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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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(Mark One)



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



For the quarterly period ended September 30, 2005



OR



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



For the transition period from
 to



Commission File Number 333-123636



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ASG Consolidated LLC



ASG Finance, Inc.

(Exact name of registrants as specified in their charters)



|                                                                 |  |                                      
|---------------------------------------------------------------- |  | -------------------------------------
|Delaware                                                         |  | 20-1741364                           
|                                                                 | 
|Delaware                                                         |  | 20-1741328                           
|(States or other jurisdictions of incorporation or organization) |  | (I.R.S. Employer Identification Nos.)



Market Place Tower

2025 First Avenue

Suite 1200

Seattle, Washington 98121

(Address of principal executive offices)

(Zip Code)



(206) 374-1515

(Registrants telephone number, including area code)



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Indicate by check mark whether the registrants
(1) have 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 were required to file such reports), and
(2) have been subject to such filing requirements for the past 90 days.     Yes x     No ̈



Indicate by check mark whether the registrants are accelerated filers (as defined in Rule 12b-2 of the Exchange Act).     Yes ̈No x



Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act.):
    Yes ̈No x



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##### Table of Contents

TABLE OF CONTENTS



|                             |  |                                                                                       |  |   
|---------------------------- |  | ------------------------------------------------------------------------------------- |  | --
|PART IFINANCIAL INFORMATION |  |                                                                                      
|                             |  |                                                                                      
|Item 1.                      |  | Financial Statements                                                                  |  | 3 
|                             |  |                                                                                      
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 19
|                             |  |                                                                                      
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 31
|                             |  |                                                                                      
|Item 4.                      |  | Controls and Procedures                                                               |  | 31
|                             | 
|PART IIOTHER INFORMATION    |  |                                                                                      
|                             |  |                                                                                      
|Item 1.                      |  | Legal Proceedings                                                                     |  | 32
|                             |  |                                                                                      
|Item 6.                      |  | Exhibits                                                                              |  | 33
|                             | 
|SIGNATURES                   |  | 34                                                                                   



2



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##### Table of Contents

PART IFINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------



ASG CONSOLIDATED LLC AND SUBSIDIARIES



UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)



|                                                                 |  |                   |          |   |                    |   |          |  
|---------------------------------------------------------------- |  | ----------------- | -------- | - | ------------------ | - | -------- | -
|                                                                 |  | December 31, 2004 |          |   | September 30, 2005 |  
|ASSETS                                                           |  |                   |          |   |                    |   |          |  
|Current assets:                                                  |  |                   |          |   |                    |   |          |  
|Cash and cash equivalents                                        |  | $                 | 1,577    |   |                    | $ | 6,046    |  
|Trade accounts receivable, net of allowance of $1,460 and $1,111 |  |                   | 38,042   |   |                    |   | 34,252   |  
|Receivables from related parties                                 |  |                   | 98       |   |                    |   | 56       |  
|Inventories                                                      |  |                   | 50,647   |   |                    |   | 104,689  |  
|Prepaid expenses                                                 |  |                   | 8,062    |   |                    |   | 10,506   |  
|Unrealized gains on derivatives                                  |  |                   |         |   |                    |   | 10,558   |  
|Other                                                            |  |                   | 5,114    |   |                    |   | 5,806    |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Total current assets                                             |  |                   | 103,540  |   |                    |   | 171,913  |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Property, vessels and equipment, net                             |  |                   | 198,335  |   |                    |   | 179,134  |  
|Capital projects in process                                      |  |                   | 1,835    |   |                    |   | 1,042    |  
|Other assets:                                                    |  |                   |          |   |                    |   |          |  
|Cooperative and fishing rights, net                              |  |                   | 83,093   |   |                    |   | 81,552   |  
|Goodwill                                                         |  |                   | 33,676   |   |                    |   | 33,676   |  
|Deferred financing costs, net                                    |  |                   | 27,827   |   |                    |   | 24,276   |  
|Other intangibles, net                                           |  |                   | 3,944    |   |                    |   | 3,522    |  
|Unrealized gains on derivatives                                  |  |                   | 2,063    |   |                    |   | 11,320   |  
|Other                                                            |  |                   | 8,826    |   |                    |   | 8,558    |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Total other assets                                               |  |                   | 159,429  |   |                    |   | 162,904  |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Total assets                                                     |  | $                 | 463,139  |   |                    | $ | 514,993  |  
|                                                                 |  |                   |          |   |                    |   |          |  
|LIABILITIES AND MEMBERS EQUITY (DEFICIT)                        |  |                   |          |   |                    |   |          |  
|Current liabilities:                                             |  |                   |          |   |                    |   |          |  
|Accounts payable and accrued expenses                            |  | $                 | 32,516   |   |                    | $ | 45,589   |  
|Current portion of long-term debt                                |  |                   | 26,547   |   |                    |   | 5,548    |  
|Unrealized losses on derivatives                                 |  |                   | 10,983   |   |                    |   | 1,553    |  
|Payables to related parties                                      |  |                   | 1,900    |   |                    |   | 1,902    |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Total current liabilities                                        |  |                   | 71,946   |   |                    |   | 54,592   |  
|Long-term liabilities:                                           |  |                   |          |   |                    |   |          |  
|Long-term debt, net of current portion                           |  |                   | 582,258  |   |                    |   | 600,001  |  
|Unrealized losses on derivatives                                 |  |                   | 50,112   |   |                    |   | 6,543    |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Total liabilities                                                |  |                   | 704,316  |   |                    |   | 661,136  |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Commitments and contingencies                                    |  |                   |          |   |                    |   |          |  
|Members equity (deficit):                                       |  |                   |          |   |                    |   |          |  
|Members deficit                                                 |  |                   | (195,135 | ) |                    |   | (149,189 | )
|Accumulated other comprehensive income (loss)                    |  |                   | (46,042  | ) |                    |   | 3,046    |  
|                                                                 |  |                   |          |   |                    |   |          |  
|Total members equity (deficit)                                  |  |                   | (241,177 | ) |                    |   | (146,143 | )
|                                                                 |  |                   |          |   |                    |   |          |  
|Total liabilities and members equity (deficit)                  |  | $                 | 463,139  |   |                    | $ | 514,993  |  
|                                                                 |  |                   |          |   |                    |   |          |  



The accompanying notes
are an integral part of these condensed consolidated financial statements.



3



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##### Table of Contents

ASG CONSOLIDATED LLC AND SUBSIDIARIES



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)



|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------------------------------------- |  | -------------------------------- | ------- | - | ------------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                                      |  | Three Months Ended September 30, |         |   | Nine Months Ended September 30, |  
|                                                                                                      |  | 2004                             |         |   | 2005                            |   |         | 2004 |  |   | 2005    |  
|Net sales and other revenue:                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Seafood sales                                                                                         |  | $                                | 92,879  |   |                                 | $ | 99,634  |      |  | $ | 354,726 |   |  | $ | 376,511 |  
|Other                                                                                                 |  |                                  | 107     |   |                                 |   | 769     |      |  |   | 449     |   |  |   | 845     |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Total sales and other revenue                                                                         |  |                                  | 92,986  |   |                                 |   | 100,403 |      |  |   | 355,175 |   |  |   | 377,356 |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Cost of sales:                                                                                        |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Cost of sales, including depreciation and amortization of $4,181, $5,286, $25,955 and $27,406         |  |                                  | 58,934  |   |                                 |   | 64,170  |      |  |   | 231,843 |   |  |   | 246,341 |  
|Cost of salesrelated parties                                                                         |  |                                  | 7,911   |   |                                 |   | 7,017   |      |  |   | 14,118  |   |  |   | 14,978  |  
|Shipping and handling costs                                                                           |  |                                  | 7,325   |   |                                 |   | 7,815   |      |  |   | 24,056  |   |  |   | 24,919  |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Gross profit                                                                                          |  |                                  | 18,816  |   |                                 |   | 21,401  |      |  |   | 85,158  |   |  |   | 91,118  |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Operating expenses:                                                                                   |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Selling, general and administrative expenses, excluding equity-based compensation and related parties |  |                                  | 7,012   |   |                                 |   | 8,593   |      |  |   | 24,391  |   |  |   | 27,395  |  
|Selling, general and administrative expensesrelated parties                                          |  |                                  | 191     |   |                                 |   | 650     |      |  |   | 566     |   |  |   | 1,800   |  
|Equity-based compensation (benefit)                                                                   |  |                                  | (3,900  | ) |                                 |   | (160    | )    |  |   | (3,334  | ) |  |   | 996     |  
|Amortization and depreciation                                                                         |  |                                  | 792     |   |                                 |   | 771     |      |  |   | 2,320   |   |  |   | 2,377   |  
|Goodwill impairment                                                                                   |  |                                  | 7,171   |   |                                 |   |        |      |  |   | 7,171   |   |  |   |        |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Operating income                                                                                      |  |                                  | 7,550   |   |                                 |   | 11,547  |      |  |   | 54,044  |   |  |   | 58,550  |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Other income (expense), net:                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Interest expense                                                                                      |  |                                  | (9,581  | ) |                                 |   | (14,603 | )    |  |   | (29,011 | ) |  |   | (43,271 | )
|Foreign exchange gains                                                                                |  |                                  | 5,850   |   |                                 |   | 4,940   |      |  |   | 3,762   |   |  |   | 18,717  |  
|Other derivatives gains (losses)                                                                      |  |                                  | (1,162  | ) |                                 |   | 4,499   |      |  |   | (1,162  | ) |  |   | 13,084  |  
|Write off of recapitalization transaction costs                                                       |  |                                  | (18,948 | ) |                                 |   |        |      |  |   | (18,948 | ) |  |   |        |  
|Other                                                                                                 |  |                                  | 57      |   |                                 |   | (415    | )    |  |   | 50      |   |  |   | (872    | )
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Other expense, net                                                                                    |  |                                  | (23,784 | ) |                                 |   | (5,579  | )    |  |   | (45,309 | ) |  |   | (12,342 | )
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Income (loss) before income taxes                                                                     |  |                                  | (16,234 | ) |                                 |   | 5,968   |      |  |   | 8,735   |   |  |   | 46,208  |  
|Income tax provision                                                                                  |  |                                  | 19      |   |                                 |   | 13      |      |  |   | 32      |   |  |   | 30      |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss)                                                                                     |  | $                                | (16,253 | ) |                                 | $ | 5,955   |      |  | $ | 8,703   |   |  | $ | 46,178  |  
|                                                                                                      |  |                                  |         |   |                                 |   |         |      |  |   |         |   |  |   |         |  



The accompanying notes
are an integral part of these condensed consolidated financial statements.



4



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                                             |  |                                 |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | ------- | - | ---- | - | ------- | -
|                                                                                                             |  | Nine Months Ended September 30, |        
|                                                                                                             |  | 2004                            |         |   | 2005 |  
|Cash flows from operating activities:                                                                        |  |                                 |         |   |      |   |         |  
|Net income                                                                                                   |  | $                               | 8,703   |   |      | $ | 46,178  |  
|Adjustments to reconcile net income to net cash provided by operating activities:                            |  |                                 |         |   |      |   |         |  
|Depreciation and amortization                                                                                |  |                                 | 28,275  |   |      |   | 29,783  |  
|Unrealized (gains) losses on derivatives, net                                                                |  |                                 | 3,577   |   |      |   | (23,722 | )
|Amortization of debt discount                                                                                |  |                                 |        |   |      |   | 11,120  |  
|Amortization of deferred financing costs                                                                     |  |                                 | 3,959   |   |      |   | 4,429   |  
|Provision for doubtful accounts                                                                              |  |                                 | (136    | ) |      |   | 58      |  
|Equity-based compensation                                                                                    |  |                                 | (3,334  | ) |      |   | 996     |  
|Loss on sale of property and equipment                                                                       |  |                                 | 133     |   |      |   | 3       |  
|Write off of recapitalization transaction costs                                                              |  |                                 | 18,948  |   |      |   |        |  
|Goodwill impairment                                                                                          |  |                                 | 7,171   |   |      |   |        |  
|Change in operating assets and liabilities:                                                                  |  |                                 |         |   |      |   |         |  
|Accounts receivables including related parties                                                               |  |                                 | (761    | ) |      |   | 3,774   |  
|Inventories, net of depreciation and amortization component                                                  |  |                                 | (20,493 | ) |      |   | (47,903 | )
|Accounts payable and accrued expenses including related parties                                              |  |                                 | 3,172   |   |      |   | 13,075  |  
|Prepaid expenses and other, net                                                                              |  |                                 | (6,180  | ) |      |   | (2,933  | )
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Net cash flows from operating activities                                                                     |  |                                 | 43,034  |   |      |   | 34,858  |  
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Cash flows from investing activities:                                                                        |  |                                 |         |   |      |   |         |  
|Purchases of property, vessels and equipment                                                                 |  |                                 | (10,478 | ) |      |   | (11,313 | )
|Capital projects in process                                                                                  |  |                                 |        |   |      |   | (1,042  | )
|Purchase of fishing rights and related acquisition costs                                                     |  |                                 |        |   |      |   | (1,581  | )
|Purchase of minority interest in Pacific Longline Company LLC                                                |  |                                 | (1,800  | ) |      |   |        |  
|Restricted cash deposits and other, net                                                                      |  |                                 | 12      |   |      |   | 29      |  
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Net cash used in investing activities                                                                        |  |                                 | (12,266 | ) |      |   | (13,907 | )
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Cash flows from financing activities:                                                                        |  |                                 |         |   |      |   |         |  
|Principal payments on long-term debt                                                                         |  |                                 | (19,296 | ) |      |   | (31,876 | )
|Net borrowings (repayments) on revolving debt facility                                                       |  |                                 | (7,000  | ) |      |   | 17,500  |  
|Payment of recapitalization and financing costs                                                              |  |                                 | (4,665  | ) |      |   | (878    | )
|Tax and other distributions to members                                                                       |  |                                 | (3,120  | ) |      |   | (1,228  | )
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Net cash used in financing activities                                                                        |  |                                 | (34,081 | ) |      |   | (16,482 | )
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Net increase (decrease) in cash and cash equivalents                                                         |  |                                 | (3,313  | ) |      |   | 4,469   |  
|Cash and cash equivalents at beginning of period                                                             |  |                                 | 5,268   |   |      |   | 1,577   |  
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                                                   |  | $                               | 1,955   |   |      | $ | 6,046   |  
|                                                                                                             |  |                                 |         |   |      |   |         |  
|Non-cash investing and financing activities:                                                                 |  |                                 |         |   |      |   |         |  
|Reclassification of prior period capital projects in progress and deposit to property, vessels and equipment |  | $                               | 436     |   |      | $ | 1,856   |  
|Capital contribution adjustment for equity-based compensation                                                |  |                                 |        |   |      |   | 996     |  



The accompanying notes
are an integral part of these condensed consolidated financial statements.



