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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-K/A


Amendment No. 3


(Mark one)


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


For the fiscal year ended December 31, 2002


OR


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


ANCHOR GLASS CONTAINER CORPORATION




(Exact name of registrant as specified in its charter)


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

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

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

Securities registered pursuant to Section 12(b) of the Act:

None





Securities registered pursuant to Section 12(g) of the Act:


None





(Title of class)




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

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

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

Number of shares outstanding of common stock at March 20, 2003:
9,000,000 shares

DOCUMENTS INCORPORATED BY REFERENCE
None





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TABLE OF CONTENTS



|                              |                                                                             |  |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                              | ITEM 6. Selected Financial Data.                                           
|                              | ITEM 8. Financial Statements and Supplementary Data.                       
|                              | ITEM 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.
|INDEX TO FINANCIAL STATEMENTS
|SIGNATURES                   
|Certification of CEO         
|Certification of CFO         
|Section 1350 Certifications  



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This Form 10-K/A is being filed to reflect the restated balance sheet of
Anchor Glass Container Corporation (Anchor or the Company) at December 31,
2002 and the restated statement of stockholders equity for the four months
ended December 31, 2002, after determination that its Series C Preferred Stock,
par value $.01 (the Series C Preferred Stock) should be classified as
temporary equity. This restatement is limited solely to classifying:



| | (i)  |  | the aggregate of $75.0 million of the Companys Series C
Preferred Stock from permanent stockholders equity and
| | ---- |  | ----------------------------------------------------------------------------------------------------------------
|
| | (ii) |  | the related accrued dividends of $3.0 million from long-term
liabilities                                        

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

The restatement had no effect on the Companys statements of operations,
assets or cash flows. Furthermore, as described in the Use of Proceeds section
of the Companys 424(b)(1) prospectus filed with the Securities and Exchange
Commission on September 25, 2003 in connection with the Companys initial
public offering that was consummated on September 30, 2003 (the Equity
Offering), all of the Series C Preferred Stock was redeemed in full on
September 30, 2003 with a portion of the net proceeds of the Equity Offering.
Accordingly, the change in classification will have no effect on the Companys
balance sheet as of or following September 30, 2003. See Note 16 for additional
information.

In addition, certain additional disclosures have been added to the
financial statements herein to conform to the financial statements contained in
the 424(b)(1) prospectus filed with the Securities and Exchange Commission on
June 30, 2003.

Part II  Item 6. Selected Financial Data, Part II  Item 8. Financial
Statementsand Part III  Item 15(a)3. Exhibitsof the Companys Annual Report
on Form 10-K is hereby amended and replaced as follows:

2



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ITEM 6. Selected Financial Data.

The following table sets forth certain historical financial information of
the Company. The selected financial data as of December 31, 2002 and December
31, 2001 and for the four months ended December 31, 2002, the eight months
ended August 31, 2002 and the two years ended December 31, 2001 and 2000 have
been derived from the Companys audited financial statements included elsewhere
in this Annual Report on Form 10-K/A. (See Note 16 to the
financial statements contained herein.) The selected financial data as of
December 31, 2000, 1999 and 1998 and for the three years ended December 31,
2000, 1999 and 1998 has been derived from the Companys financial statements
which had previously been audited by Arthur Andersen LLP. Arthur Andersen has
not reissued its report for purposes of this Annual Report on Form 10-K/A.
The following information should be read in conjunction with the Companys
financial statements and Managements Discussion and Analysis of Financial
Condition and Results of Operations.

The financial statements as of and for periods subsequent to August 31,
2002 are referred to as the Reorganized Company statements. The financial
statements prior to that date are referred to as Predecessor
Company statements. The financial statements for the eight months ended August 31, 2002
give effect to the restructuring and reorganization adjustments and the
implementation of fresh start accounting. The financial results for the year
ended December 31, 2002 include two different bases of accounting and,
consequently, after giving effect to the reorganization and fresh start
adjustments, the financial statements of the Reorganized Company are not
comparable to those of the Predecessor Company. Accordingly, the operating
results of the Reorganized Company and the Predecessor Company have been
separately disclosed.

|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |         |  
|-------------------------------------------------------------- | ----------------------------- | - | --------------------------------------------- | ------- | ------------------- | - | ------------------------ | ------- | ---- | - | ------- | ------- | ---- | - | ------- | ------- | - | - | ------- | ------- | - | - | ------- | ------- | -
|                                                               |                               |   | Reorganized                                   |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |        
|                                                               |                               |   | Company                                       |         | Predecessor Company
|                                                               |                               |   |                                               |         |                    
|                                                               |                               |   | Four Months                                   |         | Eight Months        |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |  
|                                                               |                               |   | Ended                                         |         | Ended               |   | Years Ended December 31,
|                                                               |                               |   | December 31,                                  |         | August 31,          |   |                         
|                                                               |                               |   | 2002                                          |         | 2002                |   | 2001                     |         | 2000 |   | 1999    |         | 1998
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |     
|                                                               |                               |   | (dollars in thousands, except per share data)
|Statement of Operations Data:                                  |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Net sales                                                      |                               | $ | 211,379                                       |         |                     | $ | 504,195                  |         |      | $ | 702,209 |         |      | $ | 629,548 |         |   | $ | 628,728 |         |   | $ | 643,318 |        
|Cost of products sold                                          |                               |   | 192,434                                       |         |                     |   | 451,619                  |         |      |   | 658,641 |         |      |   | 603,061 |         |   |   | 582,975 |         |   |   | 594,256 |        
|Selling and administrative expenses                            |                               |   | 9,683                                         |         |                     |   | 19,262                   |         |      |   | 28,462  |         |      |   | 33,222  |         |   |   | 28,465  |         |   |   | 30,246  |        
|Restructuring, net (1)                                         |                               |   |                                              |         |                     |   | (395                     | )       |      |   |        |         |      |   |        |         |   |   |        |         |   |   | 4,400   |        
|Related party provisions and charges (2)                       |                               |   |                                              |         |                     |   |                         |         |      |   | 35,668  |         |      |   |        |         |   |   | 9,600   |         |   |   |        |        
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|                                                               | Income (loss) from operations |   |                                               | 9,262   |                     |   |                          | 33,709  |      |   |         | (20,562 | )    |   |         | (6,735  | ) |   |         | 7,688   |   |   |         | 14,416  |  
|                                                               | Reorganization items, net (3) |   |                                               |        |                     |   |                          | 47,389  |      |   |         |        |      |   |         |        |   |   |         |        |   |   |         |        |  
|                                                               | Other income (expense), net   |   |                                               | 450     |                     |   |                          | 673     |      |   |         | 106     |      |   |         | 5,504   |   |   |         | 2,080   |   |   |         | 2,384   |  
|                                                               | Interest expense              |   |                                               | (10,381 | )                   |   |                          | (17,948 | )    |   |         | (30,612 | )    |   |         | (31,035 | ) |   |         | (27,279 | ) |   |         | (26,570 | )
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Net income (loss)                                              |                               | $ | (669                                          | )       |                     | $ | 63,823                   |         |      | $ | (51,068 | )       |      | $ | (32,266 | )       |   | $ | (17,511 | )       |   | $ | (9,770  | )      
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Series A and B Preferred Stock dividends                       |                               |   |                                               |         |                     | $ | (4,100                   | )       |      | $ | (14,057 | )       |      | $ | (14,057 | )       |   | $ | (13,650 | )       |   | $ | (13,037 | )      
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Income (loss) applicable to common stock                       |                               |   |                                               |         |                     | $ | 59,723                   |         |      | $ | (65,125 | )       |      | $ | (46,323 | )       |   | $ | (31,161 | )       |   | $ | (22,807 | )      
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Basic net income (loss) per share
applicable to common stock   |                               |   |                                               |         |                     | $ | 11.37                    |         |      | $ | (12.40  | )       |      | $ | (8.82   | )       |   | $ | (5.93   | )       |   | $ | (5.12   | )      
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Diluted net income (loss) per share
applicable to common stock |                               |   |                                               |         |                     | $ | 1.89                     |         |      | $ | (12.40  | )       |      | $ | (8.82   | )       |   | $ | (5.93   | )       |   | $ | (5.12   | )      
|                                                               |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Other Financial Data:                                          |                               |   |                                               |         |                     |   |                          |         |      |   |         |         |      |   |         |         |   |   |         |         |   |   |         |        
|Depreciation and amortization                                  |                               | $ | 18,011                                        |         |                     | $ | 35,721                   |         |      | $ | 54,024  |         |      | $ | 54,900  |         |   | $ | 51,942  |         |   | $ | 52,155  |        
|Capital expenditures                                           |                               |   | 28,666                                        |         |                     |   | 42,654                   |         |      |   | 41,952  |         |      |   | 39,805  |         |   |   | 53,963  |         |   |   | 42,297  |        

|                                              |  |                     |         |                     |  |   |          |   |  |   |         |   |  |   |         |  |  |   |         | 
|--------------------------------------------- |  | ------------------- | ------- | ------------------- |  | - | -------- | - |  | - | ------- | - |  | - | ------- |  |  | - | ------- | 
|                                              |  | Reorganized Company |         | Predecessor Company
|                                              |  |                     |         |                    
|Balance Sheet Data(at end of period):         |  | (restated)          |         |                     |  |   |          |   |  |   |         |   |  |   |         |  |  |  
|Accounts receivable                           |  | $                   | 42,070  |                     |  | $ | 43,182   |   |  | $ | 55,818  |   |  | $ | 53,556  |  |  | $ | 86,846  | 
|Inventories                                   |  |                     | 102,149 |                     |  |   | 105,573  |   |  |   | 125,521 |   |  |   | 106,977 |  |  |   | 104,329 | 
|Total assets                                  |  |                     | 556,397 |                     |  |   | 530,584  |   |  |   | 620,807 |   |  |   | 613,037 |  |  |   | 640,962 | 
|Total long-term debt including capital
leases |  |                     | 298,801 |                     |  |   | 259,435  |   |  |   | 269,279 |   |  |   | 253,132 |  |  |   | 253,922 | 
|Redeemable preferred stock                    |  |                     | 78,022  |                     |  |   | 82,026   |   |  |   | 76,428  |   |  |   | 70,830  |  |  |   | 66,643  | 
|Total stockholders equity (deficit)          |  |                     | 1,499   |                     |  |   | (124,041 | ) |  |   | (4,626  | ) |  |   | 46,187  |  |  |   | 67,938  | 

3



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|(1) |  | The Company recorded a net gain for restructuring of $395 for the eight
months ended August 31, 2002. The significant components of this net gain
included: professional fees of $10,068; direct costs of the restructuring,
net of $8,344; savings attributable to the retiree benefit plan
modification of ($24,432); and first mortgage note holder consent fee of
$5,625. The Company recorded a restructuring charge in 1998 as a result of
one furnace and one machine being removed from service.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | For the year ended December 31 2001, represents the write-off of a
receivable from Consumers Packaging Inc. (Consumers) and affiliates of
$18,221 and the write-off of an advance to G&G Investments, Inc. of
$17,447. For the year ended December 31, 1999, represents the Companys
allocable portion of the write-off of costs relating to a software system.                                                                                                                                      
|   
|(3) |  | Reorganization items, net consist of a net gain for fresh start
adjustments of $49,908 and expenses incurred in the Chapter 11 proceedings
of $2,519, comprised of: $2,450 of debtor-in-possession facility fees;
$1,687 of professional fees; $1,276 of deferred financing fees written off
relating to the Senior Notes; and a credit of $2,894 for the reversal of
interest expense relating to the Senior Notes.                                                                                    




ITEM 8. Financial Statements and Supplementary Data.

|                                                           |                                                                                                                                                                               |  |      |      | 
|---------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                           |                                                                                                                                                                               |  | Page
|                                                           |                                                                                                                                                                               |  |     
|Reports of Independent Certified Public Accountants        |                                                                                                                                                                               |  | F-2  |     
|Statements of Operations and Comprehensive Income (Loss)  |                                                                                                                                                                               |  |      |     
|                                                           | Four Months Ended December 31, 2002 (Reorganized Company),
Eight Months Ended August 31, 2002 and
Two Years Ended December 31, 2001 and 2000 (Predecessor Company)            |  |      | F-5  | 
|Balance Sheets                                            |                                                                                                                                                                               |  |      |     
|                                                           | December 31, 2002
(Reorganized Company)(restated) and                                                                                                                         |  |      |      | 
|                                                           | December 31, 2001 (Predecessor Company)                                                                                                                                       |  |      | F-6  | 
|Statements of Cash Flows                                  |                                                                                                                                                                               |  |      |     
|                                                           | Four Months Ended December 31, 2002 (Reorganized Company),
Eight Months Ended August 31, 2002 and
Two Years Ended December 31, 2001 and 2000 (Predecessor Company)            |  |      | F-8  | 
|Statements of
Stockholders Equity (Deficit)              |                                                                                                                                                                               |  |      |     
|                                                           | Four
Months Ended December 31, 2002 (Reorganized Company) (restated),
Eight Months Ended August 31, 2002 and
Two Years Ended December 31, 2001 and 2000 (Predecessor Company) |  |      | F-10 | 
|Notes to Financial Statements                              |                                                                                                                                                                               |  | F-12 |     

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ITEM 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.



| | (a) |  | Financial Statements, Schedules and Exhibits
| | --- |  | --------------------------------------------



| |  |  | 3.      Exhibits
| |  |  | ----------------

|        |  |                                                                                                                                                                                                                                                                                    |  |    
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|Exhibit |  |                                                                                                                                                                                                                                                                                    |  |    
|Number  |  | Item                                                                                                                                                                                                                                                                               |  |    
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|3.1     |  | Amended and Restated Certificate of Incorporation of Anchor                                                                                                                                                                                                                        |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|3.2     |  | Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Anchor                                                                                                                                                                                            |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|3.3     |  | Amended and Restated By-Laws of Anchor                                                                                                                                                                                                                                             |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|3.4     |  | Certificate of Designation of Series C Participating Preferred Stock                                                                                                                                                                                                               |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|3.5     |  | Certificate of Amendment of Amended and Restated Certificate of
Incorporation of Anchor                                                                                                                                                                                            |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|3.6     |  | Certificate of Amendment of The Certificate of Designation                                                                                                                                                                                                                         |  | (B)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|4.1     |  | Stockholders Agreement, dated August 30, 2002, by and among Anchor,
the Investors and the Other Stockholders                                                                                                                                                                      |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|4.2     |  | Indenture dated as of February 7, 2003 among Anchor, as Issuer and
The Bank of New York, as Trustee                                                                                                                                                                                |  | (B)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|4.3     |  | Collateral Access and Intercreditor Agreement, dated February 7,
2003, by and among Congress Financial Corporation (Central), in its
capacity as collateral agent, and The Bank of New York, in its
capacity as trustee and collateral agent                                       |  | (B)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|4.4     |  | Registration Rights Agreement, dated February 7, 2003, among Anchor
and the Initial Purchasers                                                                                                                                                                                     |  | (B)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.1   |  | Southeast Glass Bottle Supply Agreement between Anheuser-Busch,
Incorporated and Anchor                                                                                                                                                                                            |  | (C)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.2   |  | Glass Bottle Agreement between Anheuser-Busch, Incorporated and Anchor                                                                                                                                                                                                             |  | (D)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.3    |  | Limited License Agreement, dated March 8, 2002 between Owens Brockway
Glass Container Inc. and Anchor                                                                                                                                                                              |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.4    |  | Loan and Security Agreement by and among Anchor, as Borrower, and
Congress Financial Corporation (Central), as Administrative and
Collateral Agent, Bank of America, N.A., as Documentation Agent, and
the Financial Institutions Named Therein, as Lenders, dated August
30, 2002 |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.5    |  | Term Loan Agreement by and among Anchor, as Borrower, the financial
institutions from time to time party thereto, as Lenders, and Ableco
Finance LLC, as Agent, dated August 30, 2002                                                                                              |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.6    |  | Security Agreement, made by Anchor in favor of Ableco Finance LLC,
dated August 30, 2002                                                                                                                                                                                           |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.7    |  | Pledge Agreement, made by Anchor in favor of Ableco Finance LLC,
dated August 30, 2002                                                                                                                                                                                             |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.8    |  | Collateral Agency and Intercreditor Agreement dated August 30, 2002
between Congress Financial Corporation (Central) and Ableco Finance,
LLC                                                                                                                                       |  | (A)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.9    |  | Amendment No. 1 to Loan and Security Agreement by and among Anchor,
as Borrower, the financial institutions from time to time parties to
the Loan Agreement, as Lenders, and Congress Financial Corporation
(Central), as Agent, dated December 31, 2002                           |  | (B)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.10   |  | Amendment No. 2 to Loan and Security Agreement by and among Anchor,
as Borrower, and Congress Financial Corporation (Central), as Agent
for the financial institutions from time to time parties to the Loan
Agreement, as Lenders, dated February 7, 2003                         |  | (B)
|        |  |                                                                                                                                                                                                                                                                                    |  |    
|10.11   |  | Termination and Release Agreement between Anchor and Ableco Finance
LLC, dated February 7, 2003                                                                                                                                                                                    |  | (B)

5



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|        |  |                                                                                                                                                                                                                |  |    
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|Exhibit |  |                                                                                                                                                                                                                |  |    
|Number  |  | Item                                                                                                                                                                                                           |  |    
|        |  |                                                                                                                                                                                                                |  |    
|12.1    |  | Statement re: computation of ratio of earnings to fixed charges for
the four months ended December 31, 2002, the eight months ended
August 31, 2002 and the years ended December 31, 2001, 2000, 1999 and
1998 |  | (B)
|        |  |                                                                                                                                                                                                                |  |    
|21.1    |  | List of subsidiaries of the Company                                                                                                                                                                            |  | (E)
|        |  |                                                                                                                                                                                                                |  |    
|31.1    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                              |  | *  
|        |  |                                                                                                                                                                                                                |  |    
|31.2    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                              |  | *  
|        |  |                                                                                                                                                                                                                |  |    
|32      |  | Section 1350 Certifications                                                                                                                                                                                    |  | *  



---



|*   |  | Filed herewith.                                                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   |  | Portions of this document have been omitted and filed separately with the
Commission pursuant to a request for confidential treatment in accordance
with Rule 24b-2 of the Exchange Act.       
|   
|(A) |  | Previously filed as an exhibit to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 2002 and incorporated herein by
reference.                                   
|   
|(B) |  | Previously filed as an exhibit to the Companys Annual Report on Form
10-K for the year ended December 31, 2002 and incorporated herein by
reference.                                          
|   
|(C) |  | Previously filed as an exhibit to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 1999 and incorporated herein by
reference.                                        
|   
|(D) |  | Previously filed as an exhibit to the Companys Annual Report on Form
10-K/A Amendment No. 1 for the year ended December 31, 2002, filed on June
20, 2003 and incorporated herein by reference.
|   
|(E) |  | Previously filed as an exhibit to the Companys Registration Statement on
Form S-4 (Reg. No. 333-31363) originally filed with the Securities and
Exchange Commission on July 16, 1997.         

6



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ANCHOR GLASS CONTAINER CORPORATION

INDEX TO FINANCIAL STATEMENTS

|                                                           |                                                                                                                                                                             |  |      |      | 
|---------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                           |                                                                                                                                                                             |  | Page
|                                                           |                                                                                                                                                                             |  |     
|Reports of Independent Certified Public Accountants        |                                                                                                                                                                             |  | F-2  |     
|Statements of Operations and Comprehensive Income (Loss)  |                                                                                                                                                                             |  |      |     
|                                                           | Four Months Ended December 31, 2002 (Reorganized Company),
Eight Months Ended August 31, 2002 and
Two Years Ended December 31, 2001 and 2000 (Predecessor Company)          |  |      | F-5  | 
|Balance Sheets                                            |                                                                                                                                                                             |  |      |     
|                                                           | December 31, 2002
(Reorganized Company) restated and
December 31, 2001 (Predecessor Company)                                                                                |  |      | F-6  | 
|Statements of Cash Flows                                  |                                                                                                                                                                             |  |      |     
|                                                           | Four Months Ended December 31, 2002 (Reorganized Company),
Eight Months Ended August 31, 2002 and
Two Years Ended December 31, 2001 and 2000 (Predecessor Company)          |  |      | F-8  | 
|Statements of Stockholders Equity (Deficit)              |                                                                                                                                                                             |  |      |     
|                                                           | Four
Months Ended December 31, 2002 (Reorganized Company), restated
Eight Months Ended August 31, 2002 and
Two Years Ended December 31, 2001 and 2000 (Predecessor Company) |  |      | F-10 | 
|Notes to Financial Statements                              |                                                                                                                                                                             |  | F-12 |     

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##### Table of Contents



THE FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN
LLP. THIS REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP.

