US CAN CORP - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

For the fiscal year ended December 31, 2002

Commission File Number 333-53276

U.S. Can Corporation
(Exact Name Of Registrant As Specified In Its Charter)

Delaware 06-1094196
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

700 East Butterfield Road, Suite 250, Lombard, Illinois 60148
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code (630) 678-8000

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

Yes |X| No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes |X| No |_|

As of March 26, 2003, 53,333.333 shares of Common Stock were outstanding.

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TABLE OF CONTENTS

Page
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PART I

Item 1. Business.................................................................................... 2
Item 2. Properties.................................................................................. 10
Item 3. Legal Proceedings........................................................................... 11
Item 4. Submission of Matters to a Vote of Security Holder.......................................... 12

PART II

Item 5. Market for Common Equity and Related Stockholder Matters.................................... 13
Item 6. Selected Financial Data..................................................................... 14
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................................................... 15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.................................. 23
Item 8. Financial Statements and Supplementary Data................................................. 25
Item 9. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.................................................................. 65

PART III

Item 10. Directors and Executive Officers of the Registrant.......................................... 65
Item 11. Executive Compensation...................................................................... 68
Item 12. Security Ownership of Certain Beneficial Owners and Management.............................. 73
Item 13. Certain Relationships and Related Transactions.............................................. 74

PART IV

Item 14. Controls and Procedures..................................................................... 77
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................ 77

INCLUSION OF FORWARD-LOOKING INFORMATION

Certain statements in this report constitute "forward-looking statements" within the meaning of the federal
securities laws. Such statements involve known and unknown risks and uncertainties which may cause the Company's actual
results, performance or achievements to be materially different than any future results, performance or achievements
expressed or implied in this report. By way of example and not limitation and in no particular order, known risks and
uncertainties include our substantial debt and ability to generate sufficient cash flows to service our debt; the timing
and cost of plant closures; the level of cost reduction achieved through restructuring and capital expenditure programs;
the success of new technology; changes in market conditions or product demand; loss of important customers or volume;
downward selling price movements; changes in raw material costs; and currency and interest rate fluctuations. In light of
these and other risks and uncertainties, the inclusion of a forward-looking statement in this report should not be
regarded as a representation by the Company that any future results, performance or achievements will be attained.

PART I

ITEM 1. BUSINESS

General

U.S. Can Corporation, incorporated in Delaware in 1983, through its wholly owned subsidiary, United States
Can Company, is a leading manufacturer, by sales volume, of steel containers for personal care, household, automotive,
paint, industrial and specialty products in the United States and Europe. We also are a manufacturer of plastic
containers in the United States and food cans in Europe. We have long-standing relationships with many well-known
consumer products and paint manufacturers in the United States and Europe, including Reckitt Benckiser, Sherwin Williams,
S.C. Johnson, Gillette and Unilever. We also produce seasonal holiday tins sold by mass merchandisers. References in this
report include U.S. Can Corporation (the "Corporation" or "U.S. Can"), its wholly owned subsidiary, United States Can
Company ("United States Can"), and United States Can's subsidiaries (the "Subsidiaries"). The consolidated group is
referred to herein as "the Company".

We hold the number one market position in steel aerosol cans, based on sales volume, in the United States
and the number two market position in Europe. In addition, we hold the number two market position in paint cans in the
United States, by unit volume. We attribute our market leadership to our ability to consistently provide high-quality
products and service at competitive prices, while continually improving our product-related technologies. The references
in this Report to market positions or market share are based on information derived from annual reports, trade
publications and management estimates which the Company believes to be reliable. For financial information about business
segments and geographic areas, refer to Note (16) to the Consolidated Financial Statements.

Business Segments

We have four major business segments: Aerosol Products; International Operations; Paint, Plastic & General
Line Products; and Custom & Specialty Products.

Aerosol Products

As the largest producer of steel aerosol cans in the United States by sales volume, we have a leading
position in all of the major aerosol consumer product lines, including personal care, household, automotive and spray
paint cans. We offer a wide range of aerosol containers to meet our customer requirements including stylized necked-in
cans and barrier pack cans used for products that cannot be mixed with a propellant, such as shaving gel. Most of the
aerosol cans that we produce employ a lithography process that consists of printing our customers' designs and logos on
flat sheets of tinplate, prior to formation into cans.

Steel aerosol cans manufactured in the U.S. represent our largest segment, accounting for approximately
45.7%, 43.3% and 44.2% of our total net sales in 2002, 2001 and 2000, respectively. In 2002, we manufactured
approximately 55% of the steel aerosol cans produced in the United States.

International Operations

We produce steel aerosol cans and steel food cans in Europe. We also supply steel aerosol cans to
customers in Latin America through Formametal S.A., our joint venture in Argentina. The Company beneficially owns 36.5%
of Formametal S.A. Our subsidiary, May Verpackungen GmbH & Co., KG ("May"), a German manufacturer of steel food
packaging and aerosol cans provides us with diversification across our product lines and customer base.

International Operations represents our second largest segment, accounting for approximately 30.3%, 29.7%
and 29.6% of our total net sales in 2002, 2001 and 2000, respectively. In 2002, we were the second largest producer of
steel aerosol cans in Europe and manufactured over 30% of the steel aerosol cans produced. May is a leading European
food can producer with more than 30% of the German food can market, by sales volume.

Paint, Plastic & General Line Products

Our primary Paint, Plastic & General Line products include steel paint and coating containers, oblong cans
and plastic pails and drums. Management estimates that U.S. Can is second in market share in the United States, on a unit
volume basis, in steel round and general line containers. Paint, Plastic & General Line products accounted for
approximately 15.1%, 16.9% and 16.8% of our total net sales in 2002, 2001 and 2000, respectively.

Custom & Specialty Products

We also have a significant presence in the Custom & Specialty market, offering a wide range of decorative
and specialty steel products. Our primary products include functional and decorative containers and tins, and collectible
items, such as decorative metal signs. These products are generally custom designed and decorated and are typically
produced in smaller quantities than our other products. On February 20, 2001, we acquired certain assets of Olive Can
Company, a Custom & Specialty manufacturer. The Olive acquisition is not material to the Company's operations or
financial position.

Custom & Specialty products accounted for approximately 8.9%, 10.0% and 9.4% of our total net sales in
2002, 2001 and 2000, respectively.

Customers and Sales Force

As of December 31, 2002, we had approximately 4,800 customers, with our largest customer accounting for
8.6% of our total net sales in 2002. To the extent possible, we enter into one-year or multi-year supply agreements with
our major customers. Some of these agreements specify the number of containers a customer will purchase (or the mechanism
for determining this number), pricing, volume discounts (if any) and, in the case of many of our domestic and some of our
international multi-year supply agreements, a provision permitting us to pass through price increases in specified raw
material and other costs.

We market our products primarily through a sales force comprised of inside and outside sales
representatives dedicated to each segment. As of December 31, 2002, we had 68 sales representatives in the United States
and 19 sales representatives in Europe. Each sales representative is responsible for growing sales in a specific
geographic region and is compensated by a salary and a bonus based on sales volume targets.

Raw Materials

Our principal raw materials are tin-plated steel, referred to as tin-plate, and coatings and inks used to
print our customers' designs and logos onto tin-plate. Tin-plate represents our largest raw material cost. Our domestic
operations purchase tin-plate principally from domestic steel manufacturers, with a smaller portion purchased from
foreign suppliers. Our European operations purchase tin-plate principally from European suppliers. Our largest domestic
steel suppliers are U.S. Steel, Weirton Steel and Wheeling-Pitt, while Corus, Arcelor and Rasselstein supply the largest
volume in Europe.

The President of the United States has imposed 30% ad valorem tariffs under Section 201 of the Trade Act
of 1974 on tin mill imports from most foreign producers effective March 20, 2002. These tariffs are scheduled to remain
in effect for three years, declining to 24% in the second year and 18% in the third year. Tin mill imports from Canada,
Mexico and certain developing countries are excluded from the tariffs. The Company purchases the vast majority of its
domestic steel from domestic sources but since the tariff curtails foreign competition, the Company is being negatively
impacted as the competitive ability to purchase foreign steel at lower prices has been effectively restricted by the
tariff.

In response to the U.S. tariffs imposed under Section 201 of the Trade Act of 1974, in March of 2002
European Union Trade Commission established a steel safeguard initiative whereby imports of steel into Europe from
designated countries are assessed a duty of 17% versus the previous duty of 1%. The new duty on some European imports
remains in effect for the duration of the U.S. imposed tariffs under Section 201. Due to the fact that the Company's
European operations do not import steel from any of the countries affected by the new European duty, in 2002 the
Company's international operations were not affected by the new duty. Likewise, the Company does not anticipate the new
duty to affect its operations in 2003 as the Company has no plans to begin purchasing steel from these countries.

Our domestic and European operations purchase approximately 400,000 tons of tin-plate annually. The
Company believes that adequate quantities of tin-plate will continue to be available from steel manufacturers, however,
potential seasonal shortages may occur from domestic suppliers as foreign sourcing is effectively no longer available due
to the tariffs.

Tin-plate prices have increased slightly over the last five years. While there is some long-term
variability, tin-plate prices have generally been stable and price increases have historically been announced several
months before implementation. This stability has enhanced our ability to communicate and negotiate required selling price
increases with our customers and minimizes fluctuations of our gross margins. Many of our domestic and some of our
international multi-year supply agreements with our customers permit us to pass through tin-plate price increases and, in
some cases, other raw material costs. The tariffs implemented in 2002 did not have a material effect on the Company's
costs for the year but the Company expects the increase in steel costs in 2003 to be above historical increases due to
the tariffs. We cannot assess the impact of the tariffs on its steel prices in 2004 or later years. We have not always
been able to immediately offset increases in tin-plate prices with price increases on our products. Further, the tariffs
could jeopardize this pricing stability, and could negatively impact our gross margins as we may not have the ability to
immediately or fully pass through tinplate price increases to all of our customers. The Company is unable to determine
the long term effects the tariffs will have on steel prices or resource availability. However, the Company will continue
to explore other sourcing alternatives to limit any potential negative impact of the tariffs.

Coatings and inks, which are used to coat tin-plate and print designs and logos, represent our second
largest raw material expense. We purchase coatings and inks from regional suppliers in the United States and Europe.
These products historically have been readily available, and we expect to be able to meet our needs for coatings and inks
in the foreseeable future.

Our plastic products are produced from two main types of resins, which are petroleum or natural gas-based
products. High-density polyethylene resin is used to make pails, drums and agricultural products. We use 100%
post-industrial and post-consumer use, recycled polypropylene resin in the production of the Plastite(R)line of paint
cans. The price of resin fluctuates significantly, and we believe that it is standard industry practice, as well as a
provision of many of our customer contracts, to pass on increases and decreases in resin prices to our customers.

Seasonality

The Company's business as a whole has minor seasonal variations. Quarterly sales and earnings tend to be
slightly stronger starting in early spring (second quarter) through late summer (third quarter). Aerosol sales have minor
increases in the spring and summer related to increased sales of containers for household products and insect repellents.
Paint container sales tend to be stronger in spring and early summer due to the favorable weather conditions. Portions of
the Custom & Specialty products line tend to vary seasonally, because of holiday sales late in the year. May's food can
sales generally peak in the third and fourth quarters.

Special Charges

The Company initiated several restructuring programs in 2001, consisting of a voluntary termination
program offered to corporate office salaried employees, the closure of six manufacturing facilities and the opening of a
new plastics plant in Atlanta, Georgia.

During 2001, the Company closed a paint can manufacturing facility and a warehouse in Baltimore, Maryland
and ceased operations in Dallas, Texas. Also in connection with the restructuring programs established in 2001, during
2002 the Company closed a Custom & Specialty plant located in the Baltimore, Maryland area, closed the Southall, England
manufacturing facility and closed the Burns Harbor, Indiana lithography facility. The Company has also closed two
plastics facilities in Georgia and transferred production to a new facility in Atlanta, Georgia. The closure of the
Burns Harbor, Indiana lithography facility, in the fourth quarter of 2002 completed the restructuring program established
in 2001, as originally planned.
While the majority of the restructuring initiatives have been completed in 2002, certain portions of the
programs will not be completed until 2003, and the Company does not expect to realize the full earnings benefits until
2004. Certain long-term liabilities (approximately $3.7 million as of December 31, 2002), consisting primarily of
employee termination costs and future ongoing facility carrying costs will be paid over many years.

During 2002, the Company recorded a net charge of $8.7 million related to its restructuring programs.
The 2002 net charge included a reassessment of the restructuring reserves established in 2001, the costs associated with
an executive level position elimination and the loss on the sale of the Daegeling, Germany facility. The increased 2001
reserves are primarily due to additional required contractual payments to terminated employees and a reassessment of
future carrying costs for closed facilities. The increased employee separation costs are primarily due to larger
payments made to employees of the Southall, England plant as a result of the extension of the closure period and
additional employee terminations in connection with the 2001 program. Facility closing costs were reassessed and
increased as a result of landlord negotiations. The increased costs were offset by reduced employee separation and
facility closing costs of our Burns Harbor facility shutdown. The individual components of the restructuring programs
are discussed in Note (4) to the consolidated financial statements.

Labor

As of December 31, 2002, we employed approximately 2,400 employees in the United States. Of our total U.S.
workforce, approximately 1,600 employees, or 67%, were members of various labor unions, including the United Steelworkers
of America, the International Association of Machinists and the Graphic Communications International Union. Labor
agreements covering approximately 400 employees were successfully negotiated in 2002. As of December 31, 2002, our
European subsidiaries employed approximately 1,350 people. In line with common European practices, all plants are
unionized.

We have followed a labor strategy designed to enhance our flexibility and productivity through
constructive relations with our employees and collective bargaining units. Our practice is to deal directly with local
labor unions on employment contract issues and other employee concerns. This practice also has the effect of staggering
renewal negotiations with the various bargaining units. We believe that our relations with our employees and their
collective bargaining units are generally good.

As discussed previously, the restructuring programs initiated in 2001 have resulted in a reduction of the
salaried and hourly work force. The Company has worked closely with the various labor unions and their collective
bargaining units to ensure provisions for termination, severance and pension eligibility were in accordance with the
respective collective bargaining agreements. Except as referenced in "Legal Proceedings - Litigation", the Company's
relationship with represented employees is good and there have been no labor strikes, slow-downs, work stoppages or other
material labor disputes threatened or pending against the Company for at least the past 10 years.

Competition

Quality, service and price are the principal methods of competition in the rigid metal and plastic
container industry. Geographic presence is also an important competitive factor given the cost of shipping empty cans
long distances and accordingly, the Company maintains East Coast, Midwest, Southern and West Coast manufacturing
facilities. In addition, price competition in our industry limits our ability to raise prices for many of our top
products.

In the U.S. steel aerosol can market, we compete primarily with Crown Cork & Seal and BWAY. Because steel
aerosol cans are pressurized and are used for personal care, household and other consumer products, they are more
sensitive to quality, can decoration and other consumer-oriented features than some of our other products. Our European
subsidiaries compete with Crown Cork & Seal, Impress Metal Packaging and other smaller regional producers. Crown Cork &
Seal and Impress are larger and may have greater financial resources than we do.

In metal paint and general line products, we compete primarily with BWAY Corporation and one smaller
regional manufacturer. Our plastic products line competes with many regional companies.

Our Custom & Specialty line competes with a large number of container manufacturers, but we do not compete
across the entire product spectrum with any single company. Competition in this segment is based principally on quality,
service, price, geographical proximity to customers and production capability, with varying degrees of intensity
according to the specific product category.
Our products also face competition from aluminum, glass and plastic containers and flexible pouches.

Strategic Transactions

In February 2001, we acquired certain assets of Olive Can Company, a Custom & Specialty manufacturer. The
acquisition, which is not material to the Company's operations or financial position, was accounted for as a purchase.

The Company continually evaluates all areas of its operations for ways to improve profitability and
overall Company performance. In connection with these evaluations, management considers numerous alternatives to enhance
the Company's existing business including, but not limited to acquisitions, divestitures, capacity realignments and
alternative capital structures.

The Company's Senior Secured Credit Facility prohibits the redemption of the subordinated debt. The
Company may consider making such repurchases upon the expiration or amendment of the Facility.

Refer to Note (5) to the Consolidated Financial Statements for further discussion of the Olive acquisition.

Risk Factors

We have substantial debt that could negatively impact our business by, among other things, increasing our vulnerability
to general adverse economic and industrial conditions and preventing us from fulfilling our obligations under our Senior
Secured Credit Agreement and our Subordinated Debt obligations. As of December 31, 2002, total consolidated debt
outstanding was $549.7 million. We had $30.1 million of unused commitment under our revolving credit facility and cash
of $11.8 million. Our high level of debt could:

o limit our financial flexibility in planning for and reacting to industry changes;
o place us at a competitive disadvantage as compared to less leveraged companies;
o increase our vulnerability to general adverse economic and industry conditions, including changes in
interest rates;
o require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing the
availability of our cash flow for other purposes;
o make it difficult for us to satisfy our obligations, including making interest payments under our debt
obligations; and
o limit our ability to obtain additional financing to operate our business.

The terms of our debt may severely limit our ability to plan for or respond to changes in our business.

Our senior secured credit facility restricts, among other things, our ability to take specific actions,
even if these actions may be in our best interest. These restrictions limit our ability to:

o incur liens or make negative pledges on our assets;
o merge, consolidate or sell our assets;
o issue additional debt;
o pay dividends or redeem capital stock and prepay other debt;
o make investments and acquisitions;
o make capital expenditures;
o materially change our business;
o amend our debt and other material agreements;
o issue and sell capital stock;
o allow distributions from our subsidiaries; or
o prepay specified indebtedness.

Our debt requires us to maintain specified financial ratios and meet specific financial tests. Our failure
to comply with these covenants could result in an event of default that, if not cured or waived, could result in us being
required to repay these borrowings before their due date. If we were unable to make this repayment or otherwise refinance
these borrowings, our lenders could foreclose on our assets. If we were unable to refinance these borrowings on favorable
terms, our business could be adversely impacted.

Our senior debt bears interest at a floating rate, and if interest rates rise, our payments will increase and we may
incur losses.

Outstanding amounts under our senior secured credit facility bear interest at a floating rate. If interest
rates rise, our senior debt interest payments also will increase, which could make it more difficult for us to satisfy
our debt obligations and further reduce availability of our cash flow for operations and other purposes.

This risk has been partially mitigated by interest rate swap and collar agreements that we have entered
into. (See "Quantitative and Qualitative Disclosure About Market Risk - Foreign Currency and Interest Rate Risk -
Interest Rate Risk"). However, the interest rate swaps and collars were entered into in 2000, when interest rates were
higher than current rates. Accordingly, these contracts are "out of the money" and may require future payments if market
interest rates do not return to historical levels. Further, these contracts expire in October 2003. Management has not
determined whether new contracts will be entered into at that time.

Berkshire Partners owns a controlling interest in our voting securities.

Berkshire Partners and its affiliates own approximately 77.3% of the total common equity of U.S. Can
Corporation. Subject to specified limitations contained in our stockholders agreement, Berkshire Partners controls the
Company. Accordingly, Berkshire and its affiliates will control the power to elect directors and to approve many actions
requiring the approval of our stockholders, such as adopting most amendments to our certificate of incorporation and
approving mergers, sales of all or substantially all of our assets and other corporate transactions that could result in
a change of control of our company.

We face competitive risks from many sources that may negatively impact our profitability.

The can and container industry is highly competitive with some of our competitors having greater financial
resources than we do. Quality, service and price are the principal methods of competition in our industry. Because our
customers have the ability to buy similar products from our competitors, we are limited in our ability to increase
prices. Our capital investments have improved our operating efficiencies, and consequently, improved profitability, but
we cannot assure you that we will continue to improve profit margins in this manner. In addition, our profit margins
could decrease if we are unable to meet our customers' quality and service demands.

We also face competitive risks from substitute products, such as aluminum, glass and plastic containers.
Our business also is affected by changes in consumer demand for our customers' products. A decrease in the costs of
substitute products or a decline in consumer demand for our customers' products, particularly their aerosol-based
products, could reduce our customers' orders and adversely affect our business, including our profitability.

The loss of a key customer could have a significant impact on our sales.

We make a significant percentage of our sales to a limited number of customers. Our largest customer
accounted for approximately 8.6% of our sales in 2002. The loss of key customers could adversely affect our sales,
necessitating quick operating cost reductions to offset the resulting sales decrease.

In addition, several of our manufacturing plants are dependent on high volume orders from customers. The
loss of any of these customers or a decrease in demand for their products, which are packaged in our containers, could
adversely affect our business and force us to close manufacturing plants. Product quality is a key element in customer
retention in the packaging industry.

Increases in tin-plated steel prices could cause our production costs to increase, which could reduce our ability to
compete effectively.

Tin-plated steel is the most significant raw material used to make our products. Negotiations with our
domestic and European tin-plated steel suppliers generally occur once per year. Failure to negotiate favorable tin-plated
steel prices in the future could result in an increase in production costs and a negative impact on our results of
operations.

The President of the United States has imposed 30% ad valorem tariffs under Section 201 if the Trade Act
of 1974 on tin mill imports from most foreign producers effective March 30, 2002. These tariffs are scheduled to remain
in effect for three years, declining to 24% in 2003 and 18% in 2004. Tin mill imports from Canada, Mexico and certain
developing counties are excluded from these tariffs. The Company purchases the vast majority of its domestic steel from
domestic sources. Since the tariff curtails foreign competition, a negative impact to the Company is expected since the
Company is unable to purchase foreign steel at lower prices.

Some customer contracts allow us to pass tin-plated steel price increases through to our customers.
However, these contracts generally limit pass-throughs and also may require us to match other competitive bids. If we
cannot pass through all future tin-plated steel price increases to our customers or match other packaging suppliers'
bids, our financial condition may be adversely affected.

We face risks associated with our international operations.

We operate facilities and sell products in several countries outside the United States. We have
significant foreign operations, including plants and sales offices in Denmark, France, Germany, Italy, Spain and the
United Kingdom. In addition, we currently own 36.5% of an aerosol can manufacturer located in Argentina. Our
international operations subject us to risks associated with selling and operating in foreign countries. In Europe,
these risks include:

o fluctuations in currency exchange rates;
o restrictions on dividend payments and other payments by our foreign subsidiaries;
o withholding and other taxes on dividend payments and other payments by our foreign subsidiaries; and
o investment regulation and other restrictions by foreign governments.

In Argentina, these risks include:

o limitations on conversion of foreign currencies into United States dollars;
o hyperinflation; and
o political instability.

Our business is subject to substantial environmental remediation and compliance costs.

Our operations are subject to federal, state, local and foreign laws and regulations relating to
pollution, the protection of the environment, the management and disposal of hazardous substances and wastes and the
cleanup of contaminated sites. In particular, our lithography operations' air emissions are strictly regulated. We spend
significant funds each year to upgrade emissions control equipment to comply with changes in environmental regulations
and increase the efficiencies of our manufacturing operations. Changes in applicable environmental regulations could
increase the capital expenditures necessary to bring manufacturing facilities into compliance with changing environmental
laws. We also could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, as a result
of violations of, or liabilities under, environmental laws or non-compliance with environmental permits required for our
production facilities. Occasionally, contaminants from current or historical operations have been detected at some of our
present and former sites. Although we are not currently aware of any material claims or obligations with respect to these
sites, the detection of additional contaminants or the imposition of cleanup obligations at existing or unknown sites of
contamination could result in significant liability.

We cannot predict the amount or timing of costs imposed under environmental laws. Liability under certain
environmental laws relating to contaminated sites can be imposed retroactively and on a joint and several basis (i.e.,
one liable party could be held liable for all costs at a site). We have been named as a potentially responsible party for
costs incurred in the clean up of a regional groundwater plume partially extending underneath property located in San
Leandro, California, formerly a site of one of our can assembly plants. We have agreed to indemnify the owner of this
property against this matter. We do not believe the past operations of our can assembly plant caused or contributed to
this groundwater plume. However, any liability in connection with this or other environmental matters could result in
substantial costs.

A significant portion of our workforce is unionized and labor disruptions could decrease our productivity.

As of December 31, 2002, we had approximately 3,800 employees. Nearly 1,600 of our United States employees
are subject to collective bargaining agreements. In keeping with common practice, virtually all manufacturing employees
at our European plants are unionized. Although we consider our current relations with our employees to be good, except as
referenced in "Legal Proceedings - Litigation", if we do not maintain these good relations, or if major work disruptions
were to occur, our production costs could increase.

ITEM 2. PROPERTIES

We have 13 operations located in the United States, many of which are strategically positioned near
principal customers and suppliers. Through our European subsidiaries, we also have production locations in the largest
regional markets in Europe, including Denmark, France, Germany, Italy, Spain and the United Kingdom. The following table
sets forth certain information with respect to our principal plants as of March 15, 2003.

Location Size (in sq. Status Segment
- -------- ------------- ------ -------
ft.)
----

United States
Elgin, IL (1)............................ 481,346 Owned Aerosol
Tallapoosa, GA (1)....................... 249,480 Owned Aerosol
Baltimore, MD ........................... 232,172 Leased Custom & Specialty
Commerce, CA............................. 215,860 Leased Paint, Plastic & General Line
Newnan, GA............................... 185,122 Leased Paint, Plastic & General Line
Hubbard, OH (1).......................... 174,970 Owned Paint, Plastic & General Line
Elgin, IL................................ 144,578 Leased Custom & Specialty
Baltimore, MD (1)........................ 137,000 Owned Custom & Specialty
Horsham, PA (1).......................... 132,000 Owned Aerosol
Weirton, WV.............................. 108,000 Leased Aerosol
Danville, IL (1)......................... 100,000 Owned Aerosol
Alliance, OH............................. 52,000 Leased Paint, Plastic & General Line
New Castle, PA (1)....................... 22,750 Owned Custom & Specialty
Europe
Erftstadt, Germany....................... 369,000 Leased International
Merthyr Tydfil, United Kingdom (2)....... 320,000 Leased International
Laon, France............................. 220,000 Owned International
Reus, Spain.............................. 182,250 Owned International
Itzehoe, Germany......................... 80,730 Owned International
Esbjerg, Denmark......................... 66,209 Owned International
Voghera, Italy........................... 45,200 Leased International
Schwedt, Germany......................... 35,500 Leased International

(1) U.S. owned plants are subject to a lien in favor of Bank of America, N.A. as collateral agent for the
lenders under the credit agreement.

(2) The property at Merthyr Tydfil is subject to a 999-year lease with a pre-paid option to buy that becomes
exercisable in January 2007. Up to that time, the landowner may require us to purchase the property for a
payment of one Pound Sterling. Currently, the leasehold interest in, and personal property located at,
Merthyr Tydfil is subject to a pledge to secure amounts outstanding under a credit agreement with General
Electric Capital Corporation.

In connection with our restructuring initiatives, we have closed several manufacturing facilities, some
which have been subleased. The Company has reserved for on-going costs associated with these closed facilities and they
are not included in the above listing.

We believe our facilities are adequate for our present needs and that our properties are generally in good
condition, well maintained and suitable for their intended use. We continuously evaluate the composition of our various
manufacturing facilities in light of current and expected market conditions and demand, and may further consolidate our
plant operations in the future.

