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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-K

|(Mark One)                                                   |                                                                                                           
|------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------
|ý                                                            | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                      
|FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002                 
|OR                                                          
|o                                                            | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
|For the transition period
from                            to

Commission File Number: 333-88157

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CONSOLIDATED CONTAINER COMPANY LLC(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of
incorporation or organization)                      |  | 75-2825338(I.R.S. Employer Identification No.)
|------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|3101 Towercreek Parkway, Suite 300, Atlanta Georgia(Address of principal executive offices) |  | 30339(Zip Code)                               
|(678) 742-4600(Registrant's telephone number, including area code)                         

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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 ý    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
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. ý

None
of the registrant's member units were held by nonaffiliates as of March 28, 2003.

The
number of member units outstanding as of March 28, 2003 is 1,000.

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TABLE OF CONTENTS



|         |                   |                                                                                                                             | Page No.
|-------- | ----------------- | --------------------------------------------------------------------------------------------------------------------------- | --------
|PART I   |                   |                                                                                                                             |         
|         | ITEM 1.           | Business                                                                                                                    |         
|         | ITEM 2.           | Properties                                                                                                                  |         
|         | ITEM 3.           | Legal Proceedings                                                                                                           |         
|         | ITEM 4.           | Submission of Matters to a Vote of Security Holders                                                                         |         
|PART II  |                   |                                                                                                                             |         
|         | ITEM 5.           | Market for the Registrant's Common Equity and Related Stockholder Matters                                                   |         
|         | ITEM 6.           | Selected Historical Financial Data of Consolidated Container Company LLC                                                    |         
|         | ITEM 7.           | Management's Discussion and Analysis of Financial Condition and Results of Operations of Consolidated Container Company LLC |         
|         | ITEM 7A.          | Quantitative and Qualitative Disclosures About Market Risk                                                                  |         
|         | ITEM 8.           | Financial Statements and Supplementary Data                                                                                 |         
|         | ITEM 9.           | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                        |         
|PART III |                   |                                                                                                                             |         
|         | ITEM 10.          | Management Committee and Executive Officers of the Registrant                                                               |         
|         | ITEM 11.          | Executive Compensation                                                                                                      |         
|         | ITEM 12.          | Security Ownership of Certain Beneficial Owners and Management                                                              |         
|         | ITEM 13.          | Certain Relationships and Related Transactions                                                                              |         
|PART IV  |                   |                                                                                                                             |         
|         | ITEM 14.          | Controls and Procedures                                                                                                     |         
|         | ITEM 15.          | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                                            |         
|         | Index to Exhibits |                                                                                                                             | 43      

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PART I

ITEM 1: BUSINESS

BACKGROUND

On July 2, 1999, substantially all of the United States plastic packaging assets formerly held by Franklin Plastics, Inc. and Plastics
Containers, Inc., both subsidiaries of Suiza Foods Corporation, now known as Dean Foods Company, and the plastic packaging assets of Reid Plastics, Inc., were contributed and merged into
Consolidated Container Company LLC, a Delaware limited liability company. In connection with these and related transactions, which are referred to herein as the Transactions, Consolidated Container
Company and our wholly owned subsidiary, Consolidated Container Capital, Inc., issued 101/8% senior subordinated notes due 2009 in an aggregate principal amount of
$185.0 million, and we borrowed debt under a Senior Credit Facility, described herein.

Consolidated
Container Company is wholly owned by Consolidated Container Holdings LLC, a Delaware limited liability company.

On
June 28, 2002, in an effort to simplify our corporate structure, we converted one of our existing, wholly-owned subsidiaries into a limited partnership, Consolidated Container
Company LP, that now serves as the operating company for all domestic operations.

OVERVIEW

Consolidated Container Company is a leading domestic developer, manufacturer and marketer of rigid plastic containers for many of the world's largest branded
consumer products and beverage companies. In 2002, we sold more than 6 billion containers to the dairy, water, other beverage, food, household chemical and personal care, automotive,
agricultural, and industrial chemical sectors. Our container product line ranges in size from two ounce to six-gallon containers and consists of single and multi-layer plastic containers
made from a variety of plastic resins, including high-density polyethylene (HDPE), polycarbonate (PC), polypropylene (PP), polyethylene terephthalate (PET) and polyvinyl chloride (PVC).

We
serve our customers with a wide range of manufacturing capabilities and services through a domestic, nationwide network of 63 strategically located manufacturing facilities and
through a research, development and engineering center. In addition, we have three international manufacturing facilities in Canada, Mexico and Puerto Rico. Twenty-five of our
manufacturing facilities are located on-site at our customers' plants. On-site facilities enable us to work more 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. Our research, development and engineering center creates 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.

PRODUCTS

Below are our seven principal product categories:

Dairy.We manufacture one gallon and one-half gallon HDPE bottles and similar products, which we sell primarily
to dairies for sale through retail channels. We have worked with our customers to innovate several products in this sector, including single-serve HDPE and PET milk containers and "sleeved" milk
bottles. Our dairy related products generated approximately 23.6% of net sales for the year ended December 31, 2002.

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Water.We manufacture one and two and one-half gallon HDPE bottles and similar products, which we sell primarily
to water producers for sale through retail channels, and three, five and six gallon PC bottles for the bulk packaging of water for water coolers. Our water related products generated approximately
17.4% of net sales for the year ended December 31, 2002.

Other Beverage.We manufacture a wide variety of containers for other beverage products using HDPE and PET, consisting of
high value-added technologically advanced containers for products such as fruit juices and drinks. We manufacture a wide array of products in this sector, ranging from six to 128 ounce HDPE bottles
for fruit drinks and multiple layer one-gallon HDPE containers for fruit juice. These products generated approximately 12.4% of net sales for the year ended December 31, 2002.

Food.We manufacture a wide range of food containers using HDPE, PP and PET for a variety of food products, such as ketchup,
maple syrup, edible oils and salsa. We manufacture many innovative products, such as squeezable ketchup bottles, high-gloss salsa containers and retortable containers, which permit
reheating after the filling process without distortion to the container and which are used for infant formula and other products. Our food related products generated approximately 15.3% of net sales
for the year ended December 31, 2002.

Household Chemicals & Personal Care.Our containers for household chemical products, made mainly from HDPE and PET,
are used for laundry detergents, hard surface cleaners, dishwashing liquids, bleaches and fabric softeners. Our containers for personal care products, made from HDPE and PVC, are used for shampoos,
conditioners and other personal care products. Our household chemicals and personal care related products generated approximately 17.3% of net sales for the year ended December 31, 2002.

Automotive.We manufacture primarily one quart HDPE bottles for motor oil and one gallon HDPE containers for
anti-freeze and windshield washer solvent. Our automotive related products generated approximately 6.7% of net sales for the year ended December 31, 2002.

Agricultural, Industrial & Other.We manufacture containers for use by industrial and agricultural manufacturers for
products such as insect repellents, high strength cleaners packaged for commercial and industrial use, and fertilizers. Our other products in this category include containers for medical and
pharmaceutical supplies, shipping crates, water cooler valves and bottle caps. Our agricultural, industrial and other related products generated approximately 7.3% of net sales for the year ended
December 31, 2002.

CUSTOMERS

Our customers include many of the major branded consumer products companies, bottled water companies, national juice producers, large food concerns, national and
regional dairies, and chemical and automotive product manufacturers. For the years ended December 31, 2002, 2001 and 2000, net sales attributable to our largest customer, The Proctor &
Gamble Company, accounted for approximately 17%, 16% and 12%, respectively, and net sales attributable to our second largest customer, Dean Foods Company, accounted for approximately 11%, 12% and 9%,
respectively.

In
many cases, we are the sole supplier of substantially all of our customers' container requirements for specific products or particular container sizes. In addition, we often have more
than one contract with a particular customer because we have individual contracts for specific products or container sizes or, in some circumstances, separate contracts with one or more operating
divisions or locations of a single customer.

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COMPETITION

We face substantial competition throughout our product categories from a number of well-established businesses operating nationally, as well as from
firms operating regionally. Our primary national competitors include Ball Corp., Dupont Canada (Liqui-Box), Graham Packaging, Liquid Container, Owens-Illinois, Plastipak, Ring Can and Silgan. Several
of these competitors are larger and have greater financial and other resources than we do. In addition, we face substantial competition from a number of captive packaging operations with significant
in-house bottling and blow-molding capacity, such as those of Nestle Waters North America, Kroger and Dean Foods.

We
believe that our long-term success is largely dependent on our ability to continue to attract new customers, maintain strong relationships with current customers, develop
product innovations, improve our production technology, offer our customers competitively priced products that meet their design and performance criteria, provide superior service to our customers,
and reduce our cost structure.

MARKETING

Substantially all of our sales are made through the direct efforts of our sales personnel. We conduct sales activities from our corporate headquarters in Atlanta,
Georgia, and from various field sales offices located throughout the geographic territories in which we operate. In addition to our other sales and marketing efforts, we provide our customers with
in-house support staff and 24-hour, seven days a week, year-round customer service.

RESEARCH, DEVELOPMENT AND ENGINEERING

Research, development and engineering constitute an important part of our business. We undertake these efforts at our research, development and engineering center
in Elk Grove, Illinois. We believe that the work performed at the research, development and engineering center makes us a leader in the innovation and design of new products, product enhancements and
manufacturing technologies and processes, and thereby allows us to forge closer relationships with our customers. We are currently in
the process of relocating this center from Elk Grove, Illinois to Atlanta, Georgia. We expect the move to be complete in the third quarter of 2003.

We
spent approximately $7.5, $7.1 and $7.4 million on research, development and engineering for the years ended December 31, 2002, 2001 and 2000, respectively. We believe
that continuing cost effective product and manufacturing innovations are important to meeting customers' needs and lowering our unit cost, thus permitting us to remain competitive in the markets we
serve.

INTELLECTUAL PROPERTY

We have developed and continue to develop a number of trademarks and patents for use in our business. In addition, we also hold licenses for the use of several
registered trademarks from third parties. Because our trademarks, brand names and patented packaging designs create goodwill and result in product differentiation, we believe that these assets are
important to our business. Although we hold various trademarks and patents, we believe that our business is not dependent on any one of these patents or trademarks. 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 be assured that our competitors will not discover comparable or
identical knowledge and techniques through independent development or by other legal means, and believe that our business, as a whole, is not dependent on these matters.

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MANUFACTURING AND DISTRIBUTION

Manufacturing.At December 31, 2002, we operated over 590 blow molding production lines and twelve injection molding
machines (which are used to produce closures, crates, overcaps, valves and preforms).

Blow
molding is the technique used to convert plastic into bottles and containers by either extrusion or stretch blow molding, depending on the desired container attributes. In the
extrusion blow molding production process, resin pellets are blended with colorants or other necessary additives and fed into an extrusion machine, which uses heat and pressure to form the resin into
a round hollow tube of molten plastic called a parison. Bottle molds are used to capture the parisons as they leave the extruder. Once inside the mold, air pressure is used to blow the parison into
the bottle shape of the mold. Extrusion blow molding can be used to process many different resin types. By contrast, stretch blow molding is
either a one-stage or a two-stage process by which a test-tube shaped pre-form is injection-molded and then heated, stretched and filled with compressed
air to fill the mold and form the bottle. This process provides enhanced physical clarity and gas barrier properties and is generally used for PET bottles but can also be used for PP bottles. This
technique can be adapted for either low volume production runs of specialty containers, such as wide-mouthed jars, or high volume runs of commodity containers.

We
were among the first to develop and use wheel blow molding manufacturing technology. Our wheels operate at high speeds and efficiently manufacture containers with one or more special
features, such as multiple layers, in-mold labeling or fluorination. In most cases, we are actively involved with our customers in the design and manufacture of new packaging features
using custom wheel molds.

Twenty-five
of our manufacturing facilities are located on-site at customer plants. On-site plants enable us to work more closely with customers to
facilitate just-in-time inventory management, generate significant savings opportunities through process re-engineering, eliminate costly packing, shipping and
handling charges, reduce working capital, and foster the development of long-term customer relationships.

We
believe that capital investment to maintain and upgrade property, plant and equipment is important to remain competitive. We spent an aggregate amount of approximately $33.2, $44.1
and $68.2 million, in 2002, 2001 and 2000, respectively, on capital expenditures. We estimate that the capital expenditure required to maintain our current facilities will be approximately
$15.0 million annually. Additional capital expenditures beyond this amount are required if we choose to expand capacity, implement significant additional cost saving programs, or decide to
spend additional capital at a customer's request.

Distribution.We typically ship our products by common carrier to our customers. In general, these plants are located within
a 250 to 300 mile radius of the customers for which we manufacture containers. At our 25 on-site plants, our operations are usually integrated with the customer's manufacturing operations
so that we can make deliveries, as needed, directly to the customer's conveyor lines. A number of the on-site locations sell products to outside customers as well.

RAW MATERIALS

Our principal raw materials include HDPE, PC, PP, PET and PVC resins, although we use other materials in our manufacturing operations, such as ethyl vinyl
alcohol, resin colorant, corrugated boxes, shipping materials, pallets, labels and inks. Generally, we obtain raw materials from several sources in order to ensure an economical, adequate and timely
supply, and we are not dependent on any single supplier for any of these materials. Although we believe our access to raw materials is generally reliable, there can be no assurances that we will have
an uninterrupted supply of raw materials at competitive prices. While our net sales are affected by fluctuations in resin prices, our gross profit over

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time is generally unaffected by these changes because industry practice and our contractual arrangements with certain of our customers permit or require us to pass through these increased costs. We
may not, however, always be able to pass through these changes in raw material costs in a timely manner, or at all due to competitive pressures. Based on management's view of the relationship with our
raw material suppliers, we believe that adequate quantities of key raw materials will be available to fulfill our needs.

SEASONALITY

Our shipment volume of containers for bottled water, and our employment of temporary/seasonal workers, is typically higher in the second and third quarters
principally due to the seasonal nature of the bottled water industry, in which demand is stronger between May and September. Consequently, we normally build inventory of our water products during the
first quarter in anticipation of this demand. To a lesser extent, our shipment volume of containers for milk and other beverage products follow the same seasonal pattern.

EMPLOYEES

At December 31, 2002, we employed approximately 4,130 people. Approximately 1,200 of these employees were hourly workers covered by collective bargaining
agreements, which expire between June 1, 2003 and January 31, 2006. Given the seasonality of the bottled water industry, we expect to continue to employ full-time, temporary,
and seasonal workers during the peak production months of May through September. Neither our predecessor companies nor we have had any material labor disputes in the past five years and we consider
our relations with employees to be good.

ENVIRONMENTAL, HEALTH AND SAFETY MATTERS

In the United States and in the other countries in which we operate, we are subject to national, state, provincial and/or local environmental, health and safety
laws and regulations that impose limitations and prohibitions on the discharge and emission of, and establish standards for the use, storage, treatment, disposal, and management of, many kinds of
substances, 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 solid and
hazardous substances and materials. Environmental laws and regulations can be complex and change often and we cannot reliably predict the effect which future changes in environmental laws and
regulations in the United States and in other countries in which we operate could have on us. Compliance with these laws and regulations can require significant capital and other expenditures, and
violations may result in substantial damages, fines and penalties. In addition, environmental laws in the United States, such as the Comprehensive Environmental Response, Compensation and Liability
Act and similar state statutes, 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. Many of these manufacturing processes also require expenditures in order to comply with health and safety laws such as the Occupational Safety and
Health Administration regulations with respect to potential employee exposure.

In
addition, a number of governmental authorities in the United States and in other countries have considered or are expected to consider legislation aimed at reducing the amount of
disposed plastic waste. 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

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initiatives similarly aimed at reducing the level of plastic waste, could reduce the demand for some plastic packaging, result in greater costs for plastic packaging manufacturers, or otherwise
impact our business. 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.

Although
compliance with environmental laws and regulations requires ongoing expenditures and clean-up activities, our capital expenditures for property, plant and equipment
for environmental control activities and other expenditures for compliance with environmental laws and regulations were not material in 2002 and are not expected to be material in 2003. Safety
expenditures, while not material in 2002, are expected to be approximately $1.2 million in 2003 as part of new ANSI/OSHA standards related to machine safety guarding. We believe that we are in
material compliance with all applicable national, state, provincial and local environmental laws and regulations. We are currently not engaged in any clean-up activities required by
governmental regulatory authorities under environmental laws and regulations.

GEOGRAPHIC AREAS

Our revenues are principally generated in the United States. Foreign net sales were approximately $34.0, $37.0 and $34.6 million, respectively in 2002,
2001 and 2000. Net sales are attributed to countries based on location of the customer. The Company's long-lived assets located outside of the United States are not significant.

ONLINE PUBLICATION OF REPORTS

As soon as reasonably practicable following their electronic filing with the Securities and Exchange Commission, our Annual Reports on Form 10-K, as well
as all subsequent periodic reports on
Forms 10-Q and 8-K, will be available free of charge on our website. Our internet address is www.cccllc.com.

ITEM 2: PROPERTIES

We use various owned and leased properties located throughout the United States, Canada, Mexico and Puerto Rico for our manufacturing plants, corporate
headquarters, warehouses, technical center and sales offices. At December 31, 2002, we had 66 manufacturing plants, 15 of which we owned and 51 of which we leased.

The
table below lists the location of our active manufacturing and other facilities (by region in the United States and by country and, within region and country, in alphabetical order),
along with related information, in each case as of December 31, 2002.

|Location of Facilities     |  | Size in
Square Feet |  | Owned or
Leased |  | Principal Use |  | On-Site
|-------------------------- |  | ------------------- |  | --------------- |  | ------------- |  | -------
|Northeast                  |  |                     |  |                 |  |               |  |        
|New Britain, Connecticut   |  | 5,500               |  | Leased          |  | Manufacturing |  | X      
|Westport, Connecticut      |  | 265                 |  | Leased          |  | Sales Office  |  |        
|Windsor, Connecticut       |  | 58,000              |  | Leased          |  | Manufacturing |  |        
|Portland, Maine            |  | 5,000               |  | Leased          |  | Manufacturing |  | X      
|Franklin, Massachusetts    |  | 55,000              |  | Leased          |  | Manufacturing |  |        
|Franklin, Massachusetts    |  | 24,300              |  | Leased          |  | Manufacturing |  | X      
|Lynn, Massachusetts        |  | 12,000              |  | Leased          |  | Manufacturing |  | X      
|Marlborough, Massachusetts |  | 4,600               |  | Leased          |  | Manufacturing |  | X      
|Hampstead, New Hampshire   |  | 42,000              |  | Owned           |  | Manufacturing |  |        
|Burlington, New Jersey     |  | 6,500               |  | Leased          |  | Manufacturing |  | X      
|Elizabeth, New Jersey      |  | 40,000              |  | Owned           |  | Manufacturing |  |        