Report Of Independent Certified Public Accountants

To Anchor Glass Container Corporation:

We have audited the accompanying balance sheets of Anchor Glass Container
Corporation (a Delaware corporation) as of December 31, 2001* and 2000*, and
the related statements of operations and other comprehensive loss, cash flows
and stockholders equity (deficit) for each of the three years in the period
ended December 31, 2001*. These financial statements and Schedule II* are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Anchor Glass Container
Corporation as of December 31, 2001* and 2000*, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001*, in conformity with accounting principles generally accepted
in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 15* to the
financial statements, the Company is currently facing significant uncertainties
regarding the acceleration provisions in its financing agreements that raise
substantial doubt about its ability to continue as a going concern.
Managements plans in regard to these matters are also described in Note 15*.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule II* listed in the index of
financial statements is presented for purposes of complying with the Securities
and Exchange Commissions rules and is not part of the basic financial
statements. Schedule II* has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Tampa, Florida,
March 15, 2002



|* |  | Subsequent to the date of this report, the balance sheet as of December
31, 2001 and the related statements of operations and other comprehensive
loss, stockholders equity and cash flows and financial statement schedule
information for the year then ended were audited by PricewaterhouseCoopers
LLP whose report appears on page F-3 of this Annual Report on Form 10-K.                                                                                                                                         
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  |  | See Note 1 to the financial statements under the sub-headings Goodwilland
New Accounting Standardsfor a discussion of changes made to the original
2000 financial statements, with respect to which Arthur Andersen LLP did not
audit the changes. Note 15 to the original notes to financial statements,
which discussed a going concern qualification and managements plans with
respect thereto, has not been reproduced as a result of the Companys
reorganization discussed in Note 3 to the financial statements.
| 
|  |  | The financial statements and financial statement schedule information as of
December 31, 2000 and for the year ended December 31, 1999 are not presented
in this Annual Report on Form 10-K.                                                                                                                                                                                                                                                                                                                             

F-2



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##### Table of Contents



Report of Independent Certified Public Accountants

To the Board of Directors and Stockholders of Anchor Glass Container
Corporation:

In our opinion, the accompanying balance sheet as of December 31, 2001 and the
related statements of operations and comprehensive income (loss), stockholders
equity and cash flows present fairly, in all material respects, the financial
position of Anchor Glass Container Corporation at December 31, 2001, and the
results of its operations and cash flows for the eight-month period ended
August 31, 2002 and the year ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America. In
addition, in our opinion, the financial statement schedule listed in the index
appearing under Item 15(a) present fairly, in all material respects, the
information set forth therein when read in conjunction with the related
financial statements. These financial statements and financial statement
schedule are the responsibility of the Companys management; our responsibility
is to express an opinion on these financial statements and financial statement
schedule based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion. The financial
statements of the Company for the year ended December 31, 2000, before the
revisions described in Note 1, were audited by other independent accountants
who have ceased operations. Those independent accountants expressed an
unqualified opinion on those financial statements in their report dated March
15, 2002, which contained an explanatory paragraph surrounding the Companys
ability to continue as a going concern.

The Companys plan of reorganization became effective on August 30, 2002. As
discussed in Notes 2 and 3 to the financial statements, the Company adopted
Fresh-Start Reporting principles in accordance with the American Institute of
Certified Public Accountants Statement of Position 90-7, Financial Reporting
by Entities in Reorganization under the Bankruptcy Code. As a result of the
reorganization and the adoption of Fresh-Start Reporting, the Companys August
31, 2002 statements of operations and comprehensive income, of stockholders
equity and of cash flows are not comparable to the Companys December 31, 2001
statements of operations and comprehensive loss, of stockholders equity and of
cash flows.

As discussed in Note 1 to the financial statements, the Company adopted
Statement of Financial Accounting Standards (FASB Statement) No. 142, Goodwill
and Other Intangible Assets, on January 1, 2002.

As discussed above, the financial statements of Anchor Glass Container
Corporation for the year ended December 31, 2000 were audited by other
independent accountants who have ceased operations. As described in Note 1,
these financial statements have been revised to reflect the adoption of FASB
Statement No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections, which was adopted by the
Company upon adoption of Fresh-Start Reporting. Additionally, as described in
Note 1, these financial statements have been revised to include the
transitional disclosures required by FASB Statement No. 142. We audited the
adjustments that were applied to revise the 2000 financial statements for the
adoption of FASB Statement No. 145 and the transitional disclosures required by
FASB Statement No. 142, both of which are described in Note 1. In our opinion,
the adjustments for the adoption of FASB Statement No. 145 are appropriate and
have been properly applied, and the transitional disclosures for 2000 related
to the adoption of FASB Statement No. 142 are appropriate. However, we were
not engaged to audit, review, or apply any procedures to the 2000 financial
statements of the Company other than with respect to such adjustments and
transitional disclosures, and, accordingly, we do not express an opinion or any
other form of assurance on the 2000 financial statements taken as a whole.

PRICEWATERHOUSECOOPERS LLP

Tampa, Florida
November 22, 2002

F-3



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##### Table of Contents



Report of Independent Certified Public Accountants

To the Board of Directors and Stockholders of Anchor Glass Container
Corporation:

In our opinion, the accompanying balance sheet and the related statements of
operations and comprehensive income (loss), stockholders equity, and cash
flows present fairly, in all material respects, the financial position of
Anchor Glass Container Corporation at December 31, 2002, and the results of its
operations and cash flows for the four months ended December 31, 2002 in
conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedules
listed in the index appearing under Item 15(a) present fairly, in all material
respects, the information set forth therein when read in conjunction with the
related financial statements. These financial statements and financial
statement schedules are the responsibility of the Companys management; our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audit. We conducted our audit of
these statements in accordance with auditing standards generally accepted in
the United States of America, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 16, the Company restated the financial statements as of
and for the four months ended December 31, 2002, to classify the
Companys Series C Preferred Stock as temporary equity rather than as a
component of stockholders equity.

PRICEWATERHOUSECOOPERS LLP

Tampa, Florida
February 28, 2003, except for Note 16, for which the date is October 30, 2003

F-4



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##### Table of Contents



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

|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |         |         |         |  
|------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ---------------------------------- | ------------------------------------ | ------- | ------------ | --- | ------------------- | ------- | ------------------------ | --- | --------- | ------- | ------- | ------- | --------- | ------- | ------- | ------- | -
|                                                                                                              |                                      |                                    |                                      |         | Reorganized  |     |                     |         |                          |     |           |         |         |         |           |         |        
|                                                                                                              |                                      |                                    |                                      |         | Company      |     | Predecessor Company
|                                                                                                              |                                      |                                    |                                      |         |              |     |                    
|                                                                                                              |                                      |                                    |                                      |         | Four Months  |     | Eight Months        |         |                          |     |           |         |         |         |          
|                                                                                                              |                                      |                                    |                                      |         | Ended        |     | Ended               |         | Years Ended December 31,
|                                                                                                              |                                      |                                    |                                      |         | December 31, |     | August 31,          |         |                         
|                                                                                                              |                                      |                                    |                                      |         | 2002         |     | 2002                |         | 2001                     |     | 2000     
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |          
|Net sales                                                                                                     |                                      | $                                  | 211,379                              |         |              | $   | 504,195             |         |                          | $   | 702,209   |         |         | $       | 629,548   |        
|Costs and expenses:                                                                                           |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|                                                                                                              | Cost of products sold                |                                    |                                      | 192,434 |              |     |                     | 451,619 |                          |     |           | 658,641 |         |         |           | 603,061 |        
|                                                                                                              | Selling and administrative expenses  |                                    |                                      | 9,683   |              |     |                     | 19,262  |                          |     |           | 28,462  |         |         |           | 33,222  |        
|                                                                                                              | Restructuring, net                   |                                    |                                      |        |              |     |                     | (395    | )                        |     |           |        |         |         |           |        |        
|                                                                                                              | Related party provisions and charges |                                    |                                      |        |              |     |                     |        |                          |     |           | 35,668  |         |         |           |        |        
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Income (loss) from operations                                                                                 |                                      |                                    | 9,262                                |         |              |     | 33,709              |         |                          |     | (20,562   | )       |         |         | (6,735    | )      
|Reorganization items, net                                                                                     |                                      |                                    |                                     |         |              |     | 47,389              |         |                          |     |          |         |         |         |          |        
|Other income, net                                                                                             |                                      |                                    | 450                                  |         |              |     | 673                 |         |                          |     | 106       |         |         |         | 5,504     |        
|Interest expense (eight months ended
August 31, 2002 contractual interest of
$19,800)                         |                                      |                                    | (10,381                              | )       |              |     | (17,948             | )       |                          |     | (30,612   | )       |         |         | (31,035   | )      
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Net income (loss)                                                                                             |                                      | $                                  | (669                                 | )       |              | $   | 63,823              |         |                          | $   | (51,068   | )       |         | $       | (32,266   | )      
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Series A and B preferred stock dividends
(eight months ended August 31, 2002
contractual dividends of $9,371) |                                      |                                    |                                      |         |              | $   | (4,100              | )       |                          | $   | (14,057   | )       |         | $       | (14,057   | )      
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Income (loss) applicable to common stock                                                                      |                                      |                                    |                                      |         |              | $   | 59,723              |         |                          | $   | (65,125   | )       |         | $       | (46,323   | )      
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Basic net income (loss) per share
applicable to common stock                                                  |                                      |                                    |                                      |         |              | $   | 11.37               |         |                          | $   | (12.40    | )       |         | $       | (8.82     | )      
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Basic weighted average number of common
shares outstanding                                                    |                                      |                                    |                                      |         |              |     | 5,251,356           |         |                          |     | 5,251,356 |         |         |         | 5,251,356 |        
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Diluted net income (loss) per share
applicable to common stock                                                |                                      |                                    |                                      |         |              | $   | 1.89                |         |                          | $   | (12.40    | )       |         | $       | (8.82     | )      
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Diluted weighted average number of common
shares outstanding                                                  |                                      |                                    |                                      |         |              |     | 33,805,651          |         |                          |     | 5,251,356 |         |         |         | 5,251,356 |        
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Comprehensive income (loss):                                                                                  |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|                                                                                                              |                                      | Net income (loss)                  |                                      | $       | (669         | )   |                     | $       | 63,823                   |     |           | $       | (51,068 | )       |           | $       | (32,266 | )      
|                                                                                                              |                                      | Other comprehensive income (loss): |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |         |         |        
|                                                                                                              |                                      |                                    | Minimum pension liability adjustment |         |              |    |                     |         |                          |    |           |         |         | (62,468 | )         |         |         | (13,000 | )
|                                                                                                              |                                      |                                    | Derivative income (loss)             |         |              | 190 |                     |         |                          | 531 |           |         |         | (531    | )         |         |         |        |  
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        
|Comprehensive income (loss)                                                                                   |                                      | $                                  | (479                                 | )       |              | $   | 64,354              |         |                          | $   | (114,067  | )       |         | $       | (45,266   | )      
|                                                                                                              |                                      |                                    |                                      |         |              |     |                     |         |                          |     |           |         |         |         |           |        

See Notes to Financial Statements.

F-5



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##### Table of Contents



ANCHOR GLASS CONTAINER CORPORATION
BALANCE SHEETS
(dollars in thousands, except per share data)

|                                                                                           |                                                |                      |         |              |         |              |         |          |         | 
|------------------------------------------------------------------------------------------ | ---------------------------------------------- | -------------------- | ------- | ------------ | ------- | ------------ | ------- | -------- | ------- | 
|                                                                                           |                                                |                      |         | Reorganized  |         | Predecessor 
|                                                                                           |                                                |                      |         | Company      |         | Company     
|                                                                                           |                                                |                      |         |              |         |             
|                                                                                           |                                                |                      |         | December 31, |         | December 31,
|                                                                                           |                                                |                      |         | 2002         |         | 2001        
|Assets                                                                                     |                                                | (restated)           |         |             
|                                                                                           |                                                |                      |         |             
|Current assets:                                                                            |                                                |                      |         |              |         |              |         |         
|Cash and cash equivalents                                                                  |                                                | $                    | 351     |              |         | $            | 416     |         
|Restricted cash                                                                            |                                                |                      | 4,387   |              |         |              |        |         
|Accounts receivable, less allowance for doubtful accounts of
$561 and $1,000, respectively |                                                |                      | 42,070  |              |         |              | 43,182  |         
|Related party receivables, less allowance for doubtful
accounts of $24,979 in 2001         |                                                |                      |        |              |         |              | 1,020   |         
|Inventories                                                                                |                                                |                      | 102,149 |              |         |              | 105,573 |         
|Other current assets                                                                       |                                                |                      | 8,603   |              |         |              | 7,087   |         
|                                                                                           |                                                |                      |         |              |         |              |         |         
|                                                                                           |                                                | Total current assets |         |              | 157,560 |              |         |          | 157,278 | 
|Property, plant and equipment:                                                             |                                                |                      |         |              |         |              |         |         
|                                                                                           | Land and land improvements                     |                      |         | 11,694       |         |              |         | 6,622    |        
|                                                                                           | Buildings                                      |                      |         | 67,004       |         |              |         | 62,995   |        
|                                                                                           | Machinery, equipment and molds                 |                      |         | 322,565      |         |              |         | 430,185  |        
|                                                                                           | Less accumulated depreciation and amortization |                      |         | (16,877      | )       |              |         | (219,949 | )      
|                                                                                           |                                                |                      |         |              |         |              |         |         
|                                                                                           |                                                |                      | 384,386 |              |         |              | 279,853 |         
|Other assets                                                                               |                                                |                      | 6,815   |              |         |              | 26,042  |         
|Intangible assets, net of accumulated amortization of $264                                 |                                                |                      | 7,636   |              |         |              |        |         
|Intangible pension asset                                                                   |                                                |                      |        |              |         |              | 22,559  |         
|Goodwill, net of accumulated amortization of $14,553 in 2001                               |                                                |                      |        |              |         |              | 44,852  |         
|                                                                                           |                                                |                      |         |              |         |              |         |         
|                                                                                           |                                                | $                    | 556,397 |              |         | $            | 530,584 |         
|                                                                                           |                                                |                      |         |              |         |              |         |         

See Notes to Financial Statements.

F-6



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##### Table of Contents



ANCHOR GLASS CONTAINER CORPORATION
BALANCE SHEETS

(dollars in thousands, except per share data)


|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |        |         |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------ | ------------------------- | ------- | ------------ | ------- | ------------ | ------ | ------- | ------- | 
|                                                                                                                                                        |                                                                  |                                      |                           |         | Reorganized  |         | Predecessor 
|                                                                                                                                                        |                                                                  |                                      |                           |         | Company      |         | Company     
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |             
|                                                                                                                                                        |                                                                  |                                      |                           |         | December 31, |         | December 31,
|                                                                                                                                                        |                                                                  |                                      |                           |         | 2002         |         | 2001        
|Liabilities and Stockholders Equity (Deficit)                                                                                                          |                                                                  | (restated)                           |                           |        
|                                                                                                                                                        |                                                                  |                                      |                           |        
|Current liabilities:                                                                                                                                    |                                                                  |                                      |                           |         |              |         |              |       
|Borrowings under revolving credit facility                                                                                                              |                                                                  | $                                    | 47,413                    |         |              | $       | 50,981       |       
|Current maturities of long-term debt                                                                                                                    |                                                                  |                                      | 8,315                     |         |              |         | 822          |       
|Long-term debt classified as current                                                                                                                    |                                                                  |                                      |                          |         |              |         | 206,091      |       
|Accounts payable                                                                                                                                        |                                                                  |                                      | 46,969                    |         |              |         | 44,673       |       
|Related party payables                                                                                                                                  |                                                                  |                                      |                          |         |              |         | 4,943        |       
|Accrued expenses                                                                                                                                        |                                                                  |                                      | 35,314                    |         |              |         | 20,836       |       
|Accrued interest                                                                                                                                        |                                                                  |                                      | 5,167                     |         |              |         | 5,686        |       
|Accrued compensation and employee benefits                                                                                                              |                                                                  |                                      | 26,331                    |         |              |         | 24,581       |       
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       
|                                                                                                                                                        |                                                                  |                                      | Total current liabilities |         |              | 169,509 |              |        |         | 358,613 | 
|Bonds and long-term capital leases                                                                                                                      |                                                                  |                                      | 182,433                   |         |              |         | 1,541        |       
|Long-term obligation to PBGC                                                                                                                            |                                                                  |                                      | 60,640                    |         |              |         |             |       
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       
|                                                                                                                                                        | Long-term debt                                                   |                                      |                           | 243,073 |              |         |              | 1,541  |        
|Long-term pension liabilities                                                                                                                           |                                                                  |                                      |                          |         |              |         | 122,541      |       
|Long-term post-retirement liabilities                                                                                                                   |                                                                  |                                      | 40,342                    |         |              |         | 63,255       |       
|Other long-term liabilities                                                                                                                             |                                                                  |                                      | 23,952                    |         |              |         | 26,649       |       
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       
|                                                                                                                                                        |                                                                  |                                      | 307,367                   |         |              |         | 213,986      |       
|Commitments and contingencies                                                                                                                           |                                                                  |                                      |                           |         |              |         |              |       
|Mandatorily redeemable preferred stock, Series A, $0.01 par value;
2001  authorized, issued and outstanding 2,239,320 shares                           |                                                                  |                                      |                          |         |              |         | 82,026       |       
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       
|Redeemable preferred stock, Series C, $0.01 par value; 100,000 shares
authorized; 75,000 shares issued and outstanding ($78,022 liquidation
preference) |                                                                  |                                      | 78,022                    |         |              |         |             |       
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       
|Stockholders equity (deficit):                                                                                                                         |                                                                  |                                      |                           |         |              |         |              |       
|Redeemable preferred stock, Series B, $0.01 par value; 2001 -
5,000,000 shares authorized; 3,360,000 shares issued and outstanding                      |                                                                  |                                      |                          |         |              |         | 34           |       
|                                                                                                                                                        | Issuable preferred stock; 2001 - 869,235 shares at $25 per share |                                      |                           |        |              |         |              | 21,731 |        
|Common stock, $0.10 par value; 21,000,000 shares authorized; 9,000,000
shares issued and outstanding                                                    |                                                                  |                                      | 900                       |         |              |         |             |       
|Common stock, $0.10 par value; (2001 - authorized 50,000,000 shares;
shares issued and outstanding 3,357,825)                                           |                                                                  |                                      |                          |         |              |         | 336          |       
|Warrants; issued and outstanding (2001-1,893,531)                                                                                                       |                                                                  |                                      |                          |         |              |         | 9,446        |       
|Capital in excess of par value                                                                                                                          |                                                                  |                                      | 4,100                     |         |              |         | 104,520      |       
|Accumulated deficit                                                                                                                                     |                                                                  |                                      | (3,691                    | )       |              |         | (184,109     | )     
|Accumulated other comprehensive income (loss):                                                                                                          |                                                                  |                                      |                           |         |              |         |              |       
|                                                                                                                                                        |                                                                  | Derivative income (loss)             |                           |         | 190          |         |              |        | (531    | )      
|                                                                                                                                                        |                                                                  | Additional minimum pension liability |                           |         |             |         |              |        | (75,468 | )      
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       
|                                                                                                                                                        |                                                                  |                                      | 1,499                     |         |              |         | (124,041     | )     
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       
|                                                                                                                                                        |                                                                  | $                                    | 556,397                   |         |              | $       | 530,584      |       
|                                                                                                                                                        |                                                                  |                                      |                           |         |              |         |              |       

See Notes to Financial Statements.