ITEM 3. LEGAL PROCEEDINGS

Environmental Matters

Our operations are subject to environmental laws in the United States and abroad, relating to pollution,
the protection of the environment, the management and disposal of hazardous substances and wastes and the cleanup of
contaminated sites. Our capital and operating budgets include costs and expenses associated with complying with these
laws, including the acquisition, maintenance and repair of pollution control equipment, and routine measures to prevent,
contain and clean up spills of materials that occur in the ordinary course of our business. In addition, some of our
production facilities require environmental permits that are subject to revocation, modification and renewal. We believe
that we are in substantial compliance with environmental laws and our environmental permit requirements, and that the
costs and expenses associated with this compliance are not material to our business. However, additional operating costs
and capital expenditures could be incurred if, among other developments, additional or more stringent requirements
relevant to our operations are promulgated.

Occasionally, contaminants from current or historical operations have been detected at some of our present
and former sites. Although we are not currently aware of any material claims or obligations with respect to these sites,
the detection of additional contamination or the imposition of cleanup obligations at existing or unknown sites could
result in significant liability.

We have been designated as a potentially responsible party under superfund laws at various sites in the
United States, including a former can plant located in San Leandro, California. As a potentially responsible party, we
are or may be legally responsible, jointly and severally with other members of the potentially responsible party group,
for the cost of environmental remediation at these sites. Based on currently available data, we believe our contribution
to the sites designated under U.S. Superfund law was, in most cases, minimal. With respect to San Leandro, we believe the
principal source of contamination is unrelated to our past operations.

Through corporate due diligence and the Company's compliance management system, we identified potential
noncompliance with the environmental laws at our New Castle, Pennsylvania facility related to the possible use of a
coating or coatings inconsistent with the conditions in the facility's Clean Air Act Title V permit. In February 2001,
the Company voluntarily self-reported the potential noncompliance to the Pennsylvania Department of Environmental
Protection (PDEP) and the Environmental Protection Agency (EPA) in accordance with PDEP's and EPA's policies. The
Company undertook a full review, revised its emissions calculations based on its review and determined that it had not
exceeded its emissions cap for any reporting year. In September 2001, the Company reported to PDEP and EPA certain
deviations from the requirements of its Title V permit related to the use of non-compliant coatings and corresponding
recordkeeping and reporting obligations, and certain recordkeeping deviations stemming from the malfunction of the
temperature recorder for an oxidizer. The Company met with PDEP officials in October 2001, and provided some supplemental
information requested by PDEP in November 2001. On May 21, 2002, the Company met with PDEP officials and reached an
agreement to resolve the past reported deviations by entering into a Consent Assessment of Civil Penalty for $30,000.
The Company and PDEP signed a definitive agreement in October 2002 and the Company paid the first installment. The
second installment is due in April 2003.

Based upon currently available information, the Company does not expect the effects of environmental
matters to be material to its financial position.

Litigation

We are involved in litigation from time to time in the ordinary course of our business. In our opinion,
the litigation is not material to our financial condition or results of operations.

In May 1998, the National Labor Relations Board issued a decision ordering us to pay $1.5 million in back
pay, plus interest, for a violation of certain sections of the National Labor Relations Act. The violation was a result
of our closure of several facilities in 1991 and our failure to offer inter-plant job opportunities to 25 affected
employees. We appealed this decision on the grounds, among others, that we are entitled to a credit against this award
for certain supplemental unemployment benefits and pension payments. On June 19, 2001, the Court of Appeals issued a
written decision. While the Court enforced the award of backpay, with interest, it agreed with the Company's position
that the NLRB should permit the Company to present actuarial calculations of any credit due it because of overpayments or
early payments of supplemental unemployment benefits or pension. On March 1, 2002, the Company settled this case. Under
the settlement agreement, the Company paid approximately $1.8 million in backpay and interest, as well as certain pension
adjustments that are not expected to have a material effect on the Company. The National Labor Relations Board approved
the settlement on May 30, 2002. The Company made substantially all payments due under the settlement in July 2002. In
October 2002, the NLRB entered an Order officially closing this matter.

Walter Schmidt, former finance director at May Verpackungen GmbH ("May") sued for unfair dismissal
following termination of his employment contract. The contract had a five-year term and Schmidt remains in pay status
through its notice period, ending January 31, 2005. Mr. Schmidt claims that he also is due a severance settlement of
five years' salary at the end of the notice period. In July 2002, the labor courts of first instance ruled that Mr.
Schmidt's notice date and termination should be effective December 31, 2005, and that the severance settlement is due at
that time. On January 7, 2003, May appealed this ruling. In its appeal, May contends that the labor courts' ruling is
erroneous on four bases. The appeals court will review the ruling of the labor courts of first instance de novo, meaning
that it is not bound by the prior ruling and may render an independent decision. Since the appeals court's review is not
complete, the Company is unable, at this time, to determine the appeals court's position or the effect on the Company of
the initial decision.

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

In December 2002, U.S. Can Corporation sought the consent of its common and preferred shareholders to
amend its certificate of incorporation to effect (i) a reverse stock split which, upon obtaining the necessary consents
and filing with the Secretary of State of the State of Delaware, reclassified and converted each preexisting share of
common stock and Series A preferred stock into 1/1000th of a share of common and preferred stock, respectively, and (ii)
a corresponding reduction in the number of its authorized shares of common stock from 100,000,000 shares to 100,000
shares and in the number of its authorized shares of preferred stock from 200,000,000 shares to 200,000 shares.

The following tables set forth the number of shares consenting, not consenting, abstaining, or not
obtained (numbers shown are prior to the reverse stock split):

Common Stock
------------

Shares Outstanding........................................... 53,333,333
Shares Consenting................................. 48,620,761
Shares Not Consenting........................... ---
Shares Abstaining................................. ---
Shares Consent Not Obtained.................... 4,712,572

Preferred Stock
---------------

Shares Outstanding........................................... 106,666,667
Shares Consenting................................. 105,979,382
Shares Not Consenting........................... ---
Shares Abstaining................................. ---
Shares Consent Not Obtained.................... 687,285

PART II

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

U.S. Can has approximately 20 common stockholders. Its common stock has not been registered and there is
no trading market for its common stock. It has not paid, and has no present intention to pay, cash dividends. As U.S.
Can Corporation has no operations, its only source of cash for dividends or distributions is United States Can Company.
There are stringent limitations in the Senior Secured Credit Facility ("the Facility") and the Senior Subordinated Notes
("the Notes") on United States Can's ability to fund or pay cash dividends to U.S. Can Corporation.

In 2000, U.S. Can Corporation issued shares of preferred stock having a face value of $106.7 million.
Dividends accrue on the preferred stock at an annual rate of 10%, are cumulative from the date of issuance and are
compounded quarterly, on March 31, June 30, September 30 and December 31 of each year and are payable in cash when and as
declared by our Board of Directors, so long as sufficient cash is available to make the dividend payment and such payment
would not violate the terms of the Facility and the Notes. As of December 31, 2002, dividends of approximately $26.5
million have been accrued. As United States Can is U.S. Can Corporation's only source of cash and payments by United
States Can are restricted by the terms of the Facility and the Notes, U.S. Can Corporation does not anticipate paying
cash dividends on the preferred stock in the foreseeable future. Holders of the preferred stock have no voting rights,
except as otherwise required by law. The preferred stock has a liquidation preference equal to the purchase price per
share (after giving effect to the reverse stock split), plus all accrued and unpaid dividends. The preferred stock ranks
senior to all classes of U.S. Can Corporation common stock and is not convertible into common stock.

On December 20, 2002, U.S. Can Corporation amended its certificate of incorporation to effect (i) a
reverse stock split which, upon filing with the Secretary of State of the State of Delaware, reclassified and converted
each preexisting share of common stock and Series A preferred stock into 1/1000th of a share of common and preferred
stock, respectively, and (ii) a corresponding reduction in the number of its authorized shares of common stock from
100,000,000 shares to 100,000 shares and in the number of its authorized shares of preferred stock from 200,000,000
shares to 200,000 shares. The reverse stock split did not affect the relative percentages of ownership for any
shareholders. The reverse stock split did not affect the annual rate at which dividends on preferred stock accrue, their
cumulation or quarterly compounding. Dividends remain payable in cash when and as declared by our Board of Directors, so
long as sufficient cash is available to make the dividend payment and such payment would not violate the terms of the
Facility and the Notes.

ITEM 6. SELECTED FINANCIAL DATA

The following consolidated financial data as of and for each of the fiscal years in the five years ended
December 31, 2002 were derived from our audited financial statements. You should read all of this information in
conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our
financial statements for the year ended December 31, 2002 and accompanying notes beginning on page 25.

U.S. CAN CORPORATION AND SUBSIDIARIES
(000's omitted)
For the Year Ended December 31,
-------------------------------
2002 2001 2000 1999 1998
---- ---- ---- ---- ----
OPERATING DATA:
Net sales........................................ $ 796,500 $ 772,188 $ 809,497 $ 732,897 $ 730,951
Special charges (a).............................. 8,705 36,239 3,413 -- 35,869
Recapitalization charge (b)...................... -- -- 18,886 -- --
Operating income (loss).......................... 39,547 (6,146) 48,153 66,975 21,748
Income (loss) from continuing operations
before discontinued operations, extraordinary item,
and cumulative effect of accounting change.... (53,474) (40,416) 3,341 22,452 (7,525)
Discontinued operations, net of income taxes (c)
Net loss on sale of business.................. -- -- -- -- (8,528)
Extraordinary item, net of income taxes - loss from
early extinguishment of debt (d).............. -- -- (14,863) (1,296) --
Cumulative effect of accounting change, net of
income taxes (e).............................. (18,302) -- -- -- --
Net income (loss) before preferred stock dividends (71,776) (40,416) (11,522) 21,156
(16,053)
Preferred stock dividend requirements............ (12,521) (11,345) (2,601) -- --
Net income (loss) attributable to
common stockholders........................... $ (84,297) $ (51,761) $ (14,123) $ 21,156 $ (16,053)
BALANCE SHEET DATA:
Total assets..................................... $ 578,826 $ 634,350 $ 637,864 $ 663,570 $ 555,571
Total debt....................................... 549,682 536,776 495,045 359,317 316,673
Redeemable preferred stock....................... 133,133 120,613 109,268 -- --
Stockholders' equity (f)......................... (343,846) (247,124) (174,323) 68,556 50,177

(a) See Note (4) of the "Notes to Consolidated Financial Statements" for a description of the 2002, 2001 and 2000
Special Charges. In 1998, the Company established a restructuring provision for closure of the Green Bay,
Wisconsin aerosol assembly plant, the Alsip, Illinois general line plant, and the Columbiana, Ohio specialty
plant; a write-down to estimated proceeds for the sale of the metal closure business located in Glen Dale, West
Virginia; and selected closures and realignment of facilities servicing the lithography needs of the Company's
core businesses.

(b) See Note (3) of the "Notes to Consolidated Financial Statements."

(c) On November 9, 1998, the Company sold its commercial metal services business ("Metal Services"). Metal Services
included one plant in each of Chicago, Illinois; Trenton, New Jersey; Brookfield, Ohio, and Alsip, Illinois.

(d) In April of 2002, the FASB issued Statement of Financial Accounting Standard No. 145 related to gains and
losses on extinguishment of debt. See "New Accounting Pronouncements". In accordance with the pronouncement,
the Company will adopt the standard for the year ended December 31, 2003 and is in the process of reviewing the
criteria in Accounting Principles Board Opinion 30 as it relates to the Company's early extinguishment of debt
in 2000 and 1999. See Note (6) of the "Notes to Consolidated Financial Statements" for further details relating
to the early extinguishment of debt.

(e) See Note (15) of the "Notes to Consolidated Financial Statements."

(f) Negative stockholders' equity in 2000 was caused by the recapitalization. See Note (3) of the "Notes to
Consolidated Financial Statements."

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion summarizes the significant factors affecting the consolidated operating results
and financial condition of the Company and subsidiaries for the three years ended December 31, 2002. This discussion
should be read in conjunction with the consolidated financial statements and notes to the consolidated financial
statements.

Critical Accounting Policies; Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Estimates are used for, but not limited to: allowance for doubtful
accounts; inventory valuation; purchase accounting allocations; restructuring amounts; asset impairments; depreciable
lives of assets; goodwill impairments; pension assumptions and tax valuation allowances. Future events and their effects
cannot be perceived with certainty. Accordingly, our accounting estimates require the exercise of management's current
best reasonable judgment based on facts available. The accounting estimates used in the preparation of the consolidated
financial statements will change as new events occur, as more experience is acquired, as more information is obtained and
as the Company's operating environments change. Significant business or customer conditions could cause material changes
to the amounts reflected in our financial statements. Accounting policies requiring significant management judgments
include those related to revenue recognition, inventory valuation, accounts receivable allowances, goodwill impairment,
restructuring reserves, tax valuation allowances, pension benefit obligations and interest rate exposure.

The Company's critical accounting policies are described in Note (2) to the Consolidated Financial
Statements. Significant business or customer conditions could cause material changes to the amounts reflected in our
financial statements. For example, the Company enters into contractual agreements with certain of its customers for
rebates, generally based on annual sales volumes. Should the Company's estimates of the customers' annual sales volumes
vary materially from the sales volumes actually realized, revenue may be materially impacted. Similarly, a large portion
of the Company's inventory is manufactured to customer specifications. Other inventory is generally less specific and
saleable to multiple customers. However, losses may result should the Company manufacture customized products which it is
unable to sell. Management also estimates allowances for collectibility related to its accounts receivable. These
allowances are based on the customer relationships, the aging and turns of accounts receivable, credit worthiness of
customers, credit concentrations and payment history. Despite our best efforts, the inability of a particular customer to
pay its debts could impact collectibility of receivables and could have an impact on future revenues if the customer is
unable to arrange other financing.

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other
Intangible Assets" on January 1, 2002. Under this standard, goodwill and "indefinite-lived" intangibles are no longer
amortized, but are tested at least annually for impairment. The Company identifies potential impairments of goodwill by
comparing an estimated fair value for each applicable business unit to its respective carrying value. Although the
values were assessed using a variety of internal and external sources, future events may cause reassessments of these
values and related goodwill impairments.

During the first six months of 2002, the Company completed the initial transitional goodwill impairment
test as of January 1, 2002 required under SFAS No. 142, and reported that a non-cash impairment charge was required in
the Custom & Specialty and International segments. During the fourth quarter of 2002, the Company determined the amount
of the goodwill impairment and recorded a pre-tax goodwill impairment charge of $39.1 million ($18.3 million, net of tax)
relating to the Custom & Specialty and International segments. The charge has been presented as a cumulative effect of a
change in accounting principle effective as of January 1, 2002 and is primarily due to competitive pressures in the
Custom & Specialty and International segment marketplaces. To determine the amount of goodwill impairment, the Company
measured the impairment loss as the excess of the carrying amount of goodwill over the implied fair value of goodwill.
The impairment charge has no impact on covenant compliance under the Senior Secured Credit Agreement. As of December 31,
2002, the Company had $27.4 million of goodwill remaining on its balance sheet.

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," was issued in August
2001. SFAS No. 144, which addresses financial accounting and reporting for the impairment of long-lived assets and for
long-lived assets to be disposed of, supercedes SFAS No. 121 and is effective for fiscal years beginning after December
15, 2001. The Company adopted this pronouncement on January 1, 2002. In accordance with SFAS 144, we continually review
whether events and circumstances subsequent to the acquisition of any long-lived assets have occurred that indicate the
remaining estimated useful lives of those assets may warrant revision or that the remaining balance of those assets may
not be recoverable. If events and circumstances indicate that the long-lived assets should be reviewed for possible
impairment, we use projections to assess whether future cash flows or operating income (before amortization) on an
undiscounted basis related to the tested assets is likely to exceed the recorded carrying amount of those assets, to
determine if a write-down is appropriate. Should an impairment be identified, a loss would be reported to the extent that
the carrying value of the impaired assets exceeds their fair values as determined by valuation techniques appropriate in
the circumstances that could include the use of similar projections on a discounted basis.

As more fully described in Note (4) to the Consolidated Financial Statements, several restructuring
programs were implemented in order to streamline operations and reduce costs. The Company has established reserves and
recorded charges against such reserves, to cover the costs to implement the programs. The estimated costs were
determined based on contractual arrangements, quotes from contractors, similar historical activities and other judgmental
determinations. Actual costs may differ from those estimated and, in 2002, an additional net charge of $8.7 million was
recorded related to the reassessment of the 2001 restructuring programs, 2002 employee terminations, and the sale of the
Daegeling, Germany facility. See Note (4) to the Consolidated Financial Statements for a description of the additional
net charge. SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal Activities" was issued in July 2002.
SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the
liability is incurred. SFAS No. 146 supercedes the guidance of Emerging Issues Task Force ("EITF") Issue No. 94-3
"Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity", which required that
liabilities for exit costs be recognized at the date of an entity's commitment to an exit plan. SFAS No. 146 is
effective for exit or disposal activities that are initiated after December 31, 2002. The Company will adopt SFAS No.
146 for any exit disposal activities initiated after such date.

The Company accounts for income taxes using the asset and liability method under which deferred income tax
assets and liabilities are recognized for the tax consequences of "temporary differences" between the financial statement
carrying amounts and the tax bases of existing assets and liabilities and operating losses and tax credit carry
forwards. On an ongoing basis, the Company evaluates its deferred tax assets to determine whether it is more likely
than not that such assets will be realized in the future and records valuation allowances against the deferred tax assets
for amounts which are not considered more likely than not to be realized. The estimate of the amount that is more likely
than not to be realized requires the use of assumptions concerning the amounts and timing of the Company's future income
by taxing jurisdiction. Actual results may differ from those estimates.

Due to a history of operating losses in certain countries coupled with the deferred tax assets that arose
in connection with the restructuring programs and goodwill impairment charges, the Company has determined that it cannot
conclude that it is "more likely than not" that all of the deferred tax assets of certain of its foreign operations will
be realized in the foreseeable future. Accordingly, during the fourth quarter of 2002, the Company established a
valuation allowance of $44.7 million to provide for the estimated unrealizable amount of its net deferred tax assets as
of December 31, 2002. The Company will continue to assess the valuation allowance and, to the extent it is determined
that such allowance is no longer required, these deferred tax assets will be recognized in the future.

The Company relies upon actuarial models to calculate its pension benefit obligations and the related
effects on operations. Accounting for pensions and postretirement benefit plans using actuarial models requires the use
of estimates and assumptions regarding numerous factors, including discount rate, the long-term rate of return on plan
assets, health care cost increases, retirement ages, mortality and employee turnover. On an annual basis, the Company
evaluates these critical assumptions and makes changes to them as necessary to reflect the Company's experience. In any
given year, actual results could differ from actuarial assumptions made due to economic and other factors which could
impact the amount of expense or liability for pensions or postretirement benefits the Company reports.

Two of the critical assumptions in determining the Company's reported expense or liability for pensions or
postretirement benefits are the discount rate and the long-term expected rate of return on plan assets. The use of a
lower discount rate and a lower long-term expected rate of return on plan assets would increase the present value of
benefit obligations and increase pension expense and postretirement benefit expense. In 2002, the Company reduced its
U.S. and foreign discount rates to reflect market interest rate conditions.

To manage interest rate exposure, the Company enters into interest rate agreements. The net interest paid
or received on these agreements is recognized as interest income or expense. Our interest rate agreements are reported in
the Consolidated Financial Statements at fair value using a mark-to-market valuation. Changes in the fair value of the
contracts are recorded each period as a component of other comprehensive income. Gains or losses on our interest rate
agreements are reclassified as earnings or losses in the period in which earnings are affected by the underlying hedged
item. This may result in additional volatility in reported earnings, other comprehensive income and accumulated other
comprehensive income. Our interest rate swaps and collars were entered into in 2000, when interest rates were higher
than current rates. Accordingly, these contracts are "out of the money" and may require future payments if market
interest rates do not return to historical levels. In addition, if rates do increase above historical levels and the
counterparties to the agreements default on their obligations under the agreements, our interest expense would increase.
The Company does not use financial instruments for trading or speculative purposes.

Year Ended December 31, 2002 Compared To Year Ended December 31, 2001

Consolidated net sales for the year ended December 31, 2002 were $796.5 million as compared to $772.2
million in 2001, an increase of 3.1%. Along business segment lines, Aerosol net sales in 2002 increased to $364.1 million
from $334.7 million in 2001, an increase of 8.8%, due principally to increased unit volume ($37.4 million) partially
offset by the pricing impacts resulting from a change in customer mix and the 2002 effect of pricing concessions granted
in 2001 ($8.0 million). International net sales increased to $241.2 million in 2002 from $229.5 million in 2001, an
increase of $11.7 million or 5.1% primarily due to the positive impact of the translation of sales made in foreign
currencies based upon using the same average U.S. dollar exchange rates in effect during the year ended December 31,
2001. The Paint, Plastic & General Line segment net sales decreased 8.0%, from $130.4 million in 2001 to $120.0 million
in 2002. This decrease was due to changes in product and customer mix along with falling resin prices in our plastics
business that are contractually passed on to customers ($11.3 million) and decreased paint volume ($2.2 million) offset
by increased volume in plastics ($3.1 million). In 2002, the Company reduced manufacturing capacity in its paint
business as part of the Company's restructuring programs. In the Custom & Specialty segment, sales decreased 8.2% from
$77.6 million in 2001 to $71.2 million in 2002 driven primarily by a change in product mix ($7.6 million) partially
offset by an increase in volume ($1.2 million).

Consolidated cost of goods sold increased $14.9 million to $710.4 million for 2002. The principal reasons
for the increase were increased volume experienced in our domestic Aerosol business ($32.1 million), operating
inefficiencies in the U.K. and Germany ($3.2 million) and the foreign currency translation impact on costs ($11.9
million) based upon using the same average U.S dollar exchange rates in effect during the year ended December 31, 2001.
These increases were partially offset by cost containment programs and changes in product mix in U.S. production
facilities ($30.6 million) and the decline in resin prices ($2.0 million). As anticipated, the tariffs imposed in 2001
on imported steel did not have a material impact on the Company's cost of goods sold in 2002. The impact of higher steel
prices due to the tariffs will increase the Company's costs of goods sold in 2003, however the Company cannot determine
the effect on steel purchase prices for 2004 and later years. For further discussion on the tariffs see "Business - Raw
Materials". Gross profit margin of 10.8% in 2002 increased 0.9 percentage points from 2001. The increase in the gross
margin rate is due to the $9.6 million of benefits achieved from the restructuring programs (1.2 percentage points),
volume related efficiencies (0.4 percentage points) partially offset by operating costs and inefficiencies in the U.K.
and Germany (0.7 percentage points).

Selling, general and administrative costs decreased from $46.6 million in 2001 to $37.9 million in 2002
due to the lack of goodwill amortization during the year and positive results from management's focus on Company-wide
cost saving programs initiated in 2001. As previously discussed, the Company has ceased the amortization of goodwill.
Goodwill amortization for the year ended December 31, 2001 was $2.8 million.

During 2002, the Company substantially completed the restructuring programs initiated in 2001. The
Company offered voluntary termination programs to corporate office salaried employees, opened a new plastics plant in
Atlanta, Georgia and closed six planned manufacturing facilities. The Burns Harbor, Indiana lithography facility was
closed in the fourth quarter, completing the facility closure program. In addition, during the fourth quarter of 2002,
the Company sold its Daegeling, Germany facility.

During 2002, the Company recorded a net charge of $8.7 million related to restructuring. The net charge
of $8.7 million consists of new restructuring reserves of $11.9 million less reversals of $3.2 million due to the
reassessment of restructuring reserves established in 2001. Included in the 2002 net restructuring charge are executive
position elimination costs and the loss on the sale of the Daegeling, Germany facility. While the majority of the
restructuring initiatives have been completed in 2002, certain portions of the programs will not be completed until 2003,
and the Company does not expect to realize the full earnings benefits until 2004. Certain long-term liabilities
(approximately $3.7 million as of December 31, 2002), consisting primarily of employee termination costs and future
ongoing facility carrying costs will be paid over many years. The Company initiated the restructuring programs in 2001
and recorded a net restructuring charge of $36.2 million for the year.

The table below presents the reserve categories and related activity as of December 31, 2002:

January 1, 2002 Net December 31, 2002
(in millions) Balance Additions(d) Deductions(c) Other (b) Balance
----------------- --------------- ---------------- ------------- --------------------
----------------- --------------- ---------------- ------------- --------------------
Employee Separation $21.2 $4.9 ($17.6) $0.7 $9.2

Facility Closing Costs 10.7 3.8 (9.6) 1.6 6.5
----------------- --------------- ---------------- ------------- --------------------
----------------- --------------- ---------------- ------------- --------------------
Total $31.9 $8.7 ($27.2) $2.3 $15.7
(a)
================= =============== ================ ============= ====================
================= =============== ================ ============= ====================

(a) Includes $3.7 million classified as other long-term liabilities as of December 31, 2002.
(b) Non-cash foreign currency translation impact and the reversal of $1.5 million of asset write-offs
previously expensed in 2001.
(c) Includes cash payments of $20.8 million. The remaining non-cash deductions represent increased pension
and post-retiree benefits transferred to Other Long-Term Liabilities and the non-cash loss recorded on the sale of
the Daegeling facility.
(d) Includes reversals of $3.2 million due to the re-assessment of reserves

Interest expense in 2002 decreased 3.4%, or $1.9 million, versus 2001 due to lower interest rates ($3.4
million) partially offset by the interest expense impact of higher average borrowings ($1.5 million). See Note (6) to the
Consolidated Financial Statements for a further discussion of the Company's debt position.

Payment in kind dividends of $12.5 million and $11.3 million on the redeemable preferred stock issued in
connection with the recapitalization were recorded in 2002 and 2001, respectively. See Note (12) to the Consolidated
Financial Statements.

Year Ended December 31, 2001 Compared To Year Ended December 31, 2000

Consolidated net sales for the year ended December 31, 2001 were $772.2 million as compared to $809.5
million in 2000, a decrease of 4.6%. Along business segment lines, Aerosol net sales in 2001 decreased to $334.7 million
from $357.7 million in 2000, a 6.4% decline, due principally to decreased unit volume ($13.6 million), a change in the
mix of sales volume towards lower selling value products ($4.0 million) and pricing concessions granted in the first half
of 2001 ($5.3 million). The pricing concessions granted in the first part of the year will continue to negatively impact
the first half of 2002, both in sales and gross profit. International net sales decreased to $229.5 million in 2001 from
$239.6 million in 2000, a decrease of $10.1 million or 4.2%. There was a $9.7 million negative impact in 2001 due to
U.S. dollar translation on sales made in foreign currencies. The Paint, Plastic & General Line segment net sales
decreased 4.1%, from $136.1 million in 2000 to $130.4 million in 2001 due primarily to decreased unit volume of paint and
general line. In the Custom & Specialty segment, sales increased 2.0% from $76.1 million in 2000 to $77.6 million in
2001, due to additional sales as the result of the acquisition of Olive Can ($12.1 million see Note (5) to the
Consolidated Financial Statements) offset by the sale of the Wheeling metal closure and Warren lithography businesses
($3.4 million) and an overall decline in volume ($6.5 million).

Consolidated cost of goods sold increased $2.3 million to $695.5 million for 2001. The principal reasons
for the increase included additional volume as a result of the Olive Can acquisition ($11.8 million) and a one-time
inventory write-off relating to discontinued Custom & Specialty products ($3.2 million) offset by decreased costs caused
by volume and mix ($12.7 million). Gross profit margin of 9.9% in 2001 decreased 4.5 percentage points from 2000. The
primary reasons for the decline in gross margin rate include the impact of volume declines (0.5 percentage points),
selling price and product mix (2.0 percentage points) and manufacturing inefficiencies resulting from volume softness
(0.9 percentage points) and the delay in the sale of the Southall, U.K facility (0.4 percentage points).

