ANCHOR GLASS CONTAINER CORP /NEW, 10-12G/A, 1998-08-20

ANCHOR GLASS CONTAINER CORP /NEW
10-12G/A, 1998-08-20
GLASS CONTAINERS

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10/A

AMENDMENT NO. 1

GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934

ANCHOR GLASS CONTAINER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C>
DELAWARE 59-3417812
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

ONE ANCHOR PLAZA, 4343 ANCHOR PLAZA PKWY. 33634-7513
TAMPA, FL (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (813) 884-0000

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

NONE

SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

CLASS C COMMON STOCK, PAR VALUE $0.10 PER SHARE

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FORWARD-LOOKING STATEMENTS

This Registration Statement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond the Company's
control. Forward-looking statements are typically identified by the words
"believe," "expect," "anticipate," "intend," "estimate," "project" and similar
expressions and include statements concerning (A) the Company's strategy, (B)
the Company's liquidity and capital expenditures, (C) the Company's debt levels
and ability to obtain financing and service debt, (D) competitive pressures and
trends in the glass container industry, (E) prevailing levels of interest rates,
(F) legal proceedings and regulatory matters and (G) general economic
conditions. Actual results could differ materially from those contemplated by
these forward-looking statements as a result of factors ("Cautionary
Statements") such as those described below. In light of these risks and
uncertainties, there can be no assurance that the results and events
contemplated by the forward-looking information contained in this Registration
Statement will in fact transpire. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of their
dates. The Company does not undertake any obligation to update or revise any
forward-looking statements. All subsequent written or oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary Statements.

ITEM 1. BUSINESS

Unless otherwise noted, references to: (i) "Anchor" or "the Company" shall
mean Anchor Glass Container Corporation; (ii) "Consumers" shall mean Consumers
Packaging Inc. and its Canadian subsidiary, Consumers International Inc.
("Consumers International"), which currently owns indirectly 57% of Anchor on a
fully diluted basis; (iii) the "Anchor Acquisition" shall mean the acquisition
by the Company of certain assets and the assumption of certain liabilities of
Old Anchor on February 5, 1997; (iv) "Consumers U.S." shall mean Consumers U.S.,
Inc., Anchor's Parent; (v) "Old Anchor" shall mean the former Anchor Glass
Container Corporation, which is being liquidated in a proceeding under Chapter
11 of the United States Bankruptcy Code of 1978, as amended (the "Bankruptcy
Code"); and (vi) "Fiscal 1997," with respect to Anchor, shall mean the period
from February 5, 1997 to December 31, 1997. Financial information set forth in
this Registration Statement has been prepared in accordance with generally
accepted accounting principles in the United States ("GAAP"). References to "C$"
are to Canadian Dollars.

COMPANY OVERVIEW

Anchor is the third largest manufacturer of glass containers in the United
States. Anchor produces a diverse line of flint (clear), amber, green and other
colored glass containers of various types, designs and sizes. The Company sells
its products to many of the leading producers of beer, liquor, food, juice, tea,
soda and mineral water. The Company focuses on the production of containers for
beer, liquor and food, which accounted for approximately 35%, 22% and 20%,
respectively, of its Fiscal 1997 net sales.

The Company was formed in January 1997 by Consumers to consummate the
Anchor Acquisition. Prior to the Anchor Acquisition on February 5, 1997, the
Company did not conduct any operations. Old Anchor was formed by members of the
management of the Glass Container Division of Anchor Hocking Corporation (the
"Glass Container Division") and persons associated with Wesray Corporation to
carry out the leveraged acquisition in 1983 of the business and certain of the
assets of the Glass Container Division. Old Anchor acquired Midland Glass
Company, Inc. in 1984 and Diamond-Bathurst Inc. in 1987.

In November 1989, Vitro S.A. ("Vitro") acquired substantially all of the
stock of Old Anchor. Simultaneously, Vitro acquired all of the stock of
Latchford Glass Company, which was subsequently merged into Old Anchor. In
September 1996, Old Anchor filed for protection under Chapter 11 of the
Bankruptcy Code.
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Immediately following the Anchor Acquisition, the Company implemented a
program to reduce its operating and overhead expenses, focus on relationships
with Old Anchor's customers, achieve a more efficient product mix and realize
synergies between the Company and Consumers. The Company achieved fixed cost
reductions by closing two plants in early 1997, and reduced overhead costs by
eliminating approximately 25% of its corporate headquarters positions. Anchor
has rebuilt relationships with some of Old Anchor's larger volume customers,
including Anheuser-Busch.

THE ANCHOR ACQUISITION AND THE NOTE OFFERING

The Anchor Acquisition. On February 5, 1997, pursuant to an Asset Purchase
Agreement dated December 18, 1996, as amended (the "Asset Purchase Agreement"),
between Consumers, Owens-Brockway Glass Container, Inc. ("Owens") and Old Anchor
(the rights and obligations of Consumers under the Asset Purchase Agreement
having been assigned to the Company), the Company and Owens purchased
substantially all of the assets of, and assumed certain liabilities, of Old
Anchor. Old Anchor's Antioch and Hayward, California plants and its interest in
Rocky Mountain Bottle Company were acquired, and the related liabilities
assumed, by Owens (the "Owens Purchase"). In June 1997, Owens closed the Antioch
plant. The Company purchased substantially all of the other assets of Old
Anchor, including eleven operating plants, several idled plants and other
related assets for consideration of $200.5 million in cash in addition to common
and convertible preferred stock of the Company. The Company also assumed certain
other liabilities of Old Anchor, including certain of Old Anchor's liabilities
in respect of the Anchor Glass Container Corporation Service Retirement Plan,
the Anchor Glass Container Retirement Plan for Salaried Employees and the
Pension Plan for Hourly Employees of Latchford Glass Company and Associated
Companies (collectively, the "Plans"). In addition, the Company contributed $9.1
million in cash and convertible preferred stock of the Company, with a face
value of $9.0 million, to the Plans. The Company did not assume Old Anchor's
liabilities in respect of its bank debt, debt securities and industrial revenue
bonds.

In June 1998, as part of an adjustment to the purchase price for the Anchor
Acquisition (the "Settlement"), the Company paid to Old Anchor an additional
$1.0 million in cash and issued 1,225,000 warrants to purchase additional shares
of common stock, valued at approximately $6.1 million. In addition, the Company
issued 525,000 warrants to purchase additional shares of common stock to an
affiliate of Consumers U.S. valued at approximately $2.6 million. None of the
warrants issued require any payment upon exercise. The effects of the Settlement
have been reflected in the Company's financial statements for Fiscal 1997.

The total sources and uses of funds (excluding the Settlement) in
connection with the Anchor Acquisition and the Owens Purchase were as follows
(dollars in millions):

<TABLE>
<CAPTION>
SOURCES OF FUNDS
----------------
<S> <C>
Revolving Credit Facility........... $ 0.1
Anchor Loan Facility................ 130.0
Owens Purchase...................... 128.4
Owens purchase of inventory(1)...... 4.4
Series B Preferred Stock(2)......... 84.0
Class B Common Stock(2)............. 1.0
Series A Preferred Stock(3)(5)...... 56.0
Class A Common Stock(3)............. 2.5
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TOTAL SOURCES OF FUNDS......... $406.4
======
USES OF FUNDS
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Cash escrowed for creditors(4)...... $209.2
Repayment of DIP credit facility.... 108.6
Other priority claims............... 11.1
Cash pension payment(5)............. 9.1
Series A Preferred Stock pension
payment(5)........................ 9.0
Series A Preferred Stock(4)......... 47.0
Class A Common Stock(4)............. 2.5
Fees and expenses................... 9.9
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TOTAL USES OF FUNDS............ $406.4
======
</TABLE>

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(1) Anchor purchased certain inventory from Old Anchor, which was immediately
resold to Owens.

(2) Issued to Consumers U.S. in exchange for cash contribution.

(3) Represents (a) 1,879,320 shares of Anchor's mandatorily redeemable 10%
cumulative convertible preferred stock, par value $.01 per share (the
"Series A Preferred Stock") (face value of $47.0 million), and 490,898
shares of Anchor's Class A Common Stock, par value $.10 per share (the
"Class A
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Common Stock") (valued at $2.5 million), issued to Smith Barney, Inc.
("Smith Barney") in escrow for the benefit of certain creditors of Old
Anchor in partial satisfaction of Old Anchor's liabilities to such
creditors, including, without limitation, the holders of Old Anchor's debt
securities and industrial revenue bonds and (b) 360,000 shares of Series A
Preferred Stock (face value of $9.0 million) contributed to the Plans. As of
August 1, 1998, 1,058,121 shares of the Series A Preferred Stock and 276,392
shares of the Class A Common Stock issued to Smith Barney have been
distributed to certain creditors of Old Anchor. The remaining shares issued
to Smith Barney are still held in escrow by Smith Barney. As of August 1,
Smith Barney also held, as escrow agent, warrants exercisable for 332,844
and 892,156 shares of Class A and Class C Common Stock, respectively.

(4) This amount is being distributed by or on behalf of the Trustee for the
Anchor Liquidating Trust to certain creditors of Old Anchor. This cash will
first be allocated to Old Anchor's senior secured creditors whose claims
aggregate $158.0 million. Thereafter, the balance of this cash will be
allocated among (x) the holders of Old Anchor's 10.25% Series A Senior Notes
due 2002 and 9.875% Senior Subordinated Debentures due 2008, the holders of
which are unsecured creditors with claims aggregating approximately $307.0
million, and (y) certain other unsecured creditors of Old Anchor, in both
cases to supplement the 1,879,320 shares of Series A Preferred Stock and the
490,898 shares of Class A Common Stock issued to Smith Barney in escrow for
such unsecured creditors.

(5) $9.1 million in cash plus 360,000 shares of Series A Preferred Stock (face
value of $9.0 million) were contributed to the Plans. In November 1997, a
valuation of these shares was completed by an independent appraiser. In
March 1998, the Company made an additional contribution to the Plans of $0.7
million in cash to bring the value of the contribution to $9.0 million.

The First Mortgage Notes and Exchange Offer. On April 17, 1997, Anchor
issued $150.0 million aggregate principal amount of its 11 1/4% First Mortgage
Notes due 2005 (the "First Mortgage Notes") and used a portion of the net
proceeds therefrom to repay all amounts outstanding under its $130.0 million
loan facility (the "Anchor Loan Facility") and advances outstanding under the
$110.0 million revolving credit facility (the "Revolving Credit Facility"). Upon
the effectiveness of its registration statement on Form S-4, the Company
commenced an offer to exchange the First Mortgage Notes for a like principal
amount of new 11 1/4% First Mortgage Notes, which were registered under the
Securities Act. The exchange offer was completed March 30, 1998.

The Senior Notes and Exchange Offer. On March 16, 1998, the Company issued
$50.0 million aggregate principal amount of its 9 7/8% Senior Notes due 2008
(the "Senior Notes"). Proceeds of the issuance will be used for growth capital
expenditures and general corporate purposes. Pending such uses, the Company used
such net proceeds to temporarily repay indebtedness under the Revolving Credit
Facility. Upon the effectiveness of its registration statement on Form S-4, the
Company commenced an offer to exchange the Senior Notes for a like principal
amount of new 9 7/8% Senior Notes, which were registered under the Securities
Act. The exchange offer was completed June 2, 1998.

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PRODUCTS

The table below provides a summary by product group of net sales (in
millions of dollars) and approximate percentage of net sales by product group
for Old Anchor for the years 1995 and 1996 and for the Company for Fiscal 1997:

<TABLE>
<CAPTION>
OLD ANCHOR ANCHOR
---------------------------------- -----------------
FEBRUARY 5 TO
PRODUCT 1995 1996 DECEMBER 31, 1997
------- --------------- --------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Beer............................ $377.1 39.4% $304.7 37.4% $202.0 35.5%
Liquor/Wine..................... 202.6 21.2 200.4 24.6 125.8 22.1
Food............................ 172.1 18.0 166.0 20.4 113.5 19.9
Tea............................. 104.7 10.9 61.0 7.5 43.8 7.7
Beverage/Water.................. 60.1 6.3 42.1 5.2 37.3 6.6
Other........................... 40.0 4.2 40.2 4.9 47.0 8.2
------ ----- ------ ----- ------ -----
Total................. $956.6 100.0% $814.4 100.0% $569.4 100.0%
====== ===== ====== ===== ====== =====
</TABLE>

There can be no assurance that the information provided in the preceding
table is indicative of the glass container product mix of the Company for 1998
or in subsequent years. Management's strategy is to focus on shifting its
product mix towards those products management believes likely to both improve
operating results and increase unit volume.

CUSTOMERS

The Company produces glass containers mainly for a broad base of customers
in the food and beverage industries in the United States. The Company's ten
largest continuing customers include well-known brand names such as The Stroh
Brewery Company ("Stroh's"), Anheuser-Busch Companies, Inc. ("Anheuser-Busch"),
Latrobe (Rolling Rock), The Coca-Cola Trading Company (non-carbonated), PepsiCo,
Inc., Triarc Mistic, Saxco International, Inc., Specialty Products Company
(Nabisco), Jim Beam Brands and Hunt-Wesson. The majority of the Company's glass
container designs are produced to customer specifications and sold on a contract
basis.

The Company's two largest customers, Stroh's and Anheuser-Busch, accounted
for approximately 15.6% and 8.8% of its net sales for Fiscal 1997, respectively.
The loss of either of such customers could have a material adverse effect of the
Company's business, results of operations and financial condition. The Company's
ten largest customers, named above, accounted for approximately 45% of net sales
for Fiscal 1997.

The Company has rebuilt relationships with some of Old Anchor's larger
volume customers including Anheuser-Busch, which purchased approximately 4.0
million gross during 1997 (representing approximately 12.0% of the Company's
Fiscal 1997 volume under contract). In 1998, Anheuser-Busch is expected to
purchase approximately 9-10 million gross (representing approximately 25% of the
Company's current 1998 volume under contract). In February 1998, Anchor entered
into a long-term contract with Anheuser-Busch to serve its west coast needs and
subcontracted this additional production to its Mexican affiliate, Fevisa, for a
commission. With the exception of the Fevisa production, Anheuser-Busch
renegotiates with the Company each year for the next year's purchase orders.
Accordingly, past purchase orders placed by Anheuser-Busch are not necessarily
indicative of future purchase orders. In addition, Anchor has entered into a
contract with Stroh's to become the exclusive producer of all glass beer
containers for Stroh's product in the United States.

MARKETING AND DISTRIBUTION

The Company's products are primarily marketed by an internal sales and
marketing organization that consists of 13 direct sales people and 24 business
managers who are organized into teams with responsibility for each specific
product line.

In addition, Mr. Ghaznavi has extensive industry and customer networks.
From 1995 through 1997, he served as chairman of the Board of Trustees of the
Glass Packaging Institute, the leading industry organization

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that includes as its members manufacturers representing 95% of North America's
glass container production and he remains a member of the Board. As a result of
the Company's affiliation with Consumers and Glenshaw Glass Company
("Glenshaw"), Consumers and Glenshaw sales personnel will continue to market the
capabilities of Anchor with respect to certain production. In addition, certain
production has been and will continue to be reallocated among the Company's
ongoing plants and Consumers' plants in order to maximize machine capability and
geographic proximity to customers. In each case, the entity shifting its
existing production or responsible for the new business will receive a
market-based commission from the entity to whom the existing production or new
business was shifted.

The Company's manufacturing facilities are generally located in geographic
proximity to its customers due to the significant cost of transportation and the
importance of prompt delivery to customers. Most of the Company's production is
shipped by common carrier to customers generally within a 300-mile radius of the
plant in which it is produced.

SEASONALITY

Due principally to the seasonal nature of the brewing, iced tea and other
beverage industries, in which demand is stronger during the summer months, the
Company's shipment volume is typically higher in the second and third quarters.
Consequently, the Company normally builds inventory during the first quarter in
anticipation of seasonal demands during the second and third quarters. In
addition, the Company generally schedules shutdowns of its plants for furnace
rebuilds and machine repairs in the first and fourth quarters of the year to
coincide with scheduled holiday and vacation time under its labor union
contracts. These shutdowns adversely affect profitability during the first and
fourth quarters. The Company is implementing alternatives to reduce downtime
during these periods in order to minimize disruption to the production process
and its negative effect on profitability.

MANUFACTURING PROCESS

To manufacture glass containers, sand, limestone, soda ash and minor
ingredients, along with crushed recycled glass (also known as "cullet"), are
mixed in specific proportions and automatically fed into furnaces which,
operating at temperatures of up to 2,860 degrees Fahrenheit, melt the raw
material batch and produce molten glass. The molten glass flows from the furnace
through feeder orifices, is cut into gobs and then drops into molds located in
automatic "individual section" glass forming machines ("IS Machines"). In these
machines, mechanical devices and air pressure form the glass into its final
shape. The containers are conveyed through an oven known as an annealing lehr to
anneal (or harden) the glass. Surface coatings are applied to strengthen the
glass and lubricate it for easier handling.

Glass forming machines are generally operated for approximately five to
seven years before they are removed from the plant for rebuilding. When a
machine is removed for rebuilding, a new or rebuilt machine is immediately
installed in its place so as to minimize plant downtime.

IS Machines vary in size, usually having eight, ten or twelve "sections."
Each section in turn may have from two to four bottle-producing "cavities"
consisting of two sets of molds each. The first mold set receives the gob of
glass from the furnace feeder and forms a "parison," which is roughly in the
shape of the container. The parison is then transferred by the machine to the
second (finish) mold set where it is blown into the final container shape using
compressed air. During each machine "cycle," an IS Machine produces one bottle
in each of its cavities. Accordingly, an eight-section double-cavity machine
produces sixteen bottles per machine cycle, while a ten-section triple-cavity
machine produces thirty bottles per machine cycle. Typically, the largest
machines are the most productive as they require less labor and related costs
per unit produced.

Glass forming machines also differ in the "speed," or number of cycles per
unit of time, that they can achieve. Typically, the faster the machine, the more
efficient and productive it is as, among other things, the fixed labor costs per
unit produced are reduced. However, certain products are not necessarily
well-suited for the fastest IS Machines or those with the most bottle-producing
cavities. IS Machines with a high number of bottle producing cavities would not
be capable of producing particular product lines such as large or unusually
shaped liquor bottles.
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Finally, IS Machines form containers by one of two processes: (i) the "blow
and blow" process, whereby both the parison and the final container are formed
using compressed air or (ii) the more advanced "press and blow" method, whereby,
a precisely aligned metal plunger is used to press the molten glass into shape
in the first mold set. The "press and blow" method has been used for many years
to form all wide mouth food containers. A significant manufacturing advance has
been the development of high speed IS Machines capable of producing high quality
beer and soft drink containers using the narrow-neck-press-and-blow process. The
narrow-neck-press-and-blow process enables bottles to be made with less glass
and still meet strength requirements, which results in production cost savings.
More importantly, it results in a lighter weight bottle that costs less to
produce in terms of raw materials and energy per unit. These lightweight bottles
are also typically produced at higher machine speeds that increase productivity
and further reduce per unit costs.