F-7



---



##### Table of Contents



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

|                                                                             |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |   |         |  
|---------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ----------------------------------------------------------- | ------- | ------------ | ------- | ------------------- | ------- | ------------------------ | ------- | ---- | ------- | - | ------- | - | ------- | - | ------- | -
|                                                                             |                                                                                          |                                                             |         | Reorganized  |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          |                                                             |         | Company      |         | Predecessor Company
|                                                                             |                                                                                          |                                                             |         |              |         |                    
|                                                                             |                                                                                          |                                                             |         | Four Months  |         | Eight Months        |         |                          |         |      |         |   |         |  
|                                                                             |                                                                                          |                                                             |         | Ended        |         | Ended               |         | Years Ended December 31,
|                                                                             |                                                                                          |                                                             |         | December 31, |         | August 31,          |         |                         
|                                                                             |                                                                                          |                                                             |         | 2002         |         | 2002                |         | 2001                     |         | 2000
|                                                                             |                                                                                          |                                                             |         |              |         |                     |         |                          |         |     
|Cash flows from operating activities:                                        |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|Net income (loss)                                                            |                                                                                          | $                                                           | (669    | )            |         | $                   | 63,823  |                          |         | $    | (51,068 | ) |         | $ | (32,266 | )
|                                                                             | Adjustments to reconcile net income (loss) to
net cash provided by operating activities: |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |   |        
|                                                                             |                                                                                          | Depreciation and amortization of property and
equipment     |         |              | 17,747  |                     |         |                          | 35,721  |      |         |   | 50,748  |   |         |   | 49,651  |  
|                                                                             |                                                                                          | Other amortization                                          |         |              | 887     |                     |         |                          | 1,609   |      |         |   | 5,665   |   |         |   | 7,608   |  
|                                                                             |                                                                                          | Restructuring, net                                          |         |              |        |                     |         |                          | (395    | )    |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Reorganization items, net                                   |         |              |        |                     |         |                          | (47,389 | )    |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Restructuring and reorganization payments                   |         |              | (3,644  | )                   |         |                          | (4,835  | )    |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Related party provisions and charges                        |         |              |        |                     |         |                          |        |      |         |   | 35,668  |   |         |   |        |  
|                                                                             |                                                                                          | (Gain) loss on sale of property and equipment               |         |              | (7      | )                   |         |                          | 90      |      |         |   | (495    | ) |         |   | (4,161  | )
|                                                                             |                                                                                          | Other                                                       |         |              | (125    | )                   |         |                          | (329    | )    |         |   | (118    | ) |         |   | 2,164   |  
|Increase (decrease) in cash resulting from
changes in assets and liabilities |                                                                                          |                                                             | 8,936   |              |         |                     | 4,819   |                          |         |      | (2,919  | ) |         |   | (12,953 | )
|                                                                             |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          |                                                             | 23,125  |              |         |                     | 53,114  |                          |         |      | 37,481  |   |         |   | 10,043  |  
|Cash flows from investing activities:                                        |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          | Expenditures for property, plant and equipment              |         |              | (28,666 | )                   |         |                          | (42,654 | )    |         |   | (41,952 | ) |         |   | (39,805 | )
|                                                                             |                                                                                          | Proceeds from sale of property and equipment                |         |              | 10,026  |                     |         |                          | 47      |      |         |   | 14,812  |   |         |   | 12,382  |  
|                                                                             |                                                                                          | Deposit of sale proceeds into escrow account                |         |              | (10,000 | )                   |         |                          |        |      |         |   | (13,379 | ) |         |   | (14,205 | )
|                                                                             |                                                                                          | Withdrawal of funds from escrow account                     |         |              | 10,000  |                     |         |                          |        |      |         |   | 13,348  |   |         |   | 22,463  |  
|                                                                             |                                                                                          | Change in restricted cash                                   |         |              | 1,548   |                     |         |                          | (5,935  | )    |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Payments of strategic alliances with customers              |         |              |        |                     |         |                          | (1,266  | )    |         |   | (1,824  | ) |         |   | (1,800  | )
|                                                                             |                                                                                          | Other                                                       |         |              | (996    | )                   |         |                          | 265     |      |         |   | (1,879  | ) |         |   | (2,757  | )
|                                                                             |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          |                                                             | (18,088 | )            |         |                     | (49,543 | )                        |         |      | (30,874 | ) |         |   | (23,722 | )
|Cash flows from financing activities:                                        |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          | Proceeds from issuance of long-term debt                    |         |              |        |                     |         |                          | 20,000  |      |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Principal payments of long-term debt                        |         |              | (736    | )                   |         |                          | (51,416 | )    |         |   | (1,937  | ) |         |   | (2,058  | )
|                                                                             |                                                                                          | Net draws on Revolving Credit Facility                      |         |              | 15,817  |                     |         |                          | 31,596  |      |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Net draws (repayments) on prior revolving
credit facilities |         |              |        |                     |         |                          | (50,981 | )    |         |   | (7,976  | ) |         |   | 18,062  |  
|                                                                             |                                                                                          | Proceeds from issuance of preferred stock                   |         |              |        |                     |         |                          | 75,000  |      |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Proceeds form issuance of common stock                      |         |              |        |                     |         |                          | 5,000   |      |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Payments made under the PBGC Agreement                      |         |              | (1,038  | )                   |         |                          | (20,750 | )    |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Restructuring and reorganization payments                   |         |              | (1,056  | )                   |         |                          | (10,727 | )    |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Plan distributions to Series A preferred stock              |         |              | (17,409 | )                   |         |                          |        |      |         |   |        |   |         |   |        |  
|                                                                             |                                                                                          | Other, primarily financing fees                             |         |              | (573    | )                   |         |                          | (1,400  | )    |         |   | (810    | ) |         |   | (3,071  | )
|                                                                             |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          |                                                             | (4,995  | )            |         |                     | (3,678  | )                        |         |      | (10,723 | ) |         |   | 12,933  |  
|Cash and cash equivalents:                                                   |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          | Increase (decrease) in cash and cash equivalents            |         |              | 42      |                     |         |                          | (107    | )    |         |   | (4,116  | ) |         |   | (746    | )
|                                                                             |                                                                                          | Balance, beginning of period                                |         |              | 309     |                     |         |                          | 416     |      |         |   | 4,532   |   |         |   | 5,278   |  
|                                                                             |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  
|                                                                             |                                                                                          | Balance, end of period                                      |         | $            | 351     |                     |         | $                        | 309     |      |         | $ | 416     |   |         | $ | 4,532   |  
|                                                                             |                                                                                          |                                                             |         |              |         |                     |         |                          |         |      |         |   |         |   |         |  

See Notes to Financial Statements.

F-8



---



##### Table of Contents



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

|                                                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |     |         |  
|------------------------------------------------- | ----------------------------------------------------------------------------- | ---------------------------------------------------------------- | ----- | ------------ | ------- | ------------------- | ----- | ------------------------ | ------ | ---- | ------ | - | ------- | - | ------- | --- | ------- | -
|                                                  |                                                                               |                                                                  |       | Reorganized  |         |                     |       |                          |        |      |        |   |         |   |         |    
|                                                  |                                                                               |                                                                  |       | Company      |         | Predecessor Company
|                                                  |                                                                               |                                                                  |       |              |         |                    
|                                                  |                                                                               |                                                                  |       | Four Months  |         | Eight Months        |       |                          |        |      |        |   |         |  
|                                                  |                                                                               |                                                                  |       | Ended        |         | Ended               |       | Years Ended December 31,
|                                                  |                                                                               |                                                                  |       | December 31, |         | August 31,          |       |                         
|                                                  |                                                                               |                                                                  |       | 2002         |         | 2002                |       | 2001                     |        | 2000
|                                                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |     
|Supplemental disclosure of cash flow information: |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |    
|                                                  | Cash paid during the period for:                                              |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |     |        
|                                                  |                                                                               | Interest                                                         |       | $            | 11,638  |                     |       | $                        | 12,081 |      |        | $ | 28,223  |   |         | $   | 27,657  |  
|                                                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |    
|                                                  | Increase (decrease) in cash resulting from
changes in assets and liabilities: |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |     |        
|                                                  |                                                                               | Accounts receivable                                              |       | $            | 5,976   |                     |       | $                        | (2,342 | )    |        | $ | (2,084  | ) |         | $   | 10,607  |  
|                                                  |                                                                               | Accounts receivable, related party                               |       |              |        |                     |       |                          |       |      |        |   | (5,441  | ) |         |     | (13,203 | )
|                                                  |                                                                               | Inventories                                                      |       |              | (14,914 | )                   |       |                          | 18,338 |      |        |   | 19,948  |   |         |     | (18,544 | )
|                                                  |                                                                               | Other current assets                                             |       |              | 1,230   |                     |       |                          | 533    |      |        |   | 974     |   |         |     | (2,455  | )
|                                                  |                                                                               | Accounts payable, accrued expenses and
other current liabilities |       |              | 11,359  |                     |       |                          | (6,956 | )    |        |   | (25,199 | ) |         |     | (1,783  | )
|                                                  |                                                                               | Other, net                                                       |       |              | 5,285   |                     |       |                          | (4,754 | )    |        |   | 8,883   |   |         |     | 12,425  |  
|                                                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |    
|                                                  |                                                                               | $                                                                | 8,936 |              |         | $                   | 4,819 |                          |        | $    | (2,919 | ) |         | $ | (12,953 | )  
|                                                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |    
|Supplemental noncash activities:                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |    
|                                                  | Non-cash equipment financing                                                  |                                                                  | $     | 10,000       |         |                     | $     |                         |        |      | $      |  |         |   | $       |    |        
|                                                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |    
|                                                  | Non-cash compensation                                                         |                                                                  | $     |             |         |                     | $     |                         |        |      | $      |  |         |   | $       | 828 |        
|                                                  |                                                                               |                                                                  |       |              |         |                     |       |                          |        |      |        |   |         |   |         |    

The Company considers short-term investments with original maturities of ninety
days or less at the date of purchase to be cash equivalents.

F-9



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##### Table of Contents



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

|                                                                      |  |           |    |           |  |        |        |          |  |       |     |         |  |             |        |               |  |         |         |       |  |               |          |             |  |       |         |   |  |   |          |  
|--------------------------------------------------------------------- |  | --------- | -- | --------- |  | ------ | ------ | -------- |  | ----- | --- | ------- |  | ----------- | ------ | ------------- |  | ------- | ------- | ----- |  | ------------- | -------- | ----------- |  | ----- | ------- | - |  | - | -------- | -
|                                                                      |  |           |    |           |  |        |        |          |  |       |     |         |  |             |        |               |  | Capital |         |       |  |               |          | Accumulated |  | Total
|                                                                      |  | Series B  |    | Issuable  |  |        |        |          |  |       |     |         |  | in excess   |        |               |  |         |         | other |  | stockholders
|                                                                      |  | preferred |    | preferred |  | Common |        |          |  |       |     | of par  |  | Accumulated |        | comprehensive |  | equity 
|                                                                      |  | stock     |    | stock     |  | stock  |        | Warrants |  | value |     | deficit |  | loss        |        | (deficit)    
|                                                                      |  |           |    |           |  |        |        |          |  |       |     |         |  |             |        |              
|Balance, January 1, 2000                                              |  | $         | 34 |           |  | $      | 21,731 |          |  | $     | 216 |         |  | $           | 15,445 |               |  | $       | 98,340  |       |  | $             | (89,579  | )           |  | $     |        |   |  | $ | 46,187   |  
|Warrants exercised                                                    |  |           |   |           |  |        |       |          |  |       |    |         |  |             | (12    | )             |  |         | 12      |       |  |               |         |             |  |       |        |   |  |   |         |  
|Contribution from
shareholder related to
profit on intercompany
sales |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         | 51      |       |  |               |         |             |  |       |        |   |  |   | 51       |  
|Dividends accrued on
Series A Preferred Stock                         |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         |        |       |  |               | (5,598   | )           |  |       |        |   |  |   | (5,598   | )
|Net loss                                                              |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         |        |       |  |               | (32,266  | )           |  |       |        |   |  |   | (32,266  | )
|Amount related to minimum
pension liability                           |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         |        |       |  |               |         |             |  |       | (13,000 | ) |  |   | (13,000  | )
|                                                                      |  |           |    |           |  |        |        |          |  |       |     |         |  |             |        |               |  |         |         |       |  |               |          |             |  |       |         |   |  |   |          |  
|Balance, December 31, 2000                                            |  |           | 34 |           |  |        | 21,731 |          |  |       | 216 |         |  |             | 15,433 |               |  |         | 98,403  |       |  |               | (127,443 | )           |  |       | (13,000 | ) |  |   | (4,626   | )
|Warrants exercised                                                    |  |           |   |           |  |        |       |          |  |       | 120 |         |  |             | (5,987 | )             |  |         | 5,867   |       |  |               |         |             |  |       |        |   |  |   |         |  
|Contribution from
shareholder related to
profit on intercompany
sales |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         | 250     |       |  |               |         |             |  |       |        |   |  |   | 250      |  
|Dividends accrued on
Series A Preferred Stock                         |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         |        |       |  |               | (5,598   | )           |  |       |        |   |  |   | (5,598   | )
|Net loss                                                              |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         |        |       |  |               | (51,068  | )           |  |       |        |   |  |   | (51,068  | )
|Derivative loss                                                       |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         |        |       |  |               |         |             |  |       | (531    | ) |  |   | (531     | )
|Amount related to minimum
pension liability                           |  |           |   |           |  |        |       |          |  |       |    |         |  |             |       |               |  |         |        |       |  |               |         |             |  |       | (62,468 | ) |  |   | (62,468  | )
|                                                                      |  |           |    |           |  |        |        |          |  |       |     |         |  |             |        |               |  |         |         |       |  |               |          |             |  |       |         |   |  |   |          |  
|Balance, December 31, 2001                                            |  | $         | 34 |           |  | $      | 21,731 |          |  | $     | 336 |         |  | $           | 9,446  |               |  | $       | 104,520 |       |  | $             | (184,109 | )           |  | $     | (75,999 | ) |  | $ | (124,041 | )
|                                                                      |  |           |    |           |  |        |        |          |  |       |     |         |  |             |        |               |  |         |         |       |  |               |          |             |  |       |         |   |  |   |          |  

See Notes to Financial Statements.

F-10



---



##### Table of Contents



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

|                                              |                     |   |           |   |        |   |          |   |       |   |         |   |               |   |               |   |        |   |          |   |               |   |         |   |  |   |          |   | 
|--------------------------------------------- | ------------------- | - | --------- | - | ------ | - | -------- | - | ----- | - | ------- | - | ------------- | - | ------------- | - | ------ | - | -------- | - | ------------- | - | ------- | - |  | - | -------- | - | 
|                                              |                     |   |           |   |        |   |          |   |       |   |         |   |               |   | Capital       |   |        |   |          |   | Accumulated   |   | Total  
|                                              |                     |   | Series B  |   |        |   |          |   |       |   |         |   | in excess     |   |               |   |        |   | other    |   | stockholders
|                                              |                     |   | preferred |   | Common |   |          |   |       |   | of par  |   | Accumulated   |   | comprehensive |   | equity
|                                              |                     |   | stock     |   | stock  |   | Warrants |   | value |   | deficit |   | income (loss) |   | (deficit)    
|                                              |                     |   |           |   |        |   |          |   |       |   |         |   |               |   |              
|                                              | Predecessor Company |   |           |   |        |   |          |   |       |   |         |   |               |   |               |   |        |   |          |   |               |   |         |   |  |   |          |   | 
|Balance, January 1, 2002                      |                     | $ | 21,765    |   |        | $ | 336      |   |       | $ | 9,446   |   |               | $ | 104,520       |   |        | $ | (184,109 | ) |               | $ | (75,999 | ) |  | $ | (124,041 | )
|Dividends accrued on Series A
preferred stock |                     |   |          |   |        |   |         |   |       |   |        |   |               |   |              |   |        |   | (1,633   | ) |               |   |        |   |  |   | (1,633   | )
|Net income                                    |                     |   |          |   |        |   |         |   |       |   |        |   |               |   |              |   |        |   | 63,823   |   |               |   |        |   |  |   | 63,823   |  
|Derivative income                             |                     |   |          |   |        |   |         |   |       |   |        |   |               |   |              |   |        |   |         |   |               |   | 531     |   |  |   | 531      |  
|Reorganization adjustments, net               |                     |   | (21,765   | ) |        |   | (336     | ) |       |   | (9,446  | ) |               |   | (104,520      | ) |        |   | 121,919  |   |               |   | 75,468  |   |  |   | 61,320   |  
|Issuance of 9,000,000 shares of
common stock  |                     |   |          |   |        |   | 900      |   |       |   |        |   |               |   | 4,100         |   |        |   |         |   |               |   |        |   |  |   | 5,000    |  
|                                              |                     |   |           |   |        |   |          |   |       |   |         |   |               |   |               |   |        |   |          |   |               |   |         |   |  |   |          |  
|                                              | Reorganized Company |   |           |   |        |   |          |   |       |   |         |   |               |   |               |   |        |   |          |   |               |   |         |   |  |   |          |   | 
|Balance, August 31, 2002 (restated)           |                     |   |          |   |        |   | 900      |   |       |   |        |   |               |   | 4,100         |   |        |   |         |   |               |   |        |   |  |   | 5,000    |  
|Dividends accrued on Series C
preferred stock |                     |   |          |   |        |   |         |   |       |   |        |   |               |   |              |   |        |   | (3,022   | ) |               |   |        |   |  |   | (3,022   | )
|Net loss                                      |                     |   |          |   |        |   |         |   |       |   |        |   |               |   |              |   |        |   | (669     | ) |               |   |        |   |  |   | (669     | )
|Derivative income                             |                     |   |          |   |        |   |         |   |       |   |        |   |               |   |              |   |        |   |         |   |               |   | 190     |   |  |   | 190      |  
|                                              |                     |   |           |   |        |   |          |   |       |   |         |   |               |   |               |   |        |   |          |   |               |   |         |   |  |   |          |  
|Balance, December 31, 2002 (restated)         |                     | $ |          |   |        | $ | 900      |   |       | $ |        |   |               | $ | 4,100         |   |        | $ | (3,691   | ) |               | $ | 190     |   |  | $ | 1,499    |  
|                                              |                     |   |           |   |        |   |          |   |       |   |         |   |               |   |               |   |        |   |          |   |               |   |         |   |  |   |          |  
|See Notes to Financial Statements.            |                     |   |           |   |        |   |          |   |       |   |         |   |               |   |               |   |        |   |          |   |               |   |         |   |  |   |          |  

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##### Table of Contents



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

NOTE 1 - Basis of Presentation and Significant Accounting Policies

Organization of the Company

On August 30, 2002, Anchor Glass Container Corporation (the Company or
Anchor), a Delaware corporation, completed a restructuring of its existing
debt and equity securities pursuant to a plan of reorganization (the Plan)
under Chapter 11 of the United States Bankruptcy Code. Certain investment funds
and managed accounts affiliated with Cerberus Capital Management, L.P.
(Cerberus), acquired all of the outstanding capital stock of Anchor through
their investment in Anchor Glass Container Holding L.L.C. (AGC Holding), a
Delaware limited liability company formed in August 2002 and the parent company
of Anchor. As of December 31, 2002, AGC Holding owns approximately 95% of the
outstanding common stock and 100% of the outstanding Series C Participating
Preferred Stock of Anchor. The remaining outstanding shares of common stock of
Anchor are held by certain officers of Anchor.

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

Business Segment

The Company operates as one reportable segment and is engaged in the
manufacture and sale of a diverse line of clear, amber, green and other color
glass containers of various types, designs and sizes to customers principally
in the beer, beverage, food, and liquor industries. The Company markets its
products throughout the United States. The Companys international and export
sales are insignificant. Sales to Anheuser-Busch Companies, Inc.
(Anheuser-Busch) represented approximately 46.1%, 42.5%, 36.3% and 32.7%,
respectively, of net sales for the four months ended December 31, 2002, the
eight months ended August 31, 2002 and the two years ended December 31, 2001
and 2000. The loss of Anheuser-Busch or another significant customer, unless
replaced, could have a material adverse effect on the Companys business.

Revenue Recognition

Revenues are recognized as product is shipped to customers, net of
applicable rebates and discounts. The Company may invoice customers to recover
certain cost increases, recognizing these amounts as revenue in net sales.

Accounting for Derivative Instruments and Hedging Activities

Effective January 1, 2001, the Company adopted Statement of Financial
Accounting Standards No. 133 - Accounting for Derivative Instruments and
Hedging Activities, as amended by SFAS 137 and SFAS 138 (SFAS 133). SFAS 133
establishes accounting and reporting standards requiring every derivative
instrument (including certain derivative instruments embedded in other
contracts) to be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS 133 requires that changes in the derivative
fair values that are designated effective and qualify as cash flow hedges will
be deferred and recorded as a component of accumulated other comprehensive
income until the hedged transactions occur and are recognized in earnings. The
ineffective portion of a hedging derivatives change in fair value will be
immediately recognized in earnings. For derivative instruments that do not
qualify as cash flow hedges, SFAS 133 requires that changes in the derivative
fair values be recognized in earnings in the period of change.