Selling, general and administrative costs increased from $45.9 million in 2000 to $46.6 million in 2001.
The Company expects a reduction to selling, general and administration costs as a result of the Company offering a
voluntary termination program in connection with the restructuring initiatives discussed in Note (4) to the Consolidated
Financial Statements.

During 2001, the Company initiated several restructuring programs. These programs will result in (a) the
closure of five manufacturing facilities, (b) the additional consolidation of two facilities into one new facility, (c)
the reversal of a previous decision to close a Custom & Specialty lithography facility due to changing business needs and
(d) the elimination of approximately 600 jobs. The restructuring programs, which are more fully described in Note (4) to
the Consolidated Financial Statements, resulted in a net charge of $36.2 million in 2001. The programs are expected to
result in improved operating income in 2002 and future years as a result of reduced payroll costs and the elimination of
fixed overhead costs. A pre-tax charge of $3.4 million for severance and other termination-related costs was recorded in
the third quarter of 2000. There also was an $18.9 million charge in the fourth quarter of 2000 related to the
recapitalization. See Notes (3) and (4) to the Consolidated Financial Statements for further discussion on the
recapitalization and the special charge, respectively.

The tables below present the reserve categories and related activity as of December 31, 2001 respectively:

January 1, 2001 December 31, 2001
(in millions) Balance Additions(a) Deductions(c) Balance
-------------------- ------------------ ------------------ --------------------
Employee Separation $19.8 ($4.7) $21.2
$6.1
Facility Closing Costs 9.3 11.2 (9.8) 10.7
Other Asset Write-Offs -- 5.2 (5.2)(d) --
--------------------
------------------ ------------------ --------------------
Total $15.4 $36.2 ($19.7) $31.9(b)
==================== ================== ================== ====================
------------------ ------------------ --------------------

(a) Includes a re-assessment of prior programs of $7.2 million
(b) Includes $6.0 million of other long-term liabilities as of December 31, 2001
(c) Includes cash payments of $ 8.3 million
(d) Net of proceeds from sale of Southall facility of $11.7 million

Interest expense in 2001 increased 41.6%, or $16.8 million, versus 2000 due to borrowings made in
connection with the recapitalization transactions that occurred in October 2000. The recapitalization resulted in
increased borrowings for all 2001 versus the fourth quarter of 2000. See "Liquidity and Capital Resources" and Notes
(3), (5) and (6) to the Consolidated Financial Statements for a further discussion of the recapitalization and the
Company's debt position.

Payment in kind dividends of $11.3 million and $2.6 million on the redeemable preferred stock issued in
connection with the recapitalization were recorded in 2001 and 2000, respectively. See Note (12) to the Consolidated
Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

During 2002, liquidity needs were met through internally generated cash flow and borrowings made under
lines of credit. Principal liquidity needs included operating costs, working capital, including restructuring costs and
capital expenditures. Cash flow provided by operations was $6.2 million for the year ended December 31, 2002, compared
to cash used of $7.0 million for the year ended December 31, 2001. The decreased use of cash is primarily due to the
decrease in the net loss before income taxes (as discussed earlier).

Net cash used in investing activities was $21.7 million in 2002, as compared to $24.4 million in 2001.
Investing activities for 2002 relate primarily to capital spending of $27.2 million, including $11.5 million in
conjunction with the Company's restructuring programs, offset by the proceeds received from the sale of property of $5.7
million, including the final payment received for the sale of our Southall facility of $4.8 million. Total capital
expenditures in 2001 were $19.5 million. Base capital expenditures are expected to range from $20.0 million to $24.0
million each year during the five years commencing 2003. 2003 capital expenditures include approximately $3.0 million to
complete the Company's 2001 restructuring programs. Capital expenditures are expected to be funded from cash on hand,
operations and borrowings under the revolving credit facility. Capital investments have historically yielded reduced
operating costs and improved profit margins, and management believes that the strategic deployment of capital will enable
overall profitability to improve by leveraging the economies of scale inherent in the manufacturing of containers.

Net cash provided from financing activities in 2002 was $12.0 million versus $35.1 million in 2001. The
primary 2002 financing sources were borrowings under the revolving credit portion of the Senior Secured Credit Facility
("the Facility") and unsecured revolving lines of credit granted by various banks to fund the seasonal working capital
requirements of May Verpackungen. The Senior Secured Credit Facility and the Notes contain a number of financial and
restrictive covenants. The Company was in compliance with all of the required financial ratios and other covenants as of
December 31, 2002. The unsecured revolving lines granted to May Verpackungen may be terminated by the offering banks
upon given notice periods. As agreed, May repaid(euro)2.0 million during 2002 and(euro)0.7 million in January 2003. No further
repayments have been committed. See Note (6) to the Consolidated Financial Statements for further discussion on the
Company's debt obligations.

Primary sources of liquidity are cash flow from operations and borrowings under revolving credit
facilities. United States Can Company, as Borrower, is a party to a Credit Agreement among United States Can, U.S. Can
Corporation and Domestic Subsidiaries of U.S. Can Corporation as Domestic Guarantors, and certain lenders including Bank
of America, N.A., Citicorp North America, Inc., and Bank One NA as of October 4, 2000 (the "Senior Secured Credit
Facility"). As amended, the Senior Secured Credit Facility provides for aggregate borrowings of $395.0 million
consisting of: (i) $80.0 million Tranche A loan; (ii) $180.0 million Tranche B loan; (iii) $25.0 million Tranche C
facility and (iv) $110.0 million under a revolving credit facility. All of the Tranche A and Tranche B debt and
approximately $20.5 million under the revolving credit facility were used to finance the recapitalization. The borrowings
under the revolving credit portion of the facility are available to fund working capital requirements, capital
expenditures and other general corporate purposes. The revolving loan facility also includes a subfacility for the
issuance of Letters of Credit. The Tranche C borrowings in December 2001 provided additional liquidity.

Principal repayments required under the Senior Secured Credit Facility are $10.0 million in 2003
increasing to $218.8 million at the maturity date in 2006. Also due in 2006 are any amounts outstanding at that time
under the Company's revolving line of credit. Additionally, the Facility requires a prepayment in the event that excess
cash flow (as defined) exists and following certain other events, including certain asset sales and issuances of debt and
equity.

Amounts outstanding under the Senior Secured Credit Facility bear interest at a rate per annum equal to
either: (1) the base rate (as defined in the Senior Secured Credit Facility) or (2) the LIBOR rate (as defined in the
Senior Secured Credit Facility), in each case, plus an applicable margin. The applicable margins were increased in
connection with the 2001 amendments and are subject to future reductions based on the achievement of certain leverage
ratio targets and on the credit rating of the Senior Secured Credit Facility.

Borrowings under the Tranche A term loan are due and payable in quarterly installments, which are $2.0
million for each of the first three quarters in 2003 and $3.0 million for the fourth quarter of 2003 and increase over
time to $8.0 million per quarter, until the final balance is due. Borrowings under the Tranche B term loan are due and
payable in quarterly installments of nominal amounts until the final payment is due on January 4, 2006. No payments are
due on borrowings under the Tranche C term loan prior to its final maturity. The revolving credit facility is available
until January 4, 2006. In addition, the Company is required to prepay a portion of the facilities under the Senior
Secured Credit Facility upon the occurrence of certain specified events.

United States Can also issued $175.0 million aggregate principal amount of 12 3/8% Senior Subordinated
Notes due October 1, 2010 ("Notes"). The Notes are unsecured obligations of United States Can and are subordinated in
right of payment to all of United States Can's senior indebtedness. The Notes are guaranteed by U.S. Can and all of
United States Can's domestic restricted subsidiaries.

The Senior Secured Credit Facility and the Notes contain a number of financial and restrictive covenants.
Under our Senior Secured Credit Facility, the Company is required to meet certain financial tests, including achievement
of a minimum EBITDA level, a minimum interest coverage ratio, a minimum fixed charge coverage ratio and a maximum
leverage ratio. The restrictive covenants limit the Company's ability to incur debt, pay dividends or make distributions,
sell assets or consolidate or merge with other companies. The Company was in compliance with all of the required
financial ratios and other covenants under both facilities, as amended, at December 31, 2002 and anticipates being in
compliance in 2003. However, the minimum EBITDA covenant increases significantly in each of the first three quarters of
2003. Although management believes that it will be in compliance with these and other covenants under the Senior Secured
Credit Facility, factors beyond our control, such as sudden downturns in the demand for our products or significant cost
increases that we cannot quickly pass through to customers or offset through cost reductions, may cause our earnings
levels to not achieve those forecasted. If we believe that we would be unable to achieve our minimum EBITDA or other
financial covenants, we would expect to negotiate with the lenders an amendment to our Senior Secured Credit Facility.
We cannot be assured however, that the lenders would agree to an amendment if one were required. Without such an
amendment or a waiver, we would be in default on almost all of our borrowings, which would have severe consequences to
the Company regarding its sources of liquidity and its ability to continue operations.

At December 31, 2002, $69.7 million was outstanding under the $110.0 million revolving loan portion of the
Senior Secured Credit Facility. Letters of Credit of $10.2 million were outstanding securing the Company's obligations
under various insurance programs and other contractual agreements. Additionally, unsecured revolving lines of credit
granted by various banks of approximately $25.0 million are available to fund the seasonal working capital requirements
of our international operations. Borrowings outstanding under these facilities at December 31, 2002 were $13.4 million.
The lines may be terminated by the offering banks upon given notice periods.

As more fully described in Note (4) to the Consolidated Financial Statements, the Company has implemented
several restructuring programs. Future cash requirements to complete these programs are estimated to be approximately
$12.0 million in 2003 and $3.7 million in 2004 and beyond. The Company expects to fund these cash requirements from cash
on hand, operations and borrowings under the revolving credit facility. Upon completion, the programs are expected to
yield annual improvements in operating income exceeding $17.0 million, primarily through the reduction of payroll and
fixed overhead expenses.

The Company has a number of contractual commitments to make future cash payments. Under existing
agreements, contractual obligations as of December 31, 2002 are as follows (000's omitted):

Payments due by period
Contractual Obligations 1st year 2-3 years 4-5 years After 5 years
-------------------------------------
----------------------------------------------------------
Long Term Debt $25,074 $52,601 $ 291,140 $ 179,000
Capital lease obligations 1,079 788 - -
Operating leases 4,997 8,209 5,952 3,628
----------------------------------------------------------
Total Contractual Commitments $ 31,150 $61,598 $ 297,092 $ 182,628

See Note (6) to the Consolidated Financial Statements for further information on obligations under the
Senior Secured Credit Facility and 12 3/8% Senior Subordinated Notes due October 1, 2010 ("Notes") and Note (10) for
further information on capital and operating leases.

At existing levels of operations, cash generated from operations together with amounts to be drawn from
the revolving credit facility, are expected to be adequate to meet anticipated debt service requirements, restructure
costs, capital expenditures and working capital needs. Future operating performance, including the impact, if any, of
the tariff described under "Raw Materials", and the ability to service or refinance the notes, to service, extend or
refinance the senior secured credit facility and to redeem or refinance our preferred stock will be subject to future
economic conditions and to financial, business and other factors, many of which are beyond management's control.

The Company's Senior Secured Credit Facility prohibits the redemption of the subordinated debt. The
Company may consider making such repurchases upon the expiration or amendment of the Facility.

INFLATION

Tin-plated steel represents the primary component of the Company's raw materials requirement.
Historically, the Company has not always been able to immediately offset increases in tinplate prices with customer price
increases. The Company's capital spending programs and manufacturing process upgrades are designed to increase operating
efficiencies and mitigate the impact of inflation on the Company's cost structure.

Effective March 20, 2002, the President of the United States imposed 30% ad valorem tariffs under Section
201 of the Trade Act of 1974 on tin mill imports from most foreign producers. The tariffs are scheduled to remain in
effect for three years, declining to 24% in the second year and 18% in the third year. Tin mill imports from Canada,
Mexico and certain developing countries are excluded from the tariffs. The tariffs did not materially effect the
Company's costs for 2002. However, the Company does purchase the vast majority of its domestic steel from domestic
sources and since the tariff curtails foreign competition, a negative impact to the Company could arise from price
increases from domestic suppliers.

In response to the U.S. tariffs imposed under Section 201of the Trade Act of 1974, in March of 2002 Europe
established a steel safeguard initiative whereby imports of steel into Europe from designated countries are assessed a
duty of 17% versus the previous duty of 1%. The new duty on some European imports remains in effect for the duration of
the U.S. imposed tariffs under Section 201. Due to the fact that the Company's European operations do not import steel
from any of the countries affected by the new European duty, in 2002 the Company's international operations were not
affected by the new duty. Likewise, the Company does not anticipate the new duty to affect its operations in 2003 as the
Company has no plans to begin purchasing steel from these countries.

NEW ACCOUNTING PRONOUNCEMENTS

During July 2001, the Financial Accounting Standards Board (FASB) issued and the Company adopted Statement
of Financial Accounting Standards (SFAS) No. 141, Business Combinations. SFAS No. 141 modifies the method of accounting
for business combinations entered into after June 30, 2001 and addresses the accounting for acquired intangible assets.
All business combinations entered into after June 30, 2001, are accounted for using the purchase method.

The Company adopted SFAS No. 142 "Goodwill and Other Intangible Assets" on January 1, 2002. This standard
provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill and
"indefinite-lived" intangibles are no longer amortized, but are tested at least annually for impairment. Effective
January 1, 2002, the Company ceased amortization of its goodwill. The Company recorded goodwill amortization of $2.8
million and $2.9 million for the years ended December 31, 2001 and 2000. SFAS No. 142 required the Company to make an
initial assessment of goodwill impairment within six months after the adoption date. The initial step was designed to
identify potential goodwill impairment by comparing an estimated fair value for each applicable reporting unit to its
respective carrying value. For the reporting units where the carrying value exceeds fair value, a second step was
performed by to measure the amount of the goodwill impairment.

During the first six months of 2002, the Company completed the initial transitional goodwill impairment
test as of January 1, 2002, and reported that a non-cash impairment charge was required in the Custom & Specialty and
International segments. During the fourth quarter of 2002, the Company determined the amount of the goodwill impairment
and recorded a pre-tax goodwill impairment charge of $39.1 million relating to the Custom & Specialty and International
segments. The charge has been presented as a cumulative effect of a change in accounting principle effective as of
January 1, 2002 and is primarily due to competitive pressures in the Custom & Specialty and International segment
marketplaces. To determine the amount of goodwill impairment, the Company measured the impairment loss as the excess of
the carrying amount of goodwill over the implied fair value of goodwill. The impairment charge has no impact on covenant
compliance under the Senior Secured Credit Agreement. For further discussion of the goodwill impairment charge see Note
(15) to the Consolidated Financial Statements.

SFAS No. 145 "Recission of FASB Statements No. 4, 44, and 46, Amendment of FASB Statement No. 13, and
Technical Corrections" was issued in April 2002 and is effective for fiscal years beginning after May 15, 2002. This
statement eliminates the current requirement that gains and losses on extinguishment of debt be classified as
extraordinary items in the statement of operations. Instead, the statement requires that gains and losses on
extinguishment of debt be evaluated against the criteria in APB Opinion 30 to determine whether or not such gains or
losses should be classified as an extraordinary item. The statement also contains other corrections to authoritative
accounting literature in SFAS 4, 44 and 46. In accordance with the pronouncement, the Company will adopt the standard
for the year ended December 31, 2003 and is in the process of reviewing the criteria in Opinion 30 as it relates to the
Company's early extinguishment of debt in 2000.

The FASB issued SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal Activities", in July
2002. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when
the liability is incurred. SFAS No. 146 supercedes the guidance of Emerging Issues Task Force ("EITF") Issue No. 94-3
"Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity", which required that
liabilities for exit costs be recognized at the date of an entity's commitment to an exit plan. SFAS No. 146 is
effective for exit or disposal activities that are initiated after December 31, 2002. The Company will adopt SFAS No.
146 for any exit disposal activities initiated after such date.

In December of 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based Compensation - Transition
and Disclosure". SFAS No. 148 amends FASB Statement No. 123 "Accounting for Stock-Based Compensation" to provide
alternative methods of transition for companies who voluntarily change to the fair value based method of accounting for
stock-based employee compensation. The statement also increases stock-based compensation quarterly and annual disclosure
requirements for all companies and is effective for financial statements of companies with fiscal years ending after
December 15, 2002. The Company adopted this statement in December of 2002 and there was no impact to the financial
position and results of operations of the Company as a result of the adoption. See Note (11) to the Consolidated
Financial Statements for the additional disclosures required by this pronouncement.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Foreign Currency and Interest Rate Risk

Foreign Currency Risk

The Company has engaged in transactions that carry some degree of foreign currency risk. As such, a series
of forward hedge contracts were entered into to mitigate the foreign currency risks associated with the financing of a
production facility in the United Kingdom. Pursuant to the agreement under which the contracts had been issued, the
counterparty elected to terminate the contracts in January 2003. In connection with the termination, the Company paid
$1.0 million to the counterparty which will be reflected in 2003 interest expense in accordance with the original
contract terms.

The Company bears foreign exchange risk because much of the financing is currently obtained in United
States dollars, but a portion of the Company's revenues and expenses are earned in the various currencies of our foreign
subsidiaries' operations. The revolving credit facility allows certain foreign subsidiaries to borrow up to $75 million
in British Pounds Sterling, and Euros. The Company has not made borrowings in any of these currencies.

Interest Rate Risk

Interest rate risk exposure results from our floating rate borrowings. A portion of the interest rate
risks have been hedged by entering into swap and collar agreements. Since the counterparties to the agreements are also
lenders under the senior secured credit facility, obligations under these agreements are subject to the security interest
under the terms of the senior secured credit facility.

The table below provides information about the Company's derivative financial instruments and other
financial instruments that are sensitive to changes in interest rates, including interest rate swaps and debt
obligations. For debt obligations, the table presents principal cash flows and related weighted average interest rates
by expected maturity dates. For interest rate swaps and collars, the table presents notional amounts and weighted
average interest rates by expected (contractual) maturity dates. Notional amounts are used to calculate the contractual
payments to be exchanged under the contract.

2003 2004 2005 2006 2007 Thereafter Fair Value
----------- ------------ ----------- ------------ ------------ ----------- -------------
Debt Obligations (dollars in millions)
- --------------------------
Fixed rate $16.2 $17.8 $0.6 $1.4 $1.3 $175.0 $115.7
Average interest rate 8.35% 8.58% 6.10% 12.38%
8.14% 6.12%
Variable rate $10.0 $14.0 $21.0 $288.5 $ -- $ 4.0 $337.5
Average interest rate 5.42% 5.64% 1.40%
5.43% 5.41% 0.00%

Interest Rate Swaps-
Variable to Fixed
- --------------------------
Notional Amount $83.3 $ -- $ -- $ -- $ -- $ -- $(3.4)
Pay / receive rate 6.63% -- -- -- -- --

Interest Rate Collars
- --------------------------
Notional Amount $41.7 -- -- -- -- -- $(1.5)
Cap Rate 7.25% -- -- -- -- --
Floor Rate 6.10% -- -- -- -- --

The interest rate swaps and collars were entered into in 2000, when interest rates were higher than
current rates. Accordingly, these contracts are "out-of-the-money" and may require future payments if market interest
rates do not return to historical levels. In addition, if rates do increase above historical levels and the
counterparties to the agreements default on their obligations under the agreements, our interest expense would increase.
The Company does not use financial instruments for trading or speculative purposes. No quoted market value is available
(except on the 12 3/8% Senior Subordinated Notes). Fair value amounts, because they do not include certain costs such as
prepayment penalties, do not represent the amount the Company would have to pay to reacquire and retire all of its
outstanding debt in a current transaction.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Page
----

Independent Auditors' Report for 2002...................................................................... 26

Report of Independent Accountants for 2001 and 2000........................................................ 27

Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000................. 28

Consolidated Balance Sheets as of December 31, 2002 and 2001............................................... 29

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2002, 2001 and 2000....... 30

Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000................. 31

Notes to Consolidated Financial Statements................................................................. 32

INDEPENDENT AUDITORS' REPORT

To U.S. Can Corporation:
Lombard, Illinois

We have audited the accompanying consolidated balance sheet of U.S. Can Corporation and Subsidiaries ("the Company")
as of December 31, 2002, and the related consolidated statements of operations, stockholders' equity, and cash flows
for the year then ended. These financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on our audit. The consolidated financial
statements of the Company as of December 31, 2001 and 2000 and for each of the two years then ended, before the
inclusion of the disclosures discussed in Note 15 to the financial statements, were audited by other auditors, who
have ceased operations. Those auditors expressed an unqualified opinion on those financial statements in their
report dated March 6, 2002.

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

In our opinion, such 2002 consolidated financial statements present fairly, in all material respects, the financial
position of U.S. Can Corporation and Subsidiaries as of December 31, 2002, and the consolidated results of their
operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted
in the United States.

As discussed in Note 2, in 2002 the Company changed its method of accounting for goodwill as required by Statement of
Financial Accounting Standards (Statement) No. 142, "Goodwill and Other Intangible Assets."

As discussed above, the financial statements of U.S. Can Corporation as of December 31, 2001 and 2000, and for the
years then ended were audited by other auditors who have ceased operations. As described in Note 15, these financial
statements have been revised to include the transitional disclosures required by Statement No. 142, which was adopted
by the Company as of January 1, 2002. Our audit procedures with respect to the disclosures in Note 15 with respect
to 2001 and 2000 included (i) agreeing the previously reported net income to the previously issued financial
statements and the adjustments to reported net income representing amortization expense (including any related tax
effects) recognized in those periods related to goodwill, to the Company's underlying records obtained from
management, and (ii) testing the mathematical accuracy of the reconciliation of adjusted net income to reported net
income. In our opinion, the disclosures for 2001 and 2000 in Note 15 are appropriate. However, we were not engaged
to audit, review, or apply any procedures to the 2001 or 2000 financial statements of the Company other than with
respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001
or 2000 financial statements taken as a whole.

Deloitte & Touche LLP
Chicago, Illinois
February 21, 2003

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

The following report is a copy of a report previously issued by Arthur Andersen LLP and has not been reissued by
Arthur Andersen LLP. In fiscal 2002, the Company adopted the provisions of Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" (SFAS No. 142). As discussed in Note 15 to the
consolidated financial statements, the Company has presented the transitional disclosures for 2001 and 2000 required
by SFAS No. 142. The Arthur Andersen LLP report does not extend to these transitional disclosures. These
disclosures are reported on by Deloitte & Touche LLP as stated in their report appearing herein.

TO U.S. CAN CORPORATION:

We have audited the accompanying consolidated balance sheets of U.S. CAN CORPORATION (a Delaware corporation) AND
SUBSIDIARIES as of December 31, 2001 and 2000, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended December 31, 2001*. These financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

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

ARTHUR ANDERSEN LLP
Chicago, Illinois
March 6, 2002

* The 1999 consolidated financial statements are not required to be presented in the 2002 annual report.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted)

For the Year Ended
-------------------------------------------------------
December 31, December 31, December 31,
2002 2001 2000
----------------- ----------------- -----------------

Net Sales................................................. $796,500 $772,188 $809,497

Cost of Sales............................................. 710,395 695,514 693,158
----------------- ----------------- -----------------

Gross Income......................................... 86,105 76,674 116,339

Selling, General and Administrative Expenses.............. 37,853 46,581 45,887

Special Charges........................................... 8,705 36,239 3,413

Recapitalization Charges.................................. - - 18,886
----------------- ----------------- -----------------

Operating Income (Loss).............................. 39,547 (6,146) 48,153

Interest Expense.......................................... 55,384 57,304 40,468
----------------- ----------------- -----------------

Income (Loss) Before Income Taxes.................... (15,837) (63,450) 7,685

Provision (Benefit) for Income Taxes...................... 37,637 (23,034) 4,344
----------------- ----------------- -----------------

Income (Loss) from Operations Before Extraordinary
Item and Cumulative Effect of Accounting Change...... (53,474) (40,416) 3,341

Extraordinary Item, net of income taxes

Net Loss from Early Extinguishment of Debt........... - - (14,863)

Cumulative Effect of Accounting Change, net of income taxes (18,302) - -
----------------- ----------------- -----------------

Net Loss Before Preferred Stock Dividends............ (71,776) (40,416) (11,522)

Preferred Stock Dividend Requirement...................... (12,521) (11,345) (2,601)
----------------- ----------------- -----------------

Net Loss Attributable to Common Stockholders......... $(84,297) $(51,761) $(14,123)
================= ================= =================

The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(000's omitted, except per share data)

December 31, December 31,
ASSETS 2002 2001
--------------------- ---------------------
CURRENT ASSETS:
Cash and cash equivalents............................................ $11,790 $14,743
Accounts receivable, net of allowances............................... 89,986 95,274
Inventories, net..................................................... 105,635 100,676
Deferred income taxes................................................ 7,730 21,977
Other current assets................................................. 14,466 15,732
--------------------- ---------------------
Total current assets............................................ 229,607 248,402

PROPERTY, PLANT AND EQUIPMENT, less accumulated
depreciation and amortization........................................ 241,674 239,234

GOODWILL, less accumulated amortization................................... 27,384 66,437

DEFERRED INCOME TAXES..................................................... 29,340 20,515

OTHER NON-CURRENT ASSETS.................................................. 50,821 59,762

--------------------- ---------------------
Total assets.................................................... $578,826 $634,350
===================== =====================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt and capital lease obligations... $26,153 $14,983
Accounts payable..................................................... 94,537 96,685
Accrued expenses..................................................... 51,446 45,437
Restructuring reserves............................................... 11,990 25,945
Income taxes payable................................................. 958 1,055
--------------------- ---------------------
Total current liabilities....................................... 185,084 184,105

LONG TERM DEBT............................................................ 523,529 521,793

LONG TERM LIABILITIES PURSUANT TO EMPLOYEE
BENEFIT PLANS.......................................................... 74,574 38,000

OTHER LONG-TERM LIABILITIES............................................... 6,352 16,963
--------------------- ---------------------

Total liabilities............................................... 789,539 760,861

REDEEMABLE PREFERRED STOCK, 200,000 shares authorized, 106,667 shares
issued & outstanding................................................ 133,133 120,613

STOCKHOLDERS' EQUITY:
Common stock, $10.00 par value, 100,000 shares authorized, 53,333
shares issued & outstanding......................................... 533 533
Additional paid-in-capital........................................... 52,800 52,800
Accumulated other comprehensive loss................................. (51,076) (38,651)
Accumulated deficit.................................................. (346,103) (261,806)
--------------------- ---------------------
Total stockholders' equity / (deficit).......................... (343,846) (247,124)
--------------------- ---------------------
Total liabilities and stockholders' equity................. $578,826 $634,350
===================== =====================

