of products sold               |                          |            | 178,312             |        |               |            | 50,447     |     |   |            | 110,948     |  
|                                                                                                               | Selling and administrative expenses |                          |            | 6,627               |        |               |            | 1,942      |     |   |            | 4,038       |  
|                                                                                                               | Restructuring, net                  |                          |            |                    |        |               |            |           |     |   |            | (1,824      | )
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Income from operations                                                                                         |                                     |                          | 8,607      |                     |        |               | 2,091      |            |     |   | 12,773     |            
|Reorganization items, net                                                                                      |                                     |                          |           |                     |        |               |           |            |     |   | 50,089     |            
|Other income (expense), net                                                                                    |                                     |                          | (1,192     | )                   |        |               | 445        |            |     |   | 190        |            
|Interest expense (two months ended
August 31, 2002 contractual interest of
$4,789)                             |                                     |                          | (11,667    | )                   |        |               | (2,571     | )          |     |   | (3,974     | )          
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Net income (loss)                                                                                              |                                     | $                        | (4,252     | )                   |        | $             | (35        | )          |     | $ | 59,078     |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Series C preferred stock dividends                                                                             |                                     | $                        | (2,511     | )                   |        | $             | (750       | )          |     |   |            |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Excess fair value of consideration
transferred over carrying value of
Series C preferred stock upon
redemption |                                     | $                        | (38,118    | )                   |        | $             |           |            |     | $ |           |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Series A and B preferred stock dividends
(two months ended August 31, 2002
contractual dividends of $2,343)    |                                     |                          |            |                     |        |               |            |            |     | $ |           |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Income (loss) applicable to common stock                                                                       |                                     | $                        | (44,881    | )                   |        | $             | (785       | )          |     | $ | 59,078     |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Basic net income (loss) per share
applicable to common stock                                                   |                                     | $                        | (3.20      | )                   |        | $             | (0.06      | )          |     | $ | 11.25      |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Basic weighted average number of common
shares outstanding                                                     |                                     |                          | 14,015,021 |                     |        |               | 13,499,995 |            |     |   | 5,251,356  |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Diluted net income (loss) per share
applicable to common stock                                                 |                                     | $                        | (3.20      | )                   |        | $             | (0.06      | )          |     | $ | 1.75       |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Diluted weighted average number of
common shares outstanding                                                   |                                     |                          | 14,015,021 |                     |        |               | 13,499,995 |            |     |   | 33,805,651 |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Comprehensive income (loss):                                                                                   |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|                                                                                                               | Net income (loss)                   |                          | $          | (4,252              | )      |               | $          | (35        | )   |   | $          | 59,078      |  
|                                                                                                               | Other comprehensive income (loss):  |                          |            |                     |        |               |            |            |     |   |            |             |  
|                                                                                                               |                                     | Derivative income (loss) |            |                     | (1,141 | )             |            |            | 341 |   |            |             |  | 
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            
|Comprehensive income (loss)                                                                                    |                                     | $                        | (5,393     | )                   |        | $             | 306        |            |     | $ | 59,078     |            
|                                                                                                               |                                     |                          |            |                     |        |               |            |            |     |   |            |            

See Notes to Condensed Financial Statements.

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##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
CONDENSED BALANCE SHEETS
(dollars in thousands)

|                                                         |                                               |                                            |                                          |         |                     |         |                   |        |         |         | 
|-------------------------------------------------------- | --------------------------------------------- | ------------------------------------------ | ---------------------------------------- | ------- | ------------------- | ------- | ----------------- | ------ | ------- | ------- | 
|                                                         |                                               |                                            |                                          |         | Reorganized Company
|                                                         |                                               |                                            |                                          |         |                    
|                                                         |                                               |                                            |                                          |         | September 30, 2003  |         | December 31, 2002
|                                                         |                                               |                                            |                                          |         | (unaudited)         |         | (restated)       
|                                                         |                                               |                                            |                                          |         |                     |         |                  
|ASSETS                                                   |                                               |                                            |                                          |         |                     |         |                   |       
|Current assets:                                          |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               | Cash and cash equivalents                  |                                          | $       | 14,852              |         |                   | $      | 351     |        
|                                                         |                                               | Restricted cash                            |                                          |         |                    |         |                   |        | 4,387   |        
|                                                         |                                               | Accounts receivable                        |                                          |         | 48,336              |         |                   |        | 42,070  |        
|                                                         |                                               | Inventories:                               |                                          |         |                     |         |                   |        |         |        
|                                                         |                                               |                                            | Raw materials and manufacturing supplies |         |                     | 28,011  |                   |        |         | 22,796  | 
|                                                         |                                               |                                            | Finished products                        |         |                     | 102,119 |                   |        |         | 79,353  | 
|                                                         |                                               | Other current assets                       |                                          |         | 8,915               |         |                   |        | 8,603   |        
|                                                         |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               |                                            | Total current assets                     |         |                     | 202,233 |                   |        |         | 157,560 | 
|Property, plant and equipment, net                       |                                               |                                            | 455,082                                  |         |                     |         | 384,386           |       
|Other assets                                             |                                               |                                            | 14,760                                   |         |                     |         | 6,815             |       
|Intangible assets                                        |                                               |                                            | 7,042                                    |         |                     |         | 7,636             |       
|                                                         |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               | $                                          | 679,117                                  |         |                     | $       | 556,397           |       
|                                                         |                                               |                                            |                                          |         |                     |         |                   |        |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY                     |                                               |                                            |                                          |         |                     |         |                   |       
|Current liabilities:                                     |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               | Borrowings under revolving credit facility |                                          | $       |                    |         |                   | $      | 47,413  |        
|                                                         |                                               | Current maturities of long-term debt       |                                          |         | 9,122               |         |                   |        | 8,315   |        
|                                                         |                                               | Accounts payable                           |                                          |         | 39,835              |         |                   |        | 46,969  |        
|                                                         |                                               | Accrued expenses                           |                                          |         | 20,818              |         |                   |        | 35,314  |        
|                                                         |                                               | Accrued interest                           |                                          |         | 5,439               |         |                   |        | 5,167   |        
|                                                         |                                               | Accrued compensation and employee benefits |                                          |         | 27,375              |         |                   |        | 26,331  |        
|                                                         |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               |                                            | Total current liabilities                |         |                     | 102,589 |                   |        |         | 169,509 | 
|Notes and long-term capital leases                       |                                               |                                            | 368,158                                  |         |                     |         | 182,433           |       
|Long-term obligation to PBGC                             |                                               |                                            | 57,084                                   |         |                     |         | 60,640            |       
|                                                         |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               | Total long-term debt                       |                                          |         | 425,242             |         |                   |        | 243,073 |        
|Long-term post-retirement liabilities                    |                                               |                                            | 40,064                                   |         |                     |         | 40,342            |       
|Other long-term liabilities                              |                                               |                                            | 22,763                                   |         |                     |         | 23,952            |       
|                                                         |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               |                                            | 488,069                                  |         |                     |         | 307,367           |       
|Commitments and contingencies                            |                                               |                                            |                                          |         |                     |         |                   |       
|Redeemable preferred stock (including accrued dividends) |                                               |                                            |                                         |         |                     |         | 78,022            |       
|Stockholders equity:                                    |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         | Common stock                                  |                                            |                                          | 2,338   |                     |         |                   | 1,350  |        
|                                                         | Capital in excess of par value                |                                            |                                          | 113,662 |                     |         |                   | 3,650  |        
|                                                         | Accumulated deficit                           |                                            |                                          | (27,297 | )                   |         |                   | (3,691 | )      
|                                                         | Accumulated other comprehensive income (loss) |                                            |                                          | (244    | )                   |         |                   | 190    |        
|                                                         |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               |                                            | 88,459                                   |         |                     |         | 1,499             |       
|                                                         |                                               |                                            |                                          |         |                     |         |                   |       
|                                                         |                                               | $                                          | 679,117                                  |         |                     | $       | 556,397           |       
|                                                         |                                               |                                            |                                          |         |                     |         |                   |        |         |        

See Notes to Condensed Financial Statements.