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##### Table of Contents



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

Inventories

Inventories are stated at the lower of cost or market. The cost of
substantially all inventories of raw materials and finished products is
determined on the first-in, first-out method. Manufacturing supplies and
certain other inventories are valued at weighted average costs. Freight costs
of delivery of inventories to customers are included in cost of products sold
on the statement of operations. Inventories are comprised of:

|                                         |  |              |         |              |  |   |         | 
|---------------------------------------- |  | ------------ | ------- | ------------ |  | - | ------- | 
|                                         |  | Reorganized  |         | Predecessor 
|                                         |  | Company      |         | Company     
|                                         |  |              |         |             
|                                         |  | December 31, |         | December 31,
|                                         |  | 2002         |         | 2001        
|                                         |  |              |         |             
|Raw materials and manufacturing supplies |  | $            | 22,796  |              |  | $ | 22,171  | 
|Finished products                        |  |              | 79,353  |              |  |   | 83,402  | 
|                                         |  |              |         |              |  |   |         | 
|                                         |  | $            | 102,149 |              |  | $ | 105,573 | 
|                                         |  |              |         |              |  |   |         | 

Property, Plant and Equipment

Property, plant and equipment expenditures, including furnace rebuilds
which extend useful lives and expenditures for glass forming machine molds, are
capitalized and recorded at cost. For financial statement purposes, these
assets are depreciated using the straight-line method over the estimated useful
lives of the assets, except for molds which are depreciated on a unit of
production method based on units of glass produced, supplemented by a net
realizable formula to cover technical obsolescence. Generally, annual
depreciation lives are 40 years for buildings and range from 5 to 12 years for
machinery and equipment. Furnace and machine rebuilds, which are recurring in
nature and which extend the lives of the related assets, are capitalized and
depreciated over the period of extension, generally 4 to 5 years, based on the
type and extent of these rebuilds. Depreciation of leased property recorded as
capital assets is computed on a straight-line basis over the estimated useful
lives of the assets or the life of the lease, if shorter. Maintenance and
repairs are charged directly to expense as incurred. Construction in progress,
included in machinery and equipment, at December 31, 2002 and 2001, was
approximately $12,750 and $26,300, respectively. Interest costs on construction
projects are not capitalized due to the short duration and recurring nature of
the projects.

The Company has historically scheduled temporary shutdowns of our plants
for furnace rebuilds and machine repairs in the fourth and first quarters of
the year to coincide with scheduled holiday and vacation time under the
Companys labor union contracts. Costs related to the shutdown activities are
expensed as incurred.

Goodwill

Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards No. 142  Goodwill and Other Intangible Assets (SFAS
142), that 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. For the financial statements of the Predecessor Company, it was
determined that the fair value of the Company was greater than the carrying
amount of the net assets and no goodwill impairment resulted from the adoption
SFAS 142.

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##### Table of Contents



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

The following table reconciles the Companys net loss in the years ended
December 31, 2001 and 2000, adjusted to exclude goodwill amortization, to
amounts previously reported:

|                                                                                      |  |                          |         |      |  |   |         |  
|------------------------------------------------------------------------------------- |  | ------------------------ | ------- | ---- |  | - | ------- | -
|                                                                                      |  | Years Ended December 31,
|                                                                                      |  |                         
|                                                                                      |  | 2001                     |         | 2000
|                                                                                      |  |                          |         |     
|Net loss, as reported                                                                 |  | $                        | (51,068 | )    |  | $ | (32,266 | )
|Goodwill amortization                                                                 |  |                          | 2,976   |      |  |   | 2,976   |  
|                                                                                      |  |                          |         |      |  |   |         |  
|Net loss, as adjusted                                                                 |  | $                        | (48,092 | )    |  | $ | (29,290 | )
|                                                                                      |  |                          |         |      |  |   |         |  
|Basic and diluted net income (loss) per share
applicable to common stock, as reported |  | $                        | (12.40  | )    |  | $ | (8.82   | )
|                                                                                      |  |                          |         |      |  |   |         |  
|Basic and diluted net income (loss) per share
applicable to common stock, as adjusted |  | $                        | (11.83  | )    |  | $ | (8.25   | )
|                                                                                      |  |                          |         |      |  |   |         |  

Goodwill represented the excess of the 1997 purchase price over the
estimated fair value of net assets then acquired and was amortized on a
straight-line basis over a twenty-year period. Amortization expense was $2,976
in each of the two years ended December 31, 2001 and 2000.

Intangible assets

Intangible assets at August 31, 2002 have been valued at fair market value
by independent appraisers. These assets are attributable to long-term customer
relationships and are being amortized on a straight-line basis over a period of
ten years, which represents the estimated economic useful lives of these
relationships. Amortization expense was $264 in the four months ended December
31, 2002. The Company estimates annual amortization expense of $790 in each of
the next five years.

Impairment of Long-Lived Assets

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 Statement of
Financial Accounting Standards No. 121 - Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of (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. SFAS 121 established the recognition and measurement standards
related to the impairment of long-lived assets. The Company evaluates the
recoverability of its long-lived assets whenever adverse events or changes in
business climate indicate that the expected undiscounted future cash flows from
the related asset may be less than previously anticipated. If the net book
value of the related asset exceeds the undiscounted future cash flows of the
asset, the carrying amount would be reduced to the present value of its
expected future cash flows and an impairment loss would be recognized. The
Company concluded that no impairment exists as of December 31, 2002. SFAS 121
did not have a material effect on the Companys results of operations or
financial position for the two years ended December 31, 2001. Assets previously
held for sale have been reclassified as operating property, plant and equipment
because they had been held for sale for greater than one year. The net book
values of these assets (approximately $6,650) are equivalent to their estimated
salvage values; therefore, no future depreciation expense will be recorded.

Strategic Alliances with Customers

The Company had entered into long-term agreements with several customers.
Payments made to these customers are being amortized as a component of net
sales on the statement of operations over the term of the related supply
contract, which range between 3 and 5 years. The Company reviews the
recoverability of amortized balances

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

throughout the term of the contract through its monitoring of contract
provisions. The remaining unamortized balances of these agreements are not
material and have been reclassified into other assets.

Income Taxes

The Company applied Statement of Financial Accounting Standards No. 109 -
Accounting for Income Taxes (SFAS 109) which establishes financial accounting
and reporting standards for the effects of income taxes which result from a
companys activities during the current and preceding years. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to temporary differences between the financial statement carrying
amounts of assets and liabilities and their respective tax bases. Deferred tax
assets also are recognized for credit carryforwards. Deferred tax assets and
liabilities are measured using the enacted rates applicable to taxable income
in the years in which the temporary differences are expected to reverse and the
credits are expected to be used. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date. An assessment is made as to whether or not a
valuation allowance is required to offset deferred tax assets. This assessment
includes anticipating future taxable income and the Companys tax planning
strategies and is made on an ongoing basis. Consequently, future material
changes in the valuation allowance are possible.

Accounts Payable

Accounts payable includes checks issued and outstanding of approximately
$13,683 and $13,000, respectively, at December 31, 2002 and 2001.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107 - Disclosures about
Fair Value of Financial Instruments requires disclosure of the estimated fair
values of certain financial instruments. The estimated fair value amounts have
been determined using available market information or other appropriate
valuation methodologies that require considerable judgment in interpreting
market data and developing estimates. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that the Company could
realize in a current market exchange. The use of different market assumptions
and/or estimation methodologies may have a material effect on the estimated
fair value amounts. Long-term debt is estimated to have a fair value equal to
its carrying value at December 31, 2002. Long-term debt was estimated to have a
fair value of approximately $163,000 at December 31, 2001 based on the then
available market information. The carrying amount of other financial
instruments, except for the natural gas futures discussed in Note 6,
approximate their estimated fair values.

The fair value information presented herein is based on information
available to management as of December 31, 2002. Although management is not
aware of any factors that would significantly affect the estimated value
amounts, such amounts have not been comprehensively revalued for purposes of
these financial statements since that date and, therefore, the current
estimates of fair value may differ significantly from the amounts presented
herein.

Use of Estimates

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.

Income (Loss) per Share

Basic and diluted net income (loss) per common share was computed by
dividing income (loss) applicable to common stock by the weighted-average
number of common shares and contingently issuable shares outstanding during the
period. Warrants outstanding were contingently issuable shares as the stock
underlying the warrants were

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##### Table of Contents



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

issuable for no additional consideration and the conditions necessary
for share exercise had been met. As applicable, there was no effect given for
the assumed conversion of 6,468,555 shares of preferred stock for the two years
ended December 31, 2001 and 2000, as the conversion would have been
anti-dilutive.

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

|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |           | 
|-------------------------------------------------------------- | ---------------------------------------------------------------------------- | ----------------------------------------------------------------- | ---------- | ------------ | ---------- | ------------------------ | --------- | ------- | --------- | - | --------- | ------- | --------- | 
|                                                               |                                                                              |                                                                   |            | Eight Months |            |                          |           |         |           |   |           |        
|                                                               |                                                                              |                                                                   |            | Ended        |            | Years Ended December 31,
|                                                               |                                                                              |                                                                   |            | August 31,   |            |                         
|                                                               |                                                                              |                                                                   |            | 2002         |            | 2001                     |           | 2000   
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |        
|Basic net income (loss) per share:                             |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |        
|                                                               | Income (loss) applicable to common stock                                     |                                                                   | $          | 59,723       |            |                          | $         | (65,125 | )         |   | $         | (46,323 | )        
|                                                               | Divided by the sum of:                                                       |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|                                                               |                                                                              | Weighted average shares outstanding                               |            |              | 3,357,825  |                          |           |         | 2,772,212 |   |           |         | 2,158,431 | 
|                                                               |                                                                              | Weighted average warrants outstanding                             |            |              | 1,893,531  |                          |           |         | 2,479,144 |   |           |         | 3,092,925 | 
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|                                                               |                                                                              |                                                                   | 5,251,356  |              |            |                          | 5,251,356 |         |           |   | 5,251,356 |        
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|Basic net income (loss) per share applicable
to common stock   |                                                                              | $                                                                 | 11.37      |              |            | $                        | (12.40    | )       |           | $ | (8.82     | )      
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|Diluted net income (loss) per share:                           |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |        
|                                                               | Income (loss) applicable to common stock                                     |                                                                   | $          | 59,723       |            |                          | $         | (65,125 | )         |   | $         | (46,323 | )        
|                                                               | Effect of dilutive securities  Dividends

on Series A and B preferred stock |                                                                   |            | 4,100        |            |                          |           |        |           |   |           |        |          
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|                                                               |                                                                              |                                                                   | 63,823     |              |            |                          | (65,125   | )       |           |   | (46,323   | )      
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|                                                               | Divided by the sum of:                                                       |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|                                                               |                                                                              | Weighted average shares outstanding                               |            |              | 3,357,825  |                          |           |         | 2,772,212 |   |           |         | 2,158,431 | 
|                                                               |                                                                              | Weighted average warrants outstanding                             |            |              | 1,893,531  |                          |           |         | 2,479,144 |   |           |         | 3,092,925 | 
|                                                               |                                                                              | Dilutive potential common shares 
Series A and B preferred stock |            |              | 28,554,295 |                          |           |         |          |   |           |         |          | 
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|                                                               |                                                                              |                                                                   | 33,805,651 |              |            |                          | 5,251,356 |         |           |   | 5,251,356 |        
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          
|Diluted net income (loss) per share
applicable to common stock |                                                                              | $                                                                 | 1.89       |              |            | $                        | (12.40    | )       |           | $ | (8.82     | )      
|                                                               |                                                                              |                                                                   |            |              |            |                          |           |         |           |   |           |         |          

Stock Option Plan  Consumers Plan

Salaried employees of the Company participated in the Director and
Employee Incentive Stock Option Plan, 1996 of Consumers Packaging Inc.
(Consumers), Anchors former indirect parent. Consumers requested the Toronto
Stock Exchange (the TSE) to suspend trading of Consumers common stock and
effective December 31, 2001, the TSE issued a trading halt. The closing price
at the time of the trading halt was Cdn.$0.015 per share.

These options, which have been cancelled, generally had a life of 10 years
and vested ratably over three years. The Company elected to follow Accounting
Principles Board Opinion No. 25  Accounting for Stock Issued to Employees
(APB 25). Under APB 25, because the exercise price of employee stock options
equals or exceeds the market price of the stock on the date of the grant, no
compensation expense is recorded. The Company adopted the disclosure only
provisions of Statement of Financial Accounting Standards No. 123  Accounting
for Stock-Based Compensation (SFAS 123).

The Company applied APB 25 in accounting for these stock options and
accordingly, no compensation cost had been reported in the financial statements
for the eight months ended August 31, 2002 and the two years ended December 31,
2001. In accordance with SFAS 123, the fair value of option grants was
estimated on the date of grant using the Black-Scholes option pricing model
with the following assumptions for pro forma footnote purposes: (i)

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##### Table of Contents



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

risk-free
interest rate ranging from 5.50% to 5.99%, (ii) expected option life of 4
years, (iii) expected volatility of 41.51% and (iv) no expected dividend yield.

Had the Company determined compensation cost based on the fair value at
the grant date for these options under SFAS 123, the Companys net income
(loss) would have increased to the pro forma amounts indicated below:

|                                                               |             |  |              |        |                          |  |      |         |   |  |   |         |  
|-------------------------------------------------------------- | ----------- |  | ------------ | ------ | ------------------------ |  | ---- | ------- | - |  | - | ------- | -
|                                                               |             |  | Eight Months |        |                          |  |      |         |   |  |  
|                                                               |             |  | Ended        |        | Years Ended December 31,
|                                                               |             |  | August 31,   |        |                         
|                                                               |             |  | 2002         |        | 2001                     |  | 2000
|                                                               |             |  |              |        |                          |  |     
|Net income (loss)                                              |             |  |              |        |                          |  |      |         |   |  |   |        
|                                                               | As reported |  | $            | 63,823 |                          |  | $    | (51,068 | ) |  | $ | (32,266 | )
|                                                               | Pro forma   |  |              | 63,767 |                          |  |      | (51,575 | ) |  |   | (33,131 | )
|Income (loss) applicable to common stock                       |             |  |              |        |                          |  |      |         |   |  |   |        
|                                                               | As reported |  | $            | 59,723 |                          |  | $    | (65,125 | ) |  | $ | (46,323 | )
|                                                               | Pro forma   |  |              | 59,667 |                          |  |      | (65,632 | ) |  |   | (47,188 | )
|Basic net income (loss) per share
applicable to common stock   |             |  |              |        |                          |  |      |         |   |  |   |        
|                                                               | As reported |  | $            | 11.37  |                          |  | $    | (12.40  | ) |  | $ | (8.82   | )
|                                                               | Pro forma   |  |              | 11.36  |                          |  |      | (12.50  | ) |  |   | (8.99   | )
|Diluted net income (loss) per share
applicable to common stock |             |  |              |        |                          |  |      |         |   |  |   |        
|                                                               | As reported |  | $            | 1.89   |                          |  | $    | (12.40  | ) |  | $ | (8.82   | )
|                                                               | Pro forma   |  |              | 1.89   |                          |  |      | (12.50  | ) |  |   | (8.99   | )

New Accounting Standards

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. The Company
has adopted the requirements of SFAS 143 concurrent with fresh start reporting
(see Note 3) and has determined that the impact of adopting SFAS 143 was not
material.

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 for 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. The Company has
adopted the requirements of SFAS 145 concurrent with fresh start reporting (see
Note 3). As a result, $1,285 was reclassified from extraordinary item to
interest expense for the year ended December 31, 2000.

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. The Company has adopted the requirements of SFAS 146 concurrent
with fresh start reporting and has determined that the impact of adopting SFAS
146 was not material.

In December 2002, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 148 - Accounting for
Stock-Based Compensation  Transition and Disclosure, an amendment of

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##### Table of Contents



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

Statement
No. 123 (SFAS 148). SFAS 148 amends SFAS 123, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, SFAS 148 amends
the disclosure requirements of SFAS 123 to require prominent disclosures in
both annual and interim financial statement about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company has currently adopted the disclosure requirements of SFAS
148.

Reclassifications

Certain reclassifications, not considered material individually or in the
aggregate, were made to the balance sheet as of December 31, 2001. These
reclassifications had no effect on amounts reported in the statements of
operations, stockholders equity or cash flows for the year ended December 31,
2001. These items include reclassifying (i) pallet assets from other assets to
property, plant and equipment, (ii) strategic alliances with customers to other
assets and (iii) lock box cash receipts from cash to borrowings under revolving
credit facility.

NOTE 2 - Plan of Reorganization and Liquidity

On August 30, 2002, Anchor consummated a significant restructuring of its
existing debt and equity securities through a Chapter 11 reorganization (the
Reorganization) and a voluntary bankruptcy petition had been filed on April
15, 2002 (the Petition Date). As part of this restructuring, AGC Holding
acquired 75,000 shares of newly authorized Series C Participating Preferred
Stock for $75,000 and 9,000,000 shares of newly authorized common stock for
$5,000 (see Note 7). Ableco Finance LLC, an affiliate of Cerberus, provided
Anchor with a new $20,000 term loan (see Note 5). In connection with the
Reorganization, Anchor entered into a new $100,000 credit facility (the
Revolving Credit Facility) (see Note 4).

Under the terms of the Plan, the holders of Anchors 11.25% First Mortgage
Notes due 2005, aggregate principal amount of $150,000 (the First Mortgage
Notes), retained their outstanding $150,000 of First Mortgage Notes and
received a consent fee of $5,625 for the waiver of the change-in-control
provisions, the elimination of the pre-payment provisions and other
non-financial changes to the terms of the First Mortgage Notes (including the
release of Consumers U.S., Inc. (Consumers U.S.) as a guarantor). Consumers
U.S. was the former parent company of Anchor. The holders of Anchors 9.875%
Senior Notes due 2008, aggregate principal amount of $50,000 (the Senior
Notes), were repaid in cash at 100% of their principal amount. Holders of
Anchors mandatorily redeemable 10% cumulative convertible preferred stock
(Series A Preferred Stock) (having an accrued liquidation value of
approximately $83,600) are entitled to receive a cash distribution of $22,500
in exchange for their shares and the Series A Preferred Stock was cancelled. Of
this amount, $17,409 has been paid through December 31, 2002 and the remaining
liability is included in accrued expenses on the balance sheet. Anchors
redeemable 8% cumulative convertible preferred stock (the Series B Preferred
Stock) (having an accrued liquidation value of approximately $105,700) and
common stock and warrants were cancelled and the holders received no
distribution under the Plan.

In connection with the Reorganization, Anchor settled a shareholder
derivative action that had been pending in Delaware Chancery Court. The
litigation was settled for total consideration to the Company of approximately
$9,000, of which approximately $6,300 was in cash, with the balance of the
consideration to Anchor being an assignment to Anchor by Consumers U.S. of the
funds it would otherwise have been entitled to receive under the Plan. The
settlement also included the exchange of mutual releases by the parties and
payment by Anchor of certain legal fees. The settlement of the shareholder
derivative action was approved by the Delaware Chancery Court and was recorded
in August 2002 as a component of restructuring, net, in the accompanying
financial
statements of Anchor. Implementation of the settlement was completed in
the fourth quarter of 2002 with Anchor receiving approximately $6,300 in cash.

Anchor also entered into an agreement with the Pension Benefit Guaranty
Corporation (PBGC). At the Effective Date, Anchor paid $20,750 to the PBGC
and entered into a ten-year payment obligation (see Note 10).

All of Anchors other unaffiliated creditors, including trade creditors,
were unimpaired and have been or will be paid in the ordinary course.

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##### Table of Contents



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

In connection with the Reorganization, 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, Anchor paid the
interest payment on its First Mortgage Notes that was due April 1, 2002 and has
paid subsequent interest payments when due. Because of the Chapter 11
proceedings, there was no accrual of interest on the unsecured Senior Notes
after the Petition Date. If accrued through the Effective Date, interest
expense would have increased by $1,852 during the eight months ended August 31,
2002. In addition, effective as of the Petition Date, Anchor ceased accruing
dividends on the Series A and Series B preferred stock. The filing of the
voluntary petition and the nonpayment of interest was a default under the
indentures governing the First Mortgage Notes and the Senior Notes (the
Indentures) and certain equipment related leases, for which leases the
Company received waivers.