SUPPLIERS AND RAW MATERIALS

Sand, soda ash, limestone, cullet and corrugated packaging materials are
the principal materials used by the Company. All of these materials are
available from a number of suppliers and the Company is not dependent upon any
single supplier for any of these materials. Management believes that adequate
quantities of these materials are and will be available from various suppliers.
Material increases in the cost of any of these items could have a significant
impact on the Company's operating results.

All of the Company's glass melting furnaces are equipped to burn natural
gas, which is the primary fuel used at its manufacturing facilities. Backup
systems are in place at most facilities to permit the use of fuel oil or propane
should that become necessary. Electricity is used in certain instances for
enhanced melting. The Company expects to be continually involved in programs to
conserve and reduce its consumption of fuel. Although natural gas remains
generally less expensive than electricity, prices for natural gas have
fluctuated in recent years, with significant increases in 1993, a decline in
1994, and moderate increases after some significant fluctuation in each of 1995,
1996 and 1997. While certain of these energy sources may become increasingly in
short supply, or subject to governmental allocation or excise taxes, the Company
cannot predict the effects, if any, of such events on its future operations. In
addition, the Company utilizes a natural gas risk management program to hedge
future requirements and to minimize fluctuations in the price of natural gas.

COMPETITION

The glass container industry is a mature, low growth industry. This low
growth combined with excess capacity in the industry have made pricing an
important competitive factor. In addition to price, Anchor and the other
companies in the glass container manufacturing industry compete on the basis of
quality, reliability of delivery and general customer service. The Company's
principal competitors are Owens and Ball-Foster Glass Container Co., L.L.C.
("Ball-Foster"). These competitors are larger and have greater financial and
other resources than the Company. The glass container industry in the United
States is highly concentrated, with the three largest producers in 1997, which
included Anchor, estimated to have accounted for 94% of 1997 domestic
production. Owens has a relatively large research and development staff and has
in place numerous technology licensing agreements with other glass producers,
including the Company. See "-- Intellectual Property."

The Company's business consists exclusively of the manufacture and sale of
glass containers. Certain other glass container manufacturers engage in more
diversified business activities than the Company (including the manufacture and
sale of plastic and metal containers). In addition, plastics and other forms of
alternative packaging have made substantial inroads into the container markets
in recent years and may continue to affect demand for glass container products.
According to industry sources, unit sales in the U.S. glass container
manufacturing industry in 1996 were down 2.1% from 1995. The compound annual
decline in unit shipments from 1991 to 1996 was approximately 1.5%. Competitive
pressures from alternative forms of packaging, including plastics, as well as
consolidation in the glass container industry, have resulted in excess capacity
and have led to severe pricing pressures on glass container manufacturers.
Although the Company believes that the market shift from glass to alternative
containers is substantially complete and that glass containers will maintain a
leading position in the high-end food and beverage segments due primarily to the
premium image of glass containers, no assurances can be given that the Company
will not lose further market
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share to alternative container manufacturers. See "Item 3. Factors Affecting
Future Operating Results -- Competition."

QUALITY CONTROL

The Company maintains a program of quality control with respect to
suppliers, line performance and packaging integrity for glass containers. The
Company's production lines are equipped with a variety of automatic and
electronic devices that inspect containers for dimensional conformity, flaws in
the glass and various other performance attributes. Additionally, products are
sample inspected and tested by Company employees on the production line for
dimensions and performance and are also inspected and audited after packaging.
Containers which do not meet quality standards are crushed and recycled as
cullet.

The Company monitors and updates its inspection programs to keep pace with
modern technologies and customer demands. Samples of glass and raw materials
from its plants are routinely chemically and electronically analyzed to monitor
compliance with quality standards. Laboratories are also maintained at each
manufacturing facility to test various physical characteristics of products.

INTELLECTUAL PROPERTY

Pursuant to a Technology Assistance and License Agreement (the "Technology
Agreement") between Owens and Consumers, the Company is entitled to use patents,
trade secrets and other technical information of Owens relating to glass
manufacturing technology. The agreement, entered into in February 1997, provides
for a term of up to ten years.

While the Company holds various patents, trademarks and copyrights of its
own, it believes its business is not dependent upon any one of such patents,
trademarks or copyrights.

EMPLOYEES

As of August 1, 1998, the Company employed approximately 3,200 persons on a
full-time basis. Approximately 550 of these employees are salaried office,
supervisory and sales personnel. The remaining employees are represented
principally by two unions, Glass, Molders, Pottery, Plastics and Allied Workers
(the "GMP"), which represents approximately 90% of the Company's hourly
employees, and the American Flint Glass Workers Union (the "AFGWU"), which
represents approximately 10% of the Company's hourly employees. The Company's
two labor contracts with the GMP and its two labor contracts with the AFGWU have
three year terms expiring on March 31, 1999 and August 31, 1999, respectively.
Old Anchor was granted a deferral of the scheduled 1996 wage increase under its
collective bargaining agreements. The Company granted the 1996 increase
effective as of the date of the Anchor Acquisition, and the 1997 increase
effective as of April 1, 1997. These two increases represent an approximate 7%
increase in wage rates as of April 1, 1997 as compared to 1996 wage rates. The
Company is subject to OSHA and other laws regulating safety and noise exposure
levels in the production area of its plants. See "-- Environmental and Other
Government Regulation -- Heath and Safety Regulation."

Old Anchor had not experienced a work stoppage since an industry-wide
strike in 1968. The Company considers its employee relations to be good, and
does not anticipate any material work stoppages in the near term.

ENVIRONMENTAL AND OTHER GOVERNMENT REGULATION

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storage tanks and, air emissions produced by furnaces. In addition, the Company
is required to obtain and maintain permits in connection with its operations.
Many environmental laws and regulations provide for substantial fines and
criminal sanctions for violations. The Company believes it is in material
compliance with applicable environmental laws and regulations. It is difficult
to predict the future development of such laws and regulations or their impact
on future earnings and operations, but the Company anticipates that these
standards will continue to require increased capital expenditures. There can be
no assurance that material costs or liabilities will not be incurred.

Certain environmental laws, such as the U.S. Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA" or "Superfund") and analogous
State laws provide for strict, joint and several liability for investigation and
remediation of releases of hazardous substances into the environment. Such laws
may apply to properties presently or formerly owned or operated by an entity or
its predecessors, as well as to conditions at properties at which wastes
attributable to an entity or its predecessors were disposed. There can be no
assurance that the Company or entities for which it may be responsible will not
incur such liability in a manner that could have a material adverse effect on
the financial condition or results of operations of the Company.

The Company is engaged in investigation and remediation projects at plants
currently being operated and at closed facilities. In addition, Old Anchor was
named as a potentially responsible party (a "PRP") under CERCLA with respect to
a number of sites. Of these sites, the Company has assumed responsibility with
respect to four sites that are currently active. While the Company may be
jointly and severally liable for costs related to these sites, in most cases, it
is only one of a number of PRPs who are also jointly and severally liable. With
respect to the four currently active sites for which the Company has assumed
responsibility, the Company estimates that its share of the aggregate cleanup
costs of such sites should not exceed $2.0 million, and that the likely range
after taking into consideration the contributions anticipated from other
potentially responsible parties could be significantly less. However, no
assurance can be given that the cleanup costs of such sites will not exceed $2.0
million or that the Company will have these funds available. The Company has
established reserves of approximately $16.0 million for environmental costs
which it believes are adequate to address the anticipated costs of remediation
of these operated and closed facilities and its liability as a PRP under CERCLA.
The timing and magnitude of such costs cannot always be determined with
certainty due to, among other things, incomplete information with respect to
environmental conditions at certain sites, the absence of regulatory
determinations with respect to environmental requirements at certain sites, new
and amended environmental laws and regulations, and uncertainties regarding the
timing of remedial expenditures.

Capital expenditures required for environmental compliance were
approximately $0.8 million for 1997 and are anticipated to be approximately $1.7
million annually in 1998 and 1999. However, there can be no assurance that
future changes in such laws, regulations or interpretations thereof or the
nature of the Company's operations will not require the Company to make
significant additional capital expenditures to ensure compliance in the future.

ERISA and Pension Deficiencies. The Company maintains two defined benefit
plans and two profit sharing plans that, prior to the Anchor Acquisition, were
maintained by Old Anchor. These plans are covered by the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and are tax qualified under
the Internal Revenue Code of 1986, as amended (the "Code"), and subject to
regulation by the Internal Revenue Service and the Department of Labor. The two
defined benefit plans are also subject to regulation by the Pension Benefit
Guaranty Corporation ("PBGC"). The Company's two profit sharing plans contain
cash or deferred arrangements under Section 401(k) of the Code. The Company's
tax-qualified plans must meet stringent requirements both in form and in
operation in order to maintain their tax-qualified status. These requirements
are constantly changing with the enactment of new pension legislation, the
issuance of new Treasury regulations and other guidance from the Internal
Revenue Service. The loss of a plan's qualified status could result in the
assessment of tax on the plan's trust income, disallowance of the Company's tax
deduction for contributions, and immediate income tax liability upon individual
participant's benefits.

The two defined benefit plans are subject to minimum funding requirements
under the Code and Title IV of ERISA. These funding requirements include the
obligation to make quarterly contributions to the plans.

8
<PAGE> 10

Under ERISA, if any contribution is missed which, when added to any other missed
payment, exceeds the amount of $1.0 million, an automatic lien in favor of the
PBGC will arise on all property of the Company and all members of its controlled
group. In addition, under ERISA, the PBGC can institute proceedings to terminate
any defined benefit plan for a number of reasons, including (i) the failure of
the plan to meet ERISA's minimum funding requirements, (ii) the inability of the
plan to pay benefits when due or (iii) the possible long-run loss of the PBGC
with respect to the plan may reasonably be expected to increase unreasonably if
the plan is not terminated. Upon termination of a plan, a lien arises in favor
of the PBGC for the amount of the underfunding of the plan.

On January 9, 1997, the PBGC notified Old Anchor that it intended to
institute involuntary termination proceedings with respect to the three defined
benefit plans then maintained by Old Anchor that are now maintained by the
Company. However, the PBGC reached an agreement with Vitro (the "Termination
Agreement"), the parent of Old Anchor, in which Vitro agreed to provide a
limited guaranty to the PBGC with respect to the unfunded benefit liabilities of
the Company's defined benefit plans, if the plans, or any one of them, are
terminated before August 1, 2006. As a result of this agreement with Vitro, the
threatened involuntary termination proceeding was never commenced. Under the
terms of the Termination Agreement, the PBGC agreed that it would not implement
proceedings to terminate the Company's defined benefit plans solely as a result
of the Anchor Acquisition or the transactions contemplated by the Asset Purchase
Agreement.

The defined benefit plan covering salaried employees was frozen at the end
of 1994, and, at the end of 1997, was not underfunded under Statement of
Financial Accounting Standards No. 87 ("SFAS No. 87"). However, at the end of
1997, the defined benefit plan maintained for hourly employees was significantly
underfunded with unfunded benefits under SFAS No. 87 totaling approximately
$55.5 million. However, because of a change, effective January 1, 1998, to the
market value asset valuation method for determining pension plan contributions,
no further contributions will be required in 1998 with respect to either current
or past underfundings. Pension contributions made to the Plans during 1997,
including the contributions made by the Company in connection with Anchor
Acquisition ($9.8 million in cash and $9.0 million face value in the Company's
Series A Preferred Stock, including $8.1 million in cash and $8.0 million face
value in Series A Preferred Stock contributed to the hourly plan), were
approximately $38.4 million. In addition, Anchor paid premiums to the PBGC under
its pension guaranty program of approximately $1.8 million in 1997.

Pursuant to the Termination Agreement, a valuation of the shares of Series
A Preferred Stock contributed by the Company to the two defined benefit plans
has been performed by an independent appraiser, which was completed in November
1997. In March 1998, the Company made an additional contribution to the plans of
$0.7 million in cash to bring the value of the contribution to $9.0 million.

Based upon an average rate of return of 8% on plan assets, required pension
plan contributions are expected to be in the range of $4 to $8 million annually
for the next five years, depending on the performance of the underlying plan
assets. However, to the extent the actual rate of return differs from this
assumed average rate of return, actual required pension plan contributions could
increase or decrease significantly.

Management believes that the Company is now in material compliance with all
laws and regulations governing its employee benefit plans. In addition, based
upon the Company's business plan, management believes the Company will have
sufficient cash flow to meet its obligations to make pension contributions and
pay PBGC premiums. However, there can be no assurance that future changes in
such laws or regulations, or interpretations thereof, changes in the Company's
business or in market conditions affecting the value of plan assets will not
require the Company to expend amounts that exceed those that are now
anticipated.

Employee Health and Safety Regulation. The Company's operations are
subject to a variety of worker safety laws. The U.S. Occupational Safety and
Health Act of 1970 ("OSHA") and analogous laws mandate general requirements for
safe workplaces for all employees. The Company believes that its operations are
in material compliance with applicable employee health and safety laws.

9
<PAGE> 11

containers, particularly beer and carbonated soft drink containers. To date, 10
states have enacted some form of deposit legislation, although no such new
legislation has been enacted since 1986. The enactment of additional laws or
comparable administrative actions that would require a deposit on beer or soft
drink containers, or otherwise restrict their use, could have a material adverse
effect on the Company's business. In jurisdictions where deposit legislation has
been enacted, the consumption of beverages in glass bottles has generally
declined due largely to the preference of retailers for handling returned cans
and plastic bottles. Container deposit legislation continues to be considered
from time to time at various governmental levels.

In lieu of this type of deposit legislation, several states have enacted
various anti-littering recycling laws that do not involve the return of
containers to retailers. The use of recycled glass, and recycling in general,
are not expected to have a material adverse effect on the Company's operations.

ITEM 2. FINANCIAL INFORMATION

UNAUDITED PRO FORMA FINANCIAL DATA

The following Unaudited Pro Forma Statement of Operations of the Company
for the year ended December 31, 1997 (the "Pro Forma Statement of Operations")
gives effect to the formation of the Company, the Anchor Acquisition, the
issuance and sale of the First Mortgage Notes and the Senior Notes and the
application of the proceeds therefrom (the "Transactions"), as if each such
Transaction had occurred on January 1, 1997. The Pro Forma Statement of
Operations should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," the historical
financial statements of the Company, including the notes thereto, and the
historical consolidated financial statements of Old Anchor, including the notes
thereto and the related Management's Discussion and Analysis of Financial
Condition and Results of Operations for Old Anchor, in each case included
elsewhere in, or incorporated by reference into, this Registration Statement.
The Pro Forma Statement of Operations does not purport to be indicative of the
results that would have actually been obtained had such Transactions been
completed as of the assumed dates and for the periods presented, or that may be
obtained in the future.

The Anchor Acquisition has been accounted for using the purchase method of
accounting pursuant to which the purchase price is allocated among the acquired
assets and liabilities in accordance with estimates of fair value as of the date
of acquisition. In June 1998, as part of the Settlement, the Company paid to Old
Anchor an additional $1.0 million in cash and issued 1,225,000 warrants to
purchase additional shares of common stock, valued at approximately $6.1
million, recorded as an adjustment to goodwill. In addition, the Company issued
525,000 warrants to purchase additional shares of common stock to an affiliate
of Consumers U.S. valued at approximately $2.6 million which has been recorded
as an expense. None of the warrants issued require any payment upon exercise.
The effects of the Settlement have been reflected in the Company's historical
financial statements as of and for Fiscal 1997.

In addition, for purposes of the Pro Forma Statement of Operations, the
historical financial information of Old Anchor for the periods presented has
been adjusted to eliminate the effect of certain assets and liabilities of Old
Anchor not acquired or assumed by the Company in the Anchor Acquisition, in
accordance with the terms of the Asset Purchase Agreement.

10
<PAGE> 12

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ANCHOR
RESOLUTION ANCHOR
CORP. ONE PERIOD FROM
MONTH ENDED FEB. 5, 1997 TO PRO FORMA
FEB. 4, 1997 DEC. 31, 1997 ADJUSTMENTS PRO FORMA
------------ --------------- ------------ ---------
<S> <C> <C> <C> <C>
Net sales................................ $ 62,560 $569,441 $(8,483)(a) $623,518
Costs and expenses:
Cost of products sold.................. 70,608 523,709 (8,207)(a) 585,315
(871)(b)
76(c)
Selling and administrative expenses.... 3,745 25,120 -- 28,865
-------- -------- ------- --------
Income (loss) from operations............ (11,793) 20,612 519 9,338
Other income (expense), net.............. (595) (2,602) 630(d) 58
2,625(e)
Interest expense......................... (2,437) (18,281) (3,649)(f) (24,367)
-------- -------- ------- --------
Loss before reorganization items, income
taxes and extraordinary item........... (14,825) (271) 125 (14,971)
Reorganization items..................... (827) -- -- (827)
Income taxes............................. -- -- -- --
-------- -------- ------- --------
Loss before extraordinary item........... $(15,652) $ (271) $ 125 $(15,798)
======== ======== ======= ========
Preferred stock dividends................ $(11,302) $(1,181)(g) $(12,483)
======== ======= ========
Loss before extraordinary item applicable
to common stock........................ $(15,652) $(11,573) $(1,056) $(28,281)
======== ======== ======= ========

OTHER FINANCIAL DATA:
Depreciation and amortization.......... $ 7,605 $ 51,132 $(3,827) $ 54,910
Capital expenditures................... 7,186 41,634 -- 48,820
</TABLE>

See notes to unaudited pro forma statement of Operations.
11
<PAGE> 13

NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997

The Unaudited Pro Forma Statement of Operations as of December 31, 1997
gives effect to the following unaudited pro forma adjustments:

(a) Reflects the elimination of the operations of Old Anchor plants purchased
by Owens and the elimination of Old Anchor's share of operations of the
Rocky Mountain Bottle Company joint venture for the periods presented.

(b) Reflects the reduction of Old Anchor's historical depreciation for the
effects of the purchase price allocation to property, plant and equipment.

(d) Reflects the elimination of the amortization of deferred financing fees
recorded by Old Anchor.

(e) This charge of $2,625 recorded in 1997 reflects the additional 525,000
warrants issued to G&G Investments, Inc. ("G&G") as part of the Settlement
and is a one-time non-recurring charge. Therefore, it has not been
reflected in the pro forma statement of operations.

(f) Pro forma interest expense and amortization of financing costs has been
calculated on pro forma debt levels and applicable interest rates assuming
the Note Offering was consummated as of the beginning of the periods
indicated:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-----------------
<S> <C>
Elimination of interest expense............................. $(20,718)
Interest on borrowings under the First Mortgage Notes of
$150.0 million at an interest rate of 11.25%.............. 16,875
Interest on borrowings under the Senior Notes of $50.0
million at an interest rate of 9.875%..................... 4,938
Other interest expense...................................... 250
Amortization of financing fees.............................. 2,304
--------
$ 3,649
========
</TABLE>

Additional interest payable on the First Mortgage Notes, which ranged from
0.5% in October 1997 to 1.5% in February 1998, has not been included in the
pro forma calculation of interest expense as it is not expected to have a
continuing impact on the Company. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

On a historical basis, the Company has written off the capitalized deferred
financing fees of the Anchor Loan Facility as of the date that the offering
of the First Mortgage Notes was consummated. This amount, $11.2 million, was
recorded as an extraordinary loss in the second quarter of 1997.