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##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
(dollars in thousands)

|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |         |             |         |  
|------------------------------------- | ---------------------------------------------------------------------------------------------- | ------------------------------------------------ | -------------------------------------------- | -------- | ------------------- | ------ | ------------- | ------- | ------------ | ------ | ------- | ------- | ----------- | ------- | -
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |         | Predecessor
|                                      |                                                                                                |                                                  |                                              |          | Reorganized Company |        | Company      
|                                      |                                                                                                |                                                  |                                              |          |                     |        |              
|                                      |                                                                                                |                                                  |                                              |          | Nine Months         |        | One Month     |         | Eight Months
|                                      |                                                                                                |                                                  |                                              |          | Ended               |        | Ended         |         | Ended       
|                                      |                                                                                                |                                                  |                                              |          | September 30,       |        | September 30, |         | August 30,  
|                                      |                                                                                                |                                                  |                                              |          | 2003                |        | 2002          |         | 2002        
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |             
|Cash flows from operating activities: |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      | Net income (loss)                                                                              |                                                  | $                                            | (14,844  | )                   |        | $             | (35     | )            |        | $       | 63,823  |            
|                                      | Adjustments to reconcile net income (loss) to cash
provided by (used in) operating activities: |                                                  |                                              |          |                     |        |               |         |              |        |         |         |            
|                                      |                                                                                                |                                                  | Depreciation and amortization                |          |                     | 51,716 |               |         |              | 4,653  |         |         |             | 35,721  |  
|                                      |                                                                                                |                                                  | Write-off and amortization of financing fees |          |                     | 4,846  |               |         |              | 153    |         |         |             | 1,609   |  
|                                      |                                                                                                |                                                  | Restructuring, net                           |          |                     |       |               |         |              |       |         |         |             | (395    | )
|                                      |                                                                                                |                                                  | Reorganization items, net                    |          |                     |       |               |         |              |       |         |         |             | (47,389 | )
|                                      |                                                                                                |                                                  | Restructuring and reorganization payments    |          |                     |       |               |         |              | (1,455 | )       |         |             | (4,835  | )
|                                      |                                                                                                |                                                  | Other                                        |          |                     | 239    |               |         |              | 458    |         |         |             | (239    | )
|                                      | Increase (decrease) in cash resulting from changes in
assets and liabilities                   |                                                  |                                              | (52,704  | )                   |        |               | 6,203   |              |        |         | 4,819   |            
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      |                                                                                                |                                                  | (10,747                                      | )        |                     |        | 9,977         |         |              |        | 53,114  |        
|Cash flows from investing activities: |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      | Expenditures for property, plant and equipment                                                 |                                                  |                                              | (80,437  | )                   |        |               | (5,448  | )            |        |         | (42,654 | )          
|                                      | Purchase of equipment under leases                                                             |                                                  |                                              | (39,217  | )                   |        |               |        |              |        |         |        |            
|                                      | Proceeds from sale of property, plant and equipment                                            |                                                  |                                              | 10,590   |                     |        |               |        |              |        |         | 47      |            
|                                      | Change in restricted cash                                                                      |                                                  |                                              | 4,387    |                     |        |               | 343     |              |        |         | (5,935  | )          
|                                      | Other                                                                                          |                                                  |                                              | (2,391   | )                   |        |               | (119    | )            |        |         | (1,001  | )          
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      |                                                                                                |                                                  | (107,068                                     | )        |                     |        | (5,224        | )       |              |        | (49,543 | )      
|Cash flows from financing activities: |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      | Proceeds from issuance of long-term debt                                                       |                                                  |                                              | 353,750  |                     |        |               |        |              |        |         | 20,000  |            
|                                      | Principal payments of long-term debt                                                           |                                                  |                                              | (176,004 | )                   |        |               | (157    | )            |        |         | (51,416 | )          
|                                      | Proceeds from the issuance of preferred stock                                                  |                                                  |                                              |         |                     |        |               |        |              |        |         | 75,000  |            
|                                      | Proceeds from the issuance of common stock                                                     |                                                  |                                              | 111,000  |                     |        |               |        |              |        |         | 5,000   |            
|                                      | Redemption of Series C preferred stock, including
dividends                                    |                                                  |                                              | (85,284  | )                   |        |               |        |              |        |         |        |            
|                                      | Payment of capital lease obligations for assets purchased                                      |                                                  |                                              | (5,539   | )                   |        |               |        |              |        |         |        |            
|                                      | Payment made under the PBGC Agreement                                                          |                                                  |                                              |         |                     |        |               |        |              |        |         | (20,750 | )          
|                                      | Plan distributions to Series A preferred stock                                                 |                                                  |                                              | (3,680   | )                   |        |               | (17,040 | )            |        |         |        |            
|                                      | Repurchase of warrants                                                                         |                                                  |                                              | (1,500   | )                   |        |               |        |              |        |         |        |            
|                                      | Restructuring and reorganization payments                                                      |                                                  |                                              |         |                     |        |               | (1,056  | )            |        |         | (10,727 | )          
|                                      | Net repayments on revolving credit facility                                                    |                                                  |                                              | (47,413  | )                   |        |               | 13,559  |              |        |         | 31,596  |            
|                                      | Net draws on prior revolving credit facilities                                                 |                                                  |                                              |         |                     |        |               |        |              |        |         | (50,981 | )          
|                                      | Payment of financing fees                                                                      |                                                  |                                              | (13,014  | )                   |        |               | (80     | )            |        |         | (1,400  | )          
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      |                                                                                                |                                                  | 132,316                                      |          |                     |        | (4,774        | )       |              |        | (3,678  | )      
|Cash and cash equivalents:            |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      |                                                                                                | Increase (decrease) in cash and cash equivalents |                                              |          | 14,501              |        |               |         | (21          | )      |         |         | (107        | )      
|                                      |                                                                                                | Balance, beginning of period                     |                                              |          | 351                 |        |               |         | 309          |        |         |         | 416         |        
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      |                                                                                                | Balance, end of period                           |                                              | $        | 14,852              |        |               | $       | 288          |        |         | $       | 309         |        
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |         |            
|Supplemental noncash activities:      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |        
|                                      |                                                                                                | Non-cash redemption of Series C preferred stock  |                                              | $        | 38,118              |        |               | $       |             |        |         | $       |            |        
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |         |            
|                                      |                                                                                                | Non-cash equipment financing                     |                                              | $        | 10,000              |        |               | $       |             |        |         | $       |            |        
|                                      |                                                                                                |                                                  |                                              |          |                     |        |               |         |              |        |         |         |            

See Notes to Condensed Financial Statements.

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##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
STATEMENT OF STOCKHOLDERS EQUITY
(dollars in thousands)

|                                                                                       |                     |   |              |  |              |   |           |   |               |   |               |   |               |   |             |   |  |   |         |   | 
|-------------------------------------------------------------------------------------- | ------------------- | - | ------------ |  | ------------ | - | --------- | - | ------------- | - | ------------- | - | ------------- | - | ----------- | - |  | - | ------- | - | 
|                                                                                       |                     |   |              |  |              |   |           |   |               |   |               |   |               |   | Accumulated |   |  |   |        
|                                                                                       |                     |   |              |  |              |   | Capital   |   |               |   |               |   | other         |   | Total      
|                                                                                       |                     |   |              |  |              |   | in excess |   | Accumulated   |   | comprehensive |   | stockholders
|                                                                                       |                     |   | Common stock |  | of par value |   | deficit   |   | income (loss) |   | equity       
|                                                                                       |                     |   |              |  |              |   |           |   |               |   |              
|                                                                                       | Reorganized Company |   |              |  |              |   |           |   |               |   |               |   |               |   |             |   |  |   |         |   | 
|Balance, January 1, 2003 (restated)                                                    |                     | $ | 1,350        |  |              | $ | 3,650     |   |               | $ | (3,691        | ) |               | $ | 190         |   |  | $ | 1,499   |  
|Repurchase warrants                                                                    |                     |   |             |  |              |   |          |   |               |   | (1,500        | ) |               |   |            |   |  |   | (1,500  | )
|Dividends accrued on Series C
preferred stock                                          |                     |   |             |  |              |   |          |   |               |   | (7,262        | ) |               |   |            |   |  |   | (7,262  | )
|Issuance of 7,500,000 shares of
common stock in the initial public
offering            |                     |   | 750          |  |              |   | 110,250   |   |               |   |              |   |               |   |            |   |  |   | 111,000 |  
|Redemption of Series C preferred
stock                                                 |                     |   |             |  |              |   | (38,118   | ) |               |   |              |   |               |   |            |   |  |   | (38,118 | )
|Issuance of 2,382,348 shares of common stock in redemption of Series C preferred stock |                     |   | 238          |  |              |   | 37,880    |   |               |   |              |   |               |   |            |   |  |   | 38,118  |  
|Net loss                                                                               |                     |   |             |  |              |   |          |   |               |   | (14,844       | ) |               |   |            |   |  |   | (14,844 | )
|Derivative loss                                                                        |                     |   |             |  |              |   |          |   |               |   |              |   |               |   | (434        | ) |  |   | (434    | )
|                                                                                       |                     |   |              |  |              |   |           |   |               |   |               |   |               |   |             |   |  |   |         |  
|Balance, September 30, 2003                                                            |                     | $ | 2,338        |  |              | $ | 113,662   |   |               | $ | (27,297       | ) |               | $ | (244        | ) |  | $ | 88,459  |  
|                                                                                       |                     |   |              |  |              |   |           |   |               |   |               |   |               |   |             |   |  |   |         |  

See Notes to Condensed Financial Statements.

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##### Table of Contents






ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

NOTE 1  Basis of Presentation

Organization of the Company

On August 30, 2002, Anchor Glass Container Corporation (Anchor or the
Company), a Delaware corporation, completed a restructuring of its existing
debt and equity securities pursuant to a plan of reorganization (the Plan)
under Chapter 11 of the United States Bankruptcy Code. Certain investment funds
and managed accounts affiliated with Cerberus Capital Management, L.P.
(Cerberus) acquired all of the outstanding capital stock of Anchor through
their investment in Anchor Glass Container Holding L.L.C. (AGC Holding), a
Delaware limited liability company formed in August 2002. On September 18,
2003, AGC Holding, the former parent company of Anchor, was dissolved and the
Anchor securities held by AGC Holding were distributed to its members.