5



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##### Table of Contents

ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



|Note 1. | Basis of Presentation
|------- | ---------------------



The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in
the United States of America for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and notes required by accounting principles
generally accepted in the United States of America for annual financial statements. The unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) that the management of ASG
Consolidated LLC (ASG Consolidated) and its subsidiaries (collectively referred to herein as the Company) believes necessary for fair presentation of the Companys condensed consolidated financial position, results of operations and
cash flows for the periods presented.



The Companys
business is seasonal and subject to fluctuations in timing of the production of the Companys products and revenue recognition. A significant portion of net income relating to the Companys at-sea processing segment is recorded within the
first two quarters of the year during which time the Company completes its fishing operations for the pollock A season. Therefore, results of operations for the three and nine months ended September 30, 2004 and 2005 are not indicative of the
results of operations expected for the complete fiscal year or any other period. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the annual audited consolidated financial statements and
notes thereto for the year ended December 31, 2004, contained in Amendment No. 1 to the Companys Registration Statement on Form S-4 as filed with the Securities and Exchange Commission on April 13, 2005.



Formation of ASG Consolidated and ASG Finance and Issuance of Senior
Discount Notes.



ASG Consolidated is an intermediate
holding company and all of its activities are conducted through American Seafoods Group LLC (ASG) and its subsidiaries. ASG Consolidated and ASG Finance, Inc. (ASG Finance) were formed in September 2004 in connection with their offering of Senior
Discount Notes as further described in note 7.



Use of
Estimates



The preparation of financial statements in
conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



Significant estimates impacting the financial statements include the estimated fair values of the assets and liabilities acquired in connection with
acquisitions, depreciable lives of property, vessels, and equipment, the amortizable lives of cooperative and fishing rights and other intangibles, the fair values of hedges against risks of foreign currency, interest and fuel price changes, the
fair value of American Seafoods, L.P. (ASLP) units used for equity-based compensation, and collectibility of receivables.



Reclassification and Revisions



Certain prior period items have been reclassified to conform to the current period presentation. Accordingly, the Company has classified shipping and
handling costs in cost of sales on the condensed consolidated statements of operations consistent with the annual reporting for the year ended December 31, 2004.



Equity-Based Compensation



Certain employees of the Company have equity-based compensation arrangements that grant them options to acquire partnership units of ASLP. The related
compensation cost has been pushed down to the Companys consolidated financial statements.



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##### Table of Contents

ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



The Company applies the intrinsic-value-based method of accounting for equity-based compensation
awards to employees and has adopted only the disclosure requirements of the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by
SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure, an amendment of FASB No. 123. Equity-based compensation has no significant tax effect on the Company. The following table illustrates the effect on net
income as if the fair-value-based method had been applied to all awards in each period (in thousands):



|                                                                                                   |  |                                  |         |   |                                 |   |       |      |  |   |        |   |  |   |        |  
|-------------------------------------------------------------------------------------------------- |  | -------------------------------- | ------- | - | ------------------------------- | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                   |  | Three Months Ended September 30, |         |   | Nine Months Ended September 30, |  
|                                                                                                   |  | 2004                             |         |   | 2005                            |   |       | 2004 |  |   | 2005   |  
|Net income (loss), as reported                                                                     |  | $                                | (16,253 | ) |                                 | $ | 5,955 |      |  | $ | 8,703  |   |  | $ | 46,178 |  
|Equity-based employee compensation expense (benefit) included in reported net income               |  |                                  | (3,900  | ) |                                 |   | (160  | )    |  |   | (3,334 | ) |  |   | 996    |  
|Equity-based employee compensation expense determined under fair-value-based method for all awards |  |                                  | (150    | ) |                                 |   | (78   | )    |  |   | (450   | ) |  |   | (257   | )
|                                                                                                   |  |                                  |         |   |                                 |   |       |      |  |   |        |   |  |   |        |  
|Pro forma net income (loss)                                                                        |  | $                                | (20,303 | ) |                                 | $ | 5,717 |      |  | $ | 4,919  |   |  | $ | 46,917 |  
|                                                                                                   |  |                                  |         |   |                                 |   |       |      |  |   |        |   |  |   |        |  



Recent Accounting
Pronouncements



The FASB issued SFAS No. 123 (revised
2004), Share-Based Payment (SFAS No. 123R), in December 2004. SFAS No. 123R is a revision of SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees. SFAS No. 123R requires the fair value of employee awards issued, modified, repurchased or cancelled after implementation under share-based payment arrangements to be measured as of the date the
award is issued, modified, repurchased or canceled. The resulting cost will then be recognized in the statement of earnings over the service period. Accordingly, if the Company were to adopt SFAS No. 123R, management anticipates that there
would be no effect on the financial statements upon adoption for options outstanding prior to adoption. The Company will implement SFAS No. 123R no later than the beginning of fiscal year 2006.



In March 2005, the FASB issued FASB Interpretation No. 47, Accounting
for Conditional Asset Retirement Obligations(FIN 47), to clarify the term conditional asset retirement obligation as that term is used in FASB Statement No. 143, Accounting for Asset Retirement Obligations. FIN 47 also
clarifies when an entity has sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective for the Company no later than fiscal year 2006. The Company is in the process of determining the impact
of FIN 47 on its financial statements.



In May 2005,
the FASB issued SFAS No. 154, Accounting Changes and Error Corrections  a replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS No. 154 requires retrospective application for changes in accounting
principles whenever practicable, rather than including the cumulative effect of an accounting change in net income in the period of change. SFAS No. 154 applies to voluntary changes in accounting principles and also changes required by new
accounting pronouncements if specific transition provisions are not provided. The Company will implement this pronouncement no later than fiscal year 2006.



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



|Note 2. | Inventories
|------- | -----------



Inventories at December 31, 2004 and September 30, 2005 consist of the following (in thousands):



|                                                   |  |                   |        |                    |   |        
|-------------------------------------------------- |  | ----------------- | ------ | ------------------ | - | -------
|                                                   |  | December 31, 2004 |        | September 30, 2005
|Fish blocks, surimi and roe                        |  | $                 | 22,889 |                    | $ | 74,498 
|Finished seafood products                          |  |                   | 18,219 |                    |   | 15,129 
|Breading, batter, additives and packaging supplies |  |                   | 9,539  |                    |   | 15,062 
|                                                   |  |                   |        |                    |   |        
|                                                   |  | $                 | 50,647 |                    | $ | 104,689
|                                                   |  |                   |        |                    |   |        



The carrying amount of
inventories fluctuates during the year primarily as a result of the seasonal nature of the Companys business. Historically, such amount is highest at the end of the first and third quarters of the year.



|Note 3. | Accounts Payable and Accrued Expenses
|------- | -------------------------------------



Accounts payable and accrued expenses at December 31, 2004 and September 30, 2005 consist of the following (in thousands):



|                             |  |                   |        |                    |   |       
|---------------------------- |  | ----------------- | ------ | ------------------ | - | ------
|                             |  | December 31, 2004 |        | September 30, 2005
|Accounts payable             |  | $                 | 14,870 |                    | $ | 14,202
|Accrued payroll and benefits |  |                   | 4,281  |                    |   | 13,561
|Interest payable             |  |                   | 3,741  |                    |   | 8,121 
|Deferred compensation        |  |                   | 5,331  |                    |   | 5,101 
|Alaska landing tax payable   |  |                   | 1,406  |                    |   | 1,580 
|Other accrued liabilities    |  |                   | 2,887  |                    |   | 3,024 
|                             |  |                   |        |                    |   |       
|                             |  | $                 | 32,516 |                    | $ | 45,589
|                             |  |                   |        |                    |   |       



|Note 4. | Derivative Instruments
|------- | ----------------------



Foreign Exchange Contracts



The Company has a significant amount of Japanese yen-denominated sales; therefore, its earnings, cash flows and financial position are exposed to foreign
currency risk from yen-denominated sales transactions. The Company attempts to manage foreign currency risk by using foreign currency forward exchange contracts to hedge the variability of future cash flows associated with Japanese yen denominated
sales. These contracts are arranged so that the Company sells Japanese yen (¥) to the counterparty at a fixed exchange rate and receives U.S. dollars in return. It is the Companys risk management policy to hedge a target level of 80%
of its forecasted yen sales over the next 12 months, 65% over months 13 to 24, 50% over months 25 to 36, and 35% over months 37 to 48.



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



The following summarizes the Companys Japanese yen foreign exchange contracts designated as
cash flow hedges as of September 30, 2005 (in millions):



|                            |  |                  |  |      |  |                 |      
|--------------------------- |  | ---------------- |  | ---- |  | --------------- | -----
|                            |  | Year of Maturity |  |     
|                            |  | From             |  | To   |  | Notional Amount
|Open contracts              |  | 2005             |  | 2009 |  | $               | 337.3
|Extension agreements - 2002 |  | 2006             |  | 2007 |  |                 | 50.0 
|Extension agreements - 2003 |  | 2006             |  | 2008 |  |                 | 100.0
|                            |  |                  |  |      |  |                 |      
|Total amount of contracts   |  |                  |  |      |  | $               | 487.3
|                            |  |                  |  |      |  |                 |      



The open contracts
include agreements with notional amounts of $39.0 million that were designated and documented as hedges in 2003 when the Japanese yen reached a pre-specified level (trigger) spot rate of ¥110 per U.S. dollar. The extension agreements entered
into in 2002 and 2003 are both subject to a trigger that make them binding and effective only if the spot rate falls below ¥99 per U.S. dollar on or before December 2005 and March 2006, respectively.



In addition, the Company had Euro foreign exchange contracts with notional
amounts totaling $10.8 million at September 30, 2005, which expire during 2005 and 2006.



The following summarizes the activity in the unaudited condensed statements of operations related to the Companys foreign exchange contracts (in millions):



|                                         |  |                                  |      |                                 |      |   |      |  |   |       |   |  |   |      |  
|---------------------------------------- |  | -------------------------------- | ---- | ------------------------------- | ---- | - | ---- |  | - | ----- | - |  | - | ---- | -
|                                         |  | Three Months Ended September 30, |      | Nine Months Ended September 30, |     
|                                         |  | 2004                             |      |                                 | 2005 |   | 2004 |  |   | 2005  |  
|Statements of operations classification: |  |                                  |      |                                 |      |   |      |  |   |       |   |  |   |      |  
|Revenue  gains (losses) reclassified    |  | $                                | (1.8 | )                               |      | $ | 0.2  |  | $ | (10.1 | ) |  | $ | (7.9 | )
|Foreign exchange gains:                  |  |                                  |      |                                 |      |   |      |  |   |       |   |  |   |      |  
|Unrealized gains (losses), net           |  |                                  | 6.3  |                                 |      |   | 4.7  |  |   | (2.6  | ) |  |   | 11.8 |  
|Realized gains, net                      |  |                                  | 2.1  |                                 |      |   |     |  |   | 5.8   |   |  |   | 7.8  |  
|Transaction gains (losses), net          |  |                                  | (2.5 | )                               |      |   | 0.2  |  |   | 0.6   |   |  |   | (0.9 | )
|                                         |  |                                  |      |                                 |      |   |      |  |   |       |   |  |   |      |  
|Foreign exchange gains                   |  |                                  | 5.9  |                                 |      |   | 4.9  |  |   | 3.8   |   |  |   | 18.7 |  
|                                         |  |                                  |      |                                 |      |   |      |  |   |       |   |  |   |      |  
|Net effect on earnings during the period |  | $                                | 4.1  |                                 |      | $ | 5.1  |  | $ | (6.3  | ) |  | $ | 10.8 |  
|                                         |  |                                  |      |                                 |      |   |      |  |   |       |   |  |   |      |  



The unrealized gains
and losses resulting from changes in the spot rate on the effective portion are recorded in accumulated other comprehensive loss and are reclassified to revenue when the underlying forecasted transaction occurs. The unrealized gains and losses
resulting from factors other than changes in the spot rates, including changes in fair value and the time value component of the contracts, are recorded as foreign exchange gains (losses) and classified in other income (expense), net.



Until September 28, 2005, the majority of the Companys foreign
exchange contracts were covered by a cash collateralization agreement that required the Company to place restricted cash deposits or standby letters of credit with the counterparty for unrealized losses on the total portfolio in excess of $27.5
million for a period through March 31, 2006. On September 28, 2005, this requirement was permanently waived by the counterparty. Therefore, collateral is no longer required under the agreement.