(g) Reflects preferred stock dividends on both the Series A Preferred Stock and
Series B Preferred Stock. In 1997, this includes dividends for the period
from January 1, 1997 through February 4, 1997 whereas 1996 includes the
entire year.

12
<PAGE> 14

SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth certain historical financial information of
the Company. The selected financial data for the period from February 5, 1997 to
December 31, 1997, the period from February 5, 1997 to June 30, 1997, and the
six months ended June 30, 1998 has been derived from the Company's audited or
unaudited condensed financial statements, as the case may be, incorporated by
reference into this Registration Statement. The following information should be
read in conjunction with the Company's financial statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
included elsewhere in, or incorporated by reference into, this Registration
Statement.

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM SIX MONTHS
FEBRUARY 5, 1997 TO FEBRUARY 5, 1997 TO ENDED
DECEMBER 31, 1997(1) JUNE 30, 1997(1) JUNE 30, 1998
-------------------- ------------------- -------------
(UNAUDITED) (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales................................ $ 569,441 $ 261,141 $ 324,402
Cost of products sold.................... 523,709 244,285 301,803
Selling and administrative expenses...... 25,120 11,176 14,434
--------- --------- ---------
Income from operations................... 20,612 5,680 8,165
Other income (expense), net.............. (2,602) 211 160
Interest expense......................... (18,281) (7,882) (13,080)
--------- --------- ---------
Loss before extraordinary item........... (271) (1,991) (4,755)
Extraordinary item(2).................... (11,200) (11,200) --
--------- --------- ---------
Net loss................................. $ (11,471) $ (13,191) $ (4,755)
========= ========= =========
Preferred stock dividends................ $ (11,302) $ (4,927) $ (6,391)
========= ========= =========
Loss applicable to common stock.......... $ (22,773) $ (18,118) $ (11,146)
========= ========= =========
Basic net loss per share before
extraordinary item applicable to common
stock.................................. $ (3.62) $ (2.45) $ (3.06)
========= ========= =========
Basic net loss per share applicable to
common stock........................... $ (7.11) $ (6.43) $ (3.06)
========= ========= =========
BALANCE SHEET DATA (at end of period):
Accounts receivable...................... $ 56,940 $ 62,262 $ 77,422
Inventories.............................. 120,123 117,198 115,005
Total assets............................. 614,730 596,944 626,270
Total debt............................... 163,793 153,212 233,893
Total stockholders' equity............... 73,074 84,042 74,293

OTHER FINANCIAL DATA:
Depreciation and amortization............ 51,132 23,176 27,035
Capital expenditures..................... 41,634 12,251 19,469
</TABLE>

- ---------------
(1) The Anchor Acquisition was consummated on February 5, 1997.

(2) Extraordinary item in the periods from February 5, 1997 to December 31, 1997
and February 5, 1997 to June 30, 1997 resulted from the write-off of
financing costs related to debt extinguished.

13
<PAGE> 15

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company was formed in January 1997 to consummate the Anchor
Acquisition. On February 5, 1997, pursuant to the Asset Purchase Agreement, the
Company and Owens acquired substantially all of the assets of, and assumed
certain liabilities of, Old Anchor. In the Anchor Acquisition, the Company
purchased eleven operating glass container manufacturing facilities and other
related assets. Prior to the Anchor Acquisition, the Company had no operations
and therefore the following discussion represents activity from February 5, 1997
through December 31, 1997 for Fiscal 1997 and from February 5, 1997 to June 30,
1997 (the "1997 Period"). Accordingly, operations for the Company for Fiscal
1997 are not directly comparable to operations of Old Anchor for 1996 nor are
operations for the Company for the first half of 1998 directly comparable to the
1997 Period.

RESULTS OF OPERATIONS

Six Months Ended June 30, 1998 Compared to 1997 Period

Net Sales. Net sales for the 1998 second quarter were $175.2 million,
compared to $167.0 million for the comparable quarter of 1997, an increase of
4.9% on a unit volume increase of 16%. Net sales for the first half of 1998 were
$324.4 million, or approximately $12.5 million per week. Net sales for the 1997
Period were approximately $261.1 million, or approximately $12.4 million per
week. This slight increase in net sales was principally as a result of higher
sales of beer and tea products in 1998 as compared to 1997. This shift in
product mix in 1998 towards higher volume, lower margin products has unfavorably
impacted margins, as noted below. Also, despite operating at near full
manufacturing capacity, the industry has experienced significant pricing
pressures, unfavorably effecting margins.

Cost of Products Sold. The Company's cost of products sold in the second
quarter and first half of 1998 were $158.4 million and $301.8 million,
respectively (or 90.4% and 93.0% of net sales), while the cost of products sold
for the second quarter of 1997 and the 1997 Period were $151.6 million and
$244.2 million, respectively (or 90.8% and 93.5% of net sales). The decrease in
the percentage of cost of products sold for 1998, as compared with the 1997
Period, reflects more favorable employee benefit costs, particularly in the
areas of pensions and health insurance, as the result of favorable claims and
census experience, which may be non-recurring, offset by higher freight costs
and the impact of increased sales of lower margin items. This improvement also
reflects the impact of the closing of the Dayville, Connecticut plant effective
during the second quarter of 1997 and is partially offset by costs related to
the delay and start-up of a rebuilt furnace and machine rebuilds at one
manufacturing plant, originally scheduled for December 1997 but completed in
February 1998.

Selling and Administrative Expenses. Selling and administrative expenses
for the 1998 second quarter were approximately $7.2 million (or 4.1% of net
sales), while selling and administrative expenses in the second quarter of 1997
were $6.8 million (or 4.1% of net sales). Selling and administrative expenses
for the first six months of 1998 were approximately $14.4 million (or 4.4% of
net sales), while selling and administrative expenses in the 1997 Period was
$11.2 million (or 4.3% of net sales). This slight increase in selling and
administrative expenses as a percentage of net sales reflects slightly higher
personnel costs as the Company augmented its management team in the second half
of 1997, offset by focused reductions in other selling and administrative
categories.

Net Income (Loss). The Company had net income in the second quarter of
1998 of approximately $3.0 million as compared to income before extraordinary
item of $4.0 million in the second quarter of 1997. The Company had a net loss
of $4.7 million for the first six months of 1998 compared to a loss before
extraordinary item of $2.0 million for the 1997 Period.

14
<PAGE> 16

Fiscal 1997 Compared to Old Anchor 1996

Net Sales. Net sales for the 47 weeks in Fiscal 1997 for the continuing
plants operated by the Company were approximately $569.4 million, or
approximately $12.1 million per week. Net sales for the same nine plants for
1996 (52 weeks) under Old Anchor were approximately $722.7, or $13.9 million per
week. Net sales per week decreased principally as a result of lower sales of
beer products by the Company.

Cost of Products Sold. The Company's cost of products sold in Fiscal 1997
was $523.7 million (or 92.0% of net sales), while Old Anchor's cost of products
sold in 1996 was $831.6 million (or 102.1% of net sales) in 1996. Despite
closing four plants in 1995 and 1996, Old Anchor still maintained excess
capacity which reduced its ability to withstand the adverse industry conditions
prevailing in 1996. In an attempt to fill excess capacity, some of Old Anchor's
lost volume was replaced with smaller orders requiring shorter production runs
as well as more frequent retooling and color changes, which led to higher unit
costs and lower margins. Following the Anchor Acquisition, the Company closed
its Houston and Dayville plants and removed from production two furnaces, one at
each of two other plants. By reducing excess capacity and through a better
utilization of the Company's workforce during Fiscal 1997, wage increases of
approximately 7% during Fiscal 1997 had only a limited impact.

Selling and Administrative Expenses. Selling and administrative expenses
for Fiscal 1997 were approximately $25.1 million (or 4.4% of net sales), while
Old Anchor's selling and administrative expenses were $39.6 million in 1996 (or
4.8% of net sales). This slight decline in selling and administrative expenses
as a percentage of net sales reflects lower personnel and fringe benefit costs
primarily as a result of the headquarters cost reductions that occurred in March
1997.

Net Income (Loss). The Company had a net loss in Fiscal 1997 of
approximately $11.5 million, including an extraordinary loss of approximately
$11.2 million as result of the write-off of certain financing fees in connection
with the refinancing of the Anchor Loan Facility. Despite lower net sales per
week in Fiscal 1997 compared to Old Anchor's net sales per week in 1996, income
from operations during Fiscal 1997 for the continuing plants was approximately
$20.6 million, while Old Anchor has a loss from operations in 1996 from these
same plants of $63.2 million, principally as a result of the return to higher
margin business and reduced cost of products sold and selling and administrative
expenses.

LIQUIDITY AND CAPITAL RESOURCES

In the first six months of 1998, operating activities consumed $42.8
million in cash as compared to $4.0 million of cash provided in the 1997 Period.
This increase in cash consumed reflects the higher loss in the first half of
1998 as compared with the loss before the extraordinary item in the 1997 Period,
adjusted for changes in working capital items. The balance of accounts
receivable increased approximately $20.6 million from year-end 1997 reflecting
the seasonal nature of certain sales and the impact of credit terms of certain
customers. Additionally, the balance of accounts payable decreased approximately
$25.0 million from year-end partially as a result of the increase in cash from
other financing activities, allowing the Company to take cash discounts earlier
in the year than usual. In addition, trade payables were higher in December
1997, due to the furnace and machine rebuilds noted above. Cash consumed in
investing activities in the first half of 1998 and the 1997 Period were $19.8
million and $222.6 million, respectively, principally reflecting the capital
expenditures in 1998 and the cash component of the Anchor Acquisition in the
1997 Period. In February 1997, the Company contributed $9.0 million in cash to
the Company's defined benefit pension plans. Also, as a result of the valuation
performed by an independent appraiser of the Series A Preferred Stock
contribution to the plans, which was completed in November 1997, the Company
made an additional pension contribution of $0.7 million in cash in March 1998.
Capital expenditures in the first six months of 1998 were $19.1 million. Cash
increased from financing activities for the first half of 1998 by $66.8 million
principally reflecting the issuance of the Senior Notes in March 1998 and
borrowings under the Revolving Credit Facility.

In Fiscal 1997, operating activities provided $25.5 million in cash,
reflecting the loss before extraordinary item adjusted for changes in working
capital items. Cash consumed in investing activities for Fiscal 1997 was $257.3
million, principally reflecting the cash component of the Anchor Acquisition.
Additionally, in February 1997, the Company contributed $9.0 million in cash to
the Company's defined benefit pension plans. Capital
15
<PAGE> 17

expenditures in Fiscal 1997 were $41.6 million. Cash increased from financing
activities for Fiscal 1997 by $232.8 million reflecting the issuance of capital
stock and borrowings in connection with the Anchor Acquisition.

Capital expenditures required for environmental compliance were
approximately $0.8 million for Fiscal 1997 and are anticipated to be
approximately $1.7 million annually in 1998 and 1999. However, there can be no
assurance that future changes in such laws, regulations or interpretations
thereof or the nature of the Company's operations will not require the Company
to make significant additional capital expenditures to ensure compliance in the
future. In addition, expenditures for Year 2000 compliance are anticipated to be
approximately $1.0 million in the aggregate in 1998 and 1999. However, no
assurance can be given that the Company's actual expenditures for Year 2000
compliance will not be higher. See "-- Year 2000."

The purchase price of the Anchor Acquisition was approximately $250.0
million and was comprised of: approximately $200.5 million in cash, $47.0
million face amount (1,879,320 shares) of Series A Preferred Stock and $2.5
million (490,898 shares) of Class A Common Stock. However, in June 1998, as part
of an adjustment to the purchase price for the Anchor Acquisition, the Company
paid to Old Anchor an additional $1.0 million in cash and issued 1,225,000
warrants to purchase additional shares of common stock, valued at approximately
$6.1 million. In addition, the Company issued 525,000 warrants to purchase
additional shares of common stock to an affiliate of Consumers U.S. valued at
approximately $2.6 million. None of the warrants issued require any payment upon
exercise. The effects of the Settlement have been reflected in the Company's
financial statements for Fiscal 1997.

The Company obtained the cash portion of the purchase price principally
from an $85.0 million cash investment by Consumers consisting of $84.0 million
face amount (3,360,000 shares) of Series B Preferred Stock and $1.0 million of
Class B Common Stock and borrowings under the $130.0 million Anchor Loan
Facility. In conjunction with the Anchor Acquisition, the Company also entered
into the $110.0 million Revolving Credit Facility. At August 1, 1998, advances
outstanding under the Revolving Credit Facility were approximately $22.7 million
and the total outstanding letters of credit on this facility were approximately
$11.1 million.

On April 17, 1997, the Company completed an offering of $150.0 million
aggregate principal amount of First Mortgage Notes. The First Mortgage Notes are
senior secured obligations of the Company, ranking senior in right of payment to
all existing and future subordinate indebtedness of the Company and pari passu
with all existing and future senior indebtedness of the Company. The First
Mortgage Notes are guaranteed by Consumers U.S. Proceeds from the issuance of
the First Mortgage Notes, net of fees, were approximately $144.0 million and
were used to repay $130.0 million outstanding under the Anchor Loan Facility and
$8.8 million outstanding under the Revolving Credit Facility, with the balance
used for general corporate purposes. In connection with the refinancing of the
Anchor Loan Facility with the First Mortgage Notes, the Company issued 702,615
shares of Class B Common Stock to Consumers U.S. and 702,614 warrants to the
initial purchasers of the First Mortgage Notes. The warrants and common stock
are each valued at $5.00 per share.

As a result of its failure to have an exchange offer registration statement
declared effective and to have exchanged all First Mortgage Notes validly
tendered, the Company has paid additional interest on the First Mortgage Notes.
The amount of additional interest that the Company has paid has ranged from 0.5%
in October 1997 to 1.5% in February 1998. This additional interest is expected
to be nonrecurring and not significant to the Company's continuing operations.

On March 16, 1998, the Company completed an offering of $50.0 million
aggregate principal amount of Senior Notes. The Senior Notes are unsecured
obligations of the Company ranking senior in right of payment to all existing
and future subordinate indebtedness of the Company and pari passu with all
existing and future senior indebtedness of the Company. Proceeds from the
issuance of the Senior Notes will be used for growth capital expenditures and
general corporate purposes. Pending such use, the Company used the net proceeds
to temporarily repay advances under the Revolving Credit Facility.

The indentures (the "Indentures") governing the First Mortgage Notes and
the Senior Notes contain certain covenants that restrict the Company from taking
various actions, including, subject to specified

16
<PAGE> 18

exceptions, the incurrence of additional indebtedness, the granting of
additional liens, the making of investments, the payment of dividends and other
restricted payments, mergers, acquisitions and other fundamental corporate
changes, capital expenditures, operating lease payments and transactions with
affiliates. The Revolving Credit Facility contains other and more restrictive
covenants, including certain financial covenants that require the Company to
meet and maintain certain financial tests and minimum ratios such as a minimum
working capital ratio, a minimum consolidated net worth test and a minimum
interest coverage ratio.

The Company expects significant expenditures in the remainder of 1998,
including interest expense on the First Mortgage Notes, the Senior Notes and the
Revolving Credit Facility, a payment in respect of the Company's supply
agreement with Stroh's of $7.0 million, capital expenditures of approximately
$35.0 million (a portion of which will be leased), and closing costs associated
with the closed manufacturing facilities of approximately $2.0 million. In
addition, at December 31, 1997, one of the Company's pension plans was
underfunded. However, because of a change, effective January 1, 1998, to the
market value asset valuation method for determining pension plan contributions,
no further contributions to the Company's pension plans will be required in 1998
with respect to either current or past underfundings. Based on an average rate
of return of 8% on plan assets, future required pension plan contributions are
currently expected to be in the range of $4 to $8 million annually, depending on
the performance of the underlying plan assets. However, to the extent that the
actual rate of return differs from this assumed average rate of return, pension
plan contributions could increase or decrease significantly. Peak needs are in
spring and fall at which time working capital borrowings are estimated to be
$20.0 million higher than at other times of the year. The Company's principal
sources of liquidity through the remainder of 1998 and 1999 are expected to be
funds derived from operations, borrowings under the Revolving Credit Facility
and proceeds from asset sales.

IMPACT OF INFLATION

The impact of inflation on the costs of the Company, and the ability to
pass on cost increases in the form of increased sales prices, is dependent upon
market conditions. While the general level of inflation in the domestic economy
has been at relatively low levels, the Company has begun to pass on inflationary
cost increases either as a result of contractual arrangements permitting the
pass on of cost increases or as the result of recent negotiations with various
customers.

SEASONALITY

YEAR 2000

The Company's information systems cover a broad spectrum of software
applications for its manufacturing processes, certain of which are custom
designed. After an extensive study, the Company has updated its plan to achieve
Year 2000 compliance by upgrading both packaged and custom-designed software
currently in place. This upgrade is expected to resolve any Year 2000 issues.
The Company has begun the upgrade of its systems in the second quarter of 1998
with a planned completion date of December 1998, with respect to packaged
software, and June 1999, with respect to custom-designed software, which
management believes provides sufficient time to resolve any unexpected issues.

17
<PAGE> 19

The Company has initiated formal communications with all of its significant
suppliers to determine the extent to which the Company is vulnerable to the
failure of such suppliers to remediate their own Year 2000 problems. The Company
is currently in the process of grading the responses from low to high risk. In
addition, although many of the Company's customers have been communicating with
the Company regarding Year 2000 issues, the Company has not made any formal
assessment of the effect which the failure of its larger customers to remediate
their own Year 2000 problems could have on the Company's operations. Despite
these efforts, there can be no assurance that the systems of other companies on
which the Company relies will be timely converted, or that a failure to
remediate by one or more of the Company's customers or suppliers would not have
a material adverse effect on the Company.

FACTORS AFFECTING FUTURE OPERATING RESULTS

There are a number of factors, including those specified below, which may
adversely affect the Company's future operating results.

LIMITED OPERATING HISTORY; INSOLVENCY OF OLD ANCHOR

The Company was formed in January 1997 to acquire certain assets and assume
certain liabilities of Old Anchor. Prior to the Anchor Acquisition, the Company
had no operations. In addition, former management of Old Anchor has largely been
replaced since the consummation of the Anchor Acquisition in February 1997 and
new management has concentrated on formulating and refining the Company's
business strategy. Since the Anchor Acquisition, the Company has had a limited
financial performance track record.

