##### 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended June 30, 2002

OR

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

Commission File Number: 0-233-59

ANCHOR GLASS CONTAINER CORPORATION
(Exact name of registrant as specified in its charter)

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

|                                                                 
|-----------------------------------------------------------------
|One Anchor Plaza, 4343 Anchor Plaza Parkway, Tampa, FL 33634-7513

|(Address of principal executive offices) |  | (Zip Code)
|---------------------------------------- |  | ----------

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

None
(Former name, former address and former fiscal year, if changed since last report)

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 .

Number of shares outstanding of each class of common stock at July 31, 2002:
3,357,825 shares





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##### 



ANCHOR GLASS CONTAINER CORPORATION
(Debtor-in-Possession)

FORM 10-Q

For the Quarterly Period Ended June 30, 2002

INDEX

|                                                                                                                                           |  |         
|------------------------------------------------------------------------------------------------------------------------------------------ |  | --------
|                                                                                                                                           |  | Page No.
|                                                                                                                                           |  |         
|PART I  FINANCIAL INFORMATION                                                                                                             |  |         
|                                                                                                                                           |  |         
|Item 1. Financial Statements:                                                                                                              |  |         
|                                                                                                                                           |  |         
|Condensed Statements of Operations and Comprehensive Income (Loss) -
                    Three and Six Months Ended June 30, 2002 and 2001 |  | 3       
|                                                                                                                                           |  |         
|Condensed Balance Sheets -
                    June 30, 2002 and December 31, 2001                                                         |  | 4       
|                                                                                                                                           |  |         
|Condensed Statements of Cash Flows -                    Six Months Ended June 30, 2002 and 2001                                            |  | 5       
|                                                                                                                                           |  |         
|Notes to Condensed Financial Statements                                                                                                    |  | 6       
|                                                                                                                                           |  |         
|Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations                                              |  | 12      
|                                                                                                                                           |  |         
|Item 3. Quantitative and Qualitative Disclosures About
Market Risk                                                                         |  | 20      
|                                                                                                                                           |  |         
|PART II  OTHER INFORMATION                                                                                                                |  | 20      
|                                                                                                                                           |  |         
|SIGNATURES                                                                                                                                 |  | 22      

2



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##### 



PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

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

|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |         |         |        |  
|------------------------------------------------------------------------ | ----------------------------------- | ---------------------------------- | ------------------------ | ------- | ---------------- | --- | ------------------ | ------- | ------- | ------ | --------- | ------- | ----- | - | --------- | ------- | ------- | ------ | -
|                                                                        
|                                                                         |                                     |                                    |                          |         | Six Months Ended |     | Three Months Ended
|                                                                         |                                     |                                    |                          |         | June 30,         |     | June 30,          
|                                                                         |                                     |                                    |                          |         |                  |     |                   
|                                                                         |                                     |                                    |                          |         | 2002             |     | 2001               |         | 2002    |        | 2001     
|                                                                        
|Net sales                                                                |                                     | $                                  | 378,260                  |         |                  | $   | 349,340            |         |         | $      | 199,878   |         |       | $ | 179,970   |        
|Costs and expenses:                                                      |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|                                                                         | Cost of products sold               |                                    |                          | 340,671 |                  |     |                    | 328,737 |         |        |           | 176,099 |       |   |           | 163,305 |        
|                                                                         | Selling and administrative expenses |                                    |                          | 15,224  |                  |     |                    | 14,094  |         |        |           | 7,531   |       |   |           | 6,937   |        
|                                                                         | Related party provision and charges |                                    |                          |        |                  |     |                    | 19,500  |         |        |           |        |       |   |           | 19,500  |        
|                                                                        
|Income (loss) from operations                                            |                                     |                                    | 22,365                   |         |                  |     | (12,991            | )       |         |        | 16,248    |         |       |   | (9,772    | )      
|Reorganization items                                                     |                                     |                                    | (4,129                   | )       |                  |     |                   |         |         |        | (4,129    | )       |       |   |          |        
|Other income (expense), net                                              |                                     |                                    | 483                      |         |                  |     | 353                |         |         |        | (380      | )       |       |   | 80        |        
|Interest expense                                                         |                                     |                                    | (13,974                  | )       |                  |     | (14,926            | )       |         |        | (6,791    | )       |       |   | (7,290    | )      
|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|Net income (loss)                                                        |                                     |                                    | 4,745                    |         |                  |     | (27,564            | )       |         |        | 4,948     |         |       |   | (16,982   | )      
|Preferred stock dividends                                                |                                     |                                    | (4,100                   | )       |                  |     | (7,028             | )       |         |        | (586      | )       |       |   | (3,514    | )      
|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|Income (loss) applicable to
common stock                                 |                                     | $                                  | 645                      |         |                  | $   | (34,592            | )       |         | $      | 4,362     |         |       | $ | (20,496   | )      
|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|Basic and diluted net income (loss) per
share applicable to common stock |                                     | $                                  | 0.12                     |         |                  | $   | (6.59              | )       |         | $      | 0.83      |         |       | $ | (3.90     | )      
|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|Basic weighted average number
of common shares outstanding               |                                     |                                    | 5,251,356                |         |                  |     | 5,251,356          |         |         |        | 5,251,356 |         |       |   | 5,251,356 |        
|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|Comprehensive income (loss):                                             |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|                                                                         |                                     | Net income (loss)                  |                          | $       | 4,745            |     |                    | $       | (27,564 | )      |           | $       | 4,948 |   |           | $       | (16,982 | )     
|                                                                         |                                     | Other comprehensive income (loss): |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |         |         |       
|                                                                         |                                     |                                    | Derivative income (loss) |         |                  | 531 |                    |         |         | (1,155 | )         |         |       |  |           |         |         | (1,155 | )
|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        
|Comprehensive income (loss)                                              |                                     | $                                  | 5,276                    |         |                  | $   | (28,719            | )       |         | $      | 4,948     |         |       | $ | (18,137   | )      
|                                                                         |                                     |                                    |                          |         |                  |     |                    |         |         |        |           |         |       |   |           |        



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3



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##### 



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

|                                               |                                                |                                          |                           |          |               |         |                   |          |        |         | 
|---------------------------------------------- | ---------------------------------------------- | ---------------------------------------- | ------------------------- | -------- | ------------- | ------- | ----------------- | -------- | ------ | ------- | 
|                                              
|                                               |                                                |                                          |                           |          | June 30, 2002 |         | December 31, 2001
|                                               |                                                |                                          |                           |          | (unaudited)   |         |                  
|                                              
|ASSETS                                         |                                                |                                          |                           |          |               |         |                   |         
|Current assets:                                |                                                |                                          |                           |          |               |         |                   |         
|                                               | Cash and cash equivalents                      |                                          | $                         | 3,107    |               |         | $                 | 6,209    |       
|                                               | Accounts receivable                            |                                          |                           | 54,833   |               |         |                   | 44,202   |       
|                                               | Inventories:                                   |                                          |                           |          |               |         |                   |          |       
|                                               |                                                | Raw materials and manufacturing supplies |                           |          | 22,543        |         |                   |          | 22,171 |        
|                                               |                                                | Finished products                        |                           |          | 68,887        |         |                   |          | 83,402 |        
|                                               | Other current assets                           |                                          |                           | 8,486    |               |         |                   | 7,087    |       
|                                               |                                                |                                          |                           |          |               |         |                   |         
|                                               |                                                |                                          | Total current assets      |          |               | 157,856 |                   |          |        | 163,071 | 
|Property, plant and equipment, net             |                                                |                                          | 271,148                   |          |               |         | 263,663           |         
|Assets held for sale                           |                                                |                                          | 9,263                     |          |               |         | 9,263             |         
|Other assets                                   |                                                |                                          | 31,178                    |          |               |         | 32,969            |         
|Intangible pension asset                       |                                                |                                          | 22,559                    |          |               |         | 22,559            |         
|Goodwill                                       |                                                |                                          | 44,852                    |          |               |         | 44,852            |         
|                                               |                                                |                                          |                           |          |               |         |                   |         
|                                               |                                                | $                                        | 536,856                   |          |               | $       | 536,377           |         
|                                               |                                                |                                          |                           |          |               |         |                   |         
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |                                                |                                          |                           |          |               |         |                   |         
|Current liabilities:                           |                                                |                                          |                           |          |               |         |                   |         
|                                               | Borrowings under debtor-in-possession facility |                                          | $                         | 57,988   |               |         | $                 |         |       
|                                               | Borrowings under revolving credit facility     |                                          |                           |         |               |         |                   | 56,774   |       
|                                               | Current maturities of long-term debt           |                                          |                           | 684      |               |         |                   | 822      |       
|                                               | Long-term debt classified as current           |                                          |                           | 205,471  |               |         |                   | 206,091  |       
|                                               | Accounts payable                               |                                          |                           | 43,917   |               |         |                   | 46,671   |       
|                                               | Accrued expenses                               |                                          |                           | 20,128   |               |         |                   | 23,781   |       
|                                               | Accrued interest                               |                                          |                           | 9,130    |               |         |                   | 5,686    |       
|                                               | Accrued compensation and employee benefits     |                                          |                           | 20,530   |               |         |                   | 24,581   |       
|                                               |                                                |                                          |                           |          |               |         |                   |         
|                                               |                                                |                                          | Total current liabilities |          |               | 357,848 |                   |          |        | 364,406 | 
|Long-term debt                                 |                                                |                                          | 1,291                     |          |               |         | 1,541             |         
|Long-term pension liabilities                  |                                                |                                          |                          |          |               |         | 122,541           |         
|Long-term post-retirement liabilities          |                                                |                                          | 65,277                    |          |               |         | 63,255            |         
|Other long-term liabilities                    |                                                |                                          | 25,748                    |          |               |         | 26,649            |         
|                                               |                                                |                                          |                           |          |               |         |                   |         
|                                               |                                                |                                          | 92,316                    |          |               |         | 213,986           |         
|Liabilities
subject to compromise              |                                                |                                          | 123,431                   |          |               |         |                  |         
|                                               |                                                |                                          |                           |          |               |         |                   |         
|Commitments and contingencies                  |                                                |                                          |                           |          |               |         |                   |         
|Redeemable preferred stock                     |                                                |                                          | 83,659                    |          |               |         | 82,026            |         
|                                               |                                                |                                          |                           |          |               |         |                   |         
|Stockholders equity (deficit):                |                                                |                                          |                           |          |               |         |                   |         
|                                               | Preferred stock                                |                                          |                           | 34       |               |         |                   | 34       |       
|                                               | Issuable preferred stock                       |                                          |                           | 21,731   |               |         |                   | 21,731   |       
|                                               | Common stock                                   |                                          |                           | 336      |               |         |                   | 336      |       
|                                               | Warrants                                       |                                          |                           | 9,446    |               |         |                   | 9,446    |       
|                                               | Capital in excess of par value                 |                                          |                           | 104,520  |               |         |                   | 104,520  |       
|                                               | Accumulated deficit                            |                                          |                           | (180,997 | )             |         |                   | (184,109 | )     
|                                               | Accumulated other comprehensive loss           |                                          |                           | (75,468  | )             |         |                   | (75,999  | )     
|                                               |                                                |                                          |                           |          |               |         |                   |         
|                                               |                                                |                                          | (120,398                  | )        |               |         | (124,041          | )       
|                                               |                                                |                                          |                           |          |               |         |                   |         
|                                               |                                                | $                                        | 536,856                   |          |               | $       | 536,377           |         
|                                               |                                                |                                          |                           |          |               |         |                   |         



