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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 30, 2004
ORo TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934Commission File Number: 333-73552 PLASTIPAK HOLDINGS, INC.
 
  Michigan
    
    52-2186087(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)
 41605 Ann Arbor Road, Plymouth, Michigan 48170 
 (Address of principal executive offices) (734) 455-3600 
 (Former address: 9135 General Court, Plymouth, Michigan 48170) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark 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 þ No o 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. þ Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act) Yes o No þ The number of shares of the registrants common stock, $1.00 par value, outstanding as of October
30, 2004 was 28,416. DOCUMENTS INCORPORATED BY REFERENCE: NONE




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PLASTIPAK HOLDINGS, INC.
FORM 10-K INDEX  
 PART I
    
    
    
    
    1Item 1.
    
    Business
    
    
    1Item 2.
    
    Properties
    
    
    13Item 3.
    
    Legal Proceedings
    
    
    14Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    15PART II
    
    
    
    
    15Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities
    
    
    15Item 6.
    
    Selected Financial Data
    
    
    16Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 8.
    
    Financial Statements and Supplementary Data
    
    
    28Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    59Item 9A.
    
    Controls and Procedures
    
    
    59Item 9B.
    
    Other Information
    
    
    59PART III
    
    
    
    
    59Item 10.
    
    Directors and Executive Officers of the Registrant
    
    
    59Item 11.
    
    Executive Compensation
    
    
    61Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    65Item 13.
    
    Certain Relationships and Related Transactions
    
    
    65Item 14.
    
    Principal Accountant Fees and Services
    
    
    67PART IV
    
    
    
    
    68Item 15.
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    
    68Fifth Amended and Restated Revolving Credit AgreementList of Subsidiaries of the RegistrantCertification of Principal Executive Officer Pursuant to Section 302Certification of Principal Financial Officer Pursuant to Section 302Certification of Chief Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906
  i




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PART I This Form 10-K contains certain forward-looking statements, including, in particular, the
statements about our plans and strategies, included under Item 7, Managements Discussion and
Analysis of Financial Condition and Results of Operations, and Business. Although we believe
that our plans, intentions and expectations reflected in such forward-looking statements are
reasonable, we cannot assure you that such plans, intentions or expectations will be achieved.
Important factors that could cause actual results to differ materially from our forward looking
statements are set forth in this Item 1 under the caption Risks Related to Our Business and
elsewhere in this Form 10-K. All forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by the cautionary statements. 
 ITEM 1. BUSINESS Plastipak Holdings, Inc. (Plastipak) is a privately held Michigan corporation that was
formed in 1998 to act as a holding company for several related companies. On October 30, 1999,
Plastipak acquired all of the equity interests in Plastipak Packaging, Inc. (Packaging),
Whiteline Express, Ltd. (Whiteline), Clean Tech, Inc. (Clean Tech) and TABB Realty, LLC
(TABB), and a majority of the equity interests of Plastipak Packaging do Brasil, Ltda (Plastipak
Brazil), through a reorganization (the Reorganization). Packaging, our principal operating
company whose business commenced operations in 1967, designs and manufactures rigid plastic
containers, and was incorporated in Delaware in 1982. Packaging also owns the remainder of
Plastipak Brazil. Whiteline is a trucking company that serves our transportation and logistics
needs, and was incorporated in Delaware in 1982. Clean Tech, a plastics recycling operation,
provides a source of clean, high quality post-consumer recycled plastic raw material, and was
incorporated in Michigan in 1989. TABB owns real estate and leases it to Packaging, Whiteline, and
Clean Tech. Plastipak Brazil produces injection-molded plastic preforms and blow molds rigid
plastic packaging in Paulinia and Manaus. Plastipak Brazil also maintains a sales office in Buenos
Aires, Argentina. Recently we expanded our operations to include Central Europe by organizing three entities.
Plastipak Slovakia s.r.o. and Plastipak Czech Republic s.r.o. were established as a wholly-owned
subsidiaries of Packaging in 2004 and 2003, respectively. Plastipak Czech Republic, s.r.o. serves
as a bottle manufacturing facility. Plastipak Slovakia s.r.o. serves as a technical and business
center. In 2003, Clean Tech Slovakia s.r.o. was established as a wholly-owned subsidiary of Clean
Tech. Clean Tech Slovakia s.r.o. will serve as a post-consumer recycling operation in Europe. To
this end, Clean Tech Slovakia s.r.o. acquired in October 2004 approximately 22 acres of land in the
Kechnec Industrial Park, located approximately 10 miles outside the city of Kosice in eastern
Slovakia, where we plan to construct this post-consumer recycling facility. Additionally, it is
intended that this facility will produce preforms for sale in Eastern and Central Europe. All of the Plastipak group of companies are headquartered in Plymouth, Michigan with the
exception of our entities in Central Europe and Plastipak Brazil and its subsidiaries. Plastipak is a leading manufacturer of plastic packaging containers for many of the worlds
largest consumer products companies. During fiscal 2004, we manufactured and distributed
approximately 8.5 billion containers worldwide for over 450 customers. In North America, we are the
exclusive supplier of plastic containers to Procter & Gamble for heavy-duty, liquid laundry
detergents and the largest supplier of plastic containers to Kraft Foods for their salad dressings,
barbecue sauces and grated cheeses. We are recognized by our customers as an innovator in
blow-molded package design and manufacturing, and we have obtained over 148 U.S. patents, many of
which are registered in foreign countries, for our state-of-the-art, package-manufacturing
processes. For 37 years, we have worked as a strategic partner with our customers in the early
stages of their new marketing initiatives. We provide integrated transportation and logistics
services, and satisfy our customers needs for recycling, reliability and dependability in plastic
packaging. For the year ended October 30, 2004, our revenue was $1.0 billion, our earnings were
$9.2 million and our EBITDA was $115.6 million. For reconciliation between net earnings and EBITDA
see Item 7, Managements Discussion and Analysis of Financial Condition and Results of
Operations. We have increased our revenue between 2000 and 2004 at a compounded annual growth rate (CAGR)
of approximately 9.4%. Further, all of our revenue growth has been organic. This continued growth
is being driven by the advantages of plastic over glass and metal (e.g., weight, strength and
shatter resistance), customer preferences for plastic and technological advances. We believe that
we are well positioned to capitalize on the conversion trend and to increase our market share in
our product categories. 1




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To meet the demand of our diverse customer base, we operate fifteen plants in the United
States, Brazil, Czech Republic and Slovakia. We locate our manufacturing plants near the filling
sites of our key customers. In addition to our track record of innovative design, superior customer
service and low-cost manufacturing processes, the proximity of our locations to our key customers
helps us retain our major customers. The total square footage of our manufacturing and warehousing
facilities is in excess of seven million square feet. We plan to use our relationships with key
customers to create new opportunities in North and South America and in Central Europe. OVERVIEW Because our broad range of product lines serves customers in diverse industries and geographic
regions, we believe our revenue and cash flow are relatively predictable, reducing our exposure to
market or economic fluctuations. We have increased revenue organically between 2000 and 2004 at a
CAGR of approximately 9.4%. To support our revenue growth, we have invested approximately $400.0
million in facilities, machinery and equipment over the last five years. We believe our commitment
to investing in state-of-the-art facilities, machinery and equipment has resulted in significant
additional capacity to serve our customers needs, and enables us to produce plastic containers at
competitive prices. In the year ended October 30, 2004, 66.2% of our revenue was generated by our top ten
customers, all of whom are under contracts having terms of between one and five years. The
customer, or we however, may terminate these contracts earlier under certain circumstances. Terms
and conditions of our customer contracts vary, but in general the contracts are requirements
contracts that do not obligate the customer to purchase any given amount of product from us. Our primary raw materials consist of PET and HDPE resins. Although revenue is affected by
fluctuations in resin prices, our gross margin is, in general, substantially unaffected by these
fluctuations. In general, industry practice and contractual arrangements historically have
permitted us to pass price increases through to our customers by means of corresponding changes in
product pricing. As a result, we believe that our gross profits are relatively insulated from resin
price fluctuations. We design, manufacture and distribute plastic containers in four product categories:  
    Carbonated and non-carbonated beverage;
    Consumer cleaning;
    Food and processed juices; and
    Industrial, automotive and agricultural. OUR PRODUCT CATEGORIES CARBONATED AND NON-CARBONATED BEVERAGE We are a leader in the beverage packaging industry. Our carbonated and non-carbonated beverage
business has continued to grow, as plastic has continued to make inroads in replacing other
packaging materials, generating 44.1% of our revenues for the year ended October 30, 2004. This
product category includes carbonated soft drinks (CSD), bottled water, juice drinks and beer. We
have seen significant growth in non-CSD demand for PET bottles, which are clear and lightweight,
and have become the standard for the bottled water industry. We are one of the largest suppliers of
PET bottles used for Pepsis Aquafina and Dr Peppers Deja Blue water. In addition, we were awarded
a long-term contract from the Buffalo Rock Company, the largest independently owned Pepsi
franchise, to supply CSD and bottled water containers out of our facility in McCalla, Alabama. We are also a leading producer of bottles for the CSD industry, where production complexity is
relatively low and production runs are relatively long. We are a leading supplier to Pepsi Cola
Bottlers of PET bottles for all of its Pepsi brands, including Pepsi, Diet Pepsi and Mountain Dew.
Our other large CSD customers include InBev (South Americas largest brewer and formerly known as
AmBev), Beverage Associates (Cadbury Beverages), Dr Pepper/Seven Up Bottling Group, and National
Beverage. 2




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CONSUMER CLEANING Consumer cleaning container sales provided 29.6% of our revenue for the year ended October 30,
2004. Within this product category, Procter & Gamble and Reckitt Benckiser are among our largest
customers. We are the sole supplier for all of Procter & Gambles branded heavy-duty, liquid
laundry detergent containers in North America, including Tide, Cheer, Era and Gain. We also supply
containers for various household products, such as Procter & Gambles Bounce and Febreze and
Reckitt Benckisers Lysol, Resolve and Electrasol. We partner with many of our customers to create
distinctive containers such as Procter & Gambles award-winning 300-oz. Tide dispenser bottle. We
have long been an industry leader in developing new proprietary plastic packaging for consumer
cleaning products. We also use many of our patents for value-added features such as in-mold
labeling, where a plastic or paper brand label is molded into and becomes part of the actual
plastic container in a single process, replacing glued-on, post-manufacture labeling. We use a
sophisticated preferential heating process to produce oval PET bottles suitable for trigger spray
applications, a product with growing popularity among consumers. We are pursuing significant growth
opportunities associated with the continued conversion to HDPE and PET packaging of household
cleaners. We continue to grow as liquid detergents, which are primarily packaged in plastic,
capture market share from powdered detergents, which are primarily packaged in cardboard. FOOD AND PROCESSED JUICES We produce HDPE, PET and polypropylene (PP) containers for customers in the food industry,
with a focus on customers for whom proprietary packaging designs are critical to product
identification and distinction. For the year ended October 30, 2004, food and processed juices
container sales accounted for 15.0% of our revenue. AC Humko, Kens Foods, Kraft Foods, Quaker
Oats, Marzetti, The Kroger Company and Tropicana are among our primary customers in this product
category. We are the largest supplier of plastic containers to Kraft Foods in North America for
their salad dressings, 10-oz. and 18-oz. squeeze mayonnaise and Miracle Whip, barbecue sauces and
grated cheeses. We also produce plastic containers for such popular processed foods as coffee
creamers, relishes and vegetable oils. Growth in this category has been driven by the continuing conversion from metal, glass and
paper containers to plastic bottles, as the functionality, safety and improving economics of
plastic became more apparent, and as consumer preference for plastic packaging continued to grow.
PET squeeze bottles for such condiments as salad dressing and mayonnaise have proven extremely
popular with consumers who recognize the added convenience that plastic provides. We are increasing our activity and presence in the production of PET bottles required for the
hot-fill packaging of shelf-stable juices and juice drinks. The hot-fill process, in which bottles
are filled at between 180 to 190 degrees Fahrenheit to kill bacteria, permits the shipment and
display of juices and juice drinks without refrigeration. The manufacturing process for hot-fill
PET packaging is more demanding than that used for cold-fill beverage containers, and typically
involves slower processing speeds, greater shape complexity and heavier weights. In addition, we
were awarded a long-term contract from Pepsi to supply Gatorade bottles. In the second quarter of
2004, we began servicing this business out of our facility in Garland, Texas. INDUSTRIAL, AUTOMOTIVE AND AGRICULTURAL Castrol, SOPUS Products (Equilon  Shell), Chevron/Texaco and Old World Industries (Peak) are
among our major customers in this product category. To increase our product diversity, we have
targeted end markets in this product category, including motor oil, antifreeze, windshield washer
fluid and other specialty automotive aftermarket products. We also supply containers for BEHR deck
cleaners and BASF chemical products. For the year ended October 30, 2004, industrial, automotive
and agricultural container sales generated 5.5% of our revenue. OUR COMPETITIVE STRENGTHS LONG-TERM RELATIONSHIPS WITH MAJOR CONSUMER PRODUCT COMPANIES IN DIVERSE, STABLE INDUSTRIES We enjoy long-standing relationships that average over 15 years with our top ten customers,
including Kraft Foods (over 15 years), Pepsi Cola (over 15 years), Procter & Gamble (over 25 years)
and Reckitt Benckiser (over 25 years). With our key customers, we have strategic-supply
arrangements, many of which have three years or more remaining before renewal. We attribute these
close relationships to our creative design and engineering capabilities, high level of customer
service, high quality products, efficient manufacturing, reliable delivery, speed to market and
experienced and stable management team and workforce. 3




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We supply several of these customers with 100% of their plastic
packaging needs nationally, regionally or for a specific brand, including Kraft Foods salad
dressings and Tide liquid laundry detergent. Our long-term relationships with our customers are strengthened by our ability to meet their
need for cooperative package design and development processes. Our skilled and creative engineering
staff and location of plants near key customers filling facilities encourage continued customer
loyalty. STRATEGICALLY LOCATED, STATE-OF-THE-ART OPERATING FACILITIES We serve our U.S. customers through a nationwide network of fifteen strategically located,
technologically advanced manufacturing facilities, through our Productivity Center in Jackson
Center, Ohio, through our Packaging Development Center in Medina, Ohio, and a network of
strategically located warehouse facilities. Brazil is served by manufacturing facilities in
Paulinia and Manaus. We began serving Central Europe with our new manufacturing facility in Prague,
Czech Republic. Our plants feature top quality injection molding machines, high speed blow molders
(including the multi-station GEM-PAK technology, which was developed and patented by our
manufacturing and engineering teams), computerized material and inventory handling, and machines
modified to allow the quick changeover of molds to meet varying customer needs. Over the last five
years, we have invested over $400.0 million in our facilities and state-of-the-art production
equipment, which have significantly reduced our costs. Our facilities are strategically located
near the filling sites of most of our key customers, which we believe enables us to facilitate
just-in-time inventory management, eliminate costly shipping and handling charges, reduce working
capital needs and foster the development of long-term manufacturing and distribution relationships.
We believe that locating our facilities near our key customers also creates entry barriers for our
competition. To enhance the quality of service extended to customers, we maintain a distribution
fleet of approximately 300 tractors and 1,100 trailers and offer same-day delivery to many of our
customers. TECHNOLOGY-DEVELOPMENT CAPABILITIES We are proud of our industry leading engineering and design capabilities and believe that we
often earn and retain business as a result of these skills. Our packaging development and
productivity centers have secured over 148 patents and continue to incorporate leading technology
into customer-driven applications. We also believe we have a sustainable competitive advantage
because we can produce prototypes of new designs with great speed and creativity for our customers.
We were able to design and deliver a prototype to a customer just two weeks after they first
explained their packaging concept to us. We have re-engineered existing manufacturing equipment to
allow quick mold changeovers, reducing the changeover process from days to hours, giving us greater
production flexibility. Our Packaging Development Center creates innovative product designs for our customers, and our
Productivity Center develops major process improvements in the manufacturing of our containers. Our
customers rely on our design and technical expertise because brand distinctive package design is a
critical component in many of their marketing programs. We have centered a substantial portion of
our growth strategy on customers that require custom, as opposed to stock, plastic containers as a
critical component of their marketing efforts. CUSTOMER-ORIENTED CULTURE In our 37 years in business, we have created a special culture focused on customer service.
Plastipaks engineering teams participate in the early phases of our key customers new marketing
initiatives. As an integrated team, we work alongside our customers to shape the design features of
new packaging containers and develop new processes and equipment to manufacture those containers.
Further, to ensure that our employees incentives are aligned with our customers objectives,
compensation for approximately 500 key-manufacturing employees with leadership responsibility is
based on operating and logistics performance measures. We believe these employee incentives will
further enhance our strong relationships with key customers, help us attract new customers and
allow us to control costs. MANAGEMENT DEPTH AND EXPERIENCE Our management team has an impressive track record of cultivating our customer base of major
consumer product companies, launching innovative product designs and achieving profitable, organic
growth. Our top 12 senior executives have on average 24 years experience in the industry and 20
years experience at Plastipak. Our executives are invested in our success through their over 90%
ownership of our equity (See Other Risks  Concentration of Ownership of our Common Stock  We are
Controlled by the Young Family). We believe our retention levels are among the highest in the
industry. 4




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Our management team includes engineers who have developed many of the processes that we have
patented and use to our competitive advantage. OUR BUSINESS STRATEGY Our strategy is to continue to increase our revenues and profitability and to further enhance
our leading industry positions. From fiscal 2000 and 2004, we increased our revenues by 43.1% to
$1.0 billion, our EBITDA by approximately $46.7 million to $115.6 million (see Managements
Discussion and Analysis of Financial Condition and Results of Operations) and our production
volume by 47.5% to 8.5 billion units, all through organic growth. We will continue to prudently
invest in production equipment only after establishing contracts with our customers and completing
our normal rigorous internal review process. The key components of our strategy include the
following objectives: CAPITALIZE ON CONTINUED INDUSTRY CONVERSION TO PLASTIC CONTAINERS We expect the conversion of food products from glass, paper and cans to plastic containers will
continue, which we believe is being driven by consumer preference, favorable total packaging
economics, technology advances and improved functionality. We are well positioned to capitalize on
the continuation of these trends. For example, these trends include hot-filled PET containers,
plastic beer containers, various snack, dairy and juice drink applications. In addition, we expect that over the next three to five years, as barrier technology
progresses, a portion of the single serving beer container market will be converted to plastic, for
use in venues where breakage is a concern. Brewers in the beer industry are strongly committed to
brand identity and differentiation, and would prefer serving their product to customers in
stadiums, concerts, sporting events, and at pools and beaches, in a way that permits them to
maintain that identity (rather than in paper or plastic cups). Single serving plastic beer bottles
offer that method. We also believe that as barrier technology for smaller size plastic containers progresses, we
will be positioned to compete for the conversion of single serving CSD packaging from aluminum cans
and 10-oz. glass to plastic, a 60 billion-unit market. Also, owing to environmental concerns about disposable plastic waste, the industries we serve
are requiring more high-quality, recycled content in their plastic packaging. We have significant
experience in producing high quality HDPE and PET containers with recycled content for various
customers. We own a dedicated facility that produces post-consumer recycled plastic resin that
offers us a secure source for recycled resin for our products. We believe we are well positioned to
capitalize on this growing consumer interest toward recycling. CONTINUE DEVELOPING VALUE-ADDED SERVICES AND PRODUCTS Supported by our technology and packaging development centers, we have successfully
researched, developed and launched new-patented technologies in our marketplace. We believe our
success in this area differentiates us from our competitors and will enable us to continue to gain
market share. For key customers, our technology development is an integral part of their overall
marketing strategy and has helped our customers drive innovation in the marketplace. EXPAND MARKET SHARE WITH KEY CUSTOMERS Our high-quality, low-cost manufacturing capabilities and track record of focused customer
service position us well to continue growing market share with our customer base of major consumer
product companies. As our customers continue to acquire new businesses and brands, we believe that
we will secure additional long-term contracts with them and grow our product offerings. Central to
our strategy to expand market share with key customers are the continued:  
    Delivery of focused customer service;
    Location of facilities close to customer plants;
    Innovation in packaging design; and
    Provision of low cost manufacturing processes. We also intend to target strategic new customers who require our core competencies in blow
and injection molding. 5




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OUR CUSTOMERS Substantially all of our sales are made to major branded consumer products companies,
primarily in the United States. Our customers demand a high degree of packaging design and
engineering to accommodate complex bottle shapes, performance requirements, materials, speed to
market and reliable delivery. As a result, many customers opt for long-term contracts, many of
which have terms of one to five years. All of our top ten customers are under contracts with terms
between one and five years. These contracts, however, may be terminated earlier by us or by our
customer upon a material breach of the contract or, in some cases in the event we determine it is
not in our best interest to change our terms and conditions through the procedures outlined in the
contract to meet competitive prices. Our customers have requested competitive price reductions from
time to time in the past under their contracts with us. In many cases, we are the sole supplier of all of a customers custom plastic bottle
requirements nationally, regionally or for a specific brand. Our largest customer is Procter &
Gamble. For fiscal 2002, 2003 and 2004, Procter & Gamble accounted for approximately 25%, 27% and
27% of our revenue, respectively. Our largest customers include: CUSTOMERCUSTOMER (a)
    
    PRODUCT CATEGORY
    
    SINCEProcter & Gamble
    
    Consumer Cleaning
    
    Mid 1970sReckitt Benckiser
    
    Consumer Cleaning
    
    Mid 1970sKraft Foods
    
    Food and Processed Juices
    
    Mid 1980sOld World
    
    Industrial, Automotive and Agricultural
    
    Mid 1980sThe Kroger Company
    
    Carbonated and Non-Carbonated Beverage,
Food and Processed Juices
    
    Late 1980sNational Beverage
    
    Carbonated and Non-Carbonated Beverage
    
    Late 1980sPepsi COBO
    
    Carbonated and Non-Carbonated Beverage
    
    Late 1980sAC Humko
    
    Food and Processed Juices
    
    Early 1990sPepsiAmerica
    
    Carbonated and Non-Carbonated Beverage
    
    Early 1990sInBev (Formerly known as AmBev)
    
    Carbonated and Non-Carbonated Beverage
    
    Mid 1990sBeverage Associates Cooperative(Cadbury Beverages)
    
    Carbonated and Non-Carbonated Beverage
    
    Mid 1990sDr Pepper Bottling Group
    
    Carbonated and Non-Carbonated Beverage
    
    Mid 1990sPepsi CPG
    
    Carbonated and Non-Carbonated Beverage
    
    Mid 1990sSOPUS Products
    
    Industrial, Automotive and Agricultural
    
    Late 1990sPolar Beverages
    
    Carbonated and Non-Carbonated Beverage
    
    Late 1990sQuaker Oats
    
    Carbonated and Non-Carbonated Beverage,
Food and Processed Juices
    
    Early 2000sTropicana
    
    Food and Processed Juices
    
    Early 2000sBuffalo Rock Company
    
    Carbonated and Non-Carbonated Beverage
    
    Late 2003
 (a) These companies include their predecessors, if applicable. While our business is concentrated with our major customers, we believe that our technological
skills and low-cost position, coupled with long-term partnering relationships with our customers,
make the complete loss of any of these major customers less likely. Our ten largest customers have
been associated with us for an average of over 15 years. RAW MATERIALS Resin and energy, the principal raw materials of our plastics business, have remained widely
available to our U.S. operations, though subject to considerable price volatility. The majority of
Plastipaks customer contracts allow us to pass through resin price increases on 30 days notice.
Since we usually receive 30 days notice of price increases from our resin suppliers, we are
generally able to tolerate price increases without substantial harm to profits, although contracts
containing pass-through provisions may not be available to us in the future. See Risks Related to Our
Business. As a major consumer of resin, we also leverage our bulk purchasing power to gain the
best possible pricing and terms we can obtain. Clean Tech has continued to be able to meet almost all of our needs for post-consumer recycled
material. Post-consumer recycled material prices tend to fluctuate in tandem with the virgin resin
markets, since demand for post-consumer recycled material increases as prices for virgin material
rise above those for post-consumer recycled material. 6




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Trade restrictions and currency devaluations have driven up the cost of imported resin in
Brazil. See Risks Related to Our Business. MANUFACTURING AND DISTRIBUTION We serve our customers with a wide range of state-of-the-art manufacturing capabilities and
services. Our fifteen manufacturing facilities are strategically located near the filling sites of
our key customers. We believe that our proximity to key customers enables us to work closely with
our customers, to facilitate just-in-time inventory management, to eliminate costly shipping and
handling charges, to reduce working capital needs and to foster the development of long-term
manufacturing and distribution relationships. Over the past decade, we have made significant investments in equipment and manufacturing
systems that have been designed to improve product quality and volume, and to enhance manufacturing
efficiencies. Our specially designed material handling systems, facilities layout and production
equipment give us the flexibility to manufacture products in standard production runs, as well as
respond to immediate and specialized customer needs. We continue to be an industry leader in production technologies for plastic containers by:  
    Efficiently manufacturing containers with specialized features, such as multiple layers,
barrier coatings, in-mold labeling and bottles designed to accommodate trigger sprayers;
    Improving manufacturing technology to allow ever increasing production volumes without
increasing the need for floor space (including the multi-station GEM-PAK, which we developed
and patented and which significantly increases production capability as compared to older
blow-molding machines); and
    Making innovative modifications to our blow molders to effect tooling changes in a matter
of hours, instead of days, allowing quick shifts in product mix. To meet demand and reduce our inventory costs and better serve our customers needs, our
facility managers receive real-time order and forecasting information from some of our customers. Our subsidiary, Whiteline, is a fully licensed ICC common carrier, and serves approximately
70% of our transportation needs. With Whitelines fleet of approximately 300 tractors and 1,100
trailers, we offer same-day delivery to many of our customers. PACKAGING DEVELOPMENT Our Productivity and Packaging Development Centers create innovative product designs for our
customers and process improvements in the manufacture of our containers. Our customers rely on our
design and technical expertise because package design is a critical component in many of their
marketing programs. We have an in-house staff of approximately 70 employees at our Productivity and
Packaging Development Centers dedicated to product development and improvement. These professionals
work closely with customers to develop new products and designs, often using sophisticated
computer-aided design software. We are capable of generating new product designs within weeks of customer requests. We also
believe that our customized designs help our customers differentiate their products in the
marketplace while also improving the appeal and performance of their products. We believe that
these capabilities have given us a significant competitive advantage in certain high-margin niche
container product markets where the ability to produce sophisticated package designs and deliver
high quality graphics at a reasonable cost is crucial to a products success. Additionally, we have
the engineering capabilities in-house to create new machines, which can more efficiently produce
the proprietary products developed for our customers. We plan to continue to invest in research and development efforts and to focus
on product, process and packaging innovation in order to remain competitive and better service our
customers.Packaging development expenses were approximately
$8.6 million, $8.0 million and $8.0
million for fiscal 2002, 2003 and 2004, respectively. 7