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(000's omitted)
Common Paid-in-CapitUnearned Treasury Accumulated Accumulated Comprehensive
Other
Restricted Common Comprehensive
Stock Stock Stock Loss Deficit Income (Loss)
---------------------------------------------------------------------------------------------
BALANCE AT $ 135 $112,840 $ (629) $ (1,380) $ (7,771) $(34,639)
DECEMBER 31, 1999.......
Net loss before preferred
stock dividends......... - - - - - (11,522) $ (11,522)
Redemption of common stock
and exercise of stock
options in connection
with
the recapitalization.... (134) (110,973) 305 - - (159,220) -
Purchase of treasury stock. - - - (488) - - -
Retirement of treasury stock (1) (1,867) - 1,868 - - -
Issuance of common stock in
recapitalized company... 533 52,800 - - - - -
Preferred stock dividends.. - - - - - (2,601) -
Amortization of unearned
restricted stock........ - - 324 - - - -
Cumulative translation
adjustment.............. - - - - (11,903) - (11,903)
----------------
Comprehensive loss......... $ (23,425)
-----------------------------------------------------------------------------================
BALANCE AT 533 52,800 - - (19,674) (207,982)
DECEMBER 31, 2000.......
Net loss before preferred
stock dividends......... - - - - - (40,416) $ (40,416)
Settlement of shareholder
litigation in
connection
with the
recapitalization........... - - - - - (2,063) -
Unrealized loss on cash flow
hedge.................. - - - - (3,862) - (3,862)
Preferred stock dividends.. - - - - - (11,345) -
Equity adjustment to
reflect
minimum pension liability - - - - (288) - (288)
Cumulative translation
adjustment.............. - - - - (14,827) - (14,827)
----------------
----------------
Comprehensive loss......... $ (59,393)
------------------------------------------------------------------------------================
------------------------------------------------------------------------------================
BALANCE AT 533 52,800 - - (38,651) (261,806)
DECEMBER 31, 2001.......
Net loss before preferred
stock dividends......... - - - - - (71,776) $ (71,776)
Unrealized gain (loss) on
cash flow hedge......... - - - - 176 - (6,783)
Preferred stock dividends.. - - - - - (12,521) -
Equity adjustment to
reflect
minimum pension liability - - - - (22,058) - (22,058)
Cumulative translation
adjustment.............. - - - - 9,457 - 9,457
----------------
Comprehensive loss......... $ (91,160)
================
------------------------------------------------------------------------------
BALANCE AT $ 533 $ 52,800 $ - $ - $ (51,076) $(346,103)
DECEMBER 31, 2002.......
==============================================================================

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(000's omitted)

For the Year Ended December 31,
------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 2002 2001 2000
--------------- --------------- ---------------
Net loss before preferred stock dividends requirements................ $(71,776) $(40,416) $(11,522)
Adjustments to reconcile net loss to net cash provided by
operating activities -
Depreciation and amortization...................................... 36,086 34,626 33,670
Special Charge..................................................... 8,705 36,239 3,413
Recapitalization Charge............................................ - - 18,886
Extraordinary loss on extinguishment of debt....................... - - 14,863
Cumulative effect of accounting change, net of tax................. 18,302 - -
Deferred income taxes.............................................. 35,724 (24,369) 3,874
Change in operating assets and liabilities, net of effect of
acquired and disposed of businesses:
Accounts receivable................................................ 11,859 (5,677) (11,869)
Inventories........................................................ 2,432 11,070 (3,587)
Accounts payable................................................... (9,220) (3,366) 10,733
Accrued expenses................................................... (21,357) (12,838) (7,363)
Other, net......................................................... (4,591) (2,261) (22,366)
---------------
--------------- --------------- ---------------
Net cash provided by (used in) operating activities............. 6,164 (6,992) 28,732
--------------- --------------- ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, including restructuring capital................. (27,235) (19,537) (24,504)
Acquisition of business, net of cash acquired......................... - (4,198) -
Proceeds from sale of business........................................ - - 12,088
Proceeds from sale of property........................................ 5,662 7,208 8,755
Investment in Formametal S.A.......................................... (133) (7,891) (4,914)
--------------- --------------- ---------------
Net cash used in investing activities.......................... (21,706) (24,418) (8,575)
--------------- --------------- ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock ............................................. - - 53,333
Issuance of preferred stock .......................................... - - 106,667
Retirement of common stock and exercise of stock options.............. - - (270,022)
Settlement of shareholder litigation.................................. - (2,063) -
Purchase of treasury stock............................................ - - (488)
Issuance of 12 3/8% notes............................................. - - 175,000
Repurchase of 10 1/8% notes........................................... - - (254,658)
Net borrowings (payments) under the revolving line of credit.......... 13,600 37,600 (56,100)
Borrowing of Tranche A loan........................................... - - 80,000
Borrowing of Tranche B loan........................................... - - 180,000
Borrowing of Tranche C loan........................................... - 20,000 -
Borrowing of other long-term debt..................................... 11,079 - 19,286
Payments of long-term debt, including capital lease obligations....... (12,689) (14,102) (22,528)
Payment of debt financing costs....................................... - (6,294) (16,137)
Payment of recapitalization costs..................................... - - (18,886)
--------------- --------------- ---------------
--------------- --------------- ---------------
Net cash provided by (used in) financing activities............ 11,990 35,141 (24,533)
--------------- --------------- ---------------
--------------- --------------- ---------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH................................. 599 228 (537)
--------------- --------------- ---------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................ (2,953) 3,959 (4,913)
CASH AND CASH EQUIVALENTS, beginning of year............................ 14,743 10,784 15,697
---------------
--------------- --------------- ---------------
CASH AND CASH EQUIVALENTS, end of year.................................. $11,790 $14,743 $10,784
=============== =============== ===============

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

(1) Basis of Presentation and Operations

The consolidated financial statements include the accounts of U.S. Can Corporation (the "Corporation" or
"U.S. Can"), its wholly owned subsidiary, United States Can Company ("United States Can"), and United States Can's
subsidiaries (the "Subsidiaries"). All significant intercompany balances and transactions have been eliminated. The
consolidated group is referred to herein as "the Company". Certain prior year amounts have been reclassified to conform
with the 2002 presentation. The reclassifications had no effect on net loss attributable to common stockholders or total
assets.

The Company is a supplier of steel and plastic containers for personal care, household, food, automotive,
paint and industrial supplies, and other specialty products. The Company owns or leases 13 plants in the United States
and 8 plants located in Europe.

(2) Summary of Significant Accounting Policies

(a) Cash and Cash Equivalents - The Company considers all liquid interest-bearing instruments purchased
with an original maturity of three months or less to be cash equivalents.

(b) Accounts Receivable Allowances - Allowances for accounts receivable are based on the customer
relationships, the aging and turns of accounts receivable, credit worthiness of customers, credit concentrations and
payment history. Although management monitors collections and credit worthiness, the inability of a particular customer
to pay its debts could impact collectibility of receivables and could have an impact on future revenues if the customer
is unable to arrange other financing. Activity in the accounts receivable allowances accounts was as follows (000's
omitted):

2002 2001 2000
---- ---- ----

Balance at beginning of year........................................... $ 12,243 $ 10,971 $ 13,367
Provision for doubtful accounts..................................... 1,437 621 516
Change in discounts, allowances and rebates......................... 3,378 790 (2,449)
Write-offs of doubtful accounts, net of recoveries.................. (944) (139) (463)
------------- ----------- -----------
Balance at end of year................................................. $ 16,114 $ 12,243 $ 10,971
============= =========== ===========

(c) Inventories-- Inventories are stated at the lower of cost or market and include material, labor and
factory overhead. Costs for United States inventory have been determined using the last-in, first-out ("LIFO") method.
Had the inventories been valued using the first-in, first-out ("FIFO") method, the amount would not have differed
materially from the amounts as determined using the LIFO method. Costs for Subsidiaries' inventory has been determined
using the first-in, first-out ("FIFO") method. Subsidiaries' inventory was approximately $48.1 million as of December 31,
2002 and 2001. The Company estimates reserves for inventory obsolescence and shrinkage based on its judgment of future
realization.

Inventories reported in the accompanying balance sheets were classified as follows (000's omitted):

2002 2001
---- ----

Raw materials....................................................................... $ 23,492 $ 27,216
Work in progress.................................................................... 46,435 40,046
Finished goods...................................................................... 35,708 33,414
Total Inventory..................................................................... $ 105,635 $ 100,676
============== ===========

In addition to the 2001 restructuring initiatives, the Company charged $3.2 million to Cost of Goods Sold
for the write-off of inventory associated with discontinued product lines. See Note (4) for further information on
restructuring initiatives.

(d) Property, Plant and Equipment--Property, plant and equipment is recorded at cost. Major renewals and
betterments which extend the useful life of an asset are capitalized; routine maintenance and repairs are expensed as
incurred. Maintenance and repairs charged against earnings were approximately $27.4 million, $28.6 million and
$27.5 million in 2002, 2001 and 2000, respectively. Upon sale or retirement of these assets, the asset cost and related
accumulated depreciation are removed from the accounts and any related gain or loss is reflected in income.

Depreciation for financial reporting purposes is principally provided using the straight-line method over
the estimated useful lives of the assets, as follows: buildings-25 to 40 years; machinery and equipment-5 to 20 years.
Equipment under capital leases is amortized over the life of the lease. Depreciation expense was $32.0 million, $29.2
million and $28.7 million for 2002, 2001 and 2000, respectively.

Property reported in the accompanying balance sheets is classified as follows (000's omitted):

2002 2001
---- ----

Land ............................................................................... $ 5,086 $ 6,025
Buildings........................................................................... 60,364 62,483
Machinery and equipment............................................................. 409,052 396,843
Capital leases...................................................................... 9,036 13,135
Construction in process............................................................. 23,347 24,014
506,885 502,500
Accumulated depreciation and amortization........................................... (265,211) (263,266)
Total Property...................................................................... $ 241,674 $ 239,234
============== ============

(e) Goodwill - The Company adopted SFAS No. 142 "Goodwill and Other Intangible Assets" on January 1,
2002. This standard provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill
and "indefinite-lived" intangibles are no longer amortized, but are tested at least annually for impairment. Effective
January 1, 2002, the Company has ceased amortization of goodwill. The Company recorded goodwill amortization of $2.8
million and $2.9 million for the years ended December 31, 2001 and 2000. During the fourth quarter of 2002, the Company
completed its transitional impairment testing and recorded a non-cash, pre-tax impairment charge of $39.1 million ($18.3
million, net of tax) as the cumulative effect of a change in accounting, effective January 1, 2002. See Note (15) for
additional disclosure.

(f) Deferred Financing Costs - Costs related to the issuance of new debt are included in other
non-current assets and are deferred and amortized over the terms of the related debt agreements. Amortization of
financing costs in 2002, 2001, and 2000 were $4.1 million, $2.6 million and $1.7 million, respectively and are included
in interest expense. The Company did not incur any financing costs in 2002 and paid $6.3 million of financing costs in
2001.

(g) Impairment of Long-Lived Assets - SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," was issued in August 2001. SFAS No. 144, which addresses financial accounting and reporting for the
impairment of long-lived assets and for long-lived assets to be disposed of, supercedes SFAS No. 121 and is effective for
fiscal years beginning after December 15, 2001. The Company adopted this pronouncement on January 1, 2002. There was no
impact to the financial position and results of operations of the Company as a result of the adoption.

In accordance with SFAS 144, we continually review whether events and circumstances subsequent to the
acquisition of any long-lived assets have occurred that indicate the remaining estimated useful lives of those assets may
warrant revision or that the remaining balance of those assets may not be recoverable. If events and circumstances
indicate that the long-lived assets should be reviewed for possible impairment, we use projections to assess whether
future cash flows or operating income (before amortization) on an undiscounted basis related to the tested assets is
likely to exceed the recorded carrying amount of those assets, to determine if a write-down is appropriate. Should an
impairment be identified, a loss would be reported to the extent that the carrying value of the impaired assets exceeds
their fair values as determined by valuation techniques appropriate in the circumstances that could include the use of
similar projections on a discounted basis.

(h) Revenue - Revenue is recognized when goods are shipped, at which time, title and risk of loss pass to
the customer. Provisions for discounts, returns, allowances, customer rebates and other adjustments are provided for in
the same period as the related revenues are recorded. The Company enters into contractual agreements with certain of its
customers for rebates, generally based on annual sales volumes. As sales occur, a provision for rebates is accrued on
the balance sheet and is charged against net sales.

(i) Foreign Currency Translation - The functional currency for substantially all the Company's
Subsidiaries is the applicable local currency. The translation from the applicable foreign currencies to U.S. dollars is
performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and
expense accounts using an average exchange rate prevailing during the period. The gains or losses resulting from such
translation are included in accumulated other comprehensive loss. Gains or losses resulting from foreign currency
transactions are included in operating income and were not material in 2002, 2001 or 2000.

(j) Financial Instruments - To manage interest rate exposure, the Company enters into interest rate
agreements. The net interest paid or received on these agreements is recognized as interest income or expense. Our
interest rate agreements are reported in the consolidated financial statements at fair value using a mark to market
valuation. Changes in the fair value of the contracts are recorded each period as a component of other comprehensive
income. Gains or losses on interest rate agreements are reclassified as earnings or losses in the period in which
earnings are affected by the underlying hedged item. The Company does not use financial instruments for trading or
speculative purposes.

(k) Accumulated Other Comprehensive Loss - The components of accumulated other comprehensive loss
for 2002, 2001 and 2000 are as follows (000's omitted):

2002 2001 2000
----------------- ----------------- ----------------
Foreign Currency Translation Adjustment $(25,044) $(34,501) $(19,674)
Minimum Pension Liability Adjustment (22,346) (288) -
Unrealized Loss on Cash Flow Hedges (3,686) (3,862) -
----------------- ----------------- ----------------
Total Accumulated Other Comprehensive Loss $(51,076) $(38,651) $(19,674)

The components of comprehensive loss for 2002, 2001 and 2000 are included in the Statement of
Stockholder's Equity. The unrealized loss on cash flow hedge included in comprehensive loss is net of reclassifications
of losses included in interest expense of $7.0 million for the year ended December 31, 2002.

(l) Stock-Based Compensation - The Company currently issues stock-based compensation under its U.S. Can
2000 Equity Incentive Plan. The Company continues to use the intrinsic fair value method under APB Opinion No. 25 to
account for the plan; therefore, no compensation costs are recognized in the Company's financial statements for options
granted. In December of 2002, the FASB issued SFAS No. 148 "Accounting for Stock-Based Compensation - Transition and
Disclosure". SFAS No. 148 amends FASB Statement No. 123 "Accounting for Stock-Based Compensation" to provide alternative
methods of transition for companies who voluntarily change to the fair value based method of accounting for stock-based
employee compensation. The statement also increases stock-based compensation quarterly and annual disclosure
requirements for all companies and is effective for financial statements of companies with fiscal years ending after
December 15, 2002. The Company adopted this statement in December of 2002. In accordance with SFAS No. 148, the
following table presents (in thousands) what the Company's net loss would have been had the Company determined
compensation costs using the fair value-based accounting method.

Actual ro-forma 2002 Actual Pro-forma Actual ro-forma 2000
2002 P 2001 2001 2000 P
------------------------------------------------ ---------------- ------------------------------
Stock-Based $ $ $
Compensation Cost, net $ 5) $ 37) $ 4,266)
of tax - ( - ( - (

$
Net Loss $ (84,297) $ (84,302) $ (51,761) (51,798) $ (14,123) $ (18,389)

(m) Income Taxes - The Company accounts for income taxes using the asset and liability method under which
deferred income tax assets and liabilities are recognized for the tax consequences of "temporary differences" between the
financial statement carrying amounts and the tax bases of existing assets and liabilities and operating losses and tax
credit carry forwards. On an ongoing basis, the Company evaluates its deferred tax assets to determine whether it is
more likely than not that such assets will be realized in the future and records valuation allowances against the
deferred tax assets for amounts which are not considered more likely than not to be realized. The estimate of the amount
that is more likely than not to be realized requires the use of assumptions concerning the amounts and timing of the
Company's future income by taxing jurisdiction.

(n) New Accounting Pronouncements - SFAS No. 145 "Recission of FASB Statements No. 4, 44, and 46,
Amendment of FASB Statement No. 13, and Technical Corrections" was issued in April 2002 and is effective for fiscal years
beginning after May 15, 2002. This statement eliminates the current requirement that gains and losses on extinguishment
of debt be classified as extraordinary items in the statement of operations. Instead, the statement requires that gains
and losses on extinguishment of debt be evaluated against the criteria in APB Opinion 30 to determine whether or not such
gains or losses should be classified as an extraordinary item. The statement also contains other corrections to
authoritative accounting literature in SFAS 4, 44 and 46. The Company will adopt SFAS No. 145 for the year ended
December 31, 2003 and is in the process of reviewing the criteria in Opinion 30 as it relates to the Company's early
extinguishment of debt in 2000.

During July 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal
Activities". SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. SFAS No. 146 supercedes the guidance of Emerging Issues Task Force ("EITF")
Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity",
which required that liabilities for exit costs be recognized at the date of an entity's commitment to an exit plan. SFAS
No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002. The Company will adopt
SFAS No. 146 for any exit disposal activities initiated after such date.

(o) Use of Estimates - The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Estimates are used for, but not
limited to: allowance for doubtful accounts; inventory valuation; purchase accounting allocations; restructuring amounts;
asset impairments; depreciable lives of assets; goodwill impairments; pension assumptions and tax valuation allowances.
Future events and their effects cannot be perceived with certainty. Accordingly, our accounting estimates require the
exercise of management's current best reasonable judgment based on facts available. The accounting estimates used in the
preparation of the Consolidated Financial Statements will change as new events occur, as more experience is acquired, as
more information is obtained and as the Company's operating environments change. Significant business or customer
conditions could cause material changes to the amounts reflected in the Company's financial statements. Accounting
policies requiring significant management judgments include those related to revenue recognition, inventory valuation,
accounts receivable allowances, goodwill impairment, restructuring reserves, tax valuation allowances and interest rate
exposure. While actual results could differ from these estimates, management believes that these estimates are
reasonable.

(3) Recapitalization

On October 4, 2000, U.S. Can Corporation and Berkshire Partners LLC completed a recapitalization of the
Company through a merger. As a result of the recapitalization, all of U.S. Can's common stock, other than certain shares
held by designated continuing shareholders (the rollover shareholders), was converted into the right to receive $20.00 in
cash per share and options to purchase approximately 1.6 million shares of U.S. Can's common stock were retired in
exchange for a cash payment of $20.00 per underlying share, less the applicable option price. Certain shares held by the
rollover shareholders were converted into the right to receive $20.00 in cash per share and certain shares held by the
rollover shareholders were converted into the right to receive shares of capital stock of the surviving corporation in
the merger.

The recapitalization was financed by:

- a $106.7 million preferred stock investment by Berkshire Partners, its co-investors and certain of the
rollover stockholders;

- a $53.3 million common stock investment by Berkshire Partners, its co-investors, certain of the rollover
stockholders and management;

- $260.0 million in term loans under a new senior bank credit facility;

- $20.5 million in borrowings under a new revolving credit facility; and

- - $175.0 million from the sale of 12 3/8% Senior Subordinated Notes due 2010.

The recapitalization increased the Company's accumulated deficit as follows:

- - Accumulated deficit was charged for the difference between the redemption price and the paid in value of
the redeemed U.S. Can capital stock ($159.2 million).

- - The Company recorded a net charge of $14.9 million ($18.9 million pretax) for expenses related to their
recapitalization in the fourth quarter of 2000.

- - The extraordinary charge relating to the early redemption of the Company's 10 1/8% Notes due in 2006
($14.9 million).

- - In 2001, the shareholder litigation was settled resulting in a charge of $2.1 million.

Funds generated from the recapitalization were used to retire all of the borrowings outstanding under the
Company's former credit agreement, to repay the majority of the principal, accrued interest and tender premium applicable
to U.S. Can's 10 1/8% Notes due 2006, to purchase outstanding shares at $20 per share and to pay fees and expenses
associated with the transaction.

(4) Special Charges

The Company initiated several restructuring programs in 2001, consisting of a voluntary termination
program offered to all corporate office salaried employees, the closure of six manufacturing facilities and the
consolidation of two Georgia plastics facilities into a new plastics plant in Atlanta, Georgia.

During the year ended December 31, 2001, the Company closed a paint can manufacturing facility and a
warehouse in Baltimore, Maryland and ceased operations in Dallas, Texas. Also in conjunction with the restructuring
programs established in 2001, during 2002 the Company closed a Custom & Specialty plant located in the Baltimore,
Maryland area and closed its Southall, England manufacturing facility. The Company also closed two plastics facilities
in Georgia and consolidated production to a new facility in Atlanta, Georgia. As scheduled, in the fourth quarter of
2002, the Company closed its Burns Harbor, Indiana lithography facility, which completed the restructuring program
established in 2001, as originally planned. In addition, during the fourth quarter of 2002, the Company sold its
Daegeling, Germany facility.

During 2002, the Company recorded a net charge of $8.7 million related to restructuring. The net charge
of $8.7 million consists of new restructuring reserves of $11.9 million less reversals of $3.2 million due to the
reassessment of previously established reserves. The 2002 net charge included a reassessment of the restructuring
reserves established in 2001, position elimination costs and the loss on the sale of the Daegeling, Germany facility.
While the majority of the restructuring initiatives have been completed in 2002, certain portions of the programs will
not be completed until 2003, and the Company does not expect to realize the full earnings benefits until 2004. Certain
long-term liabilities (approximately $3.7 million as of December 31, 2002), consisting primarily of employee termination
costs and future ongoing facility carrying costs will be paid over many years.

Total cash payments in the twelve months ended December 31, 2002 were $20.8 million and the Company anticipates
spending another $15.7 million over the next several years. The remainder of the reserve consists primarily of employee
termination benefits paid over time for approximately 52 salaried and 67 hourly employees (approximately 600 positions
were originally identified for elimination), and other ongoing facility carrying costs.

The table below presents the reserve categories and related activity as of December 31, 2002:

(a) Includes $3.7 million classified as other long-term liabilities as of December 31, 2002.
(b) Non-cash foreign currency translation impact and the reversal of $1.5 million of asset write-offs previously
expensed in the 2001 restructuring.
(c) Includes cash payments of $20.8 million. The remaining non-cash deductions represent increased pension and
post-retiree benefits transferred to Other Long-Term Liabilities (see Notes 8 & 9) and the non-cash loss recorded on
the sale of the Daegeling facility.
(d) Includes reversals of $3.2 million due to the re-assessment of reserves

2001
- ----

During 2001, the Company closed a paint can manufacturing facility and a warehouse in Baltimore, Maryland
and ceased operations in Dallas, Texas. Also in connection with the restructuring programs established in 2001, during
2002 the Company closed a Custom & Specialty plant located in the Baltimore, Maryland area, closed the Southall, England
manufacturing facility and closed the Burns Harbor, Indiana lithography facility. The Company has also closed two
plastics facilities in Georgia and transferred production to a new facility in Atlanta, Georgia. The closure of the
Burns Harbor, Indiana lithography facility, in the fourth quarter of 2002 completed the restructuring program established
in 2001, as originally planned.
As of December 31, 2001, the remaining balance in the restructuring reserve included severance and related
termination benefits paid over time for approximately 159 salaried and 330 hourly employees. Net charges of $36.2
million were recorded in 2001 for the cost of these programs. The net charge of $36.2 million consists of new
restructuring reserves of $43.4 million less reversals of $7.2 million due to the reassessment of previously established
reserves. Cash charges consist primarily of employee termination costs, future cash payments for employee benefits as
required under union contracts, lease termination and other facility exit costs. Non-cash charges consist primarily of
write-offs of property, plant and equipment.

The following table summarizes the Company's 2001 restructuring programs:

Special Charge
-----------------------------------------------------------
Programs Cash Non-cash Total Charge Positions identified
for elimination
- ------------------------------------ ------------------- ----------------- --------------------- ---------------------------
(in millions)
Baltimore $0.6 $1.8 $2.4 1
Salaried Reduction in Force $4.6 -- $4.6 82
International Operations $3.4 (a) $5.8 $9.2 286
Burns Harbor $9.5 $3.8 $13.3 135
Other Facilities $4.9 $9.0 $13.9 89
Reassessment of Prior Programs -- ($7.2) ($7.2) --
------------------- ----------------- --------------------- ---------------------------
Total $23.0 $13.2 $36.2 593

(a) Net of cash proceeds of $ 11.7 million received from the sale of the Southall, UK site.

Baltimore
---------
The Company closed a paint can manufacturing facility and a warehouse in Baltimore, Maryland and
transferred a portion of its production capacity to another facility located in Baltimore, Maryland.

Salaried Reduction in Force
---------------------------
In the third quarter of 2001, the Company offered a voluntary termination program to all corporate office
salaried employees. Approximately 82 employees accepted the voluntary program.

International Operations
------------------------
After a review of its operating facilities in the United Kingdom, the Company decided to close its
Southall, England manufacturing facility. Production capabilities will be transferred to the Company's Merthyr Tydfil and
other European Aerosol plants. The European consolidation will reduce payroll and overhead costs in the U.K while
realigning capacity within Europe to meet customer demand. In connection with the realignment, the Company completed the
sale of its Southall, United Kingdom property in late December 2001 and the manufacturing facility was closed over the
first three-quarters of 2002. In addition, several other headcount reduction programs were initiated throughout the
Company's International operations, including May.

Burns Harbor
------------
The Company closed its Burns Harbor, Indiana lithography facility and transitioned its volume to other
existing operations. The closure will reduce excess capacity, overhead and related payroll costs as well as leverage
investments made in previous years in new technology in existing U.S. Can facilities.

Other Facilities
----------------
The Company reviewed its steel paint can capacity versus Company and industry requirements and decided to
permanently reduce capacity by closing its Dallas, Texas plant. The Company closed this operation in the fourth quarter
of 2001.

In 2001, the Company entered into a lease for a new plastics manufacturing plant. The Company closed its
two existing plastics plants (Newnan, Georgia and Morrow, Georgia) in the first quarter of 2002, and all goods are now
produced in our new Atlanta plant.

In order to better leverage resources and facilities, the Company closed its Columbia Specialty plant in
2002, exited certain product lines and transferred production capacity to its Steeltin and Olive Can operations. The
closure was planned to provide better operating efficiencies and reduce overhead and payroll costs associated with the
Columbia operation.

Reassessment of Prior Programs
------------------------------

Due to the Olive Can acquisition, the Company revised its plan to close a lithography operation for which
it had previously reserved closing costs. Accordingly, a reversal of previously provided restructuring reserves was
recorded.

The tables below present the reserve categories and related activity as of December 31, 2001 respectively:

In 2000, the Company announced a reduction in force program, under which 81 salaried and 39 hourly
positions were eliminated. A one-time pre-tax charge for severance and other termination related costs was recorded in
conjunction with the program.

(5) Acquisitions

On February 20, 2001, certain assets of Olive Can Company, a Custom & Specialty manufacturer, were
acquired for net cash consideration of $4.2 million. The Olive acquisition is not material to the Company's operations or
financial position.

In March 1998, a European Subsidiary acquired a 36.5% equity interest in Formametal S.A. ("Formametal"),
an aerosol can manufacturer located in Argentina, for $4.6 million. Including the initial investment, the Company has
made advances to and investments in Formametal totaling $19.5 million. The Company has also provided a $7.5 million loan
to Formametal, payable in installments through March 31, 2007.

In January 2002, Argentina enacted legislation which, among other things, repealed the one to one U.S.
dollar to Argentinean peso exchange rate. The Company has determined that the Argentinean peso denominated portion of
the investment in Formametal will not be settled in the foreseeable future and therefore has reduced the investment
balance by $17.0 million with an offsetting charge to accumulated other comprehensive income, representing the impact of
the devaluation.