Additionally, Old Anchor sought protection under Chapter 11 of the
Bankruptcy Code in September 1996. In the bankruptcy, previous investors in, and
lenders to, Old Anchor incurred substantial losses. From 1993 to 1996, Old
Anchor had significant operating losses, incurring a 1996 net loss of
approximately $655.8 million including a $490.2 million impairment of long-lived
assets. As of December 31, 1996, Old Anchor had an accumulated deficit of
approximately $823.2 million. The report of Arthur Andersen LLP, independent
public accountants, on Old Anchor's 1995 and 1996 financial statements contains
an explanatory paragraph because of the possible material effects of
uncertainties resulting from Old Anchor's filing for reorganization under
Chapter 11 of the Federal Bankruptcy Code and doubts about Old Anchor's ability
to continue as a going concern following its sale of substantially all of its
assets on February 5, 1997.

SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE DEBT

Anchor has incurred significant Indebtedness. At June 30, 1998, Anchor's
aggregate consolidated indebtedness was $233.9 million and it had outstanding
advances of $30.4 million and outstanding letters of credit of $11.1 million
under the Revolving Credit Facility. At such date, Anchor's stockholders' equity
was $74.3 million. In addition, subject to the restrictions in the Revolving
Credit Facility and the Indentures, the Company may incur additional
indebtedness from time to time to finance capital expenditures or for other
purposes. Substantially all of the Company's assets have been pledged to secure
the First Mortgage Notes and the Revolving Credit Facility. For Fiscal 1997, the
Company's earnings would have been insufficient to cover its fixed charges. The
Company's debt service requirements (including interest and principal) over the
next five years are expected to be approximately $26.9 million annually.

The level of the Company's indebtedness could have important consequences,
including: (i) a substantial portion of the Company's cash flow from operations
must be dedicated to service debt and will not be available for other purposes;
(ii) the Company's ability to obtain additional debt financing in the future for
working capital, capital expenditures or other needs may be limited; and (iii)
the Company's level of indebtedness could limit its flexibility in reacting to
changes in the industry in which it competes and economic conditions in general.
Certain of the Company's competitors currently operate on a less leveraged basis
and have significantly greater operating and financing flexibility than the
Company.

The Company's ability to pay interest on, and to repay portions of, its
long-term indebtedness and to satisfy its other debt obligations will depend
upon its future operating performance and the availability of

18
<PAGE> 20

refinancing indebtedness, which will be affected by prevailing economic
conditions and financial, business and other factors, certain of which are
beyond the Company's control. In addition, the indenture governing the 10 1/4%
Senior Secured Notes (the "Consumers International Notes") of Consumers
International, Anchor's indirect parent, and Consumers' revolving credit
facility substantially restrict Consumers' ability to make further investments
in the Company whether through equity investments, loans or otherwise.
Accordingly, Anchor will not be able to rely on Consumers for liquidity or for
payments on its long-term indebtedness. The Company anticipates that its
operating cash flow, together with borrowings under the Revolving Credit
Facility, will be sufficient to meet its operating needs and to meet its debt
service requirements as they become due, assuming that the Company achieves a
significant portion of the cost reduction components of its business strategy.
See "Business -- Business Strategy." However, if this is not the case, the
Company will be forced to seek alternatives that may include reducing or
delaying capital expenditures, selling assets, restructuring or refinancing its
indebtedness or seeking additional equity capital. There can be no assurance
that any such strategy could be effected on satisfactory terms, if at all. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

In addition, the Company's Series A Preferred Stock issued to certain
creditors of Old Anchor and contributed to the Plans in connection with the
Anchor Acquisition is subject to mandatory redemption in 2009, which could
adversely affect Anchor's ability to refinance the First Mortgage Notes or the
Senior Notes at their maturity.

SIGNIFICANT EXPENDITURES; DEPENDENCE ON SUCCESSFUL IMPLEMENTATION OF BUSINESS
STRATEGY

The Company has significant cash expenditures relating to the operation of
its business, including the following: (i) required pension plan contributions
in the range of approximately $4 to $8 million annually for the next five years,
based on an assumed average rate of return of 8% on plan assets; (ii) a payment
in respect of the Company's supply agreement with Stroh's of $7.0 million in
1998; (iii) significant capital expenditures of approximately $35 million and
$56 million in the remainder of 1998 and 1999, respectively; and (iv)
significant cash expenses of closing the Houston and Dayville plants and certain
plants previously closed by Old Anchor, including an estimated $2.0 million in
the remainder of 1998. In addition, with respect to the Company's expected
required pension plan contributions, to the extent that the actual rate of
return differs from the assumed average rate of return of 8%, the actual
required pension plan contributions could increase or decrease significantly.

The Company is also accruing annual dividend payment obligations of
approximately $5.6 million in respect of the Company's Series A Preferred Stock.
In addition, the Company's Series B Preferred Stock, par value $.01 per share
(the "Series B Preferred Stock"), receives dividends in kind only until February
2000 and beginning thereafter will accrue annual dividend payments of $8.5
million, as declared by the board of directors of the Company.

In order to meet its fixed payment obligations and retain sufficient
borrowing availability under the Revolving Credit Facility to satisfy its
working capital requirements, the Company must achieve significant cash flow
from operations which requires it to improve its operating results significantly
over those of Old Anchor. In order to improve on Old Anchor's operating results,
the Company must achieve substantial cost savings and improvements in average
selling prices resulting from a shift in product mix toward products with higher
average selling prices. In the event that the operating improvements from
management's business strategy are materially less than estimated and/or require
a longer time frame than anticipated to achieve or the estimated costs of the
plant closings are materially higher than anticipated, the Company's ability to
service its debt and pay its other fixed charges could be adversely impacted.

In the event that Anchor's cash flow from operations is less than
anticipated or its cash expenditures are greater than anticipated and available
borrowings under the Revolving Credit Facility are used, there can be no
assurance that Anchor can raise additional funds through equity or debt
financings or asset sales given the financial and other covenants to which
Anchor is subject under the Indentures and the Revolving Credit Facility, Old
Anchor's insolvency and uncertainty regarding Anchor's future operating
performance, the pledge by Anchor of substantially all of its assets to secure
the First Mortgage Notes and the Revolving Credit Facility and the limitations
on investments by Consumers in Anchor imposed under Consumers' credit
19
<PAGE> 21

facilities and Consumers International Indenture. See "-- Substantial Leverage;
Ability to Service Debt" and "-- Restrictive Debt Covenants."

RESTRICTIVE DEBT COVENANTS

The Indentures restrict the ability of the Company and its Restricted
Subsidiaries to, among other things, incur additional indebtedness, incur liens,
pay dividends or make certain other restricted payments or investments,
consummate certain asset sales, enter into certain transactions with affiliates,
incur indebtedness that is subordinate in right of payment to any senior
indebtedness and senior in right of payment to the First Mortgage Notes or
Senior Notes, as the case may be, merge or consolidate with any other person or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company. The Indentures also impose
restrictions on the ability of a subsidiary to pay dividends or make certain
payments to the Company. In addition, the Revolving Credit Facility contains
other and more restrictive covenants and prohibits the Company from prepaying
the First Mortgage Notes or the Senior Notes, except in certain circumstances.
The Revolving Credit Facility also requires the Company to maintain specified
financial ratios and satisfy certain financial tests. The Company's ability to
meet such financial ratios and tests may be affected by events beyond its
control. There can be no assurance that the Company will meet such tests. A
breach of any of these covenants could result in an event of default under the
Revolving Credit Facility. If such an event of default occurs, the lenders could
elect to declare all amounts borrowed under the Revolving Credit Facility,
together with accrued interest, to be immediately due and payable and to
terminate all commitments under the Revolving Credit Facility. If the Company
were unable to repay all amounts declared due and payable, the lenders could
proceed against the collateral securing such loans to satisfy the indebtedness
and other obligations due and payable. If indebtedness under the Revolving
Credit Facility were to be accelerated, there can be no assurance that the
assets of the Company would be sufficient to repay in full such indebtedness and
the other indebtedness of the Company.

COMPETITION; THE GLASS CONTAINER MARKET

The Company is subject to intense competition from other glass container
producers as well as from makers of alternative forms of packaging, such as
aluminum cans and plastic containers. The Company's principal competitors among
glass container producers are Owens and Ball-Foster, both of which are larger
competitors with less leverage and more financial resources than the Company.
Over the past several years, there has been a decline in the glass container
industry, principally as a result of the loss of market share in the soft drink
and food industries to alternative forms of packaging. Competitive pressures
from alternative forms of packaging, as well as consolidation in the glass
container industry, have resulted in excess capacity and have led to severe
pricing pressures on glass container manufacturers. See "Item 1.
Business -- Competition."

During the period of its continued losses, insolvency and uncertainty
regarding future operations and ownership, Old Anchor's relationships with many
of its major customers were adversely affected and Old Anchor lost certain
customers or received volume reductions and in many cases reduced prices
substantially in order to maintain production volumes. In order to successfully
improve the Company's operating performance as compared to Old Anchor, the
Company will need to establish and maintain strong relationships with major
customers based upon competitive pricing. There can be no assurance that the
Company will be able to achieve this objective.

DEPENDENCE ON KEY PERSONNEL AND G&G

Certain executive officers of the Company are key to the management and
direction of the Company. In addition, the Company has entered into a Management
Agreement (the "Management Agreement") with G&G, an affiliate of the Company,
for the provision of certain management services, including marketing,
managerial and technical assistance. See "Item 7. Certain Relationships and
Related Transactions." The initial term of the Management Agreement expires on
February 5, 2000. Thereafter, the Management Agreement automatically renews for
periods of one year unless either party gives notice of termination at least six
months prior to the expiration of the then current term. In addition, the
Company does not, as a general rule, enter into employment agreements with its
executive officers and/or other key employees. The loss of the

20
<PAGE> 22

services of such executive officers or of G&G, by termination of the Management
Agreement or otherwise, could have a material adverse effect on the Company, and
there can be no assurance that the Company would be able to find replacements
for such executive officers or G&G with equivalent business experience and
skills. See "Item 5. Directors and Executive Officers" and "Item 7. Certain
Relationships and Related Transactions."

CONTROLLING STOCKHOLDER; TRANSACTIONS WITH RELATED PARTIES

Mr. Ghaznavi effectively controls Anchor through G&G's control of Consumers
and its subsidiaries, Consumers International and Consumers U.S. Consumers U.S.
currently owns approximately 57% of Anchor on a fully diluted basis and is
entitled, as sole holder of the Class B Common Stock, to appoint seven of the
eleven members of Anchor's Board of Directors (the "Board of Directors") until
February 5, 2000. See "Item 5. Directors and Executive Officers." As a result,
Anchor is part of a group of glass manufacturing companies with Consumers and
Glenshaw. A portion of the cost savings anticipated to be achieved by Anchor in
connection with the implementation of its business strategy is dependent upon
the successful reallocation of customers between Anchor and Consumers in order
to achieve operational efficiencies. In addition, it is anticipated that Anchor
will be party to a number of arrangements with Consumers, Glenshaw and other
affiliated companies regarding, among other things, bulk purchasing, production
for customers (for which commissions may be payable), managerial services,
including the Management Agreement with G&G, leasing of fleets and equipment and
shipping. See "Item 7. Certain Relationships and Related Transactions." The
Indentures and the Revolving Credit Facility limit commissions and other fees
payable by the Company to Consumers and its affiliates and otherwise require
that transactions and agreements among the companies be on terms no less
favorable to the Company than could be obtained from third parties and, for
transactions in excess of certain thresholds, be approved by the Company's
independent directors and/or submitted to an independent financial advisor. The
business, financial condition and results of operations of the Company may be
adversely affected by decisions made by Consumers taking into account the needs
of Consumers, Glenshaw and other affiliated companies. A default on
indebtedness, insolvency or bankruptcy of Consumers could adversely affect
Anchor's business and results of operations, given that many members of
management at Consumers are involved in Anchor's affairs and that Anchor may be
closely associated with Consumers, its customers and suppliers, which could
adversely affect trading prices for the Class C Common Stock being registered
hereby or Anchor's ability to raise debt or equity capital.

LABOR RELATIONS

The Company is a party to collective bargaining agreements with labor
unions that will expire between March 1999 and August 1999. In the aggregate,
under those agreements the Company currently employs approximately 2,650
full-time employees. The Company's inability to negotiate acceptable contracts
with these unions could result in strikes by the affected workers and increased
operating costs as a result of higher wages or benefits paid to union members.
Although Old Anchor historically has not had any labor disruptions, if the
unionized workers were to engage in a strike or other work stoppage, the Company
could experience a significant disruption of its operations and higher ongoing
labor costs, which could have an adverse effect on the Company's business,
financial position and results of operations. See "Item 1.
Business -- Employees."

DEPENDENCE ON KEY CUSTOMERS

The Company's two largest customers (Anheuser-Busch and Stroh's) accounted
for approximately 8.8% and 15.6% of its net sales for Fiscal 1997, respectively.
The termination by either of such customers of its relationship with the Company
could have a material adverse effect upon the Company's business, financial
position and results of operations.

The Company's existing customers' purchase orders and contracts typically
vary from one to three years. Prices under these arrangements are tied to market
standards and therefore vary with market conditions. The contracts generally are
requirements contracts which do not obligate the customer to purchase any given
amount of product from the Company. Accordingly, notwithstanding the existence
of certain supply contracts, the Company faces the risk that customers will not
purchase the amounts expected by the Company pursuant
21
<PAGE> 23

to such supply contracts. In addition, with the exception of the Fevisa
production, the Company has a purchase order relationship with Anheuser-Busch
whereby Anheuser-Busch renegotiates with the Company each year for the next
year's purchase orders. Accordingly, past purchase orders placed by
Anheuser-Busch are not necessarily indicative of future purchase orders.

SEASONALITY; RAW MATERIALS

Sand, soda ash, limestone, cullet and corrugated packaging materials are
the principal raw materials used by the Company. Raw materials represented
approximately 28% of the cost of products sold for the Company in Fiscal 1997.
The Company believes that a sufficient supply of these raw materials exists and
that the Company is not dependent upon any single supplier for any of them.
However, material increases in the cost of any of the principal raw materials
used by the Company could have a material adverse impact on the Company's
results of operations.

ENVIRONMENTAL AND OTHER GOVERNMENT REGULATION

Environmental Regulation and Compliance. The Company's operations are
subject to increasingly complex and detailed Federal, state and local laws and
regulations including, but not limited to, the Federal Water Pollution Control
Act of 1972, as amended, the U.S. Clean Air Act, as amended, and the Federal
Resource Conservation and Recovery Act, as amended, that are designed to protect
the environment. Among the activities subject to regulation are the disposal of
checker slag (furnace residue usually removed during furnace rebuilds), the
disposal of furnace bricks containing chromium, the disposal of waste, the
discharge of water used to clean machines and cooling water, dust produced by
the batch mixing process, underground storage tanks and air emissions produced
by furnaces. In addition, the Company is required to obtain and maintain permits
in connection with its operations. Many environmental laws and regulations
provide for substantial fines and criminal sanctions for violations. The Company
believes that it is in material compliance with applicable environmental laws
and regulations. It is difficult to predict the future development of such laws
and regulations or their impact on future earnings and operations, but the
Company anticipates that these standards will continue to require increased
capital expenditures. There can be no assurance that material costs or
liabilities will not be incurred.

Certain environmental laws, such as CERCLA and analogous state laws provide
for strict, joint and several liability for investigation and remediation of
releases of hazardous substances into the environment. Such laws may apply to
conditions at properties presently or formerly owned or operated by an entity or
its predecessors, as well as properties at which wastes attributable to an
entity or its predecessors were disposed. See "Item 1. Business -- Environmental
and Other Government Regulation."

The Company is engaged in investigation and remediation projects at plants
currently being operated and at closed facilities. In addition, Old Anchor was
named as a PRP under CERCLA with respect to a number of sites. Of these sites,
the Company has assumed responsibility with respect to four sites that are
currently active. While the Company may be jointly and severally liable for
costs related to these sites, in most cases, it is only one of a number of PRPs
who are also jointly and severally liable. With respect to the four currently
active sites for which the Company has assumed responsibility, the Company
estimates that its share of the aggregate cleanup costs of such sites should not
exceed $2.0 million, and that the likely range after taking into consideration
the contributions anticipated from other potentially responsible parties could
be significantly less. However, no assurance can be given that the cleanup costs
of such sites will not exceed $2.0 million or that the Company will have these
funds available. The Company has established reserves of approximately

22
<PAGE> 24

$16.0 million for environmental costs which it believes are adequate to address
the anticipated costs of remediation of these operated and closed facilities and
its liability as a PRP under CERCLA. The timing and magnitude of such costs
cannot always be determined with certainty due to, among other things,
incomplete information with respect to environmental conditions at certain
sites, the absence of regulatory determinations with respect to environmental
requirements at certain sites, new and amended environmental laws and
regulations, and uncertainties regarding the timing of remedial expenditures.

ERISA. The Company maintains two defined benefit plans and two profit
sharing plans that, prior to the Anchor Acquisition, were maintained by Old
Anchor. These plans are covered by ERISA, are tax-qualified under the Code, and
subject to regulation by the Internal Revenue Service and the Department of
Labor. The two defined benefit plans are also subject to regulation by the PBGC.
The Company's two profit sharing plans contain cash or deferred arrangements
under Section 401(k) of the Code. The Company's tax-qualified plans must meet
stringent requirements both in form and in operation in order to maintain their
tax-qualified status. These requirements are constantly changing with the
enactment of new pension legislation, the issuance of new Treasury regulations
and other guidance from the Internal Revenue Service. The loss of a plan's
qualified status could result in the assessment of tax on the plan's trust
income, disallowance of the Company's tax deduction for contributions, and
immediate income tax liability upon individual participants' benefits.

The defined benefit plan covering salaried employees was frozen at the end
of 1994, and, at the end of 1997, was not underfunded under SFAS No. 87.
However, at the end of 1997, the defined benefit plan maintained for hourly
employees was significantly underfunded with unfunded benefits under SFAS No. 87
totaling approximately $55.5 million. However, because of a change, effective
January 1, 1998, to the market value asset valuation method for determining
pension plan contributions, no further contributions will be required in 1998
with respect to either current or past underfundings. Pension underfunding
contributions made to the two defined benefit plans during 1997, excluding
contributions made by the Company upon the closing of the Anchor Acquisition,
were approximately $15.1 million. In addition, increased premiums to the PBGC
under its pension guaranty program of approximately $1.8 million in 1997.

Employee Health and Safety Regulation. The Company's operations are
subject to a variety of worker safety laws. OSHA and analogous state laws
mandate general requirements for safe workplaces for all employees. The Company
believes that its operations are in material compliance with applicable employee
health and safety laws.

Deposit and Recycling Legislation. In recent years, legislation has been
introduced at the Federal, state and local levels that would require a deposit
or tax, or impose other restrictions, on the sale or use of certain containers,
particularly beer and carbonated soft drink containers. To date, ten states have
enacted some form of deposit legislation, although no such new legislation has
been enacted since 1986. The enactment of additional laws or comparable
administrative actions that would require a deposit on beer or soft drink
containers, or otherwise restrict their use, could have a material adverse
effect on the Company's business. In jurisdictions where deposit legislation has
been enacted, the consumption of beverages in glass bottles has generally
declined due largely to the preference of retailers for handling returned cans
and plastic bottles. Container deposit legislation continues to be considered
from time to time at various governmental levels.