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SALES AND MARKETING We reach our large and diversified base of over 450 customers primarily through our direct
field sales force. A large number of our sales representatives focus their work on particular
product lines and national accounts, while the remaining field sales staff covers specific
geographic territories. We believe that our direct field sales force is able to focus on target
markets and create strong, enduring customer relationships. A direct sales force also allows us to
coordinate centralized pricing strategies. FOREIGN OPERATIONS Since 1996, we have expanded our operations into South America. We are working to leverage our
relationships with new customers in Brazil into new opportunities in North and South America. Our
initial operation was a plant located in suburban Sao Paulo (Paulinia), Brazil. We have a facility
in Manaus, an area with favorable tax incentives in the state of Amazonia, Brazil. We also have a
sales office in Buenos Aires, Argentina. Our Brazilian net revenue has grown 66% from 2000 to 2004
to $105.3 million for the year ended October 30, 2004. We believe that the global trend in the
conversion of glass, metal and paper to plastic packaging will continue, particularly in the
developing world, as consumer economies expand and industrialization continues. We have established three entities in Central Europe, Plastipak Czech Republic, s.r.o.,
Plastipak Slovakia, s.r.o. and Clean Tech Slovakia, s.r.o. Plastipak Czech Republic, s.r.o. serves
as a bottle manufacturing facility. Production for one of our major customers began in the fall of
2004. Currently we employ 15 employees and plan to hire approximately 10 additional people to
support the new site. Plastipak Slovakia is serving as our technical and business center for Europe. Plastipak
Slovakia has begun providing sales, marketing and administrative services for Central Europe.
Certain machine parts have already been ordered through this office and are under evaluation at our
equipment development center. In October 2004, Clean Tech Slovakia s.r.o. acquired from the Municipality of Kechnec,
Slovakia, approximately 22 acres of land in the Kechnec Industrial Park, located approximately 10
miles outside the city of Kosice. In addition, it received written notice from the Recycling Fund,
a business development arm of the federal government of Slovakia, of its award of 100 million
Slovak Crowns, approximately U.S. $3.0 million, to be used in accordance with Clean Tech Slovakia
s.r.o.s application to the Recycling Fund for its projects in Slovakia. We plan to construct a
post-consumer recycling facility and produce preforms for sale in Eastern and Central Europe from
this location. It is anticipated that the total initial investment will not exceed $20.0 million. COMPETITION We face substantial competition throughout our four product categories from a number of
well-established national and regional companies. Our primary national competitors include Amcor
PET Packaging, Graham Packaging Company, Consolidated Container Company, Constar International,
Ball Plastics, Liqui-Box Corporation and Silgan Holdings, Inc. In addition, we face substantial
competition from a number of captive packaging operations with significant in-house bottling and
blow-molding capacity, such as Dean Foods, The Kroger Company, The Perrier Group of America and
Suiza Foods. INTELLECTUAL PROPERTY We own over 148 U.S. patents, and have over 95 patent applications currently pending at the
United States Patent and Trademark Office. In addition, over 268 foreign patents have been issued
and are currently active, and approximately 134 are pending, although not all of our U.S. patents
are registered in foreign countries. Our patents include patents for our GEM-PAK molding system, a
gas clamping electronically controlled molding machine. We are continually developing new patents. Because our patented packaging designs create
goodwill and result in product differentiation, we believe that these intellectual property assets
are important to our business. Our business is not dependent on any one of these patents, since
plastics manufacturing technology continues to move forward rapidly. Patent protection, however,
serves to keep the new technologies we develop proprietary, giving us a short, but important,
window of competitive advantage. 8




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In addition, we rely on proprietary know-how, continuing technological innovation and other
trade secrets to develop products and maintain our competitive position. We attempt to protect our
proprietary know-how and our other trade secrets by executing, when appropriate, confidentiality
agreements with our customers and employees. We cannot assure you that our competitors will not
discover comparable or the same knowledge and techniques through independent development or other
means. We have also licensed or sub-licensed certain of our intellectual property rights to third
parties. These range from trimming systems that eliminate any plastic waste or chips from
containers to our unique in-mold labeling equipment for bottle decoration. Some bottle designs
are also licensed for revenue generation. In some cases, patented bottle designs are assigned or
used by our customers, as their needs arise. Since our unique customer relationships allow us to be
in on the ground floor in bottle design development, our customers often attain patent coverage for
our joint design efforts. ENVIRONMENTAL COMPLIANCE We are subject to national, state, local and foreign laws and regulations that impose
limitations and prohibitions on the discharge and emission of, and establish standards for the use,
disposal, and management of, some kinds of materials and waste, and impose liability for the costs
of investigating and cleaning up, and damages resulting from, present and past spills, disposals,
or other releases of hazardous substances or materials. Environmental laws and regulations can be
complex and may change often. Compliance with these laws and regulations can require significant
capital expenditures, and violations may result in substantial fines and penalties. In addition,
environmental laws in the United States, such as the Comprehensive Environmental Response,
Compensation and Liability Act, impose liability on several grounds for the investigation and
cleanup of contaminated soil, groundwater, and buildings, and for damages to natural resources, at
a wide range of properties. For example, contamination at properties formerly owned or operated by
us, as well as at properties we currently own or operate, and properties to which hazardous
substances were sent by us, may result in liability for us under these environmental laws and
regulations. As a manufacturer, we also have an inherent risk of liability under environmental laws
and regulations regarding ongoing operations. From time to time, we have been subject to claims asserted against us by regulatory agencies
for environmental matters relating to the generation and disposal of hazardous substances and
wastes. Some of these claims have related to properties or business lines acquired by us after a
release has occurred. In each known instance, however, we believe that the claims asserted against
us, or obligations incurred by us, will not result in a material adverse effect upon our business,
financial position or results of operations. Nonetheless, there can be no assurance that activities
at these facilities or facilities acquired in the future, or changes in environmental laws and
regulations, will not result in additional environmental claims being asserted against us or
additional investigations or remedial actions being required. In addition, a number of governmental authorities in the United States and in other countries
have enacted and are expected to continue to enact legislation aimed at reducing the amount of
disposed plastic wastes. These programs have included, for example, mandating rates of recycling
and/or the use of recycled materials, imposing deposits or taxes on plastic packaging material,
and/or requiring retailers or manufacturers to take back packaging used for their products. This
legislation, as well as voluntary initiatives similarly aimed at reducing the level of plastic
wastes, could reduce the demand for some plastic packaging, result in greater costs for plastic
packaging manufacturers or otherwise affect our business. To date, these initiatives and
developments have not materially and adversely affected us. Some consumer products companies
(including some of our customers) have responded to these governmental initiatives and to perceived
environmental concerns of consumers by, for example, using bottles made in whole or in part of
recycled plastic. Our subsidiary, Clean Tech, is among the top 20 suppliers of post-consumer
recycled materials in the United States. Clean Tech supplies the majority of Plastipaks
post-consumer recycled materials needs. EMPLOYEES We have approximately 3,700 non-union employees in the U.S. and 150 unionized employees in
Brazil. To support our operations in Europe, we have employed approximately 15 employees. Given
the seasonality of the plastic bottling industry, we expect to continue to employ temporary and
seasonal workers during peak production months, in both the United States and Brazil. We have not
had any material labor disputes in the past five years and consider our relations with our
employees to be good. 9




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RISKS RELATED TO OUR BUSINESS COMPETITION  WE FACE CONSIDERABLE COMPETITIVE RISKS. We face substantial competition from a number of well-established national and regional
companies. Our primary national competitors include Amcor PET Packaging, Consolidated Container
Company, Constar International, Graham Packaging Company, Ball Plastics, and Silgan Holdings, Inc.
In addition, we face substantial competition from a number of captive packaging operations with
significant in-house bottling and blow-molding capacity, such as Dean Foods, The Kroger Company,
The Perrier Group of America and Suiza Foods. Many of our competitors have financial and other
resources that are substantially greater than ours. In order to compete successfully, we will need
to continue to make substantial capital expenditures to develop new products and streamline our
manufacturing processes. Competition in our industry could negatively affect our business
operations. CONCENTRATION OF CUSTOMERS  WE HAVE SEVERAL MAJOR CUSTOMERS, THE LOSS OF WHICH COULD HAVE A
MATERIAL ADVERSE EFFECT ON US. For the fiscal year ended October 30, 2004, our largest single customer accounted for
approximately 27% of our revenue. Our ten largest customers accounted for approximately 66.2% of
our revenue. The termination by any of these customers of their relationship with us could have a
material adverse effect on our business and results of operations. All of our top ten customers are
under contracts with terms of between one and five years. In general, these contracts are
requirements contracts that do not obligate our customers to purchase any specific minimum product
from us. These contracts may be terminated by us or by our customer prior to their expiration dates
upon a material breach of the contract or, in some cases, in the event we determine it is not in
our best interest to change our terms and conditions through the procedures outlined in the
contract to meet competitive prices. Our customers have requested competitive price reductions from
time to time in the past under their contracts with us. ECONOMIC AND POLITICAL RISK IN SOUTH AMERICA AND EUROPE  WE HAVE SPECIAL RISKS ASSOCIATED WITH OUR
SOUTH AMERICAN AND EUROPEAN OPERATIONS. We have significant operations in Brazil. We currently have two plants located in Brazil. We
also have a sales office in Buenos Aires, Argentina. For the year ended October 30, 2004, net sales
of our Brazilian subsidiaries totaled approximately $105.3 million, representing approximately
10.0% of our worldwide revenue for such period. We experienced a net loss of approximately $6.0
million on our Brazilian sales for the year ended October 30, 2004. Our results to date in Brazil have been less than we expected, as currency devaluations, high
interest rates, inflation, import restrictions and a legal system which makes it difficult to
enforce contracts have reduced both revenue and profits. Import duties on equipment needed to
upgrade our production capabilities in Brazil are significant. We are working diligently to improve
and expand our operations in Brazil to make them profitable, but we cannot assure you that our
Brazilian operations will ever become profitable. See Managements Discussion and Analysis of
Financial Condition and Results of Operations and Business  Foreign Operations. The following factors create higher risks to our South American and European operations than
we experience in the United States:  
    High nominal interest rates;
    Limitations on conversion of foreign currencies into U.S. dollars or remittance of dividends and other payments;
    Imposition or increase of withholding and other taxes on remittances and other payments;
    Inability to fully utilize foreign tax credits and fully pass through foreign losses here
in the U.S. due to limitations imposed by U.S. tax laws;
    The potential for political instability and inflation and the imposition or increase of
restrictions on investments and other restrictions by foreign governments;
    Inability of our foreign subsidiaries to enforce certain of their key agreements through
the legal systems in South America and Central Europe; 10




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
    and changes in tax laws. CURRENCY FLUCTUATIONS  WE HAVE SIGNIFICANT FOREIGN EXCHANGE RISKS WITH RESPECT TO OUR BRAZILIAN
AND EUROPEAN OPERATIONS THAT WE CANNOT CONTROL. In general, our results of operations are partially affected by changes in foreign exchange
rates. Our Brazilian contracts are priced in U.S. dollars; however, we invoice our customers in
the Brazilian Real and Argentine Peso, respectively. We have experienced several significant
devaluations of Brazils currency, despite make whole agreements in our contracts, some of our
customers agreed to only partial price increases. These increases accounted for only a portion of
the cost to us of devaluation, leading to a reduction in our gross margin in Brazil. Fluctuations in the value of the U.S. dollar may adversely affect our results of operations.
Because our consolidated financial results are reported in dollars, if we generate sales or
earnings in other currencies the translation of those results into dollars can result in a
significant increase or decrease in the amount of those sales or earnings. In addition, our debt
service requirements are primarily in U.S. dollars, even though a portion of our cash flow is
generated in the Brazilian Real. Significant changes in the value of the Brazilian Real relative to
the U.S. dollar could have a material adverse effect on our financial condition and our ability to
meet interest and principal payments on U.S. dollar denominated debt, including the exchange notes
and borrowings under the Amended Credit Agreement. Given the volatility of exchange rates, we may
not be able to effectively manage our currency transaction and/or translation risks. It is expected
that the volatility in currency exchange rates will continue to have a material effect on the
financial condition or results of operations of our foreign subsidiaries. We expect that the
portion of our revenue denominated in non-dollar currencies will continue to increase in future
periods. See Managements Discussion and Analysis of Financial Condition and Results of Operations
 Effects of Changes in Exchange Rates. In addition, the value of our investment in Plastipak
Brazil is partially a function of the currency exchange rate between the U.S. dollar and the
Brazilian Real. Any change in value of the Euro as compared to the U.S. dollar may impact start-up costs and
results of operations associated with our new activities in Central Europe. We have not executed
hedge transactions to endeavor to reduce our exposure to foreign currency exchange rate risks, and
do not believe that hedging is a viable option for us in the immediate future. FUTURE CAPITAL REQUIREMENTS  IF WE CANNOT OBTAIN THE FUNDS TO MAKE THE SIGNIFICANT CAPITAL
EXPENDITURES THAT OUR BUSINESS WILL REQUIRE, WE MAY NOT BE ABLE TO MAINTAIN OUR CURRENT LEVEL OF
OPERATIONS OR GROW OUR BUSINESS. To fund our growth plans and maintain our current level of operations, we will continue to
make substantial capital expenditures for product development and improvements in our manufacturing
processes. In fiscal 2003 and 2004, we made capital expenditures, including the assumption of
capital leases, of approximately $107.3 million and $121.6 million, respectively. We estimate that
capital expenditures in each of fiscal 2005 and 2006 will be approximately $85.0 million and $70.0
million, respectively. In addition, we may be required to make additional investments as the
demands of our industry and our customers evolve. We may not be able to fund any necessary
investments, and the failure to do so could have a material adverse effect on our business,
financial condition and results of operations. ACQUISITION STRATEGY  WE COULD FACE CONSIDERABLE BUSINESS AND FINANCIAL RISKS IN IMPLEMENTING OUR
ACQUISITION STRATEGY. Our growth strategy may include acquisitions of other consumer goods packaging businesses,
although we do not currently have any commitments or agreements with respect to any such
acquisitions. Risks we could face with respect to acquisitions include:  
    Problems in assimilating operations, technologies, services and products;
    Diversion of managements attention from existing business concerns; and
    Incurrence of debt and contingent liabilities. Any of these risks could have a material adverse effect upon our business, financial condition
and results of operations. We may not be successful in consummating future acquisitions on
favorable terms or at all. 11




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EXPOSURE TO FLUCTUATIONS IN RESIN PRICES AND DEPENDENCE ON RESIN SUPPLIERS  WE ARE EXPOSED TO THE
RISKS ASSOCIATED WITH FLUCTUATIONS IN THE PRICES OF RESIN. We face the risk that our access to resin is interrupted or that we may not be able to
purchase it at competitive prices. We use large quantities of plastic resins in manufacturing our
products. Plastic resins accounted for a major portion of our cost of goods sold in fiscal 2004.
Plastic resins are subject to substantial price fluctuations caused by shortages in supply and
changes in the prices of natural gas, crude oil and other petrochemical products from which these
resins are produced. We may experience supply interruptions in the future. Our purchases of raw
materials are subject to market prices. Although we generally have pass through provisions in many
of our customer contracts, market conditions may not permit us to pass through any future raw
material price increases. The inability to procure resin or significant increases in resin prices,
coupled with an inability to promptly pass such increases on to customers, would have a material
adverse effect on our financial condition and results of operations. Furthermore, a significant
increase in resin prices could slow the pace of conversion from paper, glass and metal containers
to plastic containers to the extent that these costs are passed on to the customer. See
Managements Discussion and Analysis of Financial Condition and Results of Operations and
Business  Raw Materials. DEPENDENCE ON KEY PERSONNEL  WE ARE DEPENDENT ON SEVERAL KEY SENIOR MANAGERS, THE LOSS OF WHOM
COULD HAVE A MATERIAL EFFECT ON OUR BUSINESS AND DEVELOPMENT. Our business and our future success depend to a significant extent upon the continued service
of our executive officers and senior managers. In particular, the loss of the services provided by
William C. Young, William A. Slat, Michael J. Plotzke, Gene W. Mueller, Pradeep Modi, Thomas
Busard, Frank Pollock, Richard Darr, J. Ronald Overbeck, Leann M. Underhill and David Daugherty,
among others, could have a material adverse effect on our business and results of operations. Our
failure to retain such key personnel could have a material adverse effect on our business,
financial condition and results of operations. OTHER RISKS CONCENTRATION OF OWNERSHIP OF OUR COMMON STOCK  WE ARE CONTROLLED BY THE YOUNG FAMILY. William C. Young, our Chief Executive Officer, and members of his immediate family own over
90% of our common stock on a fully diluted basis and, therefore, control our board of directors. As
a result, the Young family will continue to have the ability to elect and remove directors and
determine the outcome of matters presented for approval by our shareholders. Circumstances may
occur in which the interests of the Young family could be in conflict with the interests of the
holders of our 10.75% Senior Notes. REGULATION  OUR OPERATIONS AND PRODUCTS ARE SUBJECT TO SUBSTANTIAL ENVIRONMENTAL, HEALTH AND
SAFETY REGULATIONS. Our operations and properties are subject to stringent federal, state, local and foreign laws
and regulations relating to pollution, environmental protection and workplace health and safety.
Such laws and regulations frequently change, are different in every jurisdiction, and can impose
substantial fines and sanctions for violations. Our operations must comply with these laws, and
must adapt to regulatory requirements in all jurisdictions in which we operate as these
requirements change. Environmental laws generally impose liability for costs to investigate and remediate
contamination without regard to fault and, under certain circumstances, liability may be joint and
several resulting in one responsible party being held responsible for the entire obligation. We
have incurred, and may continue to incur, such costs related to at least two of our properties. Although we believe our operations and properties are substantially in compliance, new laws
and regulations, stricter enforcement or interpretation of existing laws and regulations or the
discovery of previously unknown contamination or previously unknown off-site liability, the
imposition of new clean-up requirements, or claims for property damage or personal injury arising
from environmental matters could require us to incur costs or become the basis for the new or
increased liabilities that could have a material adverse effect on our business, financial
condition or results of operations. 12




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Legislation concerning mandatory rates of recycling, mandatory use of recycled materials,
deposits or taxes on plastic packaging material or requirements that retailers or manufacturers
take back packaging used for their products could reduce the demand for certain plastic packaging,
result in greater costs for plastic packaging manufacturers and, therefore, have a material adverse
effect on our business, financial condition and results of operations. PRODUCTS LIABILITY RISK  WE FACE PRODUCTS LIABILITY RISK. IN ADDITION, OUR BUSINESS IS EXPOSED TO
THE PRODUCTS LIABILITY RISK OF OUR CUSTOMERS . Because our plastic containers are used for consumer products, our business is exposed to
products liability risk and the risk of negative publicity. The amount and scope of our product
liability insurance may not be adequate to cover a products liability claim that is successfully
asserted against us. In addition, we are exposed to the products liability risk and negative publicity of our
customers and suppliers. Because many of our customers are carbonated soft drink, dairy, water and
branded consumer products companies, with their own products liability risk, our sales may decline
if any of our or our competitors customers are sued on a products liability claim. We may also
suffer a decline in sales from the negative publicity associated with such a lawsuit or with
adverse public perceptions in general regarding our products or our customers products in our
containers. INTELLECTUAL PROPERTY PROTECTION  WE ENJOY LIMITED PROTECTION FOR OUR INTELLECTUAL PROPERTY, AND
ARE SUBJECT TO A PATENT INFRINGEMENT CLAIM. We have a number of patents covering design and construction of our products and
manufacturing equipment. Patents do not ensure that competitors will not develop competing products
or infringe upon our patents, or that the patents will withstand challenge in litigation. The costs
of litigation to defend our patents could be substantial and may outweigh the benefits of enforcing
our rights under our patents. Patent laws of foreign countries may offer less protection than the
patent laws of the United States. We also rely on unpatented proprietary technology, trade secrets and know-how. Others may
independently develop the same or similar technology or otherwise obtain access to our unpatented
technology. If we are unable to maintain the proprietary nature of our technologies, we could be
materially adversely affected. In 1999, North American Container filed a lawsuit against us and 41 other defendants claiming
some of our products infringe one of their patents and requesting an unspecified amount in damages.
See Item 3  Legal Proceedings. Discovery has been completed. On February 24, 2004, the U.S.
District Court entered a judgment of non-infringement of all accused containers for all defendants,
and a judgment of invalidity for some of the claims. North American Container has appealed this
judgment to the U.S. Court of Appeals for the Federal Circuit and the appeal is in process. If we
do not prevail in the litigation, our business and financial condition could be materially
adversely affected. 
 ITEM 2. PROPERTIES Our principal executive offices are located at 41605 Ann Arbor Road, Plymouth, Michigan 48170.
We occupy a number of owned and leased properties located throughout the United States, Brazil,
Argentina and the Slovak and Czech Republics for our technical centers, manufacturing plants, corporate
headquarters and sales offices. We currently utilize 42 facilities,
16 of which we own and 26 of
which we lease. Our interests in all of our U.S. facilities are pledged to secure our current
credit facility. Of these 42 facilities, 38 are located in the United States, 2 are located in
South America and 2 are located in Central Europe. The Company acquired two additional parcels of land in 2004, one in Brazil and one in
Slovakia. In Brazil, we foreclosed in payment of a debt on a piece of land aggregating 132,396
square feet in the state of Pernambuco. We currently lease the approximately 45,208 square foot
warehouse facility to a third party. In Slovakia, Clean Tech Slovakia s.r.o. acquired in October
2004 approximately 22 acres of land in the Kechnec Industrial Park, located approximately 10 miles
outside the city of Kosice in eastern Slovakia, from the Municipality of Kechnec. We plan to
construct a post-consumer recycling facility and manufacture performs for sale in Eastern and
Central Europe at this location. 13




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The following table lists the location, square footage, and principal use and ownership interest in
our facilities. LOCATION
    
    SQUARE FOOTAGE
    
    PRINCIPAL USE
    
    OWNED/LEASEDJackson Center, OH
    
    66,000
    
    Productivity Center
    
    OwnedMedina, OH
    
    13,200
    
    Packaging & Development Center
    
    OwnedChampaign, IL
    
    683,300
    
    Manufacturing
    
    OwnedDundee, MI
    
    135,300
    
    Manufacturing
    
    OwnedEast Longmeadow, MA
    
    262,700
    
    Manufacturing
    
    OwnedGarland, TX
    
    415,900
    
    Manufacturing
    
    OwnedHighland, TX
    
    84,100
    
    Manufacturing
    
    OwnedJackson Center, OH
    
    995,300
    
    Manufacturing
    
    OwnedLima, OH
    
    126,600
    
    Warehouse
    
    OwnedManaus, Brazil
    
    82,600
    
    Manufacturing
    
    OwnedMcCalla, AL
    
    296,300
    
    Manufacturing
    
    OwnedMedina, OH
    
    279,600
    
    Manufacturing
    
    OwnedPaulinia, Brazil
    
    177,400
    
    Manufacturing
    
    OwnedPineville, LA
    
    566,000
    
    Manufacturing
    
    OwnedPlant City, FL
    
    78,400
    
    Manufacturing
    
    OwnedWestland, MI
    
    184,600
    
    Manufacturing
    
    OwnedAlsip, IL
    
    204,586
    
    Manufacturing, Warehouse
    
    LeasedAlsip, IL
    
    100,000
    
    Warehouse
    
    LeasedAtlanta, GA
    
    76,800
    
    Warehouse
    
    LeasedAyer, MA
    
    77,000
    
    Warehouse
    
    LeasedCanton, MI
    
    35,000
    
    Warehouse
    
    LeasedCanton, MI
    
    24,174
    
    Warehouse
    
    LeasedChampaign, IL
    
    187,000
    
    Warehouse
    
    LeasedChampaign, IL
    
    208,630
    
    Warehouse
    
    LeasedChampaign, IL
    
    85,000
    
    Warehouse
    
    LeasedChampaign, IL
    
    145,000
    
    Warehouse
    
    LeasedChampaign, IL
    
    8,285
    
    Warehouse
    
    LeasedDallas, TX
    
    208,712
    
    Warehouse
    
    LeasedGarland, TX
    
    200,000
    
    Warehouse
    
    LeasedChannelview, TX
    
    140,000
    
    Warehouse
    
    LeasedLakeland, FL
    
    127,200
    
    Warehouse
    
    LeasedLima, OH
    
    100,000
    
    Warehouse
    
    LeasedLima, OH
    
    100,000
    
    Warehouse
    
    LeasedLima, OH
    
    60,000
    
    Warehouse
    
    LeasedMedina, OH
    
    75,500
    
    Warehouse
    
    LeasedMedina, OH
    
    6,000
    
    Warehouse
    
    LeasedMedina, OH
    
    74,000
    
    Warehouse
    
    LeasedRomulus, MI
    
    246,750
    
    Warehouse
    
    LeasedWestland, MI
    
    12,000
    
    Warehouse
    
    LeasedPlymouth, MI
    
    32,000
    
    Truck Garage
    
    LeasedPlymouth, MI
    
    129,783
    
    Headquarters
    
    LeasedBratislava, Slovak. Rep.
    
    10,000
    
    Development Center
    
    LeasedPrague, Czech Rep.
    
