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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission

File Number

Registrant and State of Incorporation Address and Telephone Number

I.R.S. Employer

Identification No.

333-172764-01

BWAY Intermediate Company. Inc.

(Delaware)

8607 Roberts Drive, Suite 250

Atlanta, Georgia 30350-2237

(770) 645-4800

27-2594571

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

As of August 14, 2013, there were 1,000 shares of common stock, $0.01 par value, outstanding, all of which were owned by BWAY Parent Company, Inc.

BWAY INTERMEDIATE COMPANY, INC.

Quarterly Report on Form 10-Q

For the quarterly period ended June 30, 2013

TABLE OF CONTENTS


PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income	4
	Unaudited Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Managements Discussion and Analysis of Financial Condition and Result of Operations	30

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39

Item 4.	Controls and Procedures	39

PART II

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 6.	Exhibits	41

PART 1

FINANCIAL INFORMATION

Item 1. Financial Statements

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

BWAY Intermediate Company, Inc. and Subsidiaries


($ in millions, except per share data)	June 30, 2013			December 31, 2012 (Revised)
Assets
Current assets
Cash and cash equivalents	$	8.2		$	2.2
Accounts receivable, net of allowance for doubtful accounts of $0.9 at June 30, 2013 and $0.7 at December 31, 2012		186.0			102.3
Inventories		136.0			125.5
Other current assets		80.9			63.5

Total current assets		411.1			293.5

Property, plant and equipment, net		350.3			246.3
Goodwill		596.2			501.6
Other intangible assets, net		694.9			650.1
Deferred debt issuance costs		25.9			19.7
Other assets		6.4			4.1

Total assets	$	2,084.8		$	1,715.3


Liabilities and Shareholder’s Equity
Current liabilities
Accounts payable	$	99.9		$	72.8
Other current liabilities		59.6			41.8
Current portion of long-term debt		7.3			4.7

Total current liabilities		166.8			119.3

Long-term debt		972.7			693.7
Deferred tax liabilities		340.8			284.4
Other liabilities		46.0			44.0

Total liabilities		1,526.3			1,141.4


Commitments and contingencies (Note 15)

Shareholder’s equity
Common stock, $0.01 par value, authorized 1,000 shares; issued and outstanding 1,000 shares at June 30, 2013 and December 31, 2012		—			—
Additional paid-in capital		568.8			578.1
Accumulated deficit		(9.3	)		(5.3	)
Accumulated other comprehensive (loss) income		(1.0	)		1.1


Total shareholder’s equity		558.5			573.9


Total liabilities and shareholder’s equity	$	2,084.8		$	1,715.3

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

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE (LOSS) INCOME

BWAY Intermediate Company, Inc. and Subsidiaries (and Predecessor)


	Successor						Predecessor
($ in millions)	Three Months Ended June 30, 2013			Six Months Ended June 30, 2013			Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Net Sales	$	392.5		$	746.5		$	329.7		$	639.4

Costs and expenses
Cost of products sold (excluding depreciation and amortization)		320.6			618.1			274.9			536.2
Depreciation and amortization		36.0			69.8			21.7			43.4
Selling and administrative		12.4			21.5			6.6			12.8
Restructuring		5.5			7.1			0.1			1.0
Interest		15.2			29.0			11.9			24.4
Business acquisition costs		0.4			5.1			0.2			0.2
Management fee		1.2			2.5			—			—
Gain on disposition of equipment		(0.2	)		(0.2	)		(0.1	)		(9.9	)
Other (income) expense		(0.7	)		(0.9	)		0.8			(0.3	)

Total costs and expenses		390.4			752.0			316.1			607.8


Income (loss) before income taxes		2.1			(5.5	)		13.6			31.6
Provision for (benefit from) for income taxes		1.8			(1.5	)		4.7			10.8


Net income (loss)	$	0.3		$	(4.0	)	$	8.9		$	20.8


Comprehensive (loss) income	$	(1.0	)	$	(6.1	)	$	9.3		$	20.8

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

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

BWAY Intermediate Company, Inc. and Subsidiaries (and Predecessor)


	Successor			Predecessor
($ in millions)	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Cash Flows from Operating Activities
Net (loss) income	$	(4.0	)	$	20.8
Adjustments to reconcile net (loss) income to net provided by operating activities:
Depreciation		31.1			20.8
Amortization of other intangibles		38.7			22.6
Amortization of debt issuance costs		2.8			2.1
Amortization of debt (premium) discount, net		(1.4	)		0.3
Non-cash charge related to increased inventory value		0.8			—
Net gain on disposition of equipment		(0.2	)		(9.9	)
Unrealized foreign currency gain		—			0.2
Deferred income taxes		—			(0.2	)
Share-based compensation expense		—			0.8
Other		(0.3	)		(0.2	)
Change in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable		(59.9	)		(42.9	)
Inventories		18.7			6.8
Accounts payable		16.7			38.3
Other assets		(3.3	)		(0.5	)
Accrued and other liabilities		9.7			0.8
Income taxes, net		(2.5	)		7.3

Net cash provided by operating activities		46.9			67.1


Cash Flows from Investing Activities
Capital expenditures		(31.7	)		(15.6	)
Cash paid for acquisitions, net of cash acquired		(266.2	)		—
Net proceeds from disposition of equipment		0.2			12.4
Other		—			(0.3	)

Net cash used in investing activities		(297.7	)		(3.5	)


Cash Flows from Financing Activities
Proceeds from issuance of secured debt		261.0			—
Repayments of secured debt		(3.7	)		(37.0	)
Proceeds from revolving credit facilities borrowings		161.0			16.5
Repayments of revolving credit facilities borrowings		(135.3	)		(34.0	)
Principal repayments under capital lease obligations		(0.5	)		(0.5	)
Payment of debt issuance costs		(9.1	)		—
Dividend to Parent		(17.1	)		—

Net cash provided by (used in) financing activities		256.3			(55.0	)


Effect of exchange rate changes on cash and cash equivalents		0.5			—


Net increase in cash and cash equivalents		6.0			8.6
Cash and cash equivalents, beginning of period		2.2			4.7

Cash and cash equivalents, end of period	$	8.2		$	13.3

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

NOTES TO UNAUDITED CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

BWAY Intermediate Company, Inc. and Subsidiaries (and Predecessor)

1.	General

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of BWAY Intermediate Company, Inc. (“BWAY Intermediate”) and its subsidiaries, each 100% owned, including BWAY Holding Company (“BWAY Holding”). All intercompany accounts and transactions have been eliminated in consolidation. Unless the context specifies otherwise, references to “the Company,” “we,” “us,” or “our,” relate to BWAY Intermediate and its subsidiaries on a consolidated basis.

BWAY Intermediate is a 100% owned subsidiary of BWAY Parent Company, Inc. (“BWAY Parent”). Effective November 5, 2012, BWAY Parent was acquired by certain private equity investment vehicles sponsored by Platinum Equity, LLC (“Platinum”) and certain members of management. See Note 2, “Acquisition of BWAY Parent by Platinum” for a discussion of the “Platinum Merger.”

BWAY Intermediate continued as the same legal entity following the Platinum Merger. However, due to the change in control of BWAY Parent, the assets and liabilities of the Company were recorded at their estimated fair value as of the acquisition date. The accompanying unaudited condensed consolidated financial statements are presented as “Predecessor” or “Successor” to indicate whether they relate to the period preceding the Platinum Merger (through November 5, 2012 excluding the effects of the merger) or the period succeeding the Platinum Merger, respectively.

The unaudited condensed consolidated financial statements and the notes thereto should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2012 (the “Annual Report”) and the unaudited financial statements included in our transition report on Form 10-Q for the period ended December 31, 2012 (the “Transition Report”).

The condensed consolidated balance sheet data as of December 31, 2012 included herein was derived from the unaudited condensed consolidated financial statements included in the Transition Report, but such condensed data does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for audited financial statements.

Management believes that the unaudited condensed consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations, comprehensive (loss) income, and cash flows for the periods presented. Certain information and footnote disclosures, including critical and significant accounting policies, normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Results of operations, comprehensive (loss) income, and cash flows for interim periods presented in the unaudited condensed consolidated financial statements are not necessarily indicative of results of operations, comprehensive (loss) income, and cash flows for the full fiscal year.

Effective February 8, 2013, we changed our fiscal year end from September 30 to December 31. The accompanying unaudited condensed consolidated financial statements cover the predecessor period from January 1, 2012 to June 30, 2012 and the successor period from January 1, 2013 to June 30, 2013. Our 2013 fiscal year will cover the period from January 1, 2013 to December 31, 2013.

Business and Segment Information

BWAY Parent, BWAY Intermediate and BWAY Holding are holding companies that do not have independent operations. Our operating subsidiary, BWAY Corporation (“BWAY”), and its subsidiaries manufacture and distribute metal and rigid plastic containers primarily to manufacturers of industrial and consumer products for use as packaging. BWAY is a 100% owned subsidiary of BWAY Holding.

We have operations in the United States, Puerto Rico and Canada, and we sell primarily to customers located in these geographic markets. We report our operations in two business segments: metal packaging and plastic packaging. See Note 16, “Business Segments.”

Recently Adopted Accounting Standards

In February 2013, amendments to the existing accounting guidance were issued requiring the company to present, either on the face of the financial statements or in the notes, the effect of significant amounts reclassified and based on the source in their entirety and from each component of accumulated other comprehensive income into net income during the reporting period. For amounts not required to be reclassified in their entirety, the company is required to cross-reference to other disclosures that provide additional details about those reclassifications. The new guidance was effective for us on a prospective basis as of January 1, 2013 and did not have a material effect on our consolidated financial statements.