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



Other Derivative Instruments



The following summarizes activity in the unaudited condensed statements of operations related to the Companys other
derivative instruments contracts (in millions):



|                                                                                                              |  |                                  |      |   |                                |   |      |      |  |   |      |   |  |   |     
|------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ---- | - | ------------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ----
|                                                                                                              |  | Three Months Ended September 30, |      |   | Nine Months EndedSeptember 30,
|                                                                                                              |  | 2004                             |      |   | 2005                           |   |      | 2004 |  |   | 2005
|Statements of operations and inventory classification:                                                        |  |                                  |      |   |                                |   |      |      |  |   |      |   |  |   |     
|Cost of production, included as a component of cost of sales and inventory  fuel hedge settlement gains, net |  | $                                | 1.0  |   |                                | $ |     |      |  | $ | 2.1  |   |  | $ |    
|Interest expense  unrealized gains (losses), net                                                             |  |                                  | 0.1  |   |                                |   |     |      |  |   | 0.2  |   |  |   | 0.1 
|Other derivative gains (losses), net:                                                                         |  |                                  |      |   |                                |   |      |      |  |   |      |   |  |   |     
|Cross currency interest rate swap contracts:                                                                  |  |                                  |      |   |                                |   |      |      |  |   |      |   |  |   |     
|Unrealized gains (losses)                                                                                     |  | $                                | (1.2 | ) |                                | $ | 1.7  |      |  | $ | (1.2 | ) |  | $ | 6.4 
|Realized gains (losses)                                                                                       |  |                                  |     |   |                                |   | (0.2 | )    |  |   |     |   |  |   | 0.4 
|Fuel contracts:                                                                                               |  |                                  |      |   |                                |   |      |      |  |   |      |   |  |   |     
|Unrealized gains                                                                                              |  |                                  |     |   |                                |   | 2.3  |      |  |   |     |   |  |   | 5.4 
|Realized gains                                                                                                |  |                                  |     |   |                                |   | 0.7  |      |  |   |     |   |  |   | 0.9 
|                                                                                                              |  |                                  |      |   |                                |   |      |      |  |   |      |   |  |   |     
|Other derivative gains (losses), net                                                                          |  | $                                | (1.2 | ) |                                | $ | 4.5  |      |  | $ | (1.2 | ) |  | $ | 13.1
|                                                                                                              |  |                                  |      |   |                                |   |      |      |  |   |      |   |  |   |     



Cross Currency
Interest Rate Swap Agreements. As of September 30, 2005, the Company had variable to fixed-rate cross currency interest swap contracts with an aggregate notional amount of $20.0 million. Under the terms of these contracts, the Company pays
a fixed rate of interest in Japanese yen and receives payments on a variable rate of interest in U.S. dollars based on the three-month LIBOR rate. As these instruments have not been designated as hedges, any unrealized gains and losses resulting
from the change in fair value are recognized in the unaudited condensed statements of operations as a component of other derivatives gains (losses), net. At September 30, 2005, the fair value of these contracts had an unrealized net gain of
approximately $0.1 million, which reflects a $6.4 million reduction in unrealized losses from December 31, 2004. Accordingly, unrealized gains of approximately $1.7 million and $6.4 million were recorded in the unaudited condensed statements of
operations as a component of other derivatives gains (losses), net for the three and nine months ended September 30, 2005, respectively.



Interest Rate and Cap Agreements.The Company had an interest rate cap with a notional amount of $72.5 million that matured in June 2005. The cap
rate was 5.0% and the variable rate was the three-month LIBOR rate. As this instrument was not considered to be effective until the interest rate of the underlying exceeded the cap rate, any unrealized gains or losses were recognized in the
unaudited condensed statements of operations. During the nine months ended September 30, 2004 and 2005, the related gain (loss) of $(0.2) million and $0.1 million, respectively, was recorded as interest expense. In addition, the Company entered
into an interest rate cap with a notional amount of $40.0 million in September 2005 that matures in November 2005 for a nominal premium. The cap rate is 6.0% and the variable rate is LIBOR. This instrument is not considered to be effective until the
interest rate of the underlying exceeds the cap rate. Accordingly, the unrealized gains or losses on this instrument are recognized in the unaudited condensed statements of operations. As of September 30, 2005, the value of this instrument was
not significant.



Fuel Contracts. The Company has fuel
contracts whereby the Company pays a fixed price per gallon and receives a floating price per gallon with payments calculated on the remaining notional amount of 6.0 million gallons over the term of the contracts through October 31, 2006.
In accordance with the Companys hedging



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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



policy in relation to these contracts, periodic assessments of effectiveness for accounting purposes are performed on at least a quarterly basis. Based on
the results of these analyses, the Company determined that these new instruments did not meet the accounting definition of highly effective (although these fuel contracts did produce their intended purpose of offsetting fluctuations in fuel prices).
At September 30, 2005, the fair value of these contracts was an unrealized gain of approximately $4.6 million, which represents a $5.4 million increase from the $0.8 million unrealized loss at December 31, 2004. Accordingly, unrealized
gains of approximately $2.3 million and $5.4 million were recorded in the unaudited condensed statements of operations as a component of other derivatives gains, net for the three and nine months ended September 30, 2005, respectively.



During the three and nine months ended September 30,
2004, fuel contracts were accounted for as hedges. Accordingly, the net realized gains on the settlement of fuel contracts of approximately $1.0 million and $2.1 million, respectively, were recorded as inventory production costs, a portion of which
is included as a component of cost of sales in the unaudited condensed statements of operations during 2004 with the remaining portion included in the carrying amount of inventory at September 30, 2004.



|Note 5. | Commitments and Contingencies
|------- | -----------------------------



Legal Matters



On October 19, 2001, a former vessel crew member filed a complaint in the United States District Court for the Western District of Washington against
one of the Companys subsidiaries, American Seafoods Company LLC (ASC), on behalf of himself and a class of 500 seamen. The action was never certified as a class action. The complaint alleged that ASC breached its contract with the plaintiffs
by underestimating the value of the catch in computing the plaintiffs wages. The plaintiffs demanded an accounting of their crew shares pursuant to federal statutory law. In addition, the plaintiffs requested relief under a Washington statute
that would render ASC liable for twice the amount of wages in dispute, as well as judgment against ASC for compensatory and exemplary damages, plus interest, attorneys fees and costs, among other things. The plaintiffs also alleged that ASC
fraudulently concealed the underestimation of product values, thereby preventing the discovery of their cause of action. The conduct allegedly took place prior to January 28, 2000, the date the Companys business was acquired by ASLP. On
September 25, 2003, the court entered an order granting ASCs motion for summary judgment and dismissing the entirety of the plaintiffs claims with prejudice and with costs. The plaintiffs filed a motion for reconsideration of this
order which was denied by the court. The plaintiffs then appealed the District Court decision to the Ninth Circuit Court of Appeals. On September 1, 2005, the Ninth Circuit Court of Appeals unanimously affirmed the decision of the District
Court and the lawsuit was dismissed. As of September 30, 2005, the Company has not recorded a related liability since it considers the matter concluded.



In 2004, the Company became aware of allegations that certain crew members may have tampered or attempted to tamper with measurement equipment on board
one of the Companys vessels. The Company understands that the National Marine Fisheries Service (NMFS) may be investigating these allegations; however, it has not received any formal notice from the NMFS and is unaware of the status of any
such investigation. To date, no fines or penalties have been assessed against the Company in connection with these allegations. As of September 30, 2005, the Company has not recorded a liability related to this matter because management
believes an unfavorable outcome is not probable.



Other
lawsuits relate principally to employment matters and are not expected to be material to the Companys consolidated financial statements taken as a whole.



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



Fish Purchase Commitments



As of September 30, 2005, the Company was party to fixed purchase obligation agreements with the following parties:



| |  |  | Alaskan community development groups that provide an exclusive license to harvest and process all or part of the groups portion of the total allowable catch of pollock and cod
allocated to them under the Alaska Community Development Quota (CDQ) program. Under these agreements, the Company is obligated to make minimum purchases over the three years, which will be based on the total allowable catch for the year;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Third-party catcher vessels that license their pollock fishing rights;
| | - |  | ----------------------------------------------------------------------



| |  |  | The previous owner of Southern Prides catfish operations to purchase up to 5 million pounds of catfish per year, at the option of the previous owner, at a price based on
a market index for a term of ten years ending on January 1, 2013;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other catfish farmers with fixed production and delivery schedules at prices based on a market price within a range of minimum and maximum prices.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



The following schedule summarizes the Companys outstanding annual fish
purchase commitments as of September 30, 2005, based on the following: (i) the fixed contractual price; (ii) if a range of prices is specified, then the high end of the range; or (iii) if no price is specified, then the average
market price during September 2005 was utilized to estimate the remaining commitment (in millions):



|                       |  |                          |     |      |   |      |  |      |      |      |   |            |  |       |     |  |   |     |  |   |      
|---------------------- |  | ------------------------ | --- | ---- | - | ---- |  | ---- | ---- | ---- | - | ---------- |  | ----- | --- |  | - | --- |  | - | -----
|                       |  | Year Ending December 31, |     |      |   |     
|                       |  | 2005                     |     | 2006 |   | 2007 |  | 2008 |      | 2009 |   | Thereafter |  | Total
|                       |  | (3 months)               |     |      |   |      |  |      |      |      |   |            |  |      
|Source and species:    |  |                          |     |      |   |      |  |      |      |      |   |            |  |       |     |  |   |     |  |   |      
|CDQ pollock and cod    |  | $                        | 1.5 |      | $ | 24.8 |  | $    | 24.8 |      | $ | 24.8       |  | $     |    |  | $ |    |  | $ | 75.9 
|Farm raised catfish    |  |                          | 4.0 |      |   | 3.2  |  |      | 3.2  |      |   | 3.2        |  |       | 3.2 |  |   | 9.8 |  |   | 26.6 
|Catcher vessel pollock |  |                          | 0.1 |      |   |     |  |      |     |      |   |           |  |       |    |  |   |    |  |   | 0.1  
|                       |  |                          |     |      |   |      |  |      |      |      |   |            |  |       |     |  |   |     |  |   |      
|Totals                 |  | $                        | 5.6 |      | $ | 28.0 |  | $    | 28.0 |      | $ | 28.0       |  | $     | 3.2 |  | $ | 9.8 |  | $ | 102.6
|                       |  |                          |     |      |   |      |  |      |      |      |   |            |  |       |     |  |   |     |  |   |      



Commitment to
Purchase Vessel and Fishing Rights



In August 2005, the
Company agreed to purchase the catcher vessel Forum Star, related gear and equipment and certain fishing rights in exchange for $10.7 million. On August 29, 2005, the first closing occurred at which the Company acquired cod fishing
rights in exchange for $1.5 million and incurred related costs of $0.1 million. On October 13, 2005, the Company completed the acquisition of the vessel, gear, equipment and remaining pollock and scallop fishing rights in exchange for $9.2
million, consisting of $8.5 million in cash and a note payable of $0.7 million. The acquired assets will be placed into service during January 2006.



Lease Guarantee



In order to obtain preferential dock space and improve operational efficiency and product security, in July 2005 ASC moved its primary dock and warehouse
facility used to offload product from its vessels in Dutch Harbor, Alaska. The lessee of the facility is a stevedoring company that provides services for the Company. The Company expects ASCs operations will represent a significant amount of
the stevedoring companys revenue generated from this facility. ASC has guaranteed the stevedoring companys lease payments for a five-year period ending on June 30, 2010. During the guarantee period, the lessee is required to pay an
annualized base rent of $1.2 million plus taxes, utilities and insurance and perform required maintenance. Upon default under the



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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



lease agreement, the lessor must first take action against the lessee, including recovery of a $0.1 million security deposit held by the lessor, before
proceeding against ASC. The lessee has notified the Company that it was in compliance with the terms of the lease as of September 30, 2005. The Company has not recorded a liability related to its guarantee because it believes default is remote
and, therefore, the value of the guarantee is negligible.



|Note 6. | Comprehensive Income (Loss)
|------- | ---------------------------



Comprehensive income (loss) includes net income (loss) as well as a component comprised of certain gains and losses that under generally accepted
accounting principles are reflected in members equity (deficit) but are excluded from the determination of net income. The Company has segregated the total accumulated other comprehensive gain or loss (specifically, accumulated unrealized
gains and losses on derivative instruments designated as hedges and foreign currency translation adjustments) from the other components of members equity (deficit) in the accompanying unaudited condensed consolidated balance sheets.



Comprehensive income (loss) for the three and nine months
ended September 30, 2004 and 2005 was as follows (in thousands):



|                                                                     |  |                                  |         |   |                                 |   |        |      |  |   |        |   |  |   |       
|-------------------------------------------------------------------- |  | -------------------------------- | ------- | - | ------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------
|                                                                     |  | Three Months Ended September 30, |         |   | Nine Months Ended September 30,
|                                                                     |  | 2004                             |         |   | 2005                            |   |        | 2004 |  |   | 2005  
|Net income (loss)                                                    |  | $                                | (16,253 | ) |                                 | $ | 5,955  |      |  | $ | 8,703  |   |  | $ | 46,178
|Unrealized gains on derivative instruments designated as hedges, net |  |                                  | 6,514   |   |                                 |   | 7,461  |      |  |   | 27,463 |   |  |   | 49,080
|Translation adjustment                                               |  |                                  |        |   |                                 |   | (1     | )    |  |   | (1     | ) |  |   | 8     
|                                                                     |  |                                  |         |   |                                 |   |        |      |  |   |        |   |  |   |       
|Comprehensive income (loss)                                          |  | $                                | (9,739  | ) |                                 | $ | 13,415 |      |  | $ | 36,165 |   |  | $ | 95,266
|                                                                     |  |                                  |         |   |                                 |   |        |      |  |   |        |   |  |   |       



|Note 7. | Long - Term Debt
|------- | ----------------



Long-term debt and interest rates at December 31, 2004 and September 30, 2005 were as follows (in thousands):



|                                                                                                                                        |  |                   |         |                    |   |        
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ------------------ | - | -------
|                                                                                                                                        |  | December 31, 2004 |         | September 30, 2005
|Credit Agreement:                                                                                                                       |  |                   |         |                    |   |        
|Term B loan, interest at 5.81% and 8.75%, respectively, maturity in 2009                                                                |  | $                 | 244,303 |                    | $ | 238,172
|Term A loan, interest at 5.56% and 8.50%, respectively, maturity in 2007                                                                |  |                   | 45,319  |                    |   | 19,574 
|Revolving Credit Facility, interest at 5.56% and 8.07%, respectively, maturity in 2007                                                  |  |                   | 16,500  |                    |   | 34,000 
|Senior Subordinated Notes, interest at 101/8%, maturing in 2010                                                                         |  |                   | 175,000 |                    |   | 175,000
|Senior Discount Notes, interest at 111/2%, $196.0 million due at maturity in 2011, net of discount of $68,317 and $57,197, respectively |  |                   | 127,683 |                    |   | 138,803
|                                                                                                                                        |  |                   |         |                    |   |        
|Total long-term debt                                                                                                                    |  |                   | 608,805 |                    |   | 605,549
|Less current portion of long-term debt                                                                                                  |  |                   | 26,547  |                    |   | 5,548  
|                                                                                                                                        |  |                   |         |                    |   |        
|Long-term debt, net of current portion                                                                                                  |  | $                 | 582,258 |                    | $ | 600,001
|                                                                                                                                        |  |                   |         |                    |   |        



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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



Credit Agreement



On April 18, 2002, the Company entered into a senior credit agreement (Credit Agreement) with a group of banks. The
Credit Agreement provided for Term A and B loans that required quarterly principal payments beginning in March 2006 and that increased over time with a final payment in March 2009. Annually during the month of March, the Credit Agreement also
required additional excess cash flow payments to be made. The Company made additional excess cash flow payments of $8.3 million and $10.0 million during March 2004 and 2005, respectively. In addition, the Company made discretionary principal
payments of $18.0 million during the nine months ended September 30, 2005.