    80,000
    
    Manufacturing
    
    Leased
 We believe that our plants, which are of varying ages and types of construction, are in good
condition, are suitable for our operations and generally provide sufficient capacity to meet our
requirements for the foreseeable future. 
 ITEM 3. LEGAL PROCEEDINGS We are a party to various litigation matters arising in the ordinary course of our business.
We cannot estimate with certainty the ultimate legal and financial liability of this litigation but
we believe, based on our examination of these matters, experience to date and discussions with
counsel, that the ultimate liability will not be material to our business, financial condition or
results of operations. 14




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In the fall of 1999, North American Container, Inc. (NAC) filed suit in the U.S. District
Court for the Northern District of Texas (Civil Action No. 3-99CV1749-D), claiming damages in an
unspecified amount against Plastipak and 41 other defendants for the alleged infringement of NAC
U.S. Patent No. 5,072,841. On April 4, 2000 this patent reissued as patent RE 36,639, with 14 new
claims. The new claims were the primary focus of NACs case against Plastipak and the major
manufacturers, as well as major food and beverage distributors. Plastipak and the other defendants
are vigorously defending this claim on the bases of both the invalidity of the patent and on
non-infringement. On February 24, 2004, the U.S. District Court entered a judgment of
non-infringement of all accused containers for all defendants, and a judgment of invalidity for
some of the claims. North American Container has appealed this judgment to the U.S. Court of
Appeals for the Federal Circuit and the appeal is in process. It is our continued belief that
Plastipak and other defendants will prevail on appeal in this case. The existing reserve will be
maintained, decreased, or increased based on contemporaneously evaluating the status of the ongoing
appeal. Our future cost of defending this action for a protracted period of time could exceed $1.0
million. 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. 
 PART II 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
REPURCHASES OF EQUITY SECURTIES There is no public market for Plastipak Holdings, common equity. On October 27, 2004, Gene Mueller exercised 100 options under the 2002 Restricted Stock Bonus
Plan. See Item 11, Executive Compensation. We received $100.00 of net proceeds upon Mr.
Muellers exercise of these options. The issuance of 100 shares of common stock to Mr. Mueller
upon the exercise of these options was exempt from registration under Section 4(2) of the
Securities Act of 1933. 15




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ITEM 6. SELECTED FINANCIAL DATA The following selected consolidated financial data for the five fiscal years ended October 30,
2004 were derived from our audited consolidated financial statements. The selected consolidated
financial data should be read in conjunction with the consolidated financial statements and the
related notes, Managements Discussion and Analysis of Financial Condition and Results of
Operations and other financial information included elsewhere in this Form 10-K. Year Ended2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004(dollar amounts in thousands)Statements of Operations Data:Total Revenues
    
    $
    701,872
    
    
    $
    809,774
    
    
    $
    812,190
    
    
    $
    897,829
    
    
    $
    1,004,045Costs and expenses
    
    
    625,691
    
    
    
    709,012
    
    
    
    697,001
    
    
    
    777,670
    
    
    
    874,301Gross Profit
    
    
    76,181
    
    
    
    100,762
    
    
    
    115,189
    
    
    
    120,159
    
    
    
    129,744Selling, general and
administrative expenses
    
    
    50,958
    
    
    
    64,477
    
    
    
    68,506
    
    
    
    74,965
    
    
    
    80,034Operating profit
    
    
    25,223
    
    
    
    36,285
    
    
    
    46,683
    
    
    
    45,194
    
    
    
    49,710Interest expense
    
    
    27,028
    
    
    
    28,956
    
    
    
    35,099
    
    
    
    36,902
    
    
    
    35,780Other income
    
    
    (1,418
    )
    
    
    (3,102
    )
    
    
    (1,840
    )
    
    
    (612
    )
    
    
    (253
    )(Loss) earnings before income taxes
and change in accounting principle
    
    
    (387
    )
    
    
    10,431
    
    
    
    13,424
    
    
    
    8,904
    
    
    
    14,183Income taxes
    
    
    (2,180
    )
    
    
    3,284
    
    
    
    4,831
    
    
    
    4,543
    
    
    
    4,993Earnings (loss) before cumulative effect
of change in accounting principle
    
    
    1,793
    
    
    
    7,147
    
    
    
    8,593
    
    
    
    4,361
    
    
    
    9,190Cumulative effect of change in
accounting principle (a)
    
    
    
    
    
    
    3,125
    
    
    
    
    
    
    
    
    
    
    
    Net earnings
    
    $
    1,793
    
    
    $
    10,272
    
    
    $
    8,593
    
    
    $
    4,361
    
    
    $
    9,190Supplemental Measures:EBITDA (b)
    
    $
    68,886
    
    
    $
    84,099
    
    
    $
    96,541
    
    
    $
    102,156
    
    
    $
    115,610Ratio of net debt to EBITDA (c)
    

    
    3.73
    x
    
    
    3.32
    x
    
    
    3.33
    x
    
    
    3.42
    x
    
    
    3.29
    xRatio of EBITDA to interest expense
    
    
    2.55
    x
    
    
    2.90
    x
    
    
    2.75
    x
    
    
    2.77
    x
    
    
    3.23
    xBalance Sheet Data (at end of period):Adjusted working capital (d)
    
    $
    23,920
    
    
    $
    31,480
    
    
    $
    31,772
    
    
    $
    22,580
    
    
    $
    19,782Total assets
    
    
    421,108
    
    
    
    505,055
    
    
    
    569,598
    
    
    
    604,683
    
    
    
    669,857Total debt
    
    
    260,200
    
    
    
    333,062
    
    
    
    387,815
    
    
    
    386,895
    
    
    
    391,925Stockholders equity
    
    
    22,592
    
    
    
    29,467
    
    
    
    37,284
    
    
    
    40,945
    
    
    
    48,810
   (a)
    A gain was recorded for a change in accounting principle due to a change in accounting
for parts and supplies. Through October 30, 1999, Packaging expensed parts and supplies
utilized in its manufacturing facilities. Effective October 31, 1999, these items are
inventoried and are charged to expense when used. Due to increased volume of purchases of
such items, management believes that this method is preferable and it provides for a better
matching of revenues and expenses. The financial statements for the years preceding the
fiscal year ended October 28, 2000 have not been restated. See Note N to the consolidated
financial statements included in Plastipaks 10-K for fiscal year ending November 2, 2002
filed on January 31, 2003.  (b)
    EBITDA represents earnings (loss) before interest expense, income taxes, depreciation and
amortization. EBITDA is not presented as, and should not be considered an alternative
measure of operating results or cash flows from operations (as determined by generally
accepted accounting principles), but it is a widely accepted financial indicator of a
companys ability to incur and service debt. While commonly used, however, EBITDA is not
identically calculated by companies presenting EBITDA and is, therefore, not necessarily an
accurate means of comparison and may not be comparable to similarly titled measures
disclosed by our competitors.  (c)
    Net debt equals total debt less cash and cash equivalents.  (d)
    Adjusted working capital represents current assets less cash and cash equivalents minus
current liabilities less short-term debt and current portion of long-term debt. 16




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS Managements discussion and analysis should be read in conjunction with the consolidated
financial statements and the accompanying notes. Please refer to the Risk Related to Our
Business section for a summary of factors that could cause actual results to differ materially
from those projected in a forward-looking statement. As you read the material below, we urge you
to carefully consider our financial statements and related information provided herein. All statements other than statements of historical fact included in this Form 10-K, including
statements regarding our future financial position, economic performance and results of operations,
as well as our business strategy, budgets and projected costs and plans and objectives of
management for future operations are forward-looking statements. In addition, forward-looking
statements generally can be identified by the use of forward-looking terminology such as may,
will, expect, intend, estimate, anticipate, believe, or continue or the negative
thereof or variations thereon or similar terminology. Although we believe that the expectations
reflected in such forward-looking statements are reasonable, we can give no assurance that such
expectations will prove to have been correct. Important factors that could cause actual results to
differ materially from our expectations include, without limitation, risks associated with our
Brazilian operations, competition in our product categories (including the impact of possible new
technologies and the impact of such competition on pricing, revenues and margins), our high degree
of leverage and substantial debt service obligations, the restrictive covenants contained in
instruments governing our indebtedness, our exposure to fluctuations in resin and energy prices,
our dependence on significant customers and the risk that customers will not purchase our products
in the amounts we expect, our dependence on key management and our labor force and the material
adverse effect that could result from the loss of their services. All forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by
the cautionary statements set forth in this paragraph. Overview Plastipak Holdings, Inc. (Plastipak) is a privately held Michigan corporation that was
formed in 1998 to act as a holding company for several related companies. On October 30, 1999,
Plastipak acquired all of the equity interests in Plastipak Packaging, Inc. (Packaging),
Whiteline Express, Ltd. (Whiteline), Clean Tech, Inc. (Clean Tech) and TABB Realty, LLC
(TABB), and a portion of the equity interests of Plastipak Packaging do Brasil, Ltda (Plastipak
Brasil), through a reorganization (the Reorganization). Packaging, our principal operating
company whose business commenced operations in 1967, designs and manufactures rigid plastic
containers, and was incorporated in Delaware in 1982. Packaging also owns the remainder of
Plastipak Brasil. Whiteline is a trucking company serving our transportation and logistics needs,
and was incorporated in Delaware in 1982. Clean Tech, a plastics recycling operation, provides a
source of clean, high quality post-consumer recycled plastic raw material, and was incorporated in
Michigan in 1989. TABB owns real estate and leases it to Packaging, Whiteline, and Clean Tech.
Plastipak Brasil produces injection-molded plastic preforms and blow molds rigid plastic packaging
in Paulinia, Brazil and produces injection-molded plastic preforms in Manaus, Brazil. Plastipak
Brasil also maintains a sales office in Buenos Aires, Argentina. We recently organized three entities in Central Europe. Plastipak Slovakia s.r.o. and
Plastipak Czech Republic s.r.o. were established as a wholly-owned subsidiaries of Packaging in
2004 and 2003, respectively. Plastipak Czech Republic, s.r.o. will serve as a bottle manufacturing
facility. Plastipak Slovakia s.r.o. serves as a technical and business center. In 2003, Clean Tech
Slovakia s.r.o. was established as a
 wholly-owned subsidiary of Clean Tech. Clean Tech Slovakia
s.r.o. will serve as a post-consumer recycling operation in Central Europe and produce performs for
sale in Eastern and Central Europe. All of the Plastipak group of companies are headquartered in Plymouth, Michigan with the
exception of our entities in Central Europe and Plastipak Brasil and its subsidiaries. Results of Operations We report our results of operations on the basis of a 52-53 week period. Our fiscal year end
is the closest Saturday to October 31 each year. The fiscal years ended October 30, 2004, November
1, 2003 and November 2, 2002 were 52 weeks long. 17




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Listed in the table below are our revenue and related percentages of revenue for the years
ended October 30, 2004, November 1, 2003 and November 2, 2002. Our revenue has been achieved
organically due to increased business with new and existing customers. Consolidated Revenue By Product CategoryYear Ended
    
    
    Year Ended
    
    
    Year EndedOctober 30, 2004
    
    
    November 1, 2003
    
    
    November 2, 2002(dollar amounts in thousands)Carbonated and non-carbonated beverage revenue
    
    $
    442,176
    
    
    
    44.1
    %
    
    $
    404,179
    
    
    
    45.0
    %
    
    $
    362,678
    
    
    
    44.7
    %Consumer cleaning revenue
    
    $
    297,618
    
    
    
    29.6
    %
    
    $
    276,325
    
    
    
    30.8
    %
    
    $
    242,106
    
    
    
    29.8
    %Food and processed juice
revenue
    
    $
    151,103
    
    
    
    15.0
    %
    
    $
    114,092
    
    
    
    12.7
    %
    
    $
    110,146
    
    
    
    13.6
    %Industrial, agricultural and
automotive revenue
    
    $
    54,891
    
    
    
    5.5
    %
    
    $
    49,003
    
    
    
    5.5
    %
    
    $
    41,752
    
    
    
    5.1
    %Other revenue (a)
    
    $
    58,257
    
    
    
    5.8
    %
    
    $
    54,230
    
    
    
    6.0
    %
    
    $
    55,508
    
    
    
    6.8
    %Total revenue
    
    $
    1,004,045
    
    
    
    100.0
    %
    
    $
    897,829
    
    
    
    100.0
    %
    
    $
    812,190
    
    
    
    100.0
    %
   (a)
    Other revenue includes Clean Tech (recycling), Whiteline (transportation and logistics),
health, personal care and distilled spirits revenue and other miscellaneous sources of
revenue. Year Ended October 30, 2004 compared to year ended November 1, 2003 Revenue Revenue increased 11.8% to $1.0 billion for the year ended October 30, 2004 while unit sales
increased 14.4% for the period to 8.5 billion units as compared to the year ended November 1, 2003.
Significant increases in our food and processed juice category, strong unit volume growth in
Brazil and consistent performance in our carbonated and non-carbonated beverage category
contributed to these results. Revenues in Brazil increased during the period with revenue up 22.6%
and unit sales increasing 20.3%. In the U.S., we continue to benefit from consumers preference
for rigid plastic containers. In the U.S., volume gains were attributable primarily to the
expansion of our food and processed juice category and the addition of new products and new
customers served by our new manufacturing facilities in Florida and Alabama. An increase in resin
prices over the prior year also contributed to the increase in revenues. Using industry standard
price data, we estimate that higher resin prices would have resulted in approximately a $45.0
million increase in revenues for year ended October 30, 2004. The increases in revenue were
partially offset by price reductions implemented for new business and the extension of current
business. Revenue and unit sales increases and decreases by product category are discussed more
specifically below:  
    Carbonated and non-carbonated beverage revenue increased 9.4% to $442.2 million in 2004
with unit volume up 12.3% over 2003. This revenue increase of $38.0 million was split
between the U.S. and Brazil with U.S. sales up $19.2 million and Brazil sales up $18.8
million. Given the current revenue base in each region, Brazil posted a higher percentage
increase in revenue with sales up 22.6% versus a gain of 6% for the U.S. Unit sales in the
U.S. grew by 9.5% during 2004 with unit sales in Brazil up 20.3%.
    Consumer cleaning revenue increased 7.7% to $297.6 million during the year ended October
30, 2004. Unit volume increased 1.8% over 2003 levels. These increases were primarily
driven by continued growth in the liquid laundry detergent business, where consumers are
shifting from powdered to liquid laundry detergents as well as gains in automatic dish
detergents, hard surface cleaners and the overall household cleaner market. Increased demand
for liquid detergent containers was offset by our exit from a piece of high volume low
margin business in this category. 18




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##### Table of Contents




    Food and processed juice revenue and unit volume increased significantly during the year
ended October 30, 2004 compared to the year ended November 1, 2003. During fiscal 2004,
revenue in this category increased 32.4% to $151.1 million, with unit volume up 34.8%. This
growth was fueled by two major initiatives. We expanded our hot fill business during the
year and commercialized an initiative in the isotonic beverage sector. Additionally, we
began commercial production of several multi-layer barrier packages for product in the food
category.
    Industrial, agricultural and automotive revenue increased 12.0% to $54.9 million with
unit sales increasing 4.1% during the year ended October 30, 2004. These increases were the
result of continued growth of the multi-quart motor oil market, where demand is shifting
from single-quart oil packages to larger, multi-quart packages that often represent a better
value to consumers. Increases with our core customers in the antifreeze market also
contributed to the growth in the period.
    Other revenue increased 7.4% to $58.3 million. The increase in other revenue was a
combination of increased sales volume associated with health, personal care, distilled
spirits and increased freight and other miscellaneous revenue. Gross Profit Gross profit increased 8.0% to $129.7 million for the year ended October 30, 2004. The
increase in gross profit was attributable to higher unit sales volume and improved operating
performance. The increase in gross profit was offset by price reductions of approximately $18.2
million implemented to extend customer contracts and increased operating costs associated with the
start-up of several new product lines and the addition of our new facility in Louisiana. Gross
profit as a percent of revenue decreased to 12.9% as compared to 13.4% in the prior year. The
erosion of gross profit as a percentage of revenue was due to the factors mentioned above and to
higher resin costs that increased revenue without increasing associated gross profit. Our primary raw materials consist of PET and HDPE resins. Although our revenue is affected by
fluctuations in resin prices, our gross profit is, in general, unaffected by these fluctuations.
In general, other than certain temporary arrangements, industry practice and contractual
arrangements with our customers permit price changes to be passed through to customers. As a
result, we have in the past experienced revenue changes without corresponding changes in gross
profit. Selling, General and Administrative Expenses Selling, general and administrative expenses (SG&A) for the year ended October 30, 2004
increased 6.8% to $80.0 million. Increases in compensation, benefits, taxes, travel expenses,
contributions and administrative fees related to the start up of our European operations offset by
a decrease in bad debt expense and legal fees were the primary factors contributing to the $5.1
million increase in SG&A. As a percentage of revenue, SG&A decreased to 8.0% for the year ended
October 30, 2004 from 8.3% for the year ended November 1, 2003. Interest Expense Interest expense decreased $1.1 million to $35.8 million for the year ended October 30, 2004,
as compared to $36.9 million for the year ended November 1, 2003. The decrease in interest expense
was primarily attributable to interest earned from interest rate swaps entered into on March 11,
2003, an increase in capitalized interest and a decrease in interest rates and interest expense
associated with our South American operations. Other (Income) and Expense Other income decreased by $0.4 million to $0.3 million for the year ended October 30, 2004.
The decrease was primarily related to a loss on the disposition of fixed assets of approximately
$1.8 million offset by a change of $1.5 million in foreign currency exchange rates. 19




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Income Tax Expense (Benefit) Provision for income taxes was a $5.0 million expense for the year ended October 30, 2004 as
compared to a $4.5 million expense for the year ended November 1, 2003. Income before taxes was
$14.2 million for the year ended October 30, 2004 as compared to $8.9 million of income before
taxes for the year ended November 1, 2003. The effective rate was 35.0% for the year ended October
30, 2004 as compared to 51.0% for the year ended November 1, 2003. The increase in the effective
tax rate for the year ended November 1, 2003 was due to the accounting of a change in estimate of
prior year book and tax differences, and the settlement of prior period tax liabilities. Net Earnings Net earnings increased by $4.8 million to net earnings of $9.2 million for the year ended
October 30, 2004 from net earnings of $4.4 million for the year ended November 1, 2003. An
increase in gross profit, favorable foreign currency exchange rates and a decrease in interest
expense offset by an increase in selling, general and administrative expenses resulted in an
increase in net earnings over the prior year. Year Ended November 1, 2003 compared to year ended November 2, 2002 Revenue Solid gains were delivered in the year ended November 1, 2003 with revenue for the full year
at $897.8 million, up 10.5% over the same period in 2002. Sales volume in 2003 increased to 7.4
billion units, up 9.0% over 2002 levels. Our four key product categories, beverage, consumer
cleaning, food and industrial and automotive, all reported unit and revenue increases for the year.
Brazil represented approximately 26.4% of our unit volume growth in 2003 and approximately 22.5%
of our sales revenue increase in 2003. Resin prices (which represent a significant cost of the product) increased during the year
ended November 1, 2003 as compared to the year ended November 2, 2002. Using industry standard
price data, we estimate that higher resin prices resulted in approximately a $39.0 million increase
in revenue for the year ended November 1, 2003. Revenue and unit sales increases and decreases by product category are discussed more
specifically below:  
    Carbonated and non-carbonated beverage revenue increased 11.4% to $404.2 million in 2003
with unit volume up 9.7% over 2002. Revenue gains for 2003 were evenly split between the
U.S. and Brazil, each up approximately $20.0 million. Unit volume grew at a higher rate in
Brazil, driven by strong preform sales, with Brazil unit volume up 26.4% and U.S. unit
volume up 4.8% during 2003. The difference between the revenue and unit volume increases
posted was largely attributable to higher average raw material prices for the period that
were passed through to customers in the form of higher selling prices.
    Consumer cleaning revenue increased 14.1% to $276.3 million during the year ended
November 1, 2003 with unit volume up 9.0% over 2002 levels. These gains were primarily a
result of two factors: new product and customer sales during the year combined with solid
gains by current customers in the liquid detergent and household cleaner markets. In
addition, higher HDPE material prices which converted into higher selling prices contributed
to the increase in consumer cleaning revenue as compared to the year ended November 2, 2002.
    Our food and processed juice product category reported higher unit and dollar sales in
2003. For the year ended November 1, 2003, unit volume increased 8.5% and sales revenue
increased 3.6% over 2002. The addition of new products in the juice, cooking oil and
condiments areas, combined with consistent performance from our core product offerings, were
key to our success in this area for the year ended November 1, 2003.
    Industrial, agricultural and automotive revenue increased in both units and dollar sales
for 2003. Revenue in this category increased 17.4% to $49.0 million with unit sales
increasing 12.2% during the year ended November 1, 2003. These increases were driven
primarily from increased large bottle sales used in the multi-quart oil market and
anti-freeze market along with new volume awards in the product category.
    Other revenue decreased 2.3% to $54.2 million. Other revenue, which includes our health,
personal care, distilled spirits, freight and other miscellaneous revenue, posted decreases
in both revenue and sales units during 2003. This decrease is attributable mainly to a
decrease in sales volume in the health, personal care and distilled spirits revenue. 20




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##### Table of Contents



Gross Profit Gross profit increased 4.3% to $120.2 million for the year ended November 1, 2003. The
increase in gross profit is primarily attributable to higher unit sales volume and improved
operating performance related to our South American operations, offset by increased operating costs
associated with the start-up of several new product lines, the addition of two new facilities and
the expansion of two existing facilities. Price reductions implemented to extend customer
contracts and expand our business also offset the increase in gross profit. We have not been able,
through efficiencies in production to date, to totally offset implemented price reductions. The
collective impact of the price reductions was approximately $5.8 million for the year ended
November 1, 2003. Gross profit as a percent of revenue decreased to 13.4% as compared to 14.2% in
the prior period. The erosion of gross profit as a percentage of revenue was also due to higher
resin costs that increased revenue without increasing associated gross profit. Our primary raw materials consist of PET and HDPE resins. Although our revenue is affected by
fluctuations in resin prices, our gross profit is, in general, unaffected by these fluctuations. In
general, industry practice and contractual arrangements with our customers permit price changes to
be passed through to customers. As a result, we experienced revenue changes without corresponding
changes in gross profit. Selling, General and Administrative Expenses Selling, general and administrative expenses (SG&A) for the year ended November 1, 2003
increased 9.4% to $75.0 million. As a percentage of revenue, selling, general and administrative
expenses decreased to 8.3% for the year ended November 1, 2003 from 8.4% in the year ended November
2, 2002. Increases in insurance, legal and professional fees and depreciation expenses of
approximately $4.0 million were the primary factors contributing to the change. Increases in
compensation and benefits and travel expenses contributed $2.0 million to the increase in SG&A.
The increase in SG&A was offset by a $0.7 decrease in overall SG&A associated with our South
American operations. Interest Expense Interest expense increased 5.1% to $36.9 million. The increase was primarily due to the sale,
on September 25, 2002, of $50.0 million of the 10.75% Senior Notes. Interest expense for the year
ended November 1, 2003 reflects a full year of interest expense for the $50.0 million Senior Notes
as compared to the prior year ended November 2, 2002. The increase in interest expense related to
the Senior Notes was partially offset by interest earned from interest rate swaps and a decrease in
interest rates and interest expense associated with our South American operations. Other (Income) and Expense Other income decreased by $1.2 million to $0.6 million for the year ended November 1, 2003 as
compared to $1.8 million for the year ended November 2, 2002. The decrease was primarily
attributable to a $1.1 million increase in foreign currency exchange rate losses related to our
South American operations. A loss of $0.5 million on the disposition and sale of fixed assets, and
a decrease in interest income offset by an increase in royalty income of $0.4 million, also
contributed to the change in other income over the prior period. Income Tax Expense (Benefit) Provision for income taxes was a $4.5 million expense for the year ended November 1, 2003 as
compared to a $4.8 million expense for the year ended November 2, 2002. Earnings before taxes were
$8.9 million for the year ended November 1, 2003 compared to $13.4 million of earnings for the year
ended November 2, 2002. The effective rate was 51.0% and 36.0% for the years ending November 1,
2003 and November 2, 2002, respectively. The increase in the effective tax rate for the year ended
November 1, 2003 is due to the accounting of a change in estimate of prior year book and tax
differences and the settlement of prior period tax liabilities. Net Earnings Net earnings decreased by $4.2 million to net earnings of $4.4 million for the year ended
November 1, 2003 from net earnings of $8.6 million for the year ended November 2, 2002. As
previously discussed, start-up costs associated with new product lines, the addition of two new
facilities and expansion of two existing facilities along with an increase in selling, general and
administrative expenses, an increase in interest expense and other factors mentioned above resulted
in a reduction in net earnings over the prior period. 21




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##### Table of Contents



Financial Condition We intend to expand our business, both domestically and internationally. We have a significant
amount of financing capacity to fund the continued growth of our business. Past expenditures have
been used to maintain equipment and expand capacity for revenue growth. These expenditures were
funded with cash flow from operations, additional debt and additional operating leases. Future
capital expenditures will be used in the same manner as past expenditures. During the year ended October 30, 2004, we spent approximately $110.7 million and assumed
$11.0 million in capital lease obligations to cover the capital requirements of our operations. We
expect to incur capital expenditures of approximately $85.0 million in fiscal 2005 and $70.0
million in 2006. We have established three entities in Central Europe, Plastipak Czech Republic, s.r.o.,
Plastipak Slovakia, s.r.o. and Clean Tech Slovakia, s.r.o. Plastipak Czech Republic, s.r.o. serves
as a bottle manufacturing facility. Production for one of our major customers began in the fall of
2004. Currently we employ 15 employees and plan to hire approximately 10 additional people to
support the new site. Plastipak Slovakia is serving as our technical and business center for Europe. Plastipak
Slovakia has begun providing sales, marketing and administrative services for Central Europe.
Certain machine parts have already been ordered through this office and are under evaluation at our
equipment development center. In October 2004, Clean Tech Slovakia s.r.o. acquired from the Municipality of Kechnec,
Slovakia, approximately 22 acres of land in the Kechnec Industrial Park, located approximately 10
miles outside the city of Kosice. In addition, it received written notice from the Recycling Fund,
a business development arm of the federal government of Slovakia, of its award of 100 million
Slovak Crowns, approximately U.S.$3.0 million, to be used in accordance with Clean Tech Slovakia
s.r.o.s application to the Recycling Fund for its projects in Slovakia. We plan to construct a
post-consumer recycling facility and produce preforms for sale in Eastern and Central Europe from
this location. It is anticipated that the total initial investment will not exceed $20.0 million. We had positive cash flow from operating activities of $96.1 million, which in part funded our
capital expenditures of approximately $110.7 million. The remaining balance of capital expenditures
was covered by cash and cash equivalents and by financing activities including the assumption of
capital lease obligations. Seasonality The carbonated soft drink (CSD) and, to a lesser extent, the other beverage portions of our
business are highly seasonal, with peak demand during warmer summer months, and reduced demand
during the winter. We normally add temporary staff and build inventory of products for our CSD and
water customers in anticipation of seasonal demand in the quarter preceding the summer. Inflation We use large quantities of plastic resins in manufacturing our products. These resins
accounted a major portion of our cost of goods sold in the year ended October 30, 2004, and are
subject to substantial price fluctuations resulting from shortages in supply and changes in the
prices of natural gas, crude oil and other petrochemical products from which these resins are
produced. We generally enter into three-year agreements with our resin suppliers, and our purchases
of raw materials are subject to market prices and inflation. Effect of Changes in Exchange Rates In general, our results of operations are partially affected by changes in foreign exchange
rates. We invoice our Brazilian and Argentine customers in the Brazilian Real and Argentine Peso,
respectively. A portion of those invoices is pegged to the U.S. exchange rate. As a result, subject
to market conditions, a decline in the value of the U.S. dollar relative to the Brazilian Real and
to a lesser extent the Argentine Peso can have a favorable effect on our profitability. Conversely,
an increase in the value of the dollar relative to the Brazilian Real and to a lesser extent the
Argentine Peso can have a negative effect on our profitability. In addition, any change in value of
the Euro as compared to the U.S. dollar may impact start-up costs associated with our new entities
in Central Europe. Exchange rate fluctuations resulted in a gain of approximately $0.5 million for
the year ended October 30, 2004. 22