During the course of the bankruptcy proceeding, including the events
leading up to the preparation and execution of the prearranged plan, the
Company incurred several costs that directly resulted from the Companys
restructuring through the Plan. Reorganization items were items that met the
definition of reorganization items per the provisions of American Institute of
Certified Public Accountants Statement of Position 90-7 Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code (SOP 90-7), which
included costs and gains that were incurred after the Chapter 11 filing and
were a direct result of the bankruptcy proceeding and gains and losses
resulting from the application of fresh-start reporting. Restructuring items
included costs and gains that directly related to the restructuring of the
Company through the Plan and were either incurred prior to the filing of
Chapter 11 or were not incurred as a direct result of the bankruptcy itself.
The costs and gains are summarized as follows (dollars in thousands):

|                           |                                                                                                                                                                                                                                                                                                            |   |         |         |  
|-------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------- | ------- | -
|Reorganization items, net: |                                                                                                                                                                                                                                                                                                            |   |         |        
|                           | Fresh start adjustments to reflect the impact of
fresh-start reporting in accordance with the provisions
of SOP 90-7, which included increasing property, plant
and equipment ($86,860), recognizing identifiable
intangible assets for customer relationships ($7,900)
and writing off goodwill ($44,852) |   | $       | (49,908 | )
|                           |                                                                                                                                                                                                                                                                                                            |   |         |        
|                           | DIP facility fees charged by the bank to execute the
Companys debtor-in-possession financing arrangement
during the course of the bankruptcy proceeding                                                                                                                                                   |   | $       | 2,450   |  
|                           | Attorneys fees incurred for legal services performed, claims
processor fees and printing fees incurred for the
bankruptcy proceeding                                                                                                                                                                      |   |         | 1,687   |  
|                           | Write-off of the unamortized balance of deferred financing
costs related to Senior Notes. The Senior Notes were
repaid with proceeds obtained when the Plan became
effective                                                                                                                               |   |         | 1,276   |  
|                           | Write-off of interest accrued on the Senior Notes prior to
the filing of Chapter 11. Interest ceased to accrue
under the bankruptcy proceedings and accrued interest
was forgiven when the plan became effective                                                                                           |   |         | (2,894  | )
|                           |                                                                                                                                                                                                                                                                                                            |   |         |        
|                           |                                                                                                                                                                                                                                                                                                            | $ | 2,519   |        
|                           |                                                                                                                                                                                                                                                                                                            |   |         |        
|                           |                                                                                                                                                                                                                                                                                                            | $ | (47,389 | )      
|                           |                                                                                                                                                                                                                                                                                                            |   |         |        

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##### Table of Contents



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

|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |         |  
|------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---- | ------- | -
|Restructuring, net: |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |        
|                    | Consulting fees and attorneys fees incurred with respect to
the preparation of the Plan. These costs were not
considered reorganization expenses because certain costs
were incurred prior to the filing for bankruptcy and
such costs were not directly related to the bankruptcy
proceeding                                                                                                                                                                                                                                                                                                                                |   | $    | 10,068  |  
|                    | Direct costs of the restructuring, which include an accrual
for claims under the Plan ($2,400), the cost of employee
restructuring bonuses paid upon the successful
implementation of the Plan ($2,110), purchase of certain
director/officer liability and environmental liability
insurance policies mandated by the Plan ($1,550), the
write-off of deferred financing fees of the revolving
credit facility upon entering into the DIP facility
($1,165) and severance charges ($728 for 12 employees).
At December 31, 2002, remaining liabilities were $2,398
for the accrual for claims and $460 for severance
charges |   |      | 7,953   |  
|                    | Consent fee paid to the holders of the First Mortgage Notes
under the terms of the Plan, which was negotiated prior
to the Chapter 11 filing and was directly stipulated by
the Plan                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |      | 5,625   |  
|                    | Write-down of a customer notes receivable of $10,000, due to
a negotiated early collection of the balance. The notes
were originally entered into in 1999 in satisfaction of
accounts receivable and a strategic alliance commitment
and were scheduled to mature in 2004. Cerberus, through
certain Cerberus-affiliated funds and managed accounts
invested $80.0 million of new equity capital into the
Company, directed the settlement of the notes, as part
of the restructuring, in order to fund other costs
incurred with respect to the restructuring                                                                |   |      | 4,473   |  
|                    | Other fees, which include a consent fee of $2,500 paid for
settlement of change-in-control issues related to the
Plan and reimbursement of professional fees of $1,400
incurred by Cerberus                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      | 3,900   |  
|                    | Gain on cash settlement of a shareholders derivative
action offset by legal fees related to the settlement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |      | 251     |  
|                    | Modifications to the Companys post-retirement benefits
program, implemented as part of the Reorganization,
resulting in a reduction of long-term post retirement
liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |      | (24,432 | )
|                    | Adjustment of previously recorded pension liabilities to
reflect amounts agreed upon under the PBGC Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |      | (8,233  | )
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |        
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $ | (395 | )      
|                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      |        

Restructuring and reorganization payments included as financing activities
in the statements of cash flows were comprised of attorneys and professional
fees, financial institution fees incurred in obtaining DIP financing and
consent fees paid to First Mortgage Note holders. All other restructuring and
reorganization payments were classified as operating activities.

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##### Table of Contents



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

NOTE 3 - Fresh Start Reporting

Upon the Effective Date, Anchor adopted fresh start reporting pursuant to
SOP 90-7. The adoption of fresh start reporting results 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 was determined by the negotiated total enterprise value for Anchor
reflected in the Plan and the Reorganization, which was the product of a six
month solicitation of proposals conducted by the prior Board of Directors and a
nationally recognized investment banking firm. The reorganization value of the
entity was allocated to assets based on the relative fair values of the assets.
Liabilities at plan consummation date are stated at the present value of
amounts to be paid. The fair values of substantially all of the property, plant
and equipment, identifiable intangible assets and outstanding debt and equity
securities of the Company were determined by independent appraisers.

The Reorganization and adoption of fresh start reporting resulted in the
following adjustments to the condensed balance sheet of Anchor as of August 31,
2002:

|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     |             |  |   |         | 
|------------------------------------- |  | --------------- | -------- | -------------- |  | - | ------- | - | ----------- | ---- | --- |  | - | --------------- | - | ---- | --- | ----------- |  | - | ------- | 
|                                      |  | Predecessor     |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     | Reorganized
|                                      |  | Company at      |          | Reorganization |  |   |         |   | Fresh Start |      |     |  |   | Company at     
|                                      |  | August 31, 2002 |          | Adjustments    |  |   |         |   | Adjustments |      |     |  |   | August 31, 2002
|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                
|Current assets                        |  | $               | 118,438  |                |  | $ | 34,810  |   | (a),        | (b), | (c) |  | $ |                |   |      |     |             |  | $ | 153,248 | 
|Property, plant and equipment         |  |                 | 285,630  |                |  |   |        |   |             |      |     |  |   | 86,860          |   | (e)  |     |             |  |   | 372,490 | 
|Other asset                           |  |                 | 11,189   |                |  |   | 1,408   |   | (a),        | (c)  |     |  |   |                |   |      |     |             |  |   | 12,597  | 
|Goodwill and intangible assets        |  |                 | 44,852   |                |  |   |        |   |             |      |     |  |   | (36,952         | ) | (d), | (e) |             |  |   | 7,900   | 
|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     |             |  |   |         | 
|                                      |  | $               | 460,109  |                |  | $ | 36,218  |   |             |      |     |  | $ | 49,908          |   |      |     |             |  | $ | 546,235 | 
|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     |             |  |   |         | 
|Current liabilities                   |  | $               | 155,656  |                |  | $ | 8,718   |   | (b),        | (c)  |     |  | $ | 93              |   |      |     |             |  | $ | 164,467 | 
|Long-term debt                        |  |                 | 266,886  |                |  |   | (30,000 | ) | (a),        | (b)  |     |  |   |                |   |      |     |             |  |   | 236,886 | 
|Long-term post-retirement
liabilities |  |                 | 39,910   |                |  |   |        |   |             |      |     |  |   |                |   |      |     |             |  |   | 39,910  | 
|Other long-term liabilities           |  |                 | 24,972   |                |  |   |        |   |             |      |     |  |   |                |   |      |     |             |  |   | 24,972  | 
|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     |             |  |   |         | 
|                                      |  |                 | 487,424  |                |  |   | (21,282 | ) |             |      |     |  |   | 93              |   | (d)  |     |             |  |   | 466,235 | 
|Redeemable preferred stock            |  |                 | 83,659   |                |  |   | (22,500 | ) | (b)         |      |     |  |   | (61,159         | ) | (d)  |     |             |  |   | 75,000  | 
|                                      |  |                 |          |                |  |   | 75,000  |   | (a)         |      |     |  |   |                 |   |      |     |             |  |   |         | 
|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     |             |  |   |         | 
|Stockholders equity (deficit)        |  |                 | (110,974 | )              |  |   | 5,000   |   | (a),        | (b)  |     |  |   | 110,974         |   | (d)  |     |             |  |   | 5,000   | 
|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     |             |  |   |         | 
|                                      |  | $               | 460,109  |                |  | $ | 36,218  |   |             |      |     |  | $ | 49,908          |   |      |     |             |  | $ | 546,235 | 
|                                      |  |                 |          |                |  |   |         |   |             |      |     |  |   |                 |   |      |     |             |  |   |         | 
|                                      |  |                 |          |                |  |   | 75,000  |   | (a)         |      |     |  |   |                 |   |      |     |             |  |   |         | 



|(a) |  | Reflects the proceeds from the issuance of 75,000 shares of Series
C Preferred Stock ($75,000), 9,000,000 shares of Common Stock ($5,000),
proceeds from the issuance of the Term Loan ($20,000) and payment of
financing fees.                                                                         
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | Reflects the distributions under the Plan to repay the Senior Notes
($50,000) and the accrual of the final distribution to the holders of
the Series A preferred stock ($22,500).                                                                                                                       
|   
|(c) |  | Reflects the payoff of the DIP Facility, the proceeds under the
Revolving Credit Facility and the payment of financing fees. (See Note
3.)                                                                                                                                                              
|   
|(d) |  | Reflects the cancellation of the remaining value of the Series A
preferred stock ($61,159), the cancellation of the Series B preferred
stock ($105,731), the cancellation of the common stock ($20,890) and
warrants ($9,446) and other accumulated deficit items ($247,041) of the
Predecessor Company.
|   
|(e) |  | Reflects the write off of goodwill ($44,852) and the revaluation of
Companys property, plant and equipment ($86,860) and identifiable
intangible assets ($7,900) based upon an independent appraisal.                                                                                                  

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##### Table of Contents



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

NOTE 4 - Revolving Credit Facility

On August 30, 2002, Anchor entered into a loan and security agreement with
various financial institutions as lenders, Congress Financial Corporation
(Central), as administrative agent and collateral agent for the lenders, and
Bank of America, N.A., as documentation agent, to provide the Revolving Credit
Facility. The Revolving Credit Facility permits drawings of up to $100,000 in
the aggregate and includes a $15,000 subfacility for letters of credit. The
Revolving Credit Facility matures on August 30, 2006.

Availability under the Revolving Credit Facility is restricted to the
lesser of (i) $100,000 and (ii) the borrowing base amount. The borrowing base
amount is defined as the amount equal to (A) the lesser of (i) the amount equal
to (a) eighty-five (85%) percent of the net amount of eligible accounts plus
(b) the lesser of (1) $60,000 or (2) sixty (60%) percent multiplied by the
value of the eligible inventory or (ii) $100,000; minus (B) reserves in such
amounts as the agent may from time to time establish. Advances under the
Revolving Credit Facility may be made as prime rate loans or eurodollar rate
loans at the Companys election. Interest rates payable upon such advances are
based upon the prime rate or eurodollar rate depending on the type of loan,
plus an applicable margin. The applicable margin for all loans for the first
six months following August 30, 2002 is 0.50% for prime rate loans, 2.25% for
eurodollar rate loans and 2.00% for letters of credit. Thereafter, these rates
can increase up to 1.00% for prime rate loans, 2.75% for eurodollar rate loans
and 2.50% for letters of credit if availability is less than $20,000. The loan
and security agreement contains certain fees, including closing fees, servicing
fees, unused line fees and early termination fees.

Loans made pursuant to the Revolving Credit Facility are secured by a
first priority security interest in, a lien upon, and a right of set off
against all of the Companys inventories, receivables, general intangibles and
proceeds therefrom. All cash collections are accounted for as reductions of
advances outstanding under the Revolving Credit Facility.

The Revolving Credit Facility contains customary negative covenants and
restrictions for transactions, including, without limitation, restrictions on
indebtedness, liens, investments, fundamental business changes, asset
dispositions outside of the ordinary course of business, subsidiary stock
dispositions, restricted junior payments, transactions with affiliates and
changes relating to indebtedness. In addition, the Revolving Credit Facility
requires that the Company meet a quarterly fixed charge coverage test unless
minimum availability declines below $10,000, in which case the Company must
meet a monthly fixed charge coverage test. The Revolving Credit Facility
contains customary events of default, including, without limitation,
non-payment of principal, interest or fees, violation of certain covenants,
inaccuracy of representations and warranties in any material respect, and cross
defaults with certain other indebtedness and agreements, including, without
limitation, the First Mortgage Note indenture and the PBGC settlement
agreement.

At December 31, 2002, advances outstanding under the Revolving Credit
Facility were $47,413, borrowing availability was $28,129 and outstanding
letters of credit on this facility were $1,000. At December 31, 2002, the
weighted average interest rate on borrowings outstanding was 4.09%. During the
four months ended December 31, 2002, average advances outstanding were
approximately $53,486, the average interest rate was 5.04% and the highest
month-end advance was $56,939. At August 31, 2002, the weighted average
interest rate on borrowings outstanding was 3.78%. During the eight months
ended August 31, 2002, average advances outstanding were approximately $57,554,
the average interest rate was 6.01% and the highest month-end advance was
$62,108.

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 $100,00 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 consisted of an $80,000 revolving credit facility,
including a letter of credit sub-facility, and a $20,000 term loan facility.
Advances under the DIP facility bore interest at an average rate of 7.0%.
Borrowings under the DIP Facility were repaid with proceeds from the Revolving
Credit Facility and the DIP Facility was cancelled.

The letters of credit outstanding under the DIP Facility are currently in
the process of being transitioned to the Revolving Credit Facility. As a
result, outstanding letters of credit under the DIP Facility, which were

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##### Table of Contents



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

approximately $3,998 at December 31, 2002, are collateralized by a cash
deposit, recorded as restricted cash on the balance sheet. The transition of
the letters of credit to the Revolving Credit Facility and the return of the
cash deposit are expected to occur in the first quarter of 2003.

In conjunction with the 1997 acquisition of Anchor, the Company entered
into a credit agreement providing for a $110,000 revolving credit facility (the
Original Credit Facility). In October 2000, the Company replaced the Original
Credit Facility with a credit facility under a Loan and Security Agreement
dated as of October 16, 2000, with Bank of America, National Association, as
agent (the Loan and Security Agreement), to provide a $100,000 senior secured
revolving credit facility (the Replacement Credit Facility). Borrowings
under the Replacement Credit Facility were repaid with proceeds of the DIP
Facility and the Loan and Security Agreement and the Replacement Credit
Facility were cancelled.

The Companys obligations under the Loan and Security Agreement were
secured by a first priority lien on all of the Companys inventories and
accounts receivable and related collateral and a second priority pledge of all
of the issued and issuable Series B Preferred Stock of the Company and 902,615
shares of the Companys Common Stock. In addition, the Companys obligations
under the Loan and Security Agreement were guaranteed by Consumers U.S., the
holder of the outstanding Series B Preferred Stock of the Company and 902,615
shares of the Companys Common Stock.

At December 31, 2001, advances outstanding under the Replacement Credit
Facility were $50,981 and the borrowing availability was $20,669. The total
outstanding letters of credit on this facility were $6,720. At December 31,
2001, the weighted average interest rate on borrowings outstanding was 4.75%.
During 2001, average advances outstanding were approximately $62,323, the
average interest rate was 7.16% and the highest month-end advance was $77,341.

The Company capitalizes financing fees related to obtaining its debt
commitments and amortizes these costs over the term of the related debt. As a
result of the refinancing of the Original Credit Facility, deferred financing
fees of $1,285 were written off in the fourth quarter of 2000.

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##### Table of Contents



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

NOTE 5 - Long-Term Debt

Long-term debt consists of the following:

|                                                         |                                      |   |              |        |              |   |         |          |  
|-------------------------------------------------------- | ------------------------------------ | - | ------------ | ------ | ------------ | - | ------- | -------- | -
|                                                         |                                      |   | Reorganized  |        | Predecessor 
|                                                         |                                      |   | Company      |        | Company     
|                                                         |                                      |   |              |        |             
|                                                         |                                      |   | December 31, |        | December 31,
|                                                         |                                      |   | 2002         |        | 2001        
|                                                         |                                      |   |              |        |             
|$150,000 First Mortgage Notes, interest at
111⁄4% due 2005 |                                      | $ | 150,000      |        |              | $ | 150,000 |         
|$20,000 Term Loan, interest at 14% due 2005              |                                      |   | 20,000       |        |              |   |        |         
|$50,000 Senior Notes, interest at 9 7/8% due 2008        |                                      |   |             |        |              |   | 50,000  |         
|Capital lease obligations                                |                                      |   | 16,359       |        |              |   | 8,454   |         
|                                                         |                                      |   |              |        |              |   |         |         
|                                                         |                                      |   | 186,359      |        |              |   | 208,454 |         
|PBGC obligation                                          |                                      |   | 65,029       |        |              |   |        |         
|                                                         |                                      |   |              |        |              |   |         |         
|                                                         |                                      |   | 251,388      |        |              |   | 208,454 |         
|Less:                                                    |                                      |   |              |        |              |   |         |         
|                                                         | Long-term debt classified as current |   |              |       |              |   |         | (206,091 | )
|                                                         | Current maturities                   |   |              | (8,315 | )            |   |         | (822     | )
|                                                         |                                      |   |              |        |              |   |         |         
|                                                         |                                      | $ | 243,073      |        |              | $ | 1,541   |         
|                                                         |                                      |   |              |        |              |   |         |         

On December 26, 2002, Anchor entered in a master lease agreement with a
major lessor. The master lease agreement is structured as a capital lease.
Equipment leases pursuant to the master lease will be secured by a first
priority lien on such assets. Under this agreement, in December 2002, the
Company financed approximately $10,000 of equipment. The lease agreement has a
term of five years and contains, among other things, a fixed charge coverage
test.

On August 30, 2002, Anchor entered into a term loan agreement with Ableco
Finance LLC, as agent for the lenders, to provide for a senior secured term
loan in the amount of $20,000 (the Term Loan). The full amount of the loan
was drawn down on August 30, 2002, and bears interest at 14% per annum, payable
monthly in arrears. The Term Loan matures on March 31, 2005. An anniversary fee
equal to $200 will be payable on each anniversary date until maturity,
beginning on August 30, 2003.

The Term Loan is secured by a second priority security interest in, a lien
upon, and a right of set off against the collateral that secures the Revolving
Credit Facility. In addition, AGC Holding has pledged its ownership interests
in Anchor to Ableco Finance LLC as additional security for the obligations
created under the agreement.

Anchor may prepay the Term Loan, in full or in part, on the following
terms: (i) if paid within the first 18 months, upon payment of a fee equal to
1.5% of the amount of principal so prepaid and (ii) thereafter, without premium
or penalty. In addition, Anchor must prepay all or a portion of the
outstanding principal amount of the Term Loan, with the proceeds received, in
the event that (i) the Revolving Credit Facility obligations becoming due and
payable or the revolving commitments are terminated or the loan and security
agreement is terminated, (ii) the receipt of cash outside of the ordinary
course of business if more than $100, (iii) any disposition by Anchor not used
to repay or redeem the First Mortgage Notes, or (iv) any indebtedness or sale
or issuance of capital stock by Anchor.

The Term Loan contains customary negative covenants and restrictions on
transactions, including, without limitation, restrictions on indebtedness,
liens, investments, fundamental business changes, asset dispositions outside of
the ordinary course of business, subsidiary stock dispositions, restricted
junior payments, transactions with affiliates and changes relating to
indebtedness. In addition, the Term Loan requires that Anchor meet a fixed
charge coverage test and maintain minimum EBITDA (earnings before interest,
taxes, depreciation and amortization), for any four consecutive quarters, of
$70,000. The Term Loan contains customary events of default, including, without
limitation, non-payment of principal, interest or fees, violation of certain
covenants, inaccuracy of representations and warranties in any material respect
and cross defaults under certain other indebtedness and agreements.

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

Effective April 17, 1997, the Company completed an offering of the First
Mortgage Notes, issued under an indenture dated as of April 17, 1997, among the
Company, Consumers U.S. and The Bank of New York, as Trustee. The First
Mortgage Notes are senior secured obligations of the Company, ranking senior in
right of payment to all existing and future subordinate indebtedness of the
Company and equal with all existing and future senior indebtedness of the
Company.