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|Monroe Township, New Jersey        |  | 62,000  |  | Owned  |  | Manufacturing    |  |  
|---------------------------------- |  | ------- |  | ------ |  | ---------------- |  | -
|Batavia, New York                  |  | 21,700  |  | Leased |  | Manufacturing    |  |  
|Rensselaer, New York               |  | 4,500   |  | Leased |  | Manufacturing    |  | X
|Rochester, New York                |  | 65,000  |  | Owned  |  | Manufacturing    |  |  
|Allentown, Pennsylvania            |  | 80,000  |  | Leased |  | Manufacturing    |  |  
|Berwick, Pennsylvania              |  | 197,000 |  | Owned  |  | Manufacturing    |  |  
|Brenigsville, Pennsylvania         |  | 8,500   |  | Leased |  | Manufacturing    |  | X
|Lancaster, Pennsylvania            |  | 18,100  |  | Leased |  | Manufacturing    |  | X
|Leetsdale, Pennsylvania            |  | 42,000  |  | Leased |  | Manufacturing    |  |  
|New Castle, Pennsylvania           |  | 92,000  |  | Owned  |  | Manufacturing    |  |  
|Oil City, Pennsylvania             |  | 96,000  |  | Owned  |  | Manufacturing    |  |  
|Penn Township Kelton, Pennsylvania |  | 36,400  |  | Leased |  | Manufacturing    |  |  
|Verona, Pennsylvania               |  | 90,200  |  | Leased |  | Manufacturing    |  |  
|York, Pennsylvania                 |  | 32,000  |  | Leased |  | Manufacturing    |  |  
|Mid-Atlantic                       |  |         |  |        |  |                  |  |  
|Baltimore, Maryland                |  | 151,000 |  | Owned  |  | Manufacturing    |  |  
|Southeast                          |  |         |  |        |  |                  |  |  
|Lakeland, Florida                  |  | 218,000 |  | Leased |  | Manufacturing    |  |  
|Tampa, Florida                     |  | 22,500  |  | Leased |  | Manufacturing    |  |  
|Winter Haven, Florida              |  | 3,335   |  | Leased |  | Manufacturing    |  | X
|Zephyr Hills, Florida              |  | 7,400   |  | Leased |  | Manufacturing    |  | X
|Atlanta, Georgia                   |  | 85,000  |  | Leased |  | Manufacturing    |  |  
|Atlanta, Georgia                   |  | 16,000  |  | Leased |  | Corporate Office |  |  
|McDonough, Georgia                 |  | 4,000   |  | Leased |  | Manufacturing    |  | X
|Greensboro, North Carolina         |  | 30,000  |  | Leased |  | Manufacturing    |  |  
|Richmond, Virginia                 |  | 11,000  |  | Leased |  | Manufacturing    |  | X
|South                              |  |         |  |        |  |                  |  |  
|Demopolis, Alabama                 |  | 44,000  |  | Owned  |  | Warehouse        |  |  
|Demopolis, Alabama                 |  | 98,000  |  | Owned  |  | Manufacturing    |  |  
|West Memphis, Arkansas             |  | 67,000  |  | Leased |  | Manufacturing    |  |  
|Louisville, Kentucky               |  | 4,000   |  | Owned  |  | Manufacturing    |  |  
|Kentwood, Louisiana                |  | 10,000  |  | Leased |  | Manufacturing    |  | X
|Memphis, Tennessee                 |  | 42,000  |  | Leased |  | Manufacturing    |  |  
|Conroe, Texas                      |  | 3,000   |  | Leased |  | Manufacturing    |  | X
|Dallas, Texas (2 facilities)       |  | 31,000  |  | Leased |  | Manufacturing    |  | X
|Fort Worth, Texas                  |  | 8,000   |  | Leased |  | Manufacturing    |  | X
|Houston, Texas                     |  | 80,000  |  | Leased |  | Manufacturing    |  |  
|Katy, Texas                        |  | 10,000  |  | Leased |  | Manufacturing    |  | X
|Sherman, Texas                     |  | 101,000 |  | Leased |  | Manufacturing    |  |  

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|Mid-West                                 |  |         |  |        |  |                                |  |  
|---------------------------------------- |  | ------- |  | ------ |  | ------------------------------ |  | -
|DuPage, Illinois                         |  | 104,000 |  | Leased |  | Manufacturing                  |  |  
|Elk Grove, Illinois                      |  | 183,000 |  | Leased |  | Manufacturing                  |  |  
|Elk Grove, Illinois                      |  | 79,000  |  | Leased |  | RD&E Center                    |  |  
|Harvard, Illinois                        |  | 126,300 |  | Leased |  | Manufacturing                  |  |  
|Hutchinson, Kansas                       |  | 2,000   |  | Leased |  | Manufacturing                  |  | X
|Kansas City, Kansas                      |  | 85,000  |  | Leased |  | Manufacturing                  |  | X
|Lenexa, Kansas                           |  | 173,000 |  | Leased |  | Manufacturing                  |  |  
|Omaha, Nebraska                          |  | 11,500  |  | Leased |  | Accounting Center              |  |  
|Cincinnati, Ohio                         |  | 1,000   |  | Leased |  | Sales Office                   |  |  
|Columbus, Ohio                           |  | 8,600   |  | Leased |  | Manufacturing                  |  | X
|Springdale, Ohio                         |  | 130,000 |  | Leased |  | Manufacturing                  |  |  
|West                                     |  |         |  |        |  |                                |  |  
|Phoenix, Arizona                         |  | 59,760  |  | Leased |  | Warehouse                      |  |  
|Phoenix, Arizona                         |  | 44,000  |  | Owned  |  | Manufacturing                  |  |  
|Anaheim, California                      |  | 161,000 |  | Leased |  | Manufacturing                  |  |  
|City of Industry (Railroad), California  |  | 22,000  |  | Leased |  | Manufacturing                  |  | X
|City of Industry (Samuelson), California |  | 135,100 |  | Leased |  | Manufacturing                  |  |  
|Ontario, California                      |  | 40,000  |  | Leased |  | Manufacturing                  |  | X
|Riverside, California                    |  | 17,000  |  | Leased |  | Manufacturing                  |  | X
|Santa Ana, California                    |  | 103,000 |  | Owned  |  | Manufacturing                  |  |  
|Tracy, California                        |  | 160,000 |  | Owned  |  | Manufacturing                  |  |  
|Union City, California                   |  | 15,000  |  | Leased |  | Manufacturing                  |  | X
|Tukwila, Washington                      |  | 67,000  |  | Leased |  | Manufacturing                  |  |  
|Vancouver, Washington                    |  | 43,800  |  | Owned  |  | Manufacturing                  |  |  
|Vancouver, Washington                    |  | 35,000  |  | Leased |  | Warehouse                      |  |  
|Canada                                   |  |         |  |        |  |                                |  |  
|Richmond, British Columbia               |  | 35,203  |  | Leased |  | Warehouse                      |  |  
|Mississauga, Ontario                     |  | 34,800  |  | Leased |  | Manufacturing                  |  |  
|Mexico                                   |  |         |  |        |  |                                |  |  
|Irapuato                                 |  | 25,000  |  | Leased |  | Manufacturing (opened in 2003) |  |  
|Mexico City                              |  | 24,300  |  | Leased |  | Manufacturing                  |  |  
|Puerto Rico                              |  |         |  |        |  |                                |  |  
|Caguas                                   |  | 47,000  |  | Owned  |  | Manufacturing                  |  |  

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 with respect to this litigation but believe, based on our examination of these matters, experience to date, and discussions with counsel, that any ultimate liability will not be material to
our financial position, results of operations, or cash flows.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of 2002.

10

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PART II

ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is no established public trading market for our member units, and as of March 28, 2003, there was one holder of record, Consolidated Container
Holdings. For a list of certain holders of the member units of Consolidated Container Holdings, see Item 12 (Security Ownership of Certain Beneficial Owners and Management) of this Annual Report on
Form 10-K.

We
are required to make tax distributions to holders of member units for reimbursement of tax obligations. There have been no distributions to our sole member, Consolidated Container
Holdings, during the year ended December 31, 2002. The indenture, as described below, under which the Consolidated Container Company and Consolidated Container Capital issued their notes, as
well as the Senior Credit Facility of Consolidated Container Company, contains restrictions on our ability to pay dividends to Consolidated Container Holdings.

ITEM 6: SELECTED HISTORICAL FINANCIAL DATA OF CONSOLIDATED CONTAINER COMPANY LLC

The following table presents selected historical financial data for the years ended December 31, 2002, 2001 and 2000, and for the period July 2,
1999, through December 31, 1999, of Consolidated Container Company, successor to Reid Plastics. The following table also presents selected financial data of Reid Plastics for the period
January 1, 1999 through July 1, 1999 and the year ended December 31, 1998.

The
selected historical consolidated financial data have been derived from and should be read in conjunction with the audited consolidated financial statements of Consolidated Container
Company LLC, the notes to the financial statements, and "Management's Discussion and Analysis of Financial Condition and Results of Operations of Consolidated Container Company LLC," included
elsewhere in this report.

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Selected Historical Consolidated Financial Data  (Amounts in millions)

|                                                    |  | Successor |        | Predecessor |  
|--------------------------------------------------- |  | --------- | ------ | ----------- | -
|
|Income Statement Data:                              |  |           |        |             |  
|Net sales                                           |  | $         | 746.5  |             | $
|Cost of goods sold                                  |  |           | 654.1  |             |  
|                                                    |  |           |        |             |  
|Gross profit                                        |  |           | 92.4   |             |  
|Selling, general and administrative expenses        |  |           | 53.8   |             |  
|Restructuring charges (credits)(a)                  |  |           | 0.1    |             |  
|Goodwill impairment                                 |  |           | 290.0  |             |  
|Contract dispute settlement and other (b)           |  |           |       |             |  
|                                                    |  |           |        |             |  
|Operating income (loss)                             |  |           | (251.5 | )           |  
|Other income (expense)                              |  |           | (1.7   | )           |  
|Interest expense, net (c)                           |  |           | 47.2   |             |  
|                                                    |  |           |        |             |  
|Income (loss) before income taxes                   |  |           | (300.4 | )           |  
|Income tax expense (benefit)                        |  |           |       |             |  
|Minority interest in subsidiaries                   |  |           |       |             |  
|                                                    |  |           |        |             |  
|Income (loss) before extraordinary item             |  |           | (300.4 | )           |  
|Extraordinary item                                  |  |           |       |             |  
|                                                    |  |           |        |             |  
|Net income (loss)                                   |  | $         | (300.4 | )           | $
|                                                    |  |           |        |             |  
|Other Data:                                         |  |           |        |             |  
|Net cash provided by operating activities           |  |           | 36.1   |             |  
|Net cash used in investing activities               |  |           | (34.1  | )           |  
|Net cash provided by (used in) financing activities |  |           | 21.2   |             |  
|Depreciation and amortization                       |  |           | 38.3   |             |  
|Capital expenditures                                |  |           | 33.2   |             |  
|Cash paid during the period for interest (d)        |  |           | 42.3   |             |  
|Balance Sheet Data (at end of period):              |  |           |        |             |  
|Cash and cash equivalents                           |  | $         | 24.4   |             | $
|Working capital                                     |  |           | (58.8  | )           |  
|Total assets                                        |  |           | 690.7  |             |  
|Total debt                                          |  |           | 577.0  |             |  
|Total stockholders'/member's equity (deficit)       |  |           | (83.6  | )           |  

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ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF CONSOLIDATED CONTAINER  COMPANY LLC

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires
management to make judgments, assumptions and estimates that affect the amounts reported in the Consolidated Financial Statements and accompanying
notes. Note 1 to the Consolidated Financial Statements in this Annual Report on Form 10-K for the fiscal year ended December 31, 2002, describes the significant
accounting policies and methods used in the preparation of the Consolidated Financial Statements. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts,
worker's compensation, benefit plan accruals, long-lived assets, and other contingencies. Actual results could differ from these estimates. The following critical accounting estimates are impacted
significantly by judgments, assumptions and estimates used in the preparation of the Consolidated Financial Statements.

The
allowance for doubtful accounts is based on our assessment of the collectibility of specific customer accounts and the aging of accounts receivable. If there is a deterioration of a
major customer's credit worthiness or if actual defaults are higher than our historical experience, our estimates of the recoverability of amounts due us could be adversely affected.

A
reserve for workers' compensation claims is established based on claim count information and historical loss data. If actual future claim's experience does not reflect historical data,
our expense could be affected and adversely affect our financial results.

Accounting
for employee retirement plans involves estimating the cost of benefits that are to be provided in the future and attempting to match, for each employee, that estimated cost to
the period worked. To accomplish this, extensive use is made of advice from actuaries and assumptions are made about inflation, investment returns, mortality, employee turnover, and discount rates
(see note 9 of the notes to the consolidated financial statements) that ultimately impact amounts recorded. While we believe that the amounts recorded in the accompanying financial statements related
to these retirement plans are based on the best estimates and judgments available to us, our actual outcomes could differ from our estimates.

We
periodically review the carrying value of our long-lived assets for indicators that the carrying value of the assets may not be recoverable. Our evaluation for property
and equipment is based on projections of anticipated future undiscounted cash flows from those assets, which necessarily are dependent upon management's assessment of future business conditions. Our
assessment of goodwill is based on the requirements of SFAS No. 142, Goodwill and Other Intangible Assets, which requires management to estimate the fair value of the Company (as we only have
one reporting unit) and if applicable the fair value of our assets and liabilities. Determination of fair value is dependent upon many factors including management's estimate of future cash flows,
appropriate discount rates, identification and evaluation of comparable businesses and amounts paid in market transactions for the sale of comparable businesses. For both goodwill and property and
equipment, any one of a number of future events could cause us to conclude that impairment indicators exist and that the carrying value of these assets cannot be recovered.

We
are subject to the possibility of various loss contingencies arising in the ordinary course of business. When determining loss contingencies, we consider the likelihood of the loss or
impairment of an asset, the likelihood of the incurrence of a liability, and our ability to reasonably estimate the amount of any loss. An estimated loss contingency is accrued when it is probable
that a liability has been incurred or
an asset has been impaired and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.

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RESULTS OF OPERATIONS



Net Sales.Net sales decreased by approximately 5.1% to $746.5 million for the year ended December 31, 2002
from $786.7 million in the year 2001. Approximately $19.6 million of the decrease was a result of lower sales prices charged due to the pass through of lower HDPE raw material costs.
Another significant portion of the decline in sales was due to the loss of sales revenue from our Maine facility, which was sold to a major customer, and the loss of the Quaker State/Pennzoil
business. The remainder of the decrease was attributable to price reductions to meet competitive situations and other volume losses.

Gross Profit.Gross profit was $92.4 million in 2002 compared to $92.5 million in 2001. Despite the lower sales
in 2002, the Company experienced lower average resin costs during the year, and launched several company-wide purchasing initiatives that significantly lowered costs in several areas, such as
corrugate, bags, film, resin, temporary labor and utilities. These gains were offset by increased levels of repair and maintenance spending to upgrade the condition of existing equipment and higher
salary expense as several plant manager positions were filled or upgraded during the year. Additionally, the Company incurred expenses in 2002 related to the implementation of a manufacturing
excellence program and the movement of equipment to better meet customer demand. Finally, despite the lower average resin prices during the year as compared to 2001, resin prices rose throughout much
of 2002, which, despite the Company policy of passing through resin prices to customers, reduced gross profit during the year.

Selling, General and Administrative Expense.Selling, general and administrative expense increased by $2.2 million to
$51.0 million, or 4.5%, during 2002 from $48.8 million in 2001. The primary reasons for the increase were increased salary and benefit expense related to increased headcount, relocation
expenses and expenses attributable to the implementation of a new financial system at the Company.

Amortization Expense.Amortization expense decreased to approximately $2.5 million from approximately
$14.0 million in 2001. This decline of $11.5 million, or 82.3%, was primarily the result of the implementation of the Statement of Financial Accounting Standards No. 142
(SFAS 142) whereby goodwill is no longer amortized.

Restructuring Charges.During the year 2002 there were no significant restructuring charges. In 2001 we recognized a
restructuring charge of $3.8 million related to the relocation of the Company's corporate offices from Dallas, Texas, to Atlanta, Georgia, severance costs, and the installation of a new
management team at the Company.

Goodwill Impairment.Goodwill impairment of $290.0 million was recorded in the fourth quarter of 2002. This impairment
was the result of several factors including a revision of management's view of future operational improvements and prospects, a decline in market trading multiples from publicly traded peers, and the
recognition of significant intangible assets (primarily customer contracts) previously reported as part of goodwill.

Contract Dispute Settlement & Other.During 2002 the Company had no contract dispute settlement costs or other
one-time expenses. During the year ended December 31, 2001, we recognized customer-related settlement costs and other charges of approximately $6.6 million. Approximately
$5.0 million of the settlement charges related to the settlement of a contract dispute with a major customer. An additional $1.0 million resulted from the settlement of other customer
claims. The remaining charges related to relocation costs of the corporate headquarters.

Operating Income.Operating income decreased by approximately 1,401.7% to a loss of $251.5 million for the year ended
December 31, 2002, from $19.3 million of income in 2001. The

14

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decrease was primarily the result of the goodwill impairment and higher selling, general and administrative expense offset by the reduced amortization expense, the lack of restructuring and contract
dispute settlements and other claims in 2002. Removing the effect of the goodwill impairment charge, operating income would have increased by approximately 99.4% to $38.5 million for the year
end 2002.

Interest Expense, Net.Net interest expense decreased by approximately 6.5%, or $3.3 million to $47.2 million
for the year from $50.5 million in 2001. This change was primarily due to a more favorable interest rate environment in 2002.

Net Loss.Net loss increased by approximately 862.9% to $300.4 million for the year ended December 31, 2002,
from a net loss of $31.2 million for the comparable period of 2001. The increase was primarily the result of the goodwill impairment and higher selling, general and administrative expense
offset by the reduced amortization expense, lack of restructuring and contract dispute settlements and other claims,
and lower interest rates in 2002. Removing the effect of the goodwill impairment charge, net loss would have decreased by approximately 66.6% to $10.4 million for the year ended 2002.



Net Sales.Net sales increased by approximately 4.2% to $786.7 million for the year ended December 31, 2001
from $754.6 million in the year 2000. Approximately $39.0 million of the increase in net sales was the result of increased volume attributable to the commercialization of several
significant new business projects. Another portion of the increase in net sales was attributable to increased prices charged to customers resulting from the pass-through of higher raw
material costs. The increase in net sales was partially offset by the settlement of a $3.0 million customer claim, unrelated price reductions to meet competitive situations, and business lost
in competitive bid situations.

Gross Profit.Gross profit decreased by approximately 27.6% to $92.5 million for the year ended December 31,
2001, from $127.7 million in the comparable period for 2000. Gross profit declined as a result of significantly increased costs in several areas of our operations. This was due primarily to the
introduction of several new capital projects that resulted in higher labor and material usage, higher levels of repair and maintenance, and increased utility expense. Problems with several plant
consolidations also contributed to the increased costs. The new capital projects and the plant consolidation issues also forced us, in certain instances, to reallocate production to other facilities,
resulting in increased labor and freight costs. In addition, our California facilities were negatively impacted by higher utility costs and related power interruptions.

Selling, General and Administrative Expense.Selling, general and administrative expense excluding amortization increased by
approximately 35.3% to $48.8 million for the year ended December 31, 2001, from $36.0 million for the comparable period in 2000. This increase was the result of higher salary and
benefit costs due to increased staffing levels, as well as increased professional fees, both of which were incurred to improve our operating effectiveness and to commercialize several of the new
projects for key customers in a timely manner. In addition, we had an increase in bad debt expense of $4.5 million due to the write-off of disputed aged accounts receivable where
collection had become doubtful.

Amortization Expense.Amortization expense decreased by approximately 0.8% to $14.0 million for the year ended
December 31, 2001, from $14.1 million for the comparable period in 2000.

Restructuring Charges.During the year ended December 31, 2001, we recognized a restructuring charge of
$3.8 million in connection with the relocation of the corporate offices from Dallas to Atlanta and the changeover of senior management. During the year ended December 31, 2000, we
recognized restructuring credits of $4.0 million by entering into subleases on certain previously closed facilities.

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Contract Dispute Settlement & Other.During the year ended December 31, 2001, we recognized customer related
settlement charges and other of $6.6 million. Approximately $5.0 million of the settlement charges related to the settlement of a contract dispute with a major customer. An additional
$1.0 million resulted from the settlement of other customer claims. The remaining charges related to relocation costs of the corporate headquarters.

Operating Income.Operating income decreased by approximately 76.3% to $19.3 million for the year ended
December 31, 2001, from $81.5 million for the comparable period in 2000. The decrease was a result of the factors discussed above.

Interest Expense, Net.Interest expense, net decreased by approximately 13.8% to $50.5 million for the year ended
December 31, 2001, from $58.6 million for the comparable period in 2000. This change was primarily attributable to a more favorable interest rate environment in 2001, and to a lesser
extent, a reduction in overall outstanding debt.

Net Loss.Net income decreased by approximately 234.7% to a net loss of $31.2 million for the year ended
December 31, 2001, from a net income of $23.2 million for the comparable period in 2000. As described above, this decline was primarily the result of difficulties encountered in the
commercialization of several new business projects that increased costs and required additional resources, the settlement of a contract dispute and other customer claims, relocation of our corporate
headquarters, employee severance, the write-off of certain accounts receivable, increased worker's compensation cost, and one-time consulting fees.

SEASONALITY

Due to the large portion of our business that is derived from the sale of dairy, water and other beverage products, our financial results are typically stronger
in the second and third quarters of the year when there is higher consumption of the end products related to these sectors.

LIQUIDITY AND CAPITAL RESOURCES

Our principal uses of cash are for capital expenditures, working capital, debt service, and acquisitions. Funds for these purposes are primarily generated from
operations and borrowings under our Senior Credit Facility.

Cash
provided by operations in 2002 was $36.1 million, a decrease of $7.0 million compared to 2001. This decrease resulted primarily from cash payments of
$12.6 million made in 2002 relating to one time charges that occurred in 2001, partially offset by improved management of accounts receivable. Cash used in investing activities for the year
ended December 31, 2002 was $34.1 million, compared to $15.8 million in 2001. The change was largely the result of proceeds received from the sale-leaseback of assets
of $28.3 million during 2001. This was offset somewhat by a decrease in capital expenditures from $44.1 million in 2001 to $33.2 million in 2002 due to lower capital spending on
new business projects in 2002. Cash provided by financing activities for 2002 of $21.2 million primarily resulted from the proceeds received from revolving and term debt during the year.