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<PAGE> 25

ITEM 3. PROPERTIES

The Company's administrative and executive offices are located in Tampa,
Florida. The Company owns and operates nine glass manufacturing plants. The
Company also leases a building located in Streator, Illinois, that is used as a
machine shop to rebuild glass-forming related machinery and one mold shop
located in Zanesville, Ohio, as well as additional warehouses for finished
products in various cities throughout the United States. Substantially all of
the Company's owned and leased properties are pledged as collateral securing the
Company's obligations under the First Mortgage Notes and the related Indenture.

As part of its long-term business strategy, the Company closed its Houston
plant effective as of February 1997 and its Dayville plant effective as of April
1997. Two furnaces and five machines have also been removed from service, one
furnace and one machine at the Company's Jacksonville plant and one furnace and
four machines at its Connellsville plant. In addition, management will continue
to monitor business conditions and utilization of plant capacity to determine
the appropriateness of further plant closings.

The following table sets forth certain information about the facilities
owned and being operated by the Company as of August 1, 1998.

<TABLE>
<CAPTION>
NUMBER OF NUMBER OF BUILDING AREA
LOCATION(1) FURNACES MACHINES (SQUARE FEET)
----------- --------- --------- -------------
<S> <C> <C> <C>
Operating Plants:
Jacksonville, Florida(2)................... 3 5 624,000
Warner Robbins, Georgia.................... 2 8 864,000
Lawrenceburg, Indiana...................... 1 4 504,000
Winchester, Indiana........................ 2 6 627,000
Shakopee, Minnesota........................ 2 6 360,000
Salem, New Jersey(3)....................... 3 6 733,000
Elmira, New York........................... 2 6 912,000
Henryetta, Oklahoma........................ 2 6 664,000
Connellsville, Pennsylvania(4)............. 2 4 624,000
</TABLE>

- ---------------
(1) Keyser, West Virginia, Gas City, Indiana, Cliffwood, New Jersey, Royersford,
Pennsylvania, Chattanooga, Tennessee, Houston, Texas and Dayville,
Connecticut are closed plants that are part of the collateral securing the
First Mortgage Notes and the Company's obligations under the related
Indenture.

(2) The Company removed one furnace and one machine from production at this
facility in February 1997.

(3) A portion of the site on which this facility is located is leased pursuant
to several long-term leases.

(4) The Company removed one furnace and four machines from production at this
facility in February 1997.

24
<PAGE> 26

The following table sets forth certain information about the facilities
leased by the Company as of August 1, 1998 (other than the Tampa headquarters):

<TABLE>
<CAPTION>
LEASE
BUILDING AREA EXPIRATION
LOCATION (SQ. FT.) DATE
-------- ------------- --------------
<S> <C> <C>
Warehouses:
Dayville, Connecticut....................... 985,000 August 2018
Jacksonville, Florida....................... 120,000 June 2003
Adairsville, Georgia........................ 165,000 June 1999
Winchester, Indiana......................... 120,000 June 2000
Savage, Minnesota........................... 102,000 month to month
Salem, New Jersey(1)........................ land only January 2029
Mt. Pleasant, Pennsylvania.................. 100,000 month to month
Mississauga, Ontario, Canada................ 48,000 month to month
Fort Collins, Colorado...................... 120,000 June 2003
Machine Shop:
Streator, Illinois.......................... 130,000 month to month
Mold Shop:
Zanesville, Ohio............................ 102,000 December 2008
</TABLE>

- ---------------
(1) The building is owned by the Company and has 733,000 square feet.

Headquarters Lease. In connection with the Anchor Acquisition, the Company
assumed and amended Old Anchor's lease of the headquarters facility located in
Tampa, Florida and a related option to purchase. In January 1998, the Company
exercised its option to purchase and assigned the option to a third party
purchaser of the facility. Anchor has entered into a lease pursuant to which it
will lease a portion of the headquarters facility for an initial term of ten
years.

25
<PAGE> 27

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of the Company's Class A Common Stock and Class B Common Stock
(collectively the "Voting Common Stock") as of August 1, 1998 by: (i) each
person who is known by the Company to beneficially own 5% or more of such Voting
Common Stock; (ii) each Director of the Company; (iii) the Company's Chief
Executive Officer and the Named Executive Officers (as defined); and (iv) all
current Directors and executive officers of the Company as a group.

<TABLE>
<CAPTION>
CLASS AND AMOUNT OF PERCENTAGE PERCENTAGE
BENEFICIAL OWNERSHIP(1) (BY CLASS)(1) (BOTH CLASSES)(1)
----------------------- ----------------------- -----------------------
PRIMARY AND
ACTUAL FULLY DILUTED PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
NAME(1) ------ ------------- ------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS:
John J. Ghaznavi(2).............. -- -- -- -- -- --
M. William Lightner(3)........... -- -- -- -- -- --
David T. Gutowski(4)............. -- -- -- -- -- --
Paul H. Farrar(5)................ -- -- -- -- -- --
C. Kent May(6)................... -- -- -- -- -- --
Steven J. Friesen(7)............. -- -- -- -- -- --
Richard M. Deneau(8)............. -- -- -- -- -- --
George C. Lusby(9)............... -- -- -- -- -- --
William J. Shaw.................. -- -- -- -- -- --
Christopher M. Mackey(10)........ 116,855 691,388 64.9 6.9 35.1 2.4
Class A Class A
All Directors and executive
officers as a group (17
persons)....................... 116,855 691,388 64.9 6.9 35.1 2.4
FIVE PERCENT STOCKHOLDERS:
Smith Barney, as escrow
agent for certain creditors 214,506 3,969,013
of Old Anchor(11).............. Class A Class A 93.5 39.1 77.1 13.9
Anchor Glass Container
Corporation Service -- 1,341,079
Retirement Plan(12)(13)........ Class A 73.2 13.2 49.0 4.7
Anchor Glass Container
Corporation Retirement
Plan for Salaried -- 158,921
Employees(12)(14).............. Class A 24.5 1.6 10.2 0.6
902,615 17,309,942
Consumers U.S., Inc.(15)......... Class B Class B 100.0 97.2 97.3 62.7
-- 525,000
G&G Investments, Inc.(16)........ Class B 36.8 2.8 27.4 1.8
</TABLE>

- ---------------
(1) Unless otherwise indicated in these footnotes, each stockholder has sole
voting and investment power with respect to shares beneficially owned and
all addresses are in care of the Company. All primary share amounts and
percentages reflect beneficial ownership determined pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
All fully diluted share amounts and percentages reflect beneficial
ownership of Voting Common Stock determined on a fully diluted basis. All
information with respect to beneficial ownership has been furnished by the
respective Director, executive officer or stockholder, as the case may be,
as of August 1, 1998.

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<PAGE> 28

(2) Through G&G, Ghaznavi Canada Inc. and other affiliates, Mr. Ghaznavi
beneficially owns 21,619,584 shares of the voting common stock of
Consumers, including 1,588,126 shares issuable upon the exercise of
currently exercisable options. Mr. Ghaznavi is the controlling shareholder
of G&G and Consumers U.S.

(3) Mr. Lightner beneficially owns 138,800 shares of the voting common stock of
Consumers, including 135,000 shares issuable upon the exercise of currently
exercisable options, but not including 2,000 shares owned by Mr. Lightner's
spouse with respect to which Mr. Lightner disclaims beneficial ownership.

(4) Mr. Gutowski beneficially owns 126,300 shares of the voting common stock of
Consumers, including 115,000 shares issuable upon the exercise of currently
exercisable options.

(5) Mr. Farrar beneficially owns 30,000 shares of the voting common stock of
Consumers, including 25,000 shares issuable upon the exercise of currently
exercisable options.

(6) Mr. May beneficially owns 92,600 shares of the voting common stock of
Consumers, including 85,000 shares issuable upon the exercise of currently
exercisable options.

(7) Mr. Friesen beneficially owns 25,000 shares of the voting common stock of
Consumers, all of which are issuable upon the exercise of currently
exercisable options.

(8) Mr. Deneau beneficially owns 33,333 shares of the voting common stock of
Consumers, all of which are issuable upon the exercise of currently
exercisable options.

(9) Mr. Lusby beneficially owns 35,000 shares of the voting common stock of
Consumers, all of which are issuable upon the exercise of currently
exercisable options.

(10) Includes 574,533 shares issuable upon conversion of 137,888 shares of
Series A Preferred Stock. Mr. Mackey has beneficial ownership of 116,801
shares of Class A Common Stock and 137,846 shares of Series A Preferred
Stock through CoMac Partners, L.P., CoMac International N.V., CoMac
Opportunities Fund, L.P. and CoMac Endowment Fund, L.P. Pursuant to Rule
13d-4 under the Securities Act, Mr. Mackey disclaims beneficial ownership
of such shares. The address for this stockholder is 1 Greenwich Office
Park, 3rd Floor, Greenwich, Connecticut 06831.

(11) Includes 3,421,663 shares issuable upon conversion of 821,199 shares of
Series A Preferred Stock and 332,844 shares issuable upon the exercise of
certain currently exercisable warrants. The 214,506 shares of Class A
Common Stock, the 821,199 shares of Series A Preferred Stock and the
warrants are held by Smith Barney, as escrow agent, pursuant to an escrow
agreement between Old Anchor and Smith Barney. Such shares and warrants are
in the process of being distributed to the creditors of Old Anchor. The
address of Smith Barney is 388 Greenwich Street, 19th Floor, New York, New
York 10013.

(12) This stockholder's shares of Series A Preferred Stock are held in trust by
The Chase Manhattan Bank, as trustee of such benefit plan and the current
address for this stockholder is c/o The Chase Manhattan Bank, 3 Chase
Metrotech Center, Brooklyn, New York 11245. However, an "investment
manager," as that term is defined in Section 3(38) of ERISA, will be
appointed to control the shares contributed to the plans. When appointed,
such investment manager will have exclusive control over this stockholder's
shares of Series A Preferred Stock and any shares of Class A Common Stock
into which such shares of Series A Preferred Stock may be converted.
Pursuant to an agreement among the Company, Consumers and the PBGC, a
valuation of the shares of Series A Preferred Stock contributed to the
Plans has been performed by an independent appraiser, which was completed
in November 1997. In March 1998, the Company made an additional
contribution to the Plans of $0.7 million in cash to bring the value of the
contribution to $9.0 million.

(13) All 1,341,079 shares of this stockholder's beneficially owned shares of
Class A Common Stock are issuable upon conversion of 321,859 shares of
Series A Preferred Stock.

(14) All 158,921 shares of this stockholder's beneficially owned shares are
issuable upon conversion of 38,141 shares of Series A Preferred Stock.

(15) Includes 17,064,682 shares issuable upon conversion of 3,754,230 shares of
Series B Preferred Stock (including 394,230 shares of Series B Preferred
Stock, accrued as of June 30, 1998 as a payment in kind dividend). Does not
include, however, shares of Series B Preferred Stock which have accrued
since

27
<PAGE> 29

June 30, 1998 as a payment in kind dividend. On a fully diluted basis,
Consumers U.S. currently owns approximately 57% of the three classes of
common stock of the Company. Not including the Class C Common Stock (which
is nonvoting), Consumers U.S. owns approximately 63.8% of the voting common
stock of the Company on a fully diluted basis. All of the shares of Class B
Common Stock and Series B Preferred Stock currently owned or subsequently
acquired by Consumers U.S. are pledged to secure Consumers U.S.' guarantee
of the Company's obligations under the First Mortgage Notes and the related
Indenture. The address for Consumers U.S. is 3140 William Flinn Highway,
Allison Park, Pennsylvania 15101.

(16) All 525,000 shares are issuable upon the exercise of currently exercisable
warrants. The address for G&G is 3140 William Flinn Highway, Allison Park,
Pennsylvania 15101.

ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

Directors and Officers. The following table sets forth certain information
regarding each of the Company's directors and executive officers.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
John J. Ghaznavi.......................... 63 Chairman, Chief Executive Officer and
Director
Richard M. Deneau......................... 51 President, Chief Operating Officer and
Director
M. William Lightner, Jr................... 64 Senior Vice President -- Finance, Chief
Financial Officer, Treasurer and Director
David T. Gutowski......................... 49 Senior Vice President -- Administration and
Director
C. Kent May............................... 58 Senior Vice President, General Counsel,
Secretary and Director
Paul H. Farrar............................ 63 Director
Steven J. Friesen......................... 53 Director
Christopher M. Mackey..................... 38 Director
William J. Shaw........................... 55 Director
Roger L. Erb.............................. 55 Senior Vice President -- Operations
Gordon S. Love............................ 48 Senior Vice President -- Sales and
Marketing
Edward M. Jonas........................... 60 Controller
Eugene K. Pool............................ 62 Vice President, Associate General Counsel
and Assistant Secretary
John F. Robichaud......................... 52 Vice President -- Order Management and
Scheduling Logistics
George C. Lusby III....................... 54 Industry Vice President -- Sales and
Marketing
John L. Day............................... 51 Industry Vice President -- Sales and
Marketing
Gregory C. Sinatro........................ 46 Industry Vice President -- Sales and
Marketing
</TABLE>

Term of Office. Each director serves until such director's successor is
elected and qualified or until such director's earlier resignation, retirement,
disqualification, removal from office or death. Each Officer serves until the
first meeting of the Board of Directors following the next annual meeting of the
stockholders and until such officer's successor is chosen and qualified.

John J. Ghaznavi became Chairman of the Board and Chief Executive Officer
of the Company in January 1997. He has been Chairman, Chief Executive Officer
and a director of each of Consumers, Glenshaw and G&G since 1993, 1988 and 1987,
respectively. Mr. Ghaznavi is currently a member of the Board of Directors of
the Glass Packaging Institute.

Richard M. Deneau assumed his duties as President and Chief Operating
Officer of the Company in July 1997 and as a director in June 1998. From January
1996 until June 1997, Mr. Deneau was Senior Vice President and Chief Operating
Officer of Ball-Foster. From October 1992 to January 1996, he was Senior Vice
President in charge of the domestic beverage can operations of American National
Can Company. Prior to
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<PAGE> 30

October 1992, Mr. Deneau was Senior Vice President of Sales at American National
Can Company's division and the predecessor of Ball-Foster, Foster Forbes
("Foster-Forbes").

M. William Lightner, Jr. joined the Company in January 1997 as a director
and as Vice President, Treasurer and Chief Financial Officer. He became Vice
President -- Finance in March 1997 and Senior Vice President -- Finance in June
1997. Since July 1994, Mr. Lightner has been Vice President of Finance and Chief
Financial Officer of Consumers. From 1989 to 1992, Mr. Lightner served as
Chairman of MICA Resources, a privately held aluminum processor and brokerage
company. Mr. Lightner was a partner with Arthur Andersen & Co. from 1969 to
1989.

David T. Gutowski joined the Company in January 1997 as a director and as a
Vice President and became Vice President -- Administration in March 1997 and
Senior Vice President -- Administration in June 1997. He has been a director of
Consumers since 1993. Mr. Gutowski served as Treasurer and Chief Financial
Officer of G&G since 1988.

C. Kent May became a director of the Company in January 1997 and became
Vice President, General Counsel and Secretary of the Company in March 1997. He
became Senior Vice President in June 1997. Mr. May has served as a director of
Consumers since 1993 and he was appointed General Counsel of Consumers in March
1997. Mr. May has been an associate, partner or member of the law firm of Eckert
Seamans Cherin & Mellott, LLC since 1964, and served as the managing partner of
such firm from 1991 to 1996.

Paul H. Farrar became a director of the Company in February 1997 and has
served as a director of Consumers since 1994. Mr. Farrar has been Chairman of
Adelaide Capital Corporation, an investment company, since 1994, and he served
as Senior Vice President of Canadian Imperial Bank of Commerce, a Canadian
chartered bank from 1986 to December 1993.

Steven J. Friesen became a director of the Company in June 1998. Mr.
Friesen has been Vice Chairman of G&G since September 1997. For the two years
prior to joining G&G he was an independent consultant and managed his own
investments. Prior thereto he was Chief Executive Officer of the Foster Forbes
Glass Division of American National Can.

Christopher M. Mackey became a director of the Company in June 1998. Mr.
Mackey has been President and Co-Chairman of the Board of Directors of CMS
Advisers, Inc., an investment company, since 1992.

William J. Shaw became a director of the Company in June 1998. Mr. Shaw has
been Chairman, President and Chief Executive Officer of Thousand Trails, Inc.,
the owner/manager of recreational campgrounds, since May 1995. He also served as
President and Chief Executive Officer of Ameriscribe, Inc., a data management
firm, from 1989 to 1994.

Roger L. Erb became Senior Vice President -- Operations of the Company in
October 1997. From September 1995 until June 1997, Mr. Erb was Senior Vice
President of Technical Services at Ball-Foster. Prior thereto, he was employed
at Foster Forbes, serving as Senior Vice President of Technical Services from
June 1994 to September 1995, Senior Vice President of Operations from January
1993 to June 1994, and Vice President of Technical Services prior to 1993.

Gordon S. Love became Senior Vice President -- Sales and Marketing of the
Company in July 1997. From October 1996 until June 1997, Mr. Love was Vice
President of Sales for Beer and Liquor at Ball-Foster. From September 1995 until
October 1996, he was Senior Vice President of Beverage Sales at Ball-Foster.
Prior thereto, he was employed at Foster Forbes, serving as Senior Vice
President of Sales and Marketing from July 1993 to September 1995, Vice
President of Sales from October 1992 to July 1993, and Beer Product Manager
prior to October 1992.

Edward M. Jonas joined the Company in February 1997 and became Controller
of the Company in March 1997. Mr. Jonas joined the predecessor to Old Anchor in
1968 and was Comptroller of Old Anchor from 1983 through early 1995.

Eugene K. Pool joined Old Anchor in June 1988 as Senior Counsel. Mr. Pool
was appointed Assistant Secretary of Old Anchor in 1988, Associate General
Counsel of Old Anchor in 1991 and Vice President-Associate General Counsel of
Old Anchor in 1995. In February 1997, Mr. Pool became Assistant Secretary of

29
<PAGE> 31

the Company and in March 1997, he became Vice President and Associate General
Counsel for the Company.

John F. Robichaud joined the Company in September 1997 as Vice
President -- Order Management and Scheduling Logistics. From 1992 until
September 1997 he was Director of Logistics for Consumers and from 1986 to 1992
was Director of Marketing for Consumers.

George C. Lusby III joined the Company in March 1997 as Industry Vice
President of Sales and Marketing. Mr. Lusby has served as Vice President of
Sales and Marketing and as a director of Glenshaw since 1987.