Related Party Transactions

Corporate Advisory Services Agreement

BWAY Parent is party to a Corporate Advisory Services Agreement with Platinum Equity Advisors, LLC (“PE Advisors”), an affiliate of Platinum. Under the agreement, PE Advisors will provide BWAY Intermediate and its subsidiaries with a variety of consulting and other services for an annual management fee and the reimbursement of out-of-pocket expenses. In March 2013, the Company paid PE Advisors $5.0 million for their 2013 annual management fee.

Transaction and Financing Fees

In January 2013, the Company paid PE Advisors $5.0 million for transaction advisory services in connection with the Ropak Acquisition (as defined and discussed in Note 3, “Recent Acquisitions”). In May 2013, the company paid PE Advisors $5.0 million for financing advisory services in connection with the completion of a private placement offering of $285.0 million aggregate principal amount of 9.00%/9.75% senior PIK toggle notes due 2017 for one of our parent companies. These PIK toggle notes are not secured by our assets, and we are not a guarantor of the notes. This private placement offering is discussed and defined in Note 6, “Long-Term Debt”.

Federal Income Taxes

For the Predecessor periods, BWAY Intermediate and its domestic subsidiaries are included in the consolidated federal income tax returns of BWAY Parent. For the Successor periods, BWAY Intermediate and its domestic subsidiaries are included in the consolidated federal income tax returns of BOE Holding (as defined below), BWAY Parent’s indirect parent company. The companies file state tax returns on a consolidated, combined or separate basis depending on applicable tax laws.

For the six months ended June 30, 2013, we increased shareholder’s equity by $7.8 million related to non-cash contributions from BWAY Parent in the form of income tax deductions utilized to reduce our taxable income. For the six months ended June 30, 2012, we increased shareholder’s equity by $2.1 million related to non-cash contributions from BWAY Parent in the form of income tax deductions utilized to reduce our taxable income.

Property, Plant and Equipment

As discussed in Note 2, we have made adjustments to the preliminary fair value estimates of property, plant and equipment acquired in the Platinum Merger. These adjustments consisted of reductions to both the fair values and useful lives of substantially all items of property, plant and equipment, with related adjustments to depreciation expense in previously reported periods. See Note 2 for additional discussion.

2.	Acquisition of BWAY Parent by Platinum

Effective November 5, 2012, pursuant to an Agreement and Plan of Merger dated as of October 2, 2012, (the “Merger Agreement”) BOE Merger Corporation (“BOE Merger”) merged with and into BWAY Parent, with the latter surviving (the “Platinum Merger”). The merger resulted in the acquisition of BWAY Parent from investment entities affiliated with Madison Dearborn Partners, LLC, a private equity investment firm based in Chicago, Illinois (“MDP”), and other shareholders.

As a result of the merger, BWAY Parent is a wholly-owned subsidiary of BOE Intermediate Holding Corporation (“BOE Intermediate”), a holding company and itself a wholly owned subsidiary of BOE Holding Corporation (“BOE Holding”). BOE Holding is owned by Platinum and certain members of management. BOE Holding and BOE Merger were formed solely to complete the Platinum Merger.

BOE Merger was determined to be the acquirer company for accounting purposes and therefore, the Platinum Merger was accounted for using the acquisition method of accounting in accordance with the accounting guidance for business combinations. Accordingly, the purchase price of the Platinum Merger has been allocated to our assets and liabilities based upon their estimated fair values at the acquisition date. Periods before November 6, 2012 reflect the financial position, results of operations and changes in financial position of the company before the Platinum Merger (the predecessor periods) and periods after November 5, 2012 reflect the financial position, results of operations, comprehensive income (loss), and changes in financial position of the company after the Platinum Merger (the successor periods). For accounting purposes, the purchase price allocation was applied on November 6, 2012.

BWAY Parent and its subsidiaries were acquired for $1,012.4 million, which represents merger consideration of $394.3 million, seller expenses of $25.9 million and the repayment of historical debt of $592.2 million, inclusive of accrued interest and repayment premiums. In addition, BWAY Holding’s outstanding senior notes due 2018 with an outstanding aggregate principal amount of $205.0 million were assumed (the “2018 senior notes”). The purchase price was funded through the net proceeds of a $470.0 million term loan ($467.7 million, net of original issue discount (“OID”)), the issuance of $335.0 million of senior PIK toggle notes by BWAY Parent (successor) and a cash equity contribution of $267.4 million.

In connection with the Platinum Merger, the following transactions occurred:

•

Platinum, together with certain other shareholders, capitalized BOE Intermediate (through BOE Holding) with an aggregate equity contribution of $267.4 million, net of a $1.8 million working capital adjustment from the seller;

•

BWAY Parent issued $335.0 million aggregate principal amount of 9.50%/10.25% Senior PIK Toggle Notes due 2017 (the “2017 PIK Notes”);

•

BWAY Holding entered into senior secured credit facilities (the “new senior secured credit facilities”) consisting of (a) a senior secured asset-based revolving credit facility with commitments of up to $150.0 million (the “new ABL facility”), which was undrawn on the closing date of the Platinum Merger and (b) a senior secured term loan facility of $470.0 million (the “new term loan facility”);

•

on October 12, 2012, BWAY Holding entered into a supplemental indenture to the indenture governing the 2018 senior notes to amend certain provisions (including amending the definition of “Change of Control”) to provide that the Platinum Merger would not constitute a Change of Control;

•

immediately prior to the effective time of the Platinum Merger, the amendments to the indenture governing the 2018 senior notes became operative;

•

on October 16, 2012, BWAY Parent (predecessor) launched a tender offer and consent solicitation to purchase for cash any and all of BWAY Parent’s outstanding PIK Notes due 2015 (the “2015 PIK Notes”);

•

at closing, $185.0 million of the 2015 PIK Notes were tendered for $195.4 million, including a tender premium and consent payment;

•

the Company redeemed $0.7 million of outstanding 2015 PIK Notes not tendered at closing;

•

at closing, $394.6 million of outstanding indebtedness under predecessor’s senior secured credit facility was repaid and all liens there under were released; and

•

the merger of BOE Merger with and into BWAY Parent, with BWAY Parent as the surviving corporation, became effective.

For a discussion of debt instruments used to fund the Platinum Merger, see Note 6, “Long-Term Debt.”

Merger Transaction Costs

In the period ended November 5, 2012, BWAY Intermediate recognized merger transaction costs of $10.9 million, which included a $10.0 million bonus to certain members of management related to the sale of BWAY Parent and $0.4 million of employer payroll taxes related to the bonus and to compensation resulting from the settlement of share options, and BWAY Parent recognized merger transaction costs of $25.9 million, inclusive of BWAY Intermediate’s $10.9 million. In the successor period ended December 31, 2012, BWAY Parent recognized merger transaction costs of $16.0 million.

Purchase Price Allocation

The Platinum Merger is accounted for as a business combination using the acquisition method of accounting. As a result, the financial statements reflect a new basis of accounting based on our estimate of the fair value of net assets acquired as of the acquisition date. See “Business Combinations” under Note 2, “Summary of Significant Accounting Polices” of the Notes to Consolidated Financial Statements included in the Annual Report.

These condensed consolidated financial statements reflect our preliminary purchase price allocation based upon our initial estimates of fair value. Our purchase price allocation, including the allocation of fair value by segment, is still under review by management and is subject to adjustment during the measurement period. However, certain third party valuation information that would enable management to make a final estimate of the fair value of certain assets, primarily related to property, plant and equipment and other intangible assets, has been finalized.

We utilized our knowledge of our business and contractual relationships and took into consideration information provided by independent third-party specialist in our valuation of certain tangible and intangible assets acquired and liabilities assumed. The specialists did not act as experts, and management has assumed full responsibility for determining the fair value of the assets acquired and liabilities assumed in the purchase price allocation.

The following table summarizes the purchase price and preliminary allocation of the purchase price based on our determination of the fair value for the net assets acquired in the Platinum Merger:


	Acquisition of Bway Parent
($ in millions)
Purchase Price
Merger consideration	$	394.3
Seller expense		25.9
Debt repaid at closing		592.2

Total purchase price	$	1,012.4


Purchase price allocation
Cash and cash equivalents	$	12.7
Accounts receivable		125.7
Inventories		127.8
Other current assets		44.5
Property, plant and equipment		246.7
Other intangible assets:
Customer relationships		537.8
Trade names		122.8
Other assets		4.2
Unfavorable lease intangible liabilities		(2.6	)
Current liabilities		(148.0	)
Other liabilities		(42.6	)
Deferred taxes, net		(290.6	)
Fair value of $205.0 million senior notes assumed		(227.6	)

Net assets acquired at fair value		510.8
Goodwill		501.6

	$	1,012.4

Cash and cash equivalents, accounts receivable, other current assets and current liabilities were stated at their historical carrying values, which approximate their fair value given the short-term nature of these assets and liabilities. Inventories were recorded at fair value, based on computations which considered many factors, including the estimated selling price of the inventory, the cost to dispose of the inventory, as well as the replacement cost of the inventory, where applicable.

The Company has allocated $122.8 million to trade names that have been determined to have indefinite lives. Management considered numerous factors in determining to account for these assets as indefinite-lived intangible assets, including the current market position of the names as well as their recognition in the industry. Indefinite-lived intangible assets are not amortized, but are instead tested for impairment at least annually (more frequently if certain conditions are present).