Effective August 30, 2002, Anchor entered into a supplemental indenture
with the holders of the First Mortgage Notes to provide for the waiver of the
change-in-control provisions, the elimination of pre-payment provisions and
other non-financial changes to the terms of the First Mortgage Notes.
Additionally, Consumers U.S. was released as a guarantor of the First Mortgage
Notes.

The Company entered into a Registration Rights Agreement on April 17,
1997. Following the issuance of the First Mortgage Notes, the Company filed
with the Securities and Exchange Commission an exchange offer registration
statement, declared effective on February 12, 1998, with respect to an issue of
111⁄4% First Mortgage Notes, due 2005, identical in all material respects to
the First Mortgage Notes, except that the new First Mortgage Notes would not
bear legends restricting the transfer thereof. In March 1998, the Company
completed an offer to the holders of the First Mortgage Notes to exchange their
First Mortgage Notes for a like principal amount of new First Mortgage Notes.

Interest on the First Mortgage Notes accrues at 111⁄4% per annum and is
payable semiannually on each April 1 and October 1 to registered holders of the
First Mortgage Notes at the close of business on the March 15 and September 15
immediately preceding the applicable interest payment date.

The First Mortgage Notes are redeemable, in whole or in part, at the
Companys option on or after April 1, 2001, at par. The indenture provides
that upon the occurrence of a change in control, the Company will be required
to offer to repurchase all of the First Mortgage Notes at a purchase price in
cash equal to 101% of the principal amount plus interest accrued to the date of
purchase.

All of the obligations of the Company under the First Mortgage Notes and
the indenture are secured by a first priority perfected security interest in
substantially all of the existing and future real property, personal property
and other assets of the Company other than inventories and receivables.

Effective March 16, 1998, the Company completed an offering of the Senior
Notes issued under an indenture dated as of March 16, 1998, among the Company,
Consumers U.S. and The Bank of New York, as Trustee. The Senior Notes were
unsecured obligations of the Company ranking equal in right of payment with all
existing and future senior indebtedness of the Company and senior in right of
payment to all existing and future subordinated indebtedness of the Company.
Under the terms of the Plan, the holders of the Senior Notes were repaid in
cash at 100% of their principal amount.

The indenture governing the First Mortgage Notes, subject to certain
exceptions, restricts the Company from taking various actions, including, but
not limited to, subject to specified exceptions, the incurrence of additional
indebtedness, the granting of additional liens, the payment of dividends and
other restricted payments, mergers, acquisitions and transactions with
affiliates.

All of the Companys debt agreements contain cross-default provisions.

Other long-term debt includes capital leases, which have imputed interest
rates ranging from 6.0% to 9.0%. Imputed interest on capital leases as of
December 31, 2002 and 2001 was $4,854 and $2,596, respectively. Property, plant
and equipment under capital lease obligations approximated $20,300 at December
31, 2002.

The Company capitalizes financing fees related to obtaining its debt
commitments and amortizes these costs over the term of the related debt.

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

As a result of the matters discussed below, the Company classified its
long-term debt as current liabilities in the balance sheet at December 31,
2001.

On May 23, 2001, Consumers filed for protection under the Canadian
Companies Creditors Arrangement Act (CCAA). On August 3, 2001, Consumers and
Owens-Brockway Glass Container Inc. (together with its affiliates O-I)
announced an agreement whereby O-I would acquire Consumers Canadian glass
producing assets as well as the stock of Consumers U.S. Management of Anchor
believed that the Reorganization or the acquisition of the stock of Consumers
U.S. by O-I would have triggered a change in control as defined in the
Indentures. Upon a change in control as defined in the Indentures, Anchor
would have been 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 did not have the cash or liquidity
available to make this repurchase offer. The failure to make the offer would
have resulted in an event of default under the Indentures that would have given
the noteholders the right to accelerate the debt and would also have been a
default under Anchors credit facility at the time and would have been an event
of default under various equipment leases.

NOTE 6 - Accounting for Derivative Instruments and Hedging Activities

The Company hedges certain of its estimated natural gas purchases,
typically over a maximum of six to twelve months, through the purchase of
natural gas futures and options. At August 31, 2002, the Company acquired
futures to hedge gas purchases from September 2002 through December 2002 that
qualify for cash flow hedge treatment under SFAS 133. During the four months
ended December 31, 2002, income of $617 was recognized in cost of products sold
related to gas futures. During the eight months ended August 31, 2002, a loss
of $2,159 was recognized in cost of products sold related to gas futures. There
were no outstanding futures as of December 31, 2002.

In the four months ended December 31, 2002 and the eight months ended
August 31, 2002, the Company entered into put and call options for purchases of
natural gas. The fair value of these options at December 31, 2002 was $680 and
is recorded in other current assets. These options do not qualify as an
effective cash flow hedge for natural gas purchases. As a result of these
contracts, the Company recognized derivative income of $71 and $562,
respectively, in the four months ended December 31, 2002 and the eight months
ended August 31, 2002.

The Company had no gas futures or options outstanding at January 1, 2001.
During the year ended December 31, 2001, a loss of $3,950 was recognized in
cost of products sold related to futures. Futures outstanding at December 31,
2001 were acquired to hedge gas purchases from January 2002 through March 2002.
The Company recorded the fair market value of the outstanding futures,
approximately $531, in accrued expenses and accumulated comprehensive income on
the balance sheet as of December 31, 2001.

In the year ended December 31, 2001, the Company entered into put and call
options for purchases of natural gas. The fair value of these options at
December 31, 2001 was $536 and is recorded in accrued expenses. These options
do not qualify as an effective cash flow hedge for natural gas purchases. As a
result of these contracts, the Company recognized a derivative loss of $334 in
the year ended December 31, 2001.

In August 2001, Anchor entered into an interest rate cap instrument with
Bank of America, National Association. The fair value of this interest rate
cap, approximately $72, was recorded in other assets on the accompanying
balance sheet at December 31, 2001. During the eight months ended August 31,
2002 and the year ended December 31, 2001, losses of $72 and $253,
respectively, were recognized in other income, net related to this instrument.

NOTE 7 - Capital Stock

At August 31, 2002, the authorized capital stock of Anchor consists of
21,000,000 shares of common stock, par value $0.10 per share, of which
9,000,000 shares are issued and outstanding, and 100,000 shares of preferred
stock, par value $0.01 per share. Of the amount of authorized preferred stock,
75,000 shares of preferred stock are designated Series C Participating
Preferred Stock, of which 75,000 shares are issued and outstanding.

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

Redeemable Preferred Stock

The Anchor Board of Directors has the authority, by adopting resolutions,
to issue shares of preferred stock in one or more series, with the designations
and preferences for each series set forth in the adopting resolutions. The
certificate of incorporation authorizes the Board of Directors to determine,
among other things, the rights, preferences and limitations pertaining to each
series of preferred stock.

The holders of the Series C Participating Preferred Stock are entitled to
vote as a single class on all actions to be taken by Anchor stockholders,
together with all other classes and series of Anchors stock. The holders of
the Series C Participating Preferred Stock will have full voting rights and
powers equal to the voting rights and powers of the holders of Anchors common
stock. The votes of the holders of Series C Participating Preferred Stock, in
the aggregate, will constitute 15% of the total aggregate votes entitled to
vote on any such action.

The Series C Participating Preferred Stock is entitled to receive
dividends, at a rate per annum equal to 12%, prior to and in preference to any
declaration or payment of any dividend on any junior securities. Dividends are
payable quarterly in cash, if and when declared by the Board of Directors and,
to the extent not paid currently with respect to any quarterly period, will
accrue and compound quarterly. Unpaid dividends of $3,022 ($40.29 per share)
as of December 31, 2002 were accrued and included in redeemable
preferred stock in the accompanying balance sheet. In addition, the Series C
Participating Preferred Stock is entitled to receive dividends and
distributions equal to 15% of the amount of dividends paid on the outstanding
shares of common stock.

The Series C Participating Preferred Stock is subject to redemption at the
Companys option at any time in whole but not in part at a redemption price
equal to the sum of (i) $1,000 per share plus all accrued and unpaid dividends
on such share computed to the date of redemption and (ii) 15% of the fair
market value of all of the outstanding shares of common stock divided by the
number of outstanding shares of Series C Participating Preferred Stock. The
portion of the redemption price specified in clause (ii) of the preceding
sentence will, at the option of the Company, be payable either in cash or in
shares of common stock.

In the event of Anchors liquidation, dissolution or winding up (or
certain other circumstances which shall be deemed a liquidation), the holders
of the Series C Participating Preferred Stock will be entitled to receive,
prior to and in preference to the holders of the common stock, an amount equal
to $1,000 per share plus all accrued and unpaid dividends on such share
computed to the date of redemption. If upon the liquidation event the available
assets are insufficient to permit the payment of those amounts, then the entire
assets and funds will be distributed to the holders of the Series C
Participating Preferred Stock. After the liquidation preference has been paid
to the holders of the Series C Participating Preferred Stock, remaining assets
will be distributed 85% to holders of the common stock and 15% to the holders
of the Series C Participating Preferred Stock.

Capital Stock of the Predecessor Company

Prior to the Reorganization, the Company had designated 2,239,320 shares
as Series A Preferred Stock and 5,000,000 shares as Series B Preferred Stock.
The holders of Series A Preferred Stock were entitled to receive, when and as
declared by the Board of Directors of the Company, cumulative dividends,
payable quarterly in cash, at an annual rate of 10%. Unpaid dividends of
$26,043 ($11.63 per share) as of December 31, 2001 were accrued and included
with the value of the related preferred stock on the balance sheet. The Company
paid one quarterly dividend in 1999 of approximately $1,411. The Series A
Preferred Stock had a liquidation and redemption value of $25.00 per share,
plus accrued dividends. The Company would have been required to redeem all
outstanding shares of the Series A Preferred Stock on January 31, 2009 and, on
or after February 5, 2000, could have, at its option, redeemed outstanding
shares of Series A Preferred Stock at a price of $25.00 per share, if the
trading price of the common stock equaled or exceeded $6.00 per share. Shares
of Series A Preferred Stock were convertible into shares of common stock, at
the option of the holder, at a ratio determined by dividing the liquidation
value of the Series A Preferred Stock of $25.00 by $6.00 and such ratio was
subject to adjustment from time to time.

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

The holders of Series B Preferred Stock were entitled to receive
cumulative dividends, payable quarterly at an annual rate of 8%. Cumulative and
unpaid dividends at December 31, 2001 were approximately $16,900 ($4.00 per
share). During the period from February 5, 1997 through and including December
31, 1999, the dividend was payable in additional shares of Series B Preferred
Stock. The Series B Preferred Stock had a liquidation and redemption value of
$25.00 per share, plus accrued dividends. Shares of Series B Preferred Stock
were not subject to mandatory redemption. On or after February 5, 2000, the
Company could have, at its option, redeemed outstanding shares of Series B
Preferred Stock at a price of $25.00 per share, if the trading price of the
common stock equaled or exceeded $5.50 per share. Shares of Series B Preferred
Stock were convertible into shares of common stock, at the option of the
holder, at a ratio determined by dividing the liquidation value of the Series B
Preferred Stock of $25.00 by $5.50 and such ratio was subject to adjustment
from time to time.

For the period from February 5, 1997 to February 5, 2000, the common stock
of Anchor was divided into three classes, Class A and Class B, which were
voting, and Class C, which was non-voting. On February 5, 2000, the three
classes of common stock were consolidated into one single class of common stock
with identical rights. At December 31, 2001, the Company had outstanding
warrants exercisable for 1,893,531 shares of common stock. None of the warrants
required any payment upon exercise. During 2001, certain Anchor warrant holders
exercised 1,197,338 warrants and acquired 1,197,338 shares of common stock of
Anchor. Until the Reorganization, Consumers U.S. owned approximately 59.5% of
Anchors equity on a fully diluted basis (approximately 26.9% of the
outstanding common stock at December 31, 2001), giving effect to the exercise
of all warrants and the conversion of Anchors convertible preferred stock.

On September 26, 2001, the former Board of Directors of Anchor adopted a
Stockholder Rights Plan (the Rights Plan). Under the Rights Plan, stock
purchase rights (Rights) would have been distributed as a dividend to all
stockholders at the rate of one Right for each share of Anchor common stock
held of record as of the close of business on September 26, 2001. Each Right
had entitled the registered holder, upon the occurrence of certain events, to
purchase from Anchor one one-thousandth of a share of Series C Junior
Participating Preferred Stock , at a price of $0.01 per one one-thousandth of a
share, subject to adjustment. The Rights were not exercisable until the
distribution date, as defined. The Rights Plan terminated upon the
Reorganization.

On October 5, 2001, an action was filed by Consumers U.S., against Anchor
and certain members of its former Board of Directors. The action alleged, among
other things, that the Rights Plan adopted by the Anchor Board of Directors was
unlawful. On October 11, 2001 O-I filed a similar action, which alleged, among
other things, that the Rights Plan adopted by the former Anchor Board of
Directors was unlawful. The actions were dismissed.

Under the terms of the Plan, Series A Preferred Stock, the Series B
Preferred Stock, common stock and warrants of Anchor outstanding at August 30,
2002 were cancelled.

NOTE 8 - Equity Incentive Plan

In October 2002, the Board of Directors of Anchor approved the equity
incentive plan, designed to motivate and retain individuals who are responsible
for the attainment of the Companys primary long-term performance goals and
covers employees, directors or consultants. The plan provides for the grant of
nonqualified stock options, incentive stock options and restricted stock for
shares of Anchor common stock to participants of the plan selected by the board
or a committee of the board (the Administrator). One million shares of
common stock have been reserved under the plan. The terms and conditions of
awards are determined by the Administrator for each grant, except that, unless
otherwise determined by the Administrator, options vest and become exercisable
as follows: 50% of an option grant vests 1/3 on the first anniversary of the
grant date, 1/3 on the second anniversary of the grant date and 1/3 on the
third anniversary of the grant date; and the remaining 50% of the option grant
vests in three tranches of equal amount if the Company attains certain
performance targets established by the Board of Directors. There were no grants
under this plan in 2002.

Upon a Liquidity Event, all unvested awards will become immediately
exercisable and the Administrator may determine the treatment of all vested
awards at the time of the Liquidity Event. A Liquidity Event is defined

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

as an event in which (1) any person who is not an affiliate becomes the
beneficial owner, directly or indirectly, of 50% or more of the combined voting
power of Anchors then outstanding securities, (2) the sale, transfer or other
disposition of all or substantially all of Anchors business and, whether by
sale of assets, merger or otherwise to a person other than Cerberus, (3) if
specified by our Board of Directors in an award at the time of grant, the
consummation of an initial public offering of common equity securities or (4)
dissolution and liquidation of the Company.

NOTE 9 - Related Party Information

On February 5, 1997, pursuant to an asset purchase agreement dated
December 18, 1996, Consumers acquired substantially all of the assets, and
assumed certain liabilities, of the former Anchor Glass Container Corporation.

From 1997 until the latter part of 2001, 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)..

The Company had, 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 former directors, purchased GGC from Consumers. Following these
events, Anchor 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.

In connection with a proposed settlement of litigation commenced by The
National Bank of Canada against Anchor and certain other former 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
assists 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 the $439 of receivables under the
agreement as of December 31, 2002.

In 2000, the Company had entered into a Restated Intercompany Agreement
(the Intercompany Agreement) with G&G, Consumers, Consumers U.S., Consumers
International Inc., GGC, Hillsboro Glass Company (Hillsboro), I.M.T.E.C.
Enterprises, Inc., a machinery manufacturer majority-owned by G&G, and certain
related companies, which established standards for certain intercompany
transactions. With the events described above, transactions carried out under
the Intercompany Agreement were significantly reduced in the latter part of
2001 and eliminated in 2002.

Historically, pursuant to the Intercompany Agreement, the Company may
have, from time to time, filled orders for customers of affiliated glass
manufacturers and affiliated glass manufacturers may have, from time to time
filled orders for customers of the Company. Through 2000, in such case where
the customer was not a common customer, the manufacturing company paid a market
commission, up to 5% of the invoiced amount, to the company that referred the
customer. In the event of a transfer of a customer to the Company by an
affiliated glass manufacturer or to an affiliated glass manufacturer by the
Company, the transfer was treated as though the transferee had filled the
orders for the transferred customer. The commission program was replaced with a
cost sharing arrangement in 2001 that was subsequently discontinued as a result
of the sale of Consumers Canadian glass producing assets and the service
agreement entered into with GGC.

Historically, pursuant to the Intercompany Agreement, in connection with
any bulk purchasing of raw materials, packaging materials, machinery,
insurance, maintenance services, environmental services, design and
implementation of certain software systems and other items and services used in
this business, each of the affiliated glass manufacturers shared out-of-pocket
costs of the purchasing activities without payment of commissions.

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

Similarly, in connection with the provision of technical, engineering or
mold design services, the company providing the services received reasonable
per diem fees and costs for the employees provided. For services such as the
provision of molds, the company providing the service received cost plus a
reasonable market mark-up.

G&G Investments, Inc.

The Company was party to a management agreement with G&G, in which G&G was
to provide specified managerial services for the Company. The Company notified
G&G that the agreement was terminated as of the beginning of January 2001. In
the fourth quarter of 2001, the Company reversed fees previously accrued of
$1,875 to selling and administrative expenses in the statement of operations.

For these services, G&G was entitled to receive an annual management fee
of up to $3,000, subject to limitations, and reimbursement of its out-of-pocket
costs. The Company recorded a management fee expense of $1,500, for this
agreement for the year ended December 31, 2000. Out-of-pocket costs for the
year ended December 31, 2000 were approximately $250. No costs were accrued in
2001.

In September 1998, G&G entered into an agreement to purchase a controlling
interest in a European glass manufacturer and advanced approximately $17,300
toward that end. This amount was funded by G&G through a loan from the Company
of approximately $17,300 in September 1998 (the G&G Loan). The funds for the
G&G Loan were obtained through a borrowing under the Original Credit Facility.
The G&G Loan was evidenced by a promissory note that originally matured in
January 1999. The transaction did not close and, in March 2000, G&G commenced
an arbitration proceeding against the principal owners of the European glass
manufacturer in accordance with the terms of the agreement to secure a return
of the advance. Arbitration hearings were held in 2001. A decision was
rendered in the fourth quarter of 2001 in favor of the principal owners of the
European glass manufacturer. As a result of the decision and questions
regarding the collectibility of the G&G Loan, Anchor recorded a provision of
$17,447 (the advance of $17,330 and other costs of $117), as a related party
provision on the statement of operations in 2001. Anchor pursued collection of
these amounts and filed an action in the Federal District Court for the Indiana
Fort Wayne Division, against certain principal owners of the 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.

In connection with the pledge by Anchor of the note issued pursuant to the
G&G Loan to Bank of America, National Association, as agent under the Loan and
Security Agreement, the original promissory note issued pursuant to the G&G
Loan was replaced by a new promissory note (the Replacement Note). G&G
provided security against the Replacement Note to Bank of America, National
Association, as agent under the Loan and Security Agreement. The maturity date
of the Replacement Note was October 31, 2003. Interest on the Replacement Note
was payable at the interest rate payable by the Company on advances under the
Loan and Security Agreement plus 0.5% and was paid through September 2000. As a
result of the arbitration ruling, in the fourth quarter of 2001, Anchor
reversed the accrual for the unpaid interest receivable of $1,766, for the
period October 1, 2000 through December 31, 2001, through a charge to interest
expense.

During the years 1997, 1998, 1999 and 2000, the Company participated in
bulk purchases of supplies for the Company and certain of its affiliates,
including Consumers, with vendors that were unrelated to the Company and
Consumers. The bulk purchases were negotiated by a sister company to G&G. The
sister company received rebates from these unrelated vendors. The rebates
attributable to purchases by the Company totaled no less than $711 over the
four-year period. When this practice became known, the Company took steps to
ensure that the practice was discontinued.

During the year 1997, the Company participated in bulk purchases of soda
ash for the Company and certain of its affiliates, including Consumers, with
vendors that were unrelated to the Company and Consumers. The bulk purchases
were negotiated by a subsidiary of G&G. The subsidiary received rebates from
the unrelated vendors. The rebates attributable to purchases by the Company
totaled no less than $547. This practice was discontinued at the end of 1997.

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

A special committee of the former Board of Anchor was appointed to review
these transactions. The special committee had issued a demand letter to G&G and
certain affiliates of G&G, requesting reimbursement to Anchor of the amounts
paid as rebates.

In September 1997, Hillsboro, a glass-manufacturing plant owned by G&G,
discontinued manufacturing. All of Hillsboros rights and obligations to fill
orders under a supply contract between Consumers and one of its major customers
was purchased by Consumers and the Company effective December 31, 1997. The
purchase price of the Companys portion of this contract was $12,525, of which
$11,725 had been paid through 2001. The outstanding balance was eliminated in
the Reorganization.