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

|                                                  |                                                                                                |                                                      |         |                           |        |      |        |         |        |  
|------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------------------------- | ------ | ---- | ------ | ------- | ------ | -
|                                                 
|                                                  |                                                                                                |                                                      |         | Six Months Ended June 30,
|                                                  |                                                                                                |                                                      |         |                          
|                                                  |                                                                                                |                                                      |         | 2002                      |        | 2001
|                                                 
|Cash flows from operating activities:             |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  | Net income (loss)                                                                              |                                                      | $       | 4,745                     |        |      | $      | (27,564 | )     
|                                                  | Adjustments to reconcile net income (loss) to
cash provided by (used in) operating activities: |                                                      |         |                           |        |      |        |         |       
|                                                  |                                                                                                | Depreciation and amortization                        |         |                           | 29,201 |      |        |         | 30,084 |  
|                                                  |                                                                                                | Related party provision and charges                  |         |                           |       |      |        |         | 19,500 |  
|                                                  |                                                                                                | Loss (gain) on sale of property, plant and equipment |         |                           | 62     |      |        |         | (270   | )
|                                                  |                                                                                                | Other                                                |         |                           | (140   | )    |        |         | (332   | )
|                                                  | Decrease in cash resulting from changes in
assets and liabilities                              |                                                      |         | (762                      | )      |      |        | (22,745 | )     
|                                                  |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  |                                                                                                |                                                      | 33,106  |                           |        |      | (1,327 | )      
|                                                 
|Cash flows from investing activities:             |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  | Expenditures for property, plant and equipment                                                 |                                                      |         | (37,256                   | )      |      |        | (17,882 | )     
|                                                  | Deposit of sale proceeds into escrow account                                                   |                                                      |         |                          |        |      |        | (13,348 | )     
|                                                  | Withdrawal of funds from escrow account                                                        |                                                      |         |                          |        |      |        | 13,348  |       
|                                                  | Proceeds from sale of property, plant and equipment                                            |                                                      |         | 3,112                     |        |      |        | 13,512  |       
|                                                  | Other                                                                                          |                                                      |         | (2,242                    | )      |      |        | (2,210  | )     
|                                                  |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  |                                                                                                |                                                      | (36,386 | )                         |        |      | (6,580 | )      
|                                                 
|Cash flows from financing activities:             |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  | Principal payments of long-term debt                                                           |                                                      |         | (1,036                    | )      |      |        | (946    | )     
|                                                  | Net draws (repayments) on revolving credit facility                                            |                                                      |         | (56,774                   | )      |      |        | 10,734  |       
|                                                  | Net
draws on debtor-in-possession facility                                                     |                                                      |         | 57,988                    |        |      |        |        |       
|                                                  | Other                                                                                          |                                                      |         |                          |        |      |        | (737    | )     
|                                                  |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  |                                                                                                |                                                      | 178     |                           |        |      | 9,051  |        
|                                                 
|Cash and equivalents:                             |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  | Increase (decrease) in cash and cash equivalents                                               |                                                      |         | (3,102                    | )      |      |        | 1,144   |       
|                                                  | Balance, beginning of period                                                                   |                                                      |         | 6,209                     |        |      |        | 4,532   |       
|                                                  |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  | Balance, end of period                                                                         |                                                      | $       | 3,107                     |        |      | $      | 5,676   |       
|                                                  |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                 
|Supplemental disclosure of cash flow information: |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  | Interest payments                                                                              |                                                      | $       | 6,429                     |        |      | $      | 13,754  |       
|                                                  |                                                                                                |                                                      |         |                           |        |      |        |        
|                                                  | Reorganization
items                                                                           |                                                      | $       | 3,731                     |        |      | $      |        |       
|                                                  |                                                                                                |                                                      |         |                           |        |      |        |        



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5



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ANCHOR GLASS CONTAINER CORPORATION
(Debtor-in-Possession)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands)

NOTE 1  Managements Responsibility

In the opinion of Management, the accompanying condensed financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position as of June 30,
2002 and the results of operations for the three and six months ended June 30,
2002 and 2001 and cash flows for the six months ended June 30, 2002 and 2001.

Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed financial statements be read in conjunction with the Financial
Statements of Anchor Glass Container Corporation (the Company or Anchor)
included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2001. The results of operations for the interim periods are not
necessarily indicative of the results of the full fiscal year.

NOTE 2  Organization of the Company

Anchor, a Delaware corporation and a majority-owned subsidiary of
Consumers Packaging Inc. (Consumers), was formed in January 1997 to acquire
certain assets and assume certain liabilities of the former Anchor Glass
Container Corporation (Old Anchor), which was subsequently liquidated in a
proceeding under Chapter 11 of the United States Bankruptcy Code.

On February 5, 1997, pursuant to an asset purchase agreement among
Consumers, Owens-Brockway Glass Container Inc. (together with its affiliates
O-I) and Old Anchor, the Company (the rights and obligations of Consumers
having been assigned to the Company) and O-I acquired substantially all of the
assets, and assumed certain liabilities, of Old Anchor.

At June 30, 2002, Consumers owns approximately 59% of Anchor, indirectly
on a fully diluted basis (approximately 26.9% of the outstanding common stock),
through Consumers U.S., Inc. (Consumers U.S.), formed in January 1997, by
Consumers, as a holding company for Anchor. Under the reorganization, the
Common Stock and Series B Preferred Stock will be cancelled and the holders
will receive no distribution under the plan. As a result of the reorganization,
Consumers will no longer be a stockholder of Anchor. See Note 3.

Consumers U.S. is a guarantor of Anchors 11.25% First Mortgage Notes due
2005, aggregate principal amount of $150,000 (the First Mortgage Notes), the
guarantee being secured by the Common Stock and Series B Preferred Stock of
Anchor, held by Consumers U.S. Pursuant to the reorganization, Anchor expects
that Consumers U.S. will be released as a guarantor. See Note 3.

Prior to 2002, the Company was part of a group of glass manufacturing
companies with Consumers and GGC, L.L.C. (GGC) each of which was controlled
through G&G Investments, Inc. (G&G). G&G, directly or indirectly, continues
to hold the majority of the outstanding stock of Consumers. See Note 3.

The Company has, in
the past, engaged in a variety of transactions (including joint
purchasing, engineering, utilization of the Companys mold and repair shops and
management information systems) with Consumers and GGC. On October 1, 2001,
Consumers completed the sale of its Canadian glass producing assets to a
subsidiary of O-I. In February 2002, Mr. J. Ghaznavi, one of the Companys
directors, purchased GGC from Consumers. Following these events, Anchor has
separated activities related to these functions, with Consumers as of October
1, 2001, and with GGC as of February 2002, with Anchor and GGC entering into
the agreement described below. GGC is currently a competitor of Anchor.

6



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##### 



In connection with a proposed settlement of litigation commenced by The
National Bank of Canada against Anchor and certain other affiliates, Anchor and
GGC entered into a services agreement, as amended, to delineate the
transitional nature of the services to be provided by Anchor, whereby Anchor
will assist GGC in certain functions, including information systems, through
2004. GGC will pay a fee to Anchor of $500 for each year of the agreement, plus
a percentage of GGCs cash flows, as determined in accordance with the services
agreement, payable in three annual installments commencing on
April 30, 2005. This agreement is subject to termination by
Anchor or GGC, with notice, after June 30, 2002. Anchor has
fully reserved amounts receivable under the agreement.

NOTE 3  Plan of Reorganization and Liquidity

Anchor Reorganization

On March 15, 2002, Anchor entered into a definitive agreement with
Cerberus Capital Management L.P. (Cerberus) pursuant to which Cerberus will
invest $100,000 of new capital in Anchor ($80,000 of which will be in the form
of equity capital) and Anchor will effect a significant restructuring of its
existing debt and equity securities (the Reorganization). The Reorganization
will result in Anchors existing senior bank facility being replaced in its
entirety by a new $100,000 credit facility, Anchors First Mortgage Notes
remaining outstanding and being paid an amount to compensate them for their
waiver of change-of-control and pre-payment provisions and other non-financial
changes to the terms of the First Mortgage Notes (approximately
$5,600), Anchors 9.875% Senior Notes
due 2008, aggregate principal amount of $50,000 (the Senior Notes) being
repaid in cash at 100% of their principal amount and the holders of Anchors
Series A Preferred Stock (which has a current accrued liquidation value of
approximately $83,600) receiving a cash distribution of $22,500. Anchors
Series B Preferred Stock (which has a current accrued liquidation value of
approximately $105,700) and Anchors outstanding Common Stock and warrants will
be cancelled and the holders will receive no distribution under the plan. All
of Anchors other unaffiliated creditors, including trade creditors, will be
unimpaired and paid in the ordinary course.

The plan is being effected through a pre-arranged case under Chapter 11
of the Bankruptcy Code. On April 15, 2002 (the Petition Date), Anchor filed a
voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code for
the purpose of confirming its proposed plan of reorganization dated April 15,
2002. The filing was entered at the United States Bankruptcy Court for the
Middle District of Florida, Tampa Division (the Court). The filing consisted
of a pre-negotiated plan of reorganization, prompted by liquidity issues raised
by change in control provisions in Anchors debt instruments, as discussed
below.

On June 13, 2002, Anchor filed an Amended Reorganization Plan, dated June
13, 2002 (the Plan) and a Disclosure Statement. On June 14, 2002, the Court
approved the Disclosure Statement as providing adequate information for holders
of claims and interests against Anchor to make a decision as to whether to
accept or reject the Plan. In addition, the Court entered an order establishing
procedures for holders of claims and interests to vote upon the Plan and set
August 1, 2002 as the deadline by which votes to accept or reject the Plan must
be received by the balloting agent.

The primary purposes of the Plan and the Reorganization are to reduce
Anchors debt service requirements and overall level of indebtedness, to obtain
additional financing in the form of the new term loan and new preferred and
common stock and to provide the Company with greater liquidity.

The closing of the restructuring transaction is subject to a number of
conditions, including the confirmation of the Plan by the Court (confirmed
August 8, 2002, see Note 5  Subsequent Events), the absence of any material
adverse change in the business of Anchor, the settlement of a shareholder
derivative action currently pending in Delaware Chancery Court, receipt of any
required governmental approvals and third party consents and other closing
conditions. The parties to the derivative action have entered into a settlement
pursuant to which the derivative action will be settled on the basis of total
consideration to the Company of approximately $9,000, of which approximately
$6,000 is in cash and the exchange of mutual releases by the parties.
Implementation of the settlement, which has not been recorded as of
June 30, 2002, is subject to approval by the Court (approved
August 8, 2002, see Note 5  Subsequent Events) and the Delaware Chancery Court
and the consummation of the Plan.

7



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In connection with the Plan, Anchor entered into an agreement with Bank of
America, N.A., Congress Financial Corporation and Ableco Finance LLC, who
together provided a $100,000 debtor-in-possession secured financing facility
under a new loan agreement (the DIP Facility), with Bank of America, N.A., as
agent. The DIP Facility consists of an $80,000 revolving credit facility,
including a letter of credit sub-facility, and a $20,000 term loan facility.
Advances under the revolving credit facility bear interest at a rate based upon
(i) the adjusted LIBOR, as defined, plus 3.0% or (ii) the base rate, as
defined, plus 1.0%. Advances under the term loan facility bear interest at a
rate based upon the agents reference rate, as defined, plus 4.75%. The DIP
Facility expires at the earlier of the Plan consummation date or April 17,
2003. The Company's obligations under the DIP Facility are secured on
a priority basis by substantially all of the assets of the Company,
subject to pre-petition liens (including liens on certain collateral
securing the First Mortgage Notes). The DIP Facility contains certain
covenants that restrict the Companys ability to take various
actions, including, subject to specified exceptions, the incurrence
of additional indebtedness, the granting of additional liens, the
making of investments, the payment of dividends and other restricted
payments, mergers, acquisitions, sales of assets and other
fundamental corporate changes, capital expenditures, operating lease
payments and transactions with affiliates. The DIP Facility also
contains a financial covenant that requires the Company to maintain a
minimum EBITDA.

In connection with the proposed plan, Anchor did not make the interest
payment on its Senior Notes due March 15, 2002 or a timely interest payment on
its First Mortgage Notes due April 1, 2002. In July 2002, upon an order
approved by the Court, Anchor paid the interest payment on its First Mortgage
Notes that was due April 1, 2002. Interest on the First Mortgage Notes
continues to accrue and is recorded in accrued interest on the condensed
balance sheet. Because of the Chapter 11 proceedings, there has been no accrual
of interest on the unsecured Senior Notes since the Petition Date. If accrued,
interest expense would have increased by $1,029 during the six months ended
June 30, 2002.

The filing of the voluntary petition and the nonpayment of interest is a
default under the indentures governing the First Mortgage Notes and the Senior
Notes (the Indentures) and certain equipment related leases.

Under the terms of the Plan, the holders of the First Mortgage Notes will
retain their outstanding $150,000 of First Mortgage Notes, plus receive a
consent fee for a waiver of the change-of-control and pre-payment provisions
and other non-financial changes to the terms of the First Mortgage Notes
(including the release of Consumers U.S. as a guarantor). The holders of the
Senior Notes would be repaid in cash at 100% of their principal amount. Holders
of Anchors Series A Preferred Stock will receive a cash distribution of
$22,500 and the Series A Preferred Stock will be cancelled. Anchors Series B
Preferred Stock and Common Stock will be cancelled and the holders will receive
no distribution under the Plan. All of Anchors other unaffiliated creditors,
including trade creditors, will be unimpaired and be paid in the ordinary
course. Effective at the Petition Date, Anchor ceased accruing dividends on the
preferred stock. Anchors pension plan is subject to administrative procedures
under ERISA and the PBGC will terminate and take over all administrative
responsibility of the plan. See Note 5  Subsequent Events  Pension Plan.

Under Chapter 11 proceedings, litigation and actions by creditors to
collect certain claims existing at the Petition Date are stayed, absent
specific Bankruptcy Court authorization to pay such claims. The Company
received authorization, pursuant to first day orders, to pay claims related to
wages, salaries, vacation, sick pay and trade creditor claims. As a
debtor-in-possession, the Company has the right, subject to Bankruptcy Court
approval, and certain other limitations, to assume or reject certain executory
contracts, including unexpired leases. Any claim for damages resulting from
the rejection of an executory contract or an unexpired lease is treated as a
general unsecured claim in the Chapter 11 proceedings.

Since the Petition Date, the Company has incurred fees and costs of
$4,129 related to the Chapter 11 proceedings, recorded in
Reorganization items on the condensed statement of operations. This
amount is primarily comprised of $2,400 of DIP Facility fees, $1,100 of
legal fees and $400 of other professional fees.
Liabilities subject to compromise on the condensed balance sheet at June 30,
2002, represents pension liabilites of $120,537 and accrued interest on the Senior Notes of $2,894.

Consumers Bankruptcy

On May 23, 2001, Consumers filed for protection under the Canadian
Companies Creditors Arrangement Act (CCAA), with the Ontario Superior Court
of Justice. On August 3, 2001, Consumers and O-I announced an agreement whereby
O-I would acquire Consumers Canadian glass producing assets as well as the
stock of Consumers U.S. The Ontario Court of Justice approved the sale of
Consumers Canadian glass producing assets and stock of Consumers U.S. to O-I
on August 31, 2001, subject to any required regulatory approval. The asset sale
was completed on October 1, 2001. O-I has not received regulatory approval to
purchase the stock of Consumers U.S. from Consumers. In April 2002, Consumers
filed for an assignment in bankruptcy to provide for the liquidation of
Consumers.

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Management of Anchor believes, upon the advice of its counsel, that the
Anchor restructuring discussed above or the acquisition of the stock of
Consumers U.S. by O-I will trigger a change in control as defined in the
Indentures. A change in control may also occur upon the change of ownership
of shares of stock of Consumers, Consumers International Inc. or Consumers,
U.S. or certain changes as to the composition of directors on the board of
Anchor. Upon a change in control as defined in the Indentures, Anchor would
be required to make an offer to repurchase all of the First Mortgage Notes and
the Senior Notes at 101% of the outstanding principal amount plus accrued and
unpaid interest. Anchor does not have the cash or liquidity available to make
this repurchase offer. The failure to make the offer would result in an event
of default under the Indentures that would give the noteholders the right to
accelerate the debt and is also a default under Anchors credit facility
and would create an event of default under various equipment leases. The
occurrence of any of these events may be outside of the control of Anchor.
Consummation of the Plan will eliminate the change-in-control provision in
the Indentures. There can be no assurance that any of these events may not
occur or that the Reorganization will be completed.

Cash Flow

The Companys principal sources of liquidity through 2002 are expected to
be funds derived from operations, borrowings under the DIP Facility (or any
permanent refinancing thereof) and the funding of the Reorganization
transactions. The Companys plans to increase liquidity include continuation of
its cost reduction efforts (including distribution costs), increased sales from its supply agreements with
major customers, price increases, sale of certain Company assets and completing the
Reorganization. While the initial positive effects of the implementation of
these plans are currently being realized, there can be no assurance that these
efforts will continue to be successful or if successful, that they will provide
sufficient liquidity to meet the Companys needs.

Cash flows from operations depend on future operating performance which is
subject to prevailing conditions and to financial, business and other factors,
many of which are beyond the Companys control. Should the Company suffer
material adverse consequences from the issues discussed here, additional
measures may be required. This may include sales of assets and/or consideration
of other strategic alternatives. No assurance can be given that the Company
will have sufficient liquidity either from internally generated sources or
external borrowings to continue its operations and to meet its obligations as
they come due.

Audit Opinion

The foregoing represents significant uncertainties as to the future
financial position of Anchor. As a result of these uncertainties,
particularly, as a result of the pending change in control and the
related repurchase obligations under the Indentures, the Companys
former outside auditors, at the time, rendered an opinion on the Companys
financial statements containing a going concern paragraph for 2001 and 2000. As
a result of these matters, the Company classified its long-term debt, including
certain capital leases, as current liabilities in the balance sheet at June 30,
2002 and December 31, 2001.

There can be no assurance that any of these events may not occur or that
the Reorganization will be completed.

NOTE 4  Summary of Recent Accounting Pronouncements

Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142  Goodwill and Other Intangible Assets (SFAS
142). SFAS 142 addresses financial accounting and reporting for intangible
assets acquired individually or with a group of other assets at acquisition.
SFAS 142 also addresses financial accounting and reporting for goodwill and
other intangible assets subsequent to their acquisition. SFAS 142 provides that
goodwill and intangible assets that have indefinite useful lives will not be
amortized but rather will be tested at least annually for impairment. It also
provides that intangible assets that have finite useful lives will continue to
be amortized over their useful lives, but those lives will no longer be limited
to forty years. The Company has determined that it should be evaluated as one
reporting unit and that the fair value of the Company is greater than the
carrying amount of the net assets, and at present, no goodwill impairment
results from the adoption SFAS 142.

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The following table reconciles the Companys net income (loss) in the
three and six months ended June 30, 2001, adjusted to exclude goodwill
amortization, to amounts previously reported:

|                                                                            |  |                  |       |                    |  |      |         |      |  |   |       |  |  |   |         |  
|--------------------------------------------------------------------------- |  | ---------------- | ----- | ------------------ |  | ---- | ------- | ---- |  | - | ----- |  |  | - | ------- | -
|                                                                            |  | Six Months Ended |       | Three Months Ended
|                                                                            |  | June 30,         |       | June 30,          
|                                                                            |  |                  |       |                   
|                                                                            |  | 2002             |       | 2001               |  | 2002 |         | 2001
|                                                                            |  |                  |       |                    |  |      |         |     
|Net income (loss), as reported                                              |  | $                | 4,745 |                    |  | $    | (27,564 | )    |  | $ | 4,948 |  |  | $ | (16,982 | )
|Goodwill amortization                                                       |  |                  |      |                    |  |      | 1,488   |      |  |   |      |  |  |   | 744     |  
|                                                                            |  |                  |       |                    |  |      |         |      |  |   |       |  |  |   |         |  
|Net income (loss), as adjusted                                              |  | $                | 4,745 |                    |  | $    | (26,076 | )    |  | $ | 4,948 |  |  | $ | (16,238 | )
|                                                                            |  |                  |       |                    |  |      |         |      |  |   |       |  |  |   |         |  
|Basic and diluted net income (loss)
applicable to common stock,
as reported |  | $                | 0.12  |                    |  | $    | (6.59   | )    |  | $ | 0.83  |  |  | $ | (3.90   | )
|                                                                            |  |                  |       |                    |  |      |         |      |  |   |       |  |  |   |         |  
|Basic and diluted net income (loss)
applicable to common stock,
as adjusted |  | $                | 0.12  |                    |  | $    | (6.30   | )    |  | $ | 0.83  |  |  | $ | (3.76   | )
|                                                                            |  |                  |       |                    |  |      |         |      |  |   |       |  |  |   |         |  

Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 144  Accounting for the Impairment or Disposal of
Long-Lived Assets (SFAS 144), that addresses financial reporting for the
impairment or disposal of long-lived assets. SFAS 144 supersedes SFAS 121 and
the reporting provisions of Accounting Principles Board Opinion No. 30 
Reporting the Results of Operations, for the disposal of a segment of a
business. The Company has determined that the impact of adopting SFAS 144 will
not be material.

In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 143  Accounting for Asset Retirement
Obligation (SFAS 143), that addresses the accounting for the recognition of
liabilities associated with the retirement of long-lived assets. SFAS 143 is
effective for financial statements issued for years beginning after June 15,
2002. The Company has not yet determined the impact of adopting SFAS 143.

In April 2002, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 145  Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections
(SFAS 145) regarding the accounting of gains and losses from the
extinguishment of debt and to eliminate an inconsistency between the accounting
for sale-leaseback transactions and certain lease modifications that have
economic effects that are similar to sale-leaseback transactions. SFAS 145 is
effective for transactions occurring after May 15, 2002.

In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146  Accounting for Exit or Disposal
Activities (SFAS 146). SFAS 146 addresses significant issues regarding the
recognition, measurement, and reporting of costs that are associated with exit
and disposal activities, including restructuring activities that are currently
accounted for pursuant to the guidance that the Emerging Issues Task Force
(EITF) has set forth in EITF Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring". SFAS 146 will be effective for exit or disposal activities that are
initiated after December 31, 2002.

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NOTE 5  Subsequent Events

Chapter 11 Proceedings

The Court established August 1, 2002 as the deadline for receiving votes
to accept or reject the Plan. Anchor received unanimous votes to accept the
Plan for each of the four classes entitled to vote on the Plan.

The Plan was confirmed by the court at a hearing held on August 8, 2002.
Anchor currently expects the Plan to become effective on or about August 30,
2002 (the Effective Date). The Court approved, among other things, the
settlement of shareholder derivative action, the amended services agreement
with GGC, the settlement with Mr. J. Ghaznavi and G&G and the agreement with the
PBGC (see below).

Upon the Effective Date, Anchor will qualify for adoption of fresh-start
reporting pursuant to the American Institute of Certified Public Accountants
Statement of Position 90-7. The adoption of fresh-start reporting will result
in Anchor revaluing its balance sheet to fair value based on the reorganization
value of the Company. The reorganization value of an entity approximates the
fair value of the entity before considering liabilities and approximates the
amount a willing buyer would pay for the assets immediately after
restructuring. The reorganization value of the entity will be allocated to
assets in conformity with the procedures specified by SFAS 141 and SFAS 142.
Liabilities at plan consummation date are stated at the present value of
amounts to be paid.

Pension Plan

Effective December 31, 2001, Anchor entered the Glass Companies
Multiemployer Pension Plan (the MEPP), created from the merger of the Anchor
defined benefit pension plan and the GGC defined benefit plan for hourly
employees. Anchor, GGC, the Board of Trustees of the MEPP and the unions
representing certain employees at Anchor and GGC considered the MEPP to be a
multiemployer pension plan.

On April 30, 2002, the Pension Benefit Guarantee Corporation (PBGC)
advised the Company that it was unable to determine whether the MEPP met the
definition of a multiemployer plan and sought a determination from the
appropriate office of the United States Department of Labor (DOL). In July
2002, the DOL notified Anchor that it determined that the MEPP did not meet the
definition of a multiemployer plan for Employee Retirement Income Security Act
of 1974, as amended (ERISA) purposes.

Effective July 31, 2002, Anchor and the PBGC entered into an agreement to
govern the dissolution of the MEPP (the PBGC Agreement). Pursuant to the
PBGC Agreement, and collective bargaining agreements with the unions
representing its employees, Anchor withdrew from the MEPP on July 31, 2002. The
PBGC intends to proceed in accordance with procedures under ERISA to partition
the assets and liabilities of the MEPP into two parts, one part attributable to Anchor
employees and former employees and terminate the Anchor portion. It is
anticipated that the termination date will be effective as of or around July
31, 2002. The PBGC will take over all administrative responsibility for the
terminated plan.

The PBGC Agreement provides that on the Effective Date, Anchor will
contribute $20,750 to the pension plan (with proceeds from the Reorganization)
and will begin, on the first day of the next month, monthly payments to the
pension plan of $833 for a period of one hundred twenty (120) months. On the
Effective Date, Anchor will grant the PBGC a warrant for the purchase of 5% of
the common stock of Anchor. Anchor has amended its labor union contracts and,
effective August 1, 2002, will contribute to other multiemployer plans for the
future service benefits of its hourly employees.

The accounting followed by Anchor and the disclosures herein reflect the
plan as if it were a single employer plan under Statement of Financial
Accounting Standards No. 87  Employers Accounting for Pensions. This
accounting will be followed until the agreement with the PBGC has been
implemented.

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

Overview

Income from operations improved approximately $35.4 million in the first
half 2002 as compared with the first half of 2001. In the second quarter of
2001, Anchor recorded a $19.5 million related party provision resulting from
Consumers CCAA filing. Recent developments for new products in the
ready-to-drink market have created increased demand for glass containers,
which has strengthened the fundamentals of the Company and the industry. This
market dynamic has resulted in the Company realizing price increases in recent
months and improving margins through upgrading a selective mix of business
opportunities. The decline in the price of natural gas (the principal fuel for
manufacturing glass), as compared with the comparable period of 2001, results
in margin improvement of approximately $6.4 million, net of the energy price
recovery program. The Companys plans to improve operations include
continuation of its cost reduction efforts (including distribution
costs), sale of discontinued manufacturing
facilities, as well as increased sales from its supply agreements with major
customers and price increases. See  Information Concerning Forward-Looking Statements.

Results of Operations

Net Sales. Net sales for the second quarter of 2002 were $199.9 million
compared to $180.0 million for the second quarter of 2001, an increase of $19.9
million, or 11%. Net sales for the first half of 2002 were $378.3 million and
$349.4 million for the comparable period of 2001. The improvement in the margin
on net sales (approximately $12.2 million) was principally a result of a shift
in product mix, specifically towards the ready-to-drink line, general price
increases and an increase in shipment volume (5.0%). Net sales dollars in the
first half of 2001 were negatively impacted by approximately $23.8 million due
to a change in the way certain packaging materials are sold to a certain
customer. This change resulted in a comparable reduction in cost of products
sold in 2001.

Cost of Products Sold.The Companys cost of products sold in the second
quarter and the first half of 2002 were $176.1 million and $340.7 million,
respectively (or 88.1% and 90.1%, respectively, of net sales), while the cost
of products sold for the second quarter of 2001 and the first half of 2001 were
$163.3 million and $328.8 million, respectively (or 90.7% and 94.1%,
respectively, of net sales). This decrease in the cost of products sold for
the six months ended June 30, 2002 as compared with the comparable period of
2001, as a percentage of net sales, principally reflects the decline in the
cost of natural gas of approximately $14.4 million, manufacturing efficiencies
and lower inventory storage costs. These improvements were partially offset by
increases in other costs, such as, insurance, fringe benefit costs and costs
associated with downtime during the modernization project at the Companys
Elmira, New York facility. With the implementation of SFAS 142, goodwill is no
longer amortized. Goodwill amortization expense was $1.5 million in the six
months ended June 30, 2001.

Selling and Administrative Expenses. Selling and administrative expenses
for the six months ended June 30, 2002 were approximately $15.3 million (or
4.0% of net sales), while selling and administrative expenses for the
comparable period of 2001 were $14.1 million (or 4.0% of net sales). This
increase is attributable to a reduction in the cross-charge of overhead costs
to certain related entities, partially offset by the discontinuance of the
management agreement with G&G.

Reorganization Items. Since the Petition Date, the Company has incurred
fees and costs of approximately $4.1 million related to the Chapter 11
proceedings. This amount is primarily comprised of $2.4 million
of DIP Facility fees, $1.1 million of fees and $0.4 million
of other professional fees.

Interest Expense. Interest expense for the six months ended June 30, 2002
decreased approximately $0.9 million compared to the same period of 2001, due
primarily to lower interest rates and lower average outstanding borrowings
under the credit facility. Interest on the First Mortgage Notes continues to accrue
and is recorded in accrued interest on the condensed balance sheet. Because of
the Chapter 11 proceedings, there has been no accrual of interest on the
unsecured Senior Notes since the Petition Date. If accrued, interest expense
would have increased by $1.0 million during the six months ended June 30, 2002.

12



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Net Income (Loss). The Company recorded net income in the second quarter
of 2002 of approximately $4.9 million as compared to a net loss of $17.0
million in the second quarter of 2001. The Company recorded a net income in the
first six months of 2002 of approximately $4.7 million as compared to a net
loss of $27.6 million in the first half of 2001. Anchor recorded $19.5
million of related party provisions and charges in the second quarter of 2001
as a result of Consumers CCAA filing. This improvement in earnings, after
consideration of the related party provision, results from the lower cost of
natural gas, general price increases, increased sales volume and an upgraded mix of business opportunities.

Significant Accounting Policies

The significant accounting policies of the Company are disclosed in Note 1
and other notes to the annual financial statements in our Form 10-K for the
fiscal year ended December 31, 2001. The preparation of financial statements in
conformity with generally accepted accounting principles, requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from estimates. The
most significant accounting estimates inherent in the preparation of the Anchor
financial statements form the bases for reserves with respect to areas such as,
post-retirement benefits and other employee benefit programs, inventories,
valuation allowances to reduce deferred tax assets and pensions. Estimates and
judgments are based on historical experience and other factors believed to be
reasonable in the circumstances. Management continually reviews its accounting
policies for application and disclosure in the financial statements.

Liquidity and Capital Resources

Anchor Reorganization

On March 15, 2002, Anchor entered into a definitive agreement with
Cerberus pursuant to which Cerberus will invest $100.0 million of new capital
in Anchor ($80.0 million of which will be in the form of equity capital) and
Anchor will effect a significant restructuring of its existing debt and equity
securities. The Reorganization will result in Anchors DIP Facility being
replaced in its entirety by a new $100 million credit facility, Anchors First
Mortgage Notes remaining outstanding and being paid an amount to compensate
them for their waiver of change-of-control and pre-payment provisions and other
non-financial changes to the terms of the First Mortgage Notes
(approximately $5.6 million), Anchors Senior
Notes being repaid in cash at 100% of their principal amount, the holders of
Anchors Series A Preferred Stock (which has a current accrued liquidation
value of approximately $83.6 million) receiving a cash distribution of $22.5
million. Anchors Series B Preferred Stock (which has a current accrued
liquidation value of approximately $105.7 million) and Anchors outstanding
Common Stock and warrants will be cancelled and the holders will receive no
distribution under the plan. All of Anchors other unaffiliated creditors,
including trade creditors, will be unimpaired and paid in the ordinary course.

The closing of the restructuring transaction is subject to a number of
conditions. Conditions met include the confirmation of the Plan by the Court.
Other conditions include the absence of any material adverse change in the
business of Anchor, the settlement of a shareholder derivative action currently
pending in Delaware Chancery Court, receipt of any required governmental
approvals and third party consents and other closing conditions. The parties to
the derivative action have entered into a settlement pursuant to which the
derivative action will be settled on the basis of total consideration to the
Company of approximately $9.0 million, of which approximately $6.0 million is
in cash and the exchange of mutual releases by the parties. Implementation of
the settlement, which has not been recorded as of June 30, 2002,  is subject to the approval by the Delaware Chancery Court and
the consummation of the Plan.

Management believes that the Cerberus agreement is an important milestone
and will allow the Company to complete the significant financial restructuring
that was necessary for Anchor. The transaction will remove a significant
amount of indebtedness from Anchors balance sheet.

The plan is being effected through a pre-arranged case under Chapter 11
of the Bankruptcy Code. On April 15, 2002, Anchor filed a voluntary petition
for relief under Chapter 11 of the U.S.

13



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Bankruptcy Code for the purpose of confirming its proposed plan of
reorganization dated April 15, 2002. The filing was entered at the United
States Bankruptcy Court for the Middle District of Florida, Tampa Division.
The filing consisted of a pre-negotiated plan of reorganization, prompted by
liquidity issues raised by change-in-control provisions in Anchors debt
instruments, as discussed below.

The primary purposes of the Plan and the Reorganization are to reduce
Anchors debt service requirements and overall level of indebtedness, to obtain
additional financing in the form of the new term loan and new preferred and
common stock and to provide the Company with greater liquidity.

Under the terms of the Plan, the holders of the First Mortgage Notes will
retain their outstanding $150.0 million of First Mortgage Notes, plus receive a
consent fee for a waiver of the change-of-control and pre-payment provisions
and other non-financial changes to the terms of the First Mortgage Notes
(including the release of Consumers U.S. as a guarantor). The holders of the
Senior Notes would be repaid in cash at 100% of their principal amount. Holders
of Anchors Series A Preferred Stock will receive a cash distribution of $22.5
million and the Series A Preferred Stock will be cancelled. Anchors Series B
Preferred Stock and Common Stock and warrants will be cancelled and the holders will receive
no distribution under the Plan. Effective at the Petition Date, Anchor ceased
accruing dividends on the preferred stock. All of Anchors other unaffiliated
creditors, including trade creditors, will be unimpaired and paid in the
ordinary course.

Under Chapter 11 proceedings, litigation and actions by creditors to
collect certain claims existing at the Petition Date are stayed,
absent
specific Bankruptcy Court authorization to pay such claims. The Company had
received authorization, pursuant to first day orders, to pay claims related to
wages, salaries, vacation, sick pay and trade creditor claims. As a
debtor-in-possession, the Company has the right, subject to Bankruptcy Court
approval, and certain other limitations, to assume or reject certain executory
contracts, including unexpired leases. Any claim for damages resulting from
the rejection of an executory contract or an unexpired lease is treated as a
general unsecured claim in the Chapter 11 proceedings.

In connection with the Plan, Anchor entered into an agreement with Bank of
America, N.A. Congress Financial Corporation and Ableco Finance LLC, who
together provided a $100.0 million debtor-in-possession secured financing
facility under the DIP Facility, with Bank of America, N.A., as agent. The DIP
Facility consists of an $80.0 million revolving credit facility, including a
letter of credit sub-facility, and a $20.0 million term loan facility. Advances
under the revolving credit facility bear interest at a rate based upon (i) the
adjusted LIBOR, as defined, plus 3.0% or (ii) the base rate, as defined, plus
1.0%. Advances under the term loan facility will bear interest at a rate based
upon the agents reference rate, as defined, plus 4.75%. The DIP Facility
expires at the earlier of the Plan consummation date or April 17, 2003.

The Court established August 1, 2002 as the deadline for receiving votes
to accept or reject the Plan. Anchor received unanimous votes to accept the
Plan for each of the four classes entitled to vote on the Plan.

The Plan was confirmed by the Court at a hearing held on August 8, 2002.
Anchor currently expects the Plan to become effective on or about August 30,
2002. The Court approved, among other things, the
settlement of shareholder derivative action, the amended services agreement
with GGC, the settlement with Mr. J. Ghaznavi and G&G and the agreement with the PBGC
(see below).

Consumers Bankruptcy

On May 23, 2001, Consumers filed for protection under the Canadian CCAA,
with the Ontario Superior Court of Justice. On August 3, 2001, Consumers and
O-I announced an agreement whereby O-I would acquire Consumers Canadian glass
producing assets as well as the stock of Consumers U.S. The Ontario Court of
Justice approved the sale of Consumers Canadian glass producing assets and
stock of Consumers U.S. to O-I on August 31, 2001, subject to any required
regulatory approval. The asset sale of Consumers Canadian glass producing
assets was completed on October 1, 2001. O-I has not received regulatory
approval to purchase the stock of Consumers U.S. from Consumers. In April
2002, Consumers filed for an assignment in bankruptcy to provide for the
liquidation of Consumers.

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Management of Anchor believes, upon the advice of its counsel, that the
Anchor restructuring or the acquisition of the stock of Consumers U.S. by O-I
will trigger a change in control as defined in the Indentures governing
Anchors First Mortgage Notes and its Senior Notes. A change in control may
also occur upon the change of ownership of shares of stock of Consumers,
Consumers International Inc. or Consumers, U.S. or certain changes as to the
composition of directors on the board of Anchor. Upon a change in control as
defined in the Indentures, Anchor would be required to make an offer to
repurchase all of the First Mortgage Notes and the Senior Notes at 101% of the
outstanding principal amount plus accrued and unpaid interest. Anchor does not
have the cash or liquidity available to make this repurchase offer. The failure
to make the offer would result in an event of default under the Indentures that
would give the noteholders the right to accelerate the debt and is also a
default under Anchors credit facility and would create an event of default
under various equipment leases. The occurrence of any of these events may be
outside of the control of Anchor. Consummation of the announced restructuring
will eliminate the change-in-control provision in the Indentures. There can
be no assurance that any of these events may not occur or that the
restructuring will be completed. The Plan was confirmed by the Court at a
hearing held on August 8, 2002. Anchor currently expects the Plan to become
effective on or about August 30, 2002.

Pension Plan

Effective December 31, 2001, Anchor entered the MEPP, created from the
merger of the Anchor defined benefit pension plan and the GGC defined benefit
plan for hourly employees. Anchor, GGC, the Board of Trustees of the MEPP and
the unions representing certain employees at Anchor and GGC considered the MEPP
to be a multiemployer pension plan.

On April 30, 2002, the PBGC advised the Company that it was unable to
determine whether the MEPP met the definition of a multiemployer plan and
sought a determination from the appropriate office of the DOL. In July 2002,
the DOL notified Anchor that it determined that the MEPP did not meet the
definition of a multiemployer plan for ERISA purposes.

Effective July 31, 2002, Anchor and the PBGC entered into an agreement to
govern the dissolution of the MEPP. Pursuant to the
PBGC Agreement, and collective bargaining agreements with the unions
representing its employees, Anchor withdrew from the MEPP on July 31, 2002. The
PBGC intends to proceed in accordance with procedures under ERISA to partition
the assets and liabilities of the MEPP into two parts, one part attributable to Anchor
employees and former employees and terminate the Anchor portion. It is
anticipated that the termination date will be effective as of or around July
31, 2002. The PBGC will take over all administrative responsibility for the
terminated plan.

The PBGC Agreement provides that on the Effective Date, Anchor will
contribute $20.7 million to the pension plan (with proceeds from the
Reorganization) and will begin, on the first day of the next month, monthly
payments to the pension plan of $0.8 million for a period of one hundred twenty
(120) months. On the Effective Date, Anchor will grant the PBGC a warrant for
the purchase of 5% of the common stock of Anchor. Anchor has amended its labor
union contracts and, effective August 1, 2002, will contribute to other
multiemployer plans for the future service benefits of its hourly employees.

The accounting followed by Anchor and the disclosures herein reflect the plan
as if it were a single employer plan under Statement of Financial Accounting
Standards No. 87  Employers Accounting for Pensions. This accounting will be
followed until the agreement with the PBGC has been implemented.

Audit Opinion

As a result of these
uncertainties, particularly, as a result of the pending change in
control and the related repurchase obligations under the Indentures, the Companys former outside auditors,
at the time, have rendered an opinion on the Companys financial statements
containing a going concern paragraph for 2001 and 2000. As a result of these
matters, the Company classified its long-term debt as current liabilities in
the balance sheet at June 30, 2002 and December 31, 2001.

15



---



##### 



Cash Flow

In the first half of 2002, operating activities provided $33.1 million in
cash as compared to cash used of $1.3 million in the same period of 2001. This
increase in cash provided reflects the improvement in earnings and changes in
working capital items. Accounts receivable at June 30, 2002 increased
approximately $10.6 million as compared with the 2001 year end, consistent with
the increase in net sales. Inventory levels decreased approximately $14.1
million in 2002. The Company contributed approximately $5.4 million to the
multiemployer pension plan in 2002. As a result of lower natural gas
prices, cash outlays for natural gas purchases in
the six months ended June 30, 2002 decreased approximately $6.4 million over
the 2001 levels for the comparable periods.

Cash consumed in investing activities for the six months ended June 30,
2002 and 2001 were $36.4 million and $6.6 million, respectively. Capital
expenditures in the first half of 2002 were $37.3 million (of which $17.0
million related to the modernization project at the Elmira, New York facility)
compared to $17.9 million in 2001. To fund capital expenditures as provided for
under the terms of the Indentures, the Company applied, in the first quarter of
2001, cash deposited into escrow of $7.8 million, proceeds of sale and
sale-leaseback transactions. The Company invested approximately $22.2 million
in 2002 and 2001 in the now completed Elmira modernization project.

Net cash of $0.2 million was provided in financing activities in the first
half of 2002, principally reflecting borrowings under the Revolving Credit and
DIP Facilities, offset by scheduled repayments of debt.

At the Petition Date, advances outstanding under the Revolving Credit
Facility were $63.3 million and were repaid with proceeds under the DIP
Facility upon the final order from the Court. At August 5, 2002, advances
outstanding under the DIP Facility were $57.6 million, borrowing availability
was $13.4 million and total outstanding letters of credit were $5.7 million.

The Companys obligations under the DIP Facility are secured on a priority
basis by substantially all of the assets of the Company, subject to
pre-petition liens (including liens on certain collateral securing the First
Mortgage Notes).

The DIP Facility contains certain covenants that restrict the Companys
ability to take various actions, including, subject to specified exceptions,
the incurrence of additional indebtedness, the granting of additional liens,
the making of investments, the payment of dividends and other restricted
payments, mergers, acquisitions, sales of assets and other fundamental
corporate changes, capital expenditures, operating lease payments and
transactions with affiliates. The DIP Facility also contains a financial
covenant that requires the Company to maintain a minimum EBITDA.

The Indentures contain certain covenants that restrict the Company from
taking various actions, including, subject to specified exceptions and limits,
the incurrence of additional indebtedness, the granting of additional liens,
the making of investments, the payment of dividends and other restricted
payments, mergers, acquisitions and other fundamental corporate changes,
capital expenditures, asset sales and transactions with affiliates.

In connection with the proposed plan, Anchor did not make the interest
payment on its Senior Notes due March 15, 2002 or a timely interest payment on
its First Mortgage Notes due April 1, 2002. In July 2002, upon an order
approved by the Court, Anchor paid the interest payment on its First Mortgage
Notes that was due April 1, 2002. Interest on the First Mortgage Notes
continues to accrue and is recorded in accrued interest on the condensed
balance sheet. Because of the Chapter 11 proceedings, there has been no accrual
of interest on the unsecured Senior Notes since the Petition Date. If accrued,
interest expense would have increased by $1.0 million during the six months
ended June 30, 2002. Effective at the Petition Date, Anchor ceased accruing
dividends on the preferred stock.

The filing of the voluntary petition and the nonpayment of interest is a
default under the Indentures and certain equipment related leases.

16



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##### 



Commitments for the principal payments required on long-term debt,
including capital leases and under operating leases are as follows:

|                             |  |           |         |      |  |      |        |      |  |            |        |  |  |   |         |          |  |   |        | 
|---------------------------- |  | --------- | ------- | ---- |  | ---- | ------ | ---- |  | ---------- | ------ |  |  | - | ------- | -------- |  | - | ------ | 
|                             |  | Remainder |         |      |  |      |        |      |  |            |        |  |  |   |         | 2006 and
|                             |  | of 2002   |         | 2003 |  | 2004 |        | 2005 |  | thereafter
|                             |  |           |         |      |  |      |        |      |  |           
|Long-term debt (1)(2)        |  | $         | 50,000  |      |  | $    |       |      |  | $          |       |  |  | $ | 150,000 |          |  | $ |       | 
|Capital leases (1)           |  |           | 1,645   |      |  |      | 2,118  |      |  |            | 1,998  |  |  |   | 1,887   |          |  |   | 353    | 
|Operating leases             |  |           | 9,000   |      |  |      | 16,240 |      |  |            | 11,180 |  |  |   | 6,110   |          |  |   | 13,420 | 
|Pension
payments (3)         |  |           | 24,083  |      |  |      | 10,000 |      |  |            | 10,000 |  |  |   | 10,000  |          |  |   | 66,667 | 
|Series A Preferred
Stock (4) |  |           | 22,500  |      |  |      |       |      |  |            |       |  |  |   |        |          |  |   |       | 
|                             |  |           |         |      |  |      |        |      |  |            |        |  |  |   |         |          |  |   |        | 
|                             |  | $         | 107,228 |      |  | $    | 28,358 |      |  | $          | 23,178 |  |  | $ | 167,997 |          |  | $ | 80,440 | 
|                             |  |           |         |      |  |      |        |      |  |            |        |  |  |   |         |          |  |   |        | 



| | (1) |  | Long-term is classified as current on the condensed balance sheet.                                                                                                   
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) |  | 2002 includes the proposed repayment of the Senior Notes ($50.0
million) under the Plan. The Senior Notes are due 2008.                                              
| | (3) |  | Payments under the PBGC
Agreement. Under multiemployer plan accounting, commitments would
have been approximately $12.5 million annually.                            
| | (4) |  | 2002 includes the proposed settlement of the Series A Preferred
Stock ($22.5 million) under the Plan. The Series A Preferred Stock is
mandatorily redeemable in 2009.

The Company expects significant expenditures in 2002, including
contributions of approximately $24.0 million to the pension plan that is
expected to be administered by the PBGC ($20.7 million with proceeds of the
Restructuring). Capital expenditures will approximate $60.0 million in 2002 (of
which $37.3 million has been incurred), increased from 2001 levels primarily
for the now completed Elmira modernization project. Total interest expenditures
for 2002 are expected to approximate $23.0 million. Peak operating needs are in
spring at which time working capital borrowings are estimated to be $20.0
million higher than at other times of the year.

The Companys principal sources of liquidity through 2002 are expected to
be funds derived from operations, borrowings under the DIP Facility (or any
permanent refinancing thereof) and the funding of the Reorganization
transactions. The Companys plans to increase liquidity include continuation of
its cost reduction efforts and increased sales from its supply agreements with
major customers, price increases, sale of certain Company assets and completing the
Reorganization. While the initial positive effects of the implementation of
these plans are currently being realized, there can be no assurance that these
efforts will continue to be successful or if successful, that they will provide
sufficient liquidity to meet the Companys needs. See  Information Concerning
Forward-Looking Statements.

Cash flows from operations depend on future operating performance which is
subject to prevailing conditions and to financial, business and other factors,
many of which are beyond the Companys control. Should the Company suffer
material adverse conditions from the issues discussed above, additional
measures may be required. This may include sales of assets and/or consideration
of other strategic alternatives. No assurance can be given that the Company
will have sufficient liquidity either from internally generated sources or
external borrowings to continue its operations and to meet its
obligations as
they come due.

Recent developments for new products in the ready-to-drink market have
created increased demand for glass containers, which has strengthened the
fundamentals of the Company and the industry. This market dynamic has resulted
in the Company realizing price increases in recent months and better margins
from an improved mix of business. See  Information Concerning Forward-Looking
Statements.

Management believes that the Reorganization will allow the Company to
complete the significant financial restructuring necessary to remove a
significant amount of indebtedness from the Anchor balance sheet and provide
additional liquidity for the Company. See  Information Concerning
Forward-Looking Statements.

17



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##### 



Impact of Inflation

The impact of inflation on the costs of the Company, and the ability to
pass on cost increases in the form of increased sales prices, is dependent
upon market conditions. While the general level of inflation in the domestic
economy has been relatively low, the Company has experienced significant cost
increases in specific materials and energy and has not been fully able to pass
on inflationary cost increases to its customers for several years, although it
did realize some price increases in 2001 and 2002, primarily due to the
abnormally high energy costs experienced in 2001.

Seasonality

Due principally to the seasonal nature of the brewing, iced tea and other
beverage industries, 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 will build inventory during the first
quarter in anticipation of seasonal demands during the second and third
quarters. Due to increased demand at the end of 2001 and beginning of 2002,
the Company is shipping more than usual and building less inventory. In
addition, the Company has historically scheduled shutdowns of its plants for
furnace rebuilds and machine repairs in the first and fourth 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 first and fourth quarters; however, the Company has in the past and
will continue in the future to implement alternatives to reduce downtime
during these periods in order to minimize disruption to the production process
and its negative effect on profitability.

New Accounting Standards

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 142  Goodwill and Other Intangible Assets. SFAS 142
addresses financial accounting and reporting for intangible assets acquired
individually or with a group of other assets at acquisition. SFAS 142 also
addresses financial accounting and reporting for goodwill and other intangible
assets subsequent to their acquisition. SFAS 142 provides that goodwill and
intangible assets that have indefinite useful lives will not be amortized but
rather will be tested at least annually for impairment. It also provides that
intangible assets that have finite useful lives will continue to be amortized
over their useful lives, but those lives will no longer be limited to forty
years. The Company has determined that it should be evaluated as one reporting
unit and that the fair value of the Company is greater than the carrying amount
of the net assets, and at present, no goodwill impairment results from the
adoption SFAS 142.

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 144  Accounting for the Impairment or Disposal of
Long-Lived Assets, that addresses financial reporting for the impairment or
disposal of long-lived assets. SFAS 144 supersedes SFAS 121 and the reporting
provisions of Accounting Principles Board Opinion No. 30  Reporting the
Results of Operations, for the disposal of a segment of a business. The Company
has determined that the impact of adopting SFAS 144 is not material.

In August 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 143  Accounting for Asset Retirement
Obligations, that addresses the accounting for the recognition of liabilities
associated with the retirement of long-lived assets. SFAS 143 is effective for
financial statements issued for years beginning after June 15, 2002. The
Company has not yet determined the impact of adopting SFAS 143.

In April 2002, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 145  Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections
regarding the accounting of gains and losses from the extinguishment of debt
and to eliminate an inconsistency between the accounting for sale-leaseback
transactions and certain lease modifications that have economic effects that
are similar to sale-leaseback transactions. SFAS 145 is effective for
transactions occurring after May 15, 2002.

18



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##### 



In June 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 146  Accounting for Exit or Disposal
Activities. SFAS 146 addresses significant issues regarding the recognition,
measurement, and reporting of costs that are associated with exit and disposal
activities, including restructuring activities that are currently accounted for
pursuant to the guidance that the EITF has set forth in EITF Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring". SFAS 146 will be effective for exit
or disposal activities that are initiated after December 31, 2002.

Information Concerning Forward-Looking Statements

With the exception of the historical information contained in this report,
the matters described herein contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
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, statements
concerning:



| |  |  | the Companys liquidity and capital resources,                             
| | - |  | ---------------------------------------------------------------------------
|
| |  |  | the Companys debt levels and ability to obtain financing and service debt,
|
| |  |  | competitive pressures and trends in the glass container industry,          
|
| |  |  | prevailing interest rates,                                                 
|
| |  |  | prices for energy, particularly natural gas,                               
|
| |  |  | legal proceedings and regulatory matters, and                              
|
| |  |  | general economic conditions.                                               

Forward-looking statements involve risks and uncertainties (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 completion of the Anchor financial restructuring; the emergence
from Chapter 11; the highly
competitive nature of the glass container industry and the intense competition
from makers of alternative forms of packaging; the fluctuation in the price of
natural gas; the consequences of involuntary termination proceedings of the
Companys pension plan; the Companys focus on the beer industry and its
dependence on certain key customers; the seasonal nature of brewing, iced tea
and other beverage industries; volatility in the demand of emerging new markets
(e.g. the ready-to-drink market); the Companys dependence on certain
executive officers; and changes in environmental and other government
regulations. The Company operates in a very competitive environment in which
new risk factors can emerge from time to time. It is not possible for
management to predict all such risk factors, nor can it assess the impact of
all such risk factors on the Companys business or 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.

19



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##### 



Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The DIP Facility is subject to variable interest rates. A change in
interest rates could have an impact on results of operations. A
change of 10% in the market rate of interest would impact interest
expense by approximately $0.2 million. The Companys
long-term debt instruments (classified as current liabilities at June 30, 2002)
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 sales are denominated in currencies other than the U.S. dollar, and
the Company does not believe its total exposure to be significant. The Company
may enter into put and call options for purchases of natural gas. Accounting
for these derivatives may increase volatility in earnings.

PART II  OTHER INFORMATION

Item 1. Legal Proceedings.

On October 13, 2000, certain stockholders of the Company, specifically
CoMac Partners, L.P., CoMac Endowment Fund, L.P., CoMac Opportunities Fund,
L.P., CoMac International, N.V., Carl Marks Strategic Investments, LP, Carl
Marks Strategic Investments II, LP, Varde Partners, L.P., Varde Fund (Cayman)
Ltd., Pequod Investments, L.P., Pequod International Ltd., Cerberus Partner
L.P. and Cerberus International Ltd. (collectively, the Plaintiffs),
commenced a shareholder derivative action against certain of the Companys
directors and certain officers and related entities in The Court of Chancery of
the State of Delaware in and for New Castle County. The parties to the
derivative action have entered in a settlement pursuant to which the derivative
action will be settled on the basis of total consideration to the Company of
approximately $9.0 million of which approximately $6.0 million is in cash and
the exchange of mutual releases by the parties. The Court approved the
settlement at the confirmation hearing. Implementation of the settlement is
subject to the approval by the Delaware Chancery Court and the closing of the
Companys Reorganization.

On June 22, 2001, the stockholders of the Company identified in the
preceding paragraph of this Item 1 commenced an action against the Company in
the Court of Chancery of the State of Delaware in and for New Castle County.
The Plaintiffs sought an order directing that the Company hold an annual
meeting for the election of directors and setting the time and place for the
meeting, and directing that the entire board of directors stand for election at
that meeting. On August 12, 2002, pursuant to a court order, the Companys annual meeting of stockholders
is postponed until October 1, 2002. Pursuant to earlier court orders, the meeting had
been scheduled to be held on April 19, 2002 and was postponed to August 15,
2002.

In September 2001, The National Bank of Canada, acting on its own behalf
and on behalf of PNC Bank, filed a complaint, in Allegheny Common Pleas Court,
against Anchor, GGC, Consumers U.S. and certain other affiliates. The complaint
alleges, among other things, fraudulent conveyances made by GGC to Anchor and
tortious interference with the contract relationship between the bank and GGC.
Discovery has not yet begun, and neither Anchor, nor any other defendant, has
been required to respond to the allegations. Negotiations have been
ongoing.

In November 2001, the Company filed an action in the Federal District
Court for the Indiana Fort Wayne Division, against certain principal owners of
a European glass manufacturer, seeking the return of amounts advanced in an
agreement to purchase a controlling interest in a European glass manufacturer.
Pursuant to the settlement with Mr. J. Ghaznavi and G&G, all rights, title and
interest to the claim have been assigned to a designate of Mr. J. Ghaznavi.

On April 15, 2002, Anchor filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code for the purpose of confirming the Plan.
The filing was entered at the United States Bankruptcy Court for the Middle
District of Florida, Tampa Division. The filing consisted of a pre-negotiated
plan of reorganization, prompted by liquidity issues raised by change in
control provisions in Anchors debt instruments. Under Chapter 11 proceedings,
litigation and actions by creditors to collect certain

20



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##### 



claims existing at the Petition Date are stayed, without specific Bankruptcy
Court authorization to pay such claims. The Company received authorization,
pursuant to first day orders, to pay claims related to wages, salaries,
vacation, sick pay and trade creditor claims. As a debtor-in-possession, the
Company has the right, subject to Court approval, and certain other
limitations, to assume or reject certain executory contracts, including
unexpired leases. Any claim for damages resulting from the rejection of an
executory contract or an unexpired lease is treated as a general unsecured
claim in the Chapter 11 proceedings. On June 13, 2002, Anchor filed an Amended
Reorganization Plan, dated June 13, 2002 and a Disclosure Statement. On June
14, 2002, the Court approved the Disclosure Statement as providing adequate
information for holders of claims and interests against Anchor to make a
decision as to whether to accept or reject the Plan. In addition, the Court
entered an order establishing procedures for holders of claims and interests to
vote upon the Plan and set August 1, 2002 as the deadline by which votes to
accept or reject the Plan must be received by the balloting agent. Anchor
received unanimous votes to accept the Plan for each of the four classes
entitled to vote on the Plan. The Plan was confirmed by the Court at a hearing
held on August 8, 2002. Anchor currently expects the Plan to become effective
on or about August 30, 2002.

In addition, 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 these proceedings is not expected to have a material adverse effect
on the financial condition or operating results of the Company, based on the
Companys current understanding of the relevant facts and law.

Item 2. Changes in Securities and Use of Proceeds.



| |  |  | None
| |  |  | ----

Item 3. Defaults Upon Senior Securities.



| |  |  | The filing of the voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code is a default under the Indentures and
certain equipment related leases.                                                         
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The nonpayment of interest on the Senior Notes and the First
Mortgage Notes, due March 15, 2002 and April 1, 2002,
respectively, is a default under the Indentures, and
cross-defaults with certain equipment related leases.

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



| |  |  | Ballots in respect of the Plan under
Chapter 11 were circulated to the four classes (Class 2-Mortgage Note Claims; Class 5-PBGC
Unsecured Claims; Class 6-Senior Note Claims; and Class 7-Series A
Preferred Interests) entitled to vote on the Plan. The Company received
unanimous votes to accept the Plan and the Plan was confirmed on August 8, 2002.
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Item 5. Other Information.



| |  |  | None
| |  |  | ----

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



| | a. | Exhibits           
| | -- | -------------------
|
| |    |                    
|
| | b. | Reports on Form 8-K
|
| |    | (i)                
|
| |    | (ii)               

21



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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:  August 14, 2002 |  |  |  | /s/ Dale A. Buckwalter          
|                       |  |  |  |                                 
|                       |  |  |  | Dale A. Buckwalter              
|                       |  |  |  | Executive Vice President and    
|                       |  |  |  | Chief Financial Officer         
|                       |  |  |  | (Principal Financial Officer and
|                       |  |  |  | Duly Authorized Officer)        

22



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##### 



CERTIFICATION ACCOMPANYING PERIODIC REPORT
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. Section 1350)

The undersigned officers, of Anchor Glass Container Corporation (the
Company), hereby certify that:



| | (1) |  | The Quarterly Report of the Company on Form 10-Q for the
period ended June, 30 2002 (the Report) fully complies with
requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and       
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | The information contained in the Report fairly presents, in
all material respects, the financial condition and results of
operations of the Company as of the dates and for the periods
expressed in the Report.

|      |  |                 |  |                                                                                     
|----- |  | --------------- |  | ------------------------------------------------------------------------------------
|Date: |  | August 14, 2002 |  |                                                                                     
|     
|      |  |                 |  | /s/ Richard M. Deneau                                                               
|      |  |                 |  |                                                                                     
|      |  |                 |  | Name: Richard M.
Deneau
Title: President and Chief Operating Officer                
|     
|      |  |                 |  | /s/ Dale A. Buckwalter                                                              
|      |  |                 |  |                                                                                     
|      |  |                 |  | Name: Dale A. Buckwalter
Title: Executive Vice President and Chief
Financial Officer