Amendment No 8 to Form S-1

S-1/A 1 ds1a.htm AMENDMENT NO 8 TO FORM S-1 Amendment No 8 to Form S-1

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As filed with the Securities and Exchange Commission on November 14, 2002.

Registration No. 333-88878

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

AMENDMENT NO. 8

TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

CONSTAR INTERNATIONAL INC.

(Exact name of Registrant as specified in its charter)

Delaware		3089		13-1889304
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

CONSTAR, INC.

(Exact name of Registrant as specified in its charter)

Pennsylvania		3089		58-0680950
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

BFF INC.

(Exact name of Registrant as specified in its charter)

Delaware		3089		04-2521229
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

DT, INC.

(Exact name of Registrant as specified in its charter)

Delaware		3089		63-0247693
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

CONSTAR PLASTICS, LLC

(Exact name of Registrant as specified in its charter)

Delaware		3089		51-0412319
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

CONSTAR FOREIGN HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Delaware		3089		14-1838591
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

One Crown Way

Philadelphia, PA 19154-4599

(215) 552-3700

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrants’ Principal Executive Offices)

Alan W. Rutherford

Vice Chairman of the Board,

Executive Vice President and

Chief Financial Officer

Crown Cork & Seal Company, Inc.

One Crown Way

Philadelphia, PA 19154-4599

(215) 698-5100

(Name, address including zip code, and telephone number, including area code, of agent for service)

With copies to:

William G. Lawlor, Esq.

David Waksman, Esq.

Dechert

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103-2793

(215) 994-4000

David C. Lopez, Esq.

Cleary, Gottlieb, Steen & Hamilton

One Liberty Plaza

New York, NY 10006-1470

(212) 225-2632

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement number of the earlier effective registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

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EXPLANATORY NOTE

This Registration Statement contains a prospectus relating to an offering of shares of our common stock followed by a separate prospectus relating to a concurrent offering of our % senior subordinated notes.

The complete prospectus for each of the common stock offering and the senior subordinated note offering will be filed with the Securities and Exchange Commission in accordance with Rule 424 under the Securities Act of 1933, as amended.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED NOVEMBER 14, 2002.

PROSPECTUS

10,500,000 Shares

Constar International Inc.

Common Stock

$ per share

We are a wholly owned subsidiary of Crown Cork & Seal Company, Inc. Crown, as selling securityholder, is offering to sell 10,500,000 shares of our common stock. Crown has granted the underwriters an option to purchase up to 1,500,000 additional shares of our common stock to cover over-allotments. Upon completion of this offering, Crown will own 1,500,000 shares of our common stock if the underwriters’ over-allotment option is not exercised and Crown will own none of our shares if the over-allotment option is exercised in full. We will not receive any of the proceeds from the sale of shares of our common stock in this offering.

Concurrently with this offering, we are offering to sell under a separate prospectus $175 million aggregate principal amount of our % senior subordinated notes due 2012. We also expect to enter into a $250 million senior secured credit facility upon the completion of this offering consisting of a $150 million seven-year term loan and a $100 million five-year revolving loan facility. The completion of the concurrent note offering and our entry into the senior secured credit facility are conditions to the completion of this offering.

This is the initial public offering of our common stock. Prior to this offering, there has been no public market for our shares. We currently expect the initial public offering price of our common stock to be between $12.00 and $14.00 per share. Our common stock has been approved for quotation on the Nasdaq National Market under the symbol “CNST.”

Investing in our common stock involves risks. See “Risk Factors” beginning on page 9.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

		Per Share			Total
Public Offering Price		$			$
Underwriting Discount		$			$
Proceeds to Crown (before expenses)		$			$

The underwriters expect to deliver the shares to purchasers on or about , 2002.