Goodwill resulting from the Platinum Merger consists largely of value associated with the Company’s ability to generate future “free cash flow” and not otherwise associated with the other identified tangible or intangible assets. The goodwill recognized is not deductible for U.S. income tax purposes. The estimated useful life of the acquired customer relationships is 21 years.

The Company is still finalizing the fair value of assets acquired and liabilities assumed, primarily the allocation of fair value by segment; however, the receipt of certain third party valuation information has enabled management to refine its estimates of the fair value of intangible assets and property, plant and equipment, their useful lives and related amortization and depreciation methods. As a result, the fair value of such assets and resulting amortization and depreciation expense for previously reported periods has been revised and will be reported as a revision in subsequent filings with the Securities and Exchange Commission. Depreciation and amortization expense recorded in the transition period from November 6, 2012 to December 31, 2012 and the interim period from January 1, 2013 to March 31, 2013 were preliminary estimates determined in a manner consistent with similar transactions prior to the Platinum Merger. The table below shows the amounts previously reported and the revised amounts for all adjustments including, but not limited to, the items discussed above.


*Balance Sheet*	As Orginally Reported				As Adjusted			Change

Inventory
As of March 31, 2013		$	145.6			$	145.0		$	(0.6	)

Other current assets
As of March 31, 2013		$	75.8			$	75.5		$	(0.3	)

Property, plant and equipment, net
As of December 31, 2012		$	278.6			$	246.3		$	(32.3	)
As of March 31, 2013		$	382.9			$	348.8		$	(34.1	)

Other intangible assets, net
As of December 31, 2012		$	635.1			$	650.1		$	15.0
As of March 31, 2013		$	708.4			$	714.8		$	6.4

Goodwill
As of December 31, 2012		$	491.0			$	501.6		$	10.6
As of March 31, 2013		$	585.1			$	596.2		$	11.1

Deferred tax liabilities
As of December 31, 2012		$	290.6			$	284.4		$	(6.2	)
As of March 31, 2013		$	348.0			$	341.4		$	(6.6	)

Accumulated other comprehensive income (loss)
As of December 31, 2012		$	0.5			$	1.1		$	0.6
As of March 31, 2013		$	(0.3	)		$	0.3		$	0.6

Other liabilities
As of December 31, 2012		$	43.3			$	44.0		$	0.7
As of March 31, 2013		$	44.0			$	44.4		$	0.4


*Statement of Operations*	As Originally Reported				As Adjusted				Change

Depreciation expense
Transition period November 6, 2012 through December 31, 2012		$	6.3			$	7.1			$	0.8
Quarter ended March 31, 2013		$	12.9			$	14.8			$	1.9

Amortization expense
Transition period November 6, 2012 through December 31, 2012		$	9.4			$	10.4			$	1.0
Quarter ended March 31, 2013		$	10.7			$	19.0			$	8.3

Income tax (benefit) expense
Transition period November 6, 2012 through December 31, 2012		$	(14.2	)		$	(15.1	)		$	(0.9	)
Quarter ended March 31, 2013		$	—			$	(3.4	)		$	(3.4	)

Net income (loss)
Transition period November 6, 2012 through December 31, 2012		$	(4.4	)		$	(5.3	)		$	(0.9	)
Quarter ended March 31, 2013		$	2.6			$	(4.2	)		$	(6.8	)

Comprehensive income (loss)
Transition period November 6, 2012 through December 31, 2012		$	(3.9	)		$	(4.8	)		$	(0.9	)
Quarter ended March 31, 2013		$	1.8			$	(5.0	)		$	(6.8	)

3.	Recent Acquisitions

Financial information related to the following acquisition is included in these condensed consolidated financial statements from the applicable acquisition date. See “Business Combinations” under Note 2, “Summary of Significant Accounting Policies” of Notes to Consolidated Financial Statements included in the Annual Report.

Ropak

On January 18, 2013, BWAY consummated the acquisition of certain subsidiaries of LINPAC (as defined below) that comprised LINPAC’s Ropak Packaging division (“Ropak”) pursuant to a definitive stock purchase agreement dated November 30, 2012 with LINPAC Finance Limited and LINPAC Group Limited, each a private limited company organized under the laws of England and Wales, (collectively, “LINPAC”), (the “Ropak Acquisition”). The purchase price for Ropak was $269.0 million in cash (subject to certain customary adjustments at and after closing). Ropak is a North American producer of rigid, plastic shipping containers serving the consumer goods, food processing, construction, dairy, petroleum and other industries. The Ropak Acquisition enhances the capabilities and scale of our plastic packaging segment.

In order to finance the Ropak Acquisition, we entered into an incremental term loan commitment agreement to borrow an additional $261.0 million of term loans under the 2012 Term Loan and increased the size of the ABL Facility by $50.0 million. BWAY used the net proceeds from the additional Term Loan borrowings and borrowed $20.0 million of the ABL Facility to finance in part the consideration paid in connection with the Ropak Acquisition and to pay fees and expenses related to the acquisition and the associated financings. The 2012 Term Loan and the ABL Facility are defined in Note 6, “Long-Term Debt.”

We have recorded the acquired net assets at fair value in accordance with applicable accounting guidance. We have allocated the purchase price based on our preliminary estimates of fair value. Certain third party valuation information that would enable management to make a final estimate of the fair value of certain assets, primarily related to property, plant and equipment and other intangible assets, is preliminary and subject to revision.

The following table summarizes our preliminary purchase price allocation for Ropak:


($ in millions)	Acquisition of Ropak
Preliminary purchase price	$	269.0


Cash and cash equivalents		2.8
Accounts receivable		24.4
Inventories		30.7
Other current assets		4.8
Property, plant and equipment		105.3
Other intangible assets:
Customer relationships		76.8
Trade names		7.3
Other assets		2.1
Current liabilities		(22.0	)
Other liabilities		(3.1	)
Deferred taxes, net		(54.7	)

Net assets acquired at fair value		174.4
Goodwill		94.6

	$	269.0

We have allocated the Ropak goodwill and intangible assets to the plastic packaging segment. Goodwill related to this acquisition consists largely of synergies and economies of scale expected from the integration of the acquired business into our existing operations. For U.S. income tax purposes, the acquisition is being treated as a stock purchase and, as such, goodwill recognized is not deductible for U.S. income tax purposes. We have estimated the useful life of trade names and customer relationships at 6 years and 19 years, respectively. See Note 8, “Goodwill and Other Intangible Assets.”

The amounts of net sales and net income of Ropak since the acquisition date included in the condensed consolidated statements of operations and comprehensive (loss) income for the three and six months ended June 30, 2013 were approximately $85.4 million and $147.2 million, of net sales respectively, and $5.1 million and $7.1 million, of net income, respectively.

Supplemental Pro Forma Information

The following unaudited pro forma financial information presents a summary of the Company’s consolidated net sales and net income for the three and six months ended June 30, 2013 and June 30, 2012, respectively, as if the Platinum Merger and the Ropak Acquisition had occurred as of January 1, 2012.


	Successor				Predecessor
($ in millions)	Three Months Ended June 30, 2013		Six Months Ended June 30, 2013		Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Net sales	$	392.5	$	761.1	$	415.7	$	805.3
Net income	$	2.4	$	—	$	5.9	$	5.7

The unaudited pro forma financial information presented above has been prepared for comparative purposes only and includes certain adjustments to actual financial results, such as imputed interest cost, and estimated additional depreciation and amortization expense as a result of property, plant and equipment and intangible assets acquired. Also, as discussed above, Predecessor Company results for the six months ended June 30, 2012 have been adjusted to include non-recurring transaction costs of approximately $4.9 million, related to the Ropak Acquisition. The pro forma financial information does not purport to be indicative of the results of operations that would have been achieved had the Platinum Merger and the Ropak Acquisition taken place on the date indicated or the results of operations that may result in the future.

4.	Inventories


	June 30, 2013		December 31, 2012
($ in millions)
Raw materials	$	37.3	$	36.9
Work in process		36.0		38.9
Finished goods		62.7		49.7

Total inventories	$	136.0	$	125.5

5.	Other Current Assets and Liabilities


	June 30, 2013		December 31, 2012
($ in millions)
Other current assets
Income taxes receivable	$	27.3	$	17.0
Deferred tax assets		36.8		34.3
Other		16.8		12.2

Total other current assets	$	80.9	$	63.5


Other current liabilities
Accrued salaries and wages	$	16.9	$	9.7
Accrued interest		3.8		2.6
Accrued rebates		7.6		7.5
Self-insurance		13.2		11.5
Other		18.1		10.5

Total other current liabilities	$	59.6	$	41.8

6.	Long-Term Debt

The weighted-average interest rate on outstanding variable rate term loan borrowings at both June 30, 2013 and December 31, 2012 was 4.5%. The current portion of long-term debt represents required repayments with due dates occurring in the twelve months subsequent to the balance sheet date.

During the six months ended June 30, 2013, we made repayments of $3.7 million on the 2012 Term Loan (as defined below). In January 2013, we borrowed an additional $261.0 million on the 2012 Term Loan related to the Ropak Acquisition, as further discussed below.

Notwithstanding the new debt instruments discussed below, see Note 7, “Long-Term Debt,” of Notes to Consolidated Financial Statements included in the Annual Report for additional information regarding the terms of our long-term debt, including covenant limitations, events of default and dividend restrictions.