John L. Day became Industry Vice President of Sales and Marketing for the
Company in March 1997. From September 1993 to February 1997, Mr. Day served as
Vice President -- Beer Sales of Old Anchor and from August 1990 to September
1993, he served as Director of Sales of Old Anchor.

Gregory C. Sinatro became Industry Vice President of Sales and Marketing
for the Company in March 1997. From October 1994 to February 1997, Mr. Sinatro
served as Senior Vice President of Food/Consumer Products of Old Anchor and from
January 1989 to September 1994, he served as Vice President -- Consumer Products
Division of Old Anchor.

BOARD OF DIRECTORS OF THE COMPANY

Classification of Board. Pursuant to the Amended and Restated Certificate
of Incorporation (the "Restated Charter") of the Company, until February 5,
2000, the holders of the Class A Common Stock are entitled to elect four
directors (the "Class A Directors") and the holders of the Class B Common Stock
are entitled to elect seven directors (the "Class B Directors"). Messrs. Mackey
and Shaw are Class A Directors (the remaining Class A Directors have not yet
been designated). Messrs. Ghaznavi, Lightner, Gutowski, Farrar, Friesen, Deneau
and May are Class B Directors.

From and after February 5, 2000, the Board of Directors has discretion to
determine the number of directors (each a "Director") constituting the Board of
Directors, and such number of Directors will be divided into three classes, as
nearly equal in the number of Directors as possible. The term of Directors of
the first, second and third class will expire at the first, second and third
annual meeting after their election, respectively. At each annual meeting, the
number of Directors constituting the class whose term has expired at the time of
such meeting will be elected to hold office until the third succeeding annual
meeting. Until February 5, 2000, Class A Directors may be removed with or
without cause only by the holders of Class A Common Stock and Class B Directors
may be removed with or without cause only by the holders of Class B Common
Stock. Thereafter, all classes of Common Stock (as defined) of the Company will
be consolidated on a one to one share basis into one class of Common Stock (the
"Consolidated Common Stock"). Upon such consolidation, all holders of
Consolidated Common Stock will have the same voting and other rights, including
the right to vote in the general election of directors. In addition, upon such
consolidation, pursuant to the Bylaws of the Company (the "Bylaws"), Directors
may be removed only with cause by the affirmative vote of the holders of 75% of
the outstanding shares of the Consolidated Common Stock.

The foregoing provisions of the Restated Charter and the Bylaws are subject
to the rights, if any, of any series of preferred stock of the Company to elect
additional Directors under circumstances specified in the certificate of
designation relating to such preferred stock.

Officers of the Company serve at the discretion of the Board of Directors.

Compensation of Directors. Non-employee directors of the Company are
entitled to receive an annual director's fee of $7,000. Effective with the
Settlement, the amount of the annual fee for non-employee directors has been
increased to $15,000. In addition, fees of $750 are paid to non-employee
directors for each directors' meeting and committee meeting attended unless more
than one meeting is held on the same day, in which case the fee for attending
each subsequent meeting is $500.

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<PAGE> 32

ITEM 6. EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

Included in the table below, is compensation awarded to, earned by or paid,
during Fiscal 1997 to the Company's Chief Executive Officer and the four most
highly compensated executive officers who were serving as officers at the end of
Fiscal 1997 (the "Named Executive Officers").

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------------
OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($)(2) BONUS($) COMPENSATION($)(3) COMPENSATION($)(4)
- --------------------------- ---- ------------ -------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
John J. Ghaznavi................ 1997 $ -- $ -- $-- $ --
Chairman, Chief Executive
Officer(1)
Richard M. Deneau............... 1997 246,703(5) -- -- 23,991
President, Chief Operating
Officer
David T. Gutowski............... 1997 171,701 -- -- 42,091
Senior Vice President-
Administration
George C. Lusby................. 1997 157,518 -- -- 3,238
Industry Vice President-Sales
and Marketing
C. Kent May..................... 1997 153,419 -- -- --
Senior Vice President-General
Counsel and Secretary
</TABLE>

- ---------------
(1) Mr. Ghaznavi received no compensation from the Company. The Company is a
party to a Management Agreement with G&G, whereby, G&G provides specified
managerial services for the Company and is entitled to receive an annual
management fee of up to $3.0 million.

(2) Salary is shown as earned in the fiscal year, however certain amounts have
been paid in the following year.

(3) No information is provided in the column labeled "Other annual compensation"
since the aggregate amount of perquisites for the period presented is less
than the lessor of $50,000 or 10% of total annual salary and bonus reported
for each of the named officers.

(4) Information provided in the column labeled "All other compensation" includes
moving expenses paid by the Company.

(5) This amount represents Mr. Deneau's salary from the date of the commencement
of his employment with the Company, June 1, 1997, through the end of the
fiscal year.

ANCHOR ANNUAL INCENTIVE PLAN

The Anchor Glass Container Corporation Annual Incentive Plan is designed to
compensate salaried employees of Anchor for performance with respect to planned
business objectives. Participants will be compensated based on the achievement
of predetermined goals of Anchor. Plan participation is limited to salaried
employees within the organization. Eligible participants are designated at the
beginning of each fiscal year as approved by the Compensation Committee. The
plan began January 1, 1998.

CONSUMERS DIRECTOR AND EMPLOYEE INCENTIVE STOCK OPTION PLAN

The Director and Employee Incentive Stock Option Plan, 1996, as amended, of
Consumers, permits Consumers to grant options to purchase common shares of
Consumers to directors and employees of Consumers and any subsidiary or
affiliate, including Anchor. Options may be granted to purchase an aggregate of
3,300,000 common shares of Consumers. Options to purchase 1,216,500 common
shares of Consumers at

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<PAGE> 33

exercise prices that range from C$9.65 to C$13.50, were granted to all of the
salaried employees of Anchor in 1997. Granted options have a term of ten years
and vest one third each year over a three year period.

EMPLOYMENT AGREEMENTS

The Company does not, as a general rule, enter into employment agreements
with its executive officers and/or other key employees.

COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION

The compensation committee is comprised of the entire board of directors,
which includes the Chief Executive Officer and President, the Chief Financial
Officer, the Senior Vice President-Administration and the Senior Vice
President-General Counsel. Messrs. Ghaznavi and Farrar are also members of
Consumers' compensation committee. Certain members of Consumers' board of
directors also serve as executive officers and/or directors of Anchor, including
Messrs. Ghaznavi, Farrar and May.

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company is part of a group of glass manufacturing companies (the
"Affiliated Glass Manufacturers") with Consumers and Glenshaw, each of which is
controlled by Mr. Ghaznavi through G&G. The Company intends to engage in a
variety of transactions with Consumers and Glenshaw as a part of its strategy to
achieve synergies among the companies. These expected transactions may include
bulk purchasing of raw and packaging materials, provision of technical and
engineering services, joint utilization of Anchor's mold and repair shops and
the possible consolidation of certain functions such as sales, engineering and
management information services.

The Company has entered into an Intercompany Agreement (the "Intercompany
Agreement") with G&G, Consumers, Consumers U.S., Consumers International,
Glenshaw, Hillsboro, I.M.T.E.C. Enterprises, Inc., a machinery manufacturer
majority-owned by G&G, and certain related companies which establishes standards
for certain intercompany transactions. Pursuant to the Intercompany Agreement,
the Company may, from time to time, fill orders for customers of Affiliated
Glass Manufacturers and Affiliated Glass Manufacturers may, from time to time,
fill orders for customers of the Company. In such case, where the customer is
not a common customer, the company that does the manufacturing will pay a market
commission, set at 5% of the invoiced amount, to the company that referred the
customer. In the event of a transfer of a customer to the Company by an
Affiliated Glass Manufacturers or to an Affiliated Glass Manufacturers by the
Company, the transfer is treated as though the transferee had filled the orders
for the transferred customer.

In connection with any bulk purchasing of raw materials, packaging
materials, machinery, insurance, maintenance services, environmental services
and other items and services used in this business, each of the Affiliated Glass
Manufacturers will share out-of-pocket costs of the purchasing activities
without payment of commissions. Similarly, in connection with the provision of
technical, engineering or mold design services, the company providing the
services will receive reasonable per diem fees and costs for the employees
provided. For services such as the provision of molds, the company providing the
service will receive cost plus a reasonable market mark-up.

Transactions carried out in accordance with the Intercompany Agreement do
not require approval of the board of directors or fairness opinions. Any
amendment to the Intercompany Agreement is subject to the Indenture requirement
that it be in writing, on terms no less favorable to the Company than could have
been obtained in a comparable arms' length transaction between the Company and
third parties and is subject to the approval of the Board of Directors
("Affiliate Transaction Provisions"). The Revolving Credit Agreement and the
Indentures require that transactions between the Company and an affiliate be in
writing on no less favorable terms to the Company than would be obtainable in a
comparable arms' length transaction between the Company and a person that is not
an affiliate. In addition, transactions exceeding certain threshold values
require the approval of the Company's board of directors, the approval of the
Company's independent directors or an independent fairness opinion.

Certain affiliates of the Company are engaged in businesses other than the
manufacture of glass containers, such as manufacturing or rehabilitating
manufacturing equipment, automobile and truck leasing,

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<PAGE> 34

shipping and real estate management. These transactions are subject to the
Affiliate Transaction Provisions of the Indentures.

The Company is party to the Management Agreement with G&G. Pursuant to the
Management Agreement, G&G is to provide specified managerial services for the
Company. For these services G&G is entitled to receive an annual management fee
of $3.0 million and to reimbursement of its out-of-pocket costs plus an
administrative charge not to exceed 10% of those costs. The Revolving Credit
Agreement and the Indenture limit management fee payments by the Company under
the Management Agreement to $1.5 million per year unless the Company meets
certain financial tests, in which case such fees will accrue.

In September 1997, Hillsboro Glass Company ("Hillsboro"), a glass container
manufacturing plant owned by G&G, discontinued manufacturing. All of Hillsboro's
rights and obligations to fill orders under a supply contract between Consumers
and one of its major customers have been purchased by Consumers and Anchor. In
addition, in connection with a plan to simplify the corporate ownership
structure of Consumers, Anchor and their affiliates, the operating assets and
liabilities of Glenshaw will be acquired by a newly-formed U.S. wholly-owned
subsidiary of Consumers. The purchase price of U.S.$54.3 million will be paid in
common shares of Consumers.

The Company from time to time has engaged the law firm of Eckert Seamans
Cherin & Mellott, LLC, to represent it on a variety of matters. C. Kent May, an
executive officer and director of the Company, is a member of such law firm.

ITEM 8. LEGAL PROCEEDINGS

The Company is, and from time to time may be, a party to routine legal
proceedings incidental to the operation of its business. The outcome of these
proceedings is not expected to have a material adverse effect on the financial
condition or operating results of the Company, based on the Company's current
understanding of the relevant facts and law.

ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS

The Company's common equity securities consist of Classes A, B and C Common
Stock and Series A and Series B Preferred Stock (collectively, the
"Securities"). There is no established public trading market for any of the
Securities. The Company has applied for quotation of the Series A Preferred
Stock and the Class A and Class C Common Stock (collectively, the "Quoted
Securities") on the OTC Electronic Bulletin Board, an automated quotation
system. However, there can be no assurance that the Company will meet the
requirements for such quotation, of the liquidity of any markets that may
develop for any of the Quoted Securities, of the ability of the holders of the
Quoted Securities to sell such Securities, or of the price at which holders of
the Quoted Securities would be able to sell such Securities. Neither the Series
B Preferred Stock nor the Class B Common Stock is listed or quoted on any
securities exchange or automated quotation system.

As of August 1, 1998, there were 1,955 registered holders of 2,239,320
shares of Series A Preferred Stock, which are convertible into 9,330,500 shares
of Class A Common Stock; one registered holder of 3,754,230 shares of Series B
Preferred Stock, which are convertible into 17,064,682 shares of Class B Common
Stock; 1,541 registered holders of Class A Common Stock; one registered holder
of Class B Common Stock; and no registered holders of Class C Common Stock. See
"Item 4. Principal Stockholders." As of August 1, 1998, 2,999,999 shares of
Class C Common Stock, which is nonvoting until February 5, 2000, were issuable
upon the exercise of currently exercisable warrants, which are held by two
institutional investors and certain creditors of Old Anchor. In addition,
pursuant to the Settlement, there are 332,844 shares of Class A Common Stock and
525,000 shares of Class B Common Stock issuable upon the exercise of currently
exercisable warrants held by certain creditors of Old Anchor and an affiliate
Consumers U.S., respectively. See "Item 11. Description of Registrant's
Securities to be Registered."

Shares of Class C Common Stock (the "Registered Securities") acquired from
any "affiliate" (as such term is defined in Rule 144(a)(1) under the Securities
Act) of the Company and shares of the Registered Securities held by an affiliate
of the Company may, under certain circumstances, be sold to the public without

33
<PAGE> 35

registration under the Securities Act in reliance on an exemption contained in
Rule 144 promulgated thereunder.

In general, under Rule 144 (a "safe harbor" for the resale of restricted
securities or other securities by an "affiliate" of the Company to the public
without registration), a person (or group of persons whose shares are
aggregated) who has beneficially owned restricted shares of the Company
(together with its predecessors) for at least one year, including any person who
may be deemed to be an "affiliate" of the Company, is entitled to sell to the
public, within any three-month period, a number of shares that does not exceed
the greater of (i) one percent of the total number of shares of the Registered
Securities that are not "restricted securities", and (ii) the average weekly
trading volume during the four calendar weeks preceding the date on which notice
of the sale is filed with the Securities and Exchange Commission. Sales under
Rule 144 are also subject to certain manner of sale provisions, notice
requirements and the availability of adequate "current public information" about
the Company. The Company will not be deemed to have such information available
until the expiration of at least 90 days following the effective date of this
Registration Statement on Form 10. A person who is not deemed to have been an
"affiliate" of the Company at any time during the 90 days preceding a sale and
who has beneficially owned his or her restricted shares for at least two years
would, pursuant to Rule 144(k), be entitled to sell such restricted shares to
the public without regard to the volume limitations described above and the
other conditions of Rule 144.

As of the date hereof, no shares of the Registered Securities are eligible
for resale under Rule 144. As noted above, there is no active trading market for
the Registered Securities, and no prediction can be made of the effect, if any,
that sales of shares of the Registered Securities under Rule 144 or the
availability of shares for sale will have on the market price of the Registered
Securities prevailing from time to time after the date of this Registration
Statement on Form 10. The Company is unable to estimate the number of shares
that may be sold in the public market under Rule 144, because such amount will
depend on the trading volume in and market price for the Registered Securities
and other factors. Nevertheless, sales of substantial amounts of shares in the
public market, or the perception that such sales could occur, could adversely
affect the market price of the Registered Securities. Due to the limited trading
market for the Registered Securities, however, the trading volume therefor may
be low and the market price volatile make reliance on Rule 144 unpredictable.

The Class C Common Stock is being registered hereby in satisfaction of the
Company's obligations to the holders thereof under the Settlement. Other than
the holders of the Class C Common Stock, no other person has any right to have
shares of Common Stock registered under the Securities Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act").

The Company has never paid dividends on its Common Stock and has no
intention to do so in the future. The holders of the Series A Preferred Stock
are entitled to receive, when and as declared by the Board of Directors of the
Company out of legally available funds, cumulative dividends, payable quarterly
in cash, at an annual rate of 10% of the liquidation value thereof. The holders
of the Series B Preferred Stock are entitled to receive cumulative dividends
payable quarterly in kind at an annual rate of 8% of the liquidation value
thereof. For a discussion regarding limitations on the Company's ability to pay
dividends, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Factors Affecting Future Operating
Results -- "Substantial Leverage; Ability to Service Debt," Significant
Expenditures; Dependence on Successful Implementation of the Business Strategy"
and "Restrictive Debt Covenants."

ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES

On various dates since January 1997, the Company sold and issued 902,615
shares of Class B Common Stock, valued at $5.00 per share, 3,754,230 shares of
Series B Preferred Stock (including the issuance of shares paid in kind as
dividends), valued at $25.00 per share, and warrants currently exercisable for
525,000 shares of Class B Common Stock. These shares and warrants were issued in
an offering not involving a public offering pursuant to Section 4(2) of the
Securities Act to Consumers U.S. and an affiliate of Consumers U.S. As a
condition to each of the above sales, the purchaser consented to a placement of
a restrictive legend on the certificate representing the securities.

34
<PAGE> 36

In connection with the Anchor Acquisition, the Company issued: (i) 490,898
shares of Class A Common Stock, valued at $5.00 per share, and 1,879,320 shares
of Series A Preferred Stock, valued at $25.00 per share, to Smith Barney, as
escrow agent for certain creditors of Old Anchor, (ii) an aggregate of 360,000
shares of Series A Preferred Stock, valued at $25.00 per share, to the defined
benefit plans maintained by Old Anchor and assumed by the Company in the Anchor
Acquisition and (iii) warrants exercisable for 2,107,843 shares of Class C
Common Stock, valued at $5.00 per share, to two institutional purchasers as
compensation for providing the interim financing for the Anchor Acquisition and
the refinancing thereof with the First Mortgage Notes. The warrants for Class C
Common Stock were issued in an offering not involving a public offering pursuant
to Section 4(2) of the Securities Act. As a condition to such sales, the
purchasers consented to a placement of a restrictive legend on the certificates
representing the warrants. All of the shares of Class A Common Stock and Series
A Preferred Stock issued to Old Anchor were issued in reliance on the exemption
from the registration requirements of the Securities Act contained in Section
1145 of the Bankruptcy Code.

In April 1997, the Company issued $150.0 million aggregate principal amount
of the First Mortgage Notes to two initial purchasers, both of whom were
"accredited investors" as that term is defined in Regulation D of the Securities
Act, in reliance on the exemption from the registration requirements of the
Securities Act provided by Rule 506 of Regulation D promulgated thereunder. The
initial purchasers resold the First Mortgage Notes to a group of "qualified
institutional buyers" (as such term is used in Rule 144A under the Securities
Act) in reliance on the exemptions from the registration requirements of the
Securities Act provided by Rule 144A and Regulation S under the Securities Act.
These securities were subsequently exchanged by the Company for securities with
comparable terms which had been registered under the Securities Act.

In March 1998, the Company issued $50.0 million aggregate principal amount
of the Senior Notes to two initial purchasers, both of whom were "accredited
investors" as that term is defined in Regulation D of the Securities Act, in
reliance on the exemption from the registration of the Securities Act provided
by Rule 506 of Regulation D promulgated thereunder. The initial purchasers
resold the Senior Notes to a group of "qualified institutional buyers" (as such
term is used in Rule 144A under the Securities Act) in reliance on the
exemptions from the registration requirements of the Securities Act provided by
Rule 144A and Regulation S under the Securities Act. These securities were
subsequently exchanged by the Company for securities with comparable terms which
had been registered under the Securities Act.

In connection with the Settlement, in June 1998, the Company issued
warrants for the purchase of 332,844 and 892,152 shares of Class A and Class C
Common Stock, respectively. These warrants are currently exercisable and do not
require any payment upon exercise. The warrants were issued in reliance on the
exemption from the registration requirements of the Securities Act contained in
Section 1145 of the Bankruptcy Code.

ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED

Anchor is authorized to issue 50,000,000 shares of Common Stock, having a
par value of $0.10 per share.

For the period from February 5, 1997 until February 5, 2000 (the "Initial
Period"), the Common Stock is divided into three classes, Class A and Class B,
which are voting, and Class C, which is non-voting during the Initial Period.
During the Initial Period, the number of Directors of Anchor is fixed at eleven,
with the holders of the Class A Common Stock having the right to elect four
directors and the holders of the Class B Common Stock having the right to elect
seven directors. The holders of the Class C Common Stock are not entitled to
participate in the election of directors. Except as described in the immediately
preceding sentence with respect to election of directors, there are no
distinctions between the rights of holders of shares of Class A Common Stock and
Class B Common Stock. The holders of Class C Common Stock have no voting rights
during the Initial Period. At the expiration of the Initial Period, the Class A
Common Stock, the Class B Common Stock and the Class C Common Stock will
automatically be consolidated on a one to one share basis into a single class of
Consolidated Common Stock. Upon such consolidation, all holders of Consolidated
Common Stock will have the same voting and other rights including the right to
vote in the general election of directors. The Revolving Credit Facility places
restriction on the Company's ability to pay dividends.

35
<PAGE> 37

The Company has issued warrants exercisable for 2,107,843 shares of Class C
Common Stock in the aggregate to two institutional purchasers as compensation
for providing interim financing for the Anchor Acquisition and the refinancing
thereof with the First Mortgage Notes. These warrants are currently exercisable
and the exercise price has been deemed to have been paid. Warrants exercisable
for 1,405,229 shares expire in February 2007 and warrants exercisable for the
remaining 702,614 shares expire in April 2007. In addition, pursuant to the
Settlement, the Company has issued warrants currently exercisable for 892,156
shares of Class C Common Stock to certain creditors of Old Anchor. The warrants
do not require any payment upon exercise and expire in June 2008.

ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS

CERTIFICATE OF INCORPORATION

Article VIII of the Company's Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") provides for the
indemnification of directors and officers of the Company and any persons serving
at the request of the Company as a director, trustee, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, to the fullest
extent permitted by the General Corporate Law of the State of Delaware (the
"DGCL"). The Certificate of Incorporation also allows the Company, by action of
the Board of Directors, to indemnify other officers, employees and agents of the
Company. These rights to indemnification (i) are contract rights; (ii) cannot be
changed by any amendment to the Certificate of Incorporation to adversely affect
any person being indemnified with respect to any alleged action or inaction
occurring prior to such amendment; (iii) subject to any rights imposed by law
and the By-Laws of the Company, include the right to have the Company advance
expenses incurred in defending any such action, suit or proceeding prior to the
final disposition; and (iv) are not exclusive of any other right which any
person may have or may acquire under the Certificate of Incorporation, or any
statute, by-law or agreement, or by any vote of the stockholders or
disinterested directors of the Company, or otherwise. In addition to the
indemnification provided by Article VIII, Article IX limits the personal
liability of directors for monetary damages arising out of a breach of fiduciary
duty to the fullest extent permitted by the DGCL.

The Certificate of Incorporation generally prohibits the Company from
indemnifying any person in connection with an action, suit or proceeding (or
portion thereof) initiated by such person unless such action, suit or proceeding
(or portion thereof) was authorized by the Board of Directors. However, this
prohibition does not apply to a counterclaim, cross-claim or third party claim
brought by an indemnitee in any action, suit or proceeding. In addition, persons
claiming a right to indemnification or advancement may bring suit against the
Company if the claim is not paid in full by the Company within sixty days, in
the case of a claim for indemnification, or thirty days, in the case of a claim
for advancement, after receipt of the written claim.

BY-LAWS

The By-laws of the Company contain no provision for indemnification.

ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Item 15.

ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Old Anchor's consolidated balance sheet as of December 31, 1996 and
consolidated statements of operations, cash flows and stockholder's equity
(deficiency in assets) for each of the two years in the period ended December
31, 1996 incorporated by reference into this Registration Statement had been
previously audited by Deloitte & Touche LLP ("Deloitte"), independent
accountants to Old Anchor (whose report disclaimed an opinion on the 1996
consolidated financial statements of Old Anchor and included explanatory
paragraphs referring to the bankruptcy proceedings of the Company and to the
remaining deficiency in assets after the sale of substantially all of the assets
and business of the Company and the substantial doubt that it raises relative to
the ability of the Company to continue as a going concern). Pursuant to the
Asset Purchase

36
<PAGE> 38

Agreement, the purchase price for the Anchor Acquisition was subject to
adjustment based on an audited balance sheet (the "Closing Balance Sheet"). As
discussed under "Item 1. Business -- The Anchor Acquisition" the parties were in
settlement negotiations regarding the appropriate adjustment. As Deloitte was
engaged to audit the Closing Balance Sheet (although an audit opinion has not
been issued) and continues to be the independent accountants to Old Anchor, Old
Anchor informed the Company that it was inappropriate for Deloitte to provide
its consent to the use of its audit report for these periods. Accordingly,
Arthur Andersen LLP audited the financial statements of Old Anchor for these
periods.

ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements and Schedules

1. Financial Statements. The unaudited condensed balance sheet of Anchor
as of June 30, 1998, the condensed statements of operations for the three months
and six months ended June 30, 1998, the three months ended June 30, 1997 and the
period from February 5, 1997 to June 30, 1997 and the condensed statements of
cash flows for the six months ended June 30, 1998 and the period from February
5, 1997 to June 30, 1997, including the notes thereto, are incorporated herein
by reference from Anchor's Quarterly Report on Form 10-Q filed with the
Commission on August 14, 1998.

The audited balance sheet of Anchor as of December 31, 1997 and the
statements of operations, stockholders' equity and cash flows for the period
from February 5, 1997 to December 31, 1997, including the notes thereto and the
Report of Independent Public Accountants thereon, and the audited consolidated
balance sheets of Old Anchor as of February 4, 1997 and December 31, 1996 and
the consolidated statements of operations, stockholder's equity (deficiency in
assets) and cash flows for the period from January 1, 1997 to February 4, 1997
and each of the years in the two-year period ended December 31, 1996, including
the notes thereto and the Report of Independent Public Accountants thereon, are
incorporated herein by reference from Anchor's Annual Report on Form 10-K/A
filed with the Commission on July 13, 1998.

2. Financial Statement Schedules. The following Financial Statement
Schedules are filed as part of this Registration Statement and should be read in
conjunction with the Consolidated Financial Statements of Old Anchor and the
Financial Statements of Anchor.

SCHEDULE II

ANCHOR RESOLUTION CORP.
VALUATION AND QUALIFYING ACCOUNTS
PERIOD FROM JANUARY 1, 1997 TO FEBRUARY 4, 1997
AND YEARS ENDED DECEMBER 31, 1996 AND 1995
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- --------- -------- -------- ---------- --------
ADDITIONS
--------------------
BALANCE CHARGED
AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
----------- --------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
Period from January 1, 1997 to
February 4, 1997
Allowance for doubtful accounts..... $1,503 $ 127 $ -- $ -- $1,630
Year ended December 31, 1996
Allowance for doubtful accounts..... $1,826 $1,126 $ -- $1,449(A) $1,503
Year ended December 31, 1995
Allowance for doubtful accounts..... $3,447 $ 656 $ -- $2,277(A) $1,826
</TABLE>

- ---------------
(A) Accounts written off

37
<PAGE> 39

SCHEDULE II

ANCHOR GLASS CONTAINER CORPORATION
VALUATION AND QUALIFYING ACCOUNTS

SIX MONTHS ENDED JUNE 30, 1998

AND PERIOD FROM FEBRUARY 5, 1997 TO DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------- -------- -------- -------- ---------- ----------
ADDITIONS
-------------------
BALANCE CHARGED
AT TO COSTS CHARGED BALANCE AT
BEGINNING AND TO OTHER END OF
DESCRIPTION OF EXPENSES ACCOUNTS DEDUCTIONS PERIOD
PERIOD
- ------------------------------------------ ------ ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
Six months ended June 30, 1998
Allowance for doubtful accounts......... $2,025 $125 -- 288(A) $1,987
Period from February 5, 1997 to December
31, 1997
Allowance for doubtful accounts......... $1,630 $375 $360(B) $340(A) $2,025
</TABLE>

- ---------------
(A) Accounts written off

(B) Amount recognized as part of Anchor Acquisition.

Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in Old Anchor's consolidated financial statements or in
Anchor's financial statements, incorporated by reference into this Registration
Statement, or in the notes thereto.

3. Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- ----
<C> <S>
2.1 Asset Purchase Agreement dated as of December 18, 1996 among
Anchor Glass Container Corporation, now known as Anchor
Resolution Corp. ("Old Anchor"), Consumers Packaging Inc.
and Owens-Brockway Glass Container Inc.
2.2 Amendment to Asset Purchase Agreement (the "Asset Purchase
Agreement") dated as of February 5, 1997 by and among Old
Anchor, Consumers Packaging Inc. and Owens-Brockway Glass
Container Inc.
2.3 Order of United States Bankruptcy Court for the District of
Delaware approving (i) the Asset Purchase Agreement and (ii)
the assumption and assignment of certain related executory
contracts
2.4 Order of United States Bankruptcy Court for the District of
Delaware approving the Amendment to the Asset Purchase
Agreement
2.5 Memorandum of Understanding dated February 5, 1997 among Old
Anchor, Consumers Packaging Inc., and the Company
2.6* Stipulation and Order of United States Bankruptcy Court for
the District of Delaware relating to the Settlement
3.1 Amended and Restated Certificate of Incorporation of the
Company
3.2 Bylaws of the Company
3.5 Certificate of Designation for Series A 10% Cumulative
Convertible Preferred Stock
3.6 Certificate of Designation for Series B 8% Cumulative
Convertible Preferred Stock
3.7* Amendment to Certificate of Designation for Series A 10%
Cumulative Convertible Preferred Stock
3.8* Amendment to Certificate of Designation for Series B 8%
Cumulative Convertible Preferred Stock
3.9* Certificate of Amendment of Certificate of Incorporation of
the Company
</TABLE>

38
<PAGE> 40

<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- ----
<C> <S>
4.1 Indenture dated as of April 17, 1997 among the Company,
Consumers U.S. and The Bank of New York, as trustee
4.2 Form of Initial Notes (included in Exhibit 4.1)
4.3 Form of Exchange Notes (included in Exhibit 4.1)
4.4 Security Agreement dated as of April 17, 1997 among the
Company, Bankers Trust Company, as agent under the Revolving
Credit Agreement
4.5 Assignment of Security Agreement dated as of April 17, 1997
among the Company, Bankers Trust Company, as assignor, and
The Bank of New York, as assignee and as trustee under the
Indenture
4.6 Pledge Agreement dated as of April 17, 1997 among Consumers
U.S. and The Bank of New York, as trustee under the
Indenture
4.7 Intercreditor Agreement dated as of February 5, 1997 among
The Bank of New York, as Note Agent, and BT Commercial
Corporation, as Credit and Shared Collateral Agent
4.8 Amendment No. 1 to the Intercreditor Agreement, dated as of
April 17, 1997 among The Bank of New York, as Note Agent,
and BT Commercial Corporation, as Credit and Shared
Collateral Agent
4.9 Registration Rights Agreement dated as of April 17, 1997
among the Company, Consumers U.S., BT Securities Corporation
and TD Securities (USA) Inc.
4.10** Indenture dated as of March 16, 1998 among the Company,
Consumers U.S. and The Bank of New York, as trustee
4.11** Form of Initial Notes (included in Exhibit 4.10)
4.12** Form of Exchange Notes (included in Exhibit 4.10)
4.13** Registration Rights Agreement dated as of March 16, 1998
among the Company, TD Securities and BT Alex. Brown
10.1 Credit Agreement (the "Credit Agreement") dated as of
February 5, 1997 among the Company, Bankers Trust Company,
as Issuing Bank, BT Commercial Corporation, as Agent and Co-
Syndication Agent, PNC Bank, National Association, as
Co-Syndication Agent and Issuing Bank, and the various
financial institutions party thereto
10.2 First Amendment to the Credit Agreement dated as of March
11, 1997 among the Company, Bankers Trust Company, BT
Commercial Corporation, and PNC Bank, National Association
10.3 Second Amendment to the Credit Agreement dated as of April
9, 1997 among the Company, Bankers Trust Company, BT
Commercial Corporation, and PNC Bank, National Association
10.4 Third Amendment and Waiver to the Credit Agreement dated as
of May 23, 1997 among the Company, Bankers Trust Company, BT
Commercial Corporation, PNC Bank, National Association, and
the various financial institutions party to the Credit
Agreement
10.5 Fourth Amendment to the Credit Agreement dated as of
September 15, 1997 among the Company, Bankers Trust Company,
BT Commercial Corporation, PNC Bank, National Association
and the various financial institutions party to the Credit
Agreement
10.6 Assignment of Security Interest in U.S. Trademarks and
Patents dated February 5, 1997 by the Company to BT
Commercial Corporation, as Collateral Agent under the Credit
Agreement
10.7 Assignment of Security Interest in U.S. Copyrights dated
February 5, 1997 by the Company to BT Commercial
Corporation, as Collateral Agent under the Credit Agreement
10.8 Guaranty dated February 5, 1997, by Consumers U.S. in favor
of BT Commercial Corporation and the other financial
institutions party to the Credit Agreement Plan
10.9 Termination Agreement dated February 3, 1997 by and between
Consumers Packaging Inc., the Company and the Pension
Benefit Guaranty Corporation
10.10 Release Agreement among Old Anchor, the Company, the
Official Committee of Unsecured Creditors of Anchor Glass
Container Corporation (Old Anchor) and Vitro, Sociedad
Anonima
10.11 Agreement (the "Vitro Agreement") dated as of December 18,
1996 between Vitro, Sociedad Anonima, Consumers Packaging
Inc., on behalf of itself, and Consumers Packaging Inc., on
behalf of the Company
10.12 First Amendment to the Vitro Agreement dated as of February
4, 1997 among Vitro, Sociedad Anonima, Consumers Packaging
Inc. and the Company
</TABLE>

39
<PAGE> 41

<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- ----
<C> <S>
10.13 Waiver Agreement dated as of February 5, 1997 by and between
Old Anchor and Consumers Packaging Inc.
10.14 Assignment and Assumption Agreement dated as of February 5,
1997 by and between Consumers Packaging Inc. and the Company
10.15 Assignment and Assumption Agreement dated as of February 5,
1997 by and between Consumers Packaging Inc. and the Company
relating to certain employee benefit plans
10.16 Assignment and Assumption Agreement dated as of February 5,
1997 between Consumers Packaging Inc. and the Company
relating to certain commitment letters
10.17 Bill of Sale, Assignment and Assumption Agreement dated as
of February 5, 1997 by and between Old Anchor and the
Company
10.18 Assignment of Patent Property and Design Property from Old
Anchor to the Company
10.19 Trademark Assignment from Old Anchor to the Company
10.20 Foreign Trademark Assignment from Old Anchor to the Company
10.21 Copyright Assignment from Old Anchor to the Company
10.22 Agreement dated as of February 5, 1997 between The Travelers
Indemnity Company and its Affiliates, including The Aetna
Casualty and Surety Company and their predecessors, and the
Company
10.23 Allocation Agreement dated as of February 5, 1997 between
Consumers Packaging Inc. and Owens-Brockway Glass Container
Inc.
10.24 Supply Agreement dated as of February 5, 1997 by and between
the Company and Owens-Brockway Glass Container Inc.
10.25 Transition Agreement dated as of February 5, 1997 between
Consumers Packaging Inc., the Company and Owens-Brockway
Glass Container Inc.
10.26+ Technical Assistance and License Agreement executed December
18, 1996 by Owens-Brockway Glass Container Inc. and
Consumers Packaging Inc.
10.27 Assurance Agreement (the "Assurance Agreement") dated as of
February 5, 1997 among Owens-Brockway Glass Container Inc.,
Consumers Packaging Inc., the Company, BT Commercial
Corporation, Bankers Trust Company and The Bank of New York
10.28 Letter agreement relating to Assurance Agreement dated April
17, 1997 addressed to Owens-Brockway Glass Container Inc.
and signed by Bankers Trust Company and The Bank of New York
10.29 Intercompany Agreement dated as of April 17, 1997
10.30 Management Agreement dated as of February 5, 1997 by and
between the Company and G&G Investments, Inc.
10.31 Anchor Glass Container Corporation/Key Executive Employee
Retention Plan
10.32 Lease Agreement -- Anchor Place at Fountain Square (the
"Lease Agreement") dated March 31, 1988, by and between Old
Anchor and Fountain Associates I Ltd. relating to the
Company's headquarters in Tampa, Florida
10.33 First Amendment to Lease Agreement effective as of June 16,
1992, by and between Fountain Associates I Ltd. and Old
Anchor
10.34 Second Amendment to Lease Agreement effective as of
September 30, 1993, by and between Fountain Associates I
Ltd. and Old Anchor
10.35 Third Amendment to Lease Agreement effective as of February
22, 1995, by and between Fountain Associates I Ltd. and Old
Anchor
10.36 Agreement dated as of March 31, 1996 by and between Fountain
Associates I Ltd., Citicorp Leasing, Inc. and Old Anchor
10.37 Amended and Restated Agreement effective as of September 12,
1996, by and between Fountain Associates I Ltd., Citicorp
Leasing Inc. and Old Anchor
10.38 Sixth Amendment to Lease and Second Amendment to Option
Agreement dated as of February 5, 1997, by and between
Fountain Associates I Ltd., Citicorp Leasing Inc. and Old
Anchor
10.39 Building Option Agreement dated March 31, 1988, by and
between Fountain Associates I, Ltd. and Old Anchor
</TABLE>

40
<PAGE> 42

<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- ----
<C> <S>
10.40 First Amendment to Building Option Agreement effective as of
June 16, 1992, by and between Fountain Associates I, Ltd.
and Old Anchor
10.41+ Supply Agreement effective as of June 17, 1996 between The
Stroh Brewery Company and the Company
10.42++ Supply Agreement between Bacardi International Limited and
the Company
10.43 Warrant Agreement dated as of February 5, 1997 between the
Company and Bankers Trust Company
10.44 Form of Warrant issued pursuant to the Warrant Agreement
10.45 Rebate Agreement dated as of January 1, 1996 between Bacardi
International Limited and the Company (Withdrawn upon the
request of the registrant, the Commission consenting
thereto.)
10.46** Fifth Amendment to the Credit Agreement dated as of January
16, 1998 among the Association and the various financial
institutions part to the Credit Agreement
10.47** Sixth Amendment to the Credit Agreement dated as of March
11, 1998 among the Association and the various financial
institutions part to the Credit Agreement
10.48* First Amendment to Intercompany Agreement dated as of April
6, 1998 among G&G Investments, Inc., Glenshaw Glass Company,
Inc., Hillsboro Glass Company, I.M.T.E.C. Enterprises, Inc.,
Consumers Packaging Inc., Consumers International Inc.,
Consumers U.S., the Company, BT Securities Corporation and
The Bank of New York, as trustee under the Indenture.
21.1 List of Subsidiaries of the Company
</TABLE>

- ---------------

* Previously filed.