Joint Book-Running Managers

Salomon Smith Barney Deutsche Bank Securities

JPMorgan

, 2002

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[Pictorial material appearing on inside front cover]

[Caption reading “Conventional PET Products”]

[Image of Soft Drink Bottles and caption reading “Soft Drinks”]

[Image of Preforms and caption reading “Preforms”]

[Image of Water Bottles and caption reading “Water”]

[Caption reading “Custom PET Products”]

[Image of Juice, Tea and Sports Beverage Bottles and caption reading “Hot-Fill Beverages”]

[Image of Food Containers and caption reading “Food”]

[Image of Beer Bottles and caption reading “Beer and Flavored Alcoholic Beverages”]

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We have not authorized anyone to provide you with information different from that which is provided in this prospectus. This document may only be used where it is legal to sell these securities. We are not making an offer of these securities in any state where the offer is not permitted.

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		Page
Summary		1
Risk Factors		9
Forward-Looking Statements		21
Use of Proceeds		22
Dividend Policy		22
Capitalization		23
Dilution		24
Unaudited Pro Forma Combined Financial Statements		25
Selected Financial Data		30
Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Our Business		50
Management		63
Principal Stockholders		77
Relationship with Crown Cork & Seal Company, Inc.		78
Selling Securityholder		91
Description of Capital Stock		92
Description of Indebtedness		99
Shares Eligible For Future Sale		102
Material United States Tax Consequences to Non-U.S. Holders of Common Stock		103
Underwriting		105
Legal Matters		108
Experts		108
Where You Can Find More Information		108
Index to Combined Financial Statements		F-1

Until , 2002 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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SUMMARY

This summary highlights certain information contained elsewhere in this prospectus. We urge you to read this entire prospectus carefully, including the financial data and related notes, to obtain a more complete understanding of this offering before making an investment decision.

Our Company

We are a leading global producer of PET, or polyethylene terephthalate, plastic containers for food and beverages. We believe that PET represents one of the most rapidly growing packaging markets worldwide. We are one of the largest North American suppliers of PET containers for conventional PET applications in soft drinks and water. We also have an expanding position in the growing custom PET market. Custom PET containers are used for food, juices, teas, sport drinks, new age beverages, beer and flavored alcoholic beverages, all of which require advanced technologies, processing know-how and innovative designs.

The PET packaging market is expanding as a result of growth in the beverage and food markets and conversions into PET packaging from traditional packaging materials such as glass, metal, and paperboard. In conventional PET applications, growth is largely due to new introductions of multi-pack single serve soft drinks in supermarkets and club stores and the increased popularity of single serve bottled water. Growth in custom applications is driven by demand for single serve beverages and convenience food products, and is facilitated by consumer preferences for PET’s combination of transparency, resealability, light weight, and shatter resistance. Until recently, the limited availability of commercially proven technologies constrained the growth of custom PET applications. We believe that we have the patented technology and full-service design capabilities necessary to capture expected large scale conversion opportunities for PET packaging.

We provide full-service PET packaging solutions, from product design and engineering to ongoing customer support, and we work closely with our customers to deliver innovative, high-performance packaging solutions that maximize the promotional appeal of our customers’ products. We believe that our Oxbar oxygen-scavenging technology, which increases product shelf life by inhibiting oxygen from penetrating the packaging, is the best performing technology for the preservation of oxygen sensitive products and is cost competitive with other available technologies. We also have the expertise and patents necessary to manufacture bottles that can withstand the high temperatures at which bottles are filled in the hot-fill process. Hot-fill is a process in which beverages are heat processed during filling. Our expertise and bottle design features enable PET bottles to be filled on the same equipment as glass bottles for pasteurized beer. We intend to exploit our Oxbar, hot-fill, pasteurization and other proprietary technologies, as well as our product development capabilities, to expand our position in custom PET.

Our largest customers include many of the world’s leading branded consumer products companies. We believe these customers represent a large share of future opportunities for PET conversion and market growth.