Outstanding Long-Term Debt


	June 30, 2013			December 31, 2012
($ in millions)
2012 Term loan facilities, net of discount of $2.0 million and $2.3 million, at June 30, 2013 and December 31, 2012, respectively	$	725.3		$	467.7
$205.0 million 10% senior notes due June 2018, including a premium of $20.4 and $22.1, at June 30, 2013 and December 31, 2012, respectively		225.4			227.1
Revolving credit facility borrowings		29.3			3.6

Total long-term debt		980.0			698.4
Less: current portion of long-term debt		(7.3	)		(4.7	)

Long-term debt, net of current maturities	$	972.7		$	693.7


($ in millions)
Year ending December 31:
2013 (remainder)	$	3.6
2014		7.3
2015		7.3
2016		7.3
2017		731.1
Thereafter		205.0

Total future scheduled maturities of long-term debt	$	961.6

Senior Notes Due 2018

In June 2010, BWAY Holding issued $205.0 million aggregate principal amount of 10% senior notes due 2018 (the “2018 Notes”). Interest on the 2018 Notes is payable semi-annually in arrears on June 15 and December 15 through maturity. The 2018 Notes mature June 15, 2018. On October 12, 2012, BWAY Holding entered into a supplemental indenture to amend certain provisions of the indenture governing the 2018 Notes (including amending the definition of “Change of Control”) to provide that the Platinum Merger would not constitute a Change of Control. The amendments became operative immediately prior to the effective time of the Platinum Merger.

The 2018 Notes were assumed in the Platinum Merger, and we recorded them at fair value in the purchase price allocation, which included a $22.5 million premium over the $205.0 million par value. The premium is being amortized on the interest rate method over the remaining term of the notes. Unamortized OID and debt issuance costs on the 2018 Notes as of November 5, 2012 had no fair value and were eliminated in the purchase price allocation.

As of June 30, 2013, BWAY Holding was in compliance with applicable covenants related to the 2018 Notes.

Senior Secured Credit Facilities

In connection with the Platinum Merger, we entered into (i) a senior secured term loan facility in an aggregate principal amount of $470.0 million (the “2012 Term Loan”), pursuant to a term loan credit agreement, dated as of November 5, 2012, by and among BWAY Holding, as lead borrower, BWAY Intermediate, BWAY Corporation and North America Packaging Corporation, as subsidiary borrowers, the lenders party thereto from time to time, and (ii) a $150.0 million senior secured asset-based revolving credit facility, pursuant to a credit agreement, dated as of November 5, 2012, by and among BWAY Holding, as lead borrower, certain domestic subsidiaries signatories thereto, as subsidiary borrowers, BWAY Intermediate, the lenders party thereto from time to time (the “ABL Facility” and together, with the 2012 Term Loan, the “2012 Senior Secured Credit Facilities”). The net proceeds from the 2012 Term Loan were used to finance in part the consideration paid in the Platinum Merger, to pay off certain predecessor indebtedness in connection with the Platinum Merger and to pay fees and expenses related to the Platinum Merger and the associated financings. The 2012 Term Loan will mature on August 6, 2017 and the ABL Facility will mature on May 6, 2017.

The 2012 Term Loan amortizes in equal quarterly installments in an amount equal to 1.00% per annum of the original principal amount thereof, with the remaining balance due at final maturity. Interest is payable on the 2012 Senior Secured Credit Facilities at a rate equal to the LIBO rate or the base rate, plus an applicable margin.

As of June 30, 2013, there were outstanding standby letters of credit of $9.0 million and outstanding ABL Facility borrowings of $29.3 million which reduced available ABL Facility borrowings to $166.9 million. As of June 30, 2013, the weighted average interest rate on outstanding ABL borrowings was 3.0%.

We are required to test BWAY Intermediate’s fixed charge ratio (as defined in the credit agreement) when availability under the ABL Facility is less than the greater of 10% of the commitments under the new ABL facility and $14.0 million. For the period ended June 30, 2013, our availability under the ABL Facility did not require us to test the fixed charge ratio.

As of June 30, 2013, BWAY Intermediate was in compliance with applicable financial covenants contained in the Credit Agreement.

Debt Issuance Costs

During the six months ended June 30 2013, we incurred debt issuance costs of $9.1 million related to the additional term loan and ABL Facility borrowings as a result of the Ropak Acquisition. We are amortizing debt issuance costs utilizing the effective yield method. As of June 30, 2013 and December 31, 2012, unamortized debt issuance costs on long-term debt were $25.9 million and $19.7 million, respectively.

Parent Company Debt

On November 5, 2012, BWAY Parent issued the 2017 PIK Notes ($335.0 million aggregate principal amount of 9.50%/10.25% Senior PIK Toggle Notes due 2017). Interest on the notes is payable each May 1 and November 1 through maturity on November 1, 2017. We are not a party to the indenture nor have we guaranteed the notes. As such, we have not included the debt in our consolidated financial statements. However, subject to limitations in our debt agreements regarding payments to our immediate parent, BWAY Parent will require us to dividend funds so that BWAY Parent may pay cash interest on the 2017 PIK Notes. The first interest payment of $15.6 million was paid May 1, 2013 and subsequent semi-annual cash interest payments of $15.9 million will be payable semi-annually to November 1, 2017. If we are limited in our ability to fund cash interest payments on the 2017 PIK Notes, then such interest payments will be paid-in-kind through the issuance of additional notes (“PIK Interest”).

As discussed in Note 2, BWAY Parent became a wholly-owned subsidiary of BOE Intermediate (a wholly-owned subsidiary of BOE Holding) upon completion of the Platinum Merger.

On May 13, 2013, BOE Intermediate issued $285.0 million aggregate principal amount of 9.00%/9.75% of Senior PIK toggle notes due 2017 (the “BOE PIK Notes”). We are not a party to the indenture governing the BOE PIK Notes, and we are not a guarantor of the BOE PIK Notes. Consequently, we have not included the debt in our consolidated financial statements. Unless BOE Intermediate makes an election to pay interest in cash, which is due semi-annually on May 1 and November 1, interest will be paid in-kind through the issuance of additional notes (“PIK Interest”). The proceeds of the offering, net of certain expenses related to the offering paid by BOE Intermediate, were paid to BOE Intermediate’s direct parent, BOE Holding, who used these proceeds to pay a special dividend to its shareholders and extinguished $25.0 million of outstanding promissory notes with its shareholders due November 4, 2015.

7.	Fair Value of Financial Instruments

For a description on how we estimated fair value, see “Fair Value Measures” under Note 2, “Summary of Significant Accounting Policies” of notes to the Consolidated Financial Statements included in the annual report.

Financial instruments include cash and cash equivalents, accounts receivable and payable, deferred compensation plan assets (see Note 10) and debt instruments. Due to their short-term maturities, we believe the fair values of cash and cash equivalents, if any, accounts receivable and accounts payable, are equal to their carrying value.

The carrying amount and estimated fair value of deferred compensation plan assets as of June 30, 2013 was $1.3 million. We did not have deferred compensation plan assets in the same period in 2012 (see Note 10). We estimated fair value for the deferred compensation plan assets based on quoted market prices, which we have categorized within Level 2 of the GAAP fair value hierarchy.

The carrying amount and estimated fair value of long-term debt was $980.0 million and $983.0 million, respectively, as of June 30, 2013 and $698.4 million and $702.3 million, respectively, as of December 31, 2012. We estimated fair value for other debt instruments based on quoted market prices in the secondary credit market, which we have categorized within Level 2 of the GAAP fair value hierarchy.

8.	Goodwill and Other Intangible Assets

Goodwill


	Metal Packaging		Plastic Packaging		Total
($ in millions)
Balance, December 31, 2012 (Revised)	$	465.8	$	35.8	$	501.6
Adjustments		—		94.6		94.6

Balance, June 30, 2013	$	465.8	$	130.4	$	596.2

Other Intangible Assets


	Weighted- Average Useful Life (in years)		Gross Carrying Amount		Accumulated Amortization			Total
($ in millions)
June 30, 2013
Finite-lived intangible assets
Customer relationships		21	$	614.6	$	(49.3	)	$	565.3
Trade names		6		7.3		(0.5	)		6.8
Indefinite-lived intangible assets
Trade names		n/a		122.8		—			122.8

Total other intangible assets			$	744.7	$	(49.8	)	$	694.9


December 31, 2012
Finite-lived intangible assets
Customer relationships		21	$	537.8	$	(10.5	)	$	527.3
Indefinite-lived intangible assets
Trade names		n/a		122.8		—			122.8

Total other intangible assets			$	660.6	$	(10.5	)	$	650.1

Our expected future amortization expense related to finite-lived intangible assets:


($ in millions)	Future Amortization

Year ending December 31:

2013 (remainder)	$	38.0
2014		67.0
2015		57.4
2016		50.2
2017		45.6
Thereafter		313.9

Total	$	572.1

9.	Income Taxes

The effective tax rate for the three and six month periods ending June 30, 2013, was 85.7% and 27.3%, respectively, as compared to 34.6% and 34.2% for the three and six months ended June 30, 2012, respectively. The effective rate for the three and six months ended June 30, 2013 differed from the statutory rate due to a foreign loss for which no tax benefit could be taken and estimated benefits from R&D credits. The rate for the three and six month periods ended June 30, 2012 were lower than the statutory rates as a result of the domestic production deduction.