(6) Debt Obligations

Long-term debt obligations of the Company at December 31, 2002 and 2001 consisted of the following (000's
omitted):
2002 2001
---- ----
Senior debt -
Revolving line of credit at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ $ 69,700 $ 56,100
Tranche A term loan at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ 66,000 74,000
Tranche B term loan at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ 177,750 178,750
Tranche C term loan at adjustable interest rate, based on market rates,
due January 4, 2006............................................................ 20,000 20,000
Secured term loan at 8.5% interest rate, due serially to January 2004............ 18,220 19,912
Unsecured revolving lines of credit at adjustable interest rate, based on
market rates................................................................... 13,384 --
Industrial revenue bonds at adjustable interest rate, based on market rates,
due February 1, 2015........................................................... 4,000 4,000
Capital lease obligations........................................................ 1,867 4,290
Other............................................................................ 2,907 3,870
Senior Subordinated Series B Notes at 12 3/8% interest rate, due October 1, 2010....... 175,000 175,000
Senior Subordinated Series B Notes at 10 1/8% interest rate, due October 15, 2006...... 854 854
------------- -------------
Total Debt....................................................................... 549,682 536,776
Less--Current maturities......................................................... (26,153) (14,983)
-------------- --------------
Total long-term debt................................................................... $ 523,529 $ 521,793
============= =============

In connection with the recapitalization, United States Can Company, as Borrower, entered into a Credit
Agreement among United States Can, U.S. Can Corporation and Domestic Subsidiaries of U.S. Can Corporation as Domestic
Guarantors, and certain lenders including Bank of America, N.A., Citicorp North America, Inc., and Bank One NA as of
October 4, 2000 (the "Senior Secured Credit Facility"). The Senior Secured Credit Facility provides for aggregate
borrowings of $395.0 million consisting of: (i) $80.0 million Tranche A loan; (ii) $180.0 million Tranche B loan; (iii)
$25.0 million Tranche C facility and (iv) $110.0 million under a revolving credit facility. All of the Tranche A and
Tranche B debt and approximately $20.5 million under the revolving credit facility were used to finance the
recapitalization.

Principal repayments required under the Senior Secured Credit Facility are $10 million in 2003 increasing
to $218.8 million in 2006. Also due in 2006 are any amounts outstanding at that time under the Company's revolving line
of credit. Additionally, the Facility requires a prepayment in the event that excess cash flow (as defined) exists and
following certain other events, including asset sales and issuances of debt and equity.

Borrowings under the Tranche A term loan are due and payable in quarterly installments, which were
initially $1.0 million and increase over time to $8.0 million, until the final balance is due. Borrowings under the
Tranche B term loan are due and payable in quarterly installments of nominal amounts. No payments are due on borrowings
under the Tranche C term loan prior to its final maturity. The revolving credit facility is available until January 4,
2006. In addition, the Company is required to prepay a portion of the facilities under the Senior Secured Credit Facility
upon the occurrence of certain specified events.

The Senior Secured Credit Facility is secured by a first priority security interest in all existing and
after-acquired assets of the Company and its direct and indirect domestic subsidiaries' existing and after-acquired
assets, including, without limitation, real property and all of the capital stock owned of its direct and indirect
domestic subsidiaries (including certain capital stock of their direct foreign subsidiaries only to the extent permitted
by applicable law). In addition, if loans are made to foreign subsidiaries, they will be secured by the existing and
after-acquired assets of certain of our foreign subsidiaries.

The Senior Secured Credit Facility and the Notes contain a number of financial and restrictive covenants.
The covenants for the Senior Secured Credit Facility were amended in connection with the 2001 amendments. Under its
Senior Secured Credit Facility, the Company is required to meet certain financial tests, including achievement of a
minimum EBITDA level (as defined in the Senior Secured Credit Facility), a minimum interest coverage ratio, a minimum
fixed charge coverage ratio and a maximum leverage ratio. The restrictive covenants limit the Company's ability to incur
debt, pay dividends or make distributions, sell assets or consolidate or merge with other companies. The Company was in
compliance with all of the required financial ratios and other covenants at December 31, 2002 and anticipates being in
compliance in 2003. However, the minimum EBITDA level covenant increases significantly in each of the first three
quarters of 2003. Although management believes that the Company will be in compliance with these and other covenants
under the Senior Secured Credit Facility, factors beyond the Company's control, such as sudden downturns in the demand
for its products or significant cost increases that it cannot quickly pass through to customers or offset through cost
reductions, may cause the Company's earnings levels to not achieve those forecasted. If the Company believes that it
would be unable to achieve its minimum EBITDA level or other financial covenants, the Company would expect to negotiate
with the lenders an amendment to its Senior Secured Credit Facility. The Company cannot be assured however, that the
lenders would agree to an amendment if one were required. Without such an amendment or a waiver, the Company would be in
default on almost all of its borrowings, which would have severe consequences to the Company regarding its sources of
liquidity and its ability to continue operations.

In connection with the recapitalization, the Corporation completed a tender offer and consent solicitation
for all of its outstanding 10 1/8% notes due 2006, plus accrued interest and a bond tender premium. $235.7 million of the
$236.6 million principal amount of bonds outstanding were purchased by the Corporation in the tender offer. An
extraordinary charge of $14.9 million ($24.2 million pre-tax) was taken in the fourth quarter of 2000, related to the
tender premium and the write-off of related deferred financing charges.

Under existing agreements, contractual maturities of long-term debt as of December 31, 2002 (including
capital lease obligations), are as follows (000's omitted):

2003............................................................................................ $ 26,153
2004............................................................................................ 31,813
2005............................................................................................ 21,576
2006............................................................................................ 289,840
2007............................................................................................ 1,300
Thereafter...................................................................................... 179,000
-------------
$ 549,682
=============

See Note (10) for further information on obligations under capital leases. Other debt, consisting of
various governmental loans, unsecured foreign debt and secured equipment notes bearing interest at rates between 1.4% and
8.5% matures at various times through 2015, and was used to finance the expansion of several manufacturing facilities.

In an effort to limit foreign exchange risks, and as required by the Credit Agreement, the Company had
entered into several forward hedge contracts. The payments due on the secured term loan used to finance the acquisition
of the Merthyr Tydfil facility were hedged by a series of British Pound/Dollar forward contracts. Pursuant to the
agreement under which the contracts had been issued, the counterparty elected to terminate the contracts in January
2003. In connection with the termination, the Company paid $1.0 million to the counterparty, which will be reflected in
2003 interest expense in accordance with the original contract terms.

Based upon borrowing rates currently available to the Company for borrowings with similar terms and
maturities, the fair value of the Company's total debt was approximately $453.2 million and $472.9 million as of
December 31, 2002 and 2001, respectively. No quoted market value is available (except on the 12 3/8% and the 10 1/8%
Notes). These amounts, because they do not include certain costs such as prepayment penalties, do not represent the
amount the Company would have to pay to reacquire and retire all of its outstanding debt in a current transaction.

The Company paid interest on borrowings of $56.0 million, $55.2 million and $27.5 million in 2002, 2001
and 2000, respectively. Accrued interest payable of $8.2 million and $11.9 million as of December 31, 2002 and 2001
respectively, is included in accrued expenses on the consolidated balance sheet.

(7) Income Taxes

The provision (benefit) for income taxes before extraordinary items and the cumulative effect of a change
in accounting principle consisted of the following (000's omitted):
2002 2001 2000
---- ---- ----
Current
U.S......................................................... $ -- $ -- $ --
Foreign................................................... 1,913 1,335 470

Deferred
U.S. .................................................... 490 (19,789) 2,301
Foreign................................................ (9,484) (4,580) 1,573

Valuation Allowance............................................. 44,718 -- --
------------ ----------- -------------
Total....................................................... $ 37,637 $ (23,034) $ 4,344
============ ============ =============

The Company received refunds of $4.9 million, $0.3 million and $2.2 million in 2002, 2001 and 2000
respectively.

The components of income (loss) before income taxes for the three years ended December 31, 2002, 2001 and
2000 were as follows (000's omitted):
2002 2001 2000
---- ---- ----

U.S............................................................. $ (1,726) $ (44,839) $ 5,568
Foreign......................................................... (14,111) (18,611) 2,117
------------- ------------ -------------
Income (loss) before income taxes........................... $ (15,837) $ (63,450) $ 7,685
============= ============ =============

A reconciliation of the difference between taxes on pre-tax income from continuing operations before
extraordinary items and the cumulative effect of a change in accounting principle and computed at the Federal statutory
rate and the actual provision (benefit) for such income taxes for the years presented were as follows (000's omitted):

2002 2001 2000
---- ---- ----

Tax provision (benefit) computed at the statutory rates............ $ (5,385) $ (21,573) $ 2,613
Nondeductible recapitalization costs and amortization of
intangible assets............................................... (143) 398 1,658
State taxes, net of Federal tax effect............................. (880) (1,601) 113
Valuation allowance................................................ 44,718 -- --
Other, net......................................................... (673) (258) (40)
------------- ------------ --------------
Provision (benefit) for income taxes............................ $ 37,637 $ (23,034) $ 4,344
============ ============ =============

Deferred income taxes are determined based on the estimated future tax effects of differences between the
financial statement and tax bases of assets and liabilities given the provisions of the enacted tax laws. Significant
temporary differences representing deferred income tax benefits and obligations consisted of the following (including
$2.6 million and $3.8 million of deferred tax liabilities included in Other Long-Term Liabilities as of December 31, 2002
and 2001, respectively) (000's omitted):

December 31, 2002 December 31, 2001
----------------- -----------------
Benefits Obligations Benefits Obligations
-------- ----------- -------- -----------

Restructuring reserves.................................. $ 5,560 -- $ 17,355 --
Goodwill ............................................... 15,305 -- -- (6,174)
Retirement and post-employment benefits................. 26,554 -- 14,231 --
Accrued liabilities..................................... 8,528 -- 9,317 --
Tax credit carry-forwards............................... 6,112 -- 7,015 --
Capitalized leases...................................... -- (930) -- (255)
Property and equipment.................................. -- (23,745) -- (27,804)
Inventory valuation reserves............................ -- (6,054) -- (4,271)
Net operating losses.................................... 47,983 -- 30,173 --
Other................................................... 2,445 (2,589) 2,386 (3,262)
------------- ------------- ----------- ---------------
Total deferred income tax benefits (obligations)... 112,487 (33,318) 80,477 (41,766)
Valuation allowance..................................... (44,718) -- -- --
--------------- ------------ ----------- --------------
Total ............................................. $ 67,769 $ (33,318) $ 80,477 $
=========== ============= =========== ====
(41,766)
========

The Company's U.S. net operating losses expire as follows: $26.6 million in 2020 and $28.0 million in
2021 and $34.8 million in 2022 and management believes it is more likely than not that the tax benefit of the net
deferred tax assets will be realized prior to expiration. The Company has foreign net operating loss carryforwards in
Germany and the United Kingdom which have no expiration date. However, the Company has taken a valuation reserve against
the full amount of its foreign net operating loss carryforwards.

The Company does not provide for U.S. income taxes which would be payable if undistributed earnings of the
European Subsidiaries were remitted to the U.S. because the Company either considers these earnings to be invested for an
indefinite period or anticipates that if such earnings were distributed, the U.S. income taxes payable would be
substantially offset by foreign tax credits. On a net basis, there were no unremitted earnings at December 31, 2002.

(8) Employee Benefit Plans

The Company maintains separate noncontributory defined benefit and defined contribution pension plans
covering most domestic hourly employees and all domestic salaried personnel, respectively. It is the Company's policy to
fund accrued pension and defined contribution plan costs in compliance with ERISA or the applicable foreign requirements.

The following tables present the changes in the projected benefit obligations for the plan years ended
December 31, 2002 and 2001 (000's omitted):

U.S.
- ----
2002 2001
---- ----

Projected benefit obligation at the beginning of the year............................ $ 33,304 $ 33,510
Net increase (decrease) during the year attributed to:
Service cost...................................................................... 860 886
Interest cost..................................................................... 2,387 2,399
Actuarial losses .................................................................... 3,028 537
Benefits paid..................................................................... (2,055) (5,378)
Plan amendments................................................................... 286 1,350
Plan curtailment (a) ............................................................. 959
- --
Special termination benefit (a)................................................... 1,141 --
------------- -------------
Net increase (decrease) during the year.............................................. 6,606 (206)
------------- --------------
Projected benefit obligation at the end of the year.................................. $ 39,910 $ 33,304
============= =============

(a) The plan curtailment benefit and special termination benefit are associated with the closure of the Burns Harbor
lithography facility.

Non-U.S.
- --------
2002 2001
---- ----

Projected benefit obligation at the beginning of the year............................ $ 56,790 $ 53,196
Net increase during the year attributed to:
Service cost...................................................................... 635 717
Interest cost..................................................................... 3,224 2,786
Actuarial losses .................................................................... 5,259 2,715
Benefits paid..................................................................... (2,679) (1,830)
Plan amendments................................................................... 119 242
Plan curtailment (a) ............................................................. (1,003)
- --
Foreign currency translation impact............................................... 6,283 (1,036)
------------- --------------
Net increase during the year......................................................... 11,838 3,594
------------- -------------
Projected benefit obligation at the end of the year.................................. $ 68,628 $ 56,790
============= =============

(a) The plan curtailment is associated with the closure of the Southall, U.K. facility.

The following tables present the changes in the fair value of net assets available for plan benefits for
the plan years ended December 31, 2002 and 2001 (000's omitted):

U.S.
- ----
2002 2001
---- ----

Fair value of plan assets at the beginning of the year.................................. $ 32,104 $ 37,299
Increase (decrease) during the year:
Return on plan assets................................................................ (2,505) (1,304)
Sponsor contributions................................................................ -- 1,487
Benefits paid........................................................................ (2,055) (5,378)
-------------- ------------
Net decrease during the year............................................................ (4,560) (5,195)
------------- ------------
Fair value of plan assets at the end of the year........................................ $ 27,544 $ 32,104
============ ===========

Non-U.S.
- --------
2002 2001
---- ----

Fair value of plan assets at the beginning of the year.................................. $ 43,431 $ 49,462
Increase (decrease) during the year:
Return on plan assets................................................................ (7,474) (4,272)
Sponsor contributions................................................................ 845 1,072
Participant contributions............................................................ 119 242
Benefits paid........................................................................ (2,679) (1,830)
Foreign currency translation impact.................................................. 4,584 (1,243)
------------- ------------
Net decrease during the year............................................................ (4,605) (6,031)
------------- ------------
Fair value of plan assets at the end of the year........................................ $ 38,826 $ 43,431
============ ===========

The following tables set forth the funded status of the Company's defined benefit pension plans, at
December 31, 2002 and 2001 (000's omitted):

U.S.
- ----
2002 2001
---- ----
Actuarial present value of benefit obligation --
Vested benefits................................................................... $ (34,921) $ (27,489)
Nonvested benefits................................................................ (4,989) (5,815)
------------- ------------
Accumulated benefit obligation....................................................... (39,910) (33,304)
Fair value of plan assets............................................................... 27,544 32,104
------------ -----------
Fair value of plan assets in excess of accumulated benefit obligation................ (12,366) (1,200)
Unrecognized net loss................................................................ 8,464 288
Unrecognized prior-service costs..................................................... 2,929 3,181
------------ -----------
Net amount recognized................................................................... $ (973) $ 2,269
============= ===========
Amounts recognized in the consolidated balance sheet consist of:
Accrued benefit liability............................................................ $ (12,366) $ (1,200)
Intangible asset..................................................................... 2,930 3,181
Deferred Tax Asset................................................................. 3,395 --
Accumulated other comprehensive income............................................... 5,068 288
------------ -----------
Net amount recognized................................................................ $ (973) $ 2,269
============= ===========

Non-U.S.
- --------
2002 2001
---- ----
Actuarial present value of benefit obligation --
Vested benefits................................................................... $ (68,569) $ (53,818)
Nonvested benefits................................................................ (6) (39)
------------- ------------
Accumulated benefit obligation....................................................... (68,575) (53,857)
Additional amounts related to projected increases in compensation levels................ (53) (2,933)
------------- ------------
Projected benefit obligation......................................................... (68,628) (56,790)
Fair value of plan assets............................................................ 38,826 43,431
------------ -----------
Fair value of plan assets in excess of projected benefit obligation.................. (29,802) (13,359)
Unrecognized net loss................................................................ 26,354 7,083
------------ -----------
Net amount recognized................................................................ $ (3,448) $ (6,276)
============= ============
Amounts recognized in the consolidated balance sheet consist of:
Accrued benefit liability............................................................ $ (29,654) $ (6,277)
Deferred Tax Asset (a)............................................................. 9,172 --
Accumulated other comprehensive income............................................... 17,034 --
------------ -----------
Net amount recognized................................................................ $ (3,448) $ (6,277)
============= ============

(a) Prior to recognition of valuation allowance.

The projected benefit obligation as of December 31, 2002, 2001 and 2000 was determined using the following
assumed discount rates and expected long-term rate of return on plan assets:

U.S. 2002 2001 2000
- ---- ---- ---- ----

Discount Rate...................................................... 6.75% 7.25%
7.50%
Long-Term Rate of Return on Plan Assets............................ 8.50% 8.50%
8.50%

Non-U.S. 2002 2001 2000
- -------- ---- ---- ----

Discount Rate...................................................... 5.00 - 5.75% 5.00 - 6.00% 5.50 - 6.00%
Long-Term Rate of Return on Plan Assets............................ 7.00% 7.00%
7.00%

The plan has a non-pay related dollar multiplier benefit formula; accordingly, the effect of projected
future compensation levels is zero. The plan's assets consist primarily of shares of equity and bond funds, corporate
bonds and cash and cash equivalents.

The net periodic pension cost was as follows (000's omitted):
U.S.
- ----
2002 2001 2000
---- ---- ----

Service costs...................................................... $ 860 $ 886 $ 782
Interest costs..................................................... 2,387 2,399 2,296
Return on assets................................................... (2,644) (2,981) (2,454)
Amortization of unrecognized transition obligation..................... -- 2 1
Recognized (gains) / loss.......................................... -- 250 (318)
Recognized prior service cost ..................................... 392 372 246
Curtailment loss and special termination benefits (a).............. 2,247 -- --
------------- -------------- -----------
Net periodic pension cost.......................................... $ 3,242 $ 928 $ 553
============= ============== ===========

(a) The curtailment loss and special termination benefits include a plan curtailment benefit of $1.0 million, special
termination benefit of $1.1 million, and recognition of prior service cost of $0.1 million, associated with the closure
of the Burns Harbor lithography facility.

Non-U.S.
- --------
2002 2001 2000
---- ---- ----

Service costs...................................................... $ 635 $ 717 $ 825
Interest costs..................................................... 3,224 2,786 2,844
Return on assets................................................... (3,301) (3,358) (3,693)
Recognized (gains) / loss.......................................... 235 -- --
------------- -------------- -----------
Net periodic pension cost.......................................... $ 793 $ 145 $ (24)
============= ============== ============

In addition, hourly employees at four plants are covered by union-sponsored collectively bargained,
multi-employer pension plans. The Company contributed to these plans and charged to expense approximately $1.1 million,
$1.1 million and $1.2 million in 2002, 2001 and 2000, respectively. The contributions are generally determined in
accordance with the provisions of the negotiated labor contracts and are generally based on a per employee, per week
amount. The Company's liability, if any, is not presently determinable and therefore no amount has been recorded for any
contingent unfunded liability.

The Company provides a 401(k) defined contribution plan to eligible employees. Company matching
contributions for employees and related administration costs associated with the plan were $2.4 million, $2.5 million and
$2.3 million for 2002, 2001 and 2000, respectively.

(9) Postretirement Benefit Plans

The Company provides health and life insurance benefits for certain domestic retired employees in
connection with collective bargaining agreements.

The following presents the changes in the accumulated postretirement benefit obligations for the plan
years ended December 31, 2002 and 2001 (000's omitted):

2002 2001
---- ----
Accumulated postretirement benefit obligations at the beginning
of the year............................................................................ $ 26,833 $ 25,351
Net increase (decrease) during the year attributable to:
Service cost........................................................................... 408 225
Interest cost.......................................................................... 1,734 1,871
Actuarial loss......................................................................... 8,497 1,060
Benefits paid.......................................................................... (1,947) (1,674)
Plan amendments........................................................................ (4,506) --
Plan curtailment (a)................................................................... 479 --
Special termination benefit (a)........................................................ 727 --
------------ -----------
Net increase for the year.................................................................. 5,392 1,482
------------ -----------
Accumulated postretirement benefit obligations at the end of the year...................... $ 32,225 $ 26,833
============ ===========

(a) The plan curtailment benefit and special termination benefit are associated with the closure of the Burns Harbor
lithography facility.

Effective January 1, 2002 the Company amended the postretiree health care plan. The amendment resulted in
a reduction in the accumulated postretirement benefit obligation of $4.5 million by capping the Company's contribution
toward retiree medical costs at 150% of the expected 2003 medical costs.

The Company's postretirement benefit plans are not funded. The status of the plans at December 31, 2002
and 2001, is as follows (000's omitted):
2002 2001
---- ----
Accumulated postretirement benefit obligations:
Active employees....................................................................... $ 9,812 $ 5,777
Retirees............................................................................... 22,413 21,056
------------ -----------
Total accumulated postretirement benefit obligations....................................... 32,225 26,833
Unrecognized net gain/(loss)............................................................... (6,953) 1,544
Unrecognized prior-service costs........................................................... 4,125 --
------------ -----------
Net liability recognized................................................................... $ 29,397 $ 28,377
============ ===========

Net periodic postretirement benefit costs for the Company's U.S. postretirement benefit plans for the
years ended December 31, 2002, 2001 and 2000, included the following components (000's omitted):

2002 2001 2000
---- ---- ----

Service cost........................................................... $ 407 $ 225 $ 243
Interest cost.......................................................... 1,734 1,871 1,764
Recognized gain........................................................ -- -- (152)
Recognized prior-service cost.......................................... (382) -- --
Curtailment and Special termination benefit............................ 1,206 -- --
------------ ---------- ----------
Net periodic postretirement benefit cost............................... $ 2,965 $ 2,096 $ 1,855
============ ========== ==========

The assumed health care cost trend rate used in measuring the accumulated postretirement benefit
obligation was 9% to 4% in 2002 and 7% in 2001 and 2000. The 2002 health care assumption was based upon emerging health
care trends, and begins at a 9% increase in 2003, reducing by 1% each year thereafter, until 2008. A one percentage
point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement
benefit obligation as of December 31, 2002 and 2001, by approximately $3.6 million and $2.3 million, respectively, and
the total of the service and interest cost components of net postretirement benefit cost for each year then ended by
approximately $0.3 million, $0.3 million and $0.2 million in 2002, 2001 and 2000. A one percentage point decrease in the
assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of
December 31, 2002 and 2001, by approximately $3.2 million and $2.1 million in 2002 and 2001 respectively, and the total
of the service and interest cost components of net postretirement benefit cost for each year then ended by approximately
$0.3 million in 2002 and $0.2 million in both 2001 and 2000. The assumed discount rate used in determining the
accumulated postretirement benefit obligation was 6.75%, 7.25% and 7.5%, in 2002, 2001 and 2000, respectively. The
increased health care cost trends, along with the decreased discount rate assumptions are the primary drivers of the $8.5
million actuarial loss disclosed above.

As of December 31, 2002, 2001 and 2000, the Company has recorded a liability of $3.0 million, $3.1 million
and $3.2 million, respectively, for benefit obligations for which a former executive was fully eligible to receive on a
periodic payment basis beginning August 1, 1998. In 2002, the Company also recorded a $244,000 charge to accumulated
other comprehensive loss in conjunction with the benefit obligations. The principal source of funding for this
obligation is an insurance policy on the executive's life.

(10) Commitments and Contingencies

Environmental

United States Can has been named as a potentially responsible party for costs incurred in the clean-up of
a groundwater plume partially extending underneath United Sates Can's former site in San Leandro, California. We are a
party to an indemnity agreement related to this matter with the owner of the property. Extensive soil and groundwater
investigative work has been performed at this site in a coordinated sampling event in 1999. The results of the sampling
were inconclusive as to the source of the contamination. While the State of California has not yet commented on the
sampling results, we believe that the principal source of contamination is unrelated to our past operations. At the
request of the State of California, the Company will provide the State with samples from monitoring wells located at the
San Leandro site as part of a coordinated sampling event that is currently scheduled for the first quarter of 2003.

Through corporate due diligence and the Company's compliance management system, a potential noncompliance
with the environmental laws at our New Castle, Pennsylvania facility related to the possible use of a coating or coatings
inconsistent with the conditions in the facility's Clean Air Act Title V permit was identified. In February 2001, the
Company voluntarily self-reported the potential noncompliance to the Pennsylvania Department of Environmental Protection
(PDEP) and the Environmental Protection Agency (EPA) in accordance with PDEP's and EPA's policies. The Company undertook
a full review, revised its emissions calculations based on its review and determined that it had not exceeded its
emissions cap for any reporting year. In September 2001, the Company reported to PDEP and EPA certain deviations from the
requirements of its Title V permit related to the use of non-compliant coatings and corresponding recordkeeping and
reporting obligations, and certain recordkeeping deviations stemming from the malfunction of the temperature recorder for
an oxidizer. The Company met with PDEP officials in October 2001, and provided some supplemental information requested by
PDEP in November 2001. On May 21, 2002, the Company met with PDEP officials and reached an agreement to resolve the past
reported deviations by entering into a Consent Assessment of Civil Penalty for $30,000. The Company and PDEP signed a
definitive agreement in October 2002 and the Company paid the first installment. The second installment is due in April
2003.

Legal

The Company is involved in litigation from time to time in the ordinary course of our business. In our
opinion, the litigation is not material to our financial condition or results of operations.

In May 1998, the National Labor Relations Board issued a decision ordering the Company to pay
$1.5 million in back pay, plus interest, for a violation of certain sections of the National Labor Relations Act. The
violation was a result of the Company's closure of several facilities in 1991 and its failure to offer inter-plant job
opportunities to 25 affected employees. The Company appealed this decision on the ground that we are entitled to a
credit against this award for certain supplemental unemployment benefits and pension payments. On June 19, 2001, the
Court of Appeals issued a written decision. While the Court enforced the award of backpay, with interest, it agreed with
the Company's position that the NLRB should permit the Company to present actuarial calculations of any credit due it
because of overpayments or early payments of supplemental unemployment benefits or pension. On March 1, 2002, the Company
settled this case. Under the settlement agreement, the Company paid approximately $1.8 million in backpay and interest,
as well as certain pension adjustments that are not expected to have a material effect on the Company. The National
Labor Relations Board approved the settlement on May 30, 2002. The Company made substantially all payments due under the
settlement in July 2002. In October 2002, the NLRB entered an Order officially closing this matter.

Walter Schmidt, former finance director at May Verpackungen GmbH ("May") sued for unfair dismissal
following termination of his employment contract. The contract had a five-year term and Schmidt remains in pay status
through its notice period, ending January 31, 2005. Mr. Schmidt claims that he also is due a severance settlement of
five years' salary at the end of the notice period. In July 2002, the labor courts of first instance ruled that Mr.
Schmidt notice date and termination should be effective December 31, 2005, and that the severance settlement is due at
that time. On January 7, 2003, May appealed this ruling. In its appeal, May contends that the labor courts' ruling is
erroneous on four bases. The appeals court will review the ruling of the labor courts of first instance de novo, meaning
that it is not bound by the prior ruling and may render an independent decision. Since the appeals court's review is not
complete, the Company is unable, at this time, to determine the appeals court's position or the effect on the Company of
the initial decision.

Leases

The Company has entered into agreements to lease certain property under terms which qualify as capital
leases. Capital leases consist primarily of various production machinery and equipment. Most capital leases contain
renewal options and some contain purchase options. As of December 31, 2002 and 2001, capital lease assets were
$1.4 million and $3.3 million, net of accumulated amortization of $7.6 million and $9.8 million, respectively.

The Company also maintains operating leases on various plant and office facilities, vehicles and office
equipment. Rent expense under operating leases for the years ended December 31, 2002, 2001 and 2000, was $7.0 million,
$8.3 million and $7.2 million, respectively.