Our conventional PET customers include PepsiCo for the Aquafina, Mountain Dew and Pepsi brands, Coca-Cola Enterprises, Inc. for the Coca-Cola, Fanta, Schweppes and Sprite brands and The Dr. Pepper Bottling Company of Texas for the Dr. Pepper and 7Up brands. Our custom PET customers include Unilever Foods North America for the Lawry’s and Wishbone brands, Ventura Foods, LLC for private label edible oil and Energy Brands, Inc. for the Glacéau Vitamin Water brand.

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Our Competitive Strengths

We believe that we are strongly positioned within the PET industry because of our:

•

Leading Market Share In Conventional PET Applications

•

We are one of the largest North American suppliers of conventional PET containers for soft drinks and water.

•

We have an extensive U.S. geographic manufacturing presence.

•

We have significant resin purchasing leverage.

•

Opportunities To Leverage Our Strong Conventional PET Infrastructure

•

Many of the assets and skills that we use in our conventional PET business are applicable to our custom PET business.

•

We have established relationships with conventional PET customers that are significant potential customers for custom PET products.

•

We can serve custom PET conversion opportunities by adding equipment to our existing plants and we do not expect to require new plant sites for several years.

•

Technology And Product Development Expertise

•

Our comprehensive portfolio of technologies and processes allows us to compete in a wide variety of PET container end-use markets.

•

We believe our proprietary Oxbar and hot-fill technologies give us a competitive advantage in the custom PET market.

•

Creative And Innovative Product Design Capability

•

Our innovative products include award-winning Oxbar multi-layer beer bottles, vacuum absorbing multi-layer juice bottles, and the first long neck PET bottle commercialized for a hot-fill application.

•

Our research and development expertise allows us to create new, value-added products for our customers.

•

World Class Performance And Highly Trained Workforce

•

We believe that we are a highly efficient manufacturer of quality PET products.

•

We have a skilled workforce and are committed to our team-oriented World Class Performance process, a formal data-based process used to drive quantitatively measurable improvements in operations and processes.

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Our Strategy

Our objective is to grow and compete profitably in the PET container packaging market. We seek to lead conversions from other packaging materials in new PET product categories, while we continue to grow with our customers and our markets in conventional or established custom PET applications. We will continue to focus on the development and commercialization of bottle design, bottle forming and technologies that allow us to further leverage our existing manufacturing and distribution infrastructure, and our strong customer relationships. This particularly applies to the significant opportunities we believe exist in the custom PET market. In support of these strategies, we plan to be a leader in all the markets we serve by:

•

continuing to serve the demanding needs of the world’s leading consumer product companies with the PET products, services, product development and reliability they need to support their markets;

•

investing in capacity expansion in all categories of PET bottle markets where profitable growth can be supported by appropriate contractual terms with our customers;

•

remaining a high-quality, low-cost operator implementing best-practices manufacturing disciplines in every manufacturing activity we undertake;

•

favoring the overhead efficiency, flexibility and utilization benefits of large scale manufacturing plants while maintaining the geographic presence that allows us to offer freight efficiency and service convenience to our customers; and

•

attracting and retaining the skills and talent necessary to achieve our goals while fostering an environment of service and teamwork throughout our workforce.

We are a Delaware corporation formed in 1927. From 1969 until 1992, we were an independent publicly held corporation. Crown Cork & Seal Company, Inc. acquired us in October 1992.

Our principal executive offices are located at One Crown Way, Philadelphia, Pennsylvania 19154-4599 and our phone number is (215) 552-3700.

Our Relationship with Crown Cork & Seal

We are currently a wholly owned subsidiary of Crown. Upon the completion of this offering, Crown will own 1,500,000 shares, or 12.5%, of our outstanding common stock if the underwriters’ over-allotment option is not exercised and Crown will own none of our shares if the over-allotment option is exercised in full. Crown has advised us that it has no present intention of disposing of any of the shares of our common stock it will own if the underwriters do not exercise their over-allotment option in full.