Deferred tax liabilities increased $56.3 million from December 31, 2012 to $340.8 million as of June 30, 2013. The increase is primarily related to the preliminary purchase price allocation for the Ropak Acquisition.

10.

Employee Benefit Obligations

Employee Benefit Obligation Liabilities

Employee benefit obligations as of the dates indicated were:


	June 30, 2013		December 31, 2012 (Revised)
($ in millions)
Employee benefit obligation liabilities
Defined benefit pension plans	$	11.6	$	13.0
Retiree medical and other postretirement benefits		7.8		7.8
Deferred compensation		7.0		6.7

Total employee benefit obligation liabilities	$	26.4	$	27.5


Employee benefit obligation liabilities by financial statement line item
Other current liabilities	$	1.2	$	1.2
Other liabilities		25.2		26.3

Total employee benefit obligation liabilities	$	26.4	$	27.5

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost for the periods indicated were:


	Successor						Predecessor
($ in millions)	Three Months Ended June 30, 2013			Six Months Ended June 30, 2013			Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Defined benefit pension plans
Interest cost	$	0.4		$	0.7		$	0.3		$	0.7
Expected return on plan assets		(0.4	)		(0.8	)		(0.4	)		(0.7	)
Amortization of actuarial costs		—			—			0.1			0.1

	$	—		$	(0.1	)	$	—		$	0.1


Other benefits
Interest cost	$	0.1		$	0.1		$	0.1		$	0.2

Total net periodic benefit cost	$	0.1		$	—		$	0.1		$	0.3

Multiemployer Pension Liabilities

At both June 30, 2013 and December 31, 2012, we had accrued pension withdrawal liabilities of $4.2 million related to multiemployer pension plans that covered certain union employees at our former Franklin Park, Illinois facility, which we closed in 2008.

Deferred Compensation Plan

Ropak maintains a nonqualified, unsecured, defined contribution Deferred Compensation Plan (“DCP”) for certain highly-compensated individuals. As of June 30, 2013, the underlying plan assets set aside for the DCP and DCP liabilities was $1.3 million. The DCP assets set aside for the plan were primarily comprised of mutual funds and are included in other assets and the DCP liabilities are included in other liabilities in the consolidated balance sheets. Benefit payments under the DCP are determined by the participants, in accordance with the with the Internal Revenue Code (“IRC”) Section 409A.

11.

Restructuring

In January 2013, we announced the planned closure of certain facilities in our plastic packaging segment in connection with the Ropak Acquisition. The cessation of operations at these facilities was substantially completed as of June 30, 2013. During the three and six months ended June 30, 2013, we expensed $5.5 million and $7.1 million, respectively, primarily related to severance and benefits for terminated employees, and for facility holding and closure costs in connection with the closure of these facilities.

For a summary of our other on-going restructuring initiatives, see Note 16, “Restructuring,” of Notes to Consolidated Financial Statements included in the Annual Report.

Restructuring liabilities by reportable segment


($ in millions)	Metal Packaging Segment			Plastic Packaging Segment			Corporate Unallocated			Total
Balance, December 31, 2012	$	4.7		$	0.1		$	—		$	4.8
Restructuring expense		0.2			5.9			1.0			7.1
Expenditures net		(0.4	)		(1.3	)		(0.6	)		(2.3	)

Balance June 30, 2013	$	4.5		$	4.7		$	0.4		$	9.6

Restructuring liabilities by major type of cost


($ in millions)	Severance and Benefits			Facility Closure			Pension Withdrawal Liability			Total
Balance, December 31, 2012	$	—		$	0.5		$	4.3		$	4.8
Restructuring expense		4.3			2.8			—			7.1
Expenditures		(1.8	)		(0.4	)		(0.1	)		(2.3	)

Balance June 30, 2013	$	2.5		$	2.9		$	4.2		$	9.6

Restructuring liabilities by balance sheet line item


($ in millions)	June 30, 2013		December 31, 2012
Current liabilities	$	4.4	$	0.7
Other liabilities		5.2		4.1

	$	9.6	$	4.8

12.

Shareholder’s equity

Statements of shareholder’s equity


($ in millions, except share data)	Shares		Common Stock		Additional Paid in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balance, December 31, 2012 (Revised)		1,000	$	—	$	578.1		$	(5.3	)	$	1.1		$	573.9
Non-cash contributions by BWAY Parent		—		—		7.8			—			—			7.8
Net loss		—		—		—			(4.0	)		—			(4.0	)
Other comprehensive loss		—		—		—			—			(2.1	)		(2.1	)
Dividend paid to Parent		—		—		(17.1	)		—			—			(17.1	)

Balance, June 30, 2013		1,000	$	—	$	568.8		$	(9.3	)	$	(1.0	)	$	558.5

Dividend Restrictions

Our ability to pay dividends to BWAY Parent is limited by certain restrictive covenants in our debt agreements.

Accumulated Other Comprehensive (Loss) Income Information

The components of accumulated other comprehensive (loss) income as of the dates indicated and the change during the period were:


($ in millions)	Pension and other Postretirement Items (net of tax)		Cumulative Foreign Currency Translation Adjustments			Total Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive (loss) income
Balance, December 31, 2012 (Revised)	$	0.6	$	0.5		$	1.1
Change		—		(2.1	)		(2.1	)

Balance, June 30, 2013	$	0.6	$	(1.6	)	$	(1.0	)

13.

Share-Based Compensation

Prior to the Platinum Merger, certain members of management were participants in a share-based compensation plan, which we describe in Note 11, “Share-Based Compensation,” of Notes to Consolidated Financial Statements included in the Annual Report. There were no grants under the plan from October 1, 2012 until the plan was terminated effective November 5, 2012.

The following table summarizes share-based compensation expense by financial statement line item for the three and six months ended June 30, 2012. There was no share-based compensation expense for the three or six month periods ending June 30, 2013.


	Predecessor
($ in millions)	Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Share-based compensation expense
Cost of products sold (excluding depreciation and amortization)	$	0.1	$	0.2
Selling and administrative expense		0.3		0.6

Total share-based compensation expense	$	0.4	$	0.8

Share-based compensation expense is included in corporate undistributed expenses in the business segment disclosure in Note 16, “Business Segments.”

Participation Plan

In March 2013, BWAY Parent adopted the 2013 Participation Plan (as amended and restated, the “Participation Plan”). The purpose of the Participation Plan is to provide incentive compensation to key employees by granting performance units. The value of the performance units is related to the appreciation in the value of BWAY Parent from and after the date of grant and the performance units vest over a period specified in the applicable award agreement, typically 43 months. The Participation Plan may be altered, amended or terminated by BWAY Parent at any time. All performance units will terminate upon termination of the Participation Plan or expiration on February 28, 2018. Participants in the Participation Plan may be entitled to receive compensation for their vested units if certain performance-based “qualifying events” occur during the participant’s employment with BWAY Parent or its subsidiaries or during a short period following the participant’s death.

There are two “qualifying events” defined in the Participation Plan: (1) A “qualifying sale event” in which there is a sale of some or all of the stock of BWAY Parent then held by BWAY Parent’s principal shareholders and (2) A “qualifying distribution” in which BWAY Parent pays a cash dividend to its principal shareholders. Upon the occurrence of a qualifying event, participants with vested units may receive an amount equal to the difference between: (i) the value (as defined by the Participation Plan) of the units on the date of the qualifying event, and (ii) the value of the units assigned on the date of grant. No amounts are due to participants until a qualifying event occurs. Upon termination, with or without cause, units are forfeited, except in the case of death, as described in the Participation Plan. We are accounting for this plan in accordance with ASC Topic 718, Compensation—Stock Compensation. Since the occurrence of future “qualifying events” is not determinable or estimable, no liability or expense has been recognized to date. The fair value of the performance units are based upon cash dividends to and net proceeds from sales of common stock of BWAY Parent by its principal shareholders through the end of each period that have occurred or are probable. The fair value of the performance units on their grant date in 2013 and at June 30, 2013 was zero.

14.

Supplemental Cash Flow Disclosures


	Successor		Predecessor
($ in millions)	Six Months Ended June 30, 2013		Six Months Ended June 30, 2012
Cash interest paid, net	$	26.3	$	20.8
Cash income taxes paid, net	$	0.1	$	4.9


	Successor			Predecessor
($ in millions)	Six Months Ended June 30, 2013			Six Months Ended June 30, 2012
Non-cash investing and financing activities
Acquisitions accounted for under the purchase method:
Fair value of assets acquired	$	348.8		$	—
Liabilities assumed		(79.8	)		—

Net assets acquired	$	269.0		$	—


Amounts owed for capital expenditures	$	1.4		$	0.9
Assets acquired through capital leases		0.2			—
Non-cash contribution by BWAY Parent (1)		7.8			2.1

(1)	See “Related Party Transactions” under Note 1, “General.”

15.

Commitments and Contingencies

For additional information on commitments and contingencies, see Note 18, “Commitments and Contingencies” of Notes to Consolidated Financial Statements included in the Annual Report.

We record reserves for environmental liabilities when environmental investigation and remediation obligations are probable and related costs are reasonably estimable. We believe that the resolution of environmental matters, individually or in the aggregate, materially in excess of amounts accrued, is not reasonably possible. As of June 30, 2013 and December 31, 2012, we had accrued $0.6 million related to environmental liabilities. Our environmental accrual is an estimate and future expenditures may exceed our estimate. Environmental related liabilities are included in the other current liabilities line item in the condensed consolidated balance sheets. We do not expect to incur material capital expenditures for environmental control projects in the next 12 months.