Condensed Financial Statements

In the opinion of management, the accompanying condensed financial
statements contain all adjustments, consisting only of normal recurring
adjustments, that are necessary to present fairly the financial position as of
September 30, 2003 and the results of operations and cash flows for all interim
periods presented.

The effective date of the Plan was August 30, 2002. The financial
statements of the Company as of and for periods subsequent to August 31, 2002
are referred to as the Reorganized Company statements. All financial
statements prior to that date are referred to as the Predecessor Company
statements. The Companys financial results for the period ended September 30,
2002 include two different bases of accounting and, consequently, after giving
effect to the reorganization and fresh start adjustments, the financial
statements of the Reorganized Company are not comparable to those of the
Predecessor Company. Accordingly, the operating results and cash flows of the
Reorganized Company and the Predecessor Company have been separately disclosed.

Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Subject to the limitations on
comparability indicated in the preceding paragraph, it is suggested that these
condensed financial statements be read in conjunction with the financial
statements of Anchor included in the Companys Annual Report on Form 10-K for
the year ended December 31, 2002. The results of operations for the interim
periods are not necessarily indicative of the results of the full fiscal year.

NOTE 2  Initial Public Offering

On September 30, 2003, the Company consummated an initial public offering
of 7,500,000 shares of its common stock, par value $.10 per share, at the
initial public offering price of $16.00 per share (the Equity Offering). On
October 8, 2003, the underwriters for the Equity Offering exercised an option
to purchase 1,125,000 additional shares of common stock to cover over-allotment
of shares in connection with the Equity Offering and a related closing was held
on October 14, 2003. The Company received net proceeds from the Equity Offering
of approximately $127,830 (including proceeds of $16,830 from the exercise of
the over-allotment option).

Net proceeds of the Equity Offering of approximately $85,284 were used to
redeem all of the Series C Participating Preferred Stock, par value $.01 (the
Series C Preferred Stock). The redemption price of the Series C Participating
Preferred Stock was equal to the sum of (i) $1,000 per share ($75,000) plus all
accrued and unpaid dividends computed to the date of redemption ($10,284) and
(ii) 15% of the fair market value of all of the outstanding shares of common
stock. The portion of the redemption price

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

specified in clause (ii) of the preceding sentence was paid through the
issuance of 2,382,348 shares of common stock (valued at $38,118 based on the
initial public offering price of $16.00 per share). The remainder of the net
proceeds of the Equity Offering will be used to fund working capital and for
general corporate purposes. Pending application of these net proceeds, advances
outstanding under Anchors Revolving Credit Facility were paid down and the
excess funds were invested in short term U.S. government securities.

In connection with the Equity Offering, the Company executed a three for
two split on September 23, 2003, with no change in par value, of its common
stock issued and outstanding as of, and subsequent to, August 31, 2002. All
share and per share amounts in the accompanying financial statements have been
restated to give effect to this stock split.

Also effective September 23, 2003, the authorized capital stock of Anchor
consists of 60,000,000 shares of common stock, par value $.10 per share and
20,000,000 shares of preferred stock, par value $.01 per share.

As of September 30, 2003, certain investment funds and managed accounts
affiliated with Cerberus own approximately 64.8% of the outstanding common
stock of Anchor (61.8% following the exercise of the over-allotment option).

NOTE 3  Senior Secured Notes

Effective February 7, 2003, the Company completed an offering of 11%
Senior Secured Notes due 2013, aggregate principal amount of $300,000 (the
Senior Secured Notes), issued under an indenture dated as of February 7,
2003, among the Company and The Bank of New York, as Trustee (the Indenture).
The Senior Secured Notes are senior secured obligations of the Company, ranking
equal in right of payment with all existing and future unsubordinated
indebtedness of the Company and senior in right of payment to all future
subordinated indebtedness of the Company. The Senior Secured Notes are secured
by a first priority lien, subject to certain permitted encumbrances, on
substantially all of Anchors existing real property, equipment and other fixed
assets relating to Anchors nine operating glass container manufacturing
facilities. The collateral does not include inventory, accounts receivables or
intangible assets.

Proceeds from the issuance of the Senior Secured Notes, net of fees, were
approximately $289,000 and were used to repay 100% of the principal amount
outstanding under Anchors 11.25% First Mortgage Notes due 2005, aggregate
principal amount of $150,000 (First Mortgage Notes) plus accrued interest
thereon ($156,256 in total), 100% of the principal amount outstanding under the
senior secured term loan (the Term Loan) plus accrued interest thereon and a
prepayment fee ($20,354 in total) and advances then outstanding under the
$100,000 credit facility (the Revolving Credit Facility) ($66,886 in total),
which included funds for certain of the Companys capital improvement projects.
The remaining proceeds of approximately $45,000 were used to terminate certain
equipment leases by purchasing from the respective lessors the equipment leased
thereunder.

The Company entered into a registration rights agreement on February 7,
2003, under which the Company was required to register with the Securities and
Exchange Commission new Senior Secured Notes, having substantially identical
terms as the Senior Secured Notes and commenced a related exchange offer for
the old Senior Secured Notes. On August 5, 2003, the Company completed an
exchange offer with respect to $298.8 million of Senior Secured Notes tendered
in the exchange offer, for a like principal amount of new Senior Secured Notes,
identical in all material respects to the Senior Secured Notes, except that the
new Senior Secured Notes do not bear legends restricting the transfer thereof.

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

On August 5, 2003, the Company completed an additional offering of 11%
Senior Secured Notes due 2013, aggregate principal amount of $50.0 million (the
Additional Notes). Proceeds from the issuance of the Additional Notes, net of
fees, were approximately $53,400. The Additional Notes were issued at an issue
price of 107.5% of their principal amount. The Additional Notes were issued
under the same Indenture as the Senior Secured Notes, as supplemented by a
first supplemental indenture, dated August 5, 2003, and their terms are
identical in all material respects to the Senior Secured Notes, except that the
Additional Notes currently are subject to certain restrictions on transfer. No
less than 75% of the net proceeds from the issuance of the Additional Notes
will be used to finance improvements to the collateral securing the Senior
Secured Notes and the Additional Notes or to refinance indebtedness incurred by
the Company to finance improvements to the collateral, in each case in
compliance with the Indenture. Pending application of such proceeds, a portion
of the net proceeds were used to pay down advances outstanding under the
Revolving Credit Facility of approximately $49,700. Any portion of the net
proceeds not so used as provided for above will be used for general corporate
purposes.

The Company entered into a registration rights agreement on August 5, 2003
with respect to the Additional Notes. Under this agreement, the Company is
required to file a registration statement for notes having substantially
identical terms as the Additional Notes by November 3, 2003, have the
registration statement declared effective by January 2, 2004 and consummate the
related exchange by February 1, 2004. Although not contractually obligated to
do so, the Company will also offer for exchange, approximately $1.2 million of
Senior Secured Notes that were not exchanged in the exchange offer that was
consummated on August 5, 2003.

Interest on the $350,000 aggregate principal amount of Senior Secured
Notes accrues at 11% per annum and is payable semiannually on each February 15
and August 15 to registered holders of the Senior Secured Notes at the close of
business on the February 1 and August 1 immediately preceding the applicable
interest payment date.

The Senior Secured Notes are redeemable, in whole or in part, at the
Companys option on or after February 15, 2008, at redemption prices listed in
the Indenture. At any time (which may be more than once) before February 15,
2006, the Company at its option may redeem up to 35% of the initial outstanding
notes with money raised in one or more public equity offerings, at redemption
prices listed in the Indenture. The Indenture provides that upon the occurrence
of a change of control, the Company will be required to offer to purchase all
of the Senior Secured Notes at a purchase price equal to 101% of the principal
amount thereof plus accrued interest to the date of purchase.

The Indenture, subject to certain exceptions, restricts the Company from
taking various actions including, but not limited to, subject to specified
exceptions, the incurrence of additional indebtedness, the payment of dividends
and other restricted payments, the granting of additional liens, mergers,
consolidations and sales of assets and transactions with affiliates.

NOTE 4  Equity Incentive Plan

In 2002, the Board of Directors of Anchor (the Board) approved an Equity
Incentive Plan, designed to motivate and retain individuals who are responsible
for the attainment of the Companys primary long-term performance goals,
covering employees, directors and consultants. The plan provides for the grant
of nonqualified stock options and incentive stock options for shares of Anchor
common stock and restricted stock to participants of the plan selected by the
Board or a committee of the Board (the Administrator). Effective January 9,
2003, the Administrator granted a total of 337,500 non-qualified stock options
to selected participants. On September 30, 2003, all unvested awards under the
January 9, 2003 grant became immediately exercisable upon the consummation of
the Equity Offering.