Our
ability to generate cash from operations and from borrowing is subject to certain risks, including fluctuations in raw material prices and availability, covenant restrictions in our
Senior Credit Facility that may adversely limit our ability to borrow funds, and reliance on several large customers, the loss of which would have a material adverse affect on our ability to generate
cash flow. If we are unable to mitigate these and the other risks discussed in more detail in the "Risk Factors" section, our cash flow could be negatively impacted.

As
a limited liability company, we are not liable for U.S. federal income taxes under the Internal Revenue Code of 1986, as amended. Similarly, as a limited liability company, our
parent, Consolidated

16

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Container Holdings, is not liable for U.S. federal income taxes. The applicable income or loss will be included in the tax returns of the members of Consolidated Container Holdings. We are required
to make tax distributions to Consolidated Container Holdings to enable it to reimburse its members for their tax obligations. Total distributions recorded for the years ended December 31, 2002,
2001 and 2000 were $(0.1), $(0.2), and $1.5 million, respectively, net of any refunds received on overpayment of prior year taxes. We estimate that there are no tax distributions payable for
2002.

In
connection with the Transactions, we entered into a credit agreement, which we refer to as the Senior Credit Facility, dated as of July 1, 1999, among us, Consolidated
Container Holdings, Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), as Administrative Agent and Collateral Agent, JPMorgan Chase Bank (successor by merger to Morgan Guaranty Trust
Company of New York), as Documentation Agent, and Credit Suisse First Boston (f/k/a Donaldson, Lufkin, & Jenrette Securities Corporation), as Syndication Agent, and the other banks a party
thereto and certain related security agreements. In connection with the Transactions, we borrowed under the Senior Credit Facility and issued $185.0 million aggregate principal amount of notes
under an indenture dated as of July 1, 1999, among us, Consolidated Container Capital, Inc., as co-issuer of the notes, the Subsidiary Guarantors named therein and The Bank
of New York, as Trustee. At December 31, 2002, we had total debt of $577.0 million and member's deficit of $83.6 million. Subject to restrictions in the Senior Credit
Facility and the indenture, we may incur more debt for working capital, capital expenditures, acquisitions and for other purposes.

Our
Senior Credit Facility was amended effective February 27, 2002. Terms of the amendment included the modification of certain covenants and the addition of others, a reduction
in commitments under the revolving loan facilities, the addition of a tranche 3 revolver guaranteed by the principal owners of Consolidated Container Holdings, and an increase in interest margins by
as much as 1.5%. Additionally, $36.5 million of the tranche 2 revolving loan facility was converted to a tranche 2 converted term loan maturing in 2005. A description of terms of our Senior
Credit Facility, as amended, follows.

Following
the February 2002 amendment, the Senior Credit Facility consisted of a committed tranche A term loan totaling $150.0 million, a committed tranche B term loan
totaling $235.0 million, an uncommitted tranche C term loan totaling $100.0 million (which will only be available under some circumstances), a committed tranche 2 converted term loan
totaling $36.5 million and a $69.5 million revolving credit facility. At December 31, 2002, we had drawn down $31.0 million under the tranche 1 revolving loan facility, and
an additional $12.4 million was reserved for outstanding standby letters of credit. An $11.0 million restriction was placed on the tranche 1 revolving loan facility in connection with
the amendment dated February 27, 2002, leaving available borrowings of $15.1 million, subject to customary borrowing conditions. Of the revolving credit facilities, $15.0 million
of the commitment was scheduled to mature on January 5, 2003, with the remaining $54.5 million maturing on July 2, 2005. Additionally, there is a requirement that the unutilized
balance under the revolving credit facility plus cash and cash equivalents cannot be less than $15.0 million on any month end on or after June 30, 2002. The amortization schedule of the
tranche A term loan will require us to repay $33.8 million in 2003, $37.5 million in 2004 and $18.8 million in 2005. The tranche B term loan requires amortization payments in
equal annual installments of 1% of its initial principal amount for each of the first six years after July 2, 1999, and the amortization of the remaining amount in eight quarterly payments in
the seventh and eighth years after the closing of the Senior Credit Facility. The tranche 2 converted term loan requires quarterly payments of $3.0 million through June 30, 2005.

Borrowings
under the Senior Credit Facility bear interest, at our option, at either:



17

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The
applicable margin on base rate and eurodollar loans is based on a schedule that corresponds to the leverage ratio of Holdings and its subsidiaries on a consolidated basis. At
December 31, 2002, we were paying the following margins on amounts borrowed:



In
addition, the Company:



The
Senior Credit Facility and the indenture contain covenants that restrict, among other things, our ability to do the following:



The
Senior Credit Facility also requires that we maintain specified financial ratios relating to maximum level of leverage to EBITDA (earnings before interest and taxes plus depreciation
and amortization) and minimum interest and fixed charge coverage. In addition, the Senior Credit Facility and the indenture restrict our ability to pay dividends. As noted above, the Senior Credit
Facility was amended in the first quarter of 2002, changing ratio covenant restrictions related to leverage, interest coverage, and fixed charge coverage. Additional covenants were added further
limiting capital expenditures, requiring a minimum EBITDA (earnings before interest, taxes, depreciation, and amortization) for the five months ending May 31, 2002, and setting minimum levels
of revolver availability at each period-end. As of December 31, 2002, we were operating under a waiver relating to these covenants.

The
Company, its principal shareholders or affiliates thereof may, from time to time, enter the market to purchase or sell securities of the Company, including the Notes, in compliance
with any applicable securities laws.

18

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SUBSEQUENT EVENT

In January 2003, the Senior Credit Facility was amended, changing the following terms:



Management
believes future funds generated by operations and borrowings under its Senior Credit Facility will be sufficient to meet working capital and capital expenditure requirements
for fiscal year 2003.

We
also have contractual obligations and commercial commitments that may affect our financial condition. The following tables identify material obligations and commitments as of
December 31, 2002

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but prior to the January 2003 amendment to the Senior Credit Facility (customer-specific commitments arising in the ordinary course of business are not included):

|                                   |  | Payments Due by Period
|---------------------------------- |  | ----------------------
|
|
|Long-Term Debt                     |  | $                     
|Capital Lease Obligations          |  |                       
|Operating Leases                   |  |                       
|Revolving Credit Facility (a)      |  |                       
|Other Long-Term Obligations (b)    |  |                       
|                                   |  |                       
|Total Contractual Cash Obligations |  | $                     
|                                   |  |                       

|                              |  | Commitment Expiration per Period
|----------------------------- |  | --------------------------------
|
|
|Standby Letters of Credit     |  | $                               
|Revolving Credit Facility (c) |  |                                 
|                              |  |                                 
|Total Commercial Commitments  |  | $                               
|                              |  |                                 

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INFLATION

Other than changes in resin costs, which are generally passed on to customers, inflation has not had a significant impact on our cost of operations.

RECENTLY ISSUED ACCOUNTING STANDARDS

In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for
Asset Retirement Obligations." This standard addresses financial accounting and reporting for obligations related to the retirement of tangible long-lived assets and the related asset
retirement costs. SFAS 143 is effective for fiscal years beginning after June 15, 2002. Management is in the process of evaluating the impact this standard will have on the Company's
consolidated financial statements.

During
June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS No. 146 requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred, while under EITF Issue 94-3 it was recognized at the date of an entity's commitment to an exit plan. The Company will adopt
SFAS No. 146 on January 1, 2003. Management is in the process of evaluating the impact this standard will have on the Company's consolidated financial statements.

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In
August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") which was effective January 1,
2002. SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets, as well as eliminating the exception to consolidation for a
subsidiary for which control is likely to be temporary. The Company adopted SFAS 144 on January 1, 2002 and the adoption did not have a significant impact on the financial position and
results of operations.

In
November 2002, the FASB issued Interpretation "FIN" No. 45 "Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of
Indebtedness of Otheran Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34." FIN No. 45 requires companies to
recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN No. 45 provides specific guidance identifying the
characteristics of contracts that are subject to its guidance in its entirety from those only subject to the initial recognition and measurement guarantees issued or modified after December 31,
2002. The disclosure provisions of FIN No. 45 are effective for the year ended December 31, 2002. We believe the provisions of FIN No. 45 will not have a material effect on our
financial position or results of operations.

In
January 2003, the FASB issued FIN No. 46 "Consolidation of Variable Interest Entitiesan Interpretation of Accounting Research Bulletin No. 51." FIN
No. 46 addresses consolidation by business enterprises where equity investors do not bear the residual economic risks and rewards. The underlying principle behind FIN No. 46 is that if a
business enterprise has the majority financial interest in an entity, which is defined in FIN No. 46 as a variable interest entity, the assets, liabilities and results of the activities of the
variable interest entity should be included in consolidated financial statements with those of the business enterprise. Companies are required to apply the provisions of FIN No. 46
prospectively for all variable interest entities created after January 31, 2003. We believe the provisions of FIN No. 46 will not have a material effect on our financial position or
results of operations.

FORWARD LOOKING STATEMENTS

Certain statements and information in this Annual Report on Form 10-K constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements may be indicated by phrases such as "will,' "estimates," "plans," "strategy," "believes," "anticipates," "expects," "intends,"
foresees," "projects," "forecasts" or words of similar meaning or import. Consolidated Container Company desires to take advantage of the "safe harbor" provisions of the aforementioned Act. We have
made such statements in prior filings with the Securities and Exchange Commission and in this filing. Such statements are subject to certain risks, uncertainties, or assumptions. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in applicable forward looking statements.

RISK FACTORS

Key factors that may have a direct bearing on our results and financial condition include, but are not limited to:

We have substantial leverage, which may affect our ability to use funds for other purposes.A substantial portion of the Company's cash
flow will be dedicated to the payment of principal and interest on the Company's indebtedness, which reduces the funds available to the Company for other purposes, including capital expenditures. The
Company also currently carries a higher degree of leverage than many of its competitors, which could place the Company at a disadvantage to some of its competitors in certain circumstances. In
addition, certain of the Company's borrowings are at variable

21

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rates of interest, which exposes the Company to the risk of increased interest rates. If the Company were to experience poor financial and operational results, the combination of the poor performance
and the substantial leverage of the Company might create difficulties in complying with the covenants contained in the Company's revised credit agreement and bond indenture. The failure to comply with
such covenants could result in an event of default under these agreements, thereby permitting an acceleration of such indebtedness as well as indebtedness under other instruments that contain cross-
default provisions.

Fluctuations in raw material prices and raw material availability may affect our results.We are exposed to fluctuations in the
availability of and/or prices for raw materials. If our access to some raw materials were to be interrupted, or we could not purchase them at competitive prices, then our financial results and results
of operations would suffer. We use large quantities of high-density polyethylene, polycarbonate, polypropylene, polyethylene terephthalate, and polyvinyl chloride resins in manufacturing
our products. In general, we do not have long-term supply contracts with our suppliers, and our purchases of raw materials are subject to market prices. On average over time, we generally
pass changes in the prices of raw materials through to our customers. We may not always be able to do so, and we cannot assure that we will always be able to pass through future price increases in a
timely manner.

Our ability to service interest expense and debt amortization could be impaired.The Company's ability to make scheduled repayments with
respect to its indebtedness will depend on the financial and operating performance of the Company over time. There can be no assurance that our operating results and cash flow will be sufficient to
meet scheduled payments related to the Company's indebtedness. If the Company were unable to make such payments, the Company would face significant liquidity problems and might be required to reduce
or delay certain capital expenditures, sell assets, obtain equity capital, or restructure their senior and subordinated debt obligations.

The covenants in our Senior Credit Facility may adversely limit our ability to operate our business.The Company's revised credit facility
contains a number of significant covenants, that, among other things, restrict the ability of the Company to make acquisitions, dispose of assets, incur additional indebtedness, pay dividends, and
make capital expenditures. The Company also operates under covenants that require us to satisfy certain financial ratios and minimum levels of financial performance. The ability of the Company to
comply with such covenants may be affected by events
beyond the control of the Company, and there is no assurance that the Company will be able to meet the specified financial ratios or minimum levels of performance. Failure to comply with such
covenants could result in an event of default under these agreements, thereby permitting an acceleration of such indebtedness as well as indebtedness under other instruments that contain cross-default
provisions.

We are dependent upon several customers, the loss of which could have a material adverse affect on our results.For the year ended
December 31, 2002, our largest customer accounted for 17% of our sales, and our ten largest customers accounted for 49% of our sales. The termination of any of our top customer relationships or
significant declines in demand for their products could have a material adverse affect on our business. Most of our contracts with large customers are requirements-based contracts that do not obligate
the customer to purchase fixed amounts of product from us. As a result, we face the risk that the customers will not purchase expected amounts of the products covered under contract. Additionally,
customer contracts come up for renewal on a regular basis in the ordinary course of business. We cannot guarantee that we will be able to successfully renew these contracts as they expire.

We are subject to intense competition in our industry.Substantial competition is present throughout our product categories from well
established businesses competing nationally and from other businesses competing locally. Several of these competitors are larger and/or have greater financial resources than we do.

22

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We are dependent on several key managers, the loss of whom could have a material effect on our operations, and on our business
development.There are several key personnel the loss of whom would have an effect on our operations. In particular, the loss of the services provided by Stephen E. Macadam,
the President and Chief Executive Officer of Consolidated Container Company, could have a material adverse effect on our business.

Our business is exposed to product liability risk.Currently, we maintain insurance for product liability claims. The amount and scope of
our insurance may not, however, be adequate to cover a product liability claim that is successfully asserted against us. Lawsuits or other negative publicity associated with the products for which our
customers use our containers could also substantially impact our business.

We operate under a variety of safety and environmental laws and regulations, and are subject to national, state, provincial and/or local laws and
regulations.Compliance with these laws and regulations can require significant capital expenditures and operating expenses. Violations of these laws and regulations may result
in substantial fines and penalties. Changes in these laws and regulations or our inability to comply with these could have a material adverse impact on our results.

We
cannot ensure that we will be able to successfully accomplish our objectives of meeting, exceeding or complying with all of the key factors summarized above. If we are not successful,
our business and results of operations could be negatively impacted.

Any
forward-looking statements made or incorporated by reference herein speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any
updates or revisions to any such statements, to reflect any change in its expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary exposure to market risk is changing interest rates due to some of our debt bearing a floating rate of interest. Our policy is to manage interest rate
risk by using a combination of fixed and floating rate debt. A hypothetical 10% increase in interest rates for the year ended December 31, 2002, would have increased interest expense by
approximately $4.3 million.

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data are listed on the index at Item 15 and included herein beginning on page F-1.

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There were no changes in accountants or disagreements with accountants on matters related to accounting or financial disclosure during the fiscal years ended
December 31, 2002 and 2001.

23

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PART III

ITEM 10: MEMBERS OF THE MANAGEMENT COMMITTEE AND EXECUTIVE OFFICERS

Consolidated
Container Company is managed by its sole member, Consolidated Container Holdings. Consolidated Container Holdings is managed by a management committee consisting of eight
members. Two of the members were appointed by Vestar Packaging LLC (James P. Kelley and John R. Woodard), two were appointed by Reid Plastics Holdings (Ronald V. Davis and Leonard Lieberman), and two
were appointed mutually by Vestar Packaging LLC and Reid Plastics Holdings (William G. Bell and B. Joseph Rokus). Of the remaining two members, one was appointed by Franklin Plastics (Richard L.
Robinson), and one is the chief executive officer of Consolidated Container Company, currently Stephen E. Macadam. The members of the management committee serve in such capacity until removed or
replaced by the parties appointing them.

The
members of the management committee of Consolidated Container Holdings and the executive officers of Consolidated Container Company and their ages and positions are as follows:

|Name                |  | Age |  | Position                                                                    
|------------------- |  | --- |  | ----------------------------------------------------------------------------
|Ronald V. Davis     |  | 56  |  | Chairman of the Management Committee                                        
|B. Joseph Rokus     |  | 49  |  | Vice Chairman of the Management Committee                                   
|Stephen E. Macadam  |  | 42  |  | President and Chief Executive Officer and Member of the Management Committee
|Tyler L. Woolson    |  | 40  |  | Chief Financial Officer                                                     
|Louis Lettes        |  | 39  |  | Vice President, General Counsel and Secretary                               
|Richard P. Sehring  |  | 40  |  | Senior Vice President, Finance & Accounting, and Chief Accounting Officer   
|Joyce A. Foster     |  | 41  |  | Vice President, Human Resources                                             
|Robert K. Brower    |  | 54  |  | Senior Vice President, Operations Services & Procurement                    
|Douglas A. Smith    |  | 43  |  | Assistant Treasurer and Director of Accounting Operations                   
|William G. Bell     |  | 56  |  | Member of the Management Committee                                          
|James P. Kelley     |  | 48  |  | Member of the Management Committee                                          
|Leonard Lieberman   |  | 74  |  | Member of the Management Committee                                          
|Richard L. Robinson |  | 73  |  | Member of the Management Committee                                          
|John R. Woodard     |  | 39  |  | Member of the Management Committee                                          

Ronald V. Davishas served as Chairman of the management committee since the closing of the Transactions. Since December 1998,
Mr. Davis has served as President and Chief Executive Officer of Reid Plastics Holdings. Currently, Mr. Davis is Chairman of Davis Capital LLC, a private equity investment company, which
he founded in 1994. Mr. Davis founded The Perrier Group of America, and, between 1979 and 1992, he served as its President and Chief Executive Officer. From 1992 to 1994, he served as Chairman
of the Board of Directors for Perrier Group of America, Inc. He currently serves on the Board of Directors of Greenwich Technology Partners. Mr. Davis received a B.A. from California
State University and an M.B.A. from the University of Southern California.

B. Joseph Rokushas served as the Vice Chairman of the management committee since the closing of the Transactions. Since
December 1998, Mr. Rokus has served as Chairman of the Boards of Directors of Reid Plastics Holdings and Reid Plastics. Between 1993 and December 1998, Mr. Rokus served as
President and Chief Executive Officer of Reid Plastics Holdings and Reid Plastics. He serves on the Board of Trustees of Pepperdine University and also serves as Chairman of the Board of Berkley
Industries. Mr. Rokus received a B.S. from Pepperdine University and an M.B.A. from the University of Southern California.

24

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Stephen E. Macadamhas served as President and Chief Executive Officer of Consolidated Container Company and as a member of the management
committee since August 2001. Mr. Macadam previously served with Georgia-Pacific Corporation where he held the position of Executive Vice President, Pulp & Paperboard from
July 2000 until August 2001, and the position of Senior Vice President, Containerboard & Packaging from March 1998 until July 2000. Mr. Macadam held positions
of increasing responsibility with McKinsey and Company, Inc. from 1988 until 1998, culminating in the role of Principal in charge of their Charlotte, North Carolina operation.
Mr. Macadam received a B.S. in Mechanical Engineering from the University of Kentucky, an M.S. in Finance from Boston College, and an M.B.A. from Harvard Business School, where he was a Baker
Scholar.

Tyler L. Woolsonhas served as Chief Financial Officer of Consolidated Container Company since January 2002. Previously
Mr. Woolson served as the Vice President, Strategic Planning for Georgia-Pacific Corporation since December 1999. Mr. Woolson also served as Vice President, Finance for The Timber
Company, a subsidiary of Georgia-Pacific, from 1997 until 1999, and as Senior Manager, Strategic Planning for Georgia-Pacific from 1995 until 1997. Between 1989 and 1995 Mr. Woolson served as a
Senior Consultant for Towers Perrin in Los Angeles and Atlanta. Mr. Woolson received a B.A. from Dartmouth College, and an M.B.A. from The Amos Tuck School (Dartmouth College) with a
specialization in Corporate Finance.

Louis Letteshas served as Vice President, General Counsel and Secretary of Consolidated Container Company since January 2002.
Previously, Mr. Lettes served as Vice President and General Manager of Homestore.com from 1999 to 2001. Mr. Lettes served in various positions at Turner Broadcasting System from 1992 to
1999 and as an associate at the law firm of Alston & Bird from 1989 to 1992. Mr. Lettes received an A.B. from Princeton University and a J.D. from Vanderbilt University School of Law.
Mr. Lettes is a member of the State Bar of Georgia.