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Liquidity and Capital Resources Net cash provided from operating activities increased 27.3% to $96.1 million for the year
ended October 30, 2004 as compared to the year ended November 1, 2003. The increase in cash was
primarily the result of an $11.2 million increase in non-cash expenses that include items such as
depreciation and amortization, bad debt expense, deferred income tax expense, and foreign currency
translation combined with an increase of $4.8 million in operating performance. In addition,
changes in net working capital and other asset and liabilities contributed $4.6 million to the
increase in cash. The changes in working capital and other assets and liabilities resulted from
increases in other liabilities and accounts payable offset by increase in accounts receivable and
prepaid expenses. Increases in other liabilities were primarily due to deposits received for
customer projects and advance from customers. The increase in accounts receivable was due to new
business and plant expansions. Prepaid expenses increased primarily due to payments made for
customer mold and tooling projects and prepaid taxes related to the excise manufacturing tax in
Brazil. Net cash provided from operating activities increased 45.5% to $75.4 million for the fiscal
year ended November 1, 2003 as compared to the fiscal year ended November 2, 2002. The increase is
in part due to adjusted net working capital and other asset and liability changes of $17.6 million
for the year ended November 1, 2003. The changes in working capital and other assets and
liabilities resulted primarily from increases in accounts payable, accounts receivable and
inventories and a decrease in deposits for equipment purchases. An increase in purchases for raw
materials mainly due to new business and new facilities was the main factor contributing to the
increase in accounts payable, accounts receivable and inventories for fiscal 2003. An increase in
depreciation, amortization and foreign currency translation loss contributed approximately $10.2
million to the increase. The increase in non-cash expenses was offset by a decrease in operating
performance of $4.2 million. During the fiscal year ended November 2, 2002 net cash generated from operations increased
18.3% to $51.9 million. The increase in 2002 was primarily the result of a $6.4 million increase
in non-cash expenses that include items such as depreciation and amortization, bad debt expense,
deferred income tax expense, and foreign currency translation. Bad debt expense decreased
approximately 53% to $1.8 million for the year ended November 2, 2002 from $3.7 million in the
prior period. The decrease in bad debt is mainly attributable to the economic crisis in Brazil and
Argentina during fiscal year 2001. As a result of the economic crisis, we incurred bad debt
expenses of approximately $3.2 million for the year ended November 3, 2001. Improved economic
conditions in both Brazil and Argentina and tighter credit controls led to a decrease in bad debt
expense for the year ended November 2, 2002. The decrease in bad debt represents 65% of the
increase in earnings before income taxes between fiscal year 2002 and 2001. Net working capital
and other asset and liability changes increased net cash by $3.6 million. Improved operating
performance of $1.5 million also contributed to the 2002 increase in cash. Net cash used in investing activities was $112.8 million and $101.3 million for fiscal 2004
and 2003, respectively. Investing activities consisted primarily of the acquisition of property,
plant and equipment for new business, new facilities and the expansion of existing facilities. For
the years ended October 30, 2004 and November 1, 2003 property, plant and equipment acquisitions
using cash were $110.7 million and $100.8 million, respectively. In 2004 and 2003, intangible
asset acquisitions to extend customer contracts were $4.5 million and $1.8 million, respectively.
For the year ending November 1, 2003, the acquisition of intangible assets decreased by $5.6
million to $1.8 million. The decrease is primarily related to customer contracts acquired by our
South American operations in fiscal 2002. For fiscal year 2002 net cash used in investing
activities was $89.6 million. Investing activities were primarily attributed to the acquisition of
property and equipment. During fiscal year 2004, 2003 and 2002, we acquired equipment through the
assumption of capital lease obligations of $11.0 million, $6.5 million and $2.4 million,
respectively. Net cash used in financing activities was $8.7 million and $3.1 million for the years ended
October 30, 2004 and November 1, 2003, respectively. In 2004, cash was primarily used to make
principal payments on long-term obligations. In the year ended November 1, 2003, net cash of $6.3
million was used to make principal payments on long-term obligations. The use of cash was offset by
net proceeds from long-term obligations of $3.2 million. For the year ended November 2, 2002 net
cash provided by financing activities was $50.4 million mainly due to the sale of $50.0 million
total principal Senior Notes. The proceeds from the sale were used for general corporate purposes,
including working capital and capital expenditures in fiscal 2002 and 2003. 23




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##### Table of Contents



On August 20, 2001 and September 25, 2002, we sold an aggregate total principal amount of $275
million and $50 million, respectively, of 10.75% Senior Notes to qualified institutional buyers.
The notes have a maturity date of September 1, 2011, and we have the option to redeem all or a
portion of the notes at any time on or after September 1, 2006. Interest under the notes is
payable on September 1 and March 1 of each year. The indenture under which the notes were issued
places restrictions on our ability to declare or pay dividends, purchase or acquire equity
interests of Plastipak, and retire indebtedness that is subordinate to the notes. The notes also
have covenants that place restrictions on the incurrence of debt, the issuance of stock, and
granting of liens. The proceeds from the Senior Notes sold on August 20, 2001 were used to pay off existing debt.
In fiscal 2002 and 2003, we used the net proceeds from the August 20, 2001 and September 25, 2002
sale of Senior Notes for general corporate purposes, including working capital, capital
expenditures and technology development. On January 28, 2005, we entered into the Fifth Amended and Restated Revolving Credit Agreement
which allows us to borrow up to $300.0 million, subject to a borrowing base consisting of 85% of
eligible domestic accounts receivable, the lesser of 65% of the value of eligible domestic
inventory or $60.0 million and 50% of the value of domestic equipment plus 65% of eligible real
estate. The Fifth Amended and Restated Revolving Credit Agreement has a five-year term. Interest
under the agreement is payable at 175 to 325 basis points per annum over Eurodollar or at prime
rates, as we select. The Fifth Amended and Restated Revolving Credit Agreement is secured by
substantially all of our assets, including pledges of the stock of Plastipak and all of its
material foreign subsidiaries. Packaging, Whiteline, Clean Tech, and TABB are the borrowers and
guarantors under the Fifth Amended and Restated Revolving Credit Agreement and Plastipak guarantees
obligations under the Fifth Amended and Restated Revolving Credit Agreement. As of October 30,
2004, when the maximum amount we could borrow under the Amended Credit Agreement was $150.0
million, $58.5 million in letters of credit were outstanding under the Amended Credit Agreement and
we had $91.5 million available for borrowing. We entered into the Fifth Amended and Restated Revolving Credit Agreement for general business
needs including the possible repurchases of the Senior Notes and the acquisition of machinery and
equipment. Under the Fifth Amended and Restated Credit Agreement we are required to calculate EBITDA
because covenants in our debt agreement are tied to ratios based on that measure. For instance,
the covenants under the Amended Credit Agreement incorporate EBITDA for the most recent last four
fiscal quarters (last twelve months), as a component of the following ratios: debt service ratio
(minimum 1.25 to 1), senior secured debt ratio (maximum 3.00 to 1), leverage ratio (maximum 4.85 to
1) and interest coverage ratio (minimum 2.25 to 1). Our ability to incur additional debt is tied to
our bank covenants. These covenants will be effective for the first quarter of fiscal 2005. As of
October 30, 2004, we were in compliance with our covenants under the Fourth Amended and Restated
Credit Agreement. EBITDA should not be considered an alternative measure of operating results or cash flows from
operations (as determined by generally accepted accounting principles), but it is a widely accepted
financial indicator of a companys ability to incur and service debt. While commonly used,
however, EBITDA is not identically calculated by companies presenting EBITDA and is, therefore, not
necessarily an accurate means of comparison and may not be comparable to similarly titled measures
disclosed by other companies. Our Amended Credit Agreement defines EBITDA as net earnings (loss) plus income tax expense,
interest expense, depreciation and amortization. A reconciliation between net earnings and EBITDA
is calculated as follows: Years EndedNovember 1,
    
    
    November 2,October 30, 2004
    
    
    2003
    
    
    2002Net earnings (per GAAP basis)
    
    $
    9,189,969
    
    
    $
    4,361,056
    
    
    $
    8,592,810Income tax expense
    
    
    4,993,000
    
    
    
    4,543,000
    
    
    
    4,831,000Interest expense
    
    
    35,779,601
    
    
    
    36,902,209
    
    
    
    35,099,265Depreciation
    
    
    60,701,290
    
    
    
    49,859,253
    
    
    
    44,070,064Amortization
    
    
    4,946,455
    
    
    
    6,490,262
    
    
    
    3,947,529EBITDA
    
    $
    115,610,315
    
    
    $
    102,155,780
    
    
    $
    96,540,668
 24




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##### Table of Contents



We have contractual obligations and commercial commitments that may affect our financial
condition. The following tables identify material obligations and commitments as of October 30,
2004. Payments Due by PeriodLess Than 1
    
    
    1-3
    
    
    3-5
    
    
    More ThanContractual Cash Obligations
    
    Total
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    5 YearsLong Term Debt Obligations,
including current portion (a)
    
    $
    52,202,926
    
    
    $
    616,454
    
    
    $
    51,586,472
    
    
    $
    
    
    
    $
    Capital Lease Obligations,
including current portion
    
    
    14,813,002
    
    
    
    4,615,794
    
    
    
    7,583,873
    
    
    
    2,613,335
    
    
    
    Operating Lease Obligations
    
    
    36,900,609
    
    
    
    15,840,724
    
    
    
    16,693,175
    
    
    
    3,693,540
    
    
    
    673,170Capital Expenditure Commitments
    
    
    10,079,207
    
    
    
    10,079,207
    
    
    
    
    
    
    
    
    
    
    
    Amended Credit Agreement (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Salary Continuation Plan
    
    
    4,138,626
    
    
    
    113,500
    
    
    
    227,000
    
    
    
    227,000
    
    
    
    3,571,126Obligations Under Stock
Bonus Plans (c)
    
    
    11,371,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,371,402Senior Notes
    
    
    325,000,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    325,000,000Total Contractual Cash Obligations
    
    $
    454,505,772
    
    
    $
    31,265,679
    
    
    $
    76,090,520
    
    
    $
    6,533,875
    
    
    $
    340,615,698
 Commitment Expiration by PeriodLess Than 1
    
    
    1-3
    
    
    3-5
    
    
    More Than 5Other Commercial Commitments
    
    Total
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    YearsStandby Letters of Credit
    
    
    58,535,009
    
    
    $
    58,535,009
    
    
    $
    
    
    
    $
    
    
    
    $
    Amended Credit Agreement (d)
    
    
    91,464,991
    
    
    
    
    
    
    
    91,464,991
    
    
    
    
    
    
    
    Total Commercial Commitments
    
    $
    150,000,000
    
    
    $
    58,535,009
    
    
    $
    91,464,991
    
    
    $
    
    
    
    $
    
   (a)
    Included in long-term debt obligations are notes payable primarily collateralized by
letters of credit and equipment.(b)
    The Amended Credit Agreements actual outstanding balance as of October 30, 2004. The
Amended Credit Agreement was amended on January 28, 2005 and will expire in January 2010.(c)
    Under the Amended Credit Agreement, the Company may redeem equity interests of
employees pursuant to the Restricted Stock Bonus Plans in amounts not to exceed $3.0
million in the aggregate in any fiscal year.(d)
    The Amended Credit Agreements unused borrowing balance as of October 30, 2004. Looking forward, we have the following short-term and medium-term capital needs. Our overall
capital expenditure budget in fiscal 2005 is approximately $85.0 million and $70.0 million in
fiscal 2006, a majority of which is expected to be discretionary capital expenditures. Our new
facility in the Czech Republic began production during the first quarter of fiscal 2005. We expect
to have a new site in Louisiana beginning production in the second quarter of fiscal 2005. We
expect to finance all of our capital expenditures with operating cash flows and to cover any
shortfalls with borrowings under the Fifth Amended and Restated Revolving Credit Agreement. Based on our current level of operations and anticipated cost savings and operating
improvements, we believe that cash flow from operations and available cash, together with available
borrowings under the Fifth Amended and Restated Credit Agreement, will be adequate to meet our future liquidity needs
for at least the next few years. As of October 30, 2004, we had approximately $11.8 million in cash
and cash equivalents. It is possible, however, that our business will not generate sufficient cash
flow from operations, that anticipated revenue growth and operating improvements will not be
realized or that future borrowings will not be available under the Fifth Amended and Restated
Revolving Credit Agreement in an amount sufficient to enable us to service our indebtedness, or to
fund our other liquidity needs. In addition, we may not be able to refinance any of our
indebtedness, including the Fifth Amended and Restated Revolving Credit Agreement or the 10.75%
Senior Notes due 2011, on commercially reasonable terms or at all. 25




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Critical Accounting Policies and Estimates Discussion and analysis of our financial condition and results of operations are based upon
our financial statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial statements requires
that management make estimates, judgments and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses. Our significant accounting policies are more fully
discussed in Note A of our annual financial statements. We base our estimates on historical
experience and on various other assumptions believed to be reasonable under the circumstances. On
an on-going basis, we evaluate estimates. Actual results could differ from those estimates,
judgments and assumptions, impacting the reported results of operations and financial position of
our Company. In the event estimates or assumptions prove to be different from actual results,
adjustments are made in subsequent periods to reflect more current information. An accounting policy is deemed to be critical if it requires an accounting estimate to be made
based on assumptions about matters that are highly uncertain at the time the estimate is made; if
different estimates reasonably could have been used; or if changes in the estimate that are
reasonably likely to occur periodically could materially impact the financial statements. The
material accounting policies that we believe are most critical to the understanding of our
financial position and results of operations that require significant management estimates,
judgments and assumptions are discussed below. Losses on accounts receivable are based upon their current status, historical experience and
managements evaluation of existing economic conditions. Significant changes in customer
profitability or general economic conditions could have a significant effect on our allowance for
doubtful accounts. Property, plant and equipment represent a significant portion of our total assets. We record
property, plant and equipment at cost. Depreciation is computed principally using the straight-line
method based upon estimated useful lives ranging from 3 to 10 years for machinery and equipment and
up to 39 years for buildings. Amortization of leasehold improvements is provided over the terms of
the various leases. These estimates require assumptions that are believed to be reasonable.
Long-lived assets, such as property, plant and equipment, and intangible assets related to customer
contracts are tested for impairment periodically and whenever an event occurs that indicates
impairment may exist. Future events may cause us to conclude that an impairment associated with our
long-lived assets exists. Any losses associated with impaired long-lived assets could have a
material impact on our financial results. Reserve for inventory losses is based upon managements review of inventory, which is
classified as either slow moving, obsolete or potentially defective. Changes in product demand and
quality issues may require us to increase our reserves. Plastipak is self-insured for health costs and workers compensation up to a certain stop loss
level. The estimated liability is based upon review by management and an independent insurance
consultant of claims filed and claims incurred but not reported. An increase in the level of claims
incurred could have a significant impact on our estimated liability of insurance costs and results
of operations. Off-Balance Sheet Arrangements As of October 30, 2004, we had no off-balance sheet arrangements, other than those disclosed
in the preceding table Contractual Cash Obligations and Other Commercial Commitments. Impact of New Accounting Pronouncements For information regarding the impact of new accounting pronouncements, see Note A to the
audited consolidated financial statements within Item 8 of this report. 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Foreign Exchange Contracts At October 30, 2004 we had no material foreign exchange contracts. We do not enter into
foreign exchange contracts for trading or speculative purposes. 26




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Short-Term and Long-Term Debt We are exposed to interest rate risk primarily through our borrowing activities. Our policy
has been to utilize United States dollar denominated borrowings to fund our working capital and
investment needs. Short-term debt, if required, is used to meet working capital requirements,
while long-term debt is generally used to finance long-term investments. There is inherent
rollover risk for borrowings as they mature and are renewed at current market rates. The extent of
this risk is not quantifiable or predictable because of the variability of future interest rates
and our future financing requirements. On March 11, 2003, we entered into two interest rate swap agreements for an 8-year period ending
September 1, 2011. In connection with the Senior Notes, we exchanged fixed rate interest of
10.75% for variable rate interest. The interest rate swap agreements have notional amounts of $50.0
million each. The variable rates are equal to six month LIBOR plus 6.46% and 6.66%, respectively;
except for the initial period from March 11, 2003 to September 1, 2003, which was determined via
linear interpolation. As of October 30, 2004, the Company
recorded a decrease of $2,722,349 in
other accrued expenses to recognize the change in fair value of the swaps and a $2,722,349 decrease
in the Senior Notes to recognize the difference between the carrying value and fair value of the
related hedge liability. 27




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND FINANCIAL STATEMENTS PLASTIPAK HOLDINGS, INC. AND SUBSIDIARIES FOR THE YEARS ENDING OCTOBER 30, 2004, NOVEMBER 1, 2003 AND NOVEMBER 2, 2002 28




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##### Table of Contents



Report of Independent Registered Public Accounting Firm Board of Directors
Plastipak Holdings, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of Plastipak Holdings, Inc. and
Subsidiaries (a Michigan corporation) as of October 30, 2004 and November 1, 2003, and the related
consolidated statements of earnings, stockholders equity, and cash flows for each of the three
years in the period ended October 30, 2004. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. 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 Plastipak Holdings, Inc. and Subsidiaries as of October 30,
2004 and November 1, 2003, and the results of its operations and its cash flows for each of the
three years in the period ended October 30, 2004 in conformity with accounting principles generally
accepted in the United States of America. /s/GRANT THORNTON LLP Southfield, Michigan
January 5, 2005, except for Note Q for    which
the date is January 28, 2005 29




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Plastipak Holdings, Inc. and Subsidiaries Consolidated Balance Sheets   October 30,
    
    
    November 1,2004
    
    
    2003ASSETSCurrent AssetsCash and cash equivalents
    
    $
    11,805,284
    
    
    $
    37,278,406Accounts ReceivableTrade (net of allowance of $2,557,711 and $2,541,820
at October 30, 2004 and November 1, 2003)
    
    
    74,818,848
    
    
    
    54,531,831Related parties
    
    
    7,953,867
    
    
    
    7,202,75382,772,715
    
    
    
    61,734,584Inventories
    
    
    99,277,849
    
    
    
    90,020,742Prepaid expenses
    
    
    20,871,455
    
    
    
    10,522,411Prepaid federal income taxes
    
    
    99,530
    
    
    
    2,793,980Deferred income taxes
    
    
    2,934,000
    
    
    
    1,843,000Other current assets
    
    
    3,021,049
    
    
    
    3,688,059Total current assets
    
    
    220,781,882
    
    
    
    207,881,182Property, Plant & Equipment- Net
    
    
    423,702,042
    
    
    
    366,920,226Other AssetsCash surrender value of life insurance
    
    
    2,237,920
    
    
    
    1,990,892Deposits
    
    
    5,833,329
    
    
    
    10,716,360Capitalized loan costs (net of accumulated amortization
of $5,169,415 and $3,449,524 at October 30, 2004
and November 1, 2003)
    
    
    7,821,832
    
    
    
    9,541,723Intangible assets (net of accumulated amortization of
of $6,826,005 and $4,937,791 at October 30, 2004
and November 1, 2003)
    
    
    8,333,754
    
    
    
    6,429,468Prepaids
    
    
    840,916
    
    
    
    936,658Sundry
    
    
    305,474
    
    
    
    266,645Total Other Assets
    
    
    25,373,225
    
    
    
    29,881,746Total Assets
    
    $
    669,857,149
    
    
    $
    604,683,154
 The accompanying notes are an integral part of these financial statements. 30




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Consolidated Balance Sheets   October 30,
    
    
    November 1,2004
    
    
    2003LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts
payable - trade
    
    $
    141,355,859
    
    
    $
    115,125,413Current portion of long term obligations
    
    
    5,232,248
    
    
    
    3,823,347Accrued liabilitiesTaxes other than income
    
    
    12,842,361
    
    
    
    4,740,907Deposits and advances received
    
    
    9,152,238
    
    
    
    2,609,712Other accrued expenses
    
    
    25,844,461
    
    
    
    24,182,959Income taxes
    
    
    
    
    
    
    1,363,371Total Current Liabilities
    
    
    194,427,167
    
    
    
    151,845,709Senior Notes (net of unamortized premium and FV of swaps
of $1,935,424 and ($2,026,103) at October 30, 2004 and
$2,218,660 and ($4,748,452) at November 1, 2003)
    
    
    324,909,322
    
    
    
    322,470,208Long-Term Obligations
    
    
    61,783,680
    
    
    
    60,601,547Deferred Income Taxes
    
    
    23,933,000
    
    
    
    16,483,000Other Non-Current Liabilities
    
    
    4,622,314
    
    
    
    4,030,943Obligations Under Stock Bonus Plans
    
    
    11,371,402
    
    
    
    8,306,882Stockholders EquityCommon stock, $1.00 par value, 60,000 shares authorized;
28,416 and 28,316 shares issued and outstanding, respectively
    
    
    28,416
    
    
    
    28,316Retained earnings
    
    
    48,781,848
    
    
    
    40,916,549Total Stockholders Equity
    
    
    48,810,264
    
    
    
    40,944,865Total Liabilities and Stockholders Equity
    
    $
    669,857,149
    
    
    $
    604,683,154
 The accompanying notes are an integral part of these financial statements. 31




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Plastipak Holdings, Inc. and Subsidiaries Consolidated Statements of Earnings   Years EndedOctober 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002Revenues
    
    $
    1,004,045,186
    
    
    $
    897,828,780
    
    
    $
    812,190,068Cost and
expenses
    
    
    874,301,138
    
    
    
    777,669,890
    
    
    
    697,000,995Gross
profit
    
    
    129,744,048
    
    
    
    120,158,890
    
    
    
    115,189,073Selling, general and administrative
expenses
    
    
    80,034,298
    
    
    
    74,964,793
    
    
    
    68,505,788Operating
profit
    
    
    49,709,750
    
    
    
    45,194,097
    
    
    
    46,683,285Other
expense (income)Interest Expense
    
    
    35,779,601
    
    
    
    36,902,209
    
    
    
    35,099,265Interest
income
    
    
    (495,795
    )
    
    
    (987,548
    )
    
    
    (1,221,145
    )Royalty
income
    
    
    (843,971
    )
    
    
    (1,117,959
    )
    
    
    (760,857
    )Loss (gain) on sale
of equipment
    
    
    1,805,899
    
    
    
    155,360
    
    
    
    (39,253
    )(Gain) loss on foreign
currency translation
    
    
    (530,661
    )
    
    
    970,726
    
    
    
    128,510Sundry
(gain) loss
    
    
    (188,292
    )
    
    
    367,253
    
    
    
    52,95535,526,781
    
    
    
    36,290,041
    
    
    
    33,259,475Earnings
before income taxes
    
    
    14,182,969
    
    
    
    8,904,056
    
    
    
    13,423,810Income
tax expense (benefit)Current
    
    
    (1,366,000
    )
    
    
    (485,000
    )
    
    
    20,000Deferred
    
    
    6,359,000
    
    
    
    5,028,000
    
    
    
    4,811,0004,993,000
    
    
    
    4,543,000
    
    
    
    4,831,000Net
earnings
    
    $
    9,189,969
    
    
    $
    4,361,056
    
    
    $
    8,592,810
 The accompanying notes are an integral part of these financial statements. 32




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Plastipak Holdings, Inc. and Subsidiaries Consolidated Statements of Stockholders Equity   Common
    
    
    RetainedStock
    
    
    Earnings
    
    
    TotalBalance, November 3, 2001
    
    $
    27,753
    
    
    $
    29,438,911
    
    
    $
    29,466,664Net earnings
    
    
    
    
    
    
    8,592,810
    
    
    
    8,592,810Issuance of shares of common stock
    
    
    563
    
    
    
    
    
    
    
    563Increase in stock redemption value
    
    
    
    
    
    
    (776,000
    )
    
    
    (776,000
    )Balance, November 2, 2002
    
    
    28,316
    
    
    
    37,255,721
    
    
    
    37,284,037Net earnings
    
    
    
    
    
    
    4,361,056
    
    
    
    4,361,056Increase in stock redemption value
    
    
    
    
    
    
    (700,228
    )
    
    
    (700,228
    )Balance, November 1, 2003
    
    
    28,316
    
    
    
    40,916,549
    
    
    
    40,944,865Net earnings
    
    
    
    
    
    
    9,189,969
    
    
    
    9,189,969Issuance of shares of common stock
    
    
    100
    
    
    
    
    
    
    
    100Increase in stock redemption value
    
    
    
    
    
    
    (1,324,670
    )
    
    
    (1,324,670
    )Balance, October 30, 2004
    
    $
    28,416
    
    
    $
    48,781,848
    
    
    $
    48,810,264
 The accompanying notes are an integral part of these financial statements. 33




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Plastipak Holdings, Inc. and Subsidiaries Consolidated Statements of Cash Flows   Years EndedOctober 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002Cash Flows from Operating ActivitiesNet earnings
    
    $
    9,189,969
    
    
    $
    4,361,056
    
    
    $
    8,592,810Adjustments to reconcile net earnings to
net cash provided by operating activities:Depreciation and amortization
    
    
    65,647,745
    
    
    
    56,349,515
    
    
    
    48,017,593Amortization of net (premium) /
discount on Senior Notes
    
    
    (283,233
    )
    
    
    (283,235
    )
    
    
    296,582Bad debt expense
    
    
    147,997
    
    
    
    1,082,219
    
    
    
    1,762,463Deferred salaries
    
    
    663,194
    
    
    
    387,600
    
    
    
    403,832Loss (gain) on sale of equipment
    
    
    1,805,899
    
    
    
    155,360
    
    
    
    (39,253
    )Deferred tax expense
    
    
    6,359,000
    
    
    
    5,028,000
    
    
    
    4,811,000Restricted stock option  compensation
    
    
    1,739,850
    
    
    
    1,501,804
    
    
    
    2,387,530Foreign currency translation loss (gain)
    
    
    327,926
    
    
    
    1,004,194
    
    
    
    (2,660,787
    )Change in assets and liabilities:(Increase) decrease in accounts receivable
    
    
    (21,186,128
    )
    
    
    (10,826,888
    )
    
    
    3,692,593Increase in inventories
    
    
    (9,257,107
    )
    
    
    (11,290,449
    )
    
    
    (799,406
    )(Increase) decrease in prepaid expenses and
other current assets
    
    
    (10,204,642
    )
    
    
    (623,749
    )
    
    
    276,111Increase in cash surrender value
    
    
    (247,028
    )
    
    
    (202,518
    )
    
    
    (137,529
    )Decrease (increase) in prepaid federal income taxes
    
    
    2,694,450
    
    
    
    1,014,750
    
    
    
    (2,708,730
    )Increase (decrease) in other liabilities
    
    
    18,955,695
    
    
    
    (1,831,678
    )
    
    
    210,902Decrease (increase) in deposits
    
    
    4,883,031
    
    
    
    4,994,844
    
    
    
    (9,644,799
    )Increase (decrease) in accounts payable
    
    
    26,230,446
    
    
    
    24,902,078
    
    
    
    (5,425,846
    )(Increase) decrease in sundry other assets
    
    
    (38,829
    )
    