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ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

Effective September 30, 2003, the Administrator granted a total of 472,503
non-qualified stock options to selected participants. The terms and conditions
of awards, as determined by the Administrator, are as follows: 50% of an
option grant vests 1/3 on the first anniversary of the grant date, 1/3 on the
second anniversary of the grant date and 1/3 on the third anniversary of the
grant date; and the remaining 50% of the option grant vests in three tranches
of equal amounts on the first, second and third anniversary of the grant date
if the Company attains certain performance targets established by the
Administrator.

In December 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 148  Accounting for
Stock-Based Compensation  Transition and Disclosure, an amendment of Statement
No. 123 (SFAS 148). SFAS 148 amends Statement of Financial Accounting
Standards No. 123  Accounting for Stock-Based Compensation (SFAS 123) to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation.
Effective January 1, 2003, the Company adopted the fair value based method of
accounting for stock-based employee compensation under SFAS 123 by applying the
prospective method of accounting, under which the Company applies the
recognition provisions to all employee awards granted after the beginning of
2003. The following table illustrates the effect on net income (loss) and
income (loss) per share as if the fair value based method had been applied to
all outstanding awards in each period:

|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |     |       | 
|-------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ----------- | ------- | ------------------- | ----- | ------------- | --- | ------------------- | ----- | ------------- | ------ | ------------- | ----- | ---------- | ------ | ---- | ----- | - | --- | - | ----- | ----------- | ------ | --- | ----- | 
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        | Predecessor   |       |            |        |      |       |   |     |   |       | Predecessor
|                                                               |                                                                                                      |             |         | Reorganized Company |       | Company       |     | Reorganized Company |       | Company      
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |              
|                                                               |                                                                                                      |             |         | Nine Months         |       | One Month     |     | Eight Months        |       | Three Months  |        | One Month     |       | Two Months
|                                                               |                                                                                                      |             |         | Ended               |       | Ended         |     | Ended               |       | Ended         |        | Ended         |       | Ended     
|                                                               |                                                                                                      |             |         | September 30,       |       | September 30, |     | August 31,          |       | September 30, |        | September 30, |       | August 31,
|                                                               |                                                                                                      |             |         | 2003                |       | 2002          |     | 2002                |       | 2003          |        | 2002          |       | 2002      
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |           
|Reported net income (loss)                                     |                                                                                                      | $           | (14,844 | )                   |       | $             | (35 | )                   |       | $             | 63,823 |               |       | $          | (4,252 | )    |       | $ | (35 | ) |       | $           | 59,078 |    
|                                                               | Add: Stock-based
employee compensation
expense included in
reported net income
(loss)                |             |         | 135                 |       |               |     |                    |       |               |        |              |       |            |        | 114  |       |   |     |  |       |             |        |    |      
|                                                               | Deduct: Total
stock-based employee
compensation expense
under fair value based
method for all awards |             |         | (135                | )     |               |     |                    |       |               |        | (56           | )     |            |        | (114 | )     |   |     |  |       |             |        | (14 | )    
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    
|Pro forma net income
(loss)                                    |                                                                                                      | $           | (14,844 | )                   |       | $             | (35 | )                   |       | $             | 63,767 |               |       | $          | (4,252 | )    |       | $ | (35 | ) |       | $           | 59,064 |    
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    
|Basic net income (loss)
per share applicable to
common stock   |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    
|                                                               |                                                                                                      | As reported |         | $                   | (4.40 | )             |     | $                   | (0.06 | )             |        | $             | 11.37 |            |        | $    | (3.20 | ) |     | $ | (0.06 | )           |        | $   | 11.25 | 
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    
|                                                               |                                                                                                      | Pro forma   |         | $                   | (4.40 | )             |     | $                   | (0.06 | )             |        | $             | 11.36 |            |        | $    | (3.20 | ) |     | $ | (0.06 | )           |        | $   | 11.25 | 
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    
|Diluted net income (loss)
per share applicable to
common stock |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    
|                                                               |                                                                                                      | As reported |         | $                   | (4.40 | )             |     | $                   | (0.06 | )             |        | $             | 1.89  |            |        | $    | (3.20 | ) |     | $ | (0.06 | )           |        | $   | 1.75  | 
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    
|                                                               |                                                                                                      | Pro forma   |         | $                   | (4.40 | )             |     | $                   | (0.06 | )             |        | $             | 1.89  |            |        | $    | (3.20 | ) |     | $ | (0.06 | )           |        | $   | 1.75  | 
|                                                               |                                                                                                      |             |         |                     |       |               |     |                     |       |               |        |               |       |            |        |      |       |   |     |   |       |             |        |    

Salaried employees of the Company participated in an incentive stock
option plan of Anchors former indirect parent. These options, which have been
cancelled, generally had a life of 10 years and vested ratably over three
years. The Company elected to follow Accounting Principles Board
Opinion No. 25  Accounting for Stock Issued to Employees, in accounting for these options in
the eight months and two months ended August 31, 2002.

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##### Table of Contents



ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

NOTE 5 - Income (Loss) per Share

Basic and diluted net income (loss) per common share was computed by dividing income (loss) applicable to common stock by the weighted-average number of common shares and contingently issuable shares outstanding during the period. Warrants outstanding in the eight and two months ended August 31, 2002 were contingently issuable shares as the stock underlying the warrants were issuable for no additional consideration and the conditions necessary for share exercise had been met. A total of 810,003 stock options currently outstanding were not included in the calculation of diluted net income (loss) per share, as the effect of such options is antidilutive.

The computation of basic and diluted net income (loss) per share is as follows (dollars in thousands, except per share data):



|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|-------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | - | ------------------- | ---------- | ------------- | - | ------------ | ---------- | - | - | ----------- | ---------- | -
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   | Predecessor
|                                                               |                                                                                                                |   | Reorganized Company |            | Company      
|                                                               |                                                                                                                |   |                     |            |              
|                                                               |                                                                                                                |   | Nine Months         |            | One Month     |   | Eight Months
|                                                               |                                                                                                                |   | Ended               |            | Ended         |   | Ended       
|                                                               |                                                                                                                |   | September 30,       |            | September 30, |   | August 31,  
|                                                               |                                                                                                                |   | 2003                |            | 2002          |   | 2002        
|                                                               |                                                                                                                |   |                     |            |               |   |             
|Basic net income (loss) per share:                             |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |           
|Net income (loss)                                              |                                                                                                                | $ | (14,844             | )          |               | $ | (35          | )          |   | $ | 63,823      |           
|                                                               | Series C Preferred Stock dividends                                                                             |   |                     | (7,262     | )             |   |              | (750       | ) |   |             |           |  
|                                                               | Series A and B Preferred Stock
dividends                                                                       |   |                     |           |               |   |              |           |   |   |             | (4,100     | )
|                                                               | Excess fair value of consideration
transferred over carrying value of
Series C Preferred Stock upon
redemption |   |                     | (38,118    | )             |   |              |           |   |   |             |           |  
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|                                                               | Income (loss) applicable to common
stock                                                                       |   | $                   | (60,224    | )             |   | $            | (785       | ) |   | $           | 59,723     |  
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|Divided by the sum of:                                         |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |           
|                                                               | Weighted average shares outstanding                                                                            |   |                     | 13,673,557 |               |   |              | 13,499,995 |   |   |             | 3,357,825  |  
|                                                               | Weighted average warrants outstanding                                                                          |   |                     |           |               |   |              |           |   |   |             | 1,893,531  |  
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|                                                               |                                                                                                                |   | 13,673,557          |            |               |   | 13,499,995   |            |   |   | 5,251,356   |           
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|Basic net income (loss) per share
applicable to common stock   |                                                                                                                | $ | (4.40               | )          |               | $ | (0.06        | )          |   | $ | 11.37       |           
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|Diluted net income (loss) per share:                           |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |           
|                                                               | Income (loss) applicable to common
stock                                                                       |   | $                   | (60,224    | )             |   | $            | (785       | ) |   | $           | 59,723     |  
|                                                               | Effect of dilutive securities 
Dividends on Series A and B
preferred stock                                    |   |                     |           |               |   |              |           |   |   |             | 4,100      |  
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|                                                               |                                                                                                                | $ | (60,224             | )          |               | $ | (785         | )          |   | $ | 63,823      |           
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|Divided by the sum of:                                         |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |           
|                                                               | Weighted average shares outstanding                                                                            |   |                     | 13,673,557 |               |   |              | 13,449,995 |   |   |             | 3,357,825  |  
|                                                               | Weighted average warrants outstanding                                                                          |   |                     |           |               |   |              |           |   |   |             | 1,893,531  |  
|                                                               | Dilutive potential common shares 
Series A and B preferred stock                                              |   |                     |           |               |   |              |           |   |   |             | 28,554,295 |  
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|                                                               |                                                                                                                |   | 13,673,557          |            |               |   | 13,449,995   |            |   |   | 33,805,651  |           
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  
|Diluted net income (loss) per share
applicable to common stock |                                                                                                                | $ | (4.40               | )          |               | $ | (0.06        | )          |   | $ | 1.89        |           
|                                                               |                                                                                                                |   |                     |            |               |   |              |            |   |   |             |            |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|-------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | - | ------------------- | ---------- | ------------- | - | ---------- | ---------- | - | - | ----------- | ---------- | 
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   | Predecessor
|                                                               |                                                                                                                |   | Reorganized Company |            | Company      
|                                                               |                                                                                                                |   |                     |            |              
|                                                               |                                                                                                                |   | Three Months        |            | One Month     |   | Two Months
|                                                               |                                                                                                                |   | Ended               |            | Ended         |   | Ended     
|                                                               |                                                                                                                |   | September 30,       |            | September 30, |   | August 31,
|                                                               |                                                                                                                |   | 2003                |            | 2002          |   | 2002      
|                                                               |                                                                                                                |   |                     |            |               |   |           
|Basic net income (loss) per share:                             |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |           
|Net income (loss)                                              |                                                                                                                | $ | (4,252              | )          |               | $ | (35        | )          |   | $ | 59,078      |           
|                                                               | Series C Preferred Stock dividends                                                                             |   |                     | (2,511     | )             |   |            | (750       | ) |   |             |           | 
|                                                               | Series A and B Preferred Stock
dividends                                                                       |   |                     |           |               |   |            |           |   |   |             |           | 
|                                                               | Excess fair value of consideration
transferred over carrying value of
Series C Preferred Stock upon
redemption |   |                     | (38,118    | )             |   |            |           |   |   |             |           | 
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|                                                               | Income (loss) applicable to common
stock                                                                       |   | $                   | (44,881    | )             |   | $          | (785       | ) |   | $           | 59,078     | 
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|Divided by the sum of:                                         |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |           
|                                                               | Weighted average shares outstanding                                                                            |   |                     | 14,015,021 |               |   |            | 13,499,995 |   |   |             | 3,357,825  | 
|                                                               | Weighted average warrants outstanding                                                                          |   |                     |           |               |   |            |           |   |   |             | 1,893,531  | 
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|                                                               |                                                                                                                |   | 14,015,021          |            |               |   | 13,499,995 |            |   |   | 5,251,356   |           
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|Basic net income (loss) per share
applicable to common stock   |                                                                                                                | $ | (3.20               | )          |               | $ | (0.06      | )          |   | $ | 11.37       |           
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|Diluted net income (loss) per share:                           |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |           
|                                                               | Income (loss) applicable to common
stock                                                                       |   | $                   | (44,881    | )             |   | $          | (785       | ) |   | $           | 59,078     | 
|                                                               | Effect of dilutive securities 
Dividends on Series A and B
preferred stock                                    |   |                     |           |               |   |            |           |   |   |             |           | 
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|                                                               |                                                                                                                | $ | (44,881             | )          |               | $ | (785       | )          |   | $ | 59,078      |           
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|Divided by the sum of:                                         |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |           
|                                                               | Weighted average shares outstanding                                                                            |   |                     | 14,015,021 |               |   |            | 13,449,995 |   |   |             | 3,357,825  | 
|                                                               | Weighted average warrants outstanding                                                                          |   |                     |           |               |   |            |           |   |   |             | 1,893,531  | 
|                                                               | Dilutive potential common shares 
Series A and B preferred stock                                              |   |                     |           |               |   |            |           |   |   |             | 28,554,295 | 
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|                                                               |                                                                                                                |   | 14,015,021          |            |               |   | 13,449,995 |            |   |   | 33,805,651  |           
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 
|Diluted net income (loss) per share
applicable to common stock |                                                                                                                | $ | (3.20               | )          |               | $ | (0.06      | )          |   | $ | 1.75        |           
|                                                               |                                                                                                                |   |                     |            |               |   |            |            |   |   |             |            | 