The Credit Agreement also provided for a revolving loan commitment through September 30, 2007 of $75.0 million with a sub-credit facility for letters of credit of up to $30.0 million. The open letters of credit
decreased the amount of available borrowings under this credit facility. As of December 31, 2004 and September 30, 2005, available borrowings under the revolving loan credit facility are summarized as follows (in thousands):



|                                |  |                   |        |                    |   |       
|------------------------------- |  | ----------------- | ------ | ------------------ | - | ------
|                                |  | December 31, 2004 |        | September 30, 2005
|Total revolving credit facility |  | $                 | 75,000 |                    | $ | 75,000
|Less outstanding commitments:   |  |                   |        |                    |   |       
|Outstanding balance             |  |                   | 16,500 |                    |   | 34,000
|Open letters of credit          |  |                   | 27,500 |                    |   |      
|                                |  |                   |        |                    |   |       
|Total outstanding commitments   |  |                   | 44,000 |                    |   | 34,000
|                                |  |                   |        |                    |   |       
|Available borrowings            |  | $                 | 31,000 |                    | $ | 41,000
|                                |  |                   |        |                    |   |       



The Credit Agreement
was secured by substantially all assets of the Company, including intangible assets. It required the Company to meet certain financial tests, including without limitation, a maximum leverage ratio, a minimum interest coverage ratio and a minimum
fixed charge coverage ratio. In addition, the Credit Agreement contained certain covenants which, among other things, limited the incurrence of additional indebtedness, liens and encumbrances, changes in the nature of the business, investments,
dividends and other restricted payments, prepayments of certain indebtedness, certain transactions with affiliates, asset sales, acquisitions, capital expenditures, mergers and consolidations, sales of receivables and other matters customarily
restricted in such agreements. As of September 30, 2005, the Company was in compliance with its covenants under the Credit Agreement.



On October 6, 2005, the Company entered into a new senior credit facility, replacing the facility described above, as further described in note 9.



Senior Discount Notes and Senior Subordinated Notes



On October 19, 2004, ASG Consolidated and ASG
Finance issued 111/2% Senior Discount Notes for gross proceeds of $124.9 million. ASG and its subsidiaries have not guaranteed the repayment of the Senior Discount Notes. The Senior Discount Notes will have an accreted
value of $196.0 million principal amount at maturity in November 2011. The carrying balance on the notes is being accreted using the effective interest method from origination through the period ending November 1, 2008. No interest will be paid
during this period. Thereafter, interest will accrue and be payable semi-annually on May 1 and November 1 of each year, at a fixed annual rate of 111/2%. The first interest-only payment is due on May 1,
2009. During the three and nine months ended September 30, 2005, $3.8 million and $11.1 million, respectively, of amortization of debt discount was charged to interest expense.



14



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##### Table of Contents

ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



ASG issued and sold $175.0 million of Senior Subordinated Notes as part of a recapitalization on
April 18, 2002. These notes mature in 2010, and interest is paid semi-annually in April and October of each year at a fixed annual interest rate of 101/8%. Interest expense for the Senior Subordinated Notes is
approximately $4.4 million per quarter.



The indentures
of the Senior Discount Notes and the Senior Subordinated Notes contain various financial and operating restrictive covenants similar to those of the Credit Agreement. The Company was in compliance with the covenants under the Senior Discount Notes
and Senior Subordinated Notes indentures at September 30, 2005.



Deferred Financing Costs Related to Senior Discount Notes



Financing costs were incurred in connection with the issuance and registration of the Senior Discount Notes. As of September 30, 2005, the deferred financing costs related to these notes, totaling approximately
$4.3 million, are being amortized into interest expense using the effective interest method over the term of the debt facility.



Additionally, the Company has recorded approximately $0.6 million of financing costs related to the Companys Registration Statement filed on Form
S-4 with the SEC on April 13, 2005. These costs are comprised primarily of professional fees and printing costs and are being amortized into interest expense using the effective interest method beginning in the second quarter of 2005.



|Note 8. | Segment Information
|------- | -------------------



The Company is principally engaged in the harvesting, processing, marketing, selling and distribution of fish products. The Companys reportable
segments are:



| |  |  | At-Sea Processingprimarily comprised of the harvesting and processing of pollock, yellowfin sole, Pacific cod and hake aboard the Companys vessels operating in
the Bering Sea and off the coast of Washington and Oregon; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Land-Based Processingprimarily comprised of the processing of catfish and scallops and secondary processing of pollock in the Companys processing plants in
Alabama and Massachusetts.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Segment operating
results and balances are determined on a basis consistent with the accounting policies used in the consolidated financial statements. Corporate costs are allocated to each segment based on the total assets of the Companys reporting units,
except for gains and losses from foreign exchange and fuel contracts that are allocated only to the at-sea processing segment.



Segment information as of and for the three months ended September 30, 2005 is as follows (in thousands):



|                   |  |                   |         |                        |   |        |              |  |   |                     |   |  |   |        
|------------------ |  | ----------------- | ------- | ---------------------- | - | ------ | ------------ |  | - | ------------------- | - |  | - | -------
|                   |  | At-Sea Processing |         | Land- Based Processing |   |        | Eliminations |  |   | Consolidated Totals
|Revenue:           |  |                   |         |                        |   |        |              |  |   |                     |   |  |   |        
|External customers |  | $                 | 49,602  |                        | $ | 50,801 |              |  | $ |                    |   |  | $ | 100,403
|Intersegment       |  |                   | 6,773   |                        |   |       |              |  |   | (6,773              | ) |  |   |       
|                   |  |                   |         |                        |   |        |              |  |   |                     |   |  |   |        
|Total revenue      |  |                   | 56,375  |                        |   | 50,801 |              |  |   | (6,773              | ) |  |   | 100,403
|                   |  |                   |         |                        |   |        |              |  |   |                     |   |  |   |        
|Gross profit:      |  |                   |         |                        |   |        |              |  |   |                     |   |  |   |        
|External customers |  |                   | 17,325  |                        |   | 4,076  |              |  |   |                    |   |  |   | 21,401 
|Intersegment       |  |                   | 3,429   |                        |   |       |              |  |   | (3,429              | ) |  |   |       
|                   |  |                   |         |                        |   |        |              |  |   |                     |   |  |   |        
|Total gross profit |  |                   | 20,754  |                        |   | 4,076  |              |  |   | (3,429              | ) |  |   | 21,401 
|                   |  |                   |         |                        |   |        |              |  |   |                     |   |  |   |        
|Net income (loss)  |  |                   | 7,678   |                        |   | (1,450 | )            |  |   | (273                | ) |  |   | 5,955  
|Total assets       |  |                   | 440,944 |                        |   | 74,049 |              |  |   |                    |   |  |   | 514,993



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



Segment information as of and for the three months ended September 30, 2004 is as follows (in
thousands):



|                   |  |                   |         |   |                        |   |         |              |  |   |                     |   |  |   |         |  
|------------------ |  | ----------------- | ------- | - | ---------------------- | - | ------- | ------------ |  | - | ------------------- | - |  | - | ------- | -
|                   |  | At-Sea Processing |         |   | Land- Based Processing |   |         | Eliminations |  |   | Consolidated Totals |  
|Revenue:           |  |                   |         |   |                        |   |         |              |  |   |                     |   |  |   |         |  
|External customers |  | $                 | 43,423  |   |                        | $ | 49,563  |              |  | $ |                    |   |  | $ | 92,986  |  
|Intersegment       |  |                   | 6,539   |   |                        |   |        |              |  |   | (6,539              | ) |  |   |        |  
|                   |  |                   |         |   |                        |   |         |              |  |   |                     |   |  |   |         |  
|Total revenue      |  |                   | 49,962  |   |                        |   | 49,563  |              |  |   | (6,539              | ) |  |   | 92,986  |  
|                   |  |                   |         |   |                        |   |         |              |  |   |                     |   |  |   |         |  
|Gross profit:      |  |                   |         |   |                        |   |         |              |  |   |                     |   |  |   |         |  
|External customers |  |                   | 15,291  |   |                        |   | 3,525   |              |  |   |                    |   |  |   | 18,816  |  
|Intersegment       |  |                   | 2,998   |   |                        |   |        |              |  |   | (2,998              | ) |  |   |        |  
|                   |  |                   |         |   |                        |   |         |              |  |   |                     |   |  |   |         |  
|Total gross profit |  |                   | 18,289  |   |                        |   | 3,525   |              |  |   | (2,998              | ) |  |   | 18,816  |  
|                   |  |                   |         |   |                        |   |         |              |  |   |                     |   |  |   |         |  
|Net income (loss)  |  |                   | (5,544  | ) |                        |   | (10,905 | )            |  |   | 196                 |   |  |   | (16,253 | )
|Total assets       |  |                   | 435,781 |   |                        |   | 74,111  |              |  |   |                    |   |  |   | 509,892 |  



Segment information
for the nine months ended September 30, 2005 is as follows (in thousands):



|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|------------------ |  | ----------------- | ------- | ---------------------- | - | ------- | ------------ |  | - | ------------------- | - |  | - | -------
|                   |  | At-Sea Processing |         | Land- Based Processing |   |         | Eliminations |  |   | Consolidated Totals
|Revenue:           |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|External customers |  | $                 | 219,047 |                        | $ | 158,309 |              |  | $ |                    |   |  | $ | 377,356
|Intersegment       |  |                   | 16,014  |                        |   |        |              |  |   | (16,014             | ) |  |   |       
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Total revenue      |  |                   | 235,061 |                        |   | 158,309 |              |  |   | (16,014             | ) |  |   | 377,356
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Gross profit:      |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|External customers |  |                   | 78,590  |                        |   | 12,528  |              |  |   |                    |   |  |   | 91,118 
|Intersegment       |  |                   | 8,596   |                        |   |        |              |  |   | (8,596              | ) |  |   |       
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Total gross profit |  |                   | 87,186  |                        |   | 12,528  |              |  |   | (8,596              | ) |  |   | 91,118 
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Net income (loss)  |  |                   | 51,931  |                        |   | (5,635  | )            |  |   | (118                | ) |  |   | 46,178 



Segment information
for the nine months ended September 30, 2004 is as follows (in thousands):



|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|------------------ |  | ----------------- | ------- | ---------------------- | - | ------- | ------------ |  | - | ------------------- | - |  | - | -------
|                   |  | At-Sea Processing |         | Land- Based Processing |   |         | Eliminations |  |   | Consolidated Totals
|Revenue:           |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|External customers |  | $                 | 207,020 |                        | $ | 148,155 |              |  | $ |                    |   |  | $ | 355,175
|Intersegment       |  |                   | 16,982  |                        |   |        |              |  |   | (16,982             | ) |  |   |       
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Total revenue      |  |                   | 224,002 |                        |   | 148,155 |              |  |   | (16,982             | ) |  |   | 355,175
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Gross profit:      |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|External customers |  |                   | 73,498  |                        |   | 11,660  |              |  |   |                    |   |  |   | 85,158 
|Intersegment       |  |                   | 7,849   |                        |   |        |              |  |   | (7,849              | ) |  |   |       
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Total gross profit |  |                   | 81,347  |                        |   | 11,660  |              |  |   | (7,849              | ) |  |   | 85,158 
|                   |  |                   |         |                        |   |         |              |  |   |                     |   |  |   |        
|Net income (loss)  |  |                   | 23,334  |                        |   | (15,039 | )            |  |   | 408                 |   |  |   | 8,703  



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



|Note 9. | Subsequent Events
|------- | -----------------



Refinancing of Credit Agreement



On October 6, 2005, the Company entered into a Third Amended and Restated Credit Agreement (Restated Credit Agreement) with a group of banks and
other financial institutions, some of which were parties to the Credit Agreement described in note 7. The Restated Credit Agreement amends and restates the Credit Agreement to provide for credit extensions of borrowings not to exceed $520.0 million.
The terms of the new credit facility are summarized as follows:



| |  |  | Revolving credit facility commitment of $75.0 million, with a sub-credit facility for letters of credit, maturing on September 30, 2011;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Term A loan in the amount of $125.0 million funded at closing, payable in quarterly payments of interest and principal, maturing on September 30, 2011;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Term B-1 loan in the amount of $140.0 million funded at closing, payable in quarterly payments of interest and principal, maturing on September 30, 2012;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Term B-2 credit facility commitment of $180.0 million available on a delayed draw basis at any time within the first seven months of closing, and requiring that any proceeds of such
facility be used to pay the principal, interest, call premium and other amounts outstanding on the Senior Subordinated Notes, payable in quarterly payments of interest and principal, maturing on September 30, 2012;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Term A and B loans require additional excess cash flow payments similar to the Credit Agreement.
| | - |  | ------------------------------------------------------------------------------------------------



The interest on the revolving credit facility and term loans is determined based on rates that are calculated using an
Eurodollar rate or base rate at the Companys option. For the revolving credit facility and Term A loans the amount of the margin is determined by results of financial covenant ratios. Such margins range from 1.25% to 1.75% for Eurodollar rate
loans and 0.25% to 0.75% for base rate loans. For the Term B loans, the margins are 1.75% for Eurodollar rate loans and 0.75% for base rate loans.