    
    (254,751
    )
    
    
    2,517,842(Decrease) increase income taxes
    
    
    (1,363,371
    )
    
    
    (24,873
    )
    
    
    306,684Net cash provided by operating activities
    
    
    96,064,864
    
    
    
    75,443,279
    
    
    
    51,859,592Cash Flows Used In Investing ActivitiesAcquisition of property and equipment
    
    
    (110,671,651
    )
    
    
    (100,813,016
    )
    
    
    (82,148,295
    )Proceeds from sale of equipment
    
    
    2,343,972
    
    
    
    1,324,171
    
    
    
    Acquisition of intangible assets
    
    
    (4,512,500
    )
    
    
    (1,775,000
    )
    
    
    (7,414,600
    )Net cash used in investing activities
    
    
    (112,840,179
    )
    
    
    (101,263,845
    )
    
    
    (89,562,895
    )
 The accompanying notes are an integral part of these financial statements. 34




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Plastipak Holdings, Inc. and Subsidiaries Consolidated Statements of Cash Flows  Continued   Years EndedOctober 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002Cash Flows Provided By (Used In) Financing ActivitiesNet (repayments) borrowings under revolving debt
    
    
    (3,669,957
    )
    
    
    3,196,044
    
    
    
    5,381,858Principal payments on long-term obligations
    
    
    (5,645,988
    )
    
    
    (6,343,879
    )
    
    
    (9,103,298
    )Proceeds from long-term obligations
    
    
    618,038
    
    
    
    50,545
    
    
    
    53,271,503Settlement of interest rate swap
    
    
    
    
    
    
    
    
    
    
    3,012,000Issuance of common stock
    
    
    100
    
    
    
    
    
    
    
    563Capitalized loan costs
    
    
    
    
    
    
    
    
    
    
    (2,146,450
    )Net cash (used in) provided by
financing activities
    
    
    (8,697,807
    )
    
    
    (3,097,290
    )
    
    
    50,416,176Net (decrease) increase in cash and cash equivalents
    
    
    (25,473,122
    )
    
    
    (28,917,856
    )
    
    
    12,712,873Cash and cash equivalents at beginning of the year
    
    
    37,278,406
    
    
    
    66,196,262
    
    
    
    53,483,389Cash and cash equivalents at end of the year
    
    $
    11,805,284
    
    
    $
    37,278,406
    
    
    $
    66,196,262Supplemental Cash Flow InformationCash paid for interest
    
    $
    41,929,000
    
    
    $
    41,100,000
    
    
    $
    37,600,000Cash paid for income taxes
    
    $
    
    
    
    $
    1,412,000
    
    
    $
    2,475,000Supplemental Noncash Investing and Financing ActivitiesAcquisition of equipment through the assumption of
long-term obligations
    
    $
    10,961,000
    
    
    $
    6,532,000
    
    
    $
    2,414,000Increase in Obligation Under Stock Bonus Plan
    
    $
    1,325,000
    
    
    $
    700,000
    
    
    $
    776,000Increase (decrease) in fair value of interest rate swaps
    
    $
    2,722,000
    
    
    $
    (4,748,000
    )
    
    $
    
 The accompanying notes are an integral part of these financial statements. 35




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Note A  Basis of Presentation, Nature of Operations and Summary of Accounting Policies Organization and Basis of Presentation Plastipak Holdings, Inc. (Plastipak) is a privately held Michigan corporation that was formed in
1998 to act as a holding company for several companies that were under common control. On October
30, 1999, Plastipak acquired all of the equity interests in Plastipak Packaging, Inc.
(Packaging), W.P. Young Marketing, TABB Investments, Inc., Whiteline Express, Ltd. (Whiteline),
Clean Tech, Inc. (Clean Tech) and TABB Realty, LLC (TABB), and a portion of the equity
interests of Plastipak Packaging do Brasil, Ltda (Plastipak Brazil), through a reorganization
(the Reorganization). Packaging, our principal operating company whose business commenced
operations in 1967, designs and manufactures rigid plastic containers, and was incorporated in
Delaware in 1982. Packaging also owns the remainder of Plastipak Brazil. Whiteline is a trucking
company that serves our transportation and logistics needs, and was incorporated in Delaware in
1982. Clean Tech, a plastics recycling operation, provides a source of clean, high quality
post-consumer recycled plastic raw material, and was incorporated in Michigan in 1989. TABB owns
real estate and leases it to Packaging, Clean Tech and Whiteline. Plastipak Brazil produces
injection-molded plastic preforms and blow molds rigid plastic packaging in Paulinia and Manaus. Three new entities were established in Central Europe. Plastipak Slovakia s.r.o. and Plastipak
Czech Republic s.r.o. were established as a wholly owned subsidiaries of Packaging in 2004 and
2003, respectively. Plastipak Czech Republic, s.r.o. serves as a bottle manufacturing facility.
Plastipak Slovakia s.r.o. serves as a technical and business center. In 2003, Clean Tech Slovakia
s.r.o. was established as a wholly owned subsidiary of Clean Tech. Clean Tech Slovakia s.r.o. will
serve as a post-consumer recycling operation in Central Europe and produce performs for sale in
Eastern and Central Europe. Other than Plastipak Czech Republic s.r.o., Plastipak Slovakia s.r.o., Clean Tech Slovakia s.r.o.
and Plastipak Brazil and its subsidiaries, all of the Plastipak group of companies are
headquartered in Plymouth, Michigan. The accompanying consolidated financial statements include the accounts of Plastipak and its wholly
owned subsidiaries. All significant intercompany balances and transactions have been eliminated in
consolidation. Significant Accounting Policies A summary of the significant accounting policies consistently applied in the preparation of the
accompanying consolidated financial statements follows. Fiscal Period Plastipak has elected a 52/53-week fiscal period for tax and financial reporting purposes.
Plastipaks fiscal period ends on the Saturday closest to October 31. The periods ended October
30, 2004, November 1, 2003 and November 2, 2002 contained 52 weeks. Revenue Recognition Revenue from product sales is recognized when persuasive evidence exists of an arrangement with the
customer, the goods are shipped and the title and risk of loss pass to the customer, the selling
price is fixed or determinable and collection is reasonably assured. Sales are recorded net of
discounts, rebates and returns. Cash Equivalents For purposes of the statement of cash flows, all investments purchased with an original maturity of
three months or less are considered to be cash equivalents. 36




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Allowance for Doubtful Accounts Plastipak provides an allowance for losses on accounts receivable based on a review of the current
status of existing receivables, historical collection experience and managements evaluation of the
effect of existing economic conditions. Significant changes in customer profitability or general economic conditions may have a significant
effect on the Companys allowance for doubtful accounts. Changes in the Companys allowance for doubtful accounts are as follows: October 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002Beginning balance
    
    $
    2,541,820
    
    
    $
    2,166,430
    
    
    $
    6,111,236Bad debt expense
    
    
    147,997
    
    
    
    1,082,219
    
    
    
    1,762,463Accounts written-off (a)
    
    
    (132,106
    )
    
    
    (706,829
    )
    
    
    (5,829,536
    )Recoveries
    
    
    
    
    
    
    
    
    
    
    122,267Ending balance
    
    $
    2,557,711
    
    
    $
    2,541,820
    
    
    $
    2,166,430
   (a)
    
    For the year ended November 1, 2003, accounts written-off include a $324,000 increase
attributable to remeasurement of allowance for doubtful accounts in South America. For the
year ended November 2, 2002, accounts written-off includes a $2,168,000 decrease
attributable to remeasurement of allowance for doubtful accounts in South America. Inventories Inventories are stated at the lower of cost or market. Cost is determined on the first-in,
first-out (FIFO) method. Property, Plant and Equipment Property, plant and equipment are stated at cost net of accumulated depreciation and amortization.
Depreciation is provided principally on the straight-line method based upon estimated useful lives
ranging from 3 to 10 years for machinery and equipment and up to 39 years for buildings.
Amortization of leasehold improvements is provided over the lesser of the useful lives of the
improvements or the terms of the various leases. Capital lease amortization for equipment is
included in depreciation expense. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from
the accounts and any resulting gain or loss is included in the results of operations. Interest costs associated with construction in process of approximately $3,716,000, $2,892,000 and
$1,418,000 were capitalized during the years ending October 30, 2004, November 1, 2003 and November
2, 2002, respectively. Capitalized Loan Costs Capitalized loan costs are amortized over the term of the related debt agreement. 37




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Intangible Assets Periodically, Packaging acquires exclusive manufacturing contracts from a customer. Consideration
paid by Packaging for these arrangements is recorded as an intangible asset and amortized over the
term of the related contract. A certain portion of these exclusive manufacturing contracts
incorporates customer short falls on previous take-or pay contracts in Brazil which are being
amortized on a straight-line basis. The following summarize the carrying amounts of intangible assets and related amortization: October 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002Gross Carrying AmountBeginning balance
    
    $
    11,367,259
    
    
    $
    12,553,502
    
    
    $
    10,307,872Additions
    
    
    4,512,500
    
    
    
    1,775,000
    
    
    
    7,414,600Deletions
    
    
    (720,000
    )
    
    
    (2,961,243
    )
    
    
    (5,168,970
    )Ending balance
    
    
    15,159,759
    
    
    
    11,367,259
    
    
    
    12,553,502Accumulated AmortizationBeginning balance
    
    
    4,937,791
    
    
    
    3,785,318
    
    
    
    7,025,570Additions
    
    
    2,608,214
    
    
    
    4,113,716
    
    
    
    1,928,718Deletions
    
    
    (720,000
    )
    
    
    (2,961,243
    )
    
    
    (5,168,970
    )Ending balance
    
    
    6,826,005
    
    
    
    4,937,791
    
    
    
    3,785,318Net Carrying Amount
    
    $
    8,333,754
    
    
    $
    6,429,468
    
    
    $
    8,768,184
 The annual estimated amortization expense for intangible assets is as follows: 2005
    
    $
    2,969,8432006
    
    
    2,550,1952007
    
    
    1,817,1892008
    
    
    870,833Thereafter
    
    
    125,694$
    8,333,754
 Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases, and the effects of tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. 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. Self-Insurance Plastipak is self-insured for health costs and workers compensation up to a certain stop loss
level. The estimated liability is based upon review by Plastipak and an independent insurance
consultant of claims filed and claims incurred but not reported. 38




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Plastipak Holdings, Inc.
and Subsidiaries Notes to the Consolidated Financial Statements   Employee Compensation Plans The Company has two stock-based employee compensation plans. The Company accounts for these plans
under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock
Issued to Employees, and related interpretations. The plans are considered to be variable plans
and therefore, stock-based employee compensation cost is reflected in net income as a component of
general and administrative expenses. All options granted under those plans had an exercise price
less than the market value of the underlying common stock on the date of grant. Amounts expensed approximate that which would have been expensed had the value of the options
granted been computed under provisions of FAS 123. Fair Value of Financial Instruments Plastipaks financial instruments include accounts receivable, accounts payable and long-term
obligations. The carrying amounts of financial instruments approximate their fair values. Research and Development Research and development costs are expensed as incurred. Research and development costs were
approximately $8,000,000, $8,000,000 and $8,600,000 for the years ended October 30, 2004, November
1, 2003 and November 2, 2002, respectively. Foreign Currency Translation The Companys functional currency for operations in South America and Europe is the U.S. dollar.
The financial statements for South America and Europe are maintained in the functional currency.
Gains and losses associated with exchange rate fluctuations are reflected in operations. Industry Segments Plastipak reports information about operating segments pursuant to SFAS No. 131, Disclosure About
Segments of an Enterprise and Related Information. Plastipak is organized and managed on a
geographic basis in two operating segments: North America; and South America and Europe. See Note
O. Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles,
management is required to make estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the reporting period. Actual results could
differ from those estimates. Reclassifications Certain reclassifications have been made to the 2003 and 2002 consolidated financial statements in
order for them to conform to the 2004 presentation. 39




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   New Accounting Pronouncements In May 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 150 (SFAS 150), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity, in November 2003, the FASB issued FASB Staff Position (FSP) FAS 150-3, which defers the effective date of the mandatorily redeemable provisions
of FASB Statement No. 150. SFAS 150 requires that an issuer classify a
financial instrument that is within its scope as a liability (or an asset in some
circumstances). The Company is evaluating any potential future impact from this standard on its financial position or results of operations. On November 2, 2003, the Company adopted Statement Financial Accounting Standards No. 149 (SFAS
149), Amendment of Statement 133 on Derivative Instruments and Hedging Activities, which
requires that contracts with comparable characteristics be accounted for similarly. The Company
also adopted, FASB Interpretation 46(R), Consolidation of
Variable Interest Entities. FIN 46(R)
replaces FIN 46 and clarifies the accounting for interests in variable interest entities. The
adoption of these standards did not have a material impact on the Companys financial position or
results of operations. In November 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 151 (SFAS 151), Inventory Costs. SFAS 151 amends the guidance in ARB No. 43,
Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs and spoilage. This statement requires that these items be
expensed as incurred and not included in overhead. In addition, SFAS 151 requires that allocation
of fixed production overhead to conversion costs should be based on normal capacity of the
production facilities. This Statement is effective for inventory costs incurred during fiscal years
beginning after June 15, 2005. The Company is currently evaluating the impact from this standard on
its results of operations and financial position.
In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting
Standards No. 153 (SFAS 153), Exchanges of Nonmonetary Assets.SFAS 153, amends APB Opinion
No. 29, Accounting for Nonmonetary Transactions.This statement eliminates the exception to fair
value in Opinion 29 for exchanges of similar productive assets and replaces it with a general
exception for exchanges that do not have commercial substance. This Statement is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company
is currently evaluating the impact from this standard on its results of operations and financial
position. In December 2004, the
Financial Accounting Standards Board issued Statement No. 123(R) (SFAS
123(R)), Share-Based Payment. This statement replaces Statement of Financial Accounting
Standards No. 123 (SFAS 123), Accounting for Stock-Based Compensation, and supersedes APB
Opinion No. 25, Accounting for Stock Issued to
Employees. SFAS 123(R) will require compensation
costs related to share-based payment transactions to be recognized in the financial statements
(with limited exceptions). The amount of compensation cost will be measured based on the
grant-date fair value of the equity or liability instruments issued. Compensation cost will be
recognized over the period that an employee provides service in exchange for the award. This
statement is effective as of the beginning of the first interim or annual reporting period that
begins after June 15, 2005. The Company is currently evaluating the impact from this standard on
its results of operations and financial position. In December 2004, the Financial Accounting Standards Board (FASB) issued two FASB Staff Positions
(FSP) that provide accounting guidance on how companies should account for the effects of the
American Jobs Creation Act of 2004 that was signed into law on October 22, 2004. FSP FAS 109-1,
Application of FASB Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on
Qualified Production Activities Provided by the American Jobs Creation Act of 2004, states that
the manufacturers deduction provided for under this legislation should be accounted for as a
special deduction instead of a tax rate change. FSP FAS 109-2, Accounting and Disclosure Guidance
for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004,
allows a company additional time to evaluate the effects of the legislation on any plan for
reinvestment or repatriation of foreign earnings for purposes of applying Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. These FSPs may affect how a company
accounts for deferred income taxes. These FSPs are effective December 21, 2004. The Company is
currently evaluating the impact from these FSPs on its results of operations and financial
position and is expected to complete its evaluation during the first half of fiscal 2005. 40




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Note B  Inventories Inventories consisted of the following at: October 30,
    
    
    November 1,2004
    
    
    2003Raw Materials
    
    $
    38,747,489
    
    
    $
    34,835,429Finished Goods
    
    
    46,855,038
    
    
    
    41,984,322Parts & Supplies
    
    
    13,675,322
    
    
    
    13,200,991$
    99,277,849
    
    
    $
    90,020,742
 Note C  Property, Plant and Equipment The principal categories of property, plant and equipment are as follows: October 30,
    
    
    November 1,2004
    
    
    2003Land
    
    $
    8,088,572
    
    
    $
    7,597,023Buildings
    
    
    88,585,011
    
    
    
    87,863,727Machines and equipment
    
    
    475,106,473
    
    
    
    421,470,747Tooling
    
    
    107,829,103
    
    
    
    93,434,596Auto, trucks and trailers
    
    
    6,337,984
    
    
    
    4,898,033Furniture and fixtures
    
    
    4,930,305
    
    
    
    3,324,034Lease acquisition costs
    
    
    289,956
    
    
    
    289,956Computer equipment
    
    
    23,874,934
    
    
    
    22,303,822Leashold improvements
    
    
    32,896,749
    
    
    
    28,492,054Construction in process
    
    
    60,220,878
    
    
    
    35,454,900808,159,965
    
    
    
    705,128,892Less accumulated depreciation and amortization
    
    
    384,457,923
    
    
    
    338,208,666$
    423,702,042
    
    
    $
    366,920,226
 Construction in process represents expenditures for assets, which have not been placed in
service. No depreciation or amortization expense is taken on these assets until they become
operational. Depreciation and amortization for property, plant and equipment was approximately $60,701,000,
$49,859,000 and $44,070,000 for the years ended October 30, 2004, November 1, 2003 and November 2,
2002, respectively. At October 30, 2004, the Company had obligations to purchase approximately
$10,079,000 of equipment. 41




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Note D  Long-Term Obligations October 30,
    
    
    November 1,2004
    
    
    2003Revolving credit facility pursuant to which Plastipak is permitted to borrow up
to $150,000,000. Interest is payable quarterly at Eurodollar (plus an additional
margin) or prime-based rates, which varied from 4.50% to 5.25% at October 30,
2004. The company is required to pay quarterly facility fees during
the year.
All the assets of Plastipak secure the credit facility.
    
    $
    
    
    
    $
    Notes payable to banks with interest rates varying from 2.9% to 4.6%, are due at
various times through 2006. Borrowings are primarily collateralized
by letters of credit.
    
    
    51,251,830
    
    
    
    54,660,590Notes payable with interest rates varying from 2.6% to 7.5% due in various
installments at various dates through 2007, collateralized by certain equipment
and, in part, by letters of credit.
    
    
    951,096
    
    
    
    1,163,285Capital leases with interest rates varying from 2.2% to 9.5% due in various
installments at various dates through 2009.
    
    
    14,813,002
    
    
    
    8,601,01967,015,928
    
    
    
    64,424,894Less current portion
    
    
    5,232,248
    
    
    
    3,823,347$
    61,783,680
    
    
    $
    60,601,547
 Minimum principal payments on long-term obligations to maturity as of October 30, 2004 are as follows: 2005
    
    $
    5,232,2482006
    
    
    55,855,4422007
    
    
    3,314,9032008
    
    
    1,924,9192009
    
    
    688,416$
    67,015,928
 The revolving credit facility contains various covenants pertaining to maintenance of net worth,
debt to equity ratios, leverage ratios and various other restrictions. At October 30, 2004 and
November 1, 2003, the Company was in compliance with all covenants. At October 30, 2004 and November 1, 2003, Plastipak had outstanding letters of credit aggregating
$58,500,000 and $57,900,000, respectively. 42




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Note E  Senior Notes In September 2002 and August 2001, the Company issued $50,000,000 and $275,000,000, respectively,
of 10.75% senior notes due in 2011. Interest is payable semi-annually. The indenture under which
the notes were issued places restrictions on the payment of dividends, the acquisition of our
common stock, the payment of indebtedness that is subordinate to the notes, asset sales, the
incurrence of debt and the issuance of preferred stock. The senior notes are unconditionally
guaranteed by all of the Companys domestic subsidiaries. After September 1, 2006, the Company may
redeem all or any portion of the outstanding notes at premiums, which decline from 105.375% at
September 1, 2006 to 101.792% at September 1, 2008. On or after September 1, 2009, the notes may be
redeemed at par. The net proceeds received, after underwriting discounts and premiums, other fees
and expenses, were approximately $51,800,000 and $263,200,000 for the years ending November 2,
2002 and November 3, 2001, respectively. The carrying amounts of the senior notes were approximately $324,909,000 and $322,470,000 as of
October 30, 2004 and November 1, 2003, respectively. Based upon current market rates primarily
provided by outside investment bankers, the fair value of the senior notes at October 30, 2004 and
November 1, 2003 was estimated at $364,000,000 and $358,000,000, respectively. Note F  Derivative Instruments and Hedging Activities Financial Accounting Standards Board Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities, as amended by Financial Accounting Standards Board Statement No. 138,
Accounting for Certain Derivative Instruments and Certain Hedging Activities, and by Financial
Accounting Standards No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
Activities, requires companies to recognize all of their derivative instruments as either assets
or liabilities at fair value in the statement of financial position. The accounting for changes in
the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been
designated and qualifies as part of a hedging relationship and further, on the type of hedging
relationship. For those derivative instruments that are designated and qualify as hedging
instruments, a company must designate the hedging instrument, based upon the exposure being hedged,
as either a fair value hedge or a cash flow hedge. For derivative instruments that are designated and qualify as a fair value hedge (i.e., hedging the
exposure to changes in the fair value of an asset or a liability or an identified portion thereof
that is attributable to a particular risk), the gain or loss on the derivative instrument as well
as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in
current earnings during the period of the change in fair values. For derivative instruments that
are designated and qualify as a cash flow hedge (i.e., hedging the exposure to variability in
expected future cash flows that is attributable to a particular risk), the effective portion of the
gain or loss on the derivative instrument is reported as a component of other comprehensive income
and reclassified into earnings in the same period or periods during which the hedged transaction
affects earnings. For derivative instruments not designated as hedging instruments, the gain or
loss is recognized in current earnings during the period of change. The Company currently uses
only fair value hedge accounting. On March 11, 2003, the Company entered into two interest rate swap agreements. In connection with
the Senior Notes, the Company exchanged fixed rate interest of 10.75% for variable rate interest.
The interest rate swap agreements have notional amounts of $50,000,000 million each. The variable
rates are equal to six month LIBOR plus 6.46% and 6.66%, respectively, for an 8-year period ending
September 1, 2011. During the year ended October 30, 2004,
the Company recorded a decrease of
$2,722,349 in other accrued expenses to recognize the change in fair value of the swaps and a
$2,722,349 decrease in the Senior Notes to recognize the difference between the carrying value and
fair value of the related hedge liability. 43




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Plastipak Holdings, Inc.
and Subsidiaries Notes to the Consolidated Financial Statements   Note G  Income Taxes The components of earnings (loss) before income taxes are as follows: Years EndedOctober 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002United States
    
    $
    20,180,380
    
    
    $
    16,112,588
    
    
    $
    26,225,605Foreign
    
    
    (5,997,411
    )
    
    
    (7,208,532
    )
    
    
    (12,801,795
    )$
    14,182,969
    
    
    $
    8,904,056
    
    
    $
    13,423,810
 Deferred income tax assets and liabilities consist of the following: October 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002Deferred tax assets:Net operating loss carryforwards
    
    $
    13,693,000
    
    
    $
    9,271,000
    
    
    $
    2,852,000Allowance for doubtful accounts
    
    
    869,000
    
    
    
    863,000
    
    
    
    1,020,000Vacation
    
    
    8,000
    
    
    
    33,000
    
    
    
    117,000Inventory
    
    
    1,077,000
    
    
    
    695,000
    
    
    
    577,000Restricted stock options
    
    
    1,470,000
    
    
    
    878,000
    
    
    
    367,000Accrued expenses
    
    
    3,250,000
    
    
    
    2,569,000
    
    
    
    1,313,000Foreign tax credit
    
    
    
    
    
    
    
    
    
    
    1,007,000Contributions
    
    
    295,000
    
    
    
    29,000
    
    
    
    78,000Deferred salary
    
    
    1,407,000
    
    
    
    1,044,000
    
    
    
    912,000U.S. tax credits
    
    
    4,620,000
    
    
    
    6,188,000
    
    
    
    5,924,000Parts and supplies inventory
    
    
    348,000
    
    
    
    339,000
    
    
    
    Loss in affiliates
    
    
    402,000
    
    
    
    
    
    
    
    139,000Interest rate swap
    
    
    754,000
    
    
    
    852,000
    
    
    
    995,00028,193,000
    
    
    
    22,761,000
    
    
    
    15,301,000Deferred tax liabilities:Depreciation
    
    
    (45,409,000
    )
    
    
    (33,346,000
    )
    
    
    (21,546,000
    )Repairs and maintenance
    
    
    (461,000
    )
    
    
    (461,000
    )
    
    
    (461,000
    )Foreign exchange gain
    
    
    (1,773,000
    )
    
    
    (1,677,000
    )
    
    
    (1,543,000
    )Capitalized Interest
    
    
    (183,000
    )
    
    
    (183,000
    )
    
    
    (183,000
    )Parts and supplies inventory
    
    
    
    
    
    
    
    
    
    
    (212,000
    )Loss in affiliates
    
    
    
    
    
    
    (7,000
    )
    
    
    Prepaids
    
    
    (99,000
    )
    
    
    (105,000
    )
    
    
    (402,000
    )VEBA
    
    
    (392,000
    )
    
    
    (300,000
    )
    
    
    (346,000
    )Renegotiated contracts
    
    
    (759,000
    )
    
    
    (1,176,000
    )
    
    
    Other
    
    
    (116,000
    )
    
    
    (146,000
    )
    
    
    (220,000
    )(49,192,000
    )
    
    
    (37,401,000
    )
    
    
    (24,913,000
    )Net deferred tax liability
    
    $
    (20,999,000
    )
    
    $
    (14,640,000
    )
    
    $
    (9,612,000
    )
 Net operating loss carryforwards expire in years ending through 2024. 44




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Note G  Income Taxes (Continued) A reconciliation of the actual federal income tax expense to the expected amounts computed by
applying the statutory tax rate percent to earnings before income taxes is as follows: Years EndedOctober 30,
    
    
    November 1,
    
    
    November 2,2004
    
    
    2003
    
    
    2002Expected federal income tax
    
    $
    4,822,000
    
    
    $
    3,027,000
    
    
    $
    4,565,000Effect of non-deductible items
    
    
    95,000
    
    
    
    61,000
    
    
    
    643,000Research and experimentation credits
    
    
    (25,000
    )
    
    
    (175,000
    )
    
    
    (300,000
    )Foreign tax credit
    
    
    92,000
    
    
    
    
    
    
    
    (167,000
    )Internal Reveue audit settlement
    
    
    
    
    
    
    329,600
    
    
    
    Tax paid with 2001 amended federal tax return
    
    
    
    
    
    
    440,400
    
    
    
    Reversal of foreign tax credits to deductions
    
    
    
    
    
    
    614,000
    
    
    
    Other
    
    
    9,000
    
    
    
    246,000
    
    
    
    90,000$
    4,993,000
    
    
    $
    4,543,000
    
    
    $
    4,831,000
 Note H  Commitments Plastipak leases office, equipment and warehouse and manufacturing facilities under operating
leases, which expire at various dates through 2010. Long-term lease commitments are as follows: Year Ending 2005
    