In a redemption of preferred stock, the excess of the fair value of the
consideration transferred to the holders of preferred stock over the carrying
amount of the preferred stock represents a return to the preferred
stockholders. Upon the redemption of the Series C Preferred Stock, the excess
consideration (2,382,348 shares of common stock valued at $16.00 per share, or
$38,118) was deducted in the calculation of income (loss) applicable to common
stock in the computation of basic and diluted net income (loss) per share,
representing $(2.78) and $(2.72) per share for the nine and three months ended
September 30, 2003.

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##### Table of Contents



ANCHOR GLASS CONTAINER CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)

NOTE 6  Commitments and Contingencies

The Company is, and from time to time may be, a party to routine legal
proceedings incidental to the operation of its business. The outcome of any
pending or threatened proceedings is not expected to have a material adverse
effect on the financial condition, operating results or cash flows of the
Company, based on the Companys current understanding of the relevant facts.
Legal expenses incurred related to these contingencies are generally expensed
as incurred.

The Companys operations are subject to various federal, state and local
requirements that are designed to protect the environment. Such requirements
have resulted in the Company being involved in related legal proceedings,
claims and remediation obligations. Based on the Companys current
understanding of the relevant facts, the Company does not believe that its
environmental exposure is in excess of the reserves reflected on its balance
sheet, although there can be no assurance that this will continue to be the
case.

NOTE 7  Restatement

These financial statements include a restated condensed balance sheet of
the Company at December 31, 2002, after determination that its Series C
Preferred Stock should be classified as temporary equity. This restatement is
limited solely to classifying:



| | (i)  |  | the aggregate of $75,000 of the Companys Series C Preferred Stock
from permanent stockholders equity and
| | ---- |  | ----------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the related accrued dividends of $3,022 from long-term liabilities                                        

to the temporary equity section of the balance sheet under the caption entitled
Redeemable Preferred Stock.

The restatement had no effect on the Companys statements of operations,
income (loss) per share, assets or cash flows. Furthermore, as described in
Note 2, all of the Series C Preferred Stock was redeemed in full on September
30, 2003 with a portion of the net proceeds of the Equity Offering.
Accordingly, the change in classification has no effect on the Companys
balance sheet as of or following September 30, 2003.

The following table summarizes the impact of the restatement as of
December 31, 2002:

|                                                         |                                                     |   |         |                   |  |         |        |          |   |   |         |       |  | 
|-------------------------------------------------------- | --------------------------------------------------- | - | ------- | ----------------- |  | ------- | ------ | -------- | - | - | ------- | ----- |  | 
|                                                         |                                                     |   |         | December 31, 2002
|                                                         |                                                     |   |         |                  
|                                                         |                                                     |   |         | As                |  |         |        |          |   |   |         |      
|                                                         |                                                     |   |         | Reported          |  | Reclass |        | Restated
|                                                         |                                                     |   |         |                   |  |         |        |         
|LIABILITIES AND STOCKHOLDERS
EQUITY (in part):          |                                                     |   |         |                   |  |         |        |          |   |   |         |      
|Other long-term liabilities                              |                                                     | $ | 26,974  |                   |  | $       | (3,022 | )        |   | $ | 23,952  |      
|Total long-term liabilities                              |                                                     |   | 310,389 |                   |  |         | (3,022 | )        |   |   | 307,367 |      
|Redeemable preferred stock
(including accrued dividends) |                                                     |   |        |                   |  |         | 78,022 |          |   |   | 78,022  |      
|Stockholders equity:                                    |                                                     |   |         |                   |  |         |        |          |   |   |         |      
|                                                         | Preferred stock                                     |   |         | 1                 |  |         |        | (1       | ) |   |         |      | 
|                                                         | Participation component of
Series C preferred stock |   |         | 750               |  |         |        | (750     | ) |   |         |      | 
|                                                         | Capital in excess of par value                      |   |         | 77,899            |  |         |        | (74,249  | ) |   |         | 3,650 | 
|                                                         | Total stockholders equity                          |   |         | 76,499            |  |         |        | (75,000  | ) |   |         | 1,499 | 

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

Overview

Company Background

The Company is the third largest manufacturer of glass containers in the
United States, focused solely on this packaging industry segment. The Company
has nine strategically located facilities where it produces a diverse line of
flint (clear), amber, green and other colored glass containers of various
types, designs and sizes for the beer, flavored alcoholic beverages,
non-alcoholic beverages, liquor and food markets. The Company manufactures and
sells its products to many of the leading producers of products in these
categories.

Initial Public Offering

On September 30, 2003, the Company consummated an initial public offering
of 7,500,000 shares of its common stock, par value $.10 per share, at the
initial public offering price of $16.00 per share. On October 8, 2003, the
underwriters for the Equity Offering exercised an option to purchase 1,125,000
additional shares of common stock to cover over-allotment of shares in
connection with the Equity Offering and a related closing was held on October
14, 2003. The Company received net proceeds from the Equity Offering of
approximately $127.8 million (including proceeds of approximately $16.8 million
from the exercise of the over-allotment option).

Of the net proceeds of the Equity Offering, approximately $85.3 million
were used to redeem all of the Series C Participating Preferred Stock, par
value $.01. The redemption price of the Series C Preferred Stock was equal to
the sum of (i) $1,000 per share ($75.0 million) plus all accrued and unpaid
dividends computed to the date of redemption ($10.3 million) and (ii) 15% of
the fair market value of all of the outstanding shares of common stock. The
portion of the redemption price specified in clause (ii) of the preceding
sentence was paid through the issuance of 2,382,348 shares of common stock
(valued at $38.1 million based on the initial public offering price of $16.00
per share). The remainder of the net proceeds will be used to fund working
capital and for general corporate purposes. Pending application of these net
proceeds, advances outstanding under Anchors Revolving Credit Facility were
paid down and the excess funds were invested in short term U.S. government
securities.