Upon the completion of this offering, we will enter into a number of agreements with Crown, including a transition services agreement and a non-competition agreement. Under the transition services agreement, Crown will provide us with selected corporate services, including information technology services. The transition services agreement terminates on December 31, 2003. However, Crown’s provision of some services terminates earlier and we may, at our option, terminate some services at an earlier date. Under the non-competition agreement, we and Crown will agree not to compete with each other in certain product and geographic markets, generally for a five-year period following the completion of this offering.

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The Offering

Common stock offered by Crown		10,500,000 shares

Common stock to be outstanding after this offering		12,015,000 shares (assuming no exercise of the underwriters’ over-allotment option and including 15,000 shares of restricted stock to be issued upon completion of this offering)

Common stock to be held by Crown after this offering		1,500,000 shares

Use of proceeds		The net proceeds from the sale of our shares by Crown will be paid to Crown. We will not receive any proceeds from this offering. We will use the proceeds from the concurrent note offering and the term loan arrangement to repay intercompany indebtedness to Crown.

Dividend policy		We intend to retain future earnings for use in our business and do not intend to pay any cash dividends on our common stock. We are primarily a holding company and our ability to pay dividends in the future will depend on our receipt of dividends from our subsidiaries.

Nasdaq National Market symbol		“CNST”

Concurrent Offering and Other Indebtedness

Concurrently with this offering, we are offering to sell under a separate prospectus $175 million aggregate principal amount of our % senior subordinated notes due 2012. Simultaneously with the completion of this offering, we expect to enter into a $250 million senior secured credit facility consisting of a $150 million seven-year term loan and a $100 million five-year revolving loan facility. We expect the term loan to be issued at 99% of face value. We refer to the term loan and the loan facility together as the “credit facility” or the “senior secured credit facility.” For additional information regarding our notes and senior secured credit facility, see the section of this prospectus entitled “Description of Indebtedness.” The completion of the concurrent note offering and our entry into the senior secured credit facility are conditions to the completion of this offering.

About this Prospectus

Unless otherwise indicated, all information in this prospectus:

•

assumes the over-allotment option for this offering has not been exercised;

•

excludes approximately 133,000 options to purchase common stock to be issued to certain of our executive officers and approximately 92,000 options to purchase common stock to be issued to other employees upon completion of this offering, none of which are currently exercisable, at an exercise price equal to the initial public offering price; and

•

excludes 15,000 shares of restricted stock to be issued to certain of our executive officers upon completion of this offering.

We have compiled the market share, market size and competitive ranking data in this prospectus using statistics and other information from several third-party sources. The main third-party sources of information are independent research organizations. We have also formed our estimates of our market share relative to other companies in light of our experience.

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We supply PET bottles to various PepsiCo subsidiaries and to independent companies that bottle PepsiCo products. When we refer to PepsiCo in this prospectus, we mean PepsiCo and its subsidiaries, and not such independent companies.

When we refer to “we,” “us” or “our” in this prospectus, we mean Constar International Inc. and its subsidiaries.

All brand names and trademarks appearing in this prospectus are the property of their respective holders.

Risk Factors

See “Risk Factors” beginning on page 9 for a discussion of risks that should be considered by potential investors.

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Summary Selected Historical and Pro Forma Financial Information

The following table presents:

•

our summary historical combined financial data for and at the end of each of the years in the five-year period ended December 31, 2001 and for and at the end of the nine month period ended September 30, 2001 and for and at the end of the nine and twelve month periods ended September 30, 2002; and

•

summary pro forma financial information for the year ended December 31, 2001, for and at the end of the nine month period ended September 30, 2002 and for and at the end of the twelve month period ended September 30, 2002.

The pro forma financial information is not necessarily indicative of either future results of operations or the results that might have occurred if the transactions they reflect on a pro forma basis had been consummated on the indicated dates.