    $
    15,840,7242006
    
    
    10,905,7642007
    
    
    5,787,4112008
    
    
    2,586,0192009
    
    
    1,107,521Thereafter
    
    
    673,170
 The total rent expense for the years ended October 30, 2004, November 1, 2003 and November 2, 2002
was approximately $26,315,000, $29,634,000 and $31,132,000, respectively. Note I  Related Party Transactions Included in revenues for the periods ended October 30, 2004, November 1, 2003 and November 2, 2002
are approximately $24,466,000, $22,225,000 and $17,834,000, respectively, of sales to companies
affiliated through common ownership. Included in accounts receivable at October 30, 2004 and
November 1, 2003 are approximately $7,400,000 and $6,887,000, respectively, of trade receivables
from these companies. A company affiliated through common ownership provides engineering services and customizes
machinery. During the fiscal years ended 2004, 2003 and 2002, Packaging was invoiced $8,671,000,
$3,936,000 and $6,431,000, respectively. 45




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Note I  Related Party Transactions  Continued During 2004, Plastipak donated $500,000 to a foundation established by the family of the principal
stockholder. The donation will be used for the Associates Sons and Daughters Scholarship Program.
The Associates Sons and Daughters Scholarship Program has been established by the Young Family
Foundation to assist eligible employees children who plan to continue education in college
programs. Note J  Profit Sharing/401(k) Plan Plastipak has a profit sharing plan and a 401(k) plan which cover substantially all employees.
Contributions to the plan are divided into profit sharing and matching contributions. Profit
sharing contributions are at the discretion of the board of directors. Matching contributions are
a discretionary percentage determined annually. The profit sharing expense for the periods ended
October 30, 2004, November 1, 2003 and November 2, 2002 was approximately $3,144,000, $2,823,000
and $2,505,000, respectively. Note K  Major Customers During the years ended October 30, 2004, November 1, 2003 and November 2, 2002 the Company
generated revenues representing approximately 27%, 27% and 25% of total revenues, respectively,
from sales to one customer. Accounts receivable for this customer at October 30, 2004 and November
1, 2003, amounted to approximately $12,604,000 and $7,772,000, respectively. Note L  Stock Compensation Plans Plastipak
sponsors two Restricted Stock Bonus Plans. Pursuant to the terms of
the Amended and Restated Stock Bonus Plan (as amended in 2002 and on
December 19, 2003), the Company has reserved 5,450 common shares for
issuance. There were no options granted during the years ended
October 30, 2004 and November 1, 2003. The Company granted 872
options during the year ended November 2, 2002. Vesting under the
plan ranges from 0 - 5 years at the discretion of the Board of
Directors. Options granted vested immediately. During the years
ending October 20, 2004, November 1, 2003 and November 2, 2002
employees exercised 0, 0, and 263 options, respectively. At October
30, 2004, November 1, 2003 and November 2, 2002 there were options
outstanding to acquire 1,808 shares at a nominal per share price. The Company adopted the 2002
Restricted Stock Bonus Plan on October 16, 2002 and subsequently
amended the plan effective December 19, 2003. Pursuant to the terms
of this plan, the Company has reserved 5,450 shares for issuance.
There were no options granted during the years ended October 30, 2004
and November 1, 2003. The Company granted 1,000 options during the
year ended November 2, 2002. The options vest over a period from 0-10
years at the discretion of the Board of Directors. For the years
ending October 30, 2004, November 1, 2003 and November 2, 2002 shares
allocated to our employees were 80%, 60% and 40% vested,
respectively. During the years ending October 20, 2004, November 1,
2003 and November 2, 2002 employees exercised 100, 0 and 300 options,
respectively. At October 30, 2004, November 1, 2003 and November 2,
2002 there were options outstanding to acquire 600, 700 and 700
shares, respectively. Each of the above-referenced plans require the Company, subject to certain limitations, to
repurchase the shares issued under the plans at a price based upon a book value computation plus
certain formula adjustments. Increases in the per share redemption value associated with shares
issued under the plans are treated as a reduction of retained earnings and an increase to
obligations under stock bonus plans. Included in general and administrative expenses for the years
ended October 30, 2004, November 1, 2003 and November 2, 2002 is $1,740,000, $1,502,000 and
$2,388,000, respectively, representing the excess of the redemption value over the exercise price
for options granted and the increase in redemption value associated with unexercised options. Amounts expensed approximate that which would have been expensed had the value of the options
granted been computed under the provisions of FAS 123. 46




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Note M  Salary Continuation Plan Packaging sponsors a nonqualified salary continuation plan that provides for the payment of normal
retirement and death benefits, and in some cases early retirement benefits, to participants, as
specified in the participants adoption agreement. An adoption agreement between the participant
and Packaging sets forth the age, years of service and other requirements a participant must attain
in order to receive a particular benefit. The plan provides a monthly benefit, as defined by the
participants contract for a stated period of time, upon reaching the age of 65. This Plan is
noncontributory, although certain life insurance policies have been acquired for the purpose of
funding these benefits. The life insurance policies are not assets of the Plan. The accumulated
postretirement obligation for the periods ended October 30, 2004 and November 1, 2003 was
approximately $4,139,000 and $3,475,000, respectively. Note N  Legal Proceedings The Company is a party to various litigation matters arising in the ordinary course of business.
The ultimate legal and financial liability of this litigation cannot be estimated with certainty,
but management believes, based on their examination of these matters, experience to date and
discussions with counsel, that the ultimate liability will not be material to the Companys
business, financial condition or results of operations. Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments The Senior Notes are unsecured, and guaranteed by each of Plastipaks current and future material
domestic subsidiaries. The following condensed consolidating financial information presents:  (1)
    Condensed consolidating balance sheets as of October 30, 2004 and November 1, 2003,
statements of operations and statements of cash flows for the years ended October 30,
2004, November 1, 2003 and November 2, 2002 of (a) Plastipak the parent; (b) the guarantor
subsidiaries (North American operating segment); (c) the nonguarantor subsidiaries (South
American and European operating segments); (d) Plastipak on a consolidated basis, and(2)
    Elimination entries necessary to consolidate Plastipak Holdings, Inc., the parent, with
the guarantor (North American operating segment) and nonguarantor (South American and
European operating segments) subsidiaries. Each subsidiary guarantor is wholly owned by Plastipak, all guarantees are full and unconditional
and all guarantees are joint and several. 47




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Plastipak Holdings, Inc.
and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Balance Sheet As of October 30, 2004 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCurrent AssetsCash
    
    $
    2,527,142
    
    
    $
    6,983,461
    
    
    $
    2,294,681
    
    
    $
    
    
    
    $
    11,805,284Accounts receivable
    
    
    13,305,985
    
    
    
    68,274,490
    
    
    
    22,191,222
    
    
    
    (20,998,982
    )
    
    
    82,772,715Inventories
    
    
    
    
    
    
    80,503,817
    
    
    
    18,774,032
    
    
    
    
    
    
    
    99,277,849Prepaid expenses
    
    
    
    
    
    
    12,545,099
    
    
    
    8,326,356
    
    
    
    
    
    
    
    20,871,455Prepaid federal income taxes
    
    
    
    
    
    
    
    
    
    
    99,530
    
    
    
    
    
    
    
    99,530Deferred income taxes
    
    
    (5,123,000
    )
    
    
    5,532,000
    
    
    
    2,525,000
    
    
    
    
    
    
    
    2,934,000Other current assets
    
    
    
    
    
    
    1,985,425
    
    
    
    1,035,624
    
    
    
    
    
    
    
    3,021,049Total Current Assets
    
    
    10,710,127
    
    
    
    175,824,292
    
    
    
    55,246,445
    
    
    
    (20,998,982
    )
    
    
    220,781,882Property, Plant &
Equipment- Net
    
    
    
    
    
    
    372,030,366
    
    
    
    51,721,676
    
    
    
    (50,000
    )
    
    
    423,702,042Other AssetsCash surrender value
of life insurance
    
    
    
    
    
    
    2,237,920
    
    
    
    
    
    
    
    
    
    
    
    2,237,920Deposits
    
    
    
    
    
    
    6,933,329
    
    
    
    
    
    
    
    (1,100,000
    )
    
    
    5,833,329Investment in and advances
to affiliates
    
    
    363,458,976
    
    
    
    (286,861,688
    )
    
    
    
    
    
    
    (76,597,288
    )
    
    
    Capitalized loan costs
    
    
    894,076
    
    
    
    6,927,756
    
    
    
    
    
    
    
    
    
    
    
    7,821,832Intangible assets
    
    
    
    
    
    
    6,660,393
    
    
    
    1,673,361
    
    
    
    
    
    
    
    8,333,754Deferred tax
asset  long term
    
    
    (766,556
    )
    
    
    766,556
    
    
    
    
    
    
    
    
    
    
    
    Prepaids
    
    
    
    
    
    
    840,916
    
    
    
    
    
    
    
    
    
    
    
    840,916Sundry
    
    
    
    
    
    
    5,000,000
    
    
    
    305,474
    
    
    
    (5,000,000
    )
    
    
    305,474Total Other Assets
    
    
    363,586,496
    
    
    
    (257,494,818
    )
    
    
    1,978,835
    
    
    
    (82,697,288
    )
    
    
    25,373,225Total Assets
    
    $
    374,296,623
    
    
    $
    290,359,840
    
    
    $
    108,946,956
    
    
    $
    (103,746,270
    )
    
    $
    669,857,149
 48




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Balance Sheet  Continued As of October 30, 2004 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCurrent LiabilitiesAccounts payable
    
    $
    100,142
    
    
    $
    114,332,462
    
    
    $
    43,299,347
    
    
    $
    (16,376,092
    )
    
    $
    141,355,859Current portion of long
term obligations
    
    
    
    
    
    
    4,171,370
    
    
    
    1,060,878
    
    
    
    
    
    
    
    5,232,248Taxes other than income
    
    
    
    
    
    
    4,167,463
    
    
    
    8,674,898
    
    
    
    
    
    
    
    12,842,361Other accrued expenses
    
    
    7,535,535
    
    
    
    27,953,070
    
    
    
    5,230,982
    
    
    
    (5,722,888
    )
    
    
    34,996,699Total Current Liabilities
    
    
    7,635,677
    
    
    
    150,624,365
    
    
    
    58,266,105
    
    
    
    (22,098,980
    )
    
    
    194,427,167Senior Notes
    
    
    327,728,378
    
    
    
    (2,819,056
    )
    
    
    
    
    
    
    
    
    
    
    324,909,322Long-Term Obligations
    
    
    
    
    
    
    8,084,014
    
    
    
    58,699,666
    
    
    
    (5,000,000
    )
    
    
    61,783,680Deferred Income Taxes
    
    
    (21,249,098
    )
    
    
    42,657,097
    
    
    
    2,525,000
    
    
    
    1
    
    
    
    23,933,000Other Non-Current
Liabilities
    
    
    
    
    
    
    4,138,626
    
    
    
    483,688
    
    
    
    
    
    
    
    4,622,314Obligations Under
Stock Bonus Plan
    
    
    11,371,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,371,402Stockholders
Equity (Deficit)
    
    
    48,810,264
    
    
    
    87,674,794
    
    
    
    (11,027,503
    )
    
    
    (76,647,291
    )
    
    
    48,810,264Total Liabilities and
Stockholders Equity
    
    $
    374,296,623
    
    
    $
    290,359,840
    
    
    $
    108,946,956
    
    
    $
    (103,746,270
    )
    
    $
    669,857,149
 49




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Balance Sheet
 As of November 1, 2003 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCurrent AssetsCash
    
    $
    23,104,119
    
    
    $
    12,750,772
    
    
    $
    1,423,515
    
    
    $
    
    
    
    $
    37,278,406Accounts receivable
    
    
    9,090,858
    
    
    
    53,711,868
    
    
    
    11,085,537
    
    
    
    (12,153,679
    )
    
    
    61,734,584Inventories
    
    
    
    
    
    
    71,520,128
    
    
    
    18,500,614
    
    
    
    
    
    
    
    90,020,742Prepaid expenses
    
    
    
    
    
    
    7,558,454
    
    
    
    2,963,957
    
    
    
    
    
    
    
    10,522,411Prepaid federal income taxes
    
    
    975,392
    
    
    
    1,719,048
    
    
    
    99,540
    
    
    
    
    
    
    
    2,793,980Deferred income taxes
    
    
    (3,679,000
    )
    
    
    2,997,000
    
    
    
    2,525,000
    
    
    
    
    
    
    
    1,843,000Other current assets
    
    
    
    
    
    
    3,336,833
    
    
    
    351,226
    
    
    
    
    
    
    
    3,688,059Total Current Assets
    
    
    29,491,369
    
    
    
    153,594,103
    
    
    
    36,949,389
    
    
    
    (12,153,679
    )
    
    
    207,881,182Property, Plant &
Equipment- Net
    
    
    
    
    
    
    315,739,770
    
    
    
    51,430,456
    
    
    
    (250,000
    )
    
    
    366,920,226Other AssetsCash surrender value
of life insurance
    
    
    
    
    
    
    1,990,892
    
    
    
    
    
    
    
    
    
    
    
    1,990,892Deposits
    
    
    
    
    
    
    10,716,360
    
    
    
    
    
    
    
    
    
    
    
    10,716,360Investment in and advances
to affiliates
    
    
    337,670,382
    
    
    
    (271,963,985
    )
    
    
    
    
    
    
    (65,706,397
    )
    
    
    Capitalized loan costs
    
    
    1,024,917
    
    
    
    8,516,806
    
    
    
    
    
    
    
    
    
    
    
    9,541,723Intangible assets
    
    
    
    
    
    
    3,527,915
    
    
    
    2,901,553
    
    
    
    
    
    
    
    6,429,468Deferred tax asset  long term
    
    
    (429,556
    )
    
    
    429,556
    
    
    
    
    
    
    
    
    
    
    
    Prepaids
    
    
    
    
    
    
    936,658
    
    
    
    
    
    
    
    
    
    
    
    936,658Sundry
    
    
    
    
    
    
    5,001,699
    
    
    
    264,946
    
    
    
    (5,000,000
    )
    
    
    266,645Total Other Assets
    
    
    338,265,743
    
    
    
    (240,844,099
    )
    
    
    3,166,499
    
    
    
    (70,706,397
    )
    
    
    29,881,746Total Assets
    
    $
    367,757,112
    
    
    $
    228,489,774
    
    
    $
    91,546,344
    
    
    $
    (83,110,076
    )
    
    $
    604,683,154
 50




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Balance Sheet  Continued As of November 1, 2003 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCurrent LiabilitiesAccounts payable
    
    $
    17,159
    
    
    $
    85,969,356
    
    
    $
    36,292,095
    
    
    $
    (7,153,197
    )
    
    $
    115,125,413Current portion of long
term obligations
    
    
    
    
    
    
    2,970,955
    
    
    
    852,392
    
    
    
    
    
    
    
    3,823,347Taxes other than income
    
    
    
    
    
    
    4,006,848
    
    
    
    734,059
    
    
    
    
    
    
    
    4,740,907Other accrued expenses
    
    
    10,207,937
    
    
    
    20,239,446
    
    
    
    1,345,770
    
    
    
    (5,000,482
    )
    
    
    26,792,671Income taxes
    
    
    (168,440
    )
    
    
    1,531,811
    
    
    
    
    
    
    
    
    
    
    
    1,363,371Total Current Liabilities
    
    
    10,056,656
    
    
    
    114,718,416
    
    
    
    39,224,316
    
    
    
    (12,153,679
    )
    
    
    151,845,709Senior Notes
    
    
    325,701,807
    
    
    
    (3,231,599
    )
    
    
    
    
    
    
    
    
    
    
    322,470,208Long-Term Obligations
    
    
    
    
    
    
    5,562,807
    
    
    
    60,038,740
    
    
    
    (5,000,000
    )
    
    
    60,601,547Deferred Income Taxes
    
    
    (17,253,098
    )
    
    
    31,211,098
    
    
    
    2,525,000
    
    
    
    
    
    
    
    16,483,000Other Non-Current
Liabilities
    
    
    
    
    
    
    3,480,939
    
    
    
    550,004
    
    
    
    
    
    
    
    4,030,943Obligations Under
Stock Bonus Plan
    
    
    8,306,882
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,306,882Stockholders
Equity (Deficit)
    
    
    40,944,865
    
    
    
    76,748,113
    
    
    
    (10,791,716
    )
    
    
    (65,956,397
    )
    
    
    40,944,865Total Liabilities and
Stockholders Equity
    
    $
    367,757,112
    
    
    $
    228,489,774
    
    
    $
    91,546,344
    
    
    $
    (83,110,076
    )
    
    $
    604,683,154
 51




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Statement of Operations For the year ended October 30, 2004 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalRevenues
    
    $
    
    
    
    $
    902,455,339
    
    
    $
    104,345,439
    
    
    $
    (2,755,592
    )
    
    $
    1,004,045,186Cost and expenses
    
    
    
    
    
    
    776,898,386
    
    
    
    99,893,619
    
    
    
    (2,490,867
    )
    
    
    874,301,138Gross profit
    
    
    
    
    
    
    125,556,953
    
    
    
    4,451,820
    
    
    
    (264,725
    )
    
    
    129,744,048Selling, general and
administrative expenses
    
    
    2,036,743
    
    
    
    69,085,342
    
    
    
    9,452,213
    
    
    
    (540,000
    )
    
    
    80,034,298Operating (loss) profit
    
    
    (2,036,743
    )
    
    
    56,471,611
    
    
    
    (5,000,393
    )
    
    
    275,275
    
    
    
    49,709,750Other expense (income)Equity in (earnings) loss
of affiliates
    
    
    (6,165,455
    )
    
    
    2,449,219
    
    
    
    
    
    
    
    3,716,236
    
    
    
    Interest expense
    
    
    32,009,746
    
    
    
    33,510,196
    
    
    
    3,443,232
    
    
    
    (33,183,573
    )
    
    
    35,779,601Interest income
    
    
    (33,065,919
    )
    
    
    (282,698
    )
    
    
    (330,751
    )
    
    
    33,183,573
    
    
    
    (495,795
    )Royalty income
    
    
    
    
    
    
    (843,971
    )
    
    
    
    
    
    
    
    
    
    
    (843,971
    )Loss (gain) on sale of equipment
    
    
    
    
    
    
    1,919,711
    
    
    
    (113,812
    )
    
    
    
    
    
    
    1,805,899Gain on foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    (530,661
    )
    
    
    
    
    
    
    (530,661
    )Sundry (income) loss
    
    
    (540,084
    )
    
    
    621
    
    
    
    (188,829
    )
    
    
    540,000
    
    
    
    (188,292
    )(7,761,712
    )
    
    
    36,753,078
    
    
    
    2,279,179
    
    
    
    4,256,236
    
    
    
    35,526,781Earnings (loss) before
income taxes
    
    
    5,724,969
    
    
    
    19,718,533
    
    
    
    (7,279,572
    )
    
    
    (3,980,961
    )
    
    
    14,182,969Income tax (benefit) expense
    
    
    (3,465,000
    )
    
    
    8,458,000
    
    
    
    
    
    
    
    
    
    
    
    4,993,000Net earnings (loss)
    
    $
    9,189,969
    
    
    $
    11,260,533
    
    
    $
    (7,279,572
    )
    
    $
    (3,980,961
    )
    
    $
    9,189,969
 52




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##### Table of Contents



Plastipak Holdings, Inc.
and Subsidiaries Notes to the Consolidated Financial Statements   Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Statement of Operations For the year ended November 1, 2003 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalRevenues
    
    $
    
    
    
    $
    814,914,674
    
    
    $
    86,540,390
    
    
    $
    (3,626,284
    )
    
    $
    897,828,780Cost and expenses
    
    
    
    
    
    
    698,309,286
    
    
    
    83,136,889
    
    
    
    (3,776,285
    )
    
    
    777,669,890Gross profit
    
    
    
    
    
    
    116,605,388
    
    
    
    3,403,501
    
    
    
    150,001
    
    
    
    120,158,890Selling, general and
administrative expenses
    
    
    380,106
    
    
    
    68,500,904
    
    
    
    6,083,783
    
    
    
    
    
    
    
    74,964,793Operating (loss) profit
    
    
    (380,106
    )
    
    
    48,104,484
    
    
    
    (2,680,282
    )
    
    
    150,001
    
    
    
    45,194,097Other expense (income)Equity in (earnings) loss
of affiliates
    
    
    (3,204,174
    )
    
    
    1,659,306
    
    
    
    
    
    
    
    1,544,868
    
    
    
    Interest expense
    
    
    32,263,521
    
    
    
    872,445
    
    
    
    3,932,076
    
    
    
    (165,833
    )
    
    
    36,902,209Interest income
    
    
    (30,391,967
    )
    
    
    29,582,502
    
    
    
    (343,916
    )
    
    
    165,833
    
    
    
    (987,548
    )Royalty income
    
    
    
    
    
    
    (1,117,959
    )
    
    
    
    
    
    
    
    
    
    
    (1,117,959
    )Loss (gain) on sale of equipment
    
    
    
    
    
    
    169,784
    
    
    
    (14,424
    )
    
    
    
    
    
    
    155,360Loss on foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    970,726
    
    
    
    
    
    
    
    970,726Sundry (income) loss
    
    
    (540,072
    )
    
    
    923,537
    
    
    
    (16,212
    )
    
    
    
    
    
    
    367,253(1,872,692
    )
    
    
    32,089,615
    
    
    
    4,528,250
    
    
    
    1,544,868
    
    
    
    36,290,041Earnings (loss) before
income taxes
    
    
    1,492,586
    
    
    
    16,014,869
    
    
    
    (7,208,532
    )
    
    
    (1,394,867
    )
    
    
    8,904,056Income taxe (benefit) expense
    
    
    (2,868,470
    )
    
    
    6,323,470
    
    
    
    1,088,000
    
    
    
    
    
    
    
    4,543,000Net earnings (loss)
    
    $
    4,361,056
    
    
    $
    9,691,399
    
    
    $
    (8,296,532
    )
    
    $
    (1,394,867
    )
    
    $
    4,361,056
 53




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Statement of Operations For the year ended November 2, 2002 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalRevenues
    
    $
    
    
    
    $
    748,587,324
    
    
    $
    65,946,063
    
    
    $
    (2,343,319
    )
    
    $
    812,190,068Cost and expenses
    
    
    
    
    
    
    630,435,701
    
    
    
    68,638,613
    
    
    
    (2,073,319
    )
    
    
    697,000,995Gross profit (loss)
    
    
    
    
    
    
    118,151,623
    
    
    
    (2,692,550
    )
    
    
    (270,000
    )
    
    
    115,189,073Selling, general and
administrative expenses
    
    
    63,487
    
    
    
    61,909,025
    
    
    
    6,803,276
    
    
    
    (270,000
    )
    
    
    68,505,788Operating (loss) profit
    
    
    (63,487
    )
    
    
    56,242,598
    
    
    
    (9,495,826
    )
    
    
    
    
    
    
    46,683,285Other expense (income)Equity in (earnings) loss
of affiliates
    
    
    (5,017,029
    )
    
    
    2,560,359
    
    
    
    
    
    
    
    2,456,670
    
    
    
    Interest expense
    
    
    29,491,925
    
    
    
    1,590,376
    
    
    
    4,219,069
    
    
    
    (202,105
    )
    
    
    35,099,265Interest income
    
    
    (28,781,238
    )
    
    
    27,860,531
    
    
    
    (502,543
    )
    
    
    202,105
    
    
    
    (1,221,145
    )Royalty income
    
    
    
    
    
    
    (760,857
    )
    
    
    
    
    
    
    
    
    
    
    (760,857
    )(Gain) loss on sale of equipment
    
    
    
    
    
    
    429,629
    
    
    
    (468,882
    )
    
    
    
    
    
    
    (39,253
    )Loss on foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    128,510
    
    
    
    
    
    
    
    128,510Sundry (income) loss
    
    
    (671,955
    )
    
    
    395,095
    
    
    
    (70,185
    )
    
    
    400,000
    
    
    
    52,955(4,978,297
    )
    
    
    32,075,133
    
    
    
    3,305,969
    
    
    
    2,856,670
    
    
    
    33,259,475Earnings (loss) before
income taxes
    
    
    4,914,810
    
    
    
    24,167,465
    
    
    
    (12,801,795
    )
    
    
    (2,856,670
    )
    
    
    13,423,810Income taxes (benefit) expense
    
    
    (3,678,000
    )
    
    
    8,509,000
    
    
    
    
    
    
    
    
    
    
    
    4,831,000Net earnings (loss)
    
    $
    8,592,810
    
    
    $
    15,658,465
    
    
    $
    (12,801,795
    )
    
    $
    (2,856,670
    )
    
    $
    8,592,810
 54




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Statement of Cash Flows For the year October 30, 2004 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows From
Operating ActivitiesNet cash (used in) provided
by operating activities
    
    $
    (953,938
    )
    
    $
    93,556,244
    
    
    $
    3,462,557
    
    
    $
    1
    
    
    $
    96,064,864Cash Flows Used In
Investing ActivitiesAcquisition of property
and equipment
    
    
    
    
    
    
    (104,772,222
    )
    
    
    (7,696,892
    )
    
    
    1,797,463
    
    
    
    (110,671,651
    )Proceeds from sale of equipment
    
    
    
    
    
    
    2,194,771
    
    
    
    1,946,664
    
    
    
    (1,797,463
    )
    
    
    2,343,972Investment in and advances
to affiliates
    
    
    (19,623,139
    )
    
    
    (10,028,897
    )
    
    
    
    
    
    
    29,652,036
    
    
    
    Acquisition of intangible assets
    
    
    
    
    
    
    (4,512,500
    )
    
    
    
    
    
    
    
    
    
    
    (4,512,500
    )Net cash (used in) provided
by investing activities
    
    
    (19,623,139
    )
    
    
    (117,118,848
    )
    
    
    (5,750,228
    )
    
    
    29,652,036
    
    
    
    (112,840,179
    )Cash Flows Used In
Financing ActivitiesNet borrowings under revolving debt
    
    
    
    
    
    
    
    
    
    
    (3,669,957
    )
    
    
    
    
    
    
    (3,669,957
    )Principal payments on long-term
obligations
    
    
    
    
    
    
    (4,682,086
    )
    
    
    (963,902
    )
    
    
    
    
    
    
    (5,645,988
    )Proceeds from long-term obligations
    
    
    
    
    
    
    22,477,379
    
    
    
    618,038
    
    
    
    (22,477,379
    )
    
    
    618,038Capital increases
    
    
    100
    
    
    
    
    
    
    
    7,174,658
    
    
    
    (7,174,658
    )
    
    
    100Net cash provided by
(used in) financing activities
    
    
    100
    
    
    
    17,795,293
    
    
    
    3,158,837
    
    
    
    (29,652,037
    )
    
    
    (8,697,807
    )Net (decrease) increase in cash
    
    
    (20,576,977
    )
    
    
    (5,767,311
    )
    
    
    871,166
    
    
    
    
    
    
    