Senior Secured Notes Offering

On February 7, 2003, the Company completed an offering of $300.0 million
aggregate principal amount of 11% Senior Secured Notes due 2013, issued under
the Indenture. The Senior Secured Notes are senior secured obligations of the
Company, ranking equal in right of payment with all existing and future
unsubordinated indebtedness of the Company and senior in right of payment to
all future subordinated indebtedness of the Company. The Senior Secured Notes
are secured by a first priority lien, subject to certain permitted
encumbrances, on substantially all of Anchors existing real property,
equipment and other fixed assets relating to Anchors nine operating glass
container manufacturing facilities. The collateral does not include inventory,
accounts receivables or intangible assets.

Proceeds from the issuance of the Senior Secured Notes, net of fees, were
approximately $289.0 million and were used to repay 100% of the principal
amount outstanding under the First Mortgage Notes plus accrued interest thereon
(approximately $156.3 million in total), 100% of the principal amount
outstanding under the Term Loan plus accrued interest thereon and a prepayment
fee (approximately $20.4 million in total) and advances then outstanding under
the Revolving Credit Facility (approximately $66.9 million in total), which
included funds for certain of the Companys capital improvement projects.
During the first quarter of 2003, the remaining proceeds of approximately $45.0
million were used to terminate certain equipment leases by purchasing from the
respective lessors the equipment leased thereunder.

On August 5, 2003, the Company completed an additional offering of the
Additional Notes. Proceeds from the issuance of the Additional Notes, net of
fees, were approximately $53.4 million. The Additional Notes were issued at an
issue price of 107.5% of their principal amount. The Additional Notes were
issued under the same Indenture as the Senior Secured Notes, as supplemented by
a first supplemental

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##### Table of Contents



indenture, dated August 5, 2003, and their terms are identical in all
material respects to the Senior Secured Notes, except that the Additional Notes
currently are subject to certain restrictions on transfer.

No less than 75% of the net proceeds from the issuance of the Additional
Notes will be used to finance improvements to the collateral securing the
Senior Secured Notes and the Additional Notes or to refinance indebtedness
incurred by the Company to finance improvements to the collateral, in each case
in compliance with the Indenture. Pending application of such proceeds, a
portion of the net proceeds were used to pay down advances outstanding under
the Revolving Credit Facility of approximately $49.7 million. Any portion of
the net proceeds not so used as provided for above will be used for general
corporate purposes.

The Company entered into a registration rights agreement on August 5, 2003
with respect to the Additional Notes. Under this agreement, the Company is
required to file a registration statement for notes having substantially
identical terms as the Additional Notes by November 3, 2003, have the
registration statement declared effective by January 2, 2004 and consummate the
related exchange by February 1, 2004. Although not contractually obligated to
do so, the Company will also offer for exchange, approximately $1.2 million of
Senior Secured Notes issued February 7, 2003, that were not exchanged in the
exchange offer that was consummated on August 5, 2003.

Reorganization

On August 30, 2002, Anchor consummated a significant restructuring of its
existing debt and equity securities through a Chapter 11 reorganization (the
Reorganization). As part of this Reorganization, Cerberus, through certain
Cerberus-affiliated funds and managed accounts, invested $80.0 million of new
equity capital into Anchor, acquiring 100% of Anchors Series C Preferred Stock
for $75.0 million and 100% of Anchors common stock for $5.0 million. In
addition, Anchor arranged for a $20.0 million Term Loan from Ableco Finance
LLC. In connection with the restructuring, Anchor also put in place a new
$100.0 million Revolving Credit Facility. In addition, Anchor settled various
lawsuits, eliminated certain related party claims and contracts and entered
into an agreement with the PBGC settling Anchors outstanding pension liability
(the PBGC Agreement). The Term Loan was subsequently repaid with a portion of
the proceeds from the offering of the Senior Secured Notes. The Series C
Preferred Stock was redeemed in full with a portion of the proceeds of the
Equity Offering.

The Reorganization was consummated on August 30, 2002; however, for
accounting purposes, the Company has accounted for the reorganization and fresh
start adjustments as of August 31, 2002, to coincide with its normal financial
closing for the month of August. The Companys financial statements as of and
for periods subsequent to August 31, 2002 are referred to as the Reorganized
Company statements. All financial statements prior to that date are referred
to as the Predecessor Company statements. The financial statements for the
eight months ended August 31, 2002 give effect to the restructuring and
reorganization adjustments and the implementation of fresh start accounting.

Results of Operations

Results for nine months ended September 30, 2002 contain two different
bases of accounting and, consequently, after giving effect to the
reorganization and fresh start adjustments, the historical financial statements
of the Reorganized Company are not comparable to those of the Predecessor
Company and have been separately disclosed.

Net sales.Net sales for the third quarter of 2003 were $193.5 million
compared to net sales of $180.4 million for the periods comprising the third
quarter of 2002, an increase of $13.1 million, or 7.3%. This increase is
principally the result of an increase in unit shipments of 7.0%, primarily in
the beer product line.

Net sales for the first nine months of 2003 were $542.8 million compared
to net sales of $558.7 million for the periods comprising the first nine months
of 2002. The decrease in net sales of approximately $15.9 million, or 2.8%, was
principally the result of a decrease in unit shipments of approximately 4.1% in
the nine months ended September 30, 2003 as compared with the periods
comprising the first nine months

15



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##### Table of Contents



of 2002, offset by certain price increases. The Company believes that the
negative impact on sales in the early months of 2003 was due to the softness in
the economy, the effect of the military action against Iraq and the harsh
weather conditions experienced during the winter and spring in certain parts of
the United States.

Cost of products sold.The Companys cost of products sold in the third
quarter and the first nine months of 2003 was $178.3 million and $499.3
million, respectively (or 92.1% and 92.0% of net sales), while the cost of
products sold for the periods comprising the third quarter and the first nine
months of 2002 was $161.4 million and $502.1 million, respectively (or 89.5%
and 89.9% of net sales). This decline in margin in 2003 principally was due to
the increase in the cost of natural gas, the principal fuel for manufacturing
glass, of approximately $4.4 million (2.3% of net sales) and $15.1 million
(2.8% of net sales), respectively, in the three months and nine months ended
September 30, 2003, as compared with the periods comprising the third quarter
and the first nine months of 2002. The Company also incurred costs associated
with downtime during the capital improvement project at the Warner Robins,
Georgia facility in the third quarter of 2003 and at the Henryetta, Oklahoma
facility in the first quarter of 2003. In the first quarter of 2002, the
Company incurred costs associated with downtime during the modernization
project at the Elmira, New York facility. In addition, margin was impacted by
cost increases, especially for depreciation, offset by additional manufacturing
efficiencies due to the Companys cost reduction efforts and by reduced
operating lease expense of approximately $7.2 million in the nine months ended
September 30, 2003 as a result of the buyout of certain equipment leases.

Selling and administrative expenses.Selling and administrative expenses
for the three months and nine months ended September 30, 2003 were $6.6 million
and $20.1 million, respectively, or 3.4% and 3.7% of net sales, while selling
and administrative expenses for the periods comprising the third quarter and
the first nine months of 2002 were $6.0 million and $21.2 million,
respectively, or 3.3% and 3.8% of net sales. The year to date decline in
selling and administrative expenses resulted from lower personnel and benefit
costs incurred in the first nine months of 2003 as compared with the first nine
months of 2002. Excluding the effect of restructuring related adjustments in
the 2002 third quarter period, selling and administrative expenses declined in
the third quarter of 2003.

Restructuring, net and Reorganization items, net.On August 30, 2002, the
effective date of the plan of reorganization, the Company adopted fresh start
reporting pursuant to the American Institute of Certified Public Accountants
Statement of Position 90-7 Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code. The adoption of fresh start reporting results in
the Company revaluing its balance sheet to fair value based on the
reorganization value of the Company. Reorganization costs for the eight months
ended August 31, 2002 consisted of a net gain for fresh start adjustments of
$49.9 million and expenses incurred in the Chapter 11 proceedings of $2.5
million.

On August 30, 2002, the Company completed the Reorganization and recorded
a net gain for restructuring of $0.4 million during the eight months ended
August 31, 2002. The significant components of this net gain include:
professional fees$10.1 million; direct costs of the restructuring$7.9
million; first mortgage note holder consent fee$5.6 million; monetization of
assets$4.5 million; other fees$3.9 million; net cost of derivative
settlement$0.2 million; retiree benefit plan modification($24.4 million); and
adjustment to pension liabilities($8.2 million).

No comparable costs were incurred in 2003.