Related party transactions with affiliates of G&G, including Interstate
Express for freight purchases, are summarized as follows:

|                                                   |  |              |       |                          |  |      |       |  |  |   |        | 
|-------------------------------------------------- |  | ------------ | ----- | ------------------------ |  | ---- | ----- |  |  | - | ------ | 
|                                                   |  | Eight Months |       |                          |  |      |       |  |  |  
|                                                   |  | Ended        |       | Years Ended December 31,
|                                                   |  | August 31,   |       |                         
|                                                   |  | 2002         |       | 2001                     |  | 2000
|                                                   |  |              |       |                          |  |     
|Purchases of freight                               |  | $            | 1,009 |                          |  | $    | 2,228 |  |  | $ | 3,078  | 
|Payable for freight                                |  |              |      |                          |  |      | 66    |  |  |   | 456    | 
|Purchases of inventory and other                   |  |              |      |                          |  |      | 31    |  |  |   | 89     | 
|Payable for inventory and other                    |  |              |      |                          |  |      | 173   |  |  |   | 27     | 
|Allocation of aircraft charges                     |  |              |      |                          |  |      | 189   |  |  |   | 797    | 
|Interest income on advance to affiliate            |  |              |      |                          |  |      |      |  |  |   | 1,829  | 
|Interest receivable on advance to affiliate        |  |              |      |                          |  |      |      |  |  |   | 457    | 
|Sales of inventory and allocation of expenses      |  |              |      |                          |  |      |      |  |  |   |       | 
|Receivable from sales of inventory and
allocations |  |              |      |                          |  |      |      |  |  |   | 342    | 
|Advance to affiliate                               |  |              |      |                          |  |      |      |  |  |   | 17,330 | 

In connection with the Reorganization, the Company entered into a
settlement agreement with Mr. J. Ghaznavi and G&G, concluding the issues noted
above.

Consumers and affiliates

At December 31, 2001, before the provision noted below, G&G, Consumers and
their affiliates owed Anchor approximately $17,400, (including an offset of
approximately $8,600 related to the allocation of the write-off of certain
software costs) in addition to the advance to affiliate receivable of
approximately $17,300, while Anchor owed G&G, Consumers and their affiliates
approximately $4,900. Additionally, Anchor held an investment in 1,842,000
common shares of Consumers.

In 1999, management approved the purchase of 1,842,000 shares of Consumers
common stock for $3,000. These shares were held pending government approval for
contribution into the Companys defined benefit pension plan. As of December
31, 2000, the Company recorded a write down for a non-temporary decline in
market value, of approximately $1,158, to reflect the investment at then fair
value. During 2001, the remaining balance of $1,842 was recorded as a related
party provision.

As a result of Consumers announcement of its intention to sell its
Canadian glass producing assets to O-I and Consumers filing under the Canadian
Companies Creditors Arrangement Act (CCAA), Anchor recorded a charge to
earnings during 2001 of $18,221 ($24,979 receivables and $1,842 investment in
common shares of Consumers, net of $8,600 payables). This amount was recorded
as a related party provision on the statement of operations.

Of the total of approximately $6,300 cash settlement of the shareholder
derivative action, as discussed in Note 2, the Company received approximately
$2,000 in cash from Consumers in the fourth quarter of 2002.

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

The Company recorded a write-off in 1999 of its allocable share of parent
company software costs. Consumers implemented the SAP based software system
with the intention that all affiliated companies would adopt that system and
share ratably in the initial design, reengineering and implementation
originated by Consumers. The SAP based system had proven to be a complicated
system requiring extensive and expensive maintenance. With the objective of
having one operating system, Consumers converted to a JDEdwards based system,
currently in place at Anchor. As authorized by the Intercompany Agreement,
Consumers allocated $9,600 to Anchor (of which $1,000 had been paid)
representing Anchors pro rata share of the original implementation costs based
upon number of plants, number of licensed users and sales.

Related party transactions with Consumers and its affiliates are
summarized as follows (there were no comparable transactions in 2002):

|                                                 |  |                          |       |      |  |   |        | 
|------------------------------------------------ |  | ------------------------ | ----- | ---- |  | - | ------ | 
|                                                 |  | Years Ended December 31,
|                                                 |  |                         
|                                                 |  | 2001                     |       | 2000
|                                                 |  |                          |       |     
|Purchases of inventory and other                 |  | $                        | 348   |      |  | $ | 1,811  | 
|Payable for inventory and other                  |  |                          | 3,948 |      |  |   | 1,402  | 
|Sales of molds and inventory                     |  |                          | 4,828 |      |  |   | 12,038 | 
|Receivable from sales of molds and inventory     |  |                          | 1,020 |      |  |   | 6,413  | 
|Allocation of expenses and other                 |  |                          | 6,878 |      |  |   | 14,133 | 
|Receivable from allocation of expenses and other |  |                          |      |      |  |   | 13,346 | 
|Payable for allocable portion of software        |  |                          |      |      |  |   | 9,315  | 

The sale of molds to Consumers was invoiced at cost plus a profit mark-up.
The amounts of these mark-ups, $250 and $51, respectively, for the years ended
December 31, 2001 and 2000, have been recorded as contributions from
shareholder and included in capital in excess of par value.

Stock Purchase Plans

Under the 2000 Executive Stock Purchase Plan, executives of Anchor
participated in the purchase of shares of Consumers common stock. Anchor made
loans to plan participants to finance the purchase of an aggregate of 332,998
shares. The loans had a term of ten years, were secured by a pledge of the
shares purchased with the loan proceeds and required that a percentage of
future management incentive awards be applied against outstanding loan
balances. The plan terminated on December 28, 2000. The Board approved bonus
compensation repaying aggregate indebtedness of approximately $476. Under the
1999 Officer Stock Purchase Plan, certain officers of Anchor participated in
the purchase of shares of Consumers common stock. Anchor made loans to plan
participants to finance the purchase of an aggregate of 183,250 shares. The
loans had a term of ten years and were secured by a pledge of the shares
purchased with the loan proceeds. On June 30, 2000, management authorized bonus
compensation repaying aggregate indebtedness of approximately $280. There were
no loans outstanding under these plans at December 31, 2002 and 2001.

Other

The Company has employee receivables of $30 and $115 outstanding, as of
December 31, 2002 and 2001, respectively.

Stock Option Plan  Consumers Plan

Salaried employees of the Company participated in the Director and
Employee Incentive Stock Option Plan, 1996 of Consumers. Consumers requested
the Toronto Stock Exchange (the TSE) to suspend trading of Consumers common
stock and effective December 31, 2001, the TSE issued a trading halt. The
closing price at the time of the trading halt was Cdn.$0.015 per share.

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##### Table of Contents



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

At the Annual Shareholders Meeting of Consumers in June 1999, the Director
and Employee Incentive Stock Option Plan was amended whereby the exercise price
of certain outstanding stock options issued under the plan for which the
current exercise price exceeded Cdn.$8.00 was reduced to an exercise price of
Cdn.$8.00. Pursuant to SFAS 123, incremental compensation expense was to be
recognized on a pro forma basis between 1999 and 2003 in the amount of $961,
related to the amended exercise price.

Information related to stock options for the eight months ended August 31,
2002 and the two years ended December 31, 2001 is as follows:

|                                       |           |  |           |          |              |  |              |       |          |  |   |      | 
|-------------------------------------- | --------- |  | --------- | -------- | ------------ |  | ------------ | ----- | -------- |  | - | ---- | 
|                                       |           |  |           |          |              |  | Weighted     |       | Weighted
|                                       |           |  | Number    |          | Average      |  | Average     
|                                       |           |  | of        |          | Exercise     |  | Fair        
|                                       |           |  | Shares    |          | Price (Cdn$) |  | Value (Cdn$)
|                                       |           |  |           |          |              |  |             
|Options outstanding, January 1, 2000   |           |  | 1,101,500 |          |              |  | 7.78         |       |          |  |   |     
|                                       | Granted   |  |           | 144,500  |              |  |              | 5.00  |          |  | $ | 4.47 | 
|                                       | Forfeited |  |           | (162,500 | )            |  |              | 8.00  |          |  | $ | 4.91 | 
|                                       |           |  |           |          |              |  |              |       |          |  |   |     
|Options outstanding, December 31,
2000 |           |  | 1,083,500 |          |              |  | 7.33         |       |          |  |   |     
|                                       | Granted   |  |           |         |              |  |              |      |          |  | $ |     | 
|                                       | Forfeited |  |           | (275,000 | )            |  |              | 7.77  |          |  | $ | 4.80 | 
|                                       |           |  |           |          |              |  |              |       |          |  |   |     
|Options outstanding, December 31,
2001 |           |  | 808,500   |          |              |  | 7.18         |       |          |  |   |     
|                                       | Cancelled |  |           | (808,500 | )            |  |              | (7.18 | )        |  |   |      | 
|                                       |           |  |           |          |              |  |              |       |          |  |   |     
|Options outstanding, August 31, 2002   |           |  |          |          |              |  |             |       |          |  |   |     
|                                       |           |  |           |          |              |  |              |       |          |  |   |     

Approximately 680,000 of the options were exercisable at December 31, 2001
and the weighted average remaining contractual life of the options was 6.6
years.

NOTE 10 - Pension Plans and Other Post-retirement Benefits

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.

In July 2002, the United States Department of Labor notified Anchor that
it determined that the MEPP did not meet the definition of a multiemployer plan
under the Employee Retirement Income Security Act of 1974, as amended
(ERISA).

Effective July 31, 2002, Anchor and the PBGC entered into an agreement to
govern the dissolution of the Anchor portion of the MEPP (the PBGC
Agreement). Pursuant to the PBGC Agreement and collective bargaining
agreements with the unions representing participants under the MEPP, Anchor
withdrew from the MEPP on July 31, 2002. The PBGC has proceeded 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 one part attributable to GGC employees and former employees and terminate
the Anchor portion. The termination was effective as of July 31, 2002.

In accordance with the PBGC Agreement, on the Effective Date, Anchor paid
$20,750 to the PBGC (with proceeds from the Reorganization). Additionally,
Anchor granted the PBGC a warrant for the purchase of
474,000 shares of common stock of
Anchor, with an exercise price of $5.27 per share and term of ten years. No
value has been attributed to this warrant as of August 31, 2002 because the
exercise price is in excess of the fair value of common stock. Anchor
renegotiated its labor union contracts and, effective August 1, 2002, began
contributing to other multiemployer plans for the future service benefits of
its hourly employees. These contributions are expensed monthly.

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##### Table of Contents



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

In accordance with the PBGC Agreement, Anchor has begun making monthly
payments to the PBGC of $833 for a period of one hundred twenty (120) months.
The present value of this obligation at August 31, 2002, $66,066 recorded as
long-term debt (less current maturities), was determined by applying a discount
rate of 8.9%. The rate was determined by management and reviewed by independent
appraisers. The Company adjusted previously recorded pension liabilities to
amounts required under the PBGC Agreement, resulting in a gain of $8,233,
included as a reduction of the cost of the restructuring.

The Anchor defined benefit plan covered salaried and hourly-paid
employees. Benefits were calculated on a service-based formula for hourly
participants. Benefits were calculated on a salary-based formula for salaried
participants and were frozen in 1994.

The Company provides other post-retirement benefits to substantially
certain salaried and hourly employees and former employees. The Company accrues
post-retirement benefits (such as healthcare benefits) during the years an
employee provides services. Currently, the Company funds these healthcare
benefits on a pay-as-you-go basis. As part of the Reorganization, the Company
implemented modifications to its current post-retirement benefits program,
resulting in a reduction of long-term post retirement liabilities of $24,432.

Statement
of Financial Accounting Standards No. 87 - Employers Accounting
for Pensions defines a multiemployer plan to be a pension plan to which two or
more unrelated employers contribute. Since Anchor and Glenshaw were defined as
related parties at December 31, 2001, the MEPP did not meet the definition of a
multiemployer plan for generally accepted accounting principles, and the
accounting followed by Anchor, and the disclosures here, reflected the plan as
if it were a single employer plan. The components of net periodic benefit costs
follows:

|                                              |                    |   |              |       |                 |   |              |       |              |   |       |   |      |   |       |      |   |   |       |      |   |   |       |      |  
|--------------------------------------------- | ------------------ | - | ------------ | ----- | --------------- | - | ------------ | ----- | ------------ | - | ----- | - | ---- | - | ----- | ---- | - | - | ----- | ---- | - | - | ----- | ---- | -
|                                              |                    |   | Pensions     |       | Post-retirement
|                                              |                    |   |              |       |                
|                                              |                    |   | Years Ended  |       | Four Months     |   | Eight Months |       | Years Ended 
|                                              |                    |   | December 31, |       | Ended           |   | Ended        |       | December 31,
|                                              |                    |   |              |       | December 31,    |   | August 31,   |       |             
|                                              |                    |   | 2001         |       | 2000            |   | 2002         |       | 2002         |   | 2001  |   | 2000
|                                              |                    |   |              |       |                 |   |              |       |              |   |       |   |     
|Service cost-benefits
earned during the year  |                    | $ | 4,600        |       |                 | $ | 4,414        |       |              | $ | 134   |   |      | $ | 671   |      |   | $ | 910   |      |   | $ | 1,110 |     
|Interest cost on projected
benefit obligation |                    |   | 33,706       |       |                 |   | 33,521       |       |              |   | 1,002 |   |      |   | 2,700 |      |   |   | 4,297 |      |   |   | 4,087 |     
|Return on plan assets                         |                    |   | (35,460      | )     |                 |   | (39,145      | )     |              |   |      |   |      |   |      |      |   |   |      |      |   |   |      |     
|Amortization of:                              |                    |   |              |       |                 |   |              |       |              |   |       |   |      |   |       |      |   |   |       |      |   |   |       |     
|                                              | Actuarial gains    |   |              |      |                 |   |              |      |              |   |       |  |      |   |       | (511 | ) |   |       | (378 | ) |   |       | (758 | )
|                                              | Prior service cost |   |              | 3,263 |                 |   |              | 3,263 |              |   |       |  |      |   |       | 292  |   |   |       | 438  |   |   |       | 438  |  
|                                              |                    |   |              |       |                 |   |              |       |              |   |       |   |      |   |       |      |   |   |       |      |   |   |       |     
|Total periodic benefit cost                   |                    | $ | 6,109        |       |                 | $ | 2,053        |       |              | $ | 1,136 |   |      | $ | 3,152 |      |   | $ | 5,267 |      |   | $ | 4,877 |     
|                                              |                    |   |              |       |                 |   |              |       |              |   |       |   |      |   |       |      |   |   |       |      |   |   |       |     

Significant assumptions used in determining net periodic benefit cost and
related obligations for the plans are as follows:

|                                                 |  |              |      |                 |  |              |       |              |  |      |      |      |  |  |      |   |  |  |      |   |  |  |       |  
|------------------------------------------------ |  | ------------ | ---- | --------------- |  | ------------ | ----- | ------------ |  | ---- | ---- | ---- |  |  | ---- | - |  |  | ---- | - |  |  | ----- | -
|                                                 |  | Pensions     |      | Post-retirement
|                                                 |  |              |      |                
|                                                 |  | Years Ended  |      | Four Months     |  | Eight Months |       | Years Ended 
|                                                 |  | December 31, |      | Ended           |  | Ended        |       | December 31,
|                                                 |  |              |      | December 31,    |  | August 31,   |       |             
|                                                 |  | 2001         |      | 2000            |  | 2002         |       | 2002         |  | 2001 |      | 2000
|                                                 |  |              |      |                 |  |              |       |              |  |      |      |     
|Discount rate                                    |  |              | 7.25 | %               |  |              | 7.625 | %            |  |      | 6.75 | %    |  |  | 7.00 | % |  |  | 7.25 | % |  |  | 7.625 | %
|Expected long-term
rate of return on
plan assets |  |              | 9.50 |                 |  |              | 9.50  |              |  |      |     |      |  |  |     |   |  |  |     |   |  |  |      |  

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

During the four months ended December 31, 2002, the Company contributed
$1,615 to the multiemployer pension plans in which it participates. During the
eight months ended August 31, 2002, the Company contributed $6,001 to the MEPP
and the other multiemployer plans. These amounts are expensed as incurred.

The funded status of the Companys pension and post-retirement plans are
as follows:

|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |        |  
|---------------------------------------------------- | ------------------------------------ | ------------------------------------------------ | ---------------------------------- | ------- | -------- | ------- | --------------- | ------- | ---------- | ------ | ------- | ------- | ------ | ------- | ------- | ------- | ------ | ------ | -
|                                                     |                                      |                                                  |                                    |         | Pensions |         | Post-retirement
|                                                     |                                      |                                                  |                                    |         |          |         |                
|                                                     |                                      |                                                  |                                    |         | Year     |         | December 31,    |         | August 31, |        | Year   
|                                                     |                                      |                                                  |                                    |         | 2001     |         | 2002            |         | 2002       |        | 2001   
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |        
|Change in benefit obligation:                        |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |        
|                                                     |                                      | Benefit obligation at beginning of period        |                                    | $       | 455,187  |         |                 | $       | 43,510     |        |         | $       | 61,449 |         |         | $       | 55,497 |       
|                                                     |                                      |                                                  | Service cost                       |         |          | 4,600   |                 |         |            | 134    |         |         |        | 671     |         |         |        | 910    |  
|                                                     |                                      |                                                  | Interest cost                      |         |          | 33,706  |                 |         |            | 1,002  |         |         |        | 2,700   |         |         |        | 4,297  |  
|                                                     |                                      |                                                  | Plan modifications                 |         |          |        |                 |         |            |       |         |         |        | (24,432 | )       |         |        |       |  
|                                                     |                                      |                                                  | Plan participants contributions   |         |          |        |                 |         |            | 140    |         |         |        | 334     |         |         |        | 577    |  
|                                                     |                                      |                                                  | Actuarial (gain) loss              |         |          | 16,215  |                 |         |            | 621    |         |         |        | 5,188   |         |         |        | 3,664  |  
|                                                     |                                      |                                                  | Benefits paid                      |         |          | (34,745 | )               |         |            | (1,044 | )       |         |        | (2,400  | )       |         |        | (3,496 | )
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       
|                                                     |                                      | Benefit obligation at end of period              |                                    |         | 474,963  |         |                 |         | 44,363     |        |         |         | 43,510 |         |         |         | 61,449 |       
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       
|Change in plan assets:                               |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |        
|                                                     |                                      | Fair value of plan assets at beginning of
period |                                    |         | 390,154  |         |                 |         |           |        |         |         |       |         |         |         |       |       
|                                                     |                                      |                                                  | Actual return on plan assets       |         |          | (8,188  | )               |         |            |       |         |         |        |        |         |         |        |       |  
|                                                     |                                      |                                                  | Employer contributions             |         |          | 7,801   |                 |         |            | 904    |         |         |        | 2,066   |         |         |        | 2,919  |  
|                                                     |                                      |                                                  | Plan participants contributions   |         |          |        |                 |         |            | 140    |         |         |        | 334     |         |         |        | 577    |  
|                                                     |                                      |                                                  | Benefits and expenses paid         |         |          | (37,345 | )               |         |            | (1,044 | )       |         |        | (2,400  | )       |         |        | (3,496 | )
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       
|                                                     |                                      | Fair value of plan assets at end of period       |                                    |         | 352,422  |         |                 |         |           |        |         |         |       |         |         |         |       |       
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       
|Funded status                                        |                                      |                                                  | (122,541                           | )       |          |         | (44,363         | )       |            |        | (43,510 | )       |        |         | (61,449 | )      
|                                                     |                                      |                                                  | Unrecognized actuarial (gain) loss |         |          | 75,468  |                 |         |            | 621    |         |         |        |        |         |         |        | (7,812 | )
|                                                     |                                      |                                                  | Unrecognized prior service cost    |         |          | 22,559  |                 |         |            |       |         |         |        |        |         |         |        | 2,406  |  
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       
|Net amount recognized                                |                                      |                                                  | (24,514                            | )       |          |         | (43,742         | )       |            |        | (43,510 | )       |        |         | (66,855 | )      
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       
|Amounts recognized in the balance sheet consists of: |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |        
|                                                     | Accrued benefit liability            |                                                  |                                    | (24,514 | )        |         |                 | (43,742 | )          |        |         | (43,510 | )      |         |         | (66,855 | )     
|                                                     | Additional minimum pension liability |                                                  |                                    | (98,027 | )        |         |                 |        |            |        |         |        |        |         |         |        |       
|                                                     | Intangible pension asset             |                                                  |                                    | 22,559  |          |         |                 |        |            |        |         |        |        |         |         |        |       
|                                                     | Accumulated other comprehensive loss |                                                  |                                    | 75,468  |          |         |                 |        |            |        |         |        |        |         |         |        |       
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       
|Net amount recognized                                |                                      | $                                                | (24,514                            | )       |          | $       | (43,742         | )       |            | $      | (43,510 | )       |        | $       | (66,855 | )      
|                                                     |                                      |                                                  |                                    |         |          |         |                 |         |            |        |         |         |        |         |         |         |        |       

The Company recognized an additional minimum liability that was equal to
the difference between the accumulated benefit obligation over plan assets in
excess of accrued pension cost. A corresponding amount is recognized as either
an intangible asset or a reduction of equity. Pursuant to this requirement,
the Company recorded, as of December 31, 2001, an additional liability of
$98,027, an intangible asset of $22,559 and accumulated other comprehensive
loss of $75,468.