Richard P. Sehringhas served as Senior Vice President, Finance and Accounting, and Chief Accounting Officer for Consolidated Container
Company since November 2001. Mr. Sehring served as Vice President Finance and Administration for LaRoche Industries, Inc. from June 2000 until June 2001. Between
1997 and 2000, Mr. Sehring served as Chief Financial Officer, in Frankfurt, Germany, and Vice President of Finance Neuilly Sur Seine, France for LII Europe SARL, a wholly owned subsidiary of
LaRoche Industries, Inc. Mr. Sehring served as Corporate Controller for LaRoche Industries, Inc. from 1994 until 1997, and various financial positions up to Corporate Controller
from 1989 until 1994 with LaRoche Chemicals, Inc. Mr. Sehring received his B.S. in Business Administration with a major in accounting and a minor in finance from Louisiana State
University.

Joyce A. Fosterhas served as Vice President, Human Resources, for Consolidated Container Company since January 2002. Previously,
Ms. Foster served as Director, Special Projects, from September 2001 until January 2002. Ms. Foster held various positions with Georgia-Pacific Corporation from
September 1987 until September 2001 including Senior Manager, Education and Development, Pulp & Paperboard, Director, Development, Containerboard & Packaging Division, and
Manager of Business Analysis, Packaging Division.

Robert K. Browerhas served as the Senior Vice President for Operations Services and Procurement of Consolidated Container Company since
October 2001. Prior to that date, Mr. Brower served as Vice President, Strategic Sourcing, for the Company since May 1999. Mr. Brower served in a variety of positions
within the procurement organization of Newell-Rubbermaid Corporation from 1997 until 1999 eventually becoming the Vice President for Global Procurement. Mr. Brower served for 26 years in
the United States Army, retiring in 1997 with the rank of Colonel. Mr. Brower received a B.A. and M.A. from the University of Richmond and an M.B.A. from Long Island University.

Douglas A. Smithhas served as Assistant Treasurer and Director of Accounting Operations since July 2002. Prior to that date,
Mr. Smith had been in the position of Manager of Accounting since the Company's inception in 1999. Mr. Smith started working for Plastic Containers, Inc. in 1988 as an

25

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accounting supervisor and was later promoted to the position of Manager of Accounting. Mr. Smith received his B.S. in Business Administration with a major in accounting from the University of
Nebraska.

William G. Bellhas served as a member of the management committee since the closing of the Transactions. Mr. Bell has been the
owner and President of Aqua Filter Fresh, Inc. since 1980 and the Executive Vice President of Tyler Mountain Water Co. Inc. since 1985. Mr. Bell was also the President of Bell
Sales, Inc. from 1980 to 2000. Mr. Bell is a director of Reid Plastics Holdings, Aqua Filter Fresh, Inc., Wissahickon Spring Water Company, Glacier Water Services Inc.,
Clear Mountain Spring Water LLC and Bell Sales, Inc. Mr. Bell also served as the Chairman of the International Bottled Water Association, an organization with which he has been
affiliated since 1989. In 2002, Mr. Bell was inducted into the Beverage World Bottled Water Hall of Fame.

James P. Kelleyhas served as a member of the management committee since the closing of the Transactions. Mr. Kelley is President
of Vestar Capital Partners (an affiliate of Vestar Capital Partners III, L.P.) and was a founding partner of Vestar Capital Partners at its inception in 1988. Mr. Kelley is a director of Reid
Plastics Holdings, SAB Wabco, Michael Foods and St. John Knits, Inc., companies in which Vestar Capital Partners III, L.P., or an affiliate has a significant equity interest. Mr. Kelley
received a B.S. from the University of Northern Colorado, a J.D. from the University of Notre Dame and an M.B.A. from Yale University.

Leonard Liebermanhas served. as a member of the management committee since the closing of the Transactions. Mr. Lieberman was
Chairman, President and Chief Executive Officer of Supermarkets General Corporation from 1982 to 1987 and of Outlet Communications, Inc. in 1991. Since 1995, Mr. Lieberman has served as
a consultant to Vestar Capital Partners III, L.P., and its affiliates. Currently, Mr. Lieberman is a director of Sonic Corp., Nice Pak Products, Inc., Michael Foods, Inc. and
Enterprise NewsMedia. Mr. Lieberman received a B.A. from Yale University, a J.D. from Columbia University and participated in the Advanced Management Program at Harvard Business School.

Richard L. Robinsonhas served as a member of the management committee since January 2000. Mr. Robinson has been
Co-CEO of Robinson Dairy LLC, a wholly owned subsidiary of Dean Foods, since August of 1999. From June 1975 until August 1999, Mr. Robinson was the Chairman and Chief
Executive Officer of Robinson Dairy, Inc. Currently, Mr. Robinson is a director of US Exploration Inc., HCA/HealthOne, and Horizon Organic Dairy. Mr. Robinson received a
B.S. from Colorado State University.

John R. Woodardhas served as a member of the management committee since the closing of the Transactions. Mr. Woodard is a Managing
Director of Vestar Capital Partners and joined Vestar Capital Partners in 1998. Between March 1996 and February 1998, he served as a Managing Director of The Blackstone Group. From
April 1990 to March 1996, Mr. Woodard was a Vice President of Vestar Capital Partners. Mr. Woodard is also a Director of Reid Plastics Holdings and A.P.
Deauville, LLC. Mr. Woodard received a B.A. from Williams College.

Except
as described in this section, there are no arrangements or understandings between any member of the management committee or executive officer and any other person under which that
person was elected or appointed to their position.

MANAGEMENT COMMITTEE COMPENSATION

All
members of the management committee are reimbursed for their usual and customary expenses incurred in attending all management committee and committee meetings. Members of the
management committee who are also employees of Consolidated Container Holdings, Consolidated Container Company, Vestar Capital Partners or Dean Foods do not receive additional remuneration for

26

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serving as members of the management committee. Each other member of the management committee receives compensation of $2,500 for each meeting of the management committee that such member attends in
person or telephonically and $3,750 for each calendar quarter of service as a member of the management committee.

Following
the closing of the Transactions, the management committee established a compensation committee, comprised of Messrs. Davis, as chairman, Bell, Kelley and Robinson. In
addition, the management committee established an audit committee, comprised of Messrs. Lieberman, as chairman, Rokus and Woodard.

OPTION PLANS

Following the closing of the Transactions, Consolidated Container Holdings adopted a 1999 Unit Option Plan to provide some of our key employees with options to
acquire up to 596,206, or 5.5% on a fully diluted basis, of the member units of Consolidated Container Holdings. The number of options available under this plan has since been increased to 1,040,694
pursuant to resolutions of the management committee and amendments to the option plan. Under the option plan, Consolidated Container Holdings has granted options to certain of these key employees that
represent the right to acquire, in total, 890,694 member units of Consolidated Container Holdings. The exact pricing, performance criteria, vesting terms and redemption of options granted under this
plan are governed by individual unit option agreements between the employee and Consolidated Container Holdings and, if the options are exercised, the terms of the options will be governed by special
unit acquisition, ownership and redemption agreements.

In
addition to the options to purchase member units in Consolidated Container Holdings that were granted to some of our key employees under the 1999 Unit Option Plan described above,
certain of these employees also hold options to purchase member units of Consolidated Container Holdings that were issued in exchange for previously owned Franklin Plastics options. Under this plan,
the rights to acquire 139,224 member units were outstanding as of December 31, 2002. The compensation committee administers these option plans.

LONG-TERM INCENTIVE PLAN

Following the closing of the Transactions, the management committee of Consolidated Container Holdings adopted a long-term incentive plan for some of
our officers, other key employees and outside consultants. If a liquidity event, as defined in the plan, were to occur, then the management committee of Consolidated Container Holdings will establish
a bonus pool of cash equal to a formula based on the
appreciation in value of the member units of Consolidated Container Holdings. As defined in the plan, a liquidity event includes:



Those
awarded grants under the plan will share in the bonus pool. Consolidated Container Holdings will make bonus payments, however, only if (1) a liquidity event occurs and
(2) specified rates of return are realized by Vestar Packaging LLC and its affiliates on their investment in Consolidated Container Holdings. The management committee or the compensation
committee of Consolidated Container Holdings will administer the plan. To date, Consolidated Container Holdings has not made any awards under the plan.

27

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EMPLOYMENT AGREEMENTS

Effective August 31, 2001, William L. Estes resigned from his position with Consolidated Container Company. In accordance with his employment agreement, he
receives $49,700 per month for two years from the date of his resignation. Mr. Estes is also provided medical, life, dental and long-term disability insurance benefits for these two
years, provided, however, that such benefit coverage shall terminate in the event and to the extent Mr. Estes begins receiving any such benefits from a subsequent employer.

As
of August 13, 2001, Consolidated Container Company entered into an employment agreement with Stephen E. Macadam. The employment agreement provides that Mr. Macadam will
be employed as the President and Chief Executive Officer of Consolidated Container Company at an annual base salary of $500,000 for a term of five years, subject to his earlier termination for
"cause." "Cause" includes willful misconduct, his conviction of a felony, or his resignation without "good reason." Commencing with August 13, 2006, and on each August 13 thereafter, the
Employment Term shall be automatically extended for an additional one-year period, unless we or Mr. Macadam provides the other with 60 days written notice. Mr. Macadam
is entitled to a bonus of up to 100% of his base salary at the discretion of the management committee, to participate in any executive bonus plan and all employee benefit plans maintained by
Consolidated Container Company and, under some circumstances, to an additional
payment to offset negative tax effects on his benefits. Mr. Macadam was guaranteed a bonus through fiscal year 2002 of 100% of his base salary.

In
the event that Consolidated Container Company terminates Mr. Macadam without cause or he resigns for good reason before the employment agreement expires, Mr. Macadam
will be entitled to receive:



In
the event of his death or permanent disability, Mr. Macadam or his estate will be entitled to a reduced compensation package. In addition, Mr. Macadam agreed not to
disclose any confidential information regarding Consolidated Container Company and its affiliates, not to be engaged in, in any capacity, any business that competes with Consolidated Container
Company, nor to solicit any person who was employed by Consolidated Container Company or its affiliates during the twelve months preceding that solicitation for a period of twenty-four
months after the date of his termination of employment. In exchange for agreeing to be bound by these covenants, Mr. Macadam will receive payments totaling twice the average of the base salary
and annual bonus earned in the two years prior to his termination (or the average of the base salary and annual bonus payable during the first two years of the employment term if Mr. Macadam's
termination occurs prior to his second anniversary).

As
of January 27, 2002, Consolidated Container Company entered into an employment agreement with Tyler L. Woolson. The employment agreement provides that Mr. Woolson will
be employed as the Chief Financial Officer of Consolidated Container Company at an annual base salary of $300,000 (plus any increases) for a term of five years, subject to his earlier termination for
"cause." "Cause" includes willful misconduct, his conviction of a felony, or his resignation without "good reason." Commencing with January 2007, and on each January 27 thereafter, the
Employment Term shall be automatically extended for an additional one-year period, unless the Company or Mr. Woolson provides the other

28

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with 60 days written notice. Mr. Woolson is entitled to participate in any executive bonus plan and all employee benefit plans maintained by Consolidated Container Company.

In
the event that Consolidated Container Company terminates Mr. Woolson without cause or he resigns for good reason before the employment agreement expires, Mr. Woolson
will be entitled to receive:



In
the event of his death or permanent disability, Mr. Woolson or his estate will be entitled to a reduced compensation package. In addition, Mr. Woolson agreed not to
disclose any confidential information regarding Consolidated Container Company and its affiliates, not to be engaged in, in any capacity, any business that competes with Consolidated Container
Company, nor to solicit any person who was employed by Consolidated Container Company or its affiliates during the twelve months preceding that solicitation for a period of twenty-four
months after the date of his termination of employment.

ITEM 11: EXECUTIVE COMPENSATION

The
table below shows the compensation paid or earned by the current Chief Executive Officer, the four other most highly paid executive officers of Consolidated Container Company as of
December 31, 2002, and the two former executive officers who received the highest compensation during 2002 but whose employment with the Company ended during 2002. For all such officers, the
table shows compensation during the years ended December 31, 2002, 2001 and 2000 where applicable:

29

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SUMMARY COMPENSATION TABLE

|                                                                                              |  |                |  |   |                         |  |   | Long-term
Compensation |  |           
|--------------------------------------------------------------------------------------------- |  | -------------- |  | - | ----------------------- |  | - | ---------------------- |  | ----------
|
|
|
|Stephen E. Macadam (1)
President and Chief Executive Officer                                  |  | 2002
2001      |  | $ | 519,417
188,200         |  | $ | 520,000
407,692        |  | 575,000
 
|Tyler L. Woolson (2)
Chief Financial Officer                                                  |  | 2002           |  |   | 276,923                 |  |   | 45,000                 |  | 100,000   
|Richard P. Sehring (3)
Senior Vice President, Finance & Accounting & Chief Accounting Officer |  | 2002
2001      |  |   | 200,000
30,769          |  |   | 20,000
5,000           |  | 30,000
  
|Robert K. Brower (4)
Senior Vice President, Operation Services & Procurement                  |  | 2002
2001
2000 |  |   | 233,449
178,500
144,860 |  |   | 30,000
30,000
22,000   |  | 11,000


|Louis Lettes (5)
Vice President, General Counsel & Secretary                                  |  | 2002           |  |   | 171,635                 |  |   | 10,000                 |  | 15,000    
|Henry Carter (6)
Former Executive Vice President of Sales and Marketing                       |  | 2002
2001
2000 |  |   | 80,769
247,500
240,000  |  |   | 

24,000             |  | 

     
|David M. Stulman (7)
Former Vice President, Human Resources                                   |  | 2002
2001
2000 |  |   | 40,124
163,000
157,500  |  |   | 

15,000             |  | 

     

---

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OPTION GRANTS IN 2002

The table below shows the options granted to the executive officers listed on the Summary Compensation Table during fiscal year 2002:

|                   |  |                        |  |               |   |   |                  |  |                                           | Potential
Realizable Value at
Assumed Annual
Rates of Stock Price
Appreciation
for Option Term
|------------------ |  | ---------------------- |  | ------------- | - | - | ---------------- |  | ----------------------------------------- | ----------------------------------------------------------------------------------------------
|
|
|
|Stephen E. Macadam |  | 300,000
225,000
50,000 |  | 33.6
25.2
5.6 | % | $ | 6.50
15.00
15.00 |  | July 1, 2012
July 1, 2012
August 13, 2012 |                                                                                               
|Tyler L. Woolson   |  | 100,000                |  | 11.2          |   |   | 6.50             |  | July 1, 2012                              |                                                                                               
|Richard P. Sehring |  | 30,000                 |  | 3.3           |   |   | 6.50             |  | July 1, 2012                              |                                                                                               
|Robert K. Brower   |  | 11,000                 |  | 1.2           |   |   | 6.50             |  | July 1, 2012                              |                                                                                               
|Louis Lettes       |  | 15,000                 |  | 1.6           |   |   | 6.50             |  | July 1, 2012                              |                                                                                               

AGGREGATED FISCAL YEAR-END OPTION VALUES

The table below shows the aggregate number of all options held by the executive officers listed on the Summary Compensation Table as of December 31, 2002.
None of such options were in-the-money as of December 31, 2002:

|Name               |  | Shares
acquired on
exercise |  | Values realized |  | Number of
securities
underlying
unexercised
options at fiscal
year-end
Exercisable/
Unexercisable |  | Value of
unexercised in-
the-money
options at fiscal
year-end
Exercisable/
Unexercisable
|------------------ |  | --------------------------- |  | --------------- |  | ------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------
|Stephen E. Macadam |  |                            |  | $              |  | 575,000                                                                                           |  | $                                                                                      
|Tyler L. Woolson   |  |                            |  |                |  | 100,000                                                                                           |  |                                                                                        
|Richard P. Sehring |  |                            |  |                |  | 30,000                                                                                            |  |                                                                                        
|Robert K. Brower   |  |                            |  |                |  | 11,000                                                                                            |  |                                                                                        
|Louis Lettes       |  |                            |  |                |  | 15,000                                                                                            |  |                                                                                        

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10-YEAR OPTION REPRICING

When the Company initially employed the current management team, we granted options with an exercise price of either $10.50 or $29.66 to such individuals (with
the exception of an earlier grant to Stephen Macadam at $40.00). In 2002, in an effort to properly align the option values with the current performance of the Company, the management committee
replaced the options that had been granted to the new management team with options having an exercise price of $6.50 (with the exception of certain options granted to Mr. Macadam, as per the table
below). Any prior vesting of exchanged options was foregone as part of the exchange process.

|Name               |  | Date     |  | Number of securities underlying options repriced or amended |  | Market price of units at time of repricing or amendment |       | Exercise price at time of repricing or amendment |   | New exercise price |  | Length of original option term remaining at date of repricing or amendment
|------------------ |  | -------- |  | ----------------------------------------------------------- |  | ------------------------------------------------------- | ----- | ------------------------------------------------ | - | ------------------ |  | --------------------------------------------------------------------------
|Stephen E. Macadam |  | 09/01/01 |  | 300,000                                                     |  | $                                                       | 14.53 |                                                  | $ | 10.50              |  | $                                                                         
|Stephen E. Macadam |  | 09/01/01 |  | 100,000                                                     |  |                                                         | 14.53 |                                                  |   | 29.66              |  |                                                                           
|Stephen E. Macadam |  | 09/01/01 |  | 125,000                                                     |  |                                                         | 14.53 |                                                  |   | 40.00              |  |                                                                           
|Richard P. Sehring |  | 11/05/01 |  | 30,000                                                      |  |                                                         | 14.53 |                                                  |   | 29.66              |  |                                                                           
|Robert K. Brower   |  | 03/16/01 |  | 1,700                                                       |  |                                                         | 14.53 |                                                  |   | 29.66              |  |                                                                           
|Robert K. Brower   |  | 07/01/99 |  | 6,000                                                       |  |                                                         | 14.53 |                                                  |   | 29.66              |  |                                                                           
|Louis Lettes       |  | 01/07/02 |  | 10,000                                                      |  |                                                         | 14.53 |                                                  |   | 29.66              |  |                                                                           

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Ronald Davis, William Bell, James Kelley and Richard Robinson serve on the compensation committee of the management committee of Consolidated Container Holdings.
None of such individuals are employees of the Company. In addition, none of our executive officers served as a member of a board of directors of any other entity that has an executive officer who
served on our compensation committee. For information on the certain relationships between the members of the compensation committee, or their affiliates, and us, see Item 13: Certain Relationships
and Related Party Transactions.

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REPORT OF THE COMPENSATION COMMITTEE

Our compensation program is designed to attract, retain and motivate quality people in a highly competitive business environment. Our annual and
long-term incentive compensation strategy is designed to link our long-term strategic objectives to the compensation of our key executives and managers. Our compensation
packages are comprised of base salaries, annual performance-based cash bonuses, and equity based long-term incentives (primarily in the form of unit options, which are based on the value
of Consolidated Container Company). Our compensation targets are set based on a number of factors including, but not limited to, compensation practices at companies within our industry and other
industries that are similar in terms of their complexity of operations, experience, and skill levels.

Base Salaries.Base salaries of all officers, including the executive officers named in the Summary Compensation Table on
page 30, are reviewed and approved annually by the Chief Executive Officer (with the exception of the CEO, whose salary is reviewed annually by the management committee). Salaries are set at levels
that are deemed necessary to attract and retain appropriate talent; however, these rates will vary due to individual performance, the scope of responsibilities and the competitive nature of the
marketplace.

Annual Incentives.Annual bonuses are earned based on performance under the Consolidated Container Company Management
Incentive Plan. Payments under the management incentive plan vary based on the achievement of performance targets set at the beginning of each year by the leadership team of Consolidated Container
Company that have both objective and subjective components. Performance above or below these targets will result in proportionately higher or lower bonuses.

Earnings
before interest, taxes, depreciation, and amortization, known as EBITDA, is the primary objective financial metric used to determine bonuses in the management incentive plan.
The subjective component consists of the Chief Executive Officer's discretion based on qualitative and quantitative financial and non-financial goals that are set individually for the
officer group and are ultimately approved by the compensation committee. Such measures include, but are not limited to, safety, successful project implementation, and performance against department
budgets. The minimum level of EBITDA for 2002 and 2001 were not achieved by the Company as a whole, and therefore awards were made only under the subjective components of the plan or contractual
agreements. A listing of the awards made to the executive officers named in the Summary Compensation Table can be found on page 30.

Long-Term Incentives Through Option Grants.Our unit option plans are intended to align the incentives of the
covered employees with our long-term success by giving us the ability to reward employees for increasing the equity value of Consolidated Container Company and its affiliates. The
compensation committee has the authority under each of these plans to set the terms and conditions of any grants and awards. Net of options retired, repurchased, forfeited, or canceled and exchanged,
options covering 78,685 units were granted during 2002.

Chief Executive Officer CompensationSteve Macadam, the President and Chief Executive Officer of Consolidated Container
Company, participates in the compensation programs described in this report. His cash compensation for 2001 and 2002 is summarized in the summary compensation table included on page 30.