Interest expense.Interest expense for the third quarter of 2003 was $11.7
million compared to $6.5 million for the periods comprising the third quarter
of 2002, an increase of $5.2 million. Interest expense for the first nine
months of 2003 was $36.8 million compared to $20.5 million for the periods
comprising the first nine of 2002, an increase of $16.3 million. Interest
expense related to the Senior Secured Notes in 2003 increased $11.1 million, as
compared with interest expense related to the First Mortgage Notes in 2002. A
noncash write-off of approximately $3.6 million, for deferred fees related to
debt repaid with proceeds from the issuance of the Senior Secured Notes,
together with payments of $0.3 million for the Term Loan prepayment penalty and
$0.4 million for the consent fee paid to the First Mortgage Note holders were
included in interest expense in 2003 and totaled $4.3 million. Under the PBGC
Agreement entered into on August 30, 2002, interest was incurred for the full
nine months ended

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September 30, 2003 as compared to the one month ended September 30, 2002,
an increase of approximately $3.7 million. Interest expense in 2002, not
recurring in 2003, included a $1.6 million accrual of interest on the 9.875%
Senior Notes due 2008, aggregate principal amount of $50.0 million (the Senior
Notes). The Senior Notes were repaid on August 30, 2002 and the related unpaid
interest was reversed through a credit to reorganization items, net in August
2002. The overall increase in interest expense was also partially offset by
lower average interest rates and lower average borrowings outstanding under the
Companys Revolving Credit Facility in 2003.

Net income (loss).The Company recorded a net loss of $4.2 million for the
third quarter of 2003 and a net loss of $14.8 million in the first nine months
of 2003. The Company recorded net income of $59.0 million and $63.8 million in
the periods comprising the third quarter and nine months ended September 30,
2002. The restructuring and reorganization items in the periods comprising the
nine months ended September 30, 2002 were $47.8 million, leaving income of
$16.0 million attributable to all other operations.

The decline in earnings for the first nine months of 2003 was primarily
due to the increase in the cost of natural gas, higher interest expense
(including a charge in the first quarter of 2003 of $4.3 million for the
write-off of deferred fees for debt repaid with proceeds from the Senior
Secured Notes and other related payments) and lower sales volumes during the
period, offset by an improvement in earnings as a result of cost reductions due
to manufacturing efficiencies, certain price increases and lower operating
lease expenses.

Liquidity and Capital Resources

The Companys principal sources of liquidity are funds derived from
operations and borrowings under the Revolving Credit Facility. The Company
believes that cash flows from operating activities, combined with proceeds of
the Equity Offering, proceeds from the issuance of the Additional Notes and
available borrowings under the Revolving Credit Facility will be sufficient to
support its operations and liquidity requirements for the foreseeable future,
although the Company cannot be assured that this will be the case. Peak
operating needs are in the spring, at which time working capital borrowings are
significantly higher than at other times of the year.

Cash Flows

Operating Activities.Operating activities consumed $10.7 million in cash
in the first nine months of 2003, as compared to cash provided of $10.0 million
and $53.1 million, respectively, in the one month ended September 30, 2002 and
the eight months ended August 31, 2002. This increase in cash consumed reflects
the decline in earnings, before consideration of restructuring and
reorganization items, of approximately $30.8 million and changes in working
capital items. Inventory levels increased approximately $28.0 million and
current liabilities declined approximately $22.4 million from year-end 2002
levels. Although the Company has historically built inventory in the first
quarter of the year, it built slightly higher than normal inventory levels in
the first and second quarters of 2003 as a result of the lower shipment volume
in the first half of 2003 caused by the effects of the temporary softness in
the economy and winter weather. In addition, as a result of higher natural gas
prices, net cash outlays for natural gas purchases in the nine months ended
September 30, 2003 increased approximately $15.1 million as compared to the
same period of 2002. Furthermore, interest payments in the first nine months of
2003 were approximately $31.7 million, as compared to approximately $12.2
million in the periods comprising the first nine months of 2002.

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Investing Activities.Cash consumed in investing activities was $107.1
million ($80.4 million of capital expenditures) in the first nine months of
2003, as compared to $54.8 million ($48.1 million of capital expenditures) for
the periods comprising the first nine months of 2002. The Company has recently
completed several projects to expand and improve overall productive capacity,
including



| |  |  | in the third quarter of 2003, a
$27.5 million project at its
Warner Robins, Georgia facility, including approximately $10.7
million of betterment investment;         
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | in the first quarter of 2003, a $28.0 million project at its
Henryetta, Oklahoma facility, including approximately $13.4 million
of betterment investment; and        
|
| |  |  | in the first quarter of 2002, an investment of approximately
$16.6 million and completion of the $31.0 million modernization
project at its Elmira, New York facility.

In the first quarter of 2003, the Company used approximately $45.0 million
of the proceeds from the offering of the Senior Secured Notes to terminate
certain equipment leases by purchasing from the respective lessors the
equipment leased thereunder (of which approximately $39.2 million is included
in investing activities and approximately $5.5 million is included in financing
activities). In addition, the Company financed $10.0 million of equipment under
its master lease agreement.

Financing Activities.Net cash provided for financing activities was
$132.3 million in the nine months ended September 30, 2003. The net financing
activities in 2003 principally reflects the net proceeds of the Equity Offering
of $111.0 million (the proceeds of the over-allotment option being received in
October 2003) and the use of proceeds for the cash redemption of the Series C
Preferred Stock of $85.2 million, the proceeds of the offering of the
Additional Notes of $53.4 million, and the proceeds of the offering of $300.0
million of Senior Secured Notes and repayment of the First Mortgage Notes and
the Term Loan.

On August 30, 2002, pursuant to the PBGC Agreement, Anchor granted the
PBGC a warrant for the purchase of 711,000 shares of its common stock. In June
2003, the Company repurchased all of the outstanding warrants held by the PBGC
for a negotiated price of $1.5 million.

Debt and Other Contractual Obligations

On February 7, 2003, the Company completed an offering of 11% Senior
Secured Notes. On August 5, 2003, the Company completed an additional offering
of 11% Senior Secured Notes. See OverviewSenior Secured Notes Offering.

Under a master lease agreement entered into in December 2002, the Company
leased equipment in the amount of $20.0 million in the aggregate. The Company
financed $10.0 million of equipment in December 2002 and an additional $10.0
million of equipment in March 2003, each under a lease term of five years. The
master lease agreement is structured as a capital lease under GAAP. For each
group of equipment items the Company agreed to lease, it entered into an
equipment schedule that applied the terms of the master lease to such
equipment.

In August 2002, in connection with the Reorganization, the Company entered
into a ten-year payment obligation under the PBGC Agreement. The Company is
required to make monthly payments to the PBGC in the amount of $833,333.33. The
present value of this obligation was approximately $61.8 million at September
30, 2003.

As of October 24, 2003, there were no advances outstanding under the
Revolving Credit Facility, borrowing availability was approximately $81.7
million and outstanding letters of credit on this facility were approximately
$7.6 million.

The obligations under the Revolving Credit Facility are secured by a first
priority security interest in all of the Companys inventories, receivables,
general intangibles and proceeds therefrom. In addition, the Revolving Credit
Facility contains customary negative covenants and restrictions for
transactions

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including, without limitation, restrictions on indebtedness, liens,
investments, fundamental business changes, asset dispositions outside of the
ordinary course of business, certain junior payments, transactions with
affiliates and changes relating to indebtedness. The Revolving Credit Facility
requires that the Company meet a quarterly fixed charge coverage test unless
minimum availability declines below $10.0 million in which case the Company
must meet a monthly fixed charge coverage test.

In the fourth quarter of 2003, the Company expects cash outlays of
approximately $27 million for capital expenditures, approximately $2.9 million
for payments under its capital and operating leases and $2.5 million for
payments under the PBGC Agreement.

In addition to the above, the Company is obligated to pay approximately
$3.9 million annually related to its post-retirement benefit plan and
approximately $5.2 million annually to multiemployer plans for the future
service benefits of its hourly employees.

Capital Expenditures

Capital expenditures were approximately $80.4 million in the first nine
months of 2003 and are expected to total approximately $108 million in 2003 and
$55 million in 2004. The capital expenditures in the remainder of 2003 include
capital improvement projects at the Companys Salem, New Jersey and
Lawrenceburg, Indiana facilities. The Companys principal sources of liquidity
for funding of the remaining 2003 and 2004 capital expenditures are expected to
be from the proceeds of the issuance of the Additional Notes, funds derived
from operations and borrowings under the Revolving Credit Facility.

Off-Balance Sheet Arrangements

Except for operating lease commitments (approximately $4.0 million
annually), the Company is not party to any off-balance sheet arrangements.

Impact of Inflation

The impact of inflation on the Companys costs, and the ability to pass on
cost increases in the form of increased sales prices, is dependent upon market
conditions. The Company has experienced significant cost increases in specific
materials and energy and has not been fully able to pass on these cost
increases to its customers for several years, although the Company did realize
some price increases in 2001 and 2002, primarily due to the abnormally high
energy costs experienced in 2001. Since 2002, closing prices for natural gas
have fluctuated significantly from a low of $1.830 per MMBTU in October 2001 to
a high of $9.978 per MMBTU in January 2001, compared to an average price of
$2.238 per MMBTU from 1995 through 1999. Since the 2001 price peak, natural gas
prices have remained volatile. From January through October of 2003, natural
gas prices have closed between $4.430 and $9.133 per MMBTU with the high being
in March 2003 and the low being October 2003. A material increase in the price
of natural gas would have a material adverse effect on the Companys results of
operations and financial condition.