    (25,473,122
    )Cash and cash equivalents at
the beginning of the year
    
    
    23,104,119
    
    
    
    12,750,772
    
    
    
    1,423,515
    
    
    
    
    
    
    
    37,278,406Cash and cash equivalents at
the end of the period
    
    $
    2,527,142
    
    
    $
    6,983,461
    
    
    $
    2,294,681
    
    
    $
    
    
    
    $
    11,805,284
 55




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##### Table of Contents



Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Statement of Cash Flows For the year ended November 1, 2003 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows From
Operating ActivitiesNet cash (used in) provided
by operating activities
    
    $
    (3,715,361
    )
    
    $
    79,589,181
    
    
    $
    (430,541
    )
    
    $
    
    
    
    $
    75,443,279Cash Flows Used In
Investing ActivitiesAcquisition of property
and equipment
    
    
    
    
    
    
    (97,084,357
    )
    
    
    (3,728,659
    )
    
    
    
    
    
    
    (100,813,016
    )Proceeds from sale of equipment
    
    
    
    
    
    
    1,271,717
    
    
    
    52,454
    
    
    
    
    
    
    
    1,324,171Investment in and advances
to affiliates
    
    
    (17,800,000
    )
    
    
    (400,000
    )
    
    
    
    
    
    
    18,200,000
    
    
    
    Acquisition of intangible assets
    
    
    
    
    
    
    (1,775,000
    )
    
    
    
    
    
    
    
    
    
    
    (1,775,000
    )Net cash (used in) provided
by investing activities
    
    
    (17,800,000
    )
    
    
    (97,987,640
    )
    
    
    (3,676,205
    )
    
    
    18,200,000
    
    
    
    (101,263,845
    )Cash Flows Used In
Financing ActivitiesNet borrowings under revolving credit
    
    
    
    
    
    
    
    
    
    
    3,196,044
    
    
    
    
    
    
    
    3,196,044Principal payments on long-term
obligations
    
    
    
    
    
    
    (4,439,707
    )
    
    
    (1,904,172
    )
    
    
    
    
    
    
    (6,343,879
    )Proceeds from long-term obligations
    
    
    
    
    
    
    16,200,000
    
    
    
    50,545
    
    
    
    (16,200,000
    )
    
    
    50,545Capital increases
    
    
    
    
    
    
    
    
    
    
    2,000,000
    
    
    
    (2,000,000
    )
    
    
    Net cash provided by
(used in) financing activities
    
    
    
    
    
    
    11,760,293
    
    
    
    3,342,417
    
    
    
    (18,200,000
    )
    
    
    (3,097,290
    )Net decrease in cash
    
    
    (21,515,361
    )
    
    
    (6,638,166
    )
    
    
    (764,329
    )
    
    
    
    
    
    
    (28,917,856
    )Cash and cash equivalents at
the beginning of the year
    
    
    44,619,480
    
    
    
    19,388,938
    
    
    
    2,187,844
    
    
    
    
    
    
    
    66,196,262Cash and cash equivalents at
the end of the period
    
    $
    23,104,119
    
    
    $
    12,750,772
    
    
    $
    1,423,515
    
    
    $
    
    
    
    $
    37,278,406
 56




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements   Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Statement of Cash Flows For the year ended November 2, 2002 Parent
    
    
    Guarantor
    
    
    Nonguarantor
    
    
    
    
    
    
    ConsolidatedTotal
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalCash Flows From
Operating ActivitiesNet cash provided by (used in)
operating activities
    
    $
    2,529,702
    
    
    $
    50,753,541
    
    
    $
    (483,602
    )
    
    $
    (940,049
    )
    
    $
    51,859,592Cash Flows Used In
Investing ActivitiesAcquisition of property
and equipment
    
    
    
    
    
    
    (76,509,171
    )
    
    
    (8,016,798
    )
    
    
    2,377,674
    
    
    
    (82,148,295
    )Proceeds from sale of equipment
    
    
    
    
    
    
    
    
    
    
    1,977,673
    
    
    
    (1,977,673
    )
    
    
    Investment in and advances
to affiliates
    
    
    (12,997,198
    )
    
    
    (3,088,950
    )
    
    
    
    
    
    
    16,086,148
    
    
    
    Acquisition of intangible assets
    
    
    
    
    
    
    (3,000,000
    )
    
    
    (4,414,600
    )
    
    
    
    
    
    
    (7,414,600
    )Net cash (used in) provided
by investing activities
    
    
    (12,997,198
    )
    
    
    (82,598,121
    )
    
    
    (10,453,725
    )
    
    
    16,486,149
    
    
    
    (89,562,895
    )Cash Flows Used In
Financing ActivitiesNet borrowings under revolving credit
    
    
    
    
    
    
    
    
    
    
    5,354,340
    
    
    
    27,518
    
    
    
    5,381,858Principal payments on long-term
obligations
    
    
    
    
    
    
    (9,358,164
    )
    
    
    (6,145,134
    )
    
    
    6,400,000
    
    
    
    (9,103,298
    )Proceeds from long-term obligations
    
    
    53,250,000
    
    
    
    10,084,668
    
    
    
    21,503
    
    
    
    (10,084,668
    )
    
    
    53,271,503Settlement of interest rate swap
    
    
    3,012,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,012,000Capitalized loan costs
    
    
    (1,176,587
    )
    
    
    (969,863
    )
    
    
    
    
    
    
    
    
    
    
    (2,146,450
    )Capital increases
    
    
    563
    
    
    
    
    
    
    
    11,888,950
    
    
    
    (11,888,950
    )
    
    
    563Net cash provided by
(used in) financing activities
    
    
    55,085,976
    
    
    
    (243,359
    )
    
    
    11,119,659
    
    
    
    (15,546,100
    )
    
    
    50,416,176Net increase (decrease) in cash
    
    
    44,618,480
    
    
    
    (32,087,939
    )
    
    
    182,332
    
    
    
    
    
    
    
    12,712,873Cash and cash equivalents at
the beginning of the year
    
    
    1,000
    
    
    
    51,476,877
    
    
    
    2,005,512
    
    
    
    
    
    
    
    53,483,389Cash and cash equivalents at
the end of the period
    
    $
    44,619,480
    
    
    $
    19,388,938
    
    
    $
    2,187,844
    
    
    $
    
    
    
    $
    66,196,262
 57




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Plastipak Holdings, Inc. and Subsidiaries Notes to the Consolidated Financial Statements  Continued   Note O Guarantor and Nonguarantor Financial Statements and Reportable Segments (Continued) Condensed Consolidating Statement of Cash Flows  Continued Supplemental Cash Flow Information Depreciation and Amortization Expense
Period Ended Guarantor
    
    
    NonguarantorSubsidiaries
    
    
    Subsidiaries
    
    
    Total10/30/04
    
    $
    56,289,117
    
    
    $
    9,358,628
    
    
    $
    65,647,74511/01/03
    
    $
    47,011,678
    
    
    $
    9,337,837
    
    
    $
    56,349,51511/02/02
    
    $
    39,644,062
    
    
    $
    8,373,531
    
    
    $
    48,017,593
 NOTE P  Quarterly Financial Data (Unaudited) First
    
    
    Second
    
    
    Third
    
    
    FourthQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterFiscal Year Ended October 30, 2004Revenues
    
    $
    225,967,628
    
    
    $
    251,212,178
    
    
    $
    261,559,078
    
    
    $
    265,306,302Gross profit
    
    
    22,411,600
    
    
    
    37,032,805
    
    
    
    36,657,230
    
    
    
    33,642,413Net (loss) earnings
    
    
    (3,575,043
    )
    
    
    5,309,423
    
    
    
    4,717,240
    
    
    
    2,738,349Fiscal Year Ended November 1, 2003Revenues
    
    $
    199,544,801
    
    
    $
    227,328,604
    
    
    $
    237,355,017
    
    
    $
    233,600,358Gross profit
    
    
    24,814,501
    
    
    
    37,538,753
    
    
    
    29,410,424
    
    
    
    28,395,212Net (loss) earnings
    
    
    (1,820,885
    )
    
    
    6,421,279
    
    
    
    410,650
    
    
    
    (649,988
    )Fiscal Year Ended November 2, 2002Revenues
    
    $
    187,502,416
    
    
    $
    203,394,217
    
    
    $
    208,359,282
    
    
    $
    212,934,153Gross profit
    
    
    26,116,907
    
    
    
    34,670,554
    
    
    
    27,554,918
    
    
    
    26,846,694Net (loss) earnings
    
    
    (492,500
    )
    
    
    6,678,975
    
    
    
    3,052,898
    
    
    
    (646,563
    )
 NOTE Q  Subsequent Events On January 28, 2005, the Company amended its revolving credit agreement and entered into the Fifth
Amended and Restated Revolving Credit Agreement. The amendment provides for an increase in the
line of credit from $150,000,000 to $300,000,000. All other terms and conditions principally
remain the same.In addition, the Company will pay legal, accounting and other expenses in
connection with the new loan agreement. 58




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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. 
 ITEM 9A. CONTROLS AND PROCEDURES Our Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of
our controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) of the Securities and
Exchange Act of 1934, as amended) as of the end of the period covered by this report, have
concluded that as of such date the disclosure controls and procedures were adequate and effective
in ensuring that material information relating to Plastipak would be made known to them by others
in the company. There were no significant changes in internal controls or other factors that could
significantly affect Plastipaks disclosure controls and procedures subsequent to the date of their
evaluation, nor were there any significant deficiencies or material weaknesses in Plastipaks
internal controls. As a result, no corrective actions were required or undertaken. 
 ITEM 9B. OTHER INFORMATION Not applicable. 
 PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Directors, Executive Officers and Key Employees The following table sets forth certain information with respect to the executive officers,
directors and certain key employees of Plastipak and its subsidiaries. NAME
    
    
    AGE

    
    
    POSITIONWilliam C. Young
    
    
    64
    
    
    Chairman and Director, President & Chief Executive Officer, ManagerWilliam A. Slat
    
    
    57
    
    
    Vice President Operations and ManufacturingMichael J. Plotzke
    
    
    47
    
    
    Chief Financial Officer, Vice President Finance and Treasurer and
Assistant SecretaryGene W. Mueller
    
    
    47
    
    
    Vice President Sales and MarketingThomas Busard
    
    
    53
    
    
    President Clean TechPradeep Modi
    
    
    49
    
    
    Vice President Chief Accounting OfficerFrank Pollock
    
    
    49
    
    
    President International Operations and BusinessRichard Darr
    
    
    55
    
    
    Vice President Packaging DevelopmentJ. Ronald Overbeck
    
    
    56
    
    
    Vice President Product SupplyLeann M. Underhill
    
    
    59
    
    
    Corporate Legal Counsel and SecretaryDavid Daugherty
    
    
    49
    
    
    Chief Information OfficerThomas L. Schellenberg
    
    
    58
    
    
    DirectorWilliam J. Schlageter
    
    
    64
    
    
    Director
 William C. Younghas been the Chairman of the Board, President and the Chief Executive Officer of
Plastipak since its inception in 1998, and has been Chairman and Chief Executive Officer of
Packaging, Whiteline and Clean Tech since he founded each company. Mr. Young has been the sole
Manager of TABB since its inception in 1999. William Slathas been our Vice President Operations and Manufacturing since 1982. Prior to that he
was Manufacturing Manager. He has been with our company for over 33 years and served in various
capacities ranging from customer service to plant and regional management. Michael J. Plotzke, CPA,has served as our Chief Financial Officer, Vice President of Finance and
Treasurer since 1988. Throughout his 20 years with our company, Mr. Plotzke has served in many
capacities including his current role as Treasurer for Packaging, Whiteline, Clean Tech and TABB,
all of which he has held since 1992. 59




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Gene W. Muellerjoined us in February 1997 and has served as our Vice President  Sales and
Marketing since 1999. Thomas Busardis President Clean Tech and has served in that position since 1989. Mr. Busard has
been with us for over 33 years and has served in various positions throughout that time period. Pradeep Modihas been with us for over 20 years and has served in various capacities. He is
currently our Chief Accounting Officer  Vice President of Administration and Strategic Planning.
Prior to that he was Vice President  Controller and Strategic Operation Planning from 1999 to
2004. Frank Pollockis our President of International Operations and Business Development. Prior to that
he served as our Vice President  International Sales/Marketing from 1997 to 2004. He has been
with us for eight years. Richard Darr, our Vice President  Packaging Development since 1993, is our chief design and
packaging engineer. He has worked in research and development during his 27-year tenure with our
company. J. Ronald Overbeck, our Vice President  Product Supply, has worked in that position since 1999 and
has been with us for over 30 years. Leann M. Underhill, B.A., J.D., has served as our Corporate Legal Counsel since 1985 and, since
1999, has served as Secretary to Plastipak, Packaging, Whiteline, and TABB. She has been with us
since 1984. David Daughertyhas served as our Chief Information Officer since February 2000. Thomas L. Schellenberghas been a Director of Plastipak since its inception and has served as a
Director of Packaging since 1996, of Whiteline since 1999 and of Clean Tech since 1998. Mr.
Schellenberg is a tax attorney, certified public accountant and President of Schellenberg &
Associates, P.C., a tax and business consulting firm. William J. Schlageterjoined Plastipak as a Director in December 2003. Mr. Schlageter is founder
and President of Communications Technologies, Ltd. He also serves as the Chairman of the Board and
a director of Ukrainian Wave Ltd., a digital wireless telephone company in western Ukraine, and of
Hatwave Hellenic American Telecommunications Wave, Ltd., a Cypriot company that is affiliated with
Ukrainian Wave Ltd. Audit Committee Financial Expert The full Board of Directors functions as Plastipaks audit committee. The Board consists of
three directors. At the present time, no member of the Board of Directors meets the SECs
definition of an audit committee financial expert. We believe the experience and education of the
directors qualifies them to monitor the integrity of our financial statements, with legal and
regulatory requirements, the public accountants qualifications and independence, the performance
of our internal audit function, and our compliance with the Sarbanes-Oxley Act and the rules and
regulations thereunder. In addition, the Board has the ability on its own to retain independent
accountants, financial advisors or other consultants, advisors and experts whenever it deems
appropriate. We believe the directors qualifications and experience, and ability to utilize
outside advisors and experts as they consider appropriate, affords them sufficient background and
expertise to fulfill their obligations without the necessity of including a financial expert at the
present time. Management has the primary responsibility for the financial statements and the reporting
process. Our independent registered public accounting firm is responsible for performing an audit
in accordance with standards of the United States Public Company Accounting Oversight Board to
obtain reasonable assurance that our consolidated financial statements are free from material
misstatement and expressing an opinion on the conformity of the financial statements with
accounting principles generally accepted in the United States of America. The Board has approved the audited financial statements to be included in our Annual Report on
Form 10-K for the year ended October 30, 2004, for filing with the Securities and Exchange
Commission. 60




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Code of Ethics Plastipak has adopted a Code of Business Conduct (Code) which applies to all representatives,
Associates (defined as any person who is employed by Plastipak and any of its subsidiaries),
including but not limited to supervisors, managers, consultants, directors, officers and any other
persons whose business activities are conducted for Plastipak and/or any of its subsidiaries. The
Code requires all of our Associates to act ethically when conducting business. The Code provides a
summary of the conduct required from all Associates, and is a source for guidance, modification,
accountability for, and enforcement of its provisions. A complete copy of the Code has been posted
on our Internet website at www.plastipak.com and is included in Exhibit 14 of our Form 10-K filed
on January 29, 2004. We will satisfy any disclosure requirements under Item 5.05 of Form 8-K
regarding an amendment to, or waiver from, any provision of the Code with respect to our principal
executive officer, principal financial officer, principal accounting officer and any persons
performing similar functions by disclosing the nature of such amendments or waiver on our web site. 
 ITEM 11. EXECUTIVE COMPENSATION The following table sets forth a summary of compensation paid to the Chief Executive Officer
and the four other most highly compensated executives of Plastipak (the Named Executives) for
services rendered in all capacities to Plastipak and its subsidiaries during the last three fiscal
years. SUMMARY COMPENSATION TABLE Annual CompensationFiscalName and Principal Position
    
    Year
    
    
    Salary (a)
    
    
    BonusWilliam C. Young
    
    
    2004
    
    
    $
    601,248
    
    
    $
    581,845Chairman and Director, President
    
    
    2003
    
    
    
    601,248
    
    
    
    790,504and Chief Executive Officer
    
    
    2002
    
    
    
    601,248
    
    
    
    201,897Michael J. Plotzke
    
    
    2004
    
    
    
    228,750
    
    
    
    163,375Chief Financial Officer, Vice
    
    
    2003
    
    
    
    225,000
    
    
    
    194,675President  Finance, and Treasurer
    
    
    2002
    
    
    
    213,667
    
    
    
    182,248William A. Slat
    
    
    2004
    
    
    
    226,227
    
    
    
    145,750Vice President Operations
    
    
    2003
    
    
    
    219,560
    
    
    
    170,915and Manufacturing
    
    
    2002
    
    
    
    209,560
    
    
    
    173,445Gene W. Mueller
    
    
    2004
    
    
    
    209,560
    
    
    
    155,275Vice President Sales
    
    
    2003
    
    
    
    204,560
    
    
    
    173,311and Marketing
    
    
    2002
    
    
    
    183,537
    
    
    
    153,123Thomas Busard
    
    
    2004
    
    
    
    206,267
    
    
    
    149,380President Clean Tech
    
    
    2003
    
    
    
    201,600
    
    
    
    199,2922002
    
    
    
    189,547
    
    
    
    144,415
    OPTION GRANTS IN FISCAL 2004 There were no options granted to any Named Executives during the year ended October 30, 2004. 61




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AGGREGATE OPTION EXERCISES IN FISCAL 2004 AND 2004 FISCAL YEAR-END OPTION VALUES During fiscal 2004, Gene Mueller exercised 100 options. The following table sets forth, for
each of the Named Executives holding unexercised options, certain information regarding the value
of options held at October 30, 2004: Number of Unexercised
    
    
    Value of Unexercised in-the-Shares
    
    
    
    
    
    
    Options at Fiscal Year
    
    
    Money Options at Fiscal YearAcquired on
    
    
    
    
    
    
    End (Exercisable/
    
    
    End (Exercisable/Name
    
    Exercise
    
    
    Value Realized
    
    
    Unexercisable)
    
    
    Unexercisable) (a)Michael J. Plotzke
    
    
    
    
    
    $
    
    
    
    
    500/0
    
    
    $
    1,343,000/0Gene W. Mueller
    
    
    100
    
    
    $
    276,300
    
    
    
    200/0
    
    
    $
    552,400/0Thomas Busard
    
    
    
    
    
    $
    
    
    
    
    100/327
    
    
    $
    268,600 / $878,322
   (a)
    None of Plastipaks common stock is currently publicly traded. The values reflect the
adjusted per share book value of Plastipaks common stock (as defined in the Restricted
Stock Bonus Plan under which these options were granted) at October 30, 2004, less the
exercise price. RESTRICTED STOCK BONUS PLAN The board of directors of Plastipak adopted the Restricted Stock Bonus Plan (the Restricted
Stock Bonus Plan) effective as of October 30, 1999, as a successor plan to the Plastipak
Packaging, Inc. Restricted Stock Bonus Plan adopted in 1985. The Restricted Stock Bonus Plan was
amended and restated effective July 31, 2002 and subsequently amended effective August 15, 2002 and
December 19, 2003. All of our employees are eligible to participate in the Restricted Stock Bonus
Plan, subject to the boards discretion. The board makes all administrative decisions under the
Restricted Stock Bonus Plan. The board has reserved 5,450 shares of Plastipaks common stock for
distribution under the Restricted Stock Bonus Plan. As of October 30, 2004, 3,450 of the 5,450
reserved shares had been allocated to our employees and 2,000 shares remain available for
allocation. Once the board has allocated restricted shares to an employee, the employee must satisfy all
of the following terms and conditions prior to receiving certificates representing bonus shares:  
    The period of time specified by the board, in its sole discretion, not to exceed five
years, must have lapsed since the date that the board allocated the shares to the employee;
    The employee must have remained in continuous employment with us or one of our affiliates during this period;
    The employee must have paid us $1.00 for each bonus share; and
    If required, we must have received the written consent of our secured creditors. Shares issued under the Restricted Stock Bonus Plan are non-transferable and, once received,
the difference between the price paid for the shares and the adjusted book value of the shares is
taxed to the employee as non-qualified deferred compensation. Employees who have received certificates representing restricted stock pursuant to the
Restricted Stock Bonus Plan are required to sell those shares back to us upon the occurrence of
certain trigger events. These trigger events include the employees death and the employees
employment termination, whether because of resignation, retirement, dismissal or otherwise. The
redemption price is based upon our per share book value, subject to certain adjustments. The amendment and restatement of the Restricted Stock Bonus Plan in 2002 effected the
following material changes in the Plan:  
    A change in control provision was added, which provides that all bonus shares vest
immediately upon change in control, subject to the golden parachute payment limitations of
Code Section 280G. 62




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##### Table of Contents




    Bring along and come along provisions were added so that holders of the restricted
stock are (1) entitled to participate in any voluntary sale of our capital stock; and (2)
required to participate in certain voluntary sales of our capital stock.
    A covenant not to compete and a confidentiality agreement were added as a condition to
participation in the Restricted Stock Bonus Plan.
    A provision was added granting employees who are issued bonus shares under the plan
certain piggy back registration rights in the event we initiate an SEC registered public
offering of our common stock. 2002 RESTRICTED STOCK BONUS PLAN The board of directors of Plastipak adopted the 2002 Restricted Stock Bonus Plan (the 2002
Plan) on October 16, 2002 and subsequently amended it effective December 19, 2003. All of our
employees (including employees who are directors, as well as non-employees who serve as directors
or who otherwise provide services to us) are eligible to participate in the 2002 Plan. The 2002
Plan is administered by the board (or any committee established by the board for that purpose). The
board has reserved 5,450 shares of Plastipaks common stock for grant under the 2002 Plan. There
are 1,000 of the 5,450 reserved shares that have been granted to our employees, and 4,450 shares
remain available for grant. Participants in the 2002 Plan are required to pay us a per share
purchase price, as set by the board from time to time, for each restricted share. The vested percentage of a participants restricted stock award will be no more restrictive
than as follows: YEARS OF PARTICIPATION
    
    VESTEDIN PLAN
    
    PERCENTAGELess than 6 years
    
    
    0
    %6 years but less than 7 years
    
    
    20
    %7 years but less than 8 years
    
    
    40
    %8 years but less than 9 years
    
    
    60
    %9 years but less than 10 years
    
    
    80
    %10 years or more
    
    
    100
    %
 The restrictions on outstanding restricted stock awards immediately lapse (except as may be
provided in the participants restricted stock agreement with us) in the event of a change of
control, subject to the golden parachute payment limitations of Code Section 280G. In addition, a
participants restricted stock award becomes 100% vested in the event of his or her retirement at
or after age 65, death or disability. During the restriction period, participants holding shares of
restricted stock granted under the 2002 Plan are entitled to exercise full voting rights with
respect to such shares, and to receive all dividends and other distributions paid with respect to
such shares. Prior to the issuance of any common stock certificates under the 2002 Plan, participants are
required to enter into a shareholder agreement with us with bring along and come along
provisions which (1) entitle the participant to participate in any voluntary sale of our capital
stock, and (2) require the participant to participate in certain voluntary sales of our capital
stock. In addition, we may require a participant to enter into a confidentiality agreement and/or a
noncompetition agreement as a condition precedent to any award of restricted stock under the 2002
Plan. A participants restricted stock award is subject to forfeiture if the participant is
terminated for cause as defined in the 2002 Plan. Participants who have received certificates for
restricted shares issued under the 2002 Plan are required to sell those shares back to us upon the
occurrence of certain trigger events. These trigger events include: termination of employment;
death; disability; institution of certain litigation against us; and the breach or threatened
breach of the participants non-competition or confidentiality agreement. The redemption price is
based on our per share book value, subject to certain adjustments; provided, however, that if the
participant is terminated for cause or if the participant institutes certain litigation against
us, the redemption price will be reduced to $1.00 per share. A participants obligation to sell
his/her restricted stock to us, and our obligation to purchase such restricted stock, terminates
upon an initial public offering of our common stock. 63




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##### Table of Contents



SALARY CONTINUATION PLAN The board of directors of Packaging adopted a Salary Continuation Plan effective September
1985, which has been amended from time to time (the Salary Continuation Plan). The Salary
Continuation Plan is a non-qualified deferred compensation plan administered by an administrative
committee comprised of William C. Young and Michael J. Plotzke. All of Packagings employees are
eligible to participate in the Salary Continuation Plan, subject to selection by the administrative
committee. The Salary Continuation Plan provides for the payment of normal retirement and death benefits,
and in some cases early retirement benefits, to participants, as specified in the participants
adoption agreement. An adoption agreement between the participant and Packaging sets forth the age,
years of service and other requirements a participant must attain in order to receive a particular
benefit. In general, a participant must have participated in the Salary Continuation Plan for at
least 10 years, and must have attained the age of at least 59, but not age 65, in order to receive
early retirement benefits. A participant generally must have participated in the Salary
Continuation Plan for at least 10 years, and must have attained the age of 65, in order to receive
normal retirement benefits. The Salary Continuation Plan does not specify minimum age or years of
service requirements for death benefits. Following satisfaction of all eligibility requirements and a notice by the participant or his
or her representative requesting the payment of benefits, we are required to pay the early
retirement, normal retirement or death benefits specified in the participants adoption agreement.
Participants do not vest ratably in any benefit over the term of their employment with Packaging.
Participants are entitled to receive only one benefit (early retirement, normal retirement or
death), and each benefit is payable on a monthly basis for a period of 180 months. Packagings
obligation to pay benefits to a participant ceases if the participant violates the terms of a
non-competition agreement contained in his or her adoption agreement. Packaging may amend or
terminate the Salary Continuation Plan at any time, unless a participant has fully vested in his or
her benefits. All benefits payable under the Salary Continuation Plan are paid out of Packagings
general assets, and Packaging has purchased life insurance to fund death benefits for the
participants. Named Executives William A. Slat, Michael J. Plotzke, Gene W. Mueller and Thomas Busard are
participants in the Salary Continuation Plan, and Messrs. Slat, Plotzke and Busard have each
participated in the Salary Continuation Plan for over 10 years and therefore are fully vested for
purposes of retirement benefits. Mr. Mueller began his 10-year vesting requirement for retirement
benefits in February 1997. The monthly early retirement and pre-retirement death benefits for
Messrs. Plotzke, Mueller and Busard currently are $5,292, $3,967 and $3,967, respectively, and the
monthly pre-retirement death benefits for Mr. Slat are $5,292. The monthly normal retirement and
post-retirement death benefits for Messrs. Slat, Plotzke, Mueller and Busard currently are $8,333,
$8,333, $6,250 and $6,250, respectively. DIRECTOR COMPENSATION Mr. Young receives no cash consideration for serving on the board of directors of any of our
companies. Mr. Schellenberg and Mr. Schlageter received compensation in the amount of approximately
$15,000 per year, for their services on the board of directors of our companies, plus out-of-pocket
expenses incurred in connection with their duties as directors. Mr. Schlageter also received
approximately $110,000 for consulting services throughout the year. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION For the year ended October 30, 2004, William C. Young, our President and Chief Executive
Officer, determined compensation for our Named Executives. For information regarding transactions
between us and Mr. Young, his affiliates and entities he controls, see Certain Relationships and
Related Transactions. 64