The
committee's determination of Mr. Macadam's compensation in 2001 and 2002 was based on an assessment of base salaries for executives of a similar caliber of talent. In
addition, Mr. Macadam was guaranteed a bonus for 2001 and 2002 (to be paid in 2002 and 2003 respectively).

33

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Mr. Macadam's
base salary, annual bonus and equity incentives are intended to keep his compensation competitive with executives with similar skill sets and experience, and to
align his financial interests significantly with the overall success of the Company.

Respectfully
submitted,

Ronald
V. Davis, Chairman
William G. Bell
James P. Kelley
Richard L. Robinson

34

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ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Consolidated Container Holdings is the beneficial owner of all of the shares of common stock of Consolidated Container Company. Consolidated Container Holdings'
address is 3101 Towercreek Parkway, Suite 300, Atlanta, Georgia 30339.

Provided
below is information as of March 28, 2003, the most recent date practicable, concerning the beneficial ownership of the member units and the economic interests in
Consolidated Container Holdings by:



|Name and Address of Beneficial Owner                                                                          |  | Number of Member Units Beneficially Owned (a) |  | Percentage of Member Units Outstanding (a) |  
|------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------- |  | ------------------------------------------ | -
|                                                                                                              |  |                                               |  |                                            |  
|5% Equity Holders:                                                                                            |  |                                               |  |                                            |  
|Vestar Packaging LLC (b)
Seventeenth Street Plaza
1225 17th Street, Suite 1660
Denver, Colorado 80202         |  | 2,050,000                                     |  | 16.57                                      | %
|Reid Plastics Holdings, Inc. (c)
Seventeenth Street Plaza
1225 17th Street, Suite 1660
Denver, Colorado 80202 |  | 3,050,000                                     |  | 24.66                                      | %
|Franklin Plastics, Inc. (d)
2515 McKinney Avenue, Suite 1200
Dallas, Texas 75201                              |  | 4,900,000                                     |  | 39.61                                      | %
|Vestar CCH LLC (e)
Seventeenth Street Plaza
1225 17th Street, Suite 1660
Denver, Colorado 80202               |  | 1,671,284                                     |  | 13.51                                      | %
|Franklin Holdings, Inc. (f)
2515 McKinney Avenue, Suite 1200
Dallas, Texas 75201                              |  | 668,513                                       |  | 5.40                                       | %
|                                                                                                              |  |                                               |  |                                            |  

35

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|Named Executive Officers and Management Committee Members:                       |  |        |  |       |  
|-------------------------------------------------------------------------------- |  | ------ |  | ----- | -
|Ronald V Davis (b)(c)                                                            |  | 43,360 |  | 0.352 | %
|B. Joseph Rokus (c)                                                              |  | 0      |  | 0     |  
|Stephen E. Macadam                                                               |  | 0      |  | 0     |  
|William G. Bell                                                                  |  | 1,686  |  | 0.014 | %
|James P. Kelley (b)                                                              |  | 0      |  | 0     |  
|Leonard Lieberman (b)                                                            |  | 0      |  | 0     |  
|Richard L. Robinson                                                              |  | 1,686  |  | 0.014 | %
|John R. Woodard (b)                                                              |  | 0      |  | 0     |  
|Tyler L. Woolson                                                                 |  | 0      |  | 0     |  
|Richard P. Sehring                                                               |  | 0      |  | 0     |  
|Robert K. Brower                                                                 |  | 0      |  | 0     |  
|Louis Lettes                                                                     |  | 0      |  | 0     |  
|Henry Carter                                                                     |  | 0      |  | 0     |  
|David M. Stulman                                                                 |  | 0      |  | 0     |  
|All Officers and Members of the Management Committee As a Group(14 persons) (g): |  | 46,732 |  | 0.38  | %

---

36

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EQUITY COMPENSATION PLAN INFORMATION

The following table provides aggregate data on outstanding and available options under the Company's equity compensation plans:

|Plan Category                                              |  | Number of securities to be issued upon exercise of outstanding options, warrants and rights (A) |  | Weighted-average exercise price of outstanding options, warrants and rights |  | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (A))
|---------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Equity compensation plan approved by security holders (1)  |  | 1,029,918                                                                                       |  | $9.59                                                                       |  | 150,000                                                                                                                                    
|Equity compensation plans not approved by security holders |  | n/a                                                                                             |  | n/a                                                                         |  | n/a                                                                                                                                        
|Total                                                      |  | 1,029,918                                                                                       |  | 9.59                                                                        |  | 150,000                                                                                                                                    

---

37

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ITEM 13: CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Summarized
below are the material terms and provisions of material agreements and arrangements, as well as those in existence prior to the closing of the Transactions, that relate to the
businesses which were contributed to Consolidated Container Company in connection with the Transactions, with directors, officers, certain significant beneficial owners of the securities of
Consolidated Container Holdings, and their family members that involved in excess of $60,000.

LIMITED LIABILITY COMPANY AGREEMENT OF CONSOLIDATED CONTAINER HOLDINGS

Simultaneously with the closing of the Transactions, Vestar Packaging, Reid Plastics Holdings and Franklin Plastics entered into a limited liability agreement of
Consolidated Container Holdings, the sole member of Consolidated Container Company. The limited liability company agreement of Consolidated Container Holdings provides for its management,
non-compete arrangements, transfer restrictions and related matters. We summarize its material provisions below.

Management

The management committee of Consolidated Container Holdings has general powers of supervision, direction and control over the business of Consolidated Container
Holdings, Consolidated Container Company and its subsidiaries. As previously described, the management committee consists of eight members. Two of the members were appointed by Vestar Packaging LLC
(James P. Kelley and John R. Woodard), two were appointed by Reid Plastics Holdings (Ronald V. Davis and Leonard Lieberman), two were appointed mutually by Vestar Packaging LLC and Reid Plastics
Holdings (William G. Bell and B. Joseph Rokus). Of the remaining two members, one was appointed by Franklin Plastics (Richard L. Robinson), and one is the chief executive officer of Consolidated
Container Company, currently Stephen E. Macadam.

A
majority of the members of the management committee, including the affirmative vote of at least one Dean Foods-appointed member and one Vestar Packaging-appointed member, is required
for certain decisions by the management committee. These decisions include:



38

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Non-Competition Arrangements

Each of the members of Consolidated Container Holdings is subject to a non-competition arrangement limiting its ability to compete in the business for
plastic packaging products and plastic bottles for dairy, water or juice in the same geographical area served by Consolidated Container Holdings, Consolidated
Container Company and its subsidiaries. In general, these geographic areas are in the United States and Canada. The non-competition arrangements will terminate upon the earlier of five
years or upon either of Vestar Packaging LLC (together with Reid Plastics Holdings) or Franklin Plastics owning less than 10% of the member units of Consolidated Container Holdings. The following
exceptions apply to these non-competition arrangements:



MANAGEMENT AGREEMENT

Consolidated Container Company, Consolidated Container Holdings and Vestar Capital Partners entered into a management agreement on April 29, 1999, relating
to the management of Consolidated Container Company and Consolidated Container Holdings. Under the management agreement, Consolidated Container Company and Consolidated Container Holdings has paid
Vestar Capital Partners an aggregate fee of $5 million and has reimbursed Vestar Capital Partners for all out-of-pocket expenses incurred by it in connection with the
closing of the Transactions. In addition, Vestar Capital Partners has been providing on-going management services to each of Consolidated

39

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Container Company and Consolidated Container Holdings since the closing of the Transactions, including strategic, financial planning and advisory services. For these services, Consolidated Container
Company pays Vestar Capital Partners an annual fee of the greater of $500,000 or 0.42% of the earnings before interest and taxes plus depreciation and amortization, as defined in the management
agreement, of the prior year of Consolidated Container Company, Consolidated Container Holdings, and their subsidiaries on a consolidated basis and reimburses Vestar Capital Partners for all
out-of-pocket expenses incurred by it in connection with these services. During 2002, we paid Vestar Capital Partners $500,000 under the terms of this agreement. The management
agreement will terminate upon the earlier of Vestar Packaging, Vestar Capital Partners III, L.P., their members, the partners therein and their respective affiliates collectively owning less than 25%
of the member units of Consolidated Container Holdings or following the closing of an initial public offering of Consolidated Container Holdings. Consolidated Container Company and Consolidated
Container Holdings have also agreed to indemnify Vestar Capital Partners against some of the liabilities and costs incurred in connection with its engagement.

LIMITED LIABILITY COMPANY AGREEMENT OF CONSOLIDATED CONTAINER COMPANY

Simultaneously with the closing of the Transactions, Consolidated Container Holdings, as the sole member of Consolidated Container Company, entered into a limited
liability company agreement for Consolidated Container Company. As its sole member, Consolidated Container Holdings, through its management committee, manages Consolidated Container Company under this
agreement.

SUPPLY AGREEMENTS

In July 1999, we entered into agreements to supply Suiza Foods Corporation, now known as Dean Foods Company, with bottles and bottle components. The prices
for bottles are based on the prices that were in effect in July 1999 between Suiza Foods Corporation and Suiza Packaging prior to the Transactions and are subject to adjustments based on
changes in raw material, manufacturing and delivery costs. We had sales to Dean Foods of approximately $81.5 million for the year ended December 31, 2002.

TRADEMARK LICENSE AGREEMENT

Simultaneously with the closing of the Transactions, Consolidated Container Company and Consolidated Container Holdings, which are referred to collectively in
this description as the licensee, entered into a trademark license agreement with Continental Can Company, Inc., then a wholly owned subsidiary of Suiza Foods Corporation, which is now known as
Dean Foods Company. Continental Can granted licensee a non-exclusive license to use some of its trademarks in the United States. The trademark license will be royalty free as long as Dean
Foods directly or indirectly owns 10% or more of licensee. Licensee will be required to pay Continental Can an annual trademark licensing fee of $100,000 if Dean Foods directly or indirectly owns less
than 10% of Licensee. For the year ended December 31, 2002, no amounts were paid under this agreement. This agreement shall remain effective until the parties agree otherwise.

ASSUMPTION AGREEMENT

Simultaneously with the closing of the Transactions, Consolidated Container Company and Consolidated Container Holdings entered into an assumption agreement with
Reid Plastics Holdings to assume all of Reid Plastics Holdings' obligations to B. Joseph Rokus. Currently, Reid Plastics Holdings is obligated to make payments to Mr. Rokus which relate to the
1997 acquisition of a controlling interest in Reid Plastics Holdings by Vestar Reid. These payments include $400,000 each year from September 15, 1998, through a portion of 2002 when the
remaining balance was written off and the contract was renegotiated. The agreement also called for additional payments of up to $3.4 million if

40

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specified investment returns of Reid Plastics are achieved, and up to $4.8 million upon an initial public offering of Reid Plastics Holdings, if specified investment returns are achieved, or
specified qualified sales of Reid Plastics Holdings by Vestar Reid, the parent of Reid Plastics Holdings and a controlled affiliate of Vestar Capital Partners III, L.P. Consolidated
Container Holdings has agreed to indemnify Suiza Foods Corporation, now known as Dean Foods Company, for some of these payments. We made no payment for the year ended December 31, 2002 under
the terms of this agreement.

ADDITIONAL MATTERS

Aqua Filter Fresh, Inc., of which William G. Bell and his family own 75%, and of which Mr. Bell is currently a director, has purchased containers
from us at market terms. In 2002, these purchases amounted to approximately $2.3 million.

Aqua
Filter Fresh resold a portion of those containers to Alpine Spring Water Inc., which merged into Clear Mountain Spring Water LLC in 2002. Aqua Filter Fresh owned 20% of
Alpine and now owns 6% of Clear Mountain. Mr. Bell was a 10% owner and chairman of Alpine and is now a 1% owner of Clear Mountain. Alpine made purchases totaling less than $50,000 directly from
CCC in 2002 prior to Alpine's merger into Clear Mountain. Clear Mountain purchased no bottles directly from CCC in 2002.

In
addition, Aqua Filter Fresh wholly owns Bell Sales, Inc., of which Mr. Bell is a past President and is a director. Mr. Bell's son is President of Bell Sales. Bell
Sales resells containers on behalf of Consolidated Container Company. In 2002, we paid Bell Sales approximately $58,000 in commissions.

Mr. Bell
is also Executive Vice President and a 9.4% owner of Tyler Mountain Water Company, Inc., which purchases containers from us. In 2002, these purchases by Tyler
Mountain Water and its subsidiaries amounted to approximately $570,000.

B.
Joseph Rokus is a trustee of Rokus Capital, of which his five minor children collectively own 100%. Rokus Capital is a 7.7% shareholder of Berkeley Industries, which purchased Omni
Plastics in 2001. Omni Plastics and Reid Plastics, Inc., entered into a contract as of February 10, 1997, amended as of October 28, 1998, whereby Omni agreed to supply Reid
Plastics with valves. Reid Plastics, our wholly owned subsidiary, paid Omni approximately $2.4 million for such valves in 2002.

Richard
L. Robinson is co-CEO of Robinson Dairy LLC, a wholly owned subsidiary of Dean Foods Company. Robinson Dairy purchased bottles and resin from us in 2002 totaling
approximately $1.1 million.

41

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PART IV

ITEM 14: CONTROLS AND PROCEDURES

Our management, including a disclosure committee formed in 2002 which includes the Chief Executive Officer, or CEO, the Chief Financial Officer, or CFO, and other
members of our senior management and finance teams, has conducted an evaluation of the effectiveness of our disclosure controls and procedures. Based on that evaluation, the disclosure committee
concluded that the disclosure controls and procedures were adequate and effective in ensuring that all material information required to be filed in this report has been made known to them in a timely
fashion.

During
the year, management implemented several changes to policies and procedures to formalize the process whereby information relating to the Company is identified, assembled and
presented to responsible parties on a timely basis. These changes have included, but are not limited to, improvements such as: changing the organizational and reporting structures to ensure more
direct channels of communication to the CEO and CFO and encourage greater accountability throughout the organization; establishing a set of core values in the Company to better define the manner in
which our employees are expected to operate with regard to integrity, ethics, and competence; establishing anonymous channels of communication (e.g. ethics "hotline") whereby employees can make
management aware of unethical, fraudulent or criminal behavior; investing significant capital and expense dollars in a process to convert to a single financial system to improve the timeliness,
accuracy and availability of financial data; forming a disclosure committee to help ensure that all disclosures, both financial and non-financial, are complete and fairly present the
financial and operational condition of the Company in all material respects; implementing a system of periodic reporting and reviews of the business at all levels (as low as the facility level) in
order to understand any and all of our material issues and to allow management to focus on areas of significant concern; and implementing a certification process in all key areas of the Company to
ensure identification and disclosure of any items material to the Company. As the financial systems conversion process is currently in progress, it is management's opinion that the internal controls
will continue to strengthen as this conversion is fully implemented.

The
only change in internal controls subsequent to the date the disclosure committee completed their evaluations of such controls has been the continued increase in the number of
manufacturing facilities
that have been converted to the new financial system since the time of the evaluation. This change will continue to increase the effectiveness of the control process in the future.

ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A)(1)    FINANCIAL STATEMENTS

INDEX TO FINANCIAL STATEMENTS

|                                                                                                                            |  | Page
|--------------------------------------------------------------------------------------------------------------------------- |  | ----
|CONSOLIDATED CONTAINER COMPANY LLC                                                                                          |  |     
|Independent Auditors' Report                                                                                                |  | F-1 
|Consolidated Balance Sheets as of December 31, 2002 and 2001                                                                |  | F-2 
|Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2002, 2001, and 2000 |  | F-3 
|Consolidated Statements of Member's (Deficit) Equity for the years ended December 31, 2002, 2001, and 2000                  |  | F-4 
|Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001, and 2000                                 |  | F-5 
|Notes to Consolidated Financial Statements                                                                                  |  | F-6 

42

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(A)(2)    FINANCIAL STATEMENT SCHEDULES

All schedules are inapplicable or have been disclosed in the Notes to Consolidated Financial Statements and, therefore, have been omitted.

(A)(3)    EXHIBITS

|Exhibit No. |     | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|----------- | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         | (a) | Certificate of Formation of Consolidated Container Company LLC. (The Certificate of Formation, included as Exhibit 3.1(a) to the Registration Statement on Form S-4 of Consolidated Container Company LLC,
Consolidated Capital, Inc. and the Registrant Guarantors listed therein (the "Registration Statement") as filed on January 21, 2000 is hereby incorporated herein by reference).                                                                                                        
|3.1         | (a) | Limited Liability Company Agreement of Consolidated Container Company LLC. (The Limited Liability Company Agreement, included as Exhibit 3.1(b) to the Registration Statement as filed on January 21, 2000 is incorporated herein by
reference.)                                                                                                                                                                                                                                                   
|3.2         | (b) | Certificate of Formation of Consolidated Container Holdings LLC. (The Certificate of Formation, included as Exhibit 3.7(a) to the registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                                                                                                                                                                        
|3.3         | (b) | Amended and Restated Limited Liability Company Agreement of Consolidated Container Holdings LLC. (The Limited Liability Company Agreement, included as Exhibit 3.7(b) to the Registration Statement as filed on January 21, 2000 is incorporated
by reference.)                                                                                                                                                                                                                                    
|4.1         | (a) | Indenture dated as of July 1, 1999 among Consolidated Container Company LLC and Consolidated Container Capital, Inc. as Issuers, the Subsidiary Guarantors listed therein and The Bank of New York, as Trustee. (The Indenture, included as
Exhibit 4.1 to the Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                                           
|4.1         | (b) | Supplemental Indenture dated as of March 31, 2000 among Consolidated Container Company LLC and Consolidated Container Capital, Inc., as issuers, Reid Plastics Group LLC, Plastics Containers LLC, Continental Plastic Containers LLC,
Continental Caribbean Containers LLC and Franklin Plastics Holdings LLC, as guarantors, and the Bank of New York, as trustee. (The Supplemental Indenture, included as Exhibit 4.1 to the 8-K as filed on May 12, 2000 is incorporated herein by
reference.)
|4.2         |     | Form of 101/8% Senior Subordinate Note due 2009 and annexed Guarantees. (The Form of Note, included as Exhibit 4.2 to Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                                                                                                                                                                                    
|10.1        | (a) | Credit Agreement dated as of July 1, 1999 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as Administrative Agent, Morgan Guaranty Trust Company of New York, as Documentation
Agent and Donaldson, Lufkin & Jenrette Securities Corporation, as Syndication Agent. (The Credit Agreement, included as Exhibit 10.1 to the Registration Statement as filed on January 21, 2000 is incorporated herein by
reference.)          
|10.1        | (b) | First Amendment dated as of April 25, 2000 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as Administrative Agent, Morgan Guaranty Trust Company of New York, as Documentation
Agent and Credit Suisse First Boston, as Syndication Agent. (The First Amendment, included as Exhibit 10.1(b) to the 10-K as filed on April 2, 2001 is incorporated herein by reference.)                                                     
|            |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

43

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|10.1 | (c) | Second Amendment dated as of March 28, 2001 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as Administrative Agent, Morgan Guaranty Trust Company of New York, as documentation
Agent and Credit Suisse First Boston, As Syndication Agent. (The Second Amendment, included as Exhibit 10.1(c) to the 10-K as filed on April 2, 2001 is incorporated herein by reference.)                                                              
|---- | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 | (d) | Assignment and Assumption Agreement dated as of March 31, 2000 between Consolidated Container Company LLC and Franklin Plastics Holdings LLC. (Assignment and Assumption Agreement, included as Exhibit 10.1 to the 8-K as filed on May 12,
2000 is incorporated herein by reference.)                                                                                                                                                                                                                        
|10.1 | (e) | Third Amendment dated as of November 12, 2001 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as Administrative Agent, JPMorgan Chase Bank, as documentation Agent and Credit
Suisse First Boston, As Syndication Agent. (The Third Amendment, included as Exhibit 10.1(e) to the 10-K as filed on March 29, 2002 is incorporated herein by reference.)                                                                                  
|10.1 | (f) | Fourth Consent dated as of February 15, 2002 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as Administrative Agent, JPMorgan Chase Bank, as documentation Agent and Credit
Suisse First Boston, As Syndication Agent. (The Fourth Consent, included as Exhibit 10.1(f) to the 10-K as filed on March 29, 2002 is incorporated herein by reference.)                                                                                    
|10.1 | (g) | Modification to Fourth Consent dated as of February 22, 2002 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as Administrative Agent, JPMorgan Chase Bank, as documentation
Agent and Credit Suisse First Boston, As Syndication Agent. (The Modification to Fourth Consent, included as Exhibit 10.1(g) to the 10-K as filed on March 29, 2002 in incorporated herein by reference.)                                                    
|10.1 | (h) | Fifth Amendment and Agreement to Credit Agreement and First Amendment to the Security Agreement dated as of February 27, 2002 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as
Administrative Agent, JPMorgan Chase Bank, as documentation Agent and Credit Suisse First Boston, As Syndication Agent. (The Fifth Amendment, included as Exhibit 10.1 to the 8-K as filed on March 4, 2002 is incorporated herein by
reference.)       
|10.1 | (i) | Sixth Amendment and Agreement to Credit Agreement dated as of December 20, 2002 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company, as Administrative Agent, JPMorgan Chase Bank, as
documentation Agent and Credit Suisse First Boston, As Syndication Agent. (The Sixth Amendment, included as Exhibit 10.1 to the 8-K as filed on December 31, 2002 is incorporated herein by reference.)                                                 
|10.1 | (j) | Seventh Amendment and Agreement to Credit Agreement and Second Amendment to the Security Agreement dated as of January 3, 2003, among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Banks, Bankers Trust Company,
as Administrative Agent, JPMorgan Chase Bank, as documentation Agent and Credit Suisse First Boston, As Syndication Agent. (The Seventh Amendment, included as Exhibit 10.1 to the 8-K as filed on January 14, 2003 is incorporated herein by
reference.)
|     |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