The Restated Credit Agreement is secured by substantially all assets of the Company, including intangible assets. Under the terms of the Restated Credit
Agreement, the Company is required to meet certain financial tests, including a maximum leverage ratio and a minimum fixed charge coverage ratio. The Restated Credit Agreement certain covenants which, among other things, limit the incurrence of
additional indebtedness, liens, and encumbrances, changes of control, changes in the nature of the business, investments, dividends and other restricted payments, prepayments of certain indebtedness, certain transactions with affiliates, asset
sales, acquisitions, capital expenditures, mergers and consolidations, sales of receivables and other matters customarily restricted in such agreement. In addition, the Restated Credit Agreement contains customary negative and affirmative covenants
and customary events of default, funding conditions, representations and warranties and other customary provisions for senior secured credit facilities.



Notwithstanding the above maturity dates, in the event the 111/2% Senior Discount Notes remain outstanding as of May 1, 2011, then all the amounts outstanding under the Restated Credit Agreement, including revolving credit borrowings, letters of credit and Term A
and B loans, will become immediately due and payable in full on such date.



The Company estimates that it incurred $3.5 million in financing costs associated with the Restated Credit Agreement. The Company is in the process of evaluating the accounting for this transaction, which may result
in a loss on debt extinguishment during the fourth quarter of 2005.



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ASG CONSOLIDATED LLC AND SUBSIDIARIES



NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS(Continued)



Fuel Purchase Commitment for 2006



On October 27, 2005, the Company entered into an exclusive fuel
requirements agreement that obligates it to purchase its marine diesel fuel used in its fishing fleet from a third-party vendor. The commitment is for 4.5 million gallons of fuel to be delivered during the period January 1 to June 1,
2006 at a prices based on a market index.



Cross Currency
Interest Rate Swap Agreements



Effective November 4, 2005,
the Company entered into additional variable to fixed-rate cross currency interest swap contracts with an aggregate notional amount of $50.0 million, maturing in 2009. Under the terms of these contracts, the Company pays a fixed rate of interest in
Japanese yen and receives payments on a variable rate of interest in U.S. dollars based on the three-month LIBOR rate.



Fuel Derivative Contracts



During October and early November 2005, the Company entered into additional fuel derivative contracts whereby the Company pays a fixed price per gallon
and receives a floating price per gallon with payments calculated on notional amounts of 4.5 million gallons over the term of January to March 2006 and 2.0 million gallons over the term of January to October 2007.



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##### Table of Contents

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



The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and
related notes included elsewhere in this report. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws. Forward-looking statements can include words like
may, will, estimate, intend, continue, believe, expect, plan or anticipate and other similar expressions. Forward-looking statements include,
but are not limited to, statements concerning: future results of operations; future capital expenditures; environmental conditions and regulations; plans or intentions relating to acquisitions; our competitive strengths and weaknesses; future
financing needs; our business strategy; general economic conditions; trends that we anticipate in the industries and economies in which we operate; proposed new products, services or developments; and any assumptions underlying the foregoing.
Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in our forward-looking statements. Our actual results could differ
materially from those anticipated in the forward-looking statements for many reasons, including those described in our annual audited consolidated financial statements and notes thereto for the year ended December 31, 2004, contained in
Amendment No. 1 to our Registration Statement on Form S-4 as filed with the Securities and Exchange Commission on April 13, 2005.



Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We do not intend,
and we undertake no obligation, to revise or update any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this
report and in our other filings made with the SEC that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations.



Managements discussion and analysis of our financial condition and results of operations is based on our unaudited
condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America for interim condensed financial statements. The preparation of these financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our critical
accounting policies and estimates and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.



Business Overview



We are one of the largest integrated seafood companies in the U.S. in terms of revenues. We harvest and process a variety of fish species aboard our
sophisticated catcher-processor and freezer-longliner vessels and at our land-based processing facilities. We market our products to a diverse group of customers in North America, Asia and Europe. We are the largest harvester and at-sea processor of
pollock and hake and the largest processor of catfish in the U.S. In addition, we harvest or process additional seafood, including cod, scallops and yellowfin sole. We maintain an international marketing network through our U.S., Japan and Europe
offices and have developed long-term relationships with our U.S. and international customer base.



We operate in two principal operating segments, at-sea processing and land-based processing. The at-sea processing segment includes the harvesting and
processing of pollock, cod, hake and yellowfin sole on our vessels while at sea. The land-based processing segment includes the primary processing of catfish and scallops at our facilities in Alabama and Massachusetts and secondary processing of
pollock, cod and other white fish products in Massachusetts.



The most significant portion of our revenues and profitability is derived from our at-sea processing segment. The performance of our at-sea processing segment largely depends on the amount of pollock, cod and hake



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##### Table of Contents

resources that we harvest and the prevailing market prices for the related products we sell. Pollock represents the most significant portion of our harvest
and the most significant portion of our net sales both in terms of volume and revenues. These prices fluctuate from season to season and from year to year as a result of factors such as market conditions, inventory levels and production volumes.



The remaining portion of our revenues and profitability is
derived from our land-based processing segment. The performance of our land-based processing segment largely depends on the amount of catfish, pollock, cod and scallops that we process each year, the cost of fish we purchase and the prevailing
market prices for the related products we sell.



Revenues and Expenses



At-Sea Processing Segment



At-Sea Processing Revenues. Revenues in our at-sea processing segment
are primarily driven by the following factors:



| |  |  | the volume of pollock and other whitefish harvested annually by our catcher-processors and freezer-longliners;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | the quantity of finished product we are able to produce (determined by the flesh and roe recovery rates);
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | the prevailing market prices for the products we sell, such as roe, surimi (a fish protein paste used in products such as imitation lobster and crabmeat) and fillet block;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the timing of our sales of fish products; and
| | - |  | ---------------------------------------------



| |  |  | the Japanese yen to U.S. dollar exchange rate.
| | - |  | ----------------------------------------------



Harvest volumes. In addition to the portion of the directed pollock catch allocated to us under the Pollock Conservation Cooperative agreement, an
agreement among industry participants in the catcher-process sector, we historically have purchased additional pollock quota from other industry participants up to the 17.5% harvesting limit of the directed pollock catch. In addition, we
supplemented our share of the directed pollock catch in 2003, 2004 and 2005 by purchasing 36.4%, 54.0% and 54.0%, respectively, of the total community development quota (CDQ) allocated to Alaska Community Development Groups, which does not count
against the 17.5% harvesting limitation. All current CDQ agreements expire at the end of 2005 pursuant to the State of Alaska Community Development Quota program guidelines. However, we have entered into new agreements under similar terms with our
principal CDQ partners for the years 2006 through 2008.



Recovery rates. Increases in flesh and roe recovery rates, which represent the percentage of finished product produced from a whole fish, result in higher finished product volumes. Flesh recovery rate means the weight of processed
products, other than fishmeal and roe, relative to the weight of fish harvested, expressed as a percentage. Roe recovery rate means the weight of processed roe, relative to the weight of fish harvested, expressed as a percentage.



Market prices. Market prices for our at-sea processed products are
primarily influenced by the aggregate supply of products produced in any given year, the grade mix we produce, the anticipated inventory carryover for that year and changes in demand.



During fiscal years 1999 to 2004, our average pollock surimi prices have typically fluctuated within a range of
approximately 200 to 300 Japanese yen per kilogram. In the second half of 2003 and the first half of 2004, our average pollock surimi price was at the low end of this range, though surimi prices began to rise during the second half of 2004. This
trend has continued in the first three quarters of 2005. Pollock surimi prices are sensitive to grade mix composition, anticipated seasonal production, overall inventory levels and buyers speculation of anticipated price levels.



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##### Table of Contents

Our pollock roe is typically sold through an auction process. Between the years 2000 and 2004, our
average roe prices decreased primarily due to a decline in our grade mix. As a result of producing improved grades of roe in 2005, we realized higher average prices from our auctions. On a grade-by-grade basis, market prices have remained relatively
stable over the last few years.



Below is a chart illustrating
our average prices achieved for the years 2000 through 2004 for pollock surimi, pollock roe, deepskin and pollock block pin bone out products. The surimi and roe prices are noted in Japanese yen (¥) per kilogram, which is the unit price we
receive from our Japanese customers. The pollock deepskin and block pin bone out are noted in U.S. dollars per pound, which is the unit price we receive from our customers.



|                                |  |      |       |      |   |       |  |      |       |      |   |       |  |   |      
|------------------------------- |  | ---- | ----- | ---- | - | ----- |  | ---- | ----- | ---- | - | ----- |  | - | -----
|                                |  | 2000 |       | 2001 |   | 2002  |  | 2003 |       | 2004
|Pollock surimi ¥/kg             |  | ¥    | 218   |      | ¥ | 212   |  | ¥    | 278   |      | ¥ | 222   |  | ¥ | 197  
|Pollock roe ¥/kg(1)             |  | ¥    | 2,856 |      | ¥ | 2,247 |  | ¥    | 1,906 |      | ¥ | 1,778 |  | ¥ | 1,685
|Pollock deepskin $/lb           |  | $    | 1.32  |      | $ | 1.25  |  | $    | 1.24  |      | $ | 1.25  |  | $ | 1.24 
|Pollock block pin bone out $/lb |  | $    | 0.80  |      | $ | 0.88  |  | $    | 1.06  |      | $ | 1.04  |  | $ | 1.01 

---

|(1) | Average roe prices are for the A season only as this represents more than 95% of the total roe value for each year.
|--- | -------------------------------------------------------------------------------------------------------------------



Exchange rate effects. Because we sell large quantities of roe and
surimi to Japanese customers, a significant portion of our revenue is denominated in Japanese yen. Consequently, we could be at risk that any increase or decrease in the value of the Japanese yen relative to the dollar would increase or decrease the
amount of dollar revenues we record on the sales of our products in Japan. To mitigate the potentially adverse effect of fluctuations in the Japanese yen to U.S. dollar spot exchange rate, we enter into forward foreign currency contracts. It is our
risk management policy to hedge a target level of 80% of our forecasted Japanese yen sales over the next 12 months, 65% over months 13 to 24, 50% over months 25 to 36, and 35% over months 37 to 48.



Our profitability depends in part on revenue received in Japanese yen as a
result of sales in Japan. Japanese sales represented 39.6%, 24.9% and 27.0% of our total revenue in 2002, 2003 and 2004, respectively. A decline in the value of Japanese yen against the U.S. dollar would adversely affect our earnings from sales in
Japan. Fluctuations in currency are beyond our control and are unpredictable.During the nine months ended September 30, 2005, the value of the dollar increased by 10.5% against the Japanese yen, from ¥102.7 per U.S. dollar at the
beginning of the period to ¥113.5 per U.S. dollar at the end of the period. While we conduct hedging activities to mitigate the risk of currency fluctuations, these hedging activities may not be sufficient to provide complete protection against
loss and accordingly, any such fluctuations could adversely affect our revenues.



At-Sea Processing Expenses. The operating cost structure of our at-sea processing operations includes four main cost categories:



| |  |  | variable costs driven by revenue or product volume, such as crew compensation, product freight and storage, packaging and additives;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | vessel-related depreciation and amortization of cooperative and fishing rights;
| | - |  | -------------------------------------------------------------------------------



| |  |  | fixed costs that are incurred whether or not the vessel is deployed, such as quota purchases, insurance, repair and maintenance, moorage and general supplies; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | operating costs driven by vessel operations, such as fuel, nets and gear supplies, galley supplies, equipment rental, crew travel, observers and technicians.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



After depreciation expense, crew compensation
represents the largest operating cost for the vessel operations and is primarily a variable cost, structured to reward each crew member based upon an estimated value of the product. Quota purchase costs are calculated as an amount per ton harvested
and are incurred when we purchase quota amounts from our Alaska Community Development Group partners, catcher vessel owners and other third party fishery participants. Product freight is incurred when we transport the product to either our customer
or a cold storage facility. Storage costs are incurred for product entering a cold storage facility.



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Land-Based Processing Segment



Land-Based Processing Revenues. Revenues from our land-based
processing segment are primarily a function of our throughput volume of pollock, cod, catfish and scallops that we process and the prevailing market prices for those products.



Land-Based Processing Expenses. Operating costs related to our land-based processing operations are principally
comprised of the cost of raw material purchases, labor and operating costs. Operating costs include depreciation expense related to equipment and facilities used for processing and transportation.



Overall Expense Summary



Costs of sales include operating costs such as crew and factory personnel
compensation, quota purchase costs, seafood purchases, vessel fuel, packaging, insurance, product freight, other operating related expenses, amortization of cooperative and fishing rights and depreciation applicable to property, vessels and
equipment used in production. Selling, general and administrative expenses include employee compensation and benefits, rent expense, professional fees, promotional costs and other expenses, such as office equipment and supplies, not directly
involved in the production process.



Seasonality



The U.S. Bering Sea pollock fishery is split into two distinct fishing
seasons, known as the A and B seasons. The A season opens in January and typically ends in April. During the A season, pollock are spawning and therefore typically carry more high-value roe, making this season the more
profitable one. During the A season, we also produce other products such as surimi and fillet blocks, although yields on these products are slightly lower in A season compared to B season due to the prioritization of roe production in the A season.
Although the A season typically accounts for approximately 40% of our years total pollock harvest measured by weight, it represents a majority of our revenues for the year due to the higher value roe that is produced during the A season.



The pollock B season occurs in the latter half of the year,
typically beginning in June and extending through the end of October. The primary products produced in the B season are surimi and fillet blocks. The B season typically accounts for approximately 60% of our annual total pollock harvest.



The freezer-longliner Pacific cod fishery is also divided into two
seasons. Of the annual quota, approximately 60% is allocated to the A season and the remaining 40% is allocated to the B season. The A season begins January 1st and runs until the season quota is caught, and the B season begins in mid-August
and runs until the season quota is caught.