The majority of our medical and workers’ compensation benefits are under high-deductible plans with certain stop loss arrangements. We determine our workers’ compensation liability using actuarial data based on filed claims, and we determine our medical claims liability based on our analysis of historical claims. As of June 30, 2013 and December 31, 2012, we had accrued $13.2 million and $11.5 million, respectively, related to these self- insurance liabilities, which are included in other current liabilities in the consolidated balance sheets.

We are involved in legal proceedings from time to time in the ordinary course of business. We believe that the outcome of these proceedings will not have a material effect on our financial position, results of operations or cash flows. As of June 30, 2013 and December 31, 2012, we had accrued liabilities related to pending litigation matters of $0.3 million and $0.4 million, respectively, which were included in the other current liabilities line item in the condensed consolidated balance sheets.

Lead Pigment and Lead Paint Litigation

Wisconsin Personal Injury Lawsuits

Armstrong Containers, Inc. (“Armstrong”), a subsidiary of the Company, was named as an alleged successor-in-interest in over thirty lead paint related personal injury lawsuits in Wisconsin. As of June 30, 2013, all but eight of the lawsuits have been dismissed with prejudice.

The amount of each claim pending is unknown and no cases to date have been settled.

Each lawsuit served upon Armstrong has been tendered to Armstrong’s insurers, for which Armstrong had insurance policies in place during the potentially relevant period. Various insurers are participating in the defense of the cases.

Although we continue to believe that we have valid defenses against the plaintiffs in the lead paint related personal injury litigation, litigation is inherently subject to many uncertainties. We cannot predict with any degree of certainty the potential liability or likelihood of the outcome of this litigation. In addition, because of the dismissal of prior cases, we are unable to provide additional information concerning the underlying risks of the lead paint related personal injury cases. As such, we are unable to estimate a range of possible losses or the likelihood that any particular loss amount will be incurred in connection with this litigation. As of June 30, 2013, we had not accrued any amounts for lead paint related personal injury claims.

16.

Business Segments

Management reviews operations along our product lines in two reportable segments: metal packaging and plastic packaging. We differentiate the segments based on the nature of the products they manufacture. The primary raw materials and manufacturing processes are unique for each segment. We describe our business segments in further detail in Note 19, “Business Segments,” of Notes to Consolidated Financial Statements included in the Annual Report. As discussed in Note 3, results attributable to the Ropak Acquisition have been included in the plastic packaging segment.

The following tables set forth certain financial information attributable to our business segments for the periods indicated:


	Successor					Predecessor
($ in millions)	Three Months Ended June 30, 2013		Six Months Ended June 30, 2013			Three Months Ended June 30, 2012		Six Months Ended June 30, 2012
Net Sales (1)
Metal packaging	$	189.4	$	372.5		$	201.0	$	389.8
Plastic packaging		203.1		374.0			128.7		249.6

Consolidated net sales	$	392.5	$	746.5		$	329.7	$	639.4


Segment earnings (2)
Metal packaging	$	42.3	$	79.6		$	44.7	$	82.4
Plastic packaging		24.9		39.7			7.2		14.9

Segment earnings	$	67.2	$	119.3		$	51.9	$	97.3

Reconciliation of segment earnings to (loss) income before taxes
Segment earnings	$	67.2	$	119.3		$	51.9	$	97.3
Depreciation and amortization expense		36.0		69.8			21.7		43.4
Corporate undisturbed expenses (3)		7.7		12.4			3.7		6.9
Other undistributed expenses (4)		21.4		42.6			12.9		15.4

Income (loss) before income taxes	$	2.1	$	(5.5	)	$	13.6	$	31.6

Depreciation and amortization
Metal packaging	$	22.9	$	45.6		$	12.1	$	24.2
Plastic packaging		11.8		21.7			8.5		17.1

Segment depreciation and amortization		34.7		67.3			20.6		41.3
Corporate		1.3		2.5			1.1		2.1

Consolidated depreciation and amortization	$	36.0	$	69.8		$	21.7	$	43.4

(1)	In the periods presented, there were no significant intersegment sales.

(2)	Management uses a measure of segment earnings to evaluate segment performance. We calculate segment earnings as net sales less costs of products sold and selling expenses, each as related to the applicable segment. Segment earnings exclude depreciation and amortization.

(3)	Corporate undistributed expenses include share-based compensation expense and certain other general administrative expenses not allocated to the segments for reporting purposes. Corporate undistributed expenses exclude depreciation and amortization.

(4)	Other undistributed expenses not allocated to segments include the following: restructuring expense, interest expense, business acquisition costs, management fee expense, gain on disposition of equipment, and other expense/income.

The following table sets forth total assets attributable to our business segments as of the dates indicated:


($ in millions)	June 30, 2013		December 31, 2012 (Revised)
Total assets
Metal packaging	$	1,265.4	$	1,315.5
Plastic packaging		496.7		192.2

Segment total assets		1,762.1		1,507.7
Corporate		322.7		207.6

Total assets	$	2,084.8	$	1,715.3

The following table sets forth the percentage of net sales by customer geographic location for the periods indicated:


	Successor						Predecessor
	Three Months Ended June 30, 2013			Six Months Ended June 30, 2013			Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Consolidated net sales
United States		88	%		88	%		93	%		93	%
Canada		11			11			6			6
Other		1			1			1			1

Total		100	%		100	%		100	%		100	%


Metal packaging net sales
United States		91	%		91	%		96	%		93	%
Canada		8			8			3			6
Other		1			1			1			1

Total		100	%		100	%		100	%		100	%


Plastic packaging net sales
United States		85	%		86	%		93	%		93	%
Canada		14			13			7			7
Other		1			1			—			—

Total		100	%		100	%		100	%		100	%

17.

Supplemental Guarantor Subsidiaries Information

BWAY Intermediate, BWAY Holding and certain of BWAY Holding’s subsidiaries (BWAY Holding and certain of its subsidiaries collectively, the “BWAY Guarantors”) have guaranteed the 2018 Notes on a senior unsecured basis. These guarantees are joint and several obligations of the BWAY Guarantors, each of which is a 100% owned subsidiary of BWAY Intermediate. ICL and Ropak Canada, our foreign subsidiaries, do not guarantee the 2018 Notes.

In the following tables, we present consolidating supplemental financial information for BWAY Holding (issuer of the 2018 Notes), BWAY Intermediate (parent guarantor of the issuer), BWAY Holding’s domestic guarantor subsidiaries and the non-guarantor subsidiary together with eliminations as of and for the periods indicated.

We have prepared the following information using the equity method of accounting and certain financing arrangements have been push down through intercompany transactions including third party debt, debt issue costs, and related interest expense to BWAY. For example, interest expense associated with the debt of BWAY Holding is included in the interest expense of its guarantor subsidiaries, which are paying the interest. In addition, we have pushed-down the benefit from income taxes associated with BWAY Holding’s debt to the guarantor subsidiaries. The amounts pushed-down to the subsidiaries are reflected in the parent entity’s equity in income or loss of subsidiaries.

In the second quarter of 2013, we revised the presentation of certain intercompany debt related transactions between the issuer and guarantor subsidiaries within the Condensed Consolidating Balance Sheet as of December 31, 2012 and the Statement of Operations for the three months ended June 30, 2012. Additionally, we revised the presentation of a debt balance between guarantor and nonguarantor subsidiaries as intercompany on the Condensed Consolidating Balance Sheet as of December 31, 2012. The revisions to this supplemental information did not impact any amounts reported in our previously issued Consolidated Balance Sheet or Consolidated Statement of Operations. In accordance with applicable accounting guidance, we assessed the materiality of the errors and concluded that the errors were not material to any of our previously issued financial statements. As comparative prior period supplemental guarantor subsidiaries financial information is presented in future filings, we will similarly revise such prior period information.

BWAY Intermediate Company, Inc. and Subsidiaries (Successor)

Supplemental Unaudited Condensed Consolidating Balance Sheet

As of June 30, 2013


($ in millions)	BWAY Intermediate (Parent)		BWAY Holding (Issuer)		Guarantor Subsidiaries		Non Guarantor Subsidiary		Eliminations			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	—	$	—	$	1.6	$	6.6	$	—		$	8.2
Accounts receivable, net		—		—		165.7		20.3		—			186.0
Inventories		—		—		120.8		15.2		—			136.0
Other current assets		—		—		80.5		0.4		—			80.9
Related party revolving note receivable		—		—		0.4		—		(0.4	)		—

Total current assets		—		—		369.0		42.5		(0.4	)		411.1

Property, plant and equipment		—		—		329.5		20.8		—			350.3
Goodwill		—		—		596.2		—		—			596.2
Other intangible assets, net		—		—		686.4		8.5		—			694.9
Deferred debt issuance costs		—		25.9		—		—		—			25.9
Other assets		—		—		6.4		—		—			6.4
Related party note receivable		—		—		35.0		—		(35.0	)		—
Intercompany		—		983.8		27.3		—		(1,011.1	)		—
Investment in subsidiaries		558.5		558.5		16.0		—		(1,133.0	)		—

Total assets	$	558.5	$	1,568.2	$	2,065.8	$	71.8	$	(2,179.5	)	$	2,084.8


Liabilities and Shareholder’s Equity
Current liabilities
Accounts payable	$	—	$	—	$	89.2	$	10.7	$	—		$	99.9
Other current liabilities		—		3.8		50.6		5.2		—			59.6
Current portion of long-term debt		—		7.3		—		—		—			7.3
Related party revolving note payable		—		—		—		0.4		(0.4	)		—