** Incorporated by reference to the Company's March 31, 1998 filing on Form 10-K
with the Securities and Exchange Commission.

+ Portions hereof have been omitted and filed separately with the Commission
pursuant to a request for confidential treatment in accordance with Rule 406
of Regulation C.

++ Withdrawn upon the request of the registrant, the Commission consenting
thereto, as Bacardi International Limited was no longer a material customer
of the Company.

All other exhibits are incorporated by reference to the Company's
Registration Statement on Form S-4 (Reg. No. 333-31363), originally filed with
the Securities and Exchange Commission on July 16, 1997.

41
<PAGE> 43

INDEX TO FINANCIAL INFORMATION FOR OLD ANCHOR

SELECTED CONSOLIDATED FINANCIAL DATA........................ H-2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS................................. H-4
</TABLE>

H-1
<PAGE> 44

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth certain historical financial information of
Old Anchor. The selected financial data for the period from January 1, 1997 to
February 4, 1997 (the "Interim Period") and the four years ended December 31,
1996 has been derived from Old Anchor's consolidated financial statements. The
following information should be read in conjunction with Old Anchor's
consolidated financial statements and the related Old Anchor Management's
Discussion and Analysis of Financial Condition and Results of Operations for Old
Anchor, included elsewhere in, or incorporated by reference into, this
Registration Statement.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, INTERIM
------------------------------------------------ PERIOD
1993 1994 1995 1996(1) 1997
---------- ---------- ---------- --------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................................... 1,126,037 $1,089,317 $ 956,639 $ 814,370 $ 62,560
Cost of products sold........................... 1,028,332 996,780 906,393 831,612 70,608
Selling and administrative expenses............. 51,137 52,371 48,998 39,570 3,745
Restructuring and other charges(1).............. -- 79,481 10,267 49,973 --
Impairment of long-lived assets(2).............. -- -- -- 490,232 --
Write-up of assets held for sale(1)............. -- -- -- (8,967) --
---------- ---------- ---------- --------- ---------
Income (loss) from operations................... 46,568 (39,315) (9,019) (588,050) (11,793)
Other income (expense), net..................... 500 (2,385) 171 (10,020) (595)
Interest expense(3)............................. (62,535) (56,070) (56,871) (48,601) (2,437)
---------- ---------- ---------- --------- ---------
Income (loss) before reorganization items,
income taxes, extraordinary items and
cumulative effect of accounting change........ (15,467) (97,770) (65,719) (646,671) (14,825)
Reorganization items............................ -- -- -- (5,008) (827)
Income taxes(4)................................. (2,400) (250) (250) (1,825) --
Extraordinary items(5).......................... (18,152) -- -- (2,336) --
Cumulative effect of accounting change(4)....... 1,776 -- -- -- --
---------- ---------- ---------- --------- ---------
Net income (loss)............................... $ (34,243) $ (98,020) $ (65,969) $(655,840) $ (15,662)
========== ========== ========== ========= =========
OTHER FINANCIAL DATA:
Depreciation and amortization................... $ 103,549 $ 100,476 $ 99,915 $ 101,656 $ 7,605
Capital expenditures............................ 89,901 93,833 70,368 46,254 7,186
BALANCE SHEET DATA (AT END OF PERIOD):
Accounts receivable............................. $ 58,128 $ 66,618 $ 40,965 $ 55,851 60,978
Inventories..................................... 173,204 176,769 180,574 144,419 148,731
Total assets.................................... 1,347,201 1,264,488 1,208,348 643,468 651,801
Total debt(6)................................... 555,222 584,671 557,450 552,848 570,335
Total stockholder's equity (deficiency in
assets)....................................... 412,752 324,554 289,603 (269,307) (284,959)
</TABLE>

- ---------------

H-2
<PAGE> 45

(1) Restructuring and other charges reflects Old Anchor's implementation of a
series of restructuring plans in an effort to respond to the continued
decline in the industry sales volume combined with, in 1996, the loss of a
significant portion of the business of Old Anchor's largest customer. The
following represents information regarding the amounts charged against the
restructuring liability for Old Anchor's restructuring plans:

<TABLE>
<CAPTION>
AMOUNT CHARGED
AGAINST LIABILITY
AS OF
RESTRUCTURING DECEMBER 31,
CHARGES 1996
------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
1996 RESTRUCTURING PLAN
Plant shutdown costs, including severance costs and
pension curtailment losses.............................. $25,100 $20,100
Writedown of certain manufacturing assets to net
realizable value........................................ 24,900
1994/1995 RESTRUCTURING PLAN
Plant shutdown costs, including severance costs and
pension curtailment losses.............................. $39,200 $33,700
Writedown of certain manufacturing assets to net
realizable value........................................ 36,600
Writedown of previously shutdown manufacturing facilities
to net realizable value................................. 14,000
</TABLE>

During the year ended December 31, 1996, the Company recorded an adjustment
to the carrying value of certain idled facilities held for sale. These
assets were previously written down to an estimated net realizable value.
Upon a current evaluation of quotes and offers on these properties in 1996,
Old Anchor increased their net carrying value by approximately $9.0 million.
The balance of the restructuring liability is anticipated to be expended and
charged against the liability over the next three years.

(2) Impairment of long-lived assets reflects the adjustment for the write-off of
goodwill and other long-lived assets. As a result of the declining
profitability, diminishing cash flow and the bankruptcy proceedings, the
recoverable value of the carrying amount of long-lived assets and
intangibles was reviewed for impairment. Based upon this review, the amount
of remaining excess of the purchase price over the fair value of net assets
acquired at December 31, 1996, of $457.2 million and other long-lived assets
of $33.0 million were written off in the year ended December 31, 1996. The
excess cost over fair value of net assets acquired had been amortized on a
straight line basis over a 40 year period. Amortization expense, included as
a component of cost of products sold, was approximately $13.9 million for
each of the years ended December 31, 1996, 1995, 1994 and 1993. See Old
Anchor's Notes to the Consolidated Financial Statements, incorporated by
reference into this Registration Statement.

(3) Because of the Chapter 11 proceedings, there has been no accrual of interest
on the $100.0 million 10.25% Senior Notes or the $200.0 million 9.875%
Senior Subordinated Debentures since September 12, 1996. If accrued,
interest expense would have increased $2.9 million and $9.2 million,
respectively, during the Interim Period 1997 and the year ended December 31,
1996.

(4) Income tax provision reflects any additional valuation allowances required
to be recorded under SFAS 109. The adoption of SFAS 109 effective January 1,
1993 resulted in an increase in the cumulative net deferred tax asset by
$1.8 million. Under SFAS 109, deferred income taxes reflect the net tax
effects of temporary differences between carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income
tax purposes, and are measured using the enacted tax rates and laws that
will be in effect when the differences are expected to reverse. If on the
basis of available evidence, it is more likely than not that all or a
portion of the deferred tax asset will not be realized, the asset must be
reduced by a valuation allowance.

(5) Extraordinary items in the two years ended December 31, 1993 and 1996,
result from the write-off of financing costs related to debt extinguished
during the relevant periods, net of taxes.

(6) Total debt as of December 31, 1996 includes $462.3 million of pre-petition
liabilities and $90.5 million outstanding under Old Anchor's
debtor-in-possession credit facility.

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<PAGE> 46

ANCHOR RESOLUTION CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995 AND 1996

RESULTS OF OPERATIONS

Introduction

The following table sets forth certain information derived from the
Consolidated Financial Statements of Anchor Resolution Corp., formerly named
Anchor Glass Container Corporation and currently a debtor-in-possession under
Chapter 11 of the Bankruptcy Code ("Old Anchor"), for the three years ended
December 31, 1996. The following discussion should be read in conjunction with
the Consolidated Financial Statements of Old Anchor and notes thereto,
incorporated by reference into this Registration Statement.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1995 1996
---------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------- -------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Net sales................................................... $956.6 100.0% $ 814.4 100.0%
Cost of products sold....................................... 906.4 94.8 831.6 102.1
Selling and administrative expenses......................... 49.0 5.1 39.6 4.9
Restructuring and other charges............................. 10.3 1.1 50.0 6.1
Impairment of long-lived assets............................. -- -- 490.2 60.2
Write-up of assets held for sale............................ -- -- (9.0) (1.1)
Loss from operations........................................ (9.1) (1.0) (588.0) (72.2)
Interest expense............................................ 56.8 5.9 48.6 6.0
Loss before reorganization items, income taxes and
extraordinary item........................................ (65.7) (6.9) (646.7) (79.4)
Loss before extraordinary item.............................. (66.0) (6.9) (653.5) (80.2)
Net loss.................................................... (66.0) (6.9) (655.8) (80.5)
</TABLE>

The net loss for the year ended December 31, 1996 was $655.8 million
compared to a net loss of $66.0 million for 1995. Included in the loss for 1996
is the impairment of long-lived assets of $490.2 million. Included in the 1996
and 1995 results were first quarter charges of $50.0 million and $10.3 million,
respectively, for Old Anchor's 1996 and 1995 restructuring programs. Excluding
the effect of these items, net loss would have been $115.6 million compared to
$55.7 million for 1995.

The decline in Old Anchor's operations is a direct result of Old Anchor's
high debt levels and industry-wide volume declines that have led to severe
competitive pricing pressures, negatively impacting operating results. Net sales
for 1996 decreased 14.9% compared to 1995, on a volume decline of approximately
14%, primarily in the beer, iced tea and soft drink markets. As an example, Old
Anchor's 1996 volume allocation from its largest customer in 1995,
Anheuser-Busch, has been significantly reduced. The softness in overall industry
volume shipments has led to severe competitive pricing pressures, negatively
impacting operating margins. In accordance with its restructuring plans, Old
Anchor closed its Cliffwood, New Jersey plant in January 1996, and closed its
Waukegan, Illinois, Los Angeles, California and Keyser, West Virginia plants in
1995.

NET SALES

Net sales for 1996 were $814.4 million, a decrease of 14.9% compared to
$956.6 million for 1995. The decrease in net sales principally reflects the
softening in 1996 of the year-to-year demand for glass containers which has
resulted in increased competition for market share and lower pricing trends. In
addition, as described above, Anheuser-Busch has significantly reduced its
purchases from Old Anchor.

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<PAGE> 47

COST OF PRODUCTS SOLD

Cost of products sold as a percentage of net sales was 102.1% for 1996
compared to 94.8% for 1995. This increase principally reflects the impact of
reduced shipping volumes and lower pricing trends, as described above. Partially
offsetting this increase is the impact of Old Anchor's strategic initiatives and
cost savings derived from Old Anchor's restructuring plans and re-engineering
program.

SELLING AND ADMINISTRATIVE EXPENSES

Selling and administrative expenses declined $9.4 million, or 19.2%, in
1996 compared to 1995. This decrease principally reflects lower personnel and
fringe benefit costs as a result of headcount reductions associated with Old
Anchor's re-engineering and cost reduction programs.

RESTRUCTURING AND OTHER CHARGES

In the 1995 first quarter, an additional $10.3 million charge was recorded
to reflect the benefit arrangements for employees affected by this plan. In
January 1996, formal plans were approved to further restructure certain of Old
Anchor's operations to respond to the continued decline in the industry sales
volume combined with the loss of a significant portion of the business of Old
Anchor's largest 1995 customer. A restructuring charge of approximately $50.0
million has been recorded in the 1996 Consolidated Statement of Operations for
the closure of the Cliffwood, New Jersey plant and other restructuring
obligations.

IMPAIRMENT OF LONG-LIVED ASSETS

As a result of declining profitability, diminishing cash flows and the
bankruptcy proceedings, the entire $457.2 million of goodwill and $33.0 million
of other long-lived assets were written off.

WRITE-UP OF ASSETS HELD FOR SALE

In December 1996, Old Anchor wrote up the value of certain assets held for
sale by $9.0 million.

INTEREST EXPENSE

Interest expense was $48.6 million for 1996 compared to $56.8 million for
1995. Because of the Bankruptcy Proceedings, there has been no accrual of
interest on the $100.0 million 10.25% Senior Notes or the $200.0 million 9.857%
Senior Subordinated Debentures since September 12, 1996. If accrued, interest
expense would have increased by $9.1 million in 1996.

LIQUIDITY AND CAPITAL RESOURCES

As a result of the continued decline in Old Anchor's results of operations
from the effect of the highly competitive glass container market, and Old
Anchor's high debt level, on September 13, 1996 (the "Petition Date"), Old
Anchor filed a voluntary petition for reorganization under Chapter 11 of the
United States Bankruptcy Code ("Chapter 11") in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court"). On September 30,
1996, Anchor Recycling Corporation, a wholly-owned subsidiary of Old Anchor,
also filed a voluntary petition to reorganize under Chapter 11 in the same
court. The Chapter 11 proceedings are being jointly administered, with Old
Anchor managing the business in the ordinary course as a debtor-in-possession
under the supervision of the Bankruptcy Court. Old Anchor concluded that the
Chapter 11 filing was necessary in order to preserve the value of its assets and
to ensure that the business had sufficient cash resources to continue operations
while it completed the sale of the business discussed in Note 2 to the Notes to
the Consolidated Financial Statements, appearing elsewhere herein.

Old Anchor obtained debtor-in-possession ("DIP") financing from Foothill
Capital Corporation, as agent and Congress Financial Corporation, as co-agent
(the "Lender Group") to provide for a $130.0 million DIP Credit Facility (the
"DIP Facility"), which was approved by the Bankruptcy Court on November 15,
1996. The DIP Facility, which would expire September 30, 1997, provided up to
$130.0 million under a

H-5
<PAGE> 48

borrowing base formula, less prepetition advances under Old Anchor's then
existing Prepetition Credit Facility with the Lender Group, on terms
substantially the same as the Prepetition Credit Facility.

Advances outstanding at any one time were not to exceed an amount equal to
the Borrowing Base, consisting of accounts receivable and finished product
inventory, as defined in the Prepetition Credit Facility, and amended by the DIP
Facility. At December 31, 1996, Old Anchor's available borrowing base, as
defined under the DIP Facility was approximately $113.7 million against which
$90.5 was outstanding. Interest, at prime plus 1.125%, as defined, was payable
monthly. A commitment fee of 0.5% of the unused portion of the DIP Facility was
payable monthly.

On February 5, 1997, Anchor Glass Acquisition Corporation ("New Anchor"), a
wholly-owned subsidiary of Consumers Packaging Inc. ("CPI"), and Owens-Brockway
Glass Container Inc. ("OI") acquired substantially all of the assets and
business of Old Anchor in accordance with the terms of the Asset Purchase
Agreement, dated December 18, 1996 (the "Agreement") as discussed in Note 2 to
the Notes to Consolidated Financial Statements. The total purchase price
approximated $387.9 million, excluding fees of approximately $9.9 million. The
purchase price received from OI amounted to approximately $128.4 million and was
received in cash. The remaining purchase price of approximately $250.0 million
from New Anchor was comprised of approximately $200.5 million in cash, $47.0
million face amount (1,879,320 shares) of mandatorily redeemable 10% cumulative
convertible preferred stock and $2.5 million of common stock (490,898 shares
with an estimated value of $5.00 per share) of New Anchor. The purchase price is
subject to adjustment as defined in the Agreement.

Proceeds from the sale were used to repay the outstanding balance of the
DIP Facility and accrued interest thereon, at February 5, 1997, of approximately
$109.0 million. The remainder of the proceeds will be used to satisfy
prepetition liabilities, as to be determined under Old Anchor's Plan of
Reorganization. Old Anchor's principal sources of liquidity through February 5,
1997 were funds derived from operations and borrowings under the DIP Facility.

In 1996, operating activities consumed $28.4 million in cash compared to
$0.4 million of cash provided in 1995. These increases in cash consumed reflect
the increase in losses and the changes in working capital items during the
periods compared.

Capital expenditures in 1996 were $46.3 million compared to $70.4 million
in 1995. In addition, in 1996, Old Anchor invested approximately $18.6 million
in the joint venture with Coors Brewing Company ("Coors"). Old Anchor invested
$20.0 million in the joint venture in 1995. Also in 1995, Old Anchor entered
into sale and leaseback transactions, with respect to certain of its glass
manufacturing equipment, with an aggregate net selling price of approximately
$48.3 million.

Cash flows from financing activities for the years ended December 31, 1996
and 1995 were $78.9 million and $52.2 million, respectively. The 1996 cash flows
from financing activities principally reflects a $92.5 million capital
contribution received from Vitro, Sociedad Anonima and borrowings under the
Prepetition Credit Facility, modified by the DIP Facility. In February 1997, Old
Anchor received an additional capital contribution of $8.4 million in
satisfaction of obligations outstanding under the $20.0 million letter of credit
facility, which was terminated at that time.

As a result of the Bankruptcy Proceedings, Old Anchor is in default of
various covenants relating to Old Anchor's outstanding prepetition debt.
However, under Chapter 11 proceedings, litigation or actions by creditors
related to these defaults are stayed. In addition, the DIP Facility required
that Old Anchor's collateral value and availability, as defined, could not be
less than a specified amount as measured on a rolling four-week period
throughout the term of the DIP Facility. Prior to the repayment of the DIP
Facility, Old Anchor was in full compliance with these covenants.

IMPACT OF INFLATION

The impact of inflation on the costs of Old Anchor, and the ability to pass
on cost increases in the form of increased sales prices, is dependent upon
market conditions. While the general level of inflation in the domestic economy
has been at relatively low levels since Old Anchor's formation in 1983, Old
Anchor has
H-6
<PAGE> 49

generally been unable, since the end of 1991, to fully pass on inflationary cost
increases as a result of competitive pricing pressures. This has negatively
impacted Old Anchor's operating results.

SEASONALITY

Due principally to the seasonal nature of the brewing, iced tea and soft
drink industries, in which demand is stronger during the summer months, Old
Anchor's shipment volume is typically highest in the second and third quarters.
Consequently, Old Anchor historically builds inventory during the first quarter
in anticipation of seasonal demands during the second and third quarters.
However, industry patterns existing over the last 18 months have somewhat
altered the normal seasonal trends. In addition, Old Anchor generally schedules
shutdowns of its plants for furnace rebuilds and machine repairs in the first
and fourth quarters of the year to coincide with scheduled holiday and vacation
time under its labor union contracts. These shutdowns and seasonal sales
patterns adversely affect profitability during the first and fourth quarters.

H-7
<PAGE> 50

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.

ANCHOR GLASS CONTAINER CORPORATION

By: /s/ M. WILLIAM LIGHTNER, JR.

------------------------------------
M. William Lightner, Jr.
Senior Vice President -- Finance,
Chief Financial Officer and
Treasurer

August 19, 1998