To illustrate the
seasonal impact of our distinct fishing seasons for all of our operations, the table below shows our quarterly dispersion of our revenues and gross profit, expressed in terms of percentage, for the years ended December 31, 2002, 2003 and 2004:



|              |  |          |   |  |          |   |  |    |   |  |    |  
|------------- |  | -------- | - |  | -------- | - |  | -- | - |  | -- | -
|              |  | A Season |   |  | B Season |  
|              |  | Q1       |   |  | Q2       |   |  | Q3 |   |  | Q4 |  
|Revenue:      |  |          |   |  |          |   |  |    |   |  |    |  
|2002          |  | 25       | % |  | 30       | % |  | 22 | % |  | 23 | %
|2003          |  | 27       |   |  | 30       |   |  | 20 |   |  | 23 |  
|2004          |  | 29       |   |  | 28       |   |  | 20 |   |  | 23 |  
|Gross profit: |  |          |   |  |          |   |  |    |   |  |    |  
|2002          |  | 36       | % |  | 30       | % |  | 23 | % |  | 11 | %
|2003          |  | 40       |   |  | 32       |   |  | 18 |   |  | 10 |  
|2004          |  | 47       |   |  | 28       |   |  | 20 |   |  | 4  |  



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##### Table of Contents

Our fishing seasons, including the important January-to-April pollock season, straddle more than one
quarter. Additionally, the timing of our sales fluctuates from quarter to quarter. As a result, the timing of the recognition of significant amounts of revenues can vary from one quarter to another.



Results of Operations



Overview of Operating Results



The following table compares selected statements of operations data, expressed in terms of percentage of revenue, for the
three and nine months ended September 30, 2004 and 2005.



|                            |  |                                  |    |  |                                 |   |  |      |   |  |      |  
|--------------------------- |  | -------------------------------- | -- |  | ------------------------------- | - |  | ---- | - |  | ---- | -
|                            |  | Three Months Ended September 30, |    |  | Nine Months Ended September 30, |  
|                            |  | 2004                             |    |  | 2005                            |   |  | 2004 |   |  | 2005 |  
|Net sales and other revenue |  | 100                              | %  |  | 100                             | % |  | 100  | % |  | 100  | %
|Cost of sales               |  | 80                               |    |  | 79                              |   |  | 76   |   |  | 76   |  
|                            |  |                                  |    |  |                                 |   |  |      |   |  |      |  
|Gross profit                |  | 20                               |    |  | 21                              |   |  | 24   |   |  | 24   |  
|Operating expenses          |  | 12                               |    |  | 9                               |   |  | 9    |   |  | 9    |  
|                            |  |                                  |    |  |                                 |   |  |      |   |  |      |  
|Operating income            |  | 8                                |    |  | 12                              |   |  | 15   |   |  | 15   |  
|Other income (expense), net |  | (25                              | )  |  | (6                              | ) |  | (13  | ) |  | (3   | )
|                            |  |                                  |    |  |                                 |   |  |      |   |  |      |  
|Net income (loss)           |  | (17                              | )% |  | 6                               | % |  | 2    | % |  | 12   | %
|                            |  |                                  |    |  |                                 |   |  |      |   |  |      |  



Three Months
Ended September 30, 2005 Compared to the Three Months Ended September 30, 2004



Revenue. The following table compares selected segment revenue data presented in amount and as a percentage of total revenue for the three months
ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                             |  |                                  |      |   |                     |     |   |        |   |       |         |  |     |   |  |   |      |   |  |    |  
|---------------------------- |  | -------------------------------- | ---- | - | ------------------- | --- | - | ------ | - | ----- | ------- |  | --- | - |  | - | ---- | - |  | -- | -
|                             |  | Three Months Ended September 30, |      |   | Increase (Decrease) |    
|                             |  | 2004                             |      |   | 2005                |     |   | Amount |   |       | Percent | 
|Net sales and other revenue: |  |                                  |      |   |                     |     |   |        |   |       |         |  |     |   |  |   |      |   |  |    |  
|At-sea processing            |  | $                                | 50.0 |   |                     | 54  | % |        | $ | 56.4  |         |  | 56  | % |  | $ | 6.4  |   |  | 13 | %
|Land-based processing        |  |                                  | 49.5 |   |                     | 53  |   |        |   | 50.8  |         |  | 51  |   |  |   | 1.3  |   |  | 3  |  
|Intersegment elimination     |  |                                  | (6.5 | ) |                     | (7  | ) |        |   | (6.8  | )       |  | (7  | ) |  |   | (0.3 | ) |  | (5 | )
|                             |  |                                  |      |   |                     |     |   |        |   |       |         |  |     |   |  |   |      |   |  |    |  
|Total revenue                |  | $                                | 93.0 |   |                     | 100 | % |        | $ | 100.4 |         |  | 100 | % |  | $ | 7.4  |   |  | 8  | %
|                             |  |                                  |      |   |                     |     |   |        |   |       |         |  |     |   |  |   |      |   |  |    |  



At-sea processing
sales increased in the third quarter primarily as a result of higher prices for our surimi and block products and higher volumes of our hake surimi and pollock block products. This increase was partially offset by lower sales volumes of our pollock
surimi and B season roe products as compared to 2004. Land-based processing sales slightly increased for the third quarter primarily due to a higher sales prices generated from our scallop products.



Gross profit.The following table compares selected segment gross
profit data presented in amount and as a percentage of related segment revenue for the three months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                         |  |                                  |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  
|------------------------ |  | -------------------------------- | ---- | - | ------------------- | --- | - | ------ | - | ---- | ------- |  | --- | - |  | - | ---- | - |  | --- | -
|                         |  | Three Months Ended September 30, |      |   | Increase (Decrease) |    
|                         |  | 2004                             |      |   | 2005                |     |   | Amount |   |      | Percent | 
|Gross profit:            |  |                                  |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  
|At-sea processing        |  | $                                | 18.3 |   |                     | 37  | % |        | $ | 20.7 |         |  | 37  | % |  | $ | 2.4  |   |  | 13  | %
|Land-based processing    |  |                                  | 3.5  |   |                     | 7   |   |        |   | 4.1  |         |  | 8   |   |  |   | 0.6  |   |  | 17  |  
|Intersegment elimination |  |                                  | (3.0 | ) |                     | (46 | ) |        |   | (3.4 | )       |  | (50 | ) |  |   | (0.4 | ) |  | (13 | )
|                         |  |                                  |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  
|Total gross profit       |  | $                                | 18.8 |   |                     | 20  | % |        | $ | 21.4 |         |  | 21  | % |  | $ | 2.6  |   |  | 14  | %
|                         |  |                                  |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  



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##### Table of Contents

At-sea processing gross profit for the third quarter increased in amount, but remained relatively
constant as a percentage of related revenue, primarily as a result of the revenue factors described above, which is partially offset by higher fuel and freight costs during 2005. Land-based processing gross profit for the third quarter slightly
increased in amount and as a percentage of related revenue primarily as a result of the revenue factors described above and higher catfish production yields, which was partially offset by higher scallop purchase costs and higher production costs in
our land-based processing operations.



Operating
expenses. The following table compares selected operating expenses in amount and as a percentage of total revenue for the three months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between
the periods (amounts in millions):



|                                    |  |                                  |      |   |                     |    |   |        |   |      |         |  |   |   |  |   |      |   |  |     |   
|----------------------------------- |  | -------------------------------- | ---- | - | ------------------- | -- | - | ------ | - | ---- | ------- |  | - | - |  | - | ---- | - |  | --- | --
|                                    |  | Three Months Ended September 30, |      |   | Increase (Decrease) |   
|                                    |  | 2004                             |      |   | 2005                |    |   | Amount |   |      | Percent | 
|Operating expenses:                 |  |                                  |      |   |                     |    |   |        |   |      |         |  |   |   |  |   |      |   |  |     |   
|Selling, general and administrative |  | $                                | 7.2  |   |                     | 8  | % |        | $ | 9.2  |         |  | 9 | % |  | $ | 2.0  |   |  | 28  | % 
|Equity-based compensation (benefit) |  |                                  | (3.9 | ) |                     | (4 | ) |        |   | (0.2 | )       |  |  |   |  |   | 3.7  |   |  | 95  |   
|Amortization and depreciation       |  |                                  | 0.8  |   |                     |   |   |        |   | 0.8  |         |  |  |   |  |   |     |   |  |    |   
|Goodwill impairment                 |  |                                  | 7.2  |   |                     | 8  |   |        |   |     |         |  |  |   |  |   | (7.2 | ) |  |     |   
|                                    |  |                                  |      |   |                     |    |   |        |   |      |         |  |   |   |  |   |      |   |  |     |   
|Total operating expenses            |  | $                                | 11.3 |   |                     | 12 | % |        | $ | 9.8  |         |  | 9 | % |  | $ | (1.5 | ) |  | (13 | )%
|                                    |  |                                  |      |   |                     |    |   |        |   |      |         |  |   |   |  |   |      |   |  |     |   



Selling, general and
administrative expenses for the third quarter, excluding equity-based compensation (benefit), increased primarily as a result of higher corporate transportation costs and professional fees during the third quarter of 2005 as compared to 2004. The
change in equity-based compensation benefit resulted primarily from the change in the estimated fair value of options accounted for under variable accounting. Amortization and depreciation of other assets remained consistent between periods. During
the third quarter of 2004, we wrote off goodwill related to our investment in our catfish operations.



Other income (expense), net. The following table compares selected other income (expense), net in amount and as a percentage of total revenue for
the three months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                                                 |  |                                  |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |      |   |  |     |   
|------------------------------------------------ |  | -------------------------------- | ----- | - | ------------------- | --- | -- | ------ | - | ----- | ------- |  | --- | -- |  | - | ---- | - |  | --- | --
|                                                 |  | Three Months Ended September 30, |       |   | Increase (Decrease) |    
|                                                 |  | 2004                             |       |   | 2005                |     |    | Amount |   |       | Percent | 
|Other income (expense), net:                     |  |                                  |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |      |   |  |     |   
|Interest expense                                 |  | $                                | (9.6  | ) |                     | (10 | )% |        | $ | (14.6 | )       |  | (15 | )% |  | $ | (5.0 | ) |  | (52 | )%
|Foreign exchange gains                           |  |                                  | 5.9   |   |                     | 6   |    |        |   | 4.9   |         |  | 5   |    |  |   | (1.0 | ) |  | (17 | ) 
|Other derivatives gains (losses)                 |  |                                  | (1. 2 | ) |                     | (1  | )  |        |   | 4.5   |         |  | 4   |    |  |   | 5.7  |   |  |     |   
|Write off of recapitalization transactions costs |  |                                  | (18.9 | ) |                     | (20 | )  |        |   |      |         |  |    |    |  |   | 18.9 |   |  |     |   
|Other expense                                    |  |                                  |      |   |                     |    |    |        |   | (0.4  | )       |  |    |    |  |   | (0.4 | ) |  |    |   
|                                                 |  |                                  |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |      |   |  |     |   
|Other income (expense), net                      |  | $                                | (23.8 | ) |                     | (25 | )% |        | $ | (5.6  | )       |  | (6  | )% |  | $ | 18.2 |   |  | 76  | % 
|                                                 |  |                                  |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |      |   |  |     |   



Interest expense
increased due to the addition of the amortization of discounts and financing costs of $3.8 million related to our Senior Discount Notes, which were issued in October 2004, and general increases in interest rates on our variable rate debt. The
following table compares the average outstanding debt levels and interest rates on borrowed funds for the three months ended September 30, 2004 and 2005 (amounts in millions):



|                         |  |                                  |       |   |                     |   |       |        |  |         |      |  |    |  
|------------------------ |  | -------------------------------- | ----- | - | ------------------- | - | ----- | ------ |  | ------- | ---- |  | -- | -
|                         |  | Three Months Ended September 30, |       |   | Increase (Decrease) |  
|                         |  | 2004                             |       |   | 2005                |   |       | Amount |  | Percent |     
|Average outstanding debt |  | $                                | 498.9 |   |                     | $ | 578.2 |        |  | $       | 79.3 |  | 16 | %
|Average interest rate    |  |                                  | 6.02  | % |                     |   | 8.81  | %      |  |         |      |  |    |  



24



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##### Table of Contents

Foreign exchange gains decreased primarily due to a number of factors including changes in the
composition of our portfolio of foreign exchange contracts and the underlying forward points caused by changes in the duration of our contracts and a general increase in the inherent market discount rates. This decrease is partially offset by a
stronger average U.S. dollar versus the Japanese yen when compared to the prior year quarter.



Other derivative gains increased resulting from both the realized and unrealized net gains on cross currency interest rate swap contracts from the effects of a stronger U.S. dollar versus Japanese yen exchange rate at
the beginning and end of the third quarter of 2005 versus 2004 and general increases in interest rates, and realized and unrealized gains on fuel contracts from the effects of rising fuel prices.



The non-recurring write off of recapitalization transaction costs related to
the cancelled income deposit securities (IDS) offering and senior subordinated notes was charged to earnings during the third quarter of 2004.



Other expense increased in 2005 resulting from the classification of expenses related to one of our two aircraft as other expense. In March 2005, we
entered into a two-year charter arrangement of the aircraft with a third party. As a result, expenses related to this aircraft are included in other, net of charter income. Previously, the aircraft was used primarily for internal use and its related
expenses were classified as a component of selling, general and administrative expenses, net of incidental rental income.



Nine months ended September 30, 2005 compared to the nine months ended September 30, 2004



Revenue. The following table compares selected segment revenue data
presented in amount and as a percentage of total revenue for the nine months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                             |  |                                 |       |   |                     |     |   |        |   |         |   |  |     |   |  |   |      |  |   |  
|---------------------------- |  | ------------------------------- | ----- | - | ------------------- | --- | - | ------ | - | ------- | - |  | --- | - |  | - | ---- |  | - | -
|                             |  | Nine Months Ended September 30, |       |   | Increase (Decrease) |    
|                             |  | 2004                            |       |   | 2005                |     |   | Amount |   | Percent |  
|Net sales and other revenue: |  |                                 |       |   |                     |     |   |        |   |         |   |  |     |   |  |   |      |  |   |  
|At-sea processing            |  | $                               | 224.0 |   |                     | 63  | % |        | $ | 235.1   |   |  | 62  | % |  | $ | 11.1 |  | 5 | %
|Land-based processing        |  |                                 | 148.2 |   |                     | 42  |   |        |   | 158.3   |   |  | 42  |   |  |   | 10.1 |  | 7 |  
|Intersegment elimination     |  |                                 | (17.0 | ) |                     | (5  | ) |        |   | (16.0   | ) |  | (4  | ) |  |   | 1.0  |  | 6 |  
|                             |  |                                 |       |   |                     |     |   |        |   |         |   |  |     |   |  |   |      |  |   |  
|Total revenue                |  | $                               | 355.2 |   |                     | 100 | % |        | $ | 377.4   |   |  | 100 | % |  | $ | 22.2 |  | 6 | %
|                             |  |                                 |       |   |                     |     |   |        |   |         |   |  |     |   |  |   |      |  |   |  



At-sea processing
sales increased primarily as a result of higher prices for our pollock surimi, roe and block, as well as higher sales volumes of hake and yellowfin sole products. This increase was partially offset by lower sales volumes of pollock roe and block
products, as well as pollock surimi due to a lower amount of carryover inventory than in the prior year. Land-based processing sales increased primarily due to higher sales volumes and prices generated from our secondary processed products and
higher prices for our scallop products, which was partially offset by lower catfish sales volumes.