Total current liabilities		—		11.1		139.8		16.3		(0.4	)		166.8

Long-term debt		—		972.7		—		—		—			972.7
Related party note payable		—		—		—		35.0		(35.0	)		—
Deferred income taxes		—		—		340.6		0.2		—			340.8
Intercompany		—		25.9		983.8		1.4		(1,011.1	)		—
Other liabilities		—		—		43.1		2.9		—			46.0
Total shareholder’s equity		558.5		558.5		558.5		16.0		(1,133.0	)		558.5

Total liabilities and shareholder’s equity	$	558.5	$	1,568.2	$	2,065.8	$	71.8	$	(2,179.5	)	$	2,084.8

BWAY Intermediate Company, Inc. and Subsidiaries (Successor)

Supplemental Unaudited Condensed Consolidating Balance Sheet

As of December 31, 2012

(Revised)


($ in millions)	BWAY Intermediate (Parent)		BWAY Holding (Issuer)		Guarantor Subsidiaries			Non Guarantor Subsidiary			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	—	$	0.5		$	1.7		$	—		$	2.2
Accounts receivable, net		—		—		98.9			3.4			—			102.3
Inventories		—		—		122.9			2.6			—			125.5
Other current assets		—		—		62.4			1.1			—			63.5

Total current assets		—		—		284.7			8.8			—			293.5

Property, plant and equipment		—		—		241.3			5.0			—			246.3
Goodwill		—		—		501.6			—			—			501.6
Other intangible assets, net		—		—		640.8			9.3			—			650.1
Deferred debt issuance costs		—		19.7		—			—			—			19.7
Other assets		—		—		4.1			—			—			4.1
Related party note receivable		—		—		35.0			—			(35.0	)		—
Intercompany		—		701.0		20.0			0.3			(721.3	)		—
Investment in subsidiaries		573.9		573.9		(16.2	)		—			(1,131.6	)		—

Total assets	$	573.9	$	1,294.6	$	1,711.3		$	23.4		$	(1,887.9	)	$	1,715.3


Liabilities and Shareholder’s Equity
Current liabilities
Accounts payable	$	—	$	—	$	69.7		$	3.1		$	—		$	72.8
Other current liabilities		—		2.6		38.1			1.1			—			41.8
Current portion of long-term debt		—		4.7		—			—			—			4.7

Total current liabilities		—		7.3		107.8			4.2			—			119.3

Long-term debt		—		693.7		—			—			—			693.7

Related party note payable		—		—		—			35.0			(35.0	)		—
Deferred tax liabilities		—		—		284.4			—			—			284.4
Intercompany		—		19.7		701.3			0.3			(721.3	)		—
Other liabilities		—		—		43.9			0.1			—			44.0
Total shareholder’s equity		573.9		573.9		573.9			(16.2	)		(1,131.6	)		573.9

Total liabilities and shareholder’s equity	$	573.9	$	1,294.6	$	1,711.3		$	23.4		$	(1,887.9	)	$	1,715.3

BWAY Intermediate Company, Inc. and Subsidiaries (Successor)

Supplemental Unaudited Condensed Consolidating

Statement of Operations and Comprehensive Income Information

For the three months ended June 30, 2013


($ in millions)	BWAY Intermediate (Parent)			BWAY Holding (Issuer)			Guarantor Subsidiaries			Non Guarantor Subsidiary			Eliminations			Consolidated
Net sales	$	—		$	—		$	350.0		$	42.5		$	—		$	392.5

Costs and expenses
Cost of products sold (excluding depreciation and amortization)		—			—			284.6			36.0			—			320.6
Depreciation and amortization		—			—			33.7			2.3			—			36.0
Selling and administrative		—			—			11.5			0.9			—			12.4
Restructuring		—			—			2.9			2.6			—			5.5
Interest		—			14.8			0.4			—			—			15.2
Related party interest (income) expense		—			(14.8	)		14.3			0.5			—			—
Business acquisition costs		—			—			0.4			—			—			0.4
Management fee		—			—			1.2			—			—			1.2
Other (income) expense		—			—			(0.6	)		(0.3	)		—			(0.9	)

Total costs and expenses		—			—			348.4			42.0			—			390.4


Income before income taxes		—			—			1.6			0.5			—			2.1
Provision for income taxes		—			—			0.7			1.1			—			1.8
Equity in income (loss) of subsidiaries		0.3			0.3			(0.6	)		—			—			—

Net income (loss)	$	0.3		$	0.3		$	0.3		$	(0.6	)	$	—		$	0.3


Comprehensive (loss) income	$	(1.0	)	$	(1.0	)	$	(1.0	)	$	(1.9	)	$	(3.9	)	$	(1.0	)

BWAY Intermediate Company, Inc. and Subsidiaries (Successor)

Supplemental Unaudited Condensed Consolidating Statement of

Operations and Comprehensive Income Information

For the six months ended June 30, 2013


($ in millions)	BWAY Intermediate (Parent)			BWAY Holding (Issuer)			Guarantor Subsidiaries			Non Guarantor Subsidiary			Eliminations		Consolidated
Net sales	$	—		$	—		$	673.5		$	73.0		$	—	$	746.5

Costs and expenses
Cost of products sold (excluding depreciation and amortization)		—			—			556.1			62.0			—		618.1
Depreciation and amortization		—			—			65.4			4.4			—		69.8
Selling and administrative		—			—			19.8			1.7			—		21.5
Restructuring		—			—			4.3			2.8			—		7.1
Interest		—			28.5			0.5			—			—		29.0
Related party interest (income) expense		—			(28.5	)		27.5			1.0			—		—
Business acquisition costs		—			—			5.1			—			—		5.1
Management fee		—			—			2.5			—			—		2.5
Other (income) expense		—			—			(0.7	)		(0.4	)		—		(1.1	)

Total costs and expenses		—			—			680.5			71.5			—		752.0


(Loss) income before income taxes		—			—			(7.0	)		1.5			—		(5.5	)
Provision for (benefit from) income taxes		—			—			(3.2	)		1.7			—		(1.5	)
Equity in income (loss) of subsidiary		(4.0	)		(4.0	)		(0.2	)		—			8.2		—
Net income (loss)	$	(4.0	)	$	(4.0	)	$	(4.0	)	$	(0.2	)	$	8.2	$	(4.0	)


Comprehensive income (loss)	$	(6.1	)	$	(6.1	)	$	(6.1	)	$	(2.3	)	$	14.5	$	(6.1	)

BWAY Intermediate Company, Inc. and Subsidiaries (Predecessor)

Supplemental Unaudited Condensed Consolidating Statement of

Operations and Comprehensive Income Information

For the three months ended June 30, 2012

(Revised)


($ in millions)	BWAY Intermediate (Parent)		BWAY Holding (Issuer)			Guarantor Subsidiaries			Non Guarantor Subsidiary			Eliminations			Consolidated
Net sales	$	—	$	—		$	320.7		$	9.0		$	—		$	329.7

Cost and expenses
Cost of products sold (excluding depreciation and amortization		—		—			266.7			8.2			—			274.9
Depreciation and amortization		—		—			20.7			1.0			—			21.7
Selling and administrative		—		—			6.3			0.3			—			6.6
Restructuring		—		—			0.1			—			—			0.1
Interest		—		11.3			0.2			0.4			—			11.9
Related party interest (income) expense		—		(11.3	)		11.3			—			—			—
Business acquisition costs		—		—			0.2			—			—			0.2
Management fee		—		—			(0.1	)		—			—			(0.1	)
Other (income) expense		—		—			(0.2	)		1.0			—			0.8

Total costs and expenses		—		—			305.2			10.9			—			316.1


(Loss) income before income taxes		—		—			15.5			(1.9	)		—			13.6
Provision for (benefit from) income taxes		—		—			4.8			(0.1	)		—			4.7
Equity in income (loss) of subsidiaries		8.9		8.9			(1.8	)		—			(16.0	)		—

Net income (loss)	$	8.9	$	8.9		$	8.9		$	(1.8	)	$	(16.0	)	$	8.9


Comprehensive income (loss)	$	9.3	$	9.3		$	9.3		$	(1.4	)	$	(17.2	)	$	9.3

BWAY Intermediate Company, Inc. and Subsidiaries (Predecessor)

Supplemental Unaudited Condensed Consolidating Statement of

Operations and Comprehensive Income Information

For the six months ended June 30, 2012


($ in millions)	BWAY Intermediate (Parent)		BWAY Holding (Issuer)			Guarantor Subsidiaries			Non Guarantor Subsidiary			Eliminations			Consolidated
Net sales	$	—	$	—		$	622.0		$	17.4		$	—		$	639.4

Cost and expenses
Cost of products sold (excluding depreciation and amortization		—		—			520.6			15.6			—			536.2
Depreciation and amortization		—		—			41.6			1.8			—			43.4
Selling and administrative		—		—			12.3			0.5			—			12.8
Restructuring		—		—			0.9			0.1			—			1.0
Interest		—		22.9			0.6			0.9			—			24.4
Related party interest (income) expense		—		(22.9	)		22.9			—			—			—
Business acquisition costs		—		—			0.2			—			—			0.2
Gain on disposition of equipment		—		—			(9.9	)		—			—			(9.9	)
Other (income) expense		—		—			(0.5	)		0.2			—			(0.3	)