At December 31, 2002, minimum payments due under these leases were as follows (000's omitted):

Capital Operating
Leases Leases
------ ------
2003 .............................................................................. $ 1,143 $ 4,997
2004 .............................................................................. 764 4,326
2005 .............................................................................. 41 3,883
2006 .............................................................................. -- 3,125
2007 .............................................................................. -- 2,827
Thereafter.......................................................................... -- 3,628
------------- ------------
Total minimum lease payments.................................................. 1,948 $ 22,786
============
Amount representing interest........................................................ (81)
-------------
Present value of net minimum capital lease payments................................. $ 1,867
=============

(11) Equity Incentive Plans

In connection with the recapitalization, the Board of Directors and stockholders of U.S. Can Corporation
approved the U.S. Can 2000 Equity Incentive Plan. The Board of Directors administers the plan and may, from time to time,
grant option awards to directors of U.S. Can Corporation, including directors who are not employees of U.S. Can
Corporation, all executive officers of U.S. Can Corporation and its subsidiaries, and other employees, consultants, and
advisers who, in the opinion of the Board, are in a position to make a significant contribution to the success of U.S.
Can and its subsidiaries. The Board of Directors may grant options that are time-vested and options that vest based on
the attainment of performance goals specified by the Board of Directors. All previous plans were terminated in
connection with the recapitalization.

In prior years, the Company made grants of restricted shares which were charged to stockholders' equity at
their fair value and amortized as expense on a straight-line basis over the period earned. In 2000, all unvested
outstanding restricted stock was accelerated and issued or otherwise retired in connection with the recapitalization.

A summary of the status of the Company's stock option plans (as restated for the reverse stock split) at
December 31, 2002, 2001 and 2000, and changes during the years then ended, are presented in the tables below:

Options Outstanding Exercisable Options
------------------- -------------------
Wtd. Avg. Wtd. Avg.
Exercise Exercise
Shares (in 000s) Price Shares (in 000s) Price
---------------- ----- ---------------- -----
December 31, 1999.............................. 1,438.150 $ 16,820 801.212$
15,900
Granted..................................... 433.500 14,190
Exercised................................... (1,855.859) 16,290
Canceled.................................... (15.791) 6,200
---------------------- ----------

October 4, 2000................................ -- --
Granted..................................... 2,476.542 1,000 -- $ --
Exercised................................... -- --
Canceled.................................... -- --
-------------- ----------

December 31, 2000.............................. 2,476.542 1,000 -- $ --
Granted..................................... 154.000 1,000
Exercised................................... -- --
Canceled.................................... (387.622) 1,000
---------------------- ----------

December 31, 2001.............................. 2,242.920 1,000 325.547 $ 1,000
Granted..................................... 25.000 1,000
Exercised................................... -- --
Canceled.................................... (461.186) 1,000
--------------------- ----------
December 31, 2002 ............................. 1,806.734 1,000 551.744 $ 1,000

Exercisable Options
Options Outstanding at December 31,
at December 31, 2002 2002
-------------------- ----
Remaining Wtd. Wtd.
Contractual Avg. Avg.
Life Exercise Exercise
Shares (Years) Price Shares Price
------ ------- ----- ------ -----

$1,000.00...................... 1,806.734 7.40 1,000.00 551.744 $1,000.00
========= ======= =========

The Company accounts for the plan using the intrinsic fair value method under APB Opinion No. 25;
therefore, no compensation costs have been recognized for options granted. Had compensation costs been determined on the
fair value-based accounting method for options granted in 2002, 2001 and 2000, pro forma net income (loss) would have
been $(84.3) million, $(51.8) million and $(18.4) million for 2002, 2001 and 2000, respectively.

The weighted-average estimated fair value of options granted during 2002, 2001, and 2000 after and before
the recapitalization was $341.10, $388.42, $440.02, and $13,515.71, respectively. The fair value of each option grant is
determined on the date of grant using the Black-Scholes option pricing model with the following weighted-average
assumptions for options granted in 2002, 2001, and 2000 after and before the recapitalization, respectively: risk-free
interest rate of 4.26%, 5.04%, 6.0% and 6.0%; expected lives of 10 years in all cases; expected volatility of 0%, 0%, 0%,
and 35.2%; and no dividends for any year.

(12) Redeemable Preferred Stock

As part of the recapitalization, U.S. Can Corporation issued shares of preferred stock having an aggregate
value of $106.7 million to Berkshire Partners and its affiliates and the rollover stockholders. Dividends accrue on the
preferred stock at an annual rate of 10%, are cumulative from the date of issuance and compounded quarterly, on March 31,
June 30, September 30 and December 31 of each year and are payable in cash when and as declared by our Board of
Directors, so long as sufficient cash is available to make the dividend payment and has been obtained in a manner
permitted under the terms of our new senior secured credit facility and the indenture. As of December 31, 2002 and 2001,
dividends of approximately $26.5 million and $13.9 million, respectively, have been accrued. Holders of the preferred
stock have no voting rights, except as otherwise required by law. The preferred stock has a liquidation preference equal
to the purchase price per share, plus all accrued and unpaid dividends. The preferred stock ranks senior to all classes
of U.S. Can Corporation common stock and is not convertible into common stock.

The Company is required to redeem the preferred stock, at the option of the holders, at a price equal to
its liquidation preference, plus accrued and unpaid dividends, upon the occurrence of any of the following events and so
long as sufficient cash is available to the Company or available from dividend payments permitted under the terms of the
Company's debt agreement:

o the bankruptcy of the Company

o the acceleration of debt under any major loan agreement to which the Company or any of its subsidiaries is
a party; or

o public offerings of shares of capital stock of the Company

The Company's certificate of incorporation expressly states that any redemption rights of holders of
preferred stock shall be subordinate or otherwise subject to prior rights of the lenders under the Company's Senior
Secured Credit Facility and the holders of the exchange notes.

At this time, the Company's Senior Secured Credit Facility prohibits the Company's ability to redeem the
preferred stock and the debt agreement restricts the Company's ability to obtain funds that may be necessary to redeem
the preferred stock.

(13) Related Parties

Berkshire Partners is the majority shareholder (77.3%) of the Company. Berkshire received a fee of
$2.0 million upon the completion of the recapitalization and receives a management fee of $750,000 per year.

Under the provisions of the second amendment to the Senior Secured Credit Facility, Berkshire Partners may
be required to cash collateralize and ultimately repurchase the Tranche C term loan facility. In consideration for
Berkshire's agreement to purchase a participation in the Tranche C term loan, the Company has agreed to accrue for and
pay to Berkshire an annual fee of 2.75% of the amount of the Tranche C term loan then outstanding, which was $550,000 for
2002. This amount was included in accrued liabilities in the accompanying balance sheet. This fee is payable in
advance, is non-refundable and may not be paid in cash (without the requisite senior lenders' consent) so long as the
Company's current senior bank debt is outstanding. If Berkshire were required to purchase a Tranche C term loan
participation in the future, the Company would be required to pay Berkshire the amount of such Tranche C term loan, plus
accrued interest, to the extent of Berkshire's participation. The Company also agreed to reimburse Berkshire's
out-of-pocket costs and expenses incurred in connection with the purchase agreement and the second amendment to the
credit agreement.

Salomon Smith Barney currently beneficially owns 4.90% of the Company's common stock. Salomon Smith Barney
was paid $2.0 million in fees in 2000 for financial advisory services provided in connection with the recapitalization.

(14) Reverse Stock Split

On December 5, 2002, the board of directors authorized (i) a reverse stock split in which each issued
share of the Company's common stock and Series A preferred stock, $0.01 par value per share, would be reclassified as and
converted into 1/1000th of a share of common stock and preferred stock, $10.00 par value per share, subject to approval
of the Company's shareholders and (ii) a corresponding reduction in the number of its authorized shares of common stock
from 100,000,000 shares to 100,000 shares and in the number of its authorized shares of preferred stock from 200,000,000
shares to 200,000 shares. During December, the Company obtained the necessary shareholder consents and on December 20,
2002, U.S. Can Corporation, upon filing with the Secretary of State of the State of Delaware, amended its certificate of
incorporation to effect the reverse stock split. The reverse stock split did not affect the relative percentages of
ownership for any shareholders. The reverse stock split did not affect the annual rate at which dividends on preferred
stock accrue, their cumulation or quarterly compounding. Dividends remain payable in cash when and as declared by our
Board of Directors, so long as sufficient cash is available to make the dividend payment and such payment would not
violate the terms of the Facility and the Notes.

(15) Accounting Change

The Company adopted SFAS No. 142 "Goodwill and Other Intangible Assets" on January 1, 2002. This standard
provides accounting and disclosure guidance for acquired intangibles. Under this standard, goodwill and
"indefinite-lived" intangibles are no longer amortized, but are tested at least annually for impairment. Effective
January 1, 2002, the Company has ceased amortization of goodwill. The Company recorded goodwill amortization of $2.8
million and $2.9 million for the years ended December 31, 2001 and 2000. SFAS No. 142 required the Company to make an
initial assessment of goodwill impairment within six months after the adoption date. The initial step was designed to
identify potential goodwill impairment by comparing an estimated fair value for each applicable reporting unit to its
respective carrying value. For the reporting units where the carrying value exceeds the fair value, a second step was
performed to measure the amount of the goodwill impairment.

During the first six months of 2002, the Company completed the initial transitional goodwill impairment
test as of January 1, 2002, and reported that a non-cash impairment charge was required in the Custom & Specialty and
International segments. During the fourth quarter of 2002, the Company determined the amount of the goodwill impairment
and recorded a pre-tax goodwill impairment charge of $39.1 million ($18.3 million, net of tax) relating to the Custom &
Specialty and International segments. The charge has been presented as a cumulative effect of a change in accounting
principle effective as of January 1, 2002 and is primarily due to competitive pressures in the Custom & Specialty and
International segment marketplaces. To determine the amount of goodwill impairment, the Company measured the impairment
loss as the excess of the carrying amount of goodwill over the implied fair value of goodwill. The impairment charge has
no impact on covenant compliance under the Senior Secured Credit Agreement.

The changes in the carrying amount of goodwill by segment for the year ended December 31, 2002 were as
follows (in 000's):
Paint, Plastic Custom &
-
Aerosol International & General Line Specialty Total
------- ------------- -------------- --------- -----

$ $
Balance, Dec. 31, 2001 $ 7,255 25,826 $ 20,129 13,227 $ 66,437
Impairment write-offs - (25,826) - (13,227) (39,053)
---------------- ----------------- ----------------- ----------------- -------------

$ $
Balance, December 31, 2002 $ 7,255 - $ 20,129 - $ 27,384
================ ================= ================= ================= =============

Pursuant to SFAS No. 142, the results for 2001 and 2000 have not been restated. A reconciliation of net
loss as if SFAS 142 had been adopted is presented below for the years ended December 31, 2001 and 2000.

Year Ended Year Ended
December 31, 2001 December 31, 2000
-------------------------- --------------------------
(in thousands) (in thousands)
Reported Net Loss Attributable to Common Stockholders $ (51,761) $ (14,123)
Add back: Goodwill amortization (net of tax) 1,858 1,914
-------------- --------------
Adjusted Net Loss Attributable to Common Stockholders $ (49,903) $ (12,209)
=============== ===============

(16) Business Segments

Management monitors and evaluates performance, customer base and market share for four business segments.
The segments have separate management teams and distinct product lines. The Aerosol segment primarily produces steel
aerosol containers in the U.S. for personal care, household, automotive, paint and industrial products. The International
segment produces aerosol cans in the Europe and Latin America (through Formametal S.A., a joint venture in Argentina) as
well as steel food packaging in Europe. The Paint, Plastic & General Line segment produces round cans in the U.S. for
paint and coatings, oblong cans for items such as lighter fluid and turpentine as well as plastic containers for paint
and industrial and consumer products. The Custom & Specialty segment produces a wide array of functional and decorative
tins, containers and other products in the U.S. In 2002, the Company realigned certain plants from the Paint, Plastic &
General Line to the Custom & Specialty segments. The amounts for 2001 and 2000 were reclassified to reflect the
realignment.

The accounting policies of the segments are the same as those described in Note (2) to the Consolidated
Financial Statements. No single customer accounted for more than 10% of the Company's total net sales during 2002, 2001
or 2000.

Financial information relating to the Company's operations by geographic area was as follows (000's
omitted):

United
States Europe Consolidated
------ ------ ------------
2002
Net sales......................................... $555,303 $ 241,197 $ 796,500
Identifiable assets............................. 359,737 219,089 578,826
2001
Net sales......................................... $542,722 $ 229,466 $ 772,188
Identifiable assets............................. 395,150 239,200 634,350
2000
Net sales......................................... $569,870 $ 239,627 $ 809,497
Identifiable assets............................. 388,918 248,946 637,864

The following is a summary of revenues from external customers, income (loss) from operations, capital
spending, depreciation and amortization and identifiable assets for each segment as of December 31, 2002, 2001 and 2000
(000's omitted):
2002 2001 2000
---- ---- ----
Revenues from external customers:
Aerosol....................................................... $ 364,133 $ 334,716 $ 357,688
International................................................. 241,197 229,466 239,627
Paint, Plastic, & General Line................................ 119,952 130,412 136,054
Custom & Specialty............................................ 71,218 77,594 76,128
------------- ------------ -------------
Total revenues.......................................... $ 796,500 $ 772,188 $ 809,497
============= ============ =============
Income (loss) from operations:
Aerosol....................................................... $ 59,545 $ 47,299 $ 66,395
International................................................. 742 (267) 12,802
Paint, Plastic, & General Line................................ 11,378 12,544 14,348
Custom & Specialty............................................ 734 (998) 7,559
------------- ------------- -------------
Total Segment Income From Operations.......................... 72,399 58,578 101,104
Corporate and eliminations (a) (b)............................ (32,852) (64,724) (52,951)
Interest Expense.............................................. (55,384) (57,304) (40,468)
-------------- ------------- --------------
Total income (loss) before income taxes................. $ (15,837) $ (63,450) $ 7,685
============== ============= =============
Capital spending:
Aerosol....................................................... $ 6,879 $ 3,514 $ 6,499
International................................................. 11,996 4,556 8,063
Paint, Plastic, & General Line................................ 3,770 6,536 3,650
Custom & Specialty............................................ 3,002 1,043 609
Corporate..................................................... 1,588 3,888 5,683
------------- ------------ -------------
Total capital spending.................................. $ 27,235 $ 19,537 $ 24,504
============= ============ =============
Depreciation and amortization:
Aerosol....................................................... $ 12,014 $ 11,856 $ 10,842
International................................................. 10,182 9,355 9,288
Paint, Plastic, & General Line................................ 5,561 5,462 5,025
Custom & Specialty............................................ 1,942 2,165 2,182
Corporate..................................................... 6,387 5,788 6,333
------------- ------------ -------------
Total depreciation and amortization..................... $ 36,086 $ 34,626 $ 33,670
============= ============ =============
Identifiable assets:
Aerosol....................................................... $ 166,136 $ 168,214 $ 183,150
International................................................. 219,089 239,200 248,946
Paint, Plastic, & General Line................................ 80,566 82,627 91,209
Custom & Specialty............................................ 27,087 45,125 50,017
Corporate..................................................... 85,948 99,184 64,542
------------- ------------ -------------
Total identifiable assets............................... $ 578,826 $ 634,350 $ 637,864
============= ============ =============

(a) Includes special charges and recapitalization costs. Management does not evaluate segment performance including
such charges.

(b) Selling, general and administrative costs are not allocated to the domestic segments.

(17) Subsidiary Guarantor Information

The following presents the condensed consolidating financial data for U.S. Can Corporation (the "Parent
Guarantor"), United States Can Company (the "Issuer"), USC May Verpackungen Holding Inc. (the "Subsidiary Guarantor"),
and the Issuer's European subsidiaries, including May Verpackungen GmbH & Co., KG (the "Non-Guarantor Subsidiaries"), as
of December 31, 2002 and 2001 and for the years ended December 31, 2002, 2001 and 2000. Investments in subsidiaries are
accounted for by the Parent Guarantor, the Issuer and the Subsidiary Guarantor under the equity method for purposes of
the supplemental consolidating presentation. Earnings of subsidiaries are, therefore, reflected in their parent's
investment accounts and earnings. This consolidating information reflects the guarantors and non-guarantors of the 12
3/8% senior subordinated notes due 2010.

The 12 3/8% senior subordinated notes due 2010 are guaranteed on a full, unconditional, unsecured, senior
subordinated, joint and several basis by the Parent Guarantor, the Subsidiary Guarantor and any other domestic restricted
subsidiary of the Issuer. USC May Verpackungen Holding Inc., which is wholly owned by the Issuer, currently is the only
Subsidiary Guarantor. The Parent Guarantor has no assets or operations separate from its investment in the Issuer.

Separate financial statements of the Issuer or the Subsidiary Guarantors have not been presented as
management has determined that such information is not material to the holders of the 12 3/8% senior subordinated notes
due 2010.

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)
CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2002
(000's omitted)

USC Europe/
USC May May
United Verpackungen Verpackungen
U.S. Can States Can Holding GmbH U.S. Can
Corporation Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Eliminations Consolidated
-------------- ------------- --------------- ---------------- --------------- --------------

NET SALES.................................. $ - $ 555,303 $ - $ 241,197 $ - $ 796,500
COST OF SALES.............................. - 483,647 (406) 227,154 - 710,395
-------------- ------------- --------------- ---------------- --------------- --------------
Gross income.......................... - 71,656 406 14,043 - 86,105
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - 24,146 - 13,707 - 37,853
SPECIAL CHARGES............................ - 3,080 - 5,625 - 8,705
-------------- ------------- --------------- ---------------- --------------- --------------
Operating income (loss)............... - 44,430 406 (5,289) - 39,547
INTEREST EXPENSE........................... - 46,156 6,465 2,763 - 55,384
EQUITY EARNINGS (LOSS) FROM
SUBSIDIARY............................... (71,776) (59,871) (19,837) - 151,484 -
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) before income taxes...... (71,776) (61,597) (25,896) (8,052) 151,484 (15,837)
PROVISION FOR INCOME TAXES................. - 2,005 22,197 13,435 - 37,637
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) BEFORE (71,776) (63,602) (48,093) (21,487) 151,484 (53,474)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
AND PREFERRED STOCK
DIVIDENDS................................
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE, NET OF TAX - (8,174) 4,717 (14,845) - (18,302)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME BEFORE PREFERRED STOCK DIVIDENDS (71,776) (71,776) (43,376) (36,332) 151,484 (71,776)
PREFERRED STOCK DIVIDENDS.................. (12,521) - - - - (12,521)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) ATTRIBUTABLE TO $ (84,297) $ (71,776) $ (43,376) $ (36,332) $ 151,484 $ (84,297)
COMMON STOCKHOLDERS......................
============== ============= =============== ================ =============== ==============

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)
CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2001
(000's omitted)

U.S. Can United USC May USC Europe/ Eliminations U.S. Can
May
Verpackungen Verpackungen
States Can Holding GmbH
Corporation Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
-------------- ------------- --------------- ---------------- --------------- --------------

NET SALES.................................. $ - $ 542,722 $ - $ 229,466 $ - $ 772,188
COST OF SALES.............................. - 483,878 - 211,636 - 695,514
-------------- ------------- --------------- ---------------- --------------- --------------
Gross income.......................... - 58,844 - 17,830 - 76,674
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - 28,484 1,423 16,674 - 46,581
SPECIAL CHARGES............................ - 27,063 - 9,176 - 36,239
-------------- ------------- --------------- ---------------- --------------- --------------
Operating income (loss)............... - 3,297 (1,423) (8,020) - (6,146)
INTEREST EXPENSE........................... - 48,136 6,500 2,668 - 57,304
EQUITY EARNINGS (LOSS) FROM
SUBSIDIARY............................... (40,416) (13,010) (1,198) - 54,624 -
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) before income taxes...... (40,416) (57,849) (9,121) (10,688) 54,624 (63,450)
PROVISION FOR INCOME TAXES................. - (17,433) (3,506) (2,095) - (23,034)
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) BEFORE (40,416) (40,416) (5,615) (8,593) 54,624 (40,416)
PREFERRED STOCK DIVIDENDS................
PREFERRED STOCK DIVIDENDS.................. (11,345) - - - - (11,345)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) ATTRIBUTABLE TO $ (51,761) $ (40,416) $ (5,615) $ (8,593) $ 54,624 $ (51,761)
COMMON STOCKHOLDERS......................
============== ============= =============== ================ =============== ==============

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)
CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2000
(000's omitted)

NET SALES.................................. $ - $ 569,870 $ - $ 239,627 $ - $ 809,497
COST OF SALES.............................. - 481,217 - 211,941 - 693,158
-------------- ------------- --------------- ---------------- --------------- --------------
Gross income.......................... - 88,653 - 27,686 - 116,339
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - 29,525 1,478 14,884 - 45,887
SPECIAL CHARGES............................ - 3,413 - - - 3,413
Recapitalization Charges................... 18,886 - - - - 18,886
-------------- ------------- --------------- ---------------- --------------- --------------
Operating income (loss)............... (18,886) 55,715 (1,478) 12,802 - 48,153
INTEREST EXPENSE........................... - 31,261 6,220 2,987 - 40,468
EQUITY EARNINGS (LOSS) FROM
SUBSIDIARY............................... 55 (135) 4,476 - (4,396) -
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) before income taxes...... (18,831) 24,319 (3,222) 9,815 (4,396) 7,685
PROVISION FOR INCOME TAXES................. (7,309) 9,401 (178) 2,430 - 4,344
-------------- ------------- --------------- ---------------- --------------- --------------
Income (loss) from operations before (11,522) 14,918 (3,044) 7,385 (4,396) 3,341
extraordinary item...................
NET LOSS FROM EARLY
EXTINGUISHMENT OF DEBT................... - (14,863) - - - (14,863)
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) BEFORE (11,522) 55 (3,044) 7,385 (4,396) (11,522)
PREFERRED STOCK DIVIDENDS................
PREFERRED STOCK DIVIDENDS.................. (2,601) - - - - (2,601)
-------------- ------------- --------------- ---------------- --------------- --------------
-------------- ------------- --------------- ---------------- --------------- --------------
NET INCOME (LOSS) ATTRIBUTABLE TO $ (14,123) $ 55 $ (3,044) $ 7,385 $ (4,396) $ (14,123)
COMMON STOCKHOLDERS......................
============== ============= =============== ================ =============== ==============

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2002
(000s omitted)

U.S. Can United States USC May USC Europe/ May Eliminations U.S. Can
Verpackungen Verpackungen
Holding GmbH
Corporation Can Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
-------------- --------------- ------------------ ----------------- -------------- ------------------
CURRENT ASSETS:
Cash and cash equivalents $ - $ 5,707 $ - $ 6,083 $ - $ 11,790
Accounts receivable...... - 43,623 - 46,363 - 89,986
Inventories.............. - 57,500 (600) 48,735 - 105,635
Prepaid expenses and
other
assets................. - 11,719 1,977 8,500 - 22,196
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current assets - 118,549 1,377 109,681 - 229,607
NET PROPERTY, PLANT AND
EQUIPMENT................... - 147,588 - 94,086 - 241,674
INTANGIBLE ASSETS............. - 27,384 - - - 27,384
OTHER ASSETS.................. - 66,216 606 13,339 - 80,161
INTERCOMPANY
ADVANCES.................... - 249,649 - - (249,649) -
INVESTMENT IN
SUBSIDIARIES................ - (48,265) 61,360 - (13,095) -
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total assets........ $ - $ 561,121 $ 63,343 $ 217,106 $ (262,744) $ 578,826
============== =============== ================== ================= ============== ==================

CURRENT LIABILITIES
Current maturities of
long-term debt......... $ - $ 11,078 $ - $ 15,075 $ - $ 26,153
Accounts payable......... - 47,901 - 46,636 - 94,537
Other current liabilities - 48,389 31 15,974 - 64,394
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current - 107,368 31 77,685 - 185,084
liabilities...................
TOTAL LONG TERM DEBT.......... 854 503,238 - 19,437 - 523,529
OTHER LONG-TERM
LIABILITIES................. - 48,317 673 31,936 - 80,926
PREFERRED STOCK............... 133,133 - - - - 133,133
INTERCOMPANY LOANS............ 112,057 - 114,863 22,729 (249,649) -
INVESTMENT IN
SUBSIDIARIES................ 97,802 - - - (97,802) -
STOCKHOLDERS' EQUITY.......... (343,846) (97,802) (52,224) 65,319 84,707 (343,846)
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total liabilities $ - $ 561,121 $ 63,343 $ 217,106 $ (262,744) $ 578,826
and
stockholders'
equity........................
============== =============== ================== ================= ============== ==================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2001
(000s omitted)

U.S. Can United States USC May USC Europe/ May Eliminations U.S. Can
Verpackungen Verpackungen
Holding GmbH
Corporation Can Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
-------------- --------------- ------------------ ----------------- -------------- ------------------
CURRENT ASSETS:
Cash and cash equivalents $ - $ 8,249 $ - $ 6,494 $ - $ 14,743
Accounts receivable...... - 51,806 - 43,468 - 95,274
Inventories.............. - 52,625 (600) 48,651 - 100,676
Prepaid expenses and
other
assets................. - 26,518 1,049 10,142 - 37,709
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current assets - 139,198 449 108,755 - 248,402
NET PROPERTY, PLANT AND
EQUIPMENT................... - 152,779 - 86,455 - 239,234
INTANGIBLE ASSETS............. - 40,611 1,544 24,282 - 66,437
OTHER ASSETS.................. - 62,561 - 17,716 - 80,277
INTERCOMPANY
ADVANCES.................... - 239,414 - - (239,414) -
INVESTMENT IN
SUBSIDIARIES................ - 11,044 72,287 - (83,331) -
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total assets........ $ - $ 645,607 $ 74,280 $ 237,208 $ (322,745) $ 634,350
============== =============== ================== ================= ============== ==================

CURRENT LIABILITIES
Current maturities of
long-term debt......... $ - $ 12,801 $ - $ 2,182 $ - $ 14,983
Accounts payable......... - 47,995 - 48,690 - 96,685
Other current liabilities - 51,834 (1,759) 22,362 - 72,437
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total current - 112,630 (1,759) 73,234 - 184,105
liabilities...................
TOTAL LONG TERM DEBT.......... 854 499,339 - 21,600 - 521,793
OTHER LONG-TERM
LIABILITIES................. - 47,239 514 7,210 - 54,963
PREFERRED STOCK............... 120,613 - - - - 120,613
INTERCOMPANY LOANS............ 112,056 - 93,283 34,075 (239,414) -
INVESTMENT IN
SUBSIDIARIES................ 13,601 - - - (13,601) -
STOCKHOLDERS' EQUITY.......... (247,124) (13,601) (17,758) 101,089 (69,730) (247,124)
-------------- --------------- ------------------ ----------------- -------------- ------------------
-------------- --------------- ------------------ ----------------- -------------- ------------------
Total liabilities $ - $ 645,607 $ 74,280 $ 237,208 $ (322,745) $ 634,350
and
stockholders'
equity........................
============== =============== ================== ================= ============== ==================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2002
(000s omitted)