Seasonality

Due principally to the seasonal nature of the brewing and some other
segments of the beverage industry, in which demand is stronger during the
summer months, the Companys shipment volume is typically higher in the second
and third quarters. Consequently, the Company has historically built inventory
during the fourth and first quarters in anticipation of seasonal demands during
the second and third quarters.

In addition, although the Company seeks to minimize downtime, it has
historically scheduled shutdowns of its plants for furnace rebuilds and machine
repairs in the fourth and first quarters of the year to coincide with scheduled
holiday and vacation time under its labor union contracts. These shutdowns
normally adversely affect profitability during the fourth and first quarters.

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Information Concerning Forward-Looking Statements

This report includes forward-looking statements. Forward-looking
statements include, without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or achievements, and
may contain the words believe, anticipate, expect, estimate,
intend, project, will be,
will likely continue, will likely
result, or words or phrases of similar meaning including, among other things,
statements concerning:



| |  |  | the Companys liquidity and capital resources;                                          
| | - |  | ----------------------------------------------------------------------------------------
|
| |  |  | competitive pressures and trends in the glass container or beverage and food industries;
|
| |  |  | prevailing interest rates;                                                              
|
| |  |  | prices for energy, particularly natural gas, and other raw materials;                   
|
| |  |  | legal proceedings and regulatory matters; and                                           
|
| |  |  | general economic conditions.                                                            

Forward-looking statements involve risks and uncertainties faced by the
Company including, but not limited to, economic, competitive, governmental and
technological factors outside the control of the Company, that may cause actual
results to differ materially from the forward-looking statements. These risks
and uncertainties may include the highly competitive nature of the glass
container industry and the intense competition from makers of alternative forms
of packaging; fluctuations in the price of natural gas; the Companys focus on
the beer industry and its dependence on certain key customers; the seasonal
nature of brewing and other beverage industries; volatility in demand from
emerging new markets; the Companys dependence on certain executive officers;
and changes in environmental and other government regulations. The Company
operates in a changing environment in which new risk factors can emerge from
time to time. It is not possible for management to predict all of these risks,
nor can it assess the extent to which any factor, or a combination of factors,
may cause actual results to differ materially from those contained in
forward-looking statements. Given these risks and uncertainties, readers are
cautioned not to place undue reliance on forward-looking statements.

New Accounting Standards

In November 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN 45).
FIN 45 requires that, upon issuance of a guarantee, the guarantor must
recognize a liability for the fair value of the obligation it assumes under
that guarantee. The provisions for initial recognition and measurement for FIN
45 should be applied on a prospective basis to guarantees issued or modified
after December 31, 2002. This interpretation did not have a significant effect
on the Companys financial position or results of operations.

In January 2003, the Financial Accounting Standards Board issued FASB
Interpretation No. 46Consolidation of Variable Interest Entities (FIN 46).
The primary objectives of FIN 46 are to provide guidance on how to identify
entities for which control is achieved through means other than through voting
rights. The adoption of this interpretation did not impact the Companys
financial position or results of operations.

In January 2003, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 150Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity (SFAS 150),
effective for financial instruments entered into or modified after May 31,
2003, and otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. SFAS 150 establishes standards for how an issuer
classifies and measures certain financial instruments with characteristics of
both liabilities and equity. The adoption of SFAS 150 did not impact the
Companys financial position or results of operations.

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##### Table of Contents






Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The Revolving Credit Facility is subject to interest rates based on a
floating benchmark rate (the prime rate or eurodollar rate), plus an applicable
margin. The applicable margin was fixed through February 2003, and thereafter
became a fixed spread based on the Companys level of excess availability. A
change in interest rates under the Revolving Credit Facility could adversely
impact results of operations. A 10 percent fluctuation in the market rate of
interest would impact annual interest expense by approximately $0.2 million,
based on average borrowings outstanding during 2003. The Companys long-term
debt instruments are subject to fixed interest rates and, in addition, the
amount of principal to be repaid at maturity is also fixed. Therefore, the
Company is not subject to market risk from its long-term debt instruments.

Less than 1% of the Companys net sales are denominated in currencies
other than the U.S. dollar, and the Company does not believe its total exposure
to currency fluctuations to be significant. Through the purchase of natural gas
futures, the Company has hedged certain of its estimated natural gas purchases,
typically over a period of six to twelve months, although the Company currently
has hedges in place extending through December 2004. The Company does not enter
into such hedging transactions for speculative trading purposes but rather to
lock in energy prices. Also, the Company has entered into put and call options
for purchases of natural gas. Accounting for these derivatives may increase
volatility in earnings.




Item 4. Controls and Procedures.

An evaluation was carried out, within the 90 days prior to the filing of
this report, under the supervision of the Chief Executive Officer and the Chief
Financial Officer of the effectiveness of the design and operation of the
Companys disclosure controls and procedures pursuant to Exchange Act Rules
13a-14 and 15d-14. Based on that evaluation, Anchors Chief Executive Officer
and Chief Financial Officer have concluded that the Companys disclosure
controls and procedures are effective.

There were no significant changes in the Companys disclosure controls and
procedures or in other factors that could significantly affect these controls
and procedures subsequent to the date of their evaluation and there were no
corrective actions with regard to significant deficiencies and material
weaknesses in these controls and procedures.

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##### Table of Contents






PART II - OTHER INFORMATION




Item 1. Legal Proceedings.

The Company is, and from time to time may be, a party to routine legal
proceedings incidental to the operation of its business. The outcome of any
pending or threatened proceedings is not expected to have a material adverse
effect on the financial condition, operating results or cash flows of the
Company, based on the Companys current understanding of the relevant facts.
Legal expenses incurred related to these contingencies are generally expensed
as incurred.

The Companys operations are subject to various federal, state and local
requirements that are designed to protect the environment. Such requirements
have resulted in the Company being involved in related legal proceedings,
claims and remediation obligations. Based on the Companys current
understanding of the relevant facts, the Company does not believe that its
environmental exposure is in excess of the reserves reflected on its balance
sheet, although there can be no assurance that this will continue to be the
case.




Item 2. Changes in Securities and Use of Proceeds.

None.




Item 3. Defaults Upon Senior Securities.

None




Item 4. Submission of Matters to a Vote of Security Holders.

On September 11, 2003, in connection with the Equity Offering, the holders
of a majority of the Companys common stock approved a charter amendment
increasing the outstanding capital stock of the Company by effecting a three
for two stock split of the common stock.




Item 5. Other Information.

None




Item 6. Exhibits and Reports on Form 8-K.

|     |  |                                                                                                                                                                                                                                                                                                                        |  |                                                                  
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------
|(a.) |  | Exhibits                                                                                                                                                                                                                                                                                                               |  |                                                                  
|     |  |                                                                                                                                                                                                                                                                                                                        |  |                                                                  
|     |  | Exhibit 31.1                                                                                                                                                                                                                                                                                                           |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|     |  |                                                                                                                                                                                                                                                                                                                        |  |                                                                  
|     |  | Exhibit 31.2                                                                                                                                                                                                                                                                                                           |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|     |  |                                                                                                                                                                                                                                                                                                                        |  |                                                                  
|     |  | Exhibit 32                                                                                                                                                                                                                                                                                                             |  | Section 1350 Certifications                                      
|     |  |                                                                                                                                                                                                                                                                                                                        |  |                                                                  
|(b.) |  | Reports on Form 8-K                                                                                                                                                                                                                                                                                                   
|     |  |                                                                                                                                                                                                                                                                                                                        |  |                                                                  
|     |  | Current Report on Form 8-K dated July 28, 2003 and furnished July 29,
2003 under Item 9 (in accordance with SEC Release No. 33-8216, the
information is intended to be furnished under Item 12), regarding a
press release relating to the Companys results of operations for the
second quarter ended June 30, 2003.
|     |  |                                                                                                                                                                                                                                                                                                                        |  |                                                                  
|     |  | Current Report on Form 8-K dated September 25, 2003 and filed
September 25, 2003 pursuant to Item 5, filing as an exhibit, a press
release regarding the announcement that the Companys initial public
offering of 7,500,000 shares of its common stock priced at $16.00 per
share.                                  

22



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SIGNATURES

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

|                       |  |                        |  |                                   
|---------------------- |  | ---------------------- |  | ----------------------------------
|                       |  |                        |  | ANCHOR GLASS CONTAINER CORPORATION
|                       |  |                        |  |                                   
|Date: November 3, 2003 |  | /s/ Darrin J. Campbell
|                       |  |                        |  |                                   
|                       |  |                        |  | Darrin J. Campbell                
|                       |  |                        |  | Executive Vice President and      
|                       |  |                        |  | Chief Financial Officer           
|                       |  |                        |  | (Principal Financial Officer and  
|                       |  |                        |  | Duly Authorized Officer)          

23