Total costs and expenses		—		—			588.7			19.1			—			607.8


(Loss) income before income taxes		—		—			33.3			(1.7	)		—			31.6
Provision for income taxes		—		—			10.8			—			—			10.8
Equity in income (loss) of subsidiaries		20.8		20.8			(1.7	)		—			(39.9	)		—

Net income (loss)	$	20.8	$	20.8		$	20.8		$	(1.7	)	$	(39.9	)	$	20.8


Comprehensive income (loss)	$	20.8	$	20.8		$	20.8		$	(1.7	)	$	(39.9	)	$	20.8

BWAY Intermediate Company, Inc. and Subsidiaries (Successor)

Supplemental Unaudited Condensed Consolidating Statement of

Cash Flows Information

For the six months ended June 30, 2013


($ in millions)	BWAY Intermediate (Parent)			BWAY Holding (Issuer)			Guarantor Subsidiaries			Non Guarantor Subsidiary			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	—		$	—		$	40.5		$	6.4		$	—		$	46.9

Cash Flows from Investing Activities
Capital expenditures		—			—			(29.3	)		(2.4	)		—			(31.7	)
Cash paid for acquisitions, net of cash acquired		—			—			(266.2	)		—			—			(266.2	)
Net proceeds from disposition of equipment		—			—			0.2			—			—			0.2
Return of equity from subsidiaries		17.1			17.1			—			—			(34.2	)		—
Change in intercompany		—			(273.9	)		(0.4	)		—			274.3			—

Net cash used in investing activities		17.1			(256.8	)		(295.7	)		(2.4	)		240.1			(297.7	)


Cash Flows from Financing Activities
Proceeds from issuance of secured debt		—			261.0			—			—			—			261.0
Repayments of secured debt		—			(3.7	)		—			—			—			(3.7	)
Proceeds from revolving credit facility borrowings		—			161.0			—			—			—			161.0
Repayments of revolving credit facility borrowings		—			(135.3	)		—			—			—			(135.3	)
Principal payments under capital lease obligations		—			—			(0.5	)		—			—			(0.5	)
Payment of debt issuance costs		—			(9.1	)		—			—			—			(9.1	)
Dividend to Parent		(17.1	)		(17.1	)		(17.1	)		—			34.2			(17.1	)
Change in intercompany		—			—			273.9			0.4			(274.3	)		—

Net cash (used in) provided by financing activities		(17.1	)		256.8			256.3			0.4			(240.1	)		256.3


Effect of exchange rate changes on cash and cash equivalents		—			—			—			0.5			—			0.5

Net increase in cash and cash equivalents		—			—			1.1			4.9			—			6.0
Cash and cash equivalents, beginning of period								0.5			1.7						2.2

Cash and cash equivalents, end of period	$	—		$	—		$	1.6		$	6.6		$	—		$	8.2

BWAY Intermediate Company, Inc. and Subsidiaries (Predecessor)

Supplemental Unaudited Condensed Consolidating Statement of

Cash Flows Information

For the six months ended June 30, 2012


($ in millions)	BWAY Intermediate (Parent)		BWAY Holding (Issuer)			Guarantor Subsidiaries			Non Guarantor Subsidiary			Eliminations			Consolidated
Net cash (used in) provided by operating activities	$	—	$	—		$	65.6		$	1.5		$	—		$	67.1

Cash flows from investing activities
Capital expenditures		—		—			(15.3	)		(0.3	)		—			(15.6	)
Net proceeds from disposition of equipment		—		—			12.4			—			—			12.4
Cash paid for acquisitions, net of cash acquired		—		—			—			—			—			—
Other		—		—			(0.3	)		—			—			(0.3	)
Change in intercompany		—		53.0			—			—			(53.0	)		—

Net cash provided by (used in) investing activities		—		53.0			(3.2	)		(0.3	)		(53.0	)		(3.5	)


Cash flows from financing activities
Repayments of secured debt		—		(35.5	)		—			(1.5	)		—			(37.0	)
Proceeds from revolving credit facility borrowings		—		16.5			—			—			—			16.5
Repayments from revolving credit facility borrowings		—		(34.0	)		—			—			—			(34.0	)
Principal repayments under capital lease obligations		—		—			(0.5	)		—			—			(0.5	)
Change in intercompany		—		—			(53.0	)		—			53.0			—

Net cash used in financing activities		—		(53.0	)		(53.5	)		(1.5	)		53.0			(55.0	)


Effect of exchange rate changes on cash and cash equivalents		—		—			—			—			—			—

Net increase in cash and cash equivalents		—		—			8.9			(0.3	)		—			8.6
Cash and cash equivalents, beginning of period		—		—			3.1			1.6			—			4.7

Cash and cash equivalents, end of period	$	—	$	—		$	12.0		$	1.3		$	—		$	13.3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion should be read in conjunction with the Annual Report and with Item 1, “Financial Statements” of this report.

BWAY Intermediate is a 100% owned subsidiary of BWAY Parent. Effective November 5, 2012, BWAY Parent was acquired by certain private equity investment vehicles sponsored by Platinum. For a discussion of the “Platinum Merger,” see Note 2, “Acquisition of BWAY Parent by Platinum” of Notes to Unaudited Condensed Consolidated Financial Statements under Item 1. The transaction resulted in a change in control.

BWAY Intermediate continued as the same legal entity following the Platinum Merger. However, due to the change in control, our assets and liabilities were recorded at their estimated fair value as of the acquisition date. In this discussion and analysis, references to “Predecessor” or “Successor” indicate the period preceding the Platinum Merger (through November 5, 2012 excluding the effects of the merger) or the period succeeding the Platinum Merger, respectively. The separate presentation in the financial statements is required when there is a change in accounting basis.

The Platinum Merger did not affect the nature of the business, operations or customer relationships.

On January 18, 2013, BWAY consummated the acquisition of certain subsidiaries of LINPAC (as defined below) that comprised LINPAC’s Ropak Packaging division (“Ropak”) pursuant to a definitive stock purchase agreement dated November 30, 2012 with LINPAC Finance Limited and LINPAC Group Limited, each a private limited company organized under the laws of England and Wales, (collectively, “LINPAC”), (the “Ropak Acquisition”). The aggregate consideration paid in connection with the transaction was $269.0 million in cash (subject to certain customary adjustments at and after closing). Ropak is a North American producer of rigid, plastic shipping containers serving the consumer goods, food processing, construction, dairy, petroleum and other industries.

We have embarked on an accelerated operational improvement program to implement previously identified synergies through the Ropak Acquisition and operational improvements identified at the Company. To date, multiple actions representing approximately $73.0 million in annualized earnings improvement have been identified and are being implemented across a variety of functional areas including sales and marketing, supply chain, manufacturing and SG&A. As of June 30, 2013, initiatives expected to generate approximately $43.5 million, or 59% of such annualized earnings improvement, have been fully implemented with the majority of the remaining initiatives in advanced stages of implementation and expected to be complete by the end of 2013. In addition, we continue to identify additional cost saving opportunities that are in various stages of development, and we expect to implement these initiatives in 2014 and 2015.

Effective February 8, 2013, we changed our fiscal year end from September 30 to December 31. The unaudited condensed consolidated financial statements in Item 1 cover the predecessor period from January 1, 2012 to June 30, 2012 and the successor period from January 1, 2013 to June 30, 2013. Our 2013 fiscal year will cover the period from January 1, 2013 to December 31, 2013.

We report our results of operations in two segments: metal packaging and plastic packaging. See Note 15, “Business Segments,” of Notes to Unaudited Condensed Consolidated Financial Statements under Item 1.

Factors Affecting Our Results of Operations

For a discussion of general factors affecting our results of operations, including net sales, expenses and raw materials, see “Factors Affecting Our Results of Operations” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” of the Annual Report.

Results of Operations

In our discussion of results of operations, we discuss the mathematical difference of net sales and cost of products sold (excluding depreciation and amortization) and that difference as a percentage of net sales. We also discuss segment earnings. We define segment earnings as segment net sales less segment cost of products sold and segment related selling expenses. Segment cost of products sold excludes segment depreciation and amortization.

We exclude depreciation and amortization expense from our presentation of cost of products sold because management excludes it from operating results when evaluating segment and overall performance. Management believes the resulting measurement provides useful information to evaluate the contribution of net sales to earnings before interest, taxes, depreciation and amortization (“EBITDA”), a primary performance measure used by management.

We have separated our historical financial results into the predecessor and successor periods, as discussed above, which is required under generally accepted accounting principles when there is a change in accounting basis as occurred when purchase accounting was applied as a result of the Platinum Merger. Management believes the transaction did not affect the fundamentals of the business and our discussion and analysis of our results of operations addresses the predecessor and successor periods on a combined basis when appropriate.


	Successor		Predecessor					Successor		Predecessor
($ in millions)	Three Months Ended June 30, 2013		Three Months Ended June 30, 2012		Percent Change			Six Months Ended June 30, 2013		Six Months Ended June 30, 2012		Percent Change
Net Sales
Metal packaging	$	189.4	$	201.0		-5.8	%	$	372.5	$	389.8		-4.4	%
Plastic packaging		203.1		128.7		57.8	%		374.0		249.6		49.8	%

Total	$	392.5	$	329.7		19.0	%	$	746.5	$	639.4		16.8	%


Cost of products sold (1)
Metal packaging	$	146.2	$	154.6		-5.4	%	$	291.0	$

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

BWAY INTERMEDIATE COMPANY, INC. 10-Q