Gross profit.The following table compares selected segment gross profit data presented in amount and as a percentage of related segment revenue
for the nine months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                         |  |                                 |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  
|------------------------ |  | ------------------------------- | ---- | - | ------------------- | --- | - | ------ | - | ---- | ------- |  | --- | - |  | - | ---- | - |  | --- | -
|                         |  | Nine Months Ended September 30, |      |   | Increase (Decrease) |    
|                         |  | 2004                            |      |   | 2005                |     |   | Amount |   |      | Percent | 
|Gross profit:            |  |                                 |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  
|At-sea processing        |  | $                               | 81.3 |   |                     | 36  | % |        | $ | 87.2 |         |  | 37  | % |  | $ | 5.9  |   |  | 7   | %
|Land-based processing    |  |                                 | 11.7 |   |                     | 8   |   |        |   | 12.5 |         |  | 8   |   |  |   | 0.8  |   |  | 7   |  
|Intersegment elimination |  |                                 | (7.8 | ) |                     | (46 | ) |        |   | (8.6 | )       |  | (54 | ) |  |   | (0.8 | ) |  | (10 | )
|                         |  |                                 |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  
|Total gross profit       |  | $                               | 85.2 |   |                     | 24  | % |        | $ | 91.1 |         |  | 24  | % |  | $ | 5.9  |   |  | 7   | %
|                         |  |                                 |      |   |                     |     |   |        |   |      |         |  |     |   |  |   |      |   |  |     |  



25



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##### Table of Contents

At-sea processing gross profit increased in amount and slightly as percentage of related revenue,
primarily as a result of the revenue factors described above, which is partially offset by higher fuel and freight costs during 2005. Land-based processing gross profit increased in amount, but remained relatively constant as a percentage of related
revenue, primarily as a result of the revenue factors described above and higher catfish production yields, which was partially offset by higher scallop purchase costs and higher production costs in our land-based processing operations.



Operating expenses. The following table compares selected operating
expenses in amount and as a percentage of total revenue for the nine months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                                    |  |                                 |      |   |                     |    |   |        |   |      |         |   |   |  |   |      |   |  |    |  
|----------------------------------- |  | ------------------------------- | ---- | - | ------------------- | -- | - | ------ | - | ---- | ------- | - | - |  | - | ---- | - |  | -- | -
|                                    |  | Nine Months Ended September 30, |      |   | Increase (Decrease) |   
|                                    |  | 2004                            |      |   | 2005                |    |   | Amount |   |      | Percent |  
|Operating expenses:                 |  |                                 |      |   |                     |    |   |        |   |      |         |   |   |  |   |      |   |  |    |  
|Selling, general and administrative |  | $                               | 24.9 |   |                     | 7  | % |        | $ | 29.2 |         | 8 | % |  | $ | 4.3  |   |  | 17 | %
|Equity-based compensation (benefit) |  |                                 | (3.3 | ) |                     | (1 | ) |        |   | 1.0  |         |  |   |  |   | 4.3  |   |  |    |  
|Amortization and depreciation       |  |                                 | 2.3  |   |                     | 1  |   |        |   | 2.4  |         | 1 |   |  |   | 0.1  |   |  | 4  |  
|Goodwill impairment                 |  |                                 | 7.2  |   |                     | 2  |   |        |   |     |         |  |   |  |   | (7.2 | ) |  |    |  
|                                    |  |                                 |      |   |                     |    |   |        |   |      |         |   |   |  |   |      |   |  |    |  
|Total operating expenses            |  | $                               | 31.1 |   |                     | 9  | % |        | $ | 32.6 |         | 9 | % |  | $ | 1.5  |   |  | 5  | %
|                                    |  |                                 |      |   |                     |    |   |        |   |      |         |   |   |  |   |      |   |  |    |  



Selling, general and
administrative expenses, excluding equity-based compensation, increased during 2005 primarily resulting from higher corporate transportation costs and professional fees as compared to 2004. Additionally during 2005, a $0.7 million provision was
charged to earnings for amounts due from a large retail customer of our land-based processing segment that filed for bankruptcy protection in the U.S in the first quarter of 2005. During 2004, sales to this customer represented less than 1% of our
total revenues. The change in equity-based compensation (benefit) expense resulted primarily from the change in the estimated fair value of options accounted for under variable accounting. Amortization and depreciation of other assets remained
relatively consistent between periods. During 2004, we wrote off goodwill related to our investment in our catfish operations.



Other income (expense), net. The following table compares selected other income (expense), net in amount and as a percentage of total revenue for
the nine months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                                                 |  |                                 |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |       |   |  |     |   
|------------------------------------------------ |  | ------------------------------- | ----- | - | ------------------- | --- | -- | ------ | - | ----- | ------- |  | --- | -- |  | - | ----- | - |  | --- | --
|                                                 |  | Nine Months Ended September 30, |       |   | Increase (Decrease) |    
|                                                 |  | 2004                            |       |   | 2005                |     |    | Amount |   |       | Percent | 
|Other income (expense), net:                     |  |                                 |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |       |   |  |     |   
|Interest expense                                 |  | $                               | (29.0 | ) |                     | (8  | )% |        | $ | (43.2 | )       |  | (11 | )% |  | $ | (14.2 | ) |  | (49 | )%
|Foreign exchange gains                           |  |                                 | 3.8   |   |                     | 1   |    |        |   | 18.7  |         |  | 5   |    |  |   | 14.9  |   |  | 392 |   
|Other derivatives gains (losses)                 |  |                                 | (1.2  | ) |                     |    |    |        |   | 13.1  |         |  | 3   |    |  |   | 14.3  |   |  |     |   
|Write off of recapitalization transactions costs |  |                                 | (18.9 | ) |                     | (6  | )  |        |   |      |         |  |    |    |  |   | 18.9  |   |  |     |   
|Other expense                                    |  |                                 |      |   |                     |    |    |        |   | (0.9  | )       |  |    |    |  |   | (0.9  | ) |  |     |   
|                                                 |  |                                 |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |       |   |  |     |   
|Other income (expense), net                      |  | $                               | (45.3 | ) |                     | (13 | )% |        | $ | (12.3 | )       |  | (3  | )% |  | $ | 33.0  |   |  | 73  | % 
|                                                 |  |                                 |       |   |                     |     |    |        |   |       |         |  |     |    |  |   |       |   |  |     |   



26



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##### Table of Contents

Interest expense increased due to the addition of the amortization of discounts and financing costs of
$11.1 million related to our Senior Discount Notes, which were issued in October 2004, and general increases in interest rates on our variable rate debt. The following table compares the average outstanding debt levels and interest rates on borrowed
funds for the nine months ended September 30, 2004 and 2005 (amounts in millions):



|                         |  |                                 |       |   |                     |   |       |        |  |         |      |  |    |  
|------------------------ |  | ------------------------------- | ----- | - | ------------------- | - | ----- | ------ |  | ------- | ---- |  | -- | -
|                         |  | Nine Months Ended September 30, |       |   | Increase (Decrease) |  
|                         |  | 2004                            |       |   | 2005                |   |       | Amount |  | Percent |     
|Average outstanding debt |  | $                               | 501.2 |   |                     | $ | 588.9 |        |  | $       | 87.7 |  | 17 | %
|Average interest rate    |  |                                 | 5.19  | % |                     |   | 8.50  | %      |  |         |      |  |    |  



Foreign exchange gains
increased primarily due to a stronger average U.S. dollar versus the Japanese yen when compared to the similar prior year period.



Other derivative gains increased resulting from both the realized and unrealized gains on cross currency interest rate swap contracts from the effects of
a stronger U.S. dollar versus Japanese yen exchange rate at the beginning and end of the first and third quarters of 2005 versus 2004 and general increases in interest rates, and realized and unrealized gains on fuel contracts from the effects of
rising fuel prices.



The non recurring write off of
recapitalization transaction costs related to the cancelled income deposit securities (IDS) offering and senior subordinated notes was charged to earnings in 2004.



Other expense increased in 2005 resulting from the classification of expenses related to one of our two aircraft as other
expense. In March 2005, we entered into a two-year charter arrangement of the aircraft with a third party. As a result, expenses related to this aircraft are included in other, net of charter income. Previously, the aircraft was used primarily for
internal use and its related expenses were classified as a component of selling, general and administrative expenses, net of incidental rental income.



Liquidity and Capital Resources



Overview



Our long-term debt as of September 30, 2005 consists of amounts borrowed pursuant to our Credit Agreement with a syndicate of banks (Former Credit
Facility), Senior Subordinated Notes issued by American Seafood Group LLC (ASG), and Senior Discount Notes issued by ASG Consolidated and ASG Finance in October 2004. On October 6, 2005, we entered into a new senior credit facility (New Credit
Facility) in connection with the refinancing of the Former Credit Facility.



The proceeds of the New Credit Facility were used to repay amounts owed under the Former Credit Facility. The new facility provides for: (i) a revolving credit facility commitment of $75.0 million, with a sub-credit
facility for letters of credit, maturing on September 30, 2011, and (ii) term debt loans in the amount of $265.0 million funded at closing, payable in quarterly payments of interest and principal, with $125.0 million of the term loans maturing
on September 30, 2011 and $140.0 million on September 30, 2012. In addition, the New Credit Facility provides a term debt commitment of $180.0 million available on a delayed draw basis at any time within the first seven months of closing
that requires any proceeds of such facility be used to pay the principal, interest, call premium and other amounts outstanding on the Senior Subordinated Notes. The delayed draw loan requires quarterly payments of interest and principal and matures
on September 30, 2012. Notwithstanding the above maturity dates, in the event the 111/2% Senior Discount
Notes remain outstanding as of May 1, 2011, then all amounts outstanding under the New Credit Facility, including revolving credit borrowings, letters of credit and the term loans, will become immediately due and payable in full on such date.



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Our short-term and long-term liquidity needs arise primarily from interest payments on our debt, which we
expect to be between $13.0 million and $14.0 million for the last quarter of 2005. The following schedule summarizes our scheduled future principal payments, including accreted interest added to the principal of our Senior Discount Notes of $57.2
million. The schedule presents: (i) the scheduled principal payments before the refinancing with amounts as of September 30, 2005; (ii) the changes resulting from the New Credit Facility including the additional borrowing of $7.3
million; and (iii) the principal payments after the refinancing, excluding the possible future affect of the delayed draw term loan (in millions):



|                                                          |  |                          |     |      |   |      |      |  |   |      |   |  |      |       |   |            |   |        |   |  |   |       |  |   |      
|--------------------------------------------------------- |  | ------------------------ | --- | ---- | - | ---- | ---- |  | - | ---- | - |  | ---- | ----- | - | ---------- | - | ------ | - |  | - | ----- |  | - | -----
|                                                          |  | Year Ending December 31, |     |      |   |      |     
|                                                          |  | 2005                     |     | 2006 |   |      | 2007 |  |   | 2008 |   |  | 2009 |       |   | Thereafter |   | Total 
|                                                          |  | (3 months)               |     |      |   |      |      |  |   |      |   |  |      |       |   |            |   |       
|Scheduled principal payments:                             |  |                          |     |      |   |      |      |  |   |      |   |  |      |       |   |            |   |        |   |  |   |       |  |   |      
|Before refinancing                                        |  | $                        |    |      | $ | 9.9  |      |  | $ | 54.2 |   |  | $    | 29.9  |   |            | $ | 197.7  |   |  | $ | 371.0 |  | $ | 662.7
|Increase (decrease) in payments and additional borrowings |  |                          | 1.9 |      |   | (1.5 | )    |  |   | (8.6 | ) |  |      | (15.2 | ) |            |   | (179.9 | ) |  |   | 210.6 |  |   | 7.3  
|                                                          |  |                          |     |      |   |      |      |  |   |      |   |  |      |       |   |            |   |        |   |  |   |       |  |   |      
|After refinancing                                         |  | $                        | 1.9 |      | $ | 8.4  |      |  | $ | 45.6 |   |  | $    | 14.7  |   |            | $ | 17.8   |   |  | $ | 581.6 |  | $ | 670.0
|                                                          |  |                          |     |      |   |      |      |  |   |      |   |  |      |       |   |            |   |        |   |  |   |       |  |   |      



In addition, the New
Credit Facility requires excess cash flow principal payments similar to those under the Former Credit Facility, which have not been included in the above schedule. We made excess cash flow payments of $8.3 million and $10.0 million during March
2004 and 2005, respectively. We also made additional discretionary principal payments on the term loans of $18.0 million during the nine months ended September 30, 2005. Further, we increased our borrowings under our revolving credit facility
by $17.5 million during the nine months ended September 30, 2005.



On November 10, 2005, we increased borrowings under our revolving credit facility by $9.5 million in order to fund a redemption by ASLP of limited partnership units.



Additional cash may be needed to support our working capital requirements resulting from the seasonality of our business and
potential acquisitions to support business growth. We expect to fund our liquidity needs primarily with cash generated from operations and, to the extent necessary, through additional borrowings under our revolving line of credit, which matures in
2011.