U.S. Can United USC Europe / U.S. Can
USC May May
States Can Verpackungen Verpackungen
Corporation Company Holding (Non-Guarantor Corporation
(Parent) (Issuer) (Subsidiary-GuaraSubsidiaries) Consolidated
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM OPERATING ACTIVITIES.........................$ - $ 19,114 $ (41,410) $ 28,460 $ 6,164
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures....................................... - (15,239) - (11,996) (27,235)
Proceeds on the sale of property........................... - 817 - 4,845 5,662
Investment in Formametal S.A............................... - (133) - - (133)
--------------- ------------- --------------- ----------------
----------------
Net cash used in investing activities.................. - (14,555) - (7,151) (21,706)
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in intercompany advances........................... - (10,195) 41,410 (31,215) -
Net borrowings under the revolving line of credit.......... - 13,600 - - 13,600
Borrowing of long-term debt - - - 11,079 11,079
Payments of long-term debt, including capital lease - -
obligations.................................................. (10,506) (2,183) (12,689)
--------------- ------------- ---------------- --------------- ----------------
Net cash (used in) provided by financing activities.... - (7,101) 41,410 (22,319) 11,990
--------------- ------------- --------------- ----------------
--------------- ------------- ---------------- --------------- ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH...................... - - - 599 599
--------------- ------------- ---------------- --------------- ----------------
INCREASE (DECREASE) IN CASH AND - (2,542) - (411) (2,953)
CASH EQUIVALENTS...........................................
CASH AND CASH EQUIVALENTS, beginning of year................. - 8,249 - 6,494 14,743
--------------- ------------- ---------------- ----------------
--------------- ----------------
CASH AND CASH EQUIVALENTS, end of period.....................$ - $ 5,707 $ - $ 6,083 $ 11,790
=============== ============= ================ =============== ================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2001
(000s omitted)

CASH FLOWS FROM OPERATING ACTIVITIES.........................$ - $ 3,658 $ (10,186) $ (464) $ (6,992)
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures....................................... - (14,981) - (4,556) (19,537)
Acquisition of business, net of cash acquired.............. - (4,198) - - (4,198)
Proceeds on the sale of property........................... - - - 7,208 7,208
Investment in Formametal S.A............................... - (7,891) - - (7,891)
--------------- ------------- --------------- ----------------
----------------
Net cash used in investing activities.................. - (27,070) - 2,652 (24,418)
--------------- ------------- ---------------- --------------- ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in intercompany advances........................... - (10,289) 10,186 103 -
Settlement of shareholder litigation....................... - (2,063) - - (2,063)
Net borrowings under the revolving line of credit.......... - 37,600 - - 37,600
Borrowing of Term C loan................................... 20,000 20,000
Payments of long-term debt, including capital lease - -
obligations.................................................. (9,569) (4,533) (14,102)
Payment of debt financing costs................ - (6,294) - - (6,294)
--------------- ------------- ---------------- --------------- ----------------
Net cash (used in) provided by financing activities.... - 29,385 10,186 (4,430) 35,141
--------------- ------------- --------------- ----------------
--------------- ------------- ---------------- --------------- ----------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH...................... - - - 228 228
--------------- ------------- ---------------- --------------- ----------------
INCREASE (DECREASE) IN CASH AND - 5,973 - (2,014) 3,959
CASH EQUIVALENTS...........................................
CASH AND CASH EQUIVALENTS, beginning of year................. - 2,276 - 8,508 10,784
--------------- ------------- ---------------- ----------------
--------------- ----------------
CASH AND CASH EQUIVALENTS, end of period.....................$ - $ 8,249 $ - $ 6,494 $ 14,743
=============== ============= ================ =============== ================

U.S. CAN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-- (Continued)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2000
(000s omitted)

U.S. Can United USC May USC Europe / U.S. Can
Verpackungen May
States Can Holding Verpackungen
Corporation Company (Subsidiary (Non-Guarantor Corporation
(Parent) (Issuer) Guarantor) Subsidiaries) Consolidated
--------------- -------------- ---------------- ----------------- -----------------

CASH FLOWS FROM OPERATING
ACTIVITIES..................................... $ 18,886 $ 14,231 $ (8,809) $ 4,424 $ 28,732
--------------- -------------- ---------------- ----------------- -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... - (16,371) - (8,133) (24,504)
Proceeds on sale of business................... - 12,088 - - 12,088
Proceeds on the sale of property............... - 8,755 - - 8,755
Investment in Formametal S.A................... - - - (4,914) (4,914)
--------------- -------------- ---------------- ----------------- -----------------
Net cash used in investing activities...... - 4,472 - (13,047) (8,575)
--------------- -------------- ---------------- ----------------- -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Changes in intercompany advances............... 365,168 (392,408) 8,809 18,431 -
Issuance of common stock....................... 53,333 - - - 53,333
Issuance of preferred stock.................... 106,667 - - - 106,667
Retirement of common stock and exercise
of stock options............................. (270,022) - - - (270,022)
Purchase of treasury stock..................... (488) - - - (488)
Issuance of 12 3/8% notes...................... - 175,000 - - 175,000
Repurchase of 10 1/8% notes.................... (254,658) - - - (254,658)
Net borrowings (payments) under the old
revolving
line of credit and changes in cash overdrafts - (56,100) - - (56,100)
Borrowing of Tranche A loan.................... - 80,000 - - 80,000
Borrowing of Tranche B loan.................... - 180,000 - - 180,000
Borrowing of other long-term debt, including
capital lease obligations.................... - 18,500 - 786 19,286
Payments of long-term debt, including
capital lease obligations.................... - (7,377) - (15,151) (22,528)
Payment of debt financing costs................ - (16,137) - - (16,137)
Payment of recapitalization costs.............. (18,886) - - - (18,886)
--------------- -------------- ---------------- ----------------- -----------------
Net cash (used in) provided by
financing activities..................... (18,886) (18,522) 8,809 4,066 (24,533)
--------------- -------------- ---------------- ----------------- -----------------
--------------- -------------- ---------------- ----------------- -----------------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH........................................ - - - (537) (537)
--------------- -------------- ---------------- ----------------- -----------------
INCREASE (DECREASE) IN CASH AND CASH - 181 - (5,094) (4,913)
EQUIVALENTS....................................
CASH AND CASH EQUIVALENTS, beginning
of year........................................ - 2,095 - 13,602 15,697
--------------- -------------- ---------------- -----------------
----------------- -----------------
CASH AND CASH EQUIVALENTS, $ - $ 2,276 $ - $ 8,508 $ 10,784
end of period..................................
=============== ============== ================ ================= =================

(18) Quarterly Financial Data (Unaudited)

The following is a summary of the unaudited interim results of operations for each of the quarters in 2002
and 2001 (000's omitted).

First Quarter Second Quarter Third Quarter Fourth Qtr
----------------- ------------------ ------------------ ----------------
2002 2001 2002 2001 2002 2001 2002 2001
---- ---- ---- ---- ---- ---- ---- ----

Net Sales........... $ 186,038 $ 191,168 $ 203,624 $ 193,329 $ 205,474 $ 204,175 $ 201,364 $ 183,516
Gross Income........ 18,968 24,451 22,893 26,361 19,800 23,730 24,444 2,132
Special Charges(a).. -- -- -- -- 5,071 (284) 3,634 36,523
Income (loss) from
Operations before
Accounting Change (2,382) (1,328) (876) 423 (5,229) (1,426) (44,987)
(38,085)
Net Income (Loss)
Available for Common
Shareholders (b) $ (23,658)$ (4,053) $ (3,957) $ (2,369) $ (8,387) $ (4,288) $ (48,295) $
============= ========== =========== =========== ========== ========== =========== ==
(41,051)
========

(a) See Note (4)

(b) Amount has been restated to reflect the Company's $18.3 million goodwill impairment charge, net of tax,
effective as of January 1, 2002. See Note (15) for further detail.

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

The Company filed a Current Report on Form 8-K on July 26, 2002 reporting that on July 24, 2002, the
Company's board of directors, upon the recommendation of the audit committee, agreed to dismiss Arthur Andersen LLP as
the Company's independent auditors and engaged Deloitte & Touche LLP as the Company's new independent auditors.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth the name, age as of March 15, 2003 and position of each of our directors,
executive officers and other key employees. Each of our directors will hold office until the next annual meeting of
shareholders or until his successor has been elected and qualified. Our officers are elected by our Board of Directors
and serve at the discretion of the Board of Directors.

Name Age Position
---- --- --------
Carl Ferenbach............................ 60 Director, Chairman of the Board
John L. Workman........................... 51 Director, Chief Executive Officer
Thomas A. Scrimo.......................... 54 Executive Vice President and General Manager, Aerosol, Paint and
General Line
Roger B. Farley........................... 59 Senior Vice President, Human Resources
Larry S. Morrision........................ 49 Senior Senior Vice President and General Manager, Plastics,
Lithography and Specialty Products
James J. Poehling......................... 55 Senior Vice President, North American Sales and Channel
Development
Francois J. Vissers....................... 42 Senior Senior Vice President, International and President of
European Operations
Sandra K. Vollman......................... 45 Senior Vice President and Chief Financial Officer
W. Brien Berberich........................ 53 Vice President, Supply Chain Management
Sarah T. Macdonald........................ 38 Vice President, Global Accounts
Emil P. Obradovich........................ 56 Vice President and Chief Technical Officer
Thomas J. Olander......................... 54 Vice President, Human Resources
Sheleen Quish............................. 54 Chief Information Officer and Vice President, Corporate Marketing
Richard K. Lubin.......................... 56 Director
Philip R. Mengel.......................... 58 Director
Francisco A. Soler........................ 57 Director
Louis B. Susman........................... 65 Director

Carl Ferenbach. Mr. Ferenbach became Chairman of the Board in October 2002. Mr. Ferenbach, who was one of our founding
directors in 1983 and served as a member of our Board of Directors until February 2000, was elected as a Director at the
time of the recapitalization. Mr. Ferenbach is also a Managing Director of Berkshire Partners, which he co-founded in
1986. He has been a director of many of Berkshire Partners' manufacturing, transportation and telecommunications
investments, serves as a director of Crown Castle International Corporation and is Chairman of English Welsh & Scottish
Railway.

John L. Workman. Mr. Workman was named Chief Executive Officer in February 2003. Mr. Workman had been serving as the
Company's Chief Operating Officer since October 2002. Prior thereto, Mr. Workman had served as our Executive Vice
President and Chief Financial Officer since August 1998. Prior to his appointment, Mr. Workman served as Executive Vice
President and Chief Restructuring Officer at Montgomery Ward Holding Corporation. Montgomery Ward was one of the nation's
largest privately-held retailers. Mr. Workman joined Montgomery Ward in 1984 as a general auditor and held a variety of
financial positions with Montgomery Ward, including Vice President--Controller, Vice President--Finance and Chief Financial
Officer. Prior to joining Montgomery Ward, Mr. Workman was a partner in Main Hurdman, a CPA firm that subsequently
merged with KPMG.

Thomas A. Scrimo. Mr. Scrimo became Executive Vice President and General Manager for Aerosol, Paint and General Line in
February 2003. Mr. Scrimo had been serving as the Company's Senior Vice President and General Manager of Operations,
Americas since November 2002. Mr. Scrimo served as our Senior Vice President and General Manager, Aerosol Operations and
Business Support since February 2000. From August 1998 to February 2000, Mr. Scrimo served as our Vice President,
Business Support Operations. Prior to joining us, he served as Vice President of Operations for Greenfield
Industries, Inc., an international tool manufacturer, from January 1997 to August 1998.

Roger B. Farley. Mr. Farley, who will be retiring from the Company on April 1, 2003, has served as our Senior Vice
President, Human Resources since August 1998. Prior to joining us, Mr. Farley was Senior Vice President, Human Resources
from July 1997 to July 1998 and Vice President, Human Resources from June 1994 to June 1997 of Greenfield
Industries, Inc., an international tool manufacturer.

Larry S. Morrison. Mr. Morrison became Senior Vice President and General Manager for Plastics, Lithography and Specialty
Products in February 2003. Mr. Morrison had been serving as Vice President of Specialty Products and Litho Services
since June 2002. From February 2000 to June 2002, Mr. Morrison served as Vice President, Operational Excellence. From
1998 to February 2000, Mr. Morrison served as our Vice President and General Manager, Custom & Specialty Products. From
July 1995 to 1998, Mr. Morrison served as our Vice President of Manufacturing of Custom & Specialty Products.

James J. Poehling. Mr. Poehling was named Senior Vice President, North American Sales and Channel Development in
February 2003. Mr. Poehling served as Senior Vice President, North American Sales and Marketing since May 2002. Prior
thereto, Mr. Poehling was Senior Vice President North American Sales and Channel Development since September 2001. From
1990 until joining U.S. Can, Mr. Poehling held senior management positions of Vice President Sales and Marketing and Vice
President and General Manager Indexable Cutting Tools for Greenfield Industries, Inc., an international cutting tool
manufacturer. Prior to working for Greenfield Industries, Inc., Mr. Poehling spent 21 years with General Electric in
various sales and marketing assignments.

Francois Vissers. Mr. Vissers was named Senior Vice President, International and President of European Operations in
February 2003. Mr. Vissers previously served as Vice President Europe and Managing Director May Verpackungen since
September 2002. Prior thereto, Mr. Vissers served as Vice President, Aerosol Division - Europe since May 2001. Before
joining the Company, he held various senior management positions with GE Plastics in Europe, including General Manager
for the European ABS business from 2000 through May 2001, European productivity leader from 1999 through 2000 and global
process improvement leader (1997 through 1999).

Sandra K. Vollman. Ms. Vollman was named Senior Vice President and Chief Financial Officer in February 2003. Ms.
Vollman had been serving as the Company's Primary Financial Officer since October 2002. Since February 2002, Ms Vollman
had served as our Senior Vice President--Finance. She joined the Company in July 1999 as Vice President - Business
Development and was named Vice President - Finance in September 2000. From 1997 to 1999, Ms. Vollman was Vice President
and Corporate Controller for Montgomery Ward and Co.

W. Brien Berberich. Mr. Berberich has served as our Vice President, Supply Chain Management since September 2001. Prior
to joining U.S. Can, Mr. Berberich held various positions with Emerson Electric Company, in St. Louis, Missouri from 1993
through 2001. He was Director, Material and Logistics from 1998 through 2001 and Manager, Materials and Logistics from
1995 through 1998 and Manager of Material Planning from 1993 through 1995.

Sarah T. Macdonald. Ms. Macdonald has been our Vice President, Global Accounts since May 2001. Prior thereto, she
served as Vice President, Marketing, Aerosol and Paint, Plastic & General Line from August 2000 through May 2001 and Vice
President, Marketing, Paint, Plastic & General Line from December 1999 to August 2000. From October 1998 to December of
1999, Ms. Macdonald was the Sales and Marketing Director of the Company's U.K. operations. Before joining the Company,
Ms. Macdonald held a number of different sales and marketing positions with Crown, Cork & Seal and Carnaud Metalbox.

Emil P. Obradovich. Mr. Obradovich has served as our Vice President and Chief Technical Officer since February 2000.
From 1996 to February 2000, Mr. Obradovich served as our Managing Director of Technical Services.

Thomas J. Olander. Mr. Olander became Vice President Human Resources in March 2003. Previously, Mr. Olander held the
position of Vice President Organization & Staffing, Compensation & Benefits for U.S. Can since December 1999. Prior to
joining the company, Mr. Olander held positions as Vice President Human Resources for Draper and Kramer, Inc., a
Chicago-based real estate firm from 1996 through 1999.

Sheleen Quish. Ms. Quish was named Chief Information Officer and Vice President, Corporate Marketing in February 2003.
Ms. Quish had been serving as our Vice President and Chief Information Officer since December 2000. Prior to joining
U.S. Can, Ms. Quish served as Managing Director of Leapnet, an Internet company from June 2000 to December 2000, and as
Senior Vice President of Administration and Systems of Unitrin, an insurance and financial services company, from 1998
through June 2000. From 1996 through 1998, Ms. Quish was Executive Vice President, Corporate Planning and Information
Services of Signature Financial / Marketing Inc., a direct response marketing company.

Richard K. Lubin. Mr. Lubin has served as a Director since the recapitalization. Mr. Lubin is a Managing Director of
Berkshire Partners, which he co-founded in 1986. He has been a director of many of Berkshire Partners' manufacturing,
retailing and transportation investments and currently serves as a director of The Holmes Group, Inc., English Welsh &
Scottish Railway and Fresh Start Bakeries, Inc.

Philip R. Mengel. Mr. Mengel was elected a Director in 2001. Mr. Mengel has been the Chief Executive Officer of English
Welsh & Scottish Railway since January 2000. From 1996 to January 2000 Mr. Mengel was the Chief Executive Officer of
Ibstock plc, an international building products company. Mr. Mengel is also a director of The Economist Newspaper Group.

Francisco A. Soler. Mr. Soler has served as a Director since 1983. Since 1985, Mr. Soler has served as the Chairman of
International Bancorp of Miami, Inc., the holding company for The International Bank of Miami, N.A. Mr. Soler is also
President of Harbour Club Milano Spa and a director of various industrial and commercial companies in the United Kingdom
and El Salvador.

Louis B. Susman. Mr. Susman has served as a Director since 1998. Mr. Susman is a Vice Chairman of the Citigroup Global
Corporate Investment Bank, Chairman of the Citigroup North American Customer Committee, and a Vice Chairman of Investment
Banking and Managing Director of Salomon Smith Barney Inc. Prior to joining Salomon Brothers Inc (one of the predecessors
of Salomon Smith Barney) in June 1989, Mr. Susman was a senior partner at the St. Louis-based law firm of Thompson &
Mitchell. Mr. Susman is a Director of Drury Inns and has previously served on the boards of the St. Louis National
Baseball Club, Inc., Silver Eagle, Inc., Hasco International, PennCorp Financial, Avery, Inc. and other publicly-held
corporations.

ITEM 11. EXECUTIVE COMPENSATION

The following tables set forth information concerning compensation paid to our Chief Executive Officer and
our other four most highly compensated executive officers during fiscal years 2002, 2001 and 2000. Information is also
included for our former Chief Executive Officer, who would have been among the most highly compensated officers but for
his resignation in October 2002.

Summary Compensation Table
Long Term Compensation
----------------------
Annual Compensation Awards Payout
------------------- ------ ------
Securities
Underlying
Other Annual Options/SARs (#)(c) All Other
-------------------
Name and Principal Position Year Salary Bonus Compensation Compensation
---- ------ ----- ------------ ------------

John L. Workman 2002 $424,723 $45,000 $7,215 none $ 24,148(a)
Chief Executive Officer 2001 $412,915 $20,000 $7,215 none $ 46,600(b)
2000 $398,088 $39,000 $7,521 353.669 $1,055,782(d)

Thomas A. Scrimo 2002 $252,677 $35,000 $5,506 none $ 14,478(a)
Executive Vice President and G.M., 2001 $245,754 $12,000 $5,506 none $ 22,016(b)
Aerosol, Paint & Business Support 2000 $225,919 $22,000 $6,685 339.522 $ 360,548(d)

James J. Poehling (f) 2002 $242,292 $80,000 $5,506 none $ 87,461(a)
Senior Vice President, North 2001 $71,282 $35,000 $2,169 50.000 $ 9,751(b)
American Sales and Channel
Development

Francois Vissers (f) 2002 $270,948 $31,209 $5,457 none $
Senior Vice President, International 2001 $240,085 $20,530 $3,291 25.000 -(e)
and President of European Operations $
-(e)

Roger B. Farley (g) 2002 $249,569 $24,500 $6,194 none $ 22,962(a)
Senior Vice President, Human 2001 $244,877 $12,000 $6,194 none $ 35,398(b)
Resources 2000 $234,992 $22,600 $7,521 none $ 771,785(d)

Paul W. Jones (h) 2002 $625,292 $112,100 $6,105 none $ 157,186(a)
Former President and Chief 2001 $653,108 $32,500 $7,215 none $ 103,098(b)
Executive Officer 2000 $614,473 $122,000 $7,521 212.202 $2,351,037(d)

(a) 2002 amounts shown for Messrs. Jones, Workman, Scrimo, Poehling and Farley include contributions or payments for
their benefit to U.S. Can Corporation's Salaried Employee Savings and Retirement Accumulation Plan ("SRAP") and
pursuant to nonqualified retirement plans ($41,660, $24,148, $14,478, $8,423 and $15,327 respectively). Amounts
for Mr. Jones and Mr. Farley include the cost of life insurance in excess of our standard benefit of $3,934 and
$5,635, respectively and payments for personal financial planning of $5,150 and $2,000, respectively. The 2002
amount for Mr. Jones also includes payments made by the Company of $106,442 to Mr. Jones in accordance with his
Severance Agreement. The 2002 amount shown for Mr. Poehling includes reimbursement for relocation expenses
claimed under his Employment Agreement of $79,038.

(b) 2001 amounts shown for Messrs. Jones, Workman, Scrimo, Poehling and Farley include contributions or
payments for their benefit to U.S. Can Corporation's Salaried Employee Savings and Retirement Accumulation Plan
("SRAP") and pursuant to nonqualified retirement plans ($92,995, $46,600, $22,016, $987 and $27,036
respectively). Amounts for Mr. Jones and Mr. Farley include the cost of life insurance in excess of our standard
benefit of $5,803 and $6,362, respectively and payments for personal financial planning of $4,300 and $2,000,
respectively. The amount for Mr. Poehling represents reimbursements for relocation expenses claimed under his
employment agreement of $8,764, respectively.

(c) Options granted in 2000 exclude options for 50.000, 30.000 and 20.000 shares issued to Messrs. Jones, Workman and
Scrimo, respectively, under the plans in effect prior to the recapitalization. All of the foregoing options were
cancelled at the time of the recapitalization, and each holder received a cash payment equal to the product of
(i) the $20.00 price per share paid to shareholders in connection with the recapitalization less the exercise
price of the option and (ii) the number of shares of common stock subject to the option. Options reflected in
this table for 2000 were granted on October 4, 2000 under the U.S. Can Corporation 2000 Equity Incentive Plan in
connection with the recapitalization and were restated for the reverse stock split.

(d) The 2000 amounts include one-time bonuses in connection with the recapitalization of $697,500,
$309,000, $103,400 and $226,100 for Messrs. Jones, Workman, Scrimo and Farley respectively, cash proceeds from
the cancellation of employee stock options in the recapitalization of $1,291,312, $624,713, $208,945 and $470,437
for Messrs. Jones, Workman, Scrimo and Farley respectively, distribution of cash from U.S. Can Corporation's
executive deferred compensation program to the extent not reported as 1999 bonuses, of $124,384, $38,852, $13,462
and $23,712 for Messrs. Jones, Workman, Scrimo and Farley, respectively, contributions or payments for their
benefit to U.S. Can Corporation's Salaried Employee Savings and Retirement Accumulation Plan ("SRAP") of $10,200
for each named executive officer and $214,538, $68,614, $24,541 and $33,201 for Messrs. Jones, Workman, Scrimo
and Farley respectively, pursuant to nonqualified retirement plans. The 2000 amounts shown for Mr. Jones and Mr.
Farley include the cost of life insurance in excess of our standard benefit ($5,803 and $5,635, respectively) and
the imputed value of Mr. Workman's company-provided life insurance benefit of $810. The 2000 amounts shown for
Messrs. Jones, Workman and Farley include payments for personal financial planning of $7,300, $3,593 and $2,500,
respectively.

(e) Mr. Vissers is compensated partially in euros and partially in British pounds. The amounts shown for
Mr. Vissers have been converted to U.S. dollars at the applicable exchange rate in effect as of the calendar
year-end for the year in which payment was made. During 2002 and 2001 the Company did not make any contributions
for the benefit of Mr. Vissers to any type of executive retirement plan or overseas employee benefit trust. All
such contributions are made by Mr. Vissers through salary deductions.

(f) Mr. Poehling joined the Company in September 2001. Mr. Vissers joined the Company in May 2001.

(g) Mr. Farley has announced his retirement effective April 1, 2003.

(h) Mr. Jones' employment terminated on October 24, 2002.

Option Grants

There were no option or stock appreciation right ("SAR") grants to our former or current Chief Executive
Officer or our four most highly compensated employees in 2002.

Aggregated Option/SAR Exercises in 2002 and 2002-End Option/SAR Values

No shares were acquired as a result of option exercises by the named executive officers during 2002. The
numbers shown in the below table are after the reverse stock split on December 20, 2002.

Number of Securities
Underlying Value of Unexercised
Unexercised Options In-The-Money Options
at 2002-Year End (#) at 2002-Year End ($)(a)
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------

John L. Workman.......................................... 28.294/325.375 $0/$0
Thomas A. Scrimo......................................... 90.540/248.983 $0/$0
James J. Poehling........................................ 10.000/50.000 $0/$0
Francois Vissers......................................... 5.000/20.000 $0/$0
Roger B. Farley.......................................... 0.000/0.000 $0/$0
Paul W. Jones............................................ 28.294/56.587 $0/$0
- -----------

(a) There was no established trading market for U.S. Can Corporation's common stock as of December 31, 2002.
Management has determined that the fair market value of the common stock underlying these options did not exceed
$1,000.00 (the exercise price of these options) and, accordingly, none of the options were in-the-money.

Compensation of Directors

Directors Fees

Each outside Director of U.S. Can receives an annual retainer of $30,000 and full Board meeting fees of
$1,500 for meetings attended in person or telephonically. Directors are also reimbursed for reasonable expenses incurred
in the course of their service. There are five regularly scheduled full Board meetings each year and at least one
regularly scheduled board meeting is held each quarter.

Committee Fees

The Board has standing Audit, Compensation and Nominating Committees. Each outside Director serving on a
Committee receives meeting fees of $1,000 for meetings attended in person and $500 for meetings attended telephonically.
Committee members are also reimbursed for reasonable expenses incurred in the course of their service.

Compensation Committee Interlocks and Insider Participation

Mr. Lubin served as Chairman of U.S. Can Corporation's Compensation Committee during 2002. Mr. Lubin and
Mr. Ferenbach are managing directors of Berkshire Partners. Mr. Mengel is Chief Executive Officer of a Berkshire
Partners portfolio company. Upon the completion of the recapitalization, Berkshire Partners received a fee of
$2.0 million. In addition, Berkshire Partners receives a management fee of $750,000 per year.

The second amendment to the Senior Secured Credit Facility includes an additional Tranche C term loan of
$25.0 million. Under certain circumstances, the Company's majority shareholder may be required to cash collateralize and
ultimately repurchase the new term loan facility. The Company borrowed $20.0 million under the Tranche C facility on
December 18, 2001. In consideration for Berkshire's agreement to purchase a participation in the Tranche C term loan,
the Company has agreed to accrue for and pay to Berkshire an annual fee of 2.75% of the amount of the Tranche C term loan
then outstanding, which initially is $550,000. This fee is payable in advance, is non-refundable and may not be paid in
cash (without the requisite senior lenders' consent) so long as the Company's current senior bank debt is outstanding. If
Berkshire were required to purchase a Tranche C term loan participation in the future, the Company would be required to
pay Berkshire the amount of such Tranche C term loan, plus accrued interest, to the extent of Berkshire's participation.
The Company also agreed to reimburse Berkshire's out-of-pocket costs and expenses incurred in connection with the
purchase agreement and the second amendment to the credit agreement.

None of our executive officers serves:
(1) as a member of the compensation committee of any entity that has one or more executive officers serving as
a member of our Compensation Committee;
(2) as a member of the board of directors of any entity that has one or more executive officers serving as a
member of our Compensation Committee; and
(3) as a member of the compensation committee of any entity that has one or more executive
officers serving as a member of our Board of Directors.

Transactions with Management

Executive Severance Plan

Several of our executive officers are eligible to participate in our executive severance plan. The
executive severance plan provides an executive with a severance payment equal to 12 months (18 months for certain
executives) of the executive's base salary in the event the executive is terminated without cause or leaves for good
reason. In the cases of Messrs. Scrimo and Workman, the executive severance plan will not provide a severance benefit if
these executives are entitled to receive a severance benefit under their change in control agreements (described below).