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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding the ownership of the outstanding
capital stock of Plastipak with respect to the following:  
    each person known by Plastipak to own more than 5% of its outstanding capital stock;
    each director;
    each Named Executive; and
    the directors and executive officers of Plastipak, as a group. Each shareholder has sole voting and investment power with respect to the shares beneficially
owned. The address for each shareholder is c/o Plastipak Holdings, Inc., 41605 Ann Arbor Road,
Plymouth, Michigan 48170. SHARES OF

    
    PERCENTAGE OFNAME OF SHAREHOLDER
    
    COMMON STOCK

    
    COMMON STOCKWilliam C. Young
    
    
    21,414
    (a)
    
    
    75.63
    %Multi-Investments Limited Partnership(b)
    
    
    3,936
    
    
    
    13.90
    %William A. Slat
    
    
    725
    
    
    
    2.56
    %Michael J. Plotzke
    
    
    545
    (c)
    
    
    1.89
    %Thomas Busard
    
    
    218
    (d)
    
    
    0.77
    %Gene W. Mueller
    
    
    500
    (e)
    
    
    1.75
    %Thomas L. Schellenberg
    
    
    0
    
    
    
    0.00
    %William J. Schlageter
    
    
    0
    
    
    
    0.00
    %Directors and executive officers as a group (7 persons)
    
    
    27,338
    (f)
    
    
    93.57
    %
   (a)
    Represents 21,414 shares held by the Revocable Trust Agreement of William C. Young dated
12/23/88, as amended.(b)
    Multi-Investments Limited Partnership is a Michigan limited partnership that is owned by
the Young family. The partnership is comprised of one General Partner and four Limited
Partners. The General Partner is William C. Young, Trustee of the Revocable Trust Agreement
of William C. Young dated 12/23/88. The Limited Partners are: (i) W.C. Young Trust FBO W.
Patrick Young dated 12/23/89, or successors in trust, W.C. Young and W. Patrick Young,
Trustees; (ii) W.C. Young Trust FBO Amy L. Young dated 12/23/89, or successors in trust,
W.C. Young and Amy L. Morgan, Trustees; (iii) W.C. Young Trust FBO Tracey L. Young dated
12/23/89, or successors in trust, W.C. Young and Tracey L. Deal, Trustees; and (iv) W.C.
Young Trust FBO Brittany M.G. Young dated 12/29/92, or successors in interest, W. Patrick
Young, Amy L. Morgan and Tracey L. Deal, Trustees.(c)
    Includes options to acquire 500 shares which are presently exercisable.(d)
    Includes options to acquire 100 shares which are presently exercisable.(e)
    Includes options to acquire 200 shares which are presently exercisable.(f)
    Includes the presently exercisable options described in footnotes (c), (d) and (e) above. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS BUSINESS RELATIONSHIPS AND TRANSACTIONS We have maintained business relationships and entered into business transactions with
companies owned or controlled by Mr. William C. Young, our Chief Executive Officer and largest
shareholder, or managed by members of his immediate family (each an affiliate and collectively
affiliates). A brief summary of the agreements, leases, and arrangements between the affiliates
and us follows. We believe, based on our general awareness of market pricing and standards, that
transactions with our affiliates are on terms no less favorable to us than those that would be
available to us in arms-length transactions with unaffiliated third parties for similar products
and services, with the exception of extended payment terms 65




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for certain affiliates discussed below. As a result of the Reorganization, as described in Item 1 of this Form 10-K, certain transactions
which would formerly have been transactions with affiliates are now intercompany transactions among
our subsidiaries, which are eliminated in consolidation in our consolidated financial statements
and are not disclosed separately in this Form 10-K. FACILITIES, EQUIPMENT RENTAL AND MANUFACTURING, AND RELATED SERVICES TABB owns and leases to us most of our manufacturing locations and some warehouse facilities.
Prior to the Reorganization, the real estate we now lease from TABB had been owned by both William
P. Young (William C. Youngs father) and William C. Young as partners, or by William C. Young
individually. All of these properties were transferred to TABB in anticipation of the
Reorganization. Written leases with terms expiring on December 31, 2007 are currently in effect
(the Affiliate Real Estate Leases) for all of the properties now leased from TABB (now an
intercompany transaction eliminated in consolidation in our consolidated financial statements). In
addition, we lease a warehouse in Westland, MI from WCY Realty, LLC, a limited liability company,
which is wholly owned by a trust that is controlled by William C. Young. William C. Young is also
the manager (chief executive officer) of WCY Realty, LLC. Packaging made lease payments to WCY
Realty, LLC of $144,000 in fiscal 2004. Packaging subleased warehouse space in Plymouth, Michigan to Absopure Water Company on a rent
pass-through basis for monthly rental payments of $11,500. Recently, Whiteline has assumed the
warehouse lease. Absopure is a corporation owned by William C. Young, members of his immediate
family and trusts they control. William C. Young serves as President and as a director of Absopure.
Members of his immediate family also serve as officers and directors of Absopure. The William C. Young family owns William P. Young Company (WPY Co.). William C. Young
serves as President and as a director of WPY Co. Pursuant to an agreement among WPY Co., Packaging,
Whiteline and Clean Tech, WPY Co. provides engineering, planning, design, equipment manufacturing,
marketing consultation, logistic services and other technical services, as well as equipment rental
on a project-by-project basis. The fees WPY Co. charges Packaging, Whiteline and Clean Tech for
services are comparable to those it charges unaffiliated third parties. WPY Co. invoiced Packaging
$8,671,120 for engineering, technical and machine services in fiscal 2004. There were no fees
charged to Whiteline or Clean Tech in fiscal year 2004. TRANSPORTATION SERVICES Whiteline, a fully licensed ICC common carrier, operates a fleet of approximately 300 trucks and
1,100 trailers and is Packagings primary supplier of trucking and shipping services. Whiteline
services approximately 70% of Packagings trucking needs, and also leases trucks and provides empty
trailers under a drop trailer arrangement with Packaging to facilitate distribution and
transportation services to Packagings customers. Whiteline also supplies trucking and other
transportation-related personnel to Packaging on an as-requested basis. Whiteline also provides shipping services to affiliates Absopure, Buffalo Dons Artesian
Wells, Ltd and Waters of America. Buffalo Dons is a corporation owned by William C. Young, members
of his immediate family and trusts they control. William C. Young serves as Chairman and a director
of Buffalo Dons. Members of his immediate family are also officers and directors of Buffalo Dons.
Waters of America (Waters) is a Delaware limited liability company that was organized in 2000.
Fifty percent of the ownership interests of Waters of America is held by the Clean Drink Company, a
Michigan limited liability company, which is in turn 100% owned by members of William C. Youngs
immediate family, or by trusts controlled by William C. Young. Whiteline has entered into a
transportation contract with each of Buffalo Dons, Absopure and Waters under which it provides
shipping services at standard rates comparable to those it charges unaffiliated third parties.
These transportation contracts are terminable by either party upon 30 days notice. Whiteline
invoiced Absopure, Buffalo Dons and Waters $5,450,315, $1,190,543 and $544,046, respectively, for
services in fiscal 2004. PLASTIC CONTAINER SALES Packaging sells plastic containers to affiliate Absopure for its bottled water business. The
sales by Packaging to Absopure are not covered by a written agreement; however, sales to Absopure
are at prices no less favorable to Packaging than those with unaffiliated third parties. Packaging
invoiced Absopure for containers in the amount of $12,988,156 in
fiscal 2004. There is currently an outstanding balance of $4,052,263 due from Absopure to
Packaging, out of which $496,060 was over 90 days old at October 30, 2004. 66




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Packaging also sells plastic containers to affiliate Buffalo Dons under a sales agreement
dated February 2, 1993. The sales agreement has a term of four years with automatic annual
extensions, subject to a 90-day cancellation notice. Sales to Buffalo Dons under the sales
agreement are on terms no less favorable to Packaging than those with unaffiliated third parties.
Packaging invoiced Buffalo Dons $1,732,221 in fiscal 2004. Buffalo Dons currently owes Packaging
$1,064,124, out of which $712,364 was over 90 days old at October 30, 2004. Packaging sells plastic containers to Waters of America, LLC for its bottled water business
under a five-year product supply agreement dated July 1, 2000. The agreement is a full
requirements contract for all of Waters HDPE and PET container needs. Sales to Waters are on
terms are no less favorable to Packaging than those with unaffiliated third parties. Packaging
invoiced Waters for plastic containers in the amount of $2,560,893 in fiscal 2004. There is
currently an outstanding balance due of $1,118,682, out of which $458,518 was over 90 days old at
October 30, 2004. ADMINISTRATIVE SERVICES AND INSURANCE Plastipak and Packaging provided and continue to provide administrative services (i.e.,
marketing, accounting, legal services) to several affiliated companies. Packaging invoiced Absopure
$60,000 for administrative services in fiscal 2004, pursuant to a service agreement dated September
12, 1994. The service agreement continues until written notice of cancellation by either party.
There is currently outstanding a balance of $10,000 due to us from Absopure. Packaging invoiced
Buffalo Dons $30,000 for administrative services in fiscal 2004, pursuant to a service agreement
dated September 12, 1994. The service agreement continues until written notice of cancellation by
either party. There is currently outstanding a balance of $5,000 due to us from Buffalo Dons. Plastipak and Packaging provided and continue to provide insurance to several affiliated
companies. Plastipak and/or Packaging invoiced Absopure for insurance premiums in the amount of
$1,676,414 in fiscal 2004. Absopure currently owes us $339,143 for insurance premiums. Plastipak
and/or Packaging invoiced Buffalo Dons for insurance premiums in the amount of $126,265 in fiscal
2004. Buffalo Dons currently owes us $10,333 for insurance premiums. Plastipak and/or Packaging
invoiced WPY Co. for insurance premiums in the amount of $97,081 for fiscal 2004. OTHER During 2004, Plastipak donated $500,000 to a foundation established by the family of the principal
stockholder. The donation will be used for the Associates Sons and Daughters Scholarship Program.
The Associates Sons and Daughters Scholarship Program has been established by the Young Family
Foundation to assist eligible employees children who plan to continue education in college
programs. 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Fees paid to Plastipaks independent auditor, Grant Thornton LLP, during fiscal years 2003 and
2004 were approximately $696,000 and $487,000, respectively. The following sets forth the amounts
paid for audit, audit-related, tax and all other fees. Audit Fees Plastipak paid fees for professional services rendered for the audit of annual financial
statements and review of financial statements included in Form 10-Q reports as well as services
that are normally provided in connection with statutory and regulatory filings. In fiscal 2003 and
2004, Plastipak paid audit fees of approximately $343,000 and $331,000, respectively. Audit-Related Fees Fees were paid for assurance and related services that are reasonably related to the
performance of the audit or review of financial statements not included as audit fees. This
category includes fees related to the performance of audits and attest services not required by
statute or regulations and accounting consultations regarding the application of GAAP to proposed
transactions. Audit-related fees of approximately $87,000 and $54,000 were paid out in fiscal 2003
and 2004, respectively. Tax Fees Plastipak paid fees for professional services rendered for tax compliance, tax advice, and tax
planning (domestic and international). In fiscal 2003 and 2004, Plastipak paid tax fees of
approximately $233,000 and $87,000, respectively. 67




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All Other Fees Plastipak paid for products and services other than those reported as audit, audit-related and
tax fees as well. All other fees of approximately $33,000 and $16,000 were paid out in fiscal 2003
and 2004, respectively. These services were primarily related to cost classification studies and
other professional consultations and discussions. 
 PART IV 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a)(1)
    
    Financial StatementsConsolidated Balance Sheets as of October 30, 2004 and November 1, 2003Consolidated Statements of Earnings for the years ended October 30, 2004, November 1,
2003 and November 2, 2002Consolidated Statements of Stockholders Equity for the years ended October 30, 2004,
November 1, 2003 and November 2, 2002Consolidated Statements of Cash Flows for the years ended October 30, 2004, November 1,
2003 and November 2, 2002Notes to the Consolidated Financial Statements(a)(2)
    
    Financial Statement Schedules
 All other schedules are omitted as the required information is inapplicable or the information
is presented in the Consolidated Financial Statements and notes thereto in Item 8 above. 68




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(a)(3) Exhibits EXHIBITNO.
    
    DESCRIPTION OF EXHIBIT3.1
    (a)
    
    Articles of Incorporation of Plastipak Holdings, Inc. (incorporated by
reference to Exhibit 3.1(a) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)3.1
    (b)
    
    Bylaws of Plastipak Holdings, Inc. (incorporated by reference to Exhibit
3.1(b) to the Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)3.2
    (a)
    
    Certificate of Incorporation of Plastipak Packaging, Inc. (incorporated by
reference to Exhibit 3.2(a) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)3.2
    (b)
    
    Bylaws of Plastipak Packaging, Inc. (incorporated by reference to Exhibit
3.2(b) to the Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)3.3
    (a)
    
    Certificate of Incorporation of Whiteline Express, Ltd. (incorporated by
reference to Exhibit 3.3(a) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)3.3
    (b)
    
    Bylaws of Whiteline Express, Ltd. (incorporated by reference to Exhibit
3.3(b) to the Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)3.4
    (a)
    
    Articles of Incorporation of Clean Tech, Inc. (incorporated by reference to
Exhibit 3.4(a) to the Registration Statement on Form S-4 (File No.
333-73552) as filed on February 19, 2002)3.4
    (b)
    
    Bylaws of Clean Tech, Inc. (incorporated by reference to Exhibit 3.4(b) to
the Registration Statement on Form S-4 (File No. 333-73552) as filed on
February 19, 2002)3.5
    (a)
    
    Articles of Organization of TABB Realty, LLC (incorporated by reference to
Exhibit 3.5(a) to the Registration Statement on Form S-4 (File No.
333-73552) as filed on February 19, 2002)3.5
    (b)
    
    Bylaws of TABB Realty, LLC (incorporated by reference to Exhibit 3.5(b) to
the Registration Statement on Form S-4 (File No. 333-73552) as filed on
February 19, 2002)4.1
    
    
    Indenture dated as of August 20, 2001, by and among Plastipak Holdings,
Inc., Plastipak Packaging, Inc., Whiteline Express, Ltd., TABB Realty, LLC
and Wells Fargo Bank Minnesota, National Association, as trustee
(incorporated by reference to Exhibit 4.1 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)4.2
    
    
    Form of 10.75% Senior Note due 2011 and annexed guaranty incorporated by
reference to Exhibit 4.2 to the Registration Statement on Form S-4 (File
No. 333-101098) as filed on November 8, 2002)4.3
    
    
    Exchange and Registration Rights Agreement dated September 25, 2002 among
Plastipak Holdings, Inc., Plastipak Packaging, Inc., Whiteline Express,
Ltd., Clean Tech, Inc., TABB Realty, LLC and Goldman, Sachs & Co.
(incorporated by reference to Exhibit 4.3 to the Registration Statement on
Form S-4 (File No. 333-101098) as filed on November 8, 2002)10.1
    
    
    Fourth Amended and Restated Credit Agreement dated as of August 20, 2001 by
and among Plastipak Holdings, Inc., Plastipak Packaging, Inc., Clean Tech,
Inc., Whiteline Express, Ltd., TABB Realty, LLC, various banks, Comerica
Bank (as Lead Arranger and Administrative Agent), Bank One Michigan (as
Syndications Agent), Standard Federal Bank (as Syndications Agent) and
Fleet National Bank (as Documentation Agent) (incorporated by reference to
Exhibit 10.1 to the Registration Statement on Form S-4 (File No. 333-73552)
as filed on February 19, 2002)10.2
    
    
    First Amendment to Fourth Amended and Restated Revolving Credit Agreement
dated as of November 16, 2001 (incorporated by reference to Exhibit 10.4 to
the Registration Statement on Form S-4 (File No. 333-73552) as filed on
February 19, 2002)10.3
    
    
    Second Amendment to Fourth Amended and Restated Revolving Credit Agreement
dated as of September 18, 2002 (incorporated by reference to Exhibit 10.5
to the Registration Statement on Form S-4 (File No. 333-101098) as filed on
November 8, 2002)10.4
    
    
    Third Amendment to Fourth Amended and Restated Revolving Credit Agreement
dated as of July 25, 2003 (incorporated by reference to Exhibit 10.4 to the
Annual Report on Form 10-K for the year ended November 1, 2003 (File No.
333-73552) as filed on January 29, 2004)10.5
    *
    
    Restricted Stock Bonus Plan of Plastipak Holdings, Inc. (incorporated by
reference to Exhibit 10.2 to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)10.6
    *
    
    Amended and Restated Restricted Stock Bonus Plan of Plastipak Holdings,
Inc. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on
Form 10-Q for the quarter ended August 3, 2002 (File No. 333-73552) as
filed on September 17, 2002)
 69




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EXHIBITNO.
    
    DESCRIPTION OF EXHIBIT10.7
    *
    
    First Amendment to Amended and Restated Restricted Stock Bonus Plan of
Plastipak Holdings, Inc. (incorporated by reference to Exhibit 10.6 to the
Annual Report on Form 10-K for the year ended November 2, 2002 (File No.
333-73552) as filed on January 31, 2003)10.8
    *
    
    2002 Restricted Stock Bonus Plan of Plastipak Holdings, Inc. (incorporated
by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year
ended November 2, 2002 (File No. 333-73552) as filed on January 31, 2003)10.9
    *
    
    First Amendment to 2002 Restricted Stock Bonus Plan of Plastipak Holdings,
Inc. dated as of December 19, 2003 (incorporated by reference to Exhibit
10.9 to the Annual Report on Form 10-K for the year ended November 1, 2003
(File No. 333-73552) as filed on January 29, 2004)10.10
    *
    
    Second Amendment to Amended and Restated Restricted Stock Bonus Plan of
Plastipak Holdings, Inc. dated as of December 19, 2003 (incorporated by
reference to Exhibit 10.10 to the Annual Report on Form 10-K for the year
ended November 1, 2003 (File No. 333-73552) as filed on January 29, 2004)10.11
    *
    
    Plastipak Packaging, Inc. Amended and Restated Salary Continuation Plan
(incorporated by reference to Exhibit 10.3 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)10.12
    
    
    Fifth Amended and Restated Revolving Credit Agreement as of January 28, 200514
    
    
    Code of Business Conduct (incorporated by reference to Exhibit 14 to the
Annual Report on Form 10-K for the year ended November 1, 2003 (File No.
333-73552) as filed on January 29, 2004)21
    
    
    List of subsidiaries of the registrants31.1
    
    
    Certification of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release
34-4642731.2
    
    
    Certification of Principal Financial Officer Pursuant Section to 302 of the
Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release
34-4642732.1
    
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    70




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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. PLASTIPAK HOLDINGS, INC.By:
    /s/ Michael J.PlotzkeMichael J. Plotzke,Treasurer and Chief Financial Officer Dated: January 28, 2005
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities on the dates
indicated below. Dated:  January 28, 2005
    By:
    /s/ William C. YoungWilliam C. YoungPresident and Chief Executive Officer
and Director By:
    /s/ Michael J. PlotzkeMichael J. Plotzke,Treasurer and Chief Financial Officer By:
    /s/ Thomas L. SchellenbergThomas L. Schellenberg,Director By:
    /s/ William J. SchlageterWilliam J. Schlageter,Director 71




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EXHIBIT INDEX EXHIBITNO.
    
    DESCRIPTION OF EXHIBIT3.1
    (a)
    
    Articles of Incorporation of Plastipak Holdings, Inc. (incorporated by
reference to Exhibit 3.1(a) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)3.1
    (b)
    
    Bylaws of Plastipak Holdings, Inc. (incorporated by reference to Exhibit
3.1(b) to the Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)3.2
    (a)
    
    Certificate of Incorporation of Plastipak Packaging, Inc. (incorporated by
reference to Exhibit 3.2(a) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)3.2
    (b)
    
    Bylaws of Plastipak Packaging, Inc. (incorporated by reference to Exhibit
3.2(b) to the Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)3.3
    (a)
    
    Certificate of Incorporation of Whiteline Express, Ltd. (incorporated by
reference to Exhibit 3.3(a) to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)3.3
    (b)
    
    Bylaws of Whiteline Express, Ltd. (incorporated by reference to Exhibit
3.3(b) to the Registration Statement on Form S-4 (File No. 333-73552) as
filed on February 19, 2002)3.4
    (a)
    
    Articles of Incorporation of Clean Tech, Inc. (incorporated by reference to
Exhibit 3.4(a) to the Registration Statement on Form S-4 (File No.
333-73552) as filed on February 19, 2002)3.4
    (b)
    
    Bylaws of Clean Tech, Inc. (incorporated by reference to Exhibit 3.4(b) to
the Registration Statement on Form S-4 (File No. 333-73552) as filed on
February 19, 2002)3.5
    (a)
    
    Articles of Organization of TABB Realty, LLC (incorporated by reference to
Exhibit 3.5(a) to the Registration Statement on Form S-4 (File No.
333-73552) as filed on February 19, 2002)3.5
    (b)
    
    Bylaws of TABB Realty, LLC (incorporated by reference to Exhibit 3.5(b) to
the Registration Statement on Form S-4 (File No. 333-73552) as filed on
February 19, 2002)4.1
    
    
    Indenture dated as of August 20, 2001, by and among Plastipak Holdings,
Inc., Plastipak Packaging, Inc., Whiteline Express, Ltd., TABB Realty, LLC
and Wells Fargo Bank Minnesota, National Association, as trustee
(incorporated by reference to Exhibit 4.1 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)4.2
    
    
    Form of 10.75% Senior Note due 2011 and annexed guaranty incorporated by
reference to Exhibit 4.2 to the Registration Statement on Form S-4 (File
No. 333-101098) as filed on November 8, 2002)4.3
    
    
    Exchange and Registration Rights Agreement dated September 25, 2002 among
Plastipak Holdings, Inc., Plastipak Packaging, Inc., Whiteline Express,
Ltd., Clean Tech, Inc., TABB Realty, LLC and Goldman, Sachs & Co.
(incorporated by reference to Exhibit 4.3 to the Registration Statement on
Form S-4 (File No. 333-101098) as filed on November 8, 2002)10.1
    
    
    Fourth Amended and Restated Credit Agreement dated as of August 20, 2001 by
and among Plastipak Holdings, Inc., Plastipak Packaging, Inc., Clean Tech,
Inc., Whiteline Express, Ltd., TABB Realty, LLC, various banks, Comerica
Bank (as Lead Arranger and Administrative Agent), Bank One Michigan (as
Syndications Agent), Standard Federal Bank (as Syndications Agent) and
Fleet National Bank (as Documentation Agent) (incorporated by reference to
Exhibit 10.1 to the Registration Statement on Form S-4 (File No. 333-73552)
as filed on February 19, 2002)10.2
    
    
    First Amendment to Fourth Amended and Restated Revolving Credit Agreement
dated as of November 16, 2001 (incorporated by reference to Exhibit 10.4 to
the Registration Statement on Form S-4 (File No. 333-73552) as filed on
February 19, 2002)10.3
    
    
    Second Amendment to Fourth Amended and Restated Revolving Credit Agreement
dated as of September 18, 2002 (incorporated by reference to Exhibit 10.5
to the Registration Statement on Form S-4 (File No. 333-101098) as filed on
November 8, 2002)10.4
    
    
    Third Amendment to Fourth Amended and Restated Revolving Credit Agreement
dated as of July 25, 2003 (incorporated by reference to Exhibit 10.4 to the
Annual Report on Form 10-K for the year ended November 1, 2003 (File No.
333-73552) as filed on January 29, 2004)10.5
    *
    
    Restricted Stock Bonus Plan of Plastipak Holdings, Inc. (incorporated by
reference to Exhibit 10.2 to the Registration Statement on Form S-4 (File
No. 333-73552) as filed on February 19, 2002)10.6
    *
    
    Amended and Restated Restricted Stock Bonus Plan of Plastipak Holdings,
Inc. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on
Form 10-Q for the quarter ended August 3, 2002 (File No. 333-73552) as
 72




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EXHIBITNO.
    
    DESCRIPTION OF EXHIBITfiled on September 17, 2002)10.7
    *
    
    First Amendment to Amended and Restated Restricted Stock Bonus Plan of
Plastipak Holdings, Inc. (incorporated by reference to Exhibit 10.6 to the
Annual Report on Form 10-K for the year ended November 2, 2002 (File No.
333-73552) as filed on January 31, 2003)10.8
    *
    
    2002 Restricted Stock Bonus Plan of Plastipak Holdings, Inc. (incorporated
by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year
ended November 2, 2002 (File No. 333-73552) as filed on January 31, 2003)10.9
    *
    
    First Amendment to 2002 Restricted Stock Bonus Plan of Plastipak Holdings,
Inc. dated as of December 19, 2003 (incorporated by reference to Exhibit
10.9 to the Annual Report on Form 10-K for the year ended November 1, 2003
(File No. 333-73552) as filed on January 29, 2004)10.10
    *
    
    Second Amendment to Amended and Restated Restricted Stock Bonus Plan of
Plastipak Holdings, Inc. dated as of December 19, 2003 (incorporated by
reference to Exhibit 10.10 to the Annual Report on Form 10-K for the year
ended November 1, 2003 (File No. 333-73552) as filed on January 29, 2004)10.11
    *
    
    Plastipak Packaging, Inc. Amended and Restated Salary Continuation Plan
(incorporated by reference to Exhibit 10.3 to the Registration Statement on
Form S-4 (File No. 333-73552) as filed on February 19, 2002)10.12
    
    
    Fifth Amended and Restated Revolving Credit Agreement as of January 28, 200514
    
    
    Code of Business Conduct (incorporated by reference to Exhibit 14 to the
Annual Report on Form 10-K for the year ended November 1, 2003 (File No.
333-73552) as filed on January 29, 2004)21
    
    
    List of subsidiaries of the registrants31.1
    
    
    Certification of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release
34-4642731.2
    
    
    Certification of Principal Financial Officer Pursuant Section to 302 of the
Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission Release
34-4642732.1
    
    
    Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
    (b)
    
    Reports on Form 8-KOn October 10, 2004, Plastipak Holdings, Inc., filed a Current on Form 8-K pursuant to Iten 8.01
Other Event, regarding an agreement entered into by Clean Tech Slovakia s.r.o, a wholly owned subsidiary of Clean Tech Inc.,
which in turn is a wholly owned subsidiary of the Registrant.
 73