Historical Cash Flow



Cash flows. The following table compares selected cash flow
information for the nine months ended September 30, 2004 and 2005, and presents the corresponding change in amount and percentage between the periods (amounts in millions):



|                                                |  |                                 |       |   |                               |   |       |        |  |   |         |   |  |     |   
|----------------------------------------------- |  | ------------------------------- | ----- | - | ----------------------------- | - | ----- | ------ |  | - | ------- | - |  | --- | --
|                                                |  | Nine Months Ended September 30, |       |   | Cash Flow Increase (Decrease) |  
|                                                |  | 2004                            |       |   | 2005                          |   |       | Amount |  |   | Percent |  
|Cash flows from (used in):                      |  |                                 |       |   |                               |   |       |        |  |   |         |   |  |     |   
|Operating activities                            |  | $                               | 43.0  |   |                               | $ | 34.9  |        |  | $ | (8.1    | ) |  | (19 | )%
|Investing activities                            |  |                                 | (12.2 | ) |                               |   | (13.9 | )      |  |   | (1.7    | ) |  | (14 | ) 
|Financing activities                            |  |                                 | (34.1 | ) |                               |   | (16.5 | )      |  |   | 17.6    |   |  | 52  |   
|                                                |  |                                 |       |   |                               |   |       |        |  |   |         |   |  |     |   
|Net increase (decrease) in cash and equivalents |  | $                               | (3.3  | ) |                               | $ | 4.5   |        |  | $ | 7.8     |   |  | 236 | % 
|                                                |  |                                 |       |   |                               |   |       |        |  |   |         |   |  |     |   



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Cash flow from operating activities was higher in 2004 primarily resulting from the sale of larger
volumes of carryover inventory from the prior year B season as compared to 2005. Additionally, our working capital increased in 2005, resulting primarily from higher inventories, which is partially offset by increases in accounts payable and accrued
expenses and a decrease in trade receivables. Historically, we have limited fishing activity during the last quarter of the year and begin fishing again during our first quarter. As a result, the carrying amount of at-sea processing inventories is
lower at the end of the fourth quarter and increases with our first three quarters of fishing operations. Similarly, in our first three quarters, accounts payable and accrued expenses increase primarily because of the accrual of crew share
compensation and other operational expenses that are not present when we are not fishing. Additionally, accrued interest payable increased because of the timing of the interest payments on the Senior Subordinated Notes that are paid semiannually in
April and October.



Cash flow used in investing activities was
higher in 2005 due to a $1.9 million increase in capital expenditures and capital projects in process and our $1.6 million purchase of fishing rights in 2005, and as compared to our purchase of the remaining minority ownership interest in Pacific
Longline Company LLC for $1.8 million in January 2004.



Cash
used in financing activities was significantly higher in 2004 primarily because of a net increase in the repayment of our debt by $11.9 million as compared to the same period in 2005. As a policy, we repay our debt as required by our loan
agreements, and we pay down our revolving and term debt to reduce our interest cost and improve our leverage ratio as cash is available from our operating activities. Additionally in 2004, we incurred costs related to our offering of income deposit
securities and subordinated notes, other financing costs and higher tax and other distributions to members.



At September 30, 2005, we had $6.0 million of cash and cash equivalents, and $41.0 million available under our revolving credit facility. We believe
that the cash we expect to generate from operations and borrowing capabilities under our revolving credit facility will be sufficient to meet our liquidity requirements in the foreseeable future.



Other Factors Impacting Liquidity



Cross Currency Interest Rate Swaps. In August 2004, primarily in
order to further mitigate our risk related to the impact of fluctuations in the spot rate of the Japanese yen and interest rates, we entered into variable to fixed-rate cross currency interest swap contracts. These swap agreements require us to pay
on a quarterly basis a fixed rate of interest in Japanese yen and receive payments on a variable rate of interest in U.S. dollars based on the three-month LIBOR rate. During the three and nine months ended September 30, 2005, we realized a gain
(loss) of $(0.2) million and $0.4 million, respectively, related to settlements under these arrangements.



Tax Matters. We and our significant subsidiaries are flow-through entities for income tax purposes. We have been and will continue to be obligated
under our limited liability agreement to make distributions to our members for the tax liabilities they may incur on their allocated portion of our taxable income. More specifically, ASG will make distributions to us, as allowed by our credit
facilities, in amounts equal to the theoretical tax on our taxable income (determined without regard to deductions for interest on the notes or other deductions incurred by entities above ASG), which we may in turn distribute to our members (without
regard to the actual tax status of each member).



Capital
Expenditures. The majority of our capital expenditures relates to our catcher-processor fleet and includes items such as fishing gear, improvements to vessel factory processing equipment and major scheduled shipyard maintenance. Capital
expenditures have been funded from cash flows from operations and borrowings under our revolving credit facility. Major scheduled shipyard maintenance costs relate principally to our periodic overhauls and replacements performed generally on a
three-year cycle. These costs are capitalized and depreciated over the period through the next scheduled major shipyard maintenance session.



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Capital expenditures reflected below are additions to property, vessels and equipment that have been
placed in service. Capital projects in process will be reclassified to property, vessels and equipment when completed and placed in service. The following table summarizes our capital expenditures and capital projects in process and repairs and
maintenance expense for the nine months ended September 30, 2004 and 2005 (in millions):



|                                                                          |  |                                 |      |      |   |     
|------------------------------------------------------------------------- |  | ------------------------------- | ---- | ---- | - | ----
|                                                                          |  | Nine Months Ended September 30,
|                                                                          |  | 2004                            |      | 2005
|Capital expenditures:                                                     |  |                                 |      |      |   |     
|Purchase of property, vessels and equipment                               |  | $                               | 10.5 |      | $ | 11.3
|Reclassification of prior period capital projects in progress and deposit |  |                                 | 0.4  |      |   | 1.9 
|                                                                          |  |                                 |      |      |   |     
|Total capital expenditures                                                |  |                                 | 10.9 |      |   | 13.2
|Capital projects in process                                               |  |                                 |     |      |   | 1.0 
|                                                                          |  |                                 |      |      |   |     
|Total capital expenditures and capital projects in process                |  | $                               | 10.9 |      | $ | 14.2
|                                                                          |  |                                 |      |      |   |     
|Repairs and maintenance expense                                           |  | $                               | 6.3  |      | $ | 8.9 
|                                                                          |  |                                 |      |      |   |     



The $2.3 million
increase in capital expenditures was primarily attributable to the timing of major scheduled shipyard maintenance, the purchase of fishing gear, including the reclassification of $1.9 million from the prior years capital projects in process
and a deposit on equipment. The capital projects in process as of September 30, 2005 was comprised primarily of an opportunistic purchase of used processing equipment of $0.7 million related to our fishing vessels. Repairs and maintenance expense
increased primarily as a result of the timing of vessel repairs and maintenance and unexpected vessel repairs during 2005.



Business Development. From time to time, we may acquire businesses and operating assets such as vessels with fishing rights. We expect that these
acquisitions will be funded from cash flow from operations or borrowings under our credit facility.



On August 29, 2005, we agreed to purchase the catcher vessel Forum Star, related gear and equipment and certain cod fishing rights in exchange
for $10.7 million. The first closing occurred on August 29, 2005 at which we acquired cod fishing rights in exchange for $1.5 million and incurred related costs of $0.1 million. On October 13, 2005, we completed the acquisition of the
vessel, gear, equipment and remaining pollock and scallop fishing rights in exchange for $9.2 million, consisting of $8.5 million in cash and a note payable of $0.7 million. The acquired assets will be placed into service during January 2006.



Debt Covenants



The Former Credit Facility requires us to meet certain financial tests,
including a maximum leverage ratio, a minimum interest coverage ratio and a minimum fixed charge coverage ratio. The leverage ratio is calculated for purposes of the Former Credit Facility based on the ratio of Adjusted EBITDA to outstanding debt
(both as defined in the Former Credit Facility). In addition, the Former Credit Facility contains certain covenants which, among other things, limit the incurrence of additional indebtedness, liens and encumbrances, changes in the nature of our
business, investments, dividends and other restricted payments, prepayments of certain indebtedness, certain transactions with affiliates, asset sales, acquisitions, capital expenditures, mergers and consolidations, sales of receivables and other
matters customarily restricted in such agreements. The New Credit Facility contains similar covenants. Such restrictions could limit our ability to respond to certain market conditions, meet our capital spending program, provide for unanticipated
capital investments or take advantage of business opportunities. The indentures governing ASGs Senior Subordinated Notes and our Senior Discount Notes impose similar restrictions on the operation of our business. As of September 30, 2005,
we were in compliance with all of our debt covenants.



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Critical Accounting Policies and Contractual Obligations



There have been no material changes in our critical accounting policies as
disclosed in Amendment No. 1 to our Registration Statement on Form S-4 as filed with the Securities and Exchange Commission on April 13, 2005. See Liquidity and Capital Resources for material changes in our debt obligations effective in
October 2005.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------



The Companys exposure to financial market risk results primarily from fluctuations in pollock and catfish market prices, Japanese yen foreign
currency exchange rates, interest rates and diesel fuel prices. There have been no material changes to our market risks as disclosed in Amendment No. 1 to our Registration Statement on Form S-4 as filed with the Securities and Exchange
Commission on April 13, 2005.



|Item 4. | Controls and Procedures
|------- | -----------------------



Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures as of September 30, 2005. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in alerting them to material information
relating to us that is required to be included in our periodic SEC filings. There were no changes in our internal controls over financial reporting during the quarter ended September 30, 2005 that have materially affected, or are reasonably
likely to materially affect, our internal controls over financial reporting.



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PART IIOTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------



Intervention in U.S. Customs Lawsuit.On September 23, 2005, we intervened in a lawsuit brought by Horizon Lines, LLC (Horizon)
against the U.S. Department of Homeland Security and the U.S. Bureau of Customs and Border Protection (UCB) in the United States District Court for the District of Columbia. In its complaint, Horizon challenges the validity of a customs
ruling issued to Sunmar Shipping, Inc. that interprets the Third Proviso of the Jones Act. In general, the Jones Act prohibits the transportation of merchandise between two points in the United States using non-coastwise
(foreign-flagged) vessels. The Third Proviso is an exception to this prohibition and permits the use of foreign-flagged vessels when transporting merchandise between two U.S. ports provided certain conditions are met. The ruling challenged by
Horizon, although not directly involving us, is substantially similar to a customs ruling we received from the UCB and upon which we rely to transport our products to the east coast of the United States. Horizon seeks to overturn the challenged
ruling and, if successful, it may affect our ability to rely on the ruling we received. On October 17, 2005, we along with the UCB filed a motion to dismiss and a motion for summary judgment, which are currently pending. If Horizon
prevails in its claim, it could have an adverse effect on our business and results of operations.



Crew Member Lawsuit. On October 19, 2001, a former vessel crew member filed a complaint in the United States District Court for the Western
District of Washington against one of the Companys subsidiaries, American Seafoods Company LLC (ASC), on behalf of himself and a class of 500 seamen (although the action was never certified as a class action.) The complaint alleged that ASC
breached its contract with the plaintiffs by underestimating the value of the catch in computing the plaintiffs wages. The plaintiffs demanded an accounting of their crew shares pursuant to federal statutory law. In addition, the plaintiffs
requested relief under a Washington statute that would render ASC liable for twice the amount of wages withheld, as well as judgment against ASC for compensatory and exemplary damages, plus interest, attorneys fees and costs, among other
things. The plaintiffs also alleged that ASC fraudulently concealed the underestimation of product values, thereby preventing the discovery of their cause of action. The conduct allegedly took place prior to January 28, 2000, the date the
Companys business was acquired by Centre Partners and others through ASLP. On September 25, 2003, the court entered an order granting ASCs motion for summary judgment and dismissing the entirety of the plaintiffs claims with
prejudice and with costs. The plaintiffs filed a motion for reconsideration of this order which was denied by the court. The plaintiffs then appealed the District Court decision to the Ninth Circuit Court of Appeals. On September 1, 2005, the
Ninth Circuit Court of Appeals unanimously affirmed the decision of the District Court and the lawsuit was dismissed.



We are from time to time party to litigation, administrative proceedings and grievances that arise in the ordinary course of our business. Except as
described in previous reports, we do not have pending any litigation that, separately or in the aggregate, would in the opinion of management have a material adverse effect on our results of operations or financial condition. However, given the
inherent unpredictability of litigation, it is possible that an adverse outcome could, from time to time, have a material adverse effect on our operating results or cash flows in any particular quarterly or annual period.



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|Item 6. | Exhibits
|------- | --------



|             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|             | 
|Exhibit 10.1 |  | Third Amended and Restated Credit Agreement, dated as of October 6, 2005, by and among American Seafoods Consolidated LLC, ASG Consolidated LLC, American Seafoods Group LLC, other
financial institutions from time to time party thereto, DNB NOR Bank ASA, as Documentation Agent, and IslandsBanki HF, Harris N.A. and Wells Fargo Bank, N.A., as Co-Syndication Agents, Wells Fargo Bank, N.A., as Swingline Lender and Bank of America,
N.A., as Administrative Agent and Issuing Lender
|             | 
|Exhibit 10.2 |  | Form of Revolving Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|             | 
|Exhibit 10.3 |  | Form of Tranche A Term Loan Note                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|             | 
|Exhibit 10.4 |  | Form of Tranche B-1 Term Loan Note                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|             | 
|Exhibit 10.5 |  | Form of Tranche B-2 Term Loan Note                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|             | 
|Exhibit 10.6 |  | Form of Swingline Note                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|             | 
|Exhibit 31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                           
|             | 
|Exhibit 31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                           
|             | 
|Exhibit 32.1 |  | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                           
|             | 
|Exhibit 32.2 |  | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                           



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SIGNATURES



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



|                        |  |  |  |                      |  |                           |  |                                                                   
|----------------------- |  |  |  | -------------------- |  | ------------------------- |  | ------------------------------------------------------------------
|                        |  |  |  | ASG Consolidated LLC
|                        |  |  | 
|Date: November 14, 2005 |  |  |  | By:                  |  | /S/    BRAD
BODENMAN     
|                        |  |  |  |                      |  |                           |  | Brad Bodenman Chief Financial Officer Authorized Officer          
|                        |  | 
|                        |  |  |  | ASG Finance, Inc.   
|                        |  |  | 
|                        |  |  |  | By:                  |  | /S/    MATTHEW D.
LATIMER
|                        |  |  |  |                      |  |                           |  | Matthew D. Latimer Vice President and Secretary Authorized Officer



34