U.S. Can Corporation 2000 Equity Incentive Plan

In connection with the recapitalization, the Board of Directors and stockholders of U.S. Can Corporation
approved the U.S. Can Corporation 2000 Equity Incentive Plan. The Board of Directors administers the plan and may, from
time to time, grant option awards to directors of U.S. Can Corporation, including directors who are not employees of U.S.
Can Corporation, all executive officers of U.S. Can Corporation and its subsidiaries, and other employees, consultants,
and advisers who, in the opinion of the Board, are in a position to make a significant contribution to the success of
U.S. Can and its subsidiaries. The Board of Directors may grant options that are time-vested and options that vest based
on the attainment of performance goals specified by the Board of Directors.

Change in Control Agreements

Mr. Obradovich is a party to a change in control agreement. The agreement with Mr. Obradovich provides
that upon termination by us or constructive termination by Mr. Obradovich within two years of a change in control, he
will be entitled to:

o a severance payment equal to one times the greater of his current annual base salary or the annual base
salary immediately before the change in control;

o a pro-rated bonus based on the target bonus; and

o continuation of health and welfare benefits for one year following termination.

Employment Agreements with Messrs. Scrimo, Workman and Farley

In October of 2002, the Company renewed its existing employment agreements with Messrs. Scrimo, Workman
and Farley, referred to as the executives, for an additional year. Under the terms of these employment agreements,
Messrs. Scrimo, Workman and Farley will be paid an annual base salary of at least $220,000, $390,000 and $226,000
respectively, which have been adjusted to $285,000, $525,000 and $245,000, respectively. Each executive's base salary
and other compensation will be reviewed annually by that executive's supervisor. Each executive also participates in our
management incentive plan with an opportunity to receive a bonus payment equal to 50% of his or her base salary. The
Company also agreed to provide each executive with term life insurance coverage with death benefits at least equal to
twice his or her base salary, an automobile allowance and employee benefits comparable to those provided to our other
senior executives.

In the event of the termination of an executive's employment with us due to his death or permanent
disability, we will pay him or his estate:

(1) an amount equal to one year's base salary reduced by any amounts received from any life or
disability insurance provided by us; and

(2) if the executive is entitled to receive a bonus payment under the management incentive plan, a bonus
payment prorated to reflect any partial year of employment.

In the event an executive terminates his employment for good reason or we terminate his employment without
cause, we will pay him:

(1) his base salary and benefits for the earliest to occur of 18 months, his death or the date that he
breaches the provisions of his employee agreement (relating to non-competition, confidentiality and
inventions); and

(2) if the executive is entitled to receive a bonus payment under the management incentive plan, a bonus
payment prorated to reflect any partial year of employment.

If an executive's employment is terminated for cause or by voluntary resignation, he will receive no
further compensation.

Separation Agreements with Mr. Jones and Mr. Farley

The Company entered into a severance agreement with Mr. Jones on November 26, 2002, who resigned on October
24, 2002 (the "Separation Date"). Under the terms of this severance agreement, we agreed to provide to Mr. Jones
severance benefits, including:

(1) his salary for a period of 18 months after the Separation Date;

(2) an award, if any, to him under our Management Incentive Plan for the performance period in which
the Separation Date occurred, subject to a pro rata reduction for the period following the
Separation Date;

(3) an extension of his ability to exercise vested options beyond the period provided for in our 2000 Equity
Incentive Plan;

(4) an aggregate of $10,000 for reasonable attorneys' fees, costs and expenses;

(5) up to $25,000 for reasonable outplacement services until he obtains other employment;

(6) continuing his participation and that of his eligible dependents in our medical and dental plans for 18
months following the Separation Date, if he was enrolled as of the Separation Date, at a level of
coverage no less favorable than that offered to our other executives; and

(7) waiving our exercise of the call right of any securities held by him on the Separation Date.

Mr. Jones also agreed to standard confidentiality, nonsolicitation, nondisparagement and release provisions.

The separation agreement with Mr. Farley has not been completed. The severance agreement to be provided to
Mr. Farley is expected to be substantially comparable to his Employment Agreement described previously.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Following the recapitalization on October 4, 2000, United States Can had one class of issued and
outstanding common stock, and U.S. Can Corporation owned all of it. On December 20, 2002, U.S. Can Corporation amended
its certificate of incorporation to (i) effect a reverse stock split which, upon filing with the Secretary of State of
the State of Delaware, reclassified and converted each preexisting share of common stock and Series A preferred stock
into 1/1000th of a share of common and preferred stock, respectively, and (ii) a corresponding reduction in the number of
its authorized shares of common stock from 100,000,000 shares to 100,000 shares and in the number of its authorized
shares of preferred stock from 200,000,000 shares to 200,000 shares. The reverse stock split did not affect the relative
percentages of ownership for any shareholders.

The following table sets forth certain information with respect to the ownership of U.S. Can Corporation's
common stock as of March 15, 2003. As of March 15, 2003, U.S. Can Corporation had 53,333.333 shares of issued and
outstanding common stock.

U.S. Can Corporation's preferred stock, which has no voting rights other than those provided by Delaware
law, is owned by Berkshire Partners and its co-investors, Salomon Smith Barney and affiliates of Francisco Soler. See
"Certain Relationships and Related Party Transactions--Preferred Stock."

Notwithstanding the beneficial ownership of common stock presented below, the stockholders agreement
entered into upon consummation of the transactions governs the stockholders' exercise of their voting rights with respect
to the election of directors and other material events. The parties to the stockholders agreement have agreed to vote
their shares to elect the Board of Directors as set forth therein. See "Certain Relationships and Related Party
Transactions - Stockholders Agreement."

The following table describes the beneficial ownership, after giving effect to the reverse stock split, of
each class of issued and outstanding common stock of U.S. Can Corporation by each of our directors and executive
officers, our directors and executive officers as a group and each person who beneficially owns more than 5% of the
outstanding shares of common stock of U.S. Can Corporation as of March 15, 2003. As used in the table, beneficial
ownership has the meaning set forth in Rule 13d-3(d)(1) of the Exchange Act.

Beneficial Owner Number of Shares Percent Ownership
---------------- ---------------- -----------------

Berkshire Partners LLC (1)............................................ 41,229.278 77.30%
Paul W. Jones (2) .................................................... 1,961.628 3.68
John L. Workman (2) .................................................. 1,028.294 1.93
Roger B. Farley....................................................... 533.333 1.00
Thomas A. Scrimo (3).................................................. 303.873 *
James J. Poehling (4)................................................. 10.000 *
Francois Vissers (4).................................................. 5.000 *
Carl Ferenbach (5).................................................... 41,229.278 77.30
Richard K. Lubin (5).................................................. 41,229.278 77.30
Philip R. Mengel...................................................... -- *
Francisco A. Soler (6)................................................ 951.485 1.78
Louis B. Susman (7)................................................... 2,613.332 4.90
All officers and directors as a group (17 persons) (8)................ 46,812.745 87.77

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

* Less than 1%

(1) Includes 25,847.737 shares of common stock held by Berkshire Fund V Limited Partnership; 2,584.771 shares of
common stock held by Berkshire Investors LLC; and 12,796.770 shares of common stock held by Berkshire Fund
V Coinvestment Fund, Limited Partnership. The address of Berkshire Partners LLC is One Boston Place, Suite
3300, Boston, Massachusetts 02108.

(2) Includes 28.294 shares subject to currently exercisable options.

(3) Includes 90.540 shares subject to currently exercisable options.

(4) Number of shares represents currently exercisable options.

(5) Mr. Ferenbach and Mr. Lubin are Managing Directors of Berkshire Partners LLC.

(6) Mr. Soler beneficially owns 951.485 shares of U.S. Can Corporation common stock as a result of his relationship
to (i) Windsor International Corporation, a company of which Mr. Soler is a director and executive officer
and which is the record holder of 424.460 shares, (ii) Atlas World Carriers S.A., a company of which
Mr. Soler is a director and executive officer and which is the record holder of 250.172 shares, (iii) The
World Financial Corporation S.A., a company of which Mr. Soler is a director and executive officer and
which is the record holder of 250.172 shares, and (iv) Scarsdale Company N.V., Inc., a company of which
Mr. Soler is an executive officer and which is the record holder of 26.681 shares.

(7) Mr. Susman is the Vice Chairman of Investment Banking and Managing Director of Salomon Smith Barney Inc.
Salomon Smith Barney owns 2,613.332 shares of common stock.

(8) Includes 271.983 shares subject to currently exercisable options.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Relationship with Berkshire Partners

Mr. Lubin and Mr. Ferenbach are managing directors of Berkshire Partners. Mr. Mengel is Chief Executive
Officer of a Berkshire Partners portfolio company. Upon the completion of the recapitalization, Berkshire Partners
received a fee of $2.0 million. In addition, Berkshire Partners will receive a management fee of $750,000 per year.

Relationship with Salomon Smith Barney

Salomon Smith Barney currently beneficially owns 4.62% of the Company's common stock and provides
investment banking and financial advisory services. Salomon Smith Barney was paid $2.0 million in fees for financial
advisory services provided in connection with the recapitalization. Mr. Susman is Vice Chairman of Investment Banking and
Managing Director of Salomon Smith Barney Inc. The Company did not make any payments to Salomon Smith Barney in 2001 or
2002 and has not agreed to make any payments to it in 2003.

Stockholders Agreement

In connection with the recapitalization, the Company entered into a stockholders agreement with
stockholders which provides for, among other things, certain restrictions and rights related to the transfer, sale or
purchase of common stock and preferred stock. The stockholders agreement has the following provisions:

o Prior to the third anniversary of the closing of the recapitalization, no stockholder may transfer
shares of U.S. Can Corporation capital stock (other than limited exceptions including permitted
transfers to an affiliate or in connection with estate planning).

o After the third anniversary of the closing of the recapitalization, a stockholder may only transfer
shares of U.S. Can Corporation capital stock (other than limited exceptions including permitted
transfers to an affiliate or in connection with estate planning) after the transferring stockholder
first gives U.S. Can Corporation, and then the other stockholders on a pro rata basis, a right of first
refusal to purchase all or a portion of the shares at the same price.

o U.S. Can Corporation has the right to purchase U.S. Can Corporation equity securities held by a
management stockholder (as defined) in the event the management stockholder's employment with U.S. Can
Corporation is terminated for any reason.

o If a management stockholder's employment with U.S. Can Corporation is terminated by virtue of death,
disability or retirement in accordance with U.S. Can Corporation policy, the management stockholder will
have the right to require U.S. Can Corporation to purchase his or her equity securities of U.S. Can
Corporation.

o If, at any time, specified stockholders holding 75% of the outstanding common stock equivalents (as
defined) (i.e., Berkshire Partners, its affiliates and another stockholder) elect to consummate the sale
of 50% or more of the common stock of U.S. Can Corporation to an unaffiliated third party, the remaining
stockholders will be obligated to consent to and take all actions necessary to complete the proposed
sale of the same proportion of their stock on the same terms.

o After the third anniversary of the closing of the recapitalization, a stockholder (or a group of
stockholders together) owning more than 4% of the outstanding shares of U.S. Can Corporation capital
stock may only (other than in connection with estate planning transfers) transfer the shares to an
unaffiliated third party, so long as other stockholders are given the option to participate in the
proposed transfer on the same terms and conditions on a pro rata basis (except in connection with
transfers permitted by the stockholders agreement).

o The stockholders have agreed to elect directors of U.S. Can Corporation such that the Board of Directors
will consist of two designees of Berkshire and its affiliates so long as the Berkshire stockholders
maintain ownership of at least 25% of the U.S. Can Corporation common stock, two designees of management
stockholders, Louis Susman, Ricardo Poma, Francisco Soler (or another designee of the Scarsdale Group if
Francisco Soler and Ricardo Poma both no longer serve on the Board of Directors so long as the Scarsdale
Group owns at least 5% of the U.S. Can Corporation common stock) and up to two other independent
directors acceptable to the other directors. Mr. Poma resigned from membership on the Board in April
2001 and chose not to designate a replacement.

o Following an initial public offering of U.S. Can Corporation common stock, specified stockholders will
have either one or two demand registration rights. The stockholders will be entitled to "piggy-back"
registration rights on all registrations of U.S. Can Corporation common stock by U.S. Can Corporation or
any other stockholder, subject to customary underwriter cutback.

o So long as U.S. Can Corporation is not paying default interest under any of its financing arrangements,
an 80% vote of the common stockholders will be required to approve and adopt mergers, acquisitions,
charter or bylaw amendments, extraordinary borrowings, dividends, stock issuances and other specified
matters. An 80% vote will be required at all times for a financial restructuring that treats the
management stockholders differently and adversely from the rest of the common stockholders.

o Stockholders have pre-emptive rights to subscribe for newly issued shares on a pro rata basis, subject
to certain exclusions.

o Most of the restrictions contained in the stockholders agreements terminate upon consummation of a
qualified initial public offering of common stock by U.S. Can Corporation or specified changes in
control of U.S. Can Corporation.

Preferred Stock

As part of the recapitilization transactions, U.S. Can Corporation issued and sold in a private placement
shares of preferred stock having an aggregate value of $106.7 million to Berkshire Partners and its affiliates and the
rollover stockholders. The principal terms of the preferred stock are summarized below. This summary, however, is not
complete and is qualified in its entirety by reference to the provisions of U.S. Can Corporation's certificate of
incorporation, as in effect at the time of the closing of the transactions.

Dividends. Dividends accrue on the preferred stock at an annual rate of 10%, are cumulative from the date
of issuance and compounded quarterly, on March 31, June 30, September 30 and December 31 of each year and are payable in
cash when and as declared by our Board of Directors, so long as sufficient cash is available to make the dividend payment
and has been obtained in a manner permitted under the terms of our senior secured credit facility and the indenture.

Voting Rights. Holders of the preferred stock have no voting rights, except as otherwise required by law.

Ranking. The preferred stock has a liquidation preference equal to the purchase price per share, plus all
accrued and unpaid dividends. The preferred stock ranks senior to all classes of U.S. Can Corporation common stock and is
not convertible into common stock.

Redemption. U.S. Can Corporation is required to redeem the preferred stock, at the option of the holders,
at a price equal to its liquidation preference, plus accrued and unpaid dividends, upon the occurrence of any of the
following events and so long as sufficient cash is available at U.S. Can or available from dividend payments permitted
under the terms of the indenture:

o the bankruptcy of either U.S. Can Corporation or United States Can Company;

o the acceleration of debt under any major loan agreement to which U.S. Can Corporation or any of its
subsidiaries is a party; or

o public offerings of shares of capital stock of U.S. Can Corporation.

No holder of preferred stock, however, may require U.S. Can Corporation to redeem the preferred stock if
doing so would cause the bankruptcy of U.S. Can Corporation or United States Can Company or a breach of the indenture. In
addition, if proceeds from public offerings of U.S. Can Corporation's stock are insufficient to redeem all of the shares
of the preferred stock that the holders wish to be redeemed, U.S. Can Corporation is required to redeem the remaining
shares at a price equal to its liquidation preference, 366 days after the tenth anniversary of the closing of the
transactions or the payment in full of the notes and the debt outstanding under the senior secured credit facility,
whichever is earlier.

U.S. Can Corporation's certificate of incorporation expressly states that any redemption rights of holders
of preferred stock shall be subordinate or otherwise subject to prior rights of the lenders under our senior secured
credit facility and the holders of the exchange notes.

Upon a change of control of U.S. Can Corporation (as defined in the indenture), the shares of preferred
stock may be redeemed at the option of either the holders or U.S. Can Corporation, subject to the terms of our senior
secured credit facility and after the holders of the notes have been made and completed the requisite offer to repurchase
following a change of control under the indenture.

The senior secured credit facility prohibits our ability to redeem the preferred stock, and the indenture
restricts U.S. Can Corporation's ability to obtain funds that may be necessary to redeem the preferred stock.

PART IV

ITEM 14. CONTROLS AND PROCEDURES

Within the 90-day period prior to the date of this report, under the supervision and with the participation of the Chief Executive
Officer and the Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934. Based on and as
of the time of such evaluation, the Company's management, including the Chief Executive Officer and the Chief Financial
Officer, concluded that the Company's disclosure controls and procedures are effective and timely in alerting them to
material information relating to the Company required to be included in the Company's reports filed or submitted under
the Exchange Act. There have been no significant changes in the Company's internal controls or in other factors which
could significantly affect internal controls subsequent to the time of such evaluation.

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

(a) (1) Financial Statements commence on p. 22.

(2) Financial Statement Schedules

All schedules are omitted as they are inapplicable or not required, or the required information
is included in the financial statements or in the notes thereto.

(3) Exhibits: A list of Exhibits is included in the Exhibit Index, which appears following the
signature pages and is incorporated by reference herein.

(i) Reports on Form 8-K

The Company filed a Current Report on Form 8-K on October 25, 2002 reporting that on October 24, 2002, Paul Jones
had resigned as Chief Executive Officer and Chairman of the Board of the Company and from all other management and board
positions with the Company and its subsidiaries.

(j) See Item 15 (a) (3) above.

(d) See Item 15 (a) (2) above.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March
26, 2003.

U.S. CAN CORPORATION

By: /s/ Sandra K. Vollman
-------------------------------------------------

Sandra K. Vollman
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

Each of the undersigned officers and directors of U.S. Can Corporation hereby severally constitutes and
appoints and each of them singly, his or her true and lawful attorneys with full power to them, and each of them singly,
to execute on behalf of the undersigned in the capacities indicated below any and all amendments to this Report on Form
10-K.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report and power of attorney
have been signed below by the following persons in the capacities and on the date indicated.

Signature Title
- --------- -----

/s/ Carl Ferenbach Director and Chairman of the Board
- -----------------------------------------------------
Carl Ferenbach

/s/ John L. Workman Director and Chief Executive Officer
- -----------------------------------------------------
John L. Workman

/s/ Sandra K. Vollman Senior Vice President and Chief Financial Officer
- -----------------------------------------------------
Sandra K. Vollman

/s/ Richard K. Lubin Director
- -----------------------------------------------------
Richard K. Lubin

/s/ Philip R. Mengel Director
- -----------------------------------------------------
Philip R. Mengel

/s/ Francisco A. Soler Director
- -----------------------------------------------------
Francisco A. Soler

/s/ Louis B. Susman Director
- -----------------------------------------------------
Louis B. Susman

Dated: March 26, 2003

CERTIFICATIONS

Chief Executive Officer Certification
-------------------------------------

I, John L. Workman, certify that:

1. I have reviewed this annual report on Form 10-K of U.S. Can Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual
report, fairly present in all material respects the financials condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
days prior to the filing date of this annual report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to
the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent function);

a) all significant deficiencies in the design or operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this annual report whether or not there
were significant changes in internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.

Date: March 26, 2003

/s/ John L. Workman
-------------------

John L. Workman
Chief Executive Officer

Chief Financial Officer Certification
-------------------------------------

I, Sandra K. Vollman, certify that:

1. I have reviewed this annual report on Form 10-K of U.S. Can Corporation;

a. designed such disclosure controls and procedures to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90
days prior to the filing date of this annual report (the "Evaluation Date"); and

c. presented in this annual report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;

a. all significant deficiencies in the design or operation of internal controls which could adversely affect
the registrant's ability to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in internal controls; and

b. any fraud, whether or not material, that involves management or other employees who have significant role
in the registrant's internal controls; and

Date: March 26, 2003

/s/ Sandra K. Vollman
----------------------

Sandra K. Vollman
Senior Vice President and
Chief Financial Officer

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are either filed with this registration statement or incorporated by reference:

Exhibit
Number ................Exhibit Description

2.1 Agreement and Plan of Merger (the "Merger Agreement ") dated as of June 1, 2000 between U.S. Can Corporation and
Pac Packaging Acquisition Corporation (Exhibit 2 to the current report on Form 8-K, filed on June 15, 2000).(1)
2.2 First Amendment to Merger Agreement dated as of June 28, 2000 (Exhibit 2.2 to the current report on Form 8-K,
filed on June 30, 2000).(1)
2.3 Second Amendment to Merger Agreement dated as of August 22, 2000 (Exhibit 2.3 to the current report on Form 8-K,
filed on August 31, 2000).(1)
3.1 Restated Certificate of Incorporation of U.S. Can Corporation (Exhibit 3.1 to the registration statement on Form
(No. 333-53276), declared effective on March 5, 2001).(1)
3.2 Amended and Restated By-laws of U.S. Can Corporation (Exhibit 3.2 to the registration statement on Form (No.
333-53276), declared effective on March 5, 2001).(1)
3.3 Restated Certificate of Incorporation of United States Can Company (Exhibit 3.3 to the registration statement on
Form (No. 333-53276), declared effective on March 5, 2001).(1)
3.4 Amended and Restated By-laws of United States Can Company (Exhibit 3.4 to the registration statement on Form (No.
333-53276), declared effective on March 5, 2001).(1)
3.5 Certificate of Incorporation of USC May Verpackungen Holding Inc (Exhibit 3.5 to the registration statement on
Form (No. 333-53276), declared effective on March 5, 2001).(1)
3.6 By-Laws of USC May Verpackungen Holding Inc (Exhibit 3.6 to the registration statement on Form (No. 333-53276),
declared effective on March 5, 2001).(1)
4.1 Indenture dated as of October 4, 2000 between the Company and Bank One Trust Company, N.A., as Trustee (Exhibit
4.1 to the current report on Form 8-K, filed on October 18, 2000).(1)
10.1 Credit Agreement dated as of October 4, 2000, among United States Can Company, the guarantors and Bank of
America, N.A. and the other financial institutions listed therein, as Lenders (Exhibit 10.1 to the current report
on Form 8-K, filed on October 18, 2000).(1)
10.2 Pledge Agreement dated as of October 4, 2000 among U.S. Can Corporation, United States Can Company, each of the
domestic subsidiaries of United States Can Company and Bank of America, N.A (Exhibit 10.2 to the registration
statement on Form (No. 333-53276), declared effective on March 5, 2001).(1)
10.3 Security Agreement dated as of October 4, 2000 among U.S. Can Corporation, United States Can Company, each of the
domestic subsidiaries of United States Can Company and Bank of America, N.A (Exhibit 10.3 to the registration
statement on Form (No. 333-53276), declared effective on March 5, 2001).(1)
10.4 Sublease Agreement, dated 2/10/89, relating to the Commerce, CA property (Exhibit 10.10 to the quarterly report
on Form 10-Q for the quarter ended April 6, 1997, filed on May 20, 1997).(1)
10.5 Lease Agreement, dated 1/1/76, as amended, relating to the Weirton, WV property (Exhibit 10.11 to the quarterly
report on Form 10-Q, for the quarter ended April 6, 1997, filed on May 20, 1997).(1)
10.6 First Amendment to Credit Agreement dated as of April 1, 2001 (Exhibit 10.27 to the quarterly report on Form 10-Q
for the period ended April 1, 2001, filed on May 15, 2001). (1)
10.7 Amendment No. 4 to the Lease Agreement, dated 1/1/76, as amended, relating to the Weirton, WV property (Exhibit
10.7 to the registration statement on Form (No. 333-53276), declared effective on March 5, 2001).(1)
10.8 Lease relating to Dragon Parc Industrial Estate, Merthyr Tydfil, Wales, dated November 27, 1996 (Exhibit 10.24 to
the annual report on Form 10-K for the fiscal year ended December 31, 1996, filed on March 26, 1997).(1)
10.9 Nonqualified Supplemental 401(k) Plan (Exhibit 10.33 to the annual report on Form 10-K for the fiscal year ended
December 31, 1995, filed on March 26, 1996).(1)
10.10 Nonqualified Benefit Replacement Plan (Exhibit 10.34 to the annual report on Form 10-K for the fiscal year ended
December 31, 1995, filed on March 26, 1996).(1)

Exhibit
Number ................Exhibit Description

10.11 Lease Agreement between May Grundbesitz GmbH & Co. KG and May Verpackungen GmbH & Co. KG (Exhibit 10.1 to the
quarterly report on Form 10-Q for the quarter ended July 2, 2000, filed on August 15, 2000).(1)
10.12 Amendment No. 3 to the Lease Agreement, dated 1/1/76, as amended, relating to the Weirton, WV property (Exhibit
10.55 to the annual report on Form 10-K for the fiscal year ended December 31, 1995, filed on March 26, 1996).(1)
10.13 Employment Agreement dated October 4, 2000 by and among John L. Workman, United States Can Company and U.S. Can
Corporation (Exhibit 10.14 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.14 Lease Agreement dated June 15, 2000, related to Atlanta, GA plastics facility (Exhibit 10.15 to the annual report
on Form 10-K for the fiscal year ended December 31, 2001, filed on March 22, 2002). (1)
10.15 Employment Agreement dated October 4, 2000 by and among Roger B. Farley, United States Can Company and U.S. Can
Corporation (Exhibit 10.16 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.16 Employment Agreement dated October 4, 2000 by and among Thomas A. Scrimo, United States Can Company and U.S. Can
Corporation (Exhibit 10.18 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.17 U.S. Can Corporation Executive Deferred Compensation Plan (Exhibit 10.30 to the annual report on Form 10-K for
the fiscal year ended December 31, 1998, filed on March 31, 1999).(1)*
10.18 Amendment No. 1 to the U.S. Can Corporation Executive Deferred Compensation Plan, dated as of October 4, 2000
(Exhibit 10.23 to the registration statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.19 U.S. Can Corporation 2000 Equity Incentive Plan (Exhibit 10.24 to the registration statement on Form S-4 (No.
333-53276), filed January 5,2001).(1)*
10.20 United States Can Company Executive Severance Plan, dated as of October 13, 1999 (Exhibit 10.34 to the annual
report on Form 10-K for the fiscal year ended December 31, 1999, filed on March 30, 2000).(1)*
10.21 U.S. Can Corporation Stockholders Agreement, dated as of October 4, 2000 (Exhibit 10.26 to the registration
statement on Form S-4 (No. 333-53276), filed January 5,2001).(1)*
10.22 Berkshire Fee Letter dated December 18, 2001 (Exhibit 10.27 to the annual report on Form 10-K for the fiscal
year ended December 31, 2001, filed on March 22, 2002). (1)
10.23 Second Amendment to Credit Agreement dated December 18, 2001 (Exhibit 10.28 to the annual report on Form 10-K
for the fiscal year ended December 31, 2001, filed on March 22, 2002). (1)
10.24 Sale Agreement of the Scotts Road, Southall, United Kingdom factory premises dated December 18, 2001 (Exhibit
10.29 to the annual report on Form 10-K for the fiscal year ended December 31, 2001, filed on March 22, 2002). (1)
10.25 Compromise Agreement and General Release between the Company and David R. Ford dated June 30, 2002. (Exhibit
10(a) to the quarterly report on Form 10-Q, for the quarter ended September 29, 2002, filed on November 12,
2002).(1)*
10.26 Compromise Agreement and General Release between the Company an J. Michael Kirk dated October 16, 2002
(Exhibit 10(b) to the quarterly report on Form 10-Q, for the quarter ended September 29, 2002, filed on November
12, 2002).(1)*
10.27 Separation Agreement and General Release between the Company and Paul W. Jones dated November 26, 2002
(filed herewith).*
10.28 Amendment No. 1 to the U.S. Can Corporation Nonqualified Supplemental 401(k), dated as of February 25,
2002 (filed herewith).
99.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. 1350
99.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. 1350

21 Subsidiaries of the Registrant (filed herewith).
22 Power of Attorney (included as part of the Signature Pages).
................
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(1) Incorporated by reference.
(b) Other financial statement schedules are omitted because the information called for is not required or is shown either
in the financial statements or the accompanying notes.
* Indicates a management contract or compensatory plan or arrangement.