The combined statement of operations data for the years ended December 31, 1997 and 1998, the nine months ended September 30, 2001 and the nine and twelve month periods ended September 30, 2002, and the combined balance sheet data as of December 31, 1997, 1998 and 1999 and as of September 30, 2001 and 2002, are derived from unaudited financial statements but are presented on the same basis of accounting as the combined financial information for the audited periods. All pro forma data is unaudited.

The following table should be read in conjunction with our audited and unaudited financial statements and related notes, our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our “Unaudited Pro Forma Combined Financial Statements” included elsewhere in this prospectus.

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																						Pro Forma Year ended and as of December 31, 2001				Nine Months ended and as of September 30,								Pro Forma Nine Months ended and as of September 30, 2002				Twelve Months ended and as of September 30, 2002(6)				Pro Forma Twelve Months ended and as of September 30, 2002 (6)
		Years ended and as of December 31,																								Nine Months ended and as of September 30,
		1997				1998				1999				2000				2001								2001				2002
		(dollars in millions, except per share data)
Combined Statement of Operations Data:
Net customer sales		$	708.6			$	741.1			$	710.2			$	707.4			$	742.8			$	742.8			$	578.5			$	546.8			$	546.8			$	711.1			$	711.1
Net affiliate sales			7.9				4.3				2.6				4.5				3.0				3.0				2.3				3.5				3.5				4.2				4.2

Net Sales			716.5				745.4				712.8				711.9				745.8				745.8				580.8				550.3				550.3				715.3				715.3
Cost of products sold, excluding depreciation			601.8				613.6				568.4				610.2				648.7				647.8				502.9				458.5				456.4				604.3				602.0
Depreciation			64.0				57.8				57.2				56.7				56.5				56.5				42.3				41.6				41.6				55.8				55.8

Gross Profit			50.7				74.0				87.2				45.0				40.6				41.5				35.6				50.2				52.3				55.2				57.5
Amortization of goodwill			12.2				12.2				12.2				12.2				12.2				12.2				9.1				0.0				0.0				3.1				3.1
Selling and administrative expense			9.9				10.0				10.0				9.1				9.1				15.5				7.0				7.2				11.7				9.3				15.4
Related party charges:
Management charges			4.2				4.1				4.2				4.0				4.4				0.0				3.3				3.0				0.0				4.1				0.0
Research and technology expense			11.1				12.9				12.8				12.5				13.2				10.0				10.3				9.7				7.5				12.6				10.0
Provision for restructuring and asset impairment			47.4				2.6				0.0				0.7				2.0				2.0				2.0				0.0				0.0				0.0				0.0
Interest expense			13.4				10.7				10.6				13.1				10.4				31.4				9.0				1.7				23.6				3.1				31.4
Other expense/(income), net			0.1				(2.2	)			2.4				6.8				0.1				0.1				(0.1	)			0.0				0.0				0.2				0.2
Foreign exchange adjustments			(2.0	)			(1.1	)			(1.1	)			0.3				0.5				0.5				0.3				0.2				0.2				0.4				0.4

Income/(loss) before income taxes and cumulative effect of a change in accounting (1)			(45.6	)			24.8				36.1				(13.7	)			(11.3	)			(30.2	)			(5.3	)			28.4				9.3				22.4				(3.0	)
Provision for income taxes			11.5				(14.4	)			(18.0	)			(1.0	)			(2.5	)			4.1				(3.4	)			(11.1	)			(4.4	)			(10.2	)			(1.3	)
Minority interests			0.1				1.5				(0.4	)			(0.1	)			0.2				0.2				0.3				(0.2	)			(0.2	)			(0.3	)			(0.3	)

Income/(loss) before cumulative effect of a change in accounting (1)		$	(34.0	)		$	11.9			$	17.7			$	(14.8	)		$	(13.6	)		$	(25.9	)		$	(8.4	)		$	17.1			$	4.7			$	11.9			$	(4.6	)