Pension plan assets were held by an independent trustee and consisted
primarily of investments in equities, fixed income, government securities and
360,000 shares of Series A Preferred Stock.

Prior to the PBGC Agreement, the Company had unfunded obligations related
to its employee pension plans. The Retirement Protection Act of 1994 required
the Company to make significant additional funding contributions into its
underfunded defined benefit retirement plans, under certain conditions, and
increased the premiums paid to the PBGC. There were no required pension
contributions in the three years ended December 31, 2001 with respect to either
current funding or past underfundings. Excluding payments made as part of the
1997

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##### Table of Contents



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

acquisition of Anchor, the Company funded contributions of approximately
$7,400, $10,800, $10,900 and $20,000, respectively, in 2001, 1999, 1998 and
1997. The 2001 and 1999 contributions of $7,400 and $10,800, respectively,
represented voluntary contributions, the effect of which was to limit
contributions in the immediate future.

As part of the 1997 acquisition of Anchor, the PBGC reached an agreement
with Vitro, S.A., the parent of Old Anchor, in which Vitro, S.A. agreed to
provide a limited guaranty to the PBGC with respect to the unfunded benefit
liabilities of the Companys defined benefit plans, if the plans, or any one of
them, are terminated before August 1, 2006.

The assumed healthcare cost trend used in measuring the accumulated
post-retirement benefit obligation as of December 31, 2002 was 10.0% declining
gradually to 4.0% by the year 2008, after which it remains constant. A one
percentage point increase in the assumed healthcare cost trend rate for each
year would increase the accumulated post-retirement benefit obligation as of
December 31, 2002 by approximately $3,545 and the net post-retirement
healthcare cost for the four months ended December 31, 2002 by approximately
$294. A one percentage point decrease in the assumed healthcare cost trend rate
for each year would decrease the accumulated post-retirement benefit obligation
as of December 31, 2002 by approximately $3,107 and the net post-retirement
healthcare cost for the four months ended December 31, 2002 by approximately
$255.

The Company also contributes to a multi-employer trust that provides
certain other post-retirement benefits to retired hourly employees, recognizing
the required annual contribution as an additional benefit cost. Expenses under
this program for the four months ended December 31, 2002, the eight months
ended August 31, 2002 and the years ended December 31, 2001 and 2000 were
$1,283, $2,631, $3,906 and $4,035, respectively.

The Company continues to maintain a separate non-qualified benefit plan
covering certain former salaried employees of the former Anchor Glass. The
benefit obligation at December 31, 2002 was $4,268 and periodic benefit cost
for the four months ended December 31, 2002 and the eight months ended August
31, 2002 was $100 and $200, respectively. The benefit obligation is recorded in
other long-term liabilities at December 31, 2002. Amounts related to this plan
for 2001 and prior periods are included in the table above.

The Company also sponsors two defined contribution plans covering
substantially all salaried and hourly employees. The Company matches 100% of
employee contributions, not to exceed 6% of participant eligible compensation
or 25% of employee contributions, not to exceed 10% of participant eligible
compensation. Expenses
under the savings programs for the four months ended December 31, 2002,
the eight months ended August 31, 2002 and the years ended December 31, 2001
and 2000 were approximately $874, $1,759, $2,572 and $2,318, respectively.

In the 1987 acquisition of Diamond-Bathurst, Inc., Anchor assumed the
liabilities under a deferred compensation arrangement with certain employees of
the acquired company. Under this plan, Anchor funds certain benefits to the
participants and will be reimbursed through proceeds received on life insurance
policies carried on all participants. Plan assets of approximately $1,427 are
included in other assets and plan liabilities of approximately $2,419 are
included in liabilities.

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##### Table of Contents



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

NOTE 11 - Income Taxes

The Company applies SFAS 109 under which the liability method is used in
accounting for income taxes. Under SFAS 109, if on the basis of available
evidence, it is more likely than not that all or a portion of the deferred tax
asset will not be realized, the asset must be reduced by a valuation allowance.
Since realization is not assured as of December 31, 2002, management has
deemed it appropriate to establish a valuation allowance against the net
deferred tax assets.

The significant components of the deferred tax assets and liabilities are
as follows:

|                                                  |  |                                           |         |              |        |              |         |   |        | 
|------------------------------------------------- |  | ----------------------------------------- | ------- | ------------ | ------ | ------------ | ------- | - | ------ | 
|                                                  |  |                                           |         | Reorganized  |        | Predecessor 
|                                                  |  |                                           |         | Company      |        | Company     
|                                                  |  |                                           |         |              |        |             
|                                                  |  |                                           |         | December 31, |        | December 31,
|                                                  |  |                                           |         | 2002         |        | 2001        
|                                                  |  |                                           |         |              |        |             
|Deferred tax assets:                              |  |                                           |         |              |        |              |         |  
|                                                  |  | Reserves and allowances                   |         | $            | 14,600 |              |         | $ | 23,900 | 
|                                                  |  | Pension and post-retirement liabilities   |         |              | 41,900 |              |         |   | 9,600  | 
|                                                  |  | Inventory uniform capitalization          |         |              | 400    |              |         |   | 1,900  | 
|                                                  |  | Tax loss carryforwards                    |         |              | 51,300 |              |         |   | 58,200 | 
|                                                  |  |                                           |         |              |        |              |         |   |        | 
|                                                  |  |                                           | 108,200 |              |        |              | 93,600  |  
|Deferred tax liabilities:                         |  |                                           |         |              |        |              |         |  
|                                                  |  | Accumulated depreciation and amortization |         |              | 57,100 |              |         |   | 17,700 | 
|                                                  |  | Other current assets                      |         |              | 900    |              |         |   | 1,200  | 
|                                                  |  |                                           |         |              |        |              |         |   |        | 
|                                                  |  |                                           | 58,000  |              |        |              | 18,900  |  
|                                                  |  |                                           |         |              |        |              |         |   |        | 
|Net deferred tax assets                           |  |                                           | 50,200  |              |        |              | 74,700  |  
|Valuation allowance                               |  |                                           | (50,200 | )            |        |              | (74,700 | )
|                                                  |  |                                           |         |              |        |              |         |   |        | 
|Net deferred tax assets after valuation allowance |  | $                                         |        |              |        | $            |        |  
|                                                  |  |                                           |         |              |        |              |         |   |        | 

The effective tax rate reconciliation is as follows:

|                                  |  |              |     |                     |  |              |     |      |  |  |     |    |  |  |     |   
|--------------------------------- |  | ------------ | --- | ------------------- |  | ------------ | --- | ---- |  |  | --- | -- |  |  | --- | --
|                                  |  | Reorganized  |     |                     |  |              |     |      |  |  |     |    |  | 
|                                  |  | Company      |     | Predecessor Company
|                                  |  |              |     |                    
|                                  |  | Four Months  |     | Eight Months        |  | Years Ended 
|                                  |  | Ended        |     | Ended               |  | December 31,
|                                  |  | December 31, |     | August 31,          |  |             
|                                  |  | 2002         |     | 2002                |  | 2001         |     | 2000
|                                  |  |              |     |                     |  |              |     |     
|Federal rate                      |  |              | (34 | )%                  |  |              | 34  | %    |  |  | (34 | )% |  |  | (34 | )%
|State rate                        |  |              | (5  | )                   |  |              | 5   |      |  |  | (5  | )  |  |  | (5  | ) 
|Non-deductible goodwill write-off |  |              |    |                     |  |              | 27  |      |  |  |    |    |  |  |    |   
|Non-deductible professional fees  |  |              |    |                     |  |              | 6   |      |  |  |    |    |  |  |    |   
|Other permanent differences       |  |              | 15  |                     |  |              | 1   |      |  |  | 3   |    |  |  | 5   |   
|                                  |  |              |     |                     |  |              |     |      |  |  |     |    |  |  |     |   
|                                  |  |              | (24 | )                   |  |              | 73  |      |  |  | (36 | )  |  |  | (34 | ) 
|Valuation allowance               |  |              | 24  |                     |  |              | (73 | )    |  |  | 36  |    |  |  | 34  |   
|                                  |  |              |     |                     |  |              |     |      |  |  |     |    |  |  |     |   
|Effective rate                    |  |              |    | %                   |  |              |    | %    |  |  |    | %  |  |  |    | % 
|                                  |  |              |     |                     |  |              |     |      |  |  |     |    |  |  |     |   

For tax reporting purposes, the consummation of the Companys Plan did not
create a new tax reporting entity. However, as a result of the consummation of
the Plan, the Company has undergone a change in ownership. Due to this change
in ownership, Section 382 of the Internal Revenue Code will significantly limit
the Companys net operating loss carryforwards. In accordance with SOP 90-7,
these net operating loss carryforwards and related

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##### Table of Contents



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

valuation allowances have been revalued. Any tax benefit derived from the
release of the valuation allowances will be accounted for as a credit to
intangible assets, and then additional paid in capital.

The Company has approximately $131,500 of unused net operating loss
carryforwards expiring at various dates between 2013 through 2022; however, due
to the Section 382 limitations, the Company believes only $75,900 can be
utilized.

NOTE 12 - Manufacturing Facilities

In March 2000, Anheuser-Busch purchased the Companys previously closed
Houston, Texas glass container manufacturing facility and certain related
operating rights. The Company received proceeds of $10,000 from the sale. Under
an agreement with Anheuser-Busch, the Company provides engineering and
production consulting services, relating to the Houston Facility, for a fee.

In 1998, formal plans were approved to remove from service one furnace and
one machine at the Jacksonville, Florida manufacturing facility. Of the total
charge, $3,640 related to operating lease exit costs and closing and other
costs. As of December 31, 2002, the spending against this liability was
completed.

NOTE 13 - Leases

The Company leases distribution and office facilities (including its
headquarters facility), machinery, transportation, data processing and office
equipment under non-cancelable leases that expire at various dates through
2008. These leases generally provide for fixed rental payments and include
renewal and purchase options at amounts that are generally based on fair market
value at expiration of the lease. The Company includes capital leases in other
long-term debt (see Note 5).

Future minimum lease payments under non-cancelable operating leases, after
giving effect to the termination of certain leases by purchasing from the
lessors the equipment leased thereunder (see Note 15), are as follows:

|           |  |   |        | 
|---------- |  | - | ------ | 
|2003       |  | $ | 9,476  | 
|2004       |  |   | 4,005  | 
|2005       |  |   | 3,232  | 
|2006       |  |   | 3,015  | 
|2007       |  |   | 2,967  | 
|After 2007 |  |   | 9,198  | 
|           |  |   |        | 
|           |  | $ | 31,893 | 
|           |  |   |        | 

Rental expense for all operating leases for the four months ended December
31, 2002, the eight months ended August 31, 2002 and the years ended December
31, 2001 and 2000 were $5,429, $11,060, $15,400 and $13,000, respectively.

NOTE 14 - Commitments and Contingencies

On October 13, 2000, certain former stockholders of the Company,
consisting of 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 Partners L.P. and Cerberus International Ltd. (collectively, the
Plaintiffs), commenced a shareholder derivative action against certain of the
Companys directors and officers and related entities in The Court of Chancery
of the State of Delaware. The litigation was settled for total consideration to
the Company of approximately $9,000, of which approximately $6,300 was in cash,
the exchange of mutual releases by the parties and payment by Anchor of certain
legal fees. The settlement of the shareholder

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

derivative action was
approved by the Bankruptcy Court and the Delaware Chancery Court.
Implementation of the settlement was completed in the fourth quarter of 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 former affiliates of
Anchor. The complaint alleged, among other things, fraudulent conveyances made
by GGC to Anchor and tortious interference with the contractual relationship
between the bank and GGC. The action will be heard in the United States
Bankruptcy Court for the Middle District of Florida. A trial date is scheduled
in September 2003.

On April 15, 2002, Anchor filed a voluntary petition for relief under
Chapter 11 of the U.S. Bankruptcy Code in connection with the Reorganization.
The Plan was confirmed by the Court at a hearing held on August 8, 2002 and
became effective on August 30, 2002.

Certain environmental laws, such as CERCLA or Superfund and analogous
state laws, provide for strict, under certain circumstances, joint and several
liability for investigation and remediation of releases of hazardous substances
into the environment. Such laws may apply to properties presently or formerly
owned or operated by an entity or its predecessors, as well as to conditions at
properties at which wastes attributable to an entity or its predecessors were
disposed. The Company is engaged in investigation and remediation projects at
plants currently being operated and at closed facilities. In addition, Anchor
has been identified as a potentially responsible party (a PRP) under CERCLA
with respect to two sites. While the Company may be jointly and severally
liable for costs related to these sites, it is only one of a number of PRPs
who also may be jointly and severally liable. The Company has established
reserves for environmental costs which it believes are adequate to address the
anticipated costs of remediation of these operating and closed facilities and
its liability as a PRP under CERCLA. The timing and magnitude of such costs
cannot always be determined with certainty due to, among other things,
incomplete information with respect to environmental conditions at certain
sites, new and amended environmental laws and regulations, and uncertainties
regarding the timing of remedial expenditures.

The Companys operations are subject to federal, state and local
requirements that are designed to protect the environment. Such requirements
have resulted in the Company being involved in related legal proceedings,
claims and remediation obligations. Based on the Companys current
understanding of the relevant facts, the Company does not believe that its
environmental exposure is in excess of the reserves reflected on the balance
sheet, although there can be no assurance that this will be the case. The
Company maintains environmental reserves of approximately $10,000. In addition
to the environmental reserves, the Company an environmental impairment
liability insurance policy (expiring August 30, 2007) to address certain
potential future environmental liabilities at identified operating and
non-operating sites. There can be no assurance, however, that insurance will be
available or adequate to cover future liabilities. Average annual spending on
remediation issues in recent years approximated $500.

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 any pending or threatened proceedings is not expected to have a
material adverse effect on the financial condition, operating results or cash
flows of the Company, based on the Companys current understanding of the
relevant facts. Legal expenses incurred related to these contingencies are
generally expensed as incurred.

In 2000, the Company signed an agreement with Anheuser-Busch to provide
all the bottles for the Anheuser-Busch Jacksonville, Florida and Cartersville,
Georgia breweries, beginning in 2001 (the Southeast Agreement). To meet the
expanded demand from the supply contract and improve manufacturing efficiency,
the Company invested approximately $18,000 in new equipment in 2000 for its
Jacksonville plant, funded through the
proceeds from the sale of the Houston plant, certain capital and operating
lease transactions and internal cash flows. In December 1999, the Company
entered into an agreement with a major lessor for $30,000 of lease
transactions. Under this agreement, in December 1999, December 2000, March 2001
and April 2001, the Company financed approximately $8,200, $4,200, $7,800 and
$5,400, respectively, of the expansion through sale leaseback

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##### Table of Contents



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

arrangements.These lease agreements have terms of five to six years. The lease agreements
contain, among other things, a fixed charge coverage test. See Note 15.

NOTE 15  Subsequent Event

Effective February 7, 2003, the Company completed an offering of the 11%
Senior Secured Notes due 2013, aggregate principal amount of $300,000 (the
Senior Secured Notes), issued under an indenture dated as of February 7,
2003, among the Company and The Bank of New York, as Trustee (the Indenture).
The Senior Secured Notes are senior secured obligations of the Company, ranking
equal in right of payment with all existing and future unsubordinated
indebtedness of the Company and senior in right of payment to all future
subordinated indebtedness of the Company. The Senior Secured Notes are secured
by a first priority lien, subject to certain permitted encumbrances, on
substantially all of Anchors existing real property, equipment and other fixed
assets relating to Anchors nine operating glass container manufacturing
facilities.

Proceeds from the issuance of the Senior Secured Notes, net of fees, were
approximately $289,000 and were used to repay 100% of the principal amount
outstanding under the First Mortgage Notes plus accrued interest thereon
($156,256), 100% of the principal amount outstanding under the Term Loan plus
accrued interest thereon and a prepayment fee ($20,354) and advances
outstanding under the Revolving Credit Facility ($66,886), which includes funds
for certain of the Companys capital improvement projects. The remaining
proceeds of approximately $45,000 are being used to terminate certain equipment
leases by purchasing from the lessors the equipment leased thereunder.

The Senior Secured Notes are redeemable, in whole or in part, at the
Companys option on or after February 15, 2008, at redemption prices defined in
the Indenture. The Indenture provides that upon the occurrence of a change of
control, the Company will be required to offer to purchase all of the Senior
Secured Notes at a purchase price equal to 101% of the principal amount thereof
plus accrued interest to the date of purchase.

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

The Company entered into a Registration Rights Agreement on February 7,
2003. Under the Registration Rights Agreement, the Company will use its
reasonable best efforts to register with the Securities and Exchange
Commission, exchange notes having substantially identical terms as the Senior
Secured Notes.

Principal payments required on long-term debt, including payments made
under the PBGC obligation, and after taking into effect the above are $7,000 in
2003, $7,394 in 2004, $7,338 in 2005, $7,834 in 2006 and $8,377 in 2007.
Payments to be made in 2008 and thereafter are $338,743.

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

NOTE 16  Restatement

These financial statements include the restated balance sheet of the
Company at December 31, 2002 and the restated statement of stockholders equity
for the four months ended December 31, 2002, after determination that its
Series C Preferred Stock should be classified as temporary equity. This
restatement is limited solely to classifying:



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

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

The
restatement had no effect on the Companys statements of operations, assets or cash flows. Furthermore, as described in the
Use of Proceeds section of the Companys 424(b)(1) prospectus filed with the
Securities and Exchange Commission on September 25, 2003 in connection with the
Companys initial public offering that was consummated on September 30, 2003
(the Equity Offering), all of the Series C Preferred Stock was redeemed in
full on September 30, 2003 with a portion of the net proceeds of the Equity
Offering. Accordingly, the change in classification will have no effect on the
Companys balance sheet as of or following September 30, 2003.

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

|                                                         |                                                     |                            |         |                   |        |         |        |          |         |   |         |       |       | 
|-------------------------------------------------------- | --------------------------------------------------- | -------------------------- | ------- | ----------------- | ------ | ------- | ------ | -------- | ------- | - | ------- | ----- | ----- | 
|                                                         |                                                     |                            |         | December 31, 2002
|                                                         |                                                     |                            |         |                  
|                                                         |                                                     |                            |         | As                |        |         |        |          |         |   |         |      
|                                                         |                                                     |                            |         | Reported          |        | Reclass |        | Restated
|                                                         |                                                     |                            |         |                   |        |         |        |         
|LIABILITIES AND STOCKHOLDERS EQUITY
(in part):          |                                                     |                            |         |                   |        |         |        |          |         |   |         |      
|Other long-term liabilities                              |                                                     | $                          | 26,974  |                   |        | $       | (3,022 | )        |         | $ | 23,952  |      
|Total long-term liabilities                              |                                                     |                            | 310,389 |                   |        |         | (3,022 | )        |         |   | 307,367 |      
|Redeemable preferred stock (including
accrued dividends) |                                                     |                            |        |                   |        |         | 78,022 |          |         |   | 78,022  |      
|Stockholders equity:                                    |                                                     |                            |         |                   |        |         |        |          |         |   |         |      
|                                                         | Preferred stock                                     |                            |         | 1                 |        |         |        | (1       | )       |   |         |      |      
|                                                         | Participation component of Series C
preferred stock |                            |         | 750               |        |         |        | (750     | )       |   |         |      |      
|                                                         | Capital in excess of par value                      |                            |         | 78,349            |        |         |        | (74,249  | )       |   |         | 4,100 |      
|                                                         |                                                     | Total stockholders equity |         |                   | 76,499 |         |        |          | (75,000 | ) |         |       | 1,499 | 

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SIGNATURES

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

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