44

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|10.2  |      | Pledge Agreement dated as of July 1, 1999 by Consolidated Container Holdings LLC, Consolidated Container Company LLC, the Subsidiary Guarantors and each other Subsidiary of Consolidated Container Company LLC that is required to execute a
counterpart thereof and Bankers Trust Company as Collateral Agent. (The Pledge Agreement, included as Exhibit 10.2 to the Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)
|----- | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.3  |      | Security Agreement dated as of July 1, 1999 among Consolidated Container Holdings LLC, Consolidated Container Company LLC, various Subsidiaries and Bankers Trust Company as Collateral Agent. (The Security Agreement, included as Exhibit 10.3
to the Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                
|10.4  |      | Subsidiary Guaranty dated as of July 1, 1999 by Reid Plastics Group LLC, Plastic Containers LLC, Continental Plastic Containers LLC and Continental Caribbean Containers, Inc. (The Subsidiary Guaranty, included as Exhibit 10.4 to the
Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                               
|10.6  |      | Trademark License Agreement dated as of July 1, 1999 between Continental Can Company, Inc., Consolidated Container Holdings LLC and Consolidated Container Company LLC. (The Trademark License Agreement, included as Exhibit 10.6 to the
Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                              
|10.7  |      | Management Agreement dated as of April 29, 1999 among Consolidated Container Holdings LLC, Consolidated Container Company LLC and Vestar Capital Partners III, L.P. (The Management Agreement, included as Exhibit 10.7 to the Registration
Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                                         
|10.9  | (a)* | Consolidated Container Holdings LLC 1999 Unit Option Plan and Form of Special Unit Acquisition, Ownership and Redemption Agreement, as amended and restated. (Filed herewith.)                                                                                                                                                                                                                                                                                   
|10.9  | (b)* | Consolidated Container Holdings LLC 2002 Unit Option Agreement. (Filed herewith.)                                                                                                                                                                                                                                                                                                                                                                                
|10.10 | (a)* | Consolidated Container Holdings LLC Replacement Units Option Plan for Options Issued Pursuant to the Franklin Plastics, Inc. 1998 Stock Option Plan. (The Replacement Units Option plan, included as Exhibit 10.10(a) to the Registration
Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                                           
|10.10 | (b)* | Form of Original Consolidated Container Holdings LLC Replacement Units Option Agreement for Option Issued Pursuant to the Franklin Plastics, Inc. 1998 Stock Option Plan. (The Form of Replacement Units Option Agreement, included as
Exhibit 10.10(b) to the Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                         
|10.10 | (c)* | Form of Modified Consolidated Container Holdings LLC Replacement Units Option Agreement for Options Issued Pursuant to the Franklin Plastics, Inc. 1998 Stock Option Plan. (The Form of Replacement Units Option Agreement, included as
Exhibit 10.10(c) to the Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                        
|10.11 | *    | Long-Term Incentive Plan. (The Long-Term Incentive Plan, included as Exhibit 10.11 to the Registration Statement as filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                                                                                                                                                                              
|      |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

45

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|10.16 | * | Amended and Restated Employment Agreement dated as of September 15, 1998 by and between Reid Plastics, Inc. and B. Joseph Rokus. (The Amended and Restated Employment Agreement, included as Exhibit 10.16 to the Registration Statement as
filed on January 21, 2000 is incorporated herein by reference.)                                                                                                                                                                                  
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.17 |   | Employment Agreement dated as of August 13, 2001 between Consolidated Container Company LLC and Stephen Macadam (The Employment Agreement, included as Exhibit 10.17 to the 10-K filed March 29, 2002 is incorporated herein by
reference.)                                                                                                                                                                                                                                                  
|10.18 |   | Employment Agreement dated as of January 11, 2002 between Consolidated Container Company LLC and Tyler L. Woolson (The Employment Agreement, included as Exhibit 10 to the Quarterly Report on Form 10-Q as filed on May 15, 2002 is
incorporated herein by reference.)                                                                                                                                                                                                                      
|21    |   | List of Subsidiaries of the Registrant. (Filed herewith)                                                                                                                                                                                                                                                                                                                                                                                                                                     
|99.1  |   | Contribution and Merger Agreement by and among Suiza Foods Corporation, now known as Dean Foods Company, Franklin Plastics, Inc. and affiliates, Vestar Packaging LLC, Reid Plastics Holdings, Inc. and Affiliates, Consolidated Container
Holdings LLC, Consolidated Container Company LLC and Reid Plastics Group LLC dated as of April 29, 1999, as amended (incorporated herein by reference to Exhibit 2.1 of Suiza Foods Corporation's Current Report on Form 8-K dated
July 19, 1999.)
|99.2  |   | Amendment No. 1 to Contribution and Merger Agreement dated June 28, 1999 (incorporated herein by reference to Exhibit 2.2 of Suiza Foods Corporation's Current Report on Form 8-K dated July 19, 1999.)                                                                                                                                                                                                                                                                                      

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(B)    CURRENT REPORTS ON FORM 8-K

During the fourth quarter of 2002, we filed a form 8-K dated December 20, 2002. The report, made under cover of Item 5, discusses a bank
waiver obtained for covenants and a delay of an amortization payment due under the Senior Credit Facility for the quarter ended December 31, 2002.

46

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has the duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

| |  | CONSOLIDATED CONTAINER COMPANY LLC
| |  | ----------------------------------
| |  | By:                               
| |  | Dated: March 31, 2003             

Pursuant
to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.

|Signature                                 |  | Title                                                                                                     |  | Date          
|----------------------------------------- |  | --------------------------------------------------------------------------------------------------------- |  | --------------
|                                          |  |                                                                                                           |  |               
|/s/RONALD V. DAVISRonald V. Davis         |  | Chairman of the Management Committee                                                                      |  | March 31, 2003
|/s/B. JOSEPH ROKUSB. Joseph Rokus         |  | Vice Chairman of the Management Committee                                                                 |  | March 31, 2003
|/s/STEPHEN E. MACADAMStephen E. Macadam   |  | President, Chief Executive Officer and Manager (principal executive officer)                              |  | March 31, 2003
|/s/TYLER L. WOOLSONTyler L. Woolson       |  | Chief Financial Officer (principal financial officer)                                                     |  | March 31, 2003
|/s/RICHARD P. SEHRINGRichard P. Sehring   |  | Senior Vice President, Finance and Accounting and Chief Accounting Officer (principal accounting officer) |  | March 31, 2003
|/s/WILLIAM G. BELLWilliam G. Bell         |  | Manager                                                                                                   |  | March 31, 2003
|/s/JAMES P. KELLEYJames P. Kelley         |  | Manager                                                                                                   |  | March 31, 2003
|/s/LEONARD LIEBERMANLeonard Lieberman     |  | Manager                                                                                                   |  | March 31, 2003
|/s/RICHARD L. ROBINSONRichard L. Robinson |  | Manager                                                                                                   |  | March 31, 2003
|/s/JOHN R. WOODARDJohn R. Woodard         |  | Manager                                                                                                   |  | March 31, 2003

47

---

CERTIFICATIONS PURSUANT TO SECTION 302  OF THE SARBANES-OXLEY ACT OF 2002

I,
Stephen E. Macadam, certify that:





|Date: March 31, 2003 |  | By: | /s/STEPHEN E. MACADAMStephen E. Macadam
President, Chief Executive Officer, and Manager
|-------------------- |  | --- | ---------------------------------------------------------------------------------------

---

CERTIFICATIONS PURSUANT TO SECTION 302  OF THE SARBANES-OXLEY ACT OF 2002

I,
Tyler L. Woolson, certify that:





|Date: March 31, 2003 |  | By: | /s/TYLER L. WOOLSONTyler L. Woolson
Chief Financial Officer
|-------------------- |  | --- | -----------------------------------------------------------

---



INDEPENDENT AUDITORS' REPORT

To
the Member of
    Consolidated Container Company LLC
Atlanta, Georgia

We
have audited the accompanying consolidated balance sheets of Consolidated Container Company LLC and subsidiaries (the "Company") as of December 31, 2002 and 2001, and the
related consolidated statements of operations and comprehensive (loss) income, member's (deficit) equity, and cash flows, for the years ended December 31, 2002, 2001 and 2000. 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 auditing standards generally accepted in the United States of America. 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, such consolidated financial statements present fairly, in all material respects, the financial position of Consolidated Container Company LLC and subsidiaries as of
December 31, 2002 and 2001, and the results of their operations and their cash flows for the years ended December 31, 2002, 2001 and 2000, in conformity with accounting principles
generally accepted in the United States of America.

As
discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for goodwill and other intangible assets in 2002 to conform to
Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets."

As
discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for stock options in 2002 to conform to SFAS No. 123,
"Accounting for Stock-Based Compensation," and SFAS No. 148, "Accounting for Stock-Based CompensationTransition and Disclosurean amendment of SFAS No. 123."

DELOITTE &
TOUCHE LLP

Atlanta,
Georgia
March 21, 2003

F-1

---



CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES        CONSOLIDATED BALANCE SHEETS        DECEMBER 31, 2002 AND 2001        (Amounts in thousands)

|                                        |                                                                                                  | 2002                            |         | 2001    |        
|--------------------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------- | ------- | ------- | -------
|ASSETS                                  |                                                                                                  |                                 |         |         |        
|CURRENT ASSETS:                         |                                                                                                  |                                 |         |         |        
|                                        | Cash and cash equivalents                                                                        |                                 | $       | 24,382  |        
|                                        | Investment securities                                                                            |                                 |         | 106     |        
|                                        | Accounts receivable, net of allowance for doubtful accounts of $1,414 in 2002 and $3,561 in 2001 |                                 |         | 73,043  |        
|                                        | Inventories                                                                                      |                                 |         | 46,748  |        
|                                        | Other current receivables                                                                        |                                 |         | 27,834  |        
|                                        |                                                                                                  |                                 |         |         |        
|                                        |                                                                                                  | Total current assets            |         |         | 172,113
|PROPERTY AND EQUIPMENT, Net             |                                                                                                  |                                 | 289,281 |         |        
|GOODWILL                                |                                                                                                  |                                 | 209,859 |         |        
|INTANGIBLES AND OTHER ASSETS            |                                                                                                  |                                 | 19,444  |         |        
|                                        |                                                                                                  |                                 |         |         |        
|                                        |                                                                                                  | $                               | 690,697 |         | $      
|                                        |                                                                                                  |                                 |         |         |        
|LIABILITIES AND MEMBER'S EQUITY         |                                                                                                  |                                 |         |         |        
|CURRENT LIABILITIES:                    |                                                                                                  |                                 |         |         |        
|                                        | Accounts payable                                                                                 |                                 | $       | 92,407  |        
|                                        | Accrued liabilities                                                                              |                                 |         | 46,313  |        
|                                        | Revolving credit facility                                                                        |                                 |         | 31,000  |        
|                                        | Current portion of long-term debt                                                                |                                 |         | 61,159  |        
|                                        |                                                                                                  |                                 |         |         |        
|                                        |                                                                                                  | Total current liabilities       |         |         | 230,879
|LONG-TERM DEBT                          |                                                                                                  |                                 | 484,817 |         |        
|OTHER LIABILITIES                       |                                                                                                  |                                 | 58,643  |         |        
|COMMITMENTS AND CONTINGENCIES (Note 11) |                                                                                                  |                                 |         |         |        
|MEMBER'S (DEFICIT) EQUITY:              |                                                                                                  |                                 |         |         |        
|                                        | Member's (deficit) equity                                                                        |                                 |         | (51,599 | )      
|                                        | Foreign currency translation adjustment                                                          |                                 |         | (848    | )      
|                                        | Minimum pension liability adjustment                                                             |                                 |         | (31,195 | )      
|                                        |                                                                                                  |                                 |         |         |        
|                                        |                                                                                                  | Total member's (deficit) equity |         |         | (83,642
|                                        |                                                                                                  |                                 |         |         |        
|                                        |                                                                                                  | $                               | 690,697 |         | $      
|                                        |                                                                                                  |                                 |         |         |        

See
notes to consolidated financial statements.

F-2

---

CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME        (Amounts in thousands)

|                                             |                                         | 2002 |          | 2001    |   | 2000    |        
|-------------------------------------------- | --------------------------------------- | ---- | -------- | ------- | - | ------- | -------
|Net sales                                    |                                         | $    | 746,476  |         | $ | 786,695 |        
|Cost of sales                                |                                         |      | 654,036  |         |   | 694,219 |        
|                                             |                                         |      |          |         |   |         |        
|Gross profit                                 |                                         |      | 92,440   |         |   | 92,476  |        
|Selling, general and administrative expenses |                                         |      | (50,978  | )       |   | (48,780 | )      
|Amortization expense                         |                                         |      | (2,468   | )       |   | (13,973 | )      
|Stock based compensation expense             |                                         |      | (396     | )       |   |        |        
|Restructuring (charges) credits              |                                         |      | (83      | )       |   | (3,778  | )      
|Goodwill impairment                          |                                         |      | (290,000 | )       |   |        |        
|Contract dispute settlement & other          |                                         |      |         |         |   | (6,626  | )      
|                                             |                                         |      |          |         |   |         |        
|Operating (loss) income                      |                                         |      | (251,485 | )       |   | 19,319  |        
|Interest expense, net                        |                                         |      | (47,180  | )       |   | (50,485 | )      
|Other expense                                |                                         |      | (1,743   | )       |   | (33     | )      
|Minority interest in subsidiaries            |                                         |      |         |         |   |        |        
|                                             |                                         |      |          |         |   |         |        
|Net (loss) income                            |                                         |      | (300,408 | )       |   | (31,199 | )      
|Other comprehensive income (loss)            |                                         |      |          |         |   |         |        
|                                             | Foreign currency translation adjustment |      |          | 14      |   |         | (271   
|                                             | Minimum pension liability adjustment    |      |          | (17,765 | ) |         | (13,430
|                                             |                                         |      |          |         |   |         |        
|COMPREHENSIVE (LOSS) INCOME                  |                                         | $    | (318,159 | )       | $ | (44,900 | )      
|                                             |                                         |      |          |         |   |         |        

See
notes to consolidated financial statements.

F-3

---



CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF MEMBER'S (DEFICIT) EQUITY        (Amounts in thousands)

|                                        |  | Member's Equity |          | Other
Comprehensive
(Loss) Income |   | Total   |  
|--------------------------------------- |  | --------------- | -------- | --------------------------------- | - | ------- | -
|BALANCE, DECEMBER 31, 1999              |  | $               | 257,346  |                                   | $ | (518    | )
|Net income                              |  |                 | 23,170   |                                   |   |        |  
|Foreign currency translation adjustment |  |                 |         |                                   |   | (73     | )
|Taxes paid on behalf of members         |  |                 | (1,484   | )                                 |   |        |  
|                                        |  |                 |          |                                   |   |         |  
|BALANCE, DECEMBER 31, 2000              |  |                 | 279,032  |                                   |   | (591    | )
|Net loss                                |  |                 | (31,199  | )                                 |   |        |  
|Foreign currency translation adjustment |  |                 |         |                                   |   | (271    | )
|Minimum pension liability adjustment    |  |                 |         |                                   |   | (13,430 | )
|Stock based compensation                |  |                 | 279      |                                   |   |        |  
|Taxes received on behalf of members     |  |                 | 174      |                                   |   |        |  
|                                        |  |                 |          |                                   |   |         |  
|BALANCE, DECEMBER 31, 2001              |  |                 | 248,286  |                                   |   | (14,292 | )
|Net loss                                |  |                 | (300,408 | )                                 |   |        |  
|Foreign currency translation adjustment |  |                 |         |                                   |   | 14      |  
|Minimum pension liability adjustment    |  |                 |         |                                   |   | (17,765 | )
|Stock based compensation                |  |                 | 396      |                                   |   |        |  
|Taxes received on behalf of members     |  |                 | 127      |                                   |   |        |  
|                                        |  |                 |          |                                   |   |         |  
|BALANCE, DECEMBER 31, 2002              |  | $               | (51,599  | )                                 | $ | (32,043 | )
|                                        |  |                 |          |                                   |   |         |  

See
notes to consolidated financial statements

F-4

---

CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES        CONSOLIDATED STATEMENTS OF CASH FLOWS        (Amounts in thousands)

|                                                     |                                                                                         | Year Ended
December 31,
2002                        |                     | Year Ended
December 31,
2001              |         | Year Ended
December 31,
2000 |        
|---------------------------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------- | ----------------------------------------- | ------- | ---------------------------- | -------
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                                         |                                                     |                     |                                           |         |                              |        
|                                                     | Net (loss) income                                                                       |                                                     | $                   | (300,408                                  | )       | $                            | (31,199
|                                                     | Adjustment to reconcile net (loss) income to net cash provided by operating activitites |                                                     |                     |                                           |         |                              |        
|                                                     |                                                                                         | Minority interest                                   |                     |                                           |        |                              |        
|                                                     |                                                                                         | Depreciation and amortization                       |                     |                                           | 38,260  |                              |        
|                                                     |                                                                                         | Goodwill impairment                                 |                     |                                           | 290,000 |                              |        
|                                                     |                                                                                         | Debt and refinancing cost amortization              |                     |                                           | 2,764   |                              |        
|                                                     |                                                                                         | Stock based compensation                            |                     |                                           | 396     |                              |        
|                                                     |                                                                                         | Currency translation                                |                     |                                           | 14      |                              |        
|                                                     |                                                                                         | Gain on disposal of assets                          |                     |                                           | 1,742   |                              |        
|                                                     |                                                                                         | Changes in operating assets and liabilities         |                     |                                           |         |                              |        
|                                                     |                                                                                         |                                                     | Accounts receivable |                                           |         | 9,902                        |        
|                                                     |                                                                                         |                                                     | Inventories         |                                           |         | (4,046                       | )      
|                                                     |                                                                                         |                                                     | Prepaid expenses    |                                           |         | (294                         | )      
|                                                     |                                                                                         |                                                     | Other receivables   |                                           |         | (5,219                       | )      
|                                                     |                                                                                         |                                                     | Other assets        |                                           |         | 430                          |        
|                                                     |                                                                                         |                                                     | Accounts payable    |                                           |         | 7,846                        |        
|                                                     |                                                                                         |                                                     | Accrued liabilities |                                           |         | (641                         | )      
|                                                     |                                                                                         |                                                     | Other liabilities   |                                           |         | (4,634                       | )      
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|                                                     |                                                                                         |                                                     |                     | Net cash provided by operating activities |         |                              | 36,112 
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                                         |                                                     |                     |                                           |         |                              |        
|                                                     | Capital expenditures                                                                    |                                                     |                     | (33,176                                   | )       |                              | (44,059
|                                                     | Proceeds from sale leaseback of assets                                                  |                                                     |                     |                                          |         |                              | 28,275 
|                                                     | Net change in investments                                                               |                                                     |                     | 8                                         |         |                              | 9      
|                                                     | Proceeds from disposal of property and equipment                                        |                                                     |                     | 2,089                                     |         |                              | 6      
|                                                     | Cash paid for acquisitions, net of cash acquired                                        |                                                     |                     | (3,052                                    | )       |                              |       
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|                                                     |                                                                                         | Net cash used in investing activities               |                     |                                           | (34,131 | )                            |        
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                                         |                                                     |                     |                                           |         |                              |        
|                                                     | Net proceeds from (payments on) revolving lines of credit                               |                                                     |                     | 8,000                                     |         |                              | (11,500
|                                                     | Proceeds on notes payable                                                               |                                                     |                     | 36,500                                    |         |                              |       
|                                                     | Principal payments on notes payable to banks                                            |                                                     |                     | (21,897                                   | )       |                              | (22,471
|                                                     | Payments on other notes payable and capital leases                                      |                                                     |                     | 379                                       |         |                              | (502   
|                                                     | Debt issuance cost                                                                      |                                                     |                     | (1,895                                    | )       |                              | (860   
|                                                     | Tax receipt (distribution) to the benefit of the members                                |                                                     |                     | 127                                       |         |                              | 174    
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|                                                     |                                                                                         | Net cash provided by (used in) financing activities |                     |                                           | 21,214  |                              |        
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                         |                                                     | 23,195              |                                           |         | (7,769                       | )      
|CASH AND CASH EQUIVALANTS, BEGINNING OF PERIOD       |                                                                                         |                                                     | 1,187               |                                           |         | 8,956                        |        
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|CASH AND CASH EQUIVALANTS, END OF PERIOD             |                                                                                         | $                                                   | 24,382              |                                           | $       | 1,187                        |        
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        
|SUPPLEMENTAL CASH FLOW INFORMATION:                  |                                                                                         |                                                     |                     |                                           |         |                              |        
|                                                     | Cash paid during the period for interest                                                |                                                     | $                   | 42,334                                    |         | $                            | 48,633 
|                                                     |                                                                                         |                                                     |                     |                                           |         |                              |        

See notes to consolidated financial statements.

F-5

---



CONSOLIDATED CONTAINER COMPANY LLC AND SUBSIDIARIES        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business OrganizationOn July 2, 1999, substantially all of the United States plastic packaging assets
formerly held by Franklin Plastics, Inc. and Plastics Containers, Inc., both subsidiaries of Suiza Foods Corporation, now known as Dean Foods Company, and the plastic packaging assets of
Reid Plastics, Inc., were contributed and merged into Consolidated Container Company LLC, a Delaware limited liability company. In connection with these and related transactions, which
are referred to herein as the Transactions, Consolidated Container Company and our wholly owned subsidiary, Consolidated Container Capital, Inc. issued 101/8% senior subordinated
notes due 2009 in an aggregate principal amount of $185.0 million, and we entered into a new Senior Credit Facility, described herein.

Consolidated
Container Company is wholly owned by Consolidated Container Holdings LLC, a Delaware limited liability company.

On
June 28, 2002, in an effort to simplify our corporate structure, we converted one of our existing, wholly-owned subsidiaries into a limited partnership, Consolidated Container
Company LP, that now serves as the operating company for all domestic operations.

Business OperationsThe Company develops, manufactures and distributes a wide range of custom extrusion blow-mold
plastic containers for the dairy, juice and water industries, automotive products and motor oil, household chemicals, industrial and agricultural chemicals and hair care products. Based on the nature
of the product, the production process, types of customers, and methods used to distribute products, the Company operates in one reportable segment under Statement of Financial Accounting Standards
("SFAS") No. 131, "Disclosures About Segments of an Enterprise and Related Information."

Consolidated and Foreign OperationsThe Company maintains several wholly owned subsidiaries in the United States, Canada, and
Mexico. Effective January 1, 2002, the Company purchased the remaining 49% of Reid Mexico S.A. de C.V., which operates exclusively in Mexico. The purchase price was allocated to the customer
contract. As of December 31, 2001 and 2000, the Company owned 51% of the Mexico operation. All significant inter-company accounts and transactions have been eliminated in consolidation.

Translation of Foreign CurrenciesThe Company considers the functional currency under SFAS No. 52, "Foreign Currency
Translation," to be the local currency for its Canadian subsidiaries and its Mexican subsidiary. Assets and liabilities of the Company's Canadian and Mexican subsidiaries are converted to U.S. dollars
using the current exchange rate at period-end, and revenues and expenses of these subsidiaries are translated at the average exchange rate during the period, with the resulting translation
adjustment made to a separate component of member's equity.

Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and revenues and expenses during the reporting period. Actual results
could differ from these estimates.

Cash and Cash EquivalentsIncluded in cash and cash equivalents are highly liquid cash investments with remaining maturities
at date of purchase of three months or less.

Investment SecuritiesInvestment securities consist of held-for-trading U.S. government obligations,
certificates of deposit, eurodollar deposits and highly rated commercial paper, all of which are due

F-6

---

within one year. These investment securities are stated at market value, and related unrealized gains or losses are included in the statement of operations.

Other Current ReceivablesVendor rebate receivables are included in the Company's other receivables. Receivables from the
Company's vendors under volume rebate programs are recorded in the same period that the purchases are recorded.

InventoriesInventories consist of raw materials, spare parts and supplies, and finished goods. Inventories are stated at the
lower of cost, using the first-in, first-out ("FIFO") method, or market. Finished goods inventories include raw materials, direct and indirect labor costs, and factory
overhead.

Property and EquipmentProperty and equipment are stated at cost and are depreciated or amortized using the
straight-line method over the estimated useful lives of the related assets. Plant and equipment held under capital leases and leasehold improvements are amortized over the shorter of the
lease term or the estimated useful life of the asset.

Estimated
useful lives are as follows:

Asset

Useful LifeBuildings

25 to 40 yearsMachinery and equipment

5 to 20 yearsFurniture and fixtures

3 to 10 years


Expenditures
for repairs and maintenance that do not improve or extend the life of the assets are expensed as incurred.

Intangible and Other AssetsIntangible assets include primarily deferred financing costs which are amortized over the term of
the related debt using the effective interest method. Payments relating to noncompete agreements and multiple-year management contracts are amortized over the term of the applicable
agreement or contract.

The
Company's purchased intangible assets, primarily customer contracts are amortized over the estimated useful life of the respective assets, which is 2-10 years. They are carried at
cost of $6.1 million less accumulated amortization of $2.3 million at December 31, 2002, compared to a cost of $5.1 million less accumulated amortization of
$1.5 million at December 31, 2001. The aggregate amortization of intangible assets for the twelve months ended December 31, 2002, was $2.1 million. The annual estimated
amortization expense is as follows (amounts in thousands):

Year ending December 31,2003

$
1,6002004


3002005


3002006


3002007


300Thereafter


1,025$
3,825


F-7

---

GoodwillThe Company adopted SFAS 142, "Goodwill and Other Intangible Assets," on January 1, 2002.
SFAS 142 requires, among other things, the discontinuation of goodwill amortization. In addition, the standard includes provisions for the reclassification of certain existing recognized
intangibles as goodwill, reassessment of the useful lives of existing recognized intangibles, reclassification of certain intangibles out of previously reported goodwill and the identification of
reporting units for the purpose of assessing potential future impairments of goodwill. SFAS 142 also requires the Company to complete a transitional goodwill impairment test six months from the
date of adoption. The adoption of SFAS 142 on January 1, 2002, resulted in the discontinuation of approximately $13.5 million annually of amortization of goodwill recorded in
2001. Additionally, on adoption of SFAS 142, the Company has allocated all recorded goodwill to one reporting unit and determined that no goodwill impairment existed as of January 1,
2002. However, as part of the subsequent annual impairment test, the Company determined that goodwill was impaired by $290.0 million as of December 31,
2002.

Since
management undertook its transitional goodwill impairment test under SFAS 142, several factors related to the determination of the fair value of the Company have changed.
The company amended its financial covenants and senior debt amortization schedule, received an additional term loan in the amount of $35.0 million, and had a significant portion of business
come up for renewal. Additionally, management refined its view of future operational improvements and growth prospects, and market trading multiples for publicly traded peer Companies have declined.
As a result, goodwill impairment in the amount of $290.0 million was recorded in the fourth quarter of 2002.

In
testing for goodwill impairment, it is necessary to make a determination of the fair value of a reporting unit. Further, fair value is defined by SFAS 142 as the amount at
which the assets and
liabilities of a reporting unit could be bought or sold in a current transaction between willing parties (other than in a forced sale or liquidation). The determination of such a value is dependent
upon a number of factors, including the identification and evaluation of comparable businesses and amounts paid in market transactions for the sale of comparable businesses, management's estimate of
future cash flows and market volumes, and the determination of appropriate discount rates. As such, in determining fair value it was necessary for the Company to rely on the use of both
(i) publicly available data such as specialty packaging industry sale/acquisition data and market trading multiples for publicly traded packaging companies, and (ii) several assumptions
regarding the assets, future operations and financial performance of the Company. The assumptions include (but are not limited to) views of future operational improvements, the components used in
determining the Company's weighted average discount rate, and continued support from our capital providers. While the Company does not believe that there will be additional goodwill impairment charges
in the future under SFAS 142, to the extent that publicly available data or other assumptions used in the determination of fair value change, or there are future events that negatively impact
the operations of the Company, there could be additional material impact with respect to goodwill impairment in the future.

F-8

---

A
reconciliation of previously reported net (loss) income to proforma amounts adjusted for the exclusion of goodwill amortization follows:

Twelve Months
Ended December 31,2002

2001

2000(Amounts in thousands)Reported net (loss) income

$
(300,408
)
$
(31,199
)
$
23,170Add: Goodwill amortization





13,545


13,652Adjusted net (loss) income

$
(300,408
)
$
(17,654
)
$
36,822


Goodwill
was reduced by approximately $0.1 million in 2002 and $1.1 million in 2001 when estimates of the remaining liabilities for closed facilities changed.

InsuranceThe Company purchases commercial insurance policies to cover its insurance risks; however, certain of its
subsidiaries are self-insured in certain states for workers' compensation, general liability and property and casualty coverages in excess of varying deductible amounts.
Self-insurance liabilities are accrued based on claims filed and estimates for claims incurred but not reported.

Income TaxesAs a limited liability company, the Company is generally not subject to Federal or except on a limited basis,
state income taxes. However, the Company expects to distribute cash to its sole member, Holdings, to allow its members to pay income taxes to the extent required.

Stock-Based CompensationAt December 31, 2002, the Company has two stock-based employee compensation plans, which are
described more fully in Note 9. Prior to 2002, the Company accounted for those plans under the recognition and measurement provisions of APB Opinion No. 25, "Accounting for Stock Issued
to Employees", and related Interpretations. No stock-based employee compensation cost is reflected in 2001 or 2000 net income, as all options granted under those plans had an exercise price equal to
or greater than the market value of the underlying common stock on the date of grant. Effective July 1, 2002, the Company adopted the fair value recognition provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation", prospectively to all employee awards granted, modified, or settled after January 1, 2002. Awards under the Company's plans vest over a range of three
to five years. As such, the expense for all awards granted after the beginning of the year will be recognized as compensation expense, as will all future grants. The value of unit options granted
during 2002 was based on the Black-Scholes option pricing model, adapted for use in valuing compensatory stock options in accordance with SFAS No. 123. Therefore, the cost related to
stock-based employee compensation included in the determination of net income for 2002 is less than that which would have been recognized if the fair value based method had been applied to all awards
since the original effective date of SFAS No. 123. The effect on net income if the fair value based method had been applied to all outstanding and unvested awards in each of the years ended
December 31, 2001 and 2000 was not material. Compensation cost charged against income for the year ended December 31, 2002 was $396,000.

Impairment of Long-Lived AssetsThe Company evaluates the impairment of long-lived assets if circumstances
indicate that the carrying value of those assets may not be recoverable. Recoverability of the assets to be held and used is measured by a comparison of the carrying amount of the asset to future
undiscounted cash flows expected to be generated by the asset.

F-9

---

Derivative Financial InstrumentsThe Company entered into interest-rate cap agreements to reduce the impact of
fluctuations in interest rates on its floating-rate long-term debt. Effective October 4, 1999, the Company entered into an interest-rate cap agreement which
was for a notional amount of $75 million
and effectively caps the interest rate at 7%. The agreement terminated October 9, 2001 and was not renewed. As of December 31, 2002, there were no interest-rate caps
outstanding.

Concentration of Credit RiskFinancial instruments that subject the Company to credit risk consists primarily of temporary
cash investments and accounts receivable. The Company places its temporary cash investments with high-credit qualified financial institutions and, by policy, limits the amount of
investment exposure to any one financial institution. Accounts receivable are generally diversified due to the large number of entities comprising the Company's customer base and their geographic
dispersion. Sales to the largest customer amounted to approximately 17%, 16% and 12% of the Company's net sales for the years ended December 31, 2002, 2001 and 2000, respectively. Accounts
receivable from this customer amounted to approximately $12.1 and $19.9 million at December 31, 2002 and 2001, respectively. Sales to the second largest customer amounted to
approximately 11%, 12% and 9% of the Company's net sales for the years ended December 31, 2002, 2001 and 2000, respectively. Accounts receivable from this customer amounted to approximately
$9.1 and $9.4 million at December 31, 2002 and 2001, respectively. The Company evaluates each customer's credit worthiness on a case-by-case basis. If such
evaluations indicate substantial credit risk, the Company may choose not to do business with the customer, or at a minimum, require cash payments upon delivery of goods. Although, the Company does not
currently obtain collateral upon extension of credit, it would be considered if deemed necessary based upon the credit evaluation.

Recently Issued Accounting PronouncementsIn July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This standard addresses financial accounting and reporting for obligations related to the retirement of tangible long-lived assets and the related asset retirement
costs. SFAS 143 is effective for fiscal years beginning after June 15, 2002. The impact of adopting SFAS No. 143 is not expected to be material.

During
June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force
(EITF) Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)."
SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred, while under EITF Issue 94-3 it was
recognized at the date of an entity's commitment to an exit plan. The Company will adopt SFAS No. 146 on January 1, 2003. Management is in the process of evaluating the impact this
standard will have on the Company's consolidated financial statements.

In
August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144") which was effective January 1,
2002. SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets, as well as eliminating the exception to consolidation for a
subsidiary for which control is likely to be temporary. The Company adopted SFAS 144 on January 1, 2002 and the adoption did not have a significant impact on the financial position and
results of operations.

F-10

---

In
November 2002, the FASB issued Interpretation "FIN" No. 45 "Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of
Indebtedness of Othersan Interpretation of FASB Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34." FIN No. 45 requires companies to
recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN No. 45 provides specific guidance identifying the
characteristics of contracts that are subject to its guidance in its entirety from those only subject to the initial recognition and measurement provisions. The recognition and measurement provisions
of FIN No. 45 are effective on a prospective basis for guarantees issued or modified after December 31, 2002. The disclosure provisions of FIN No. 45 are effective for the year
ended December 31, 2002. We believe the provisions of FIN No. 45 will not have a material effect on our financial position or results of operations.

In
January 2003, the FASB issued FIN No. 46 "Consolidation of Variable Interest Entitiesan Interpretation of Accounting Research Bulletin No. 51." FIN
No. 46 addresses consolidation by business enterprises where equity investors do not bear the residual economic risks and rewards. The underlying principle behind FIN No. 46 is that if a
business enterprise has the majority financial interest in an entity, which is defined in FIN No. 46 as a variable interest entity, the assets, liabilities and results of the activities of the
variable interest entity should be included in consolidated financial statements with those of the business enterprise. Companies are required to apply the provisions of FIN No. 46
prospectively for all variable interest entities created after January 31, 2003. We believe the provisions of FIN No. 46 will not have a material effect on our financial position or
results of operations.

Revenue RecognitionSales and related cost of sales are recognized upon transfer of title and risk of loss to the customer
upon either the shipment of products or the receipt by the customer, as appropriate.

ReclassificationsCertain accounts have been reclassified to conform to current year presentation.

2. INVENTORIES

Inventories consist of the following at December 31, 2002 and 2001:

2002

2001(Amounts in thousands)Raw materials

$
21,835

$
19,969Parts and supplies


6,293


4,618Finished goods


18,620


18,115$
46,748

$
42,702


F-11

---

3. PROPERTY AND EQUIPMENT

Property and equipment consist of the following at December 31, 2002 and 2001:

2002

2001(Amounts in thousands)Land

$
10,513

$
10,512Buildings


23,332


22,847Leasehold improvements


17,579


15,784Machinery and equipment


321,747


293,836Equipment under capital leases


1,848


10,035Furniture and equipment


5,645


5,791380,664


358,805Less accumulated depreciation


(124,993
)

(96,900
)255,671


261,905Construction in progress


33,610


33,823$
289,281

$
295,728




4. INTANGIBLE AND OTHER ASSETS

Intangible and other assets consist of the following at December 31, 2002 and 2001:

2002

2001(Amounts in thousands)Deferred financing costs

$
26,251

$
24,355Noncompete agreement


2,086


2,086Deposits and other


6,934


5,08835,271


31,529Less accumulated amortization


(15,827
)

(11,514
)$
19,444

$
20,015


Non-compete AgreementIn 1997, the Company entered into a five-year noncompete agreement with a former
management shareholder. During 1998, the noncompete agreement was revised to guarantee payments totaling $400,000 per year for five years. In 2002, the remaining balance was fully amortized. In
addition, a non-guaranteed portion of up to $8.2 million will be paid based on the valuation of the Company during future ownership changes. No amount was required to be recorded at
December 31, 2002 and 2001 for potential non-guaranteed payments.

F-12

---

5. ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31, 2002 and 2001:

2002

2001(Amounts in thousands)Provision for severance and lease commitments

$
829

$
3,578Employee compensation and benefits


9,723


11,479Accrued interest


9,923


9,765Accrued real estate and personal property taxes


2,766


1,846Accrual for customer claims


2,062


9,871Rebates and other payables


21,010


10,415$
46,313

$
46,954


6. REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

Long-term debt consists of the following at December 31, 2002 and 2001:

2002

2001(Amounts in thousands)Senior subordinated notes

$
185,000

$
185,000Senior credit facilityterm loans


360,083


345,375Capital lease obligations


893


619545,976


530,994Less current portion


(61,159
)

(29,125
)$
484,817

$
501,869


In
connection with the mergers and contributions (Note 1), the Company issued notes in a private placement under Rule 144A of the Securities Act of 1933 and entered into a
new Senior Credit Facility and Revolving Credit Facility.

Senior Subordinated NotesThe senior subordinated notes (the "Notes") were issued on July 2, 1999, and have an original
par value of $185.0 million. The Notes, which are due in 2009, bear interest at a fixed interest rate of 101/8%, payable semiannually in July and January of each year. The fair
value of the Company's long-term debt is based on quoted market prices. At December 31, 2002, the estimated fair value of the Notes was $124.2 million.

Senior Credit FacilityThe Senior Credit Facility consists of four tranches of term loans in a total principal amount of
$521.5 million and a $54.5 million revolving credit facility (the "Revolver"). The term loan facilities and Revolver are summarized below:



F-13

---



Revolving Credit FacilityThe Revolving Credit Facility commitment was $54.5 million as of December 31, 2002,
with an $11.0 million restriction, so the total available revolver was $43.5 million. At December 31, 2002, the Company had $31.0 million outstanding under the Revolver, as
amended. Additionally, the Company had approximately $12.4 million of outstanding letters of credit under the Revolver.

The
Company pays a commitment fee on the unused commitments under the revolving credit facility, ranging from 0.25% to 0.50% dependent on its leverage ratio, payable quarterly in
arrears, and an annual administration fee.

Borrowings
under the Revolving Credit Facility bear interest at a base rate which is the higher of 1/2 of 1% in excess of the overnight federal funds rate and the prime
lending rate of Bankers Trust Company, plus an applicable interest margin; or a eurodollar rate on deposits for one-, two-, three- or six-month periods; or, if and
when available to all the lenders, nine- or twelve-month periods, which are offered to Bankers Trust Company in the interbank eurodollar market, plus the applicable interest margin. The
margin on base rate and eurodollar rate loans is based on the leverage ratio of the Company. At December 31, 2002, the margin on base rate and eurodollar rate loans was 2.75% and 3.75%,
respectively, for tranche A, tranche 2 converted and the revolving credit facility and 3.25% and 4.25%, respectively, for tranche B. Depending on their maturity dates, the various borrowing types bear
interest at the following rates as of December 31, 2002:

Interest
RatesRevolvereurodollar

5.5%Revolverbase rate

7.0%Tranche A Term Loan

5.5-5.6%Tranche B Term Loan

5.7-6.1%Tranche 2 Converted Term Loan

5.5-5.6%


The
obligations under the Senior Credit Facility are secured and are unconditionally and irrevocably guaranteed jointly and severally by Holdings and each of its direct and indirect
domestic

F-14

---

subsidiaries other than the Company and Consolidated Container Capital, Inc. and, in each case, are subject to customary exceptions. The separate financial statements of each guaranteeing
subsidiary are not presented because the Company's management has concluded that such financial statements are not material to investors, as non-guarantor subsidiaries are considered
inconsequential. (See Note 14)

The
Notes and the Senior Credit Facility contain covenants that restrict, among other things, the Company's ability to do the following: to make certain capital expenditures; to make
certain restricted payments; to incur debt in addition to the Company's outstanding debt; to incur certain liens; to make certain investments; to enter sales and leaseback transactions; and to merge,
consolidate or sell all or substantially all of the Company's and its subsidiaries' assets, subject to certain conditions; and to enter into transactions with affiliates. The Senior Credit Facility
also requires the Company to maintain financial ratios relating to the maximum levels of earnings before interest and taxes plus depreciation and amortization and minimum interest coverage. As of
December 31, 2002, we were operating under a waiver relating to these covenants. In addition, the Notes and Senior Credit Facility restrict the Company's ability to pay dividends.

Scheduled MaturitiesThe scheduled annual maturities of long-term debt (excluding capital leases) at
December 31, 2002, were as follows (in thousands):

Year ending December 31,2003

$
61,1592004


52,0162005


80,3532006


111,0402007


55,515Thereafter


185,000$
545,083


Subsequent
to December 31, 2002, the Senior Credit Facility was amended. See footnote 15 for additional disclosure.

7. OTHER LIABILITIES

Other liabilities consist of the following at December 31, 2002 and 2001:

2002

2001(Amounts in thousands)Noncancellable lease commitments on closed facilities

$
6,872

$
7,122Obligation under noncompete agreement





285Insurance reserve


7,875


9,537Deferred income


7,531


7,195Accrued pension


28,973


14,066Accrued post-retirement benefits


7,392


7,021Other





286$
58,643

$
45,512


F-15

---

8. RESTRUCTURING ACCRUALS

In the third quarter of 2001, the Company adopted a restructuring plan regarding the relocation of its corporate offices from Dallas to Atlanta and the changeover
of its executive leadership. The $3.8 million restructuring charge included severance, the repurchase of options held by a former executive, and lease termination costs for the Dallas location.
As a part of the decision to relocate its corporate offices during 2001, the Company repurchased a former executive's options for approximately $643,000 and has included this amount in the
restructuring charges in the consolidated statement of operations for the year ended December 31, 2001. In addition, compensation expense related to the granting of certain replacement options
to a former executive for approximately $279,000 has been recorded in the restructuring charges and as an adjustment to member's equity for the year ended December 31, 2001. During 2002,
restructuring charges of $83,000 were incurred as a result of changes made to prior restructuring estimates.

In
connection with the acquisition of Suiza Packaging in 1999, the Company developed a restructuring plan to pursue opportunities for cost reduction and operation synergies through the
consolidation of administrative and manufacturing functions and facilities. Through purchase accounting, the Company recorded a restructuring accrual of $4.6 million, which includes
$1.9 million for severance and other personnel related costs and $2.7 million for facility closing costs in connection with the closing of certain Suiza Packaging facilities. In the
third quarter of 1999, the Company recognized a restructuring charge of $1.5 million for severance and other personnel-related costs relative to the closing of its corporate administrative and
accounting office in California and the consolidation of those operations with Suiza Packaging. In the fourth quarter of 1999, the Company recognized a restructuring charge of $7.2 million in
connection with plans to close certain Reid manufacturing facilities. Of this charge, $611,000 represents severance and other personnel-related costs and $6.6 million represents remaining
commitments under noncancellable operating leases and other facility closing costs.

F-16

---

Reconciliation
of the pre-acquisition and post-acquisition restructuring expenses during 2000, 2001 and 2002 were as follows:

|                                                        |  | 1997
Restructuring |        | Purchase
Accounting
Restructuring |   | 1999
Restructuring |   | 2001
Restructuring |       
|------------------------------------------------------- |  | ------------------ | ------ | --------------------------------- | - | ------------------ | - | ------------------ | ------
|
|Balance at December 31, 1999                            |  | $                  | 6,377  |                                   | $ | 6,845              |   | $                  | 7,949 
|Charge reversal for sublease arrangements               |  |                    | (2,238 | )                                 |   |                   |   |                    | (1,754
|2000 charges                                            |  |                    | (246   | )                                 |   | (3,907             | ) |                    | (3,004
|                                                        |  |                    |        |                                   |   |                    |   |                    |       
|Balance at December 31, 2000                            |  |                    | 3,893  |                                   |   | 2,938              |   |                    | 3,191 
|Severance cost                                          |  |                    |       |                                   |   |                   |   |                    |      
|Executive option repurchase                             |  |                    |       |                                   |   |                   |   |                    |      
|Closed facility subject to operating lease              |  |                    |       |                                   |   |                   |   |                    |      
|Charge reversal for changes in scheduled plant closings |  |                    |       |                                   |   | (1,836             | ) |                    |      
|2001 charges                                            |  |                    | (58    | )                                 |   | (691               | ) |                    | (2    
|                                                        |  |                    |        |                                   |   |                    |   |                    |       
|Balance at December 31, 2001                            |  |                    | 3,835  |                                   |   | 411                |   |                    | 3,189 
|Severance cost                                          |  |                    |       |                                   |   |                   |   |                    |      
|2002 charges                                            |  |                    | (24    | )                                 |   | (324               | ) |                    | (58   
|                                                        |  |                    |        |                                   |   |                    |   |                    |       
|Balance at December 31, 2002                            |  | $                  | 3,811  |                                   | $ | 87                 |   | $                  | 3,131 
|                                                        |  |                    |        |                                   |   |                    |   |                    |       

Items
charged to the accrual in 2002, 2001 and 2000 were cash items.

9. EMPLOYEE BENEFITS

The Company sponsors both defined benefit and defined contribution retirement plans on behalf of certain of its subsidiaries, and currently contributes to one
multi-employer union pension plan.

Defined Benefit PlansThe Company succeeded to a defined benefit pension plan for substantially all salaried employees of PCI
hired prior to August 1, 1997. (PCI no longer exists as a legal entity, but the Company is successor in interest with respect to these benefit plans.) The plan was frozen for future accruals as
of December 31, 1999.

In
addition, the Company maintains a benefit equalization plan for salaried employees hired prior to August 1, 1997, whose compensation level exceeds the limits within the defined
benefit pension plan. The Plan was frozen for future accruals as of September 1, 1998.

The
Company also succeeded to a noncontributory defined benefit pension plan for substantially all hourly employees of the former PCI who had attained 21 years of age. Plan
benefits vary by location and by union contract, but are based primarily on years of service and the employee's highest wage classification for 12 consecutive months in the five-year
period prior to retirement. Normal retirement is at age 65, with at least a five-year period of continuous service. However, employees may retire as early as age 55 and receive reduced
benefits.

F-17

---

Subject
to the limitation on deductibility imposed by federal income tax laws, the Company's policy is to contribute funds to the plans annually in amounts required to maintain
sufficient plan assets to provide for accrued benefits. Plan assets are held in a master trust and are composed primarily of common stock, corporate bonds, and U.S. government and government agency
obligations.

Post-retirement Benefits Other Than PensionsThe Company provides certain health care and life insurance benefits
for retired employees of the former PCI hired before 1994. Certain of the former PCI's hourly and salaried employees became eligible for these benefits when they became eligible for an immediate
pension under a formal company pension plan. The Company's policy is to fund the cost of medical benefits as claims are incurred.

F-18

---

The
following table provides a reconciliation of the benefit obligation, plan assets and funded status of the pension and postretirement benefit plans:

Pension Benefits

Other Post-Retirement
BenefitsYear ended
December 31,
2002

Year ended
December 31,
2001

Year ended
December 31,
2002

Year ended
December 31,
2001(Amounts in thousands)Change in Benefit obligationBenefit obligation at beginning of year

$
74,160

$
68,304

$
6,135

$
5,900Service cost


903


941


109


98Interest cost


5,209


5,133


427


431Amendments


208


101





Actuarial loss (gain)


7,333


4,737


49


(227
)Benefits paid


(5,342
)

(5,056
)

(104
)

(67
)Benefit obligation at December 31


82,471


74,160


6,616


6,135Change in plan assets:Fair value of plan assets at beginning of year


60,072


69,611





Actual return on plan assets


(5,869
)

(4,623
)




Employer contribution


4,612


140


104


67Plan participant contribution








236


247Benefits paid


(5,342
)

(5,056
)

(340
)

(314
)Fair value of plan assets at December 31


53,473


60,072





Funded status


(28,998
)

(14,088
)

(6,616
)

(6,135
)Unrecognized actuarial loss (gain)


31,221


13,452


(641
)

(696
)Unrecognized prior service cost


393


416





Prepaid (Accrued) benefit cost

$
2,616

$
(220
)
$
(7,257
)
$
(6,831
)The amounts recognized in the Consolidated Balance Sheet consist of:Accrued benefit liability

$
(28,972
)
$
(14,066
)
$
(7,257
)
$
(6,831
)Intangible asset


393


416





Accumulated other comprehensive income


31,195


13,430





Net amount recognized

$
2,616

$
(220
)
$
(7,257
)
$
(6,831
)Weighted average assumptions as of December 31:Discount rate


6.50
%

7.25
%

6.50
%

7.25
%Expected asset return


9.00
%

9.00
%Rate of compensation increase


5.00
%

5.00
%Health Care Cost Trend Rates:Subsequent year








10.00
%

10.00
%Ultimate








6.00
%

6.00
%


F-19

---

The
components of the net periodic cost for the year ended December 31, 2002 and 2001 are as follows:

Pension Benefits

Other Post-Retirement
BenefitsYear Ended
December 31,
2002

Year Ended
December 31,
2001

Year Ended
December 31,
2002

Year Ended
December 31,
2001(Amounts in thousands)Service Cost

$
903

$
941

$
109

$
98Interest Cost


5,209


5,133


427


431Expected return on plan assets


(5,365
)

(6,055
)

(6
)

Amortization of prior serivce cost


231


201





Recognized actuarial loss


798








Net Periodic benefit cost

$
1,776

$
220

$
530

$
529


Assumed
health care cost trend rates have a significant effect on the amounts reported for the health care plans. A 1% increase in assumed health care cost trend rates would increase the
total of the service and interest cost components for 2002 and the postretirement benefit obligation as of December 31, 2002 by $61,000 and $555,000 respectively. A 1% decrease in assumed
health care cost
trend rates would decrease the total of the service and interest cost components for 2002 and the postretirement benefit obligation as of December 31, 2002, by $53,000 and $503,000,
respectively.

Defined Contribution PlanCertain employees not covered by collective bargaining agreements are eligible to participate in a
401(k) employee savings plan. Employees who have completed six months or more years of service and have met other requirements of the plan are eligible to participate in the plan. The employees
participating in the plan can generally make contributions up to 20% of their annual compensation, and the Company can elect to match such employee contributions up to a maximum of 50% of the
employee's first 6%. The matching contributions vest 100% after four years.

Certain
unionized employees are eligible to participate in a Savings Plan. Eligibility rules vary based upon the terms of the respective applicable location's collective bargaining
agreement.

The
Company's defined contribution plan expense was $1.3 million, $1.7 million and $1.1 million for the years ended December 31, 2002, 2001 and 2000,
respectively.

Company Sponsored and Multi-employer PlansThe Company currently contributes to various pension plans. The Company's expense
related to these plans was $2.9, $1.4 and $0.7 million, for the years ended December 31, 2002, 2001 and 2000, respectively.

Stock Option PlanDuring 1998, Suiza Packaging adopted the Franklin Plastics, Inc. 1998 Stock Option Plan, which
reserved 187,089 shares of common stock for grants and granted stock options to certain key employees at exercise prices that approximated the fair market value of such shares at the date of grant.
Stock options granted under this plan were exercisable over a three-year period from the date of grant and could become exercisable upon the termination of an individual's employment
following a change in control. As a result of the Company's merger, participants were able to convert options granted under the plan to the Consolidated Container Holdings LLC Replacement Units
Option Plan. As a result, 116,964 shares exercisable pursuant to previously issued and outstanding

F-20

---

options under the plan were converted to become exercisable into the Company's units, using a conversion rate of 2.94295 units per share, resulting in 344,167 options outstanding at July 2,
1999, none of which were exercisable at that date. As of December 31, 2002, there were 139,224 options outstanding with an average strike price of $5.07 per member unit.

In
addition, Holdings adopted a 1999 Unit Option Plan to provide some of the Company's managers and other key employees with options to acquire up to 596,206 or 5.5%, on a fully diluted
basis, of the member units of Holdings. This plan was subsequently expanded to 1,040,694 options to acquire member units of Holdings. As of December 31, 2002 there were 890,694 options
outstanding with an average exercise price of $10.30 per member unit. The exact pricing, performance criteria, vesting terms and redemption of options granted under this plan are governed by
individual unit option agreements
between the employee and Holdings and, if the options are exercised, the terms of the options will be governed by special unit acquisition, ownership and redemption agreements.

Under
the 1999 Unit Option Plan, during 2002, certain employees were offered the opportunity to exchange options formerly granted with a strike price ranging from $10.50 to $40.00 for
options with a five-year vesting period, ten-year contractual life, and a strike price ranging from $6.50 to $15.00 on a 1-for-1 basis. A total of
645,700 options were canceled and reissued under this program. Additionally, in the fourth quarter, certain employees were offered the opportunity to exchange options formerly granted with a strike
price of $29.66 for options with a five-year vesting period, ten-year contractual life, and a strike price of $6.50 on a 4-for-1 basis. As a result,
38,000 of the $29.66-strike price options were canceled and 9,494 options with a strike price of $6.50 were granted. Vesting for these newly issued options began on July 2, 2002.
Any prior vesting of exchanged options was foregone as part of the exchange process. As these options relate to the parent company's securities, the expense has been reflected in the Company's
Consolidated Statements of Operations and as a capital contribution in the parent company financial statements.

The
fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighed average assumptions for grants in 2002: no
dividend yield; no expected volatility; risk-free interest rate of 3.06 percent; and expected lives of five years. For the modified options described above, compensation expense was
recognized only to the extent that the fair market value on the date of grant of the new options exceeded the value of the options prior to conversion.

The
members of Holdings have agreed that, upon exercise of 344,167 options outstanding as of December 31, 2002, with a weighted exercise price of $5.92, some portion of the
proceeds would be remitted to one of the members who would release one of its member units to the exercising party. The portion of the proceeds that were not remitted to the member would be remitted
to Consolidated Container Company.

F-21

---

Stock
option activity from the years ending December 31, 2000, 2001 and 2002 is summarized below:

Shares

Weighted
average
exercise priceUnexercised at December 31, 1999

894,370

$
20.16Granted

52,000


29.66Forfeited or exercised

(86,759
)

18.77Unexercised at December 31, 2000

859,611


20.87Granted

633,650


22.40Forfeited or exercised

(519,955
)

23.02Unexercised at December 31, 2001

973,306


20.72Granted

892,494


10.34Forfeited or exercised

(835,882
)

23.35Unexercised at December 31, 2002

1,029,918

$
9.59


The
following table summarizes the information about stock options outstanding at December 31, 2002:

Options OutstandingOptions ExercisableWeighted
Average
Remaining
Contractual
LifeShares

Weighted
Average
Exercise
Price

Shares

Weighted
Average
Exercise
PriceRange of exercise prices:$3.40

105,059

6 years

$
3.40

63,035

$
3.40$6.50

570,494

10 years


6.50




6.50$10.19

34,165

7 years


10.19

16,084


10.19$15.00

275,000

10 years


15.00




15.00$29.66

45,200

7 years


29.66

24,190


29.66


Long-Term Incentive PlanIn 1999, Holdings adopted a bonus plan for certain of the Company's officers, other key
employees, and outside consultants. If a liquidity event, as defined in the bonus plan, were to occur, then the management committee of Holdings would establish a bonus pool of cash equal to a formula
based on the appreciation in value of the member units of Holdings. Those awarded grants under the bonus plan will share in the bonus pool, however payments will only be made if (1) a liquidity
event occurs and (2) specified rates of return are realized by Vestar Packaging LLC and its affiliates on their investment in Holdings. To date, no awards have been made under the bonus plan.

10. INCOME TAXES

As a limited liability company, the Company is generally not subject to Federal or, except on a limited basis, state income taxes. However, the Company is
required to distribute cash to its sole member, Holdings, to allow its members to pay income taxes to the extent required. Total distribution recorded for the years ended December 31, 2002,
2001 and 2000 were ($0.1), ($0.2) and $1.5 million,

F-22

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respectively, net of any refunds received on overpayment of prior year taxes. The Company estimates that there are no tax distributions payable for 2002.

In
addition, the members of Holdings will be subject to U.S. income taxes upon the distributions to the Company of unremitted earnings of the Company's foreign subsidiaries of $4.7, $7.9
and $7.0 million as of December 31, 2002, 2001 and 2000, respectively. A determination of the U.S. income tax liability to the members is not practicable. However, it is management's
intention that such unremitted earnings will be reinvested as part of the Company's ongoing foreign operations.

11. COMMITMENTS AND CONTINGENCIES

Lease CommitmentsThe Company is obligated under capital leases for certain machinery and equipment,
which expire in 2004.

The
Company leases certain property, plant and equipment used in its operations under noncancellable operating lease agreements. Such leases, which are primarily for facilities,
machinery and equipment and vehicles, have lease terms ranging from three to ten years. Certain of the operating lease agreements require the payment of additional rentals for maintenance, along with
additional rentals, based on miles driven or units produced. Rent expense was $32.0, $32.7 and $26.9 million for the years ended December 31, 2002, 2001 and 2000, respectively.

Future
minimum lease payments at December 31, 2002, are summarized below (dollar amounts in thousands):

Capital
Leases

Operating
LeasesYear ending December 31:2003

$
809

$
13,6272004


144


9,0922005





7,4652006





6,3292007





6,226Thereafter





8,826Total minimum payments required *


953

$
51,565Less portion representing interest


(60
)Present value of minimum lease payments

$
893




ContingenciesThe Company and its subsidiaries are parties, in the ordinary course of business, to certain claims and
litigation. In management's opinion, the settlement of such matters is not expected to have a material impact on the consolidated balance sheet.

In
addition, the Company is a party to employment agreements with certain officers which provided for minimum compensation levels and incentive bonuses along with provisions for
termination of benefits in certain circumstances.

F-23

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12. RELATED PARTY TRANSACTIONS

Management AgreementIn April 1999, the Company entered into a management agreement with Vestar
Capital Partners to provide ongoing management services. The Company will pay to Vestar Capital Partners an annual fee of the greater of $500,000 or 0.42% of the earnings before interest and taxes
plus depreciation and amortization of the prior year and all out-of-pocket expenses regarding these services.

Simultaneously
with the closing of the transactions, the Company entered into the following agreements:



The
Company had sales to Dean Foods of approximately $170.1, $153.7 and $121.2 million for the years ended December 31, 2002, 2001 and 2000, respectively. Accounts
receivable from Dean Foods, net of amounts owed at December 31, 2002 and 2001, amounted to approximately $9.1 and $9.4 million, respectively.

13. ALLOWANCE FOR DOUBTFUL ACCOUNTS

Period Ended

Balance at
Beginning
of Period

Provision

Recoveries
(Write-offs)

Other

Balance at
End
of Period(Amounts in thousands)December 31, 2000

$
4,410

1,200

(620
)


$
4,990December 31, 2001

$
4,990

5,980

(7,409
)


$
3,561December 31, 2002

$
3,561

46

(2,193
)


$
1,414


14. GUARANTOR FINANCIAL STATEMENTS

Separate financial statements of the subsidiary guarantors are not included herewith as management has determined that such information is not material to
investors because (i) the subsidiary guarantors constitute substantially all of the Company's direct and indirect subsidiaries and have fully and unconditionally guaranteed the Notes on a joint
and several basis, and (ii) Holdings is a holding company with no assets, operations or cash flow separate from its investment in the subsidiary guarantors.

F-24

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15. SUBSEQUENT EVENTS

In January 2003, the Company entered into an amendment to its Senior Credit Facility. Terms of the amendment included eliminating certain ratio covenants,
permanently reducing the revolver to $43.5 million, changing the term loan amortization schedule such that $25.8 million will be due in installments from March 31, 2003 until
June 29, 2005, a tranche C term loan in the amount of $35.0 million was added to the credit facility, an additional fee of 1% is to be paid on the unpaid principal balance of each loan
payable June 30, 2005, an additional fee of 2% will be charged on all deferred principal payments less any voluntary or mandatory prepayments payable June 30, 2005, a fee on the tranche
C term loan equal to 4% of the principal amount will be paid upon the repayment of tranche C and other terms less significant.

******

F-25

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