Pro forma income/(loss) per share before cumulative effect of a change in accounting (1)—basic and diluted		$	(2.83	)		$	0.99			$	1.48			$	(1.23	)		$	(1.13	)		$	(2.16	)		$	(0.70	)		$	1.42			$	0.39			$	0.99			$	(0.38	)
Pro forma shares used in computing income/(loss) per share (millions of shares) (2)			12.0				12.0				12.0				12.0				12.0				12.0				12.0				12.0				12.0				12.0				12.0
Combined Balance Sheet Data:
Working capital (3)		$	50.7			$	65.0			$	95.8			$	103.2			$	32.8				N/A			$	63.6			$	33.4			$	(8.7	)		$	33.4			$	(8.7	)
Goodwill			430.5				418.4				406.2				394.0				381.9				N/A				384.9				331.8				331.8				331.8				331.8
Total assets			1,000.4				957.9				959.0				905.9				761.7				N/A				817.6				696.8				709.6				696.8				709.6
Total debt			252.1				227.2				192.8				185.6				74.3				N/A				104.7				20.4				364.3				20.4				364.3
Owners’ net investment/shareholders’ equity			597.8				599.3				614.6				588.2				555.9				N/A				577.9				533.7				215.8				533.7				215.8
Other Data:
Cash flows provided by/(used in):
Operating activities			54.1				60.2				65.9				43.0				126.2				N/A				87.1				59.9				N/A				99.0				N/A
Investing activities			(37.5	)			(35.2	)			(30.6	)			(33.8	)			(12.7	)			N/A				(4.6	)			(14.4	)			N/A				(22.5	)			N/A
Financing activities			(16.0	)			(25.3	)			(39.7	)			(9.9	)			(112.8	)			N/A				(81.9	)			(46.4	)			N/A				(77.3	)			N/A
EBITDA (4)			44.0				105.5				116.1				68.3				67.8				69.9				55.1				71.7				74.5				84.4				87.3
EBITDA before restructuring and asset impairments (4)			76.3				106.7				116.1				68.6				69.5				71.6				56.8				71.7				74.5				84.4				87.3
Capital expenditures			39.3				37.8				32.2				34.9				23.5				23.5				14.6				15.7				15.7				24.6				24.6
Depreciation and amortization			76.2				70.0				69.4				68.9				68.7				68.7				51.4				41.6				41.6				58.9				58.9
Ratio of earnings to fixed charges (5)			—				2.7x				3.5x				—				—				—				—				7.1x				5.2x				4.2x				2.9x
Ratio of EBITDA to interest expense (7)																																											2.8x
Ratio of total debt to EBITDA (7)																																											4.2x

(See footnotes on following page)

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(1)	Excludes a charge of $50.1 ($4.17 per pro forma share) in the first quarter of 2002 for the adoption of SFAS 142, “Goodwill and Other Intangible Assets” (See Note T to the Combined Financial Statements).

(2)	Pro forma weighted shares outstanding of 12,000,000 reflect the capitalization of Constar’s Owner’s Net Investment and a 120,000 for one stock split that we effected on November 4, 2002.

(3)	We define working capital as current assets less current liabilities.

(4)

EBITDA is a non-GAAP measurement that we define as income or loss before interest expense, provision for income taxes, depreciation and amortization, minority interests, and the cumulative effect of a change in accounting. EBITDA before restructuring and asset impairments is a non-GAAP measurement that we define as EBITDA excluding non-cash restructuring charges and impairments of long-lived assets. These measures do not represent cash flow for the periods presented and should not be considered as alternatives to net income/(loss), as indicators of our operating performance or as alternatives to cash flows as a source of liquidity, but are measurements commonly used by financial analysts. Our definition of EBITDA may not be comparable to EBITDA as defined by other companies. Although EBITDA is a non-GAAP measurement, we believe it is a useful measure of pre-tax operating cash flow prior to debt service. The following table reconciles EBITDA before restructuring and asset impairments, and EBITDA, to income/(loss) before income taxes and cumulative effect of a change in accounting:

		Years ended and as of December 31,																								Nine Months ended and as of September 30,
		1997				1998				1999				2000				2001				Pro Forma Year ended and as of December 31, 2001				2001				2002				Pro Forma Nine Months ended and as of September 30, 2002				Twelve Months ended and as of September 30, 2002				Pro Forma Twelve Months ended and as of September 30, 2002
		(dollars in millions)
EBITDA before restructuring and asset impairments		$	76.3			$	106.7			$	116.1			$	68.6			$	69.5			$	71.6			$	56.8			$	71.7			$	74.5			$	84.4			$	87.3
Less: non-cash restructuring and asset impairments			(32.3	)			(1.2	)			0.0				(0.3	)			(1.7	)			(1.7	)			(1.7	)			0.0				0.0				0.0				0.0

EBITDA			44.0				105.5				116.1				68.3				67.8				69.9				55.1				71.7				74.5				84.4				87.3
Less:
Depreciation			(64.0	)			(57.8	)			(57.2	)			(56.7	)			(56.5	)			(56.5	)			(42.3	)			(41.6	)			(41.6	)			(55.8	)			(55.8	)
Amortization of goodwill			(12.2	)			(12.2	)			(12.2	)			(12.2	)			(12.2	)			(12.2	)			(9.1	)			0.0				0.0				(3.1	)			(3.1	)
Interest expense			(13.4	)			(10.7	)			(10.6	)			(13.1	)			(10.4	)			(31.4	)			(9.0	)			(1.7	)			(23.6	)			(3.1	)			(31.4	)

Income/(loss) before income taxes and cumulative effect of a change in accounting		$	(45.6	)		$	24.8			$	36.1			$	(13.7	)		$	(11.3	)		$	(30.2	)		$	(5.3	)		$	28.4			$	9.3			$	22.4			$	(3.0	)

(5)	Earnings did not cover fixed charges by $45.6, $13.7 and $11.3 for the years ended December 31, 1997, 2000 and 2001, respectively. Earnings did not cover fixed charges by $5.3 for the nine months ended September 30, 2001, and by $17.2 for the pro forma year ended December 31, 2001.

(6)

The combined financial data for the twelve months ended and as of September 30, 2002 is derived from the unaudited quarterly historical financial statements for the year ended December 31, 2001 and the nine months ended September 30, 2002. The pro forma combined financial data for the twelve months ended and as of September 30, 2002 includes pro forma adjustments consistent with those used to prepare the pro forma combined financial data for the year ended December 31, 2001, and for and at the nine months ended September 30, 2002.

(7)	The ratios of EBITDA to interest expense and debt to EBITDA are presented for the pro forma twelve months ended and as of September 30, 2002 only. We believe the ratios are most meaningful with respect to the pro forma debt and interest expense for the most recent twelve-month period.

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RISK FACTORS

Our business involves a number of risks, some of which are beyond our control. You should carefully consider each of the risks and uncertainties we describe below, which we believe are the material risks involved in investing in our securities, and all of the other information in this prospectus before deciding to invest in our shares. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also become important factors that may harm our business.

Risks Related To Our Business And Industry

We Had Net Losses In Recent Years And We May Not Generate Profits In The Future

For the fiscal years ended December 31, 2001 and 2000 we had net losses of approximately $13.6 million and $14.8 million, respectively. During the nine months ended September 30, 2002 we had a net loss of approximately $33.0 million, including a charge of $50.1 million for the cumulative effect of a change in accounting for goodwill. Continuing operating losses may limit our ability to service our debt and fund our operations and we may not generate net income from operations in the future.

We Must Generate Sufficient Cash Flow To Service Our Debt And Provide For Ongoing Operations

If we are unable to generate sufficient cash from operations to service our debt and fund our operations, or if we are unable to refinance our debt, we may have to defer capital expenditures or sell assets to generate cash, which could weaken our competitive position. When we complete this offering, we will have approximately $366 million in principal amount of debt consisting of senior subordinated notes and borrowings under our senior secured credit facility. We will need to generate enough cash to service our debt. Although interest rates and the amount outstanding under our senior secured credit facility may vary, based on the interest rates assumed in our unaudited pro forma combined financial statements and assuming that our debt levels do not change from the date of completion of this offering, servicing our outstanding indebtedness under the senior secured credit facility and our senior subordinated notes would require annual payments of approximately $30.2 million of interest (excluding $1.2 million of annual amortization of financing fees and debt discount). Our ability to generate cash depends to some extent on general economic, competitive, legislative and other factors beyond our control. Our senior secured credit facility may alleviate our short-term cash needs, but any borrowings from this facility may further increase our debt. In addition, we may need to refinance all or a portion of our debt and we may be unable to do so on commercially reasonable terms or at all.

Our Debt May Negatively Impact Our Liquidity And Harm Our Competitive Position

Our debt may have important negative consequences for us, such as:

•

significantly increasing our interest expense and related debt service costs;

•

limiting our ability to obtain additional financing;

•

increasing our vulnerability to economic downturns and changing market and industry conditions;

•

limiting our ability to compete with companies that are not as highly leveraged and that may be better positioned to withstand economic downturns; and

•

restricting our ability to pay dividends or make distributions to our stockholders.

We and our subsidiaries may be able to incur substantial additional debt in the future. If new debt is added to our current debt levels or the current debt levels of our subsidiaries, the related risks that we and they now face could intensify.

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Indebtedness Under Our Senior Secured Credit Facility Is Subject To Floating Interest Rates, Which May Cause Our Interest Expense To Increase

Changes in economic conditions could result in higher interest rates, thereby increasing our interest expense and reducing our funds available for operations and other purposes. When we complete this offering, we will have approximately $191 million in borrowings under our senior secured credit facility. We may incur up to an aggregate of $250 million of indebtedness under our senior secured credit facility, which is subject to floating interest rates. A 1% increase in market interest rates on our $191 million in borrowings under our senior secured credit facility would result in an annual increase in our interest expense and a decrease in our income before taxes of approximately $1.9 million.

We Are Subject To Certain Covenant Restrictions In Our Senior Secured Credit Facility And The Indenture Relating To Our Senior Subordinated Notes Which May Limit Our Flexibility In Operating Our Business And Our Ability To Repay Our Indebtedness

Our senior secured credit facility and the indenture relating to our senior subordinated notes contain a number of restrictive covenants that impose significant restrictions on us. Compliance with these restrictive covenants may limit our flexibility in operating our business. Failure to comply with these covenants could give rise to an event of default. These covenants restrict, among other things, our ability to:

•

incur additional indebtedness and guarantee obligations;

•

create liens;

•

engage in mergers, consolidations, liquidations or the creation of subsidiaries;

•

change the nature of our business;

•

make equity investments or loans;

•

sell, lease or otherwise dispose of assets;

•

engage in sale and leaseback transactions;

•

sell or discount notes or receivables;

•

pay dividends, make distributions, or redeem any equity securities;

•

engage in transactions with affiliates;

•

modify our organizational documents or certain debt documents;

•

enter into agreements restricting our ability or the ability of a subsidiary to incur liens, or restricting the ability of a subsidiary to pay dividends to, make or repay loans to, transfer property to, or guarantee indebtedness of, us or any of our other subsidiaries;

•

prepay certain indebtedness; and

•

allow debt to be designated as senior debt.

Our senior secured credit facility also includes financial covenants.

If we default on any of these covenants, the lenders could cause all amounts outstanding under our senior secured credit facility and our senior subordinated notes to be due and payable immediately and the lenders under our senior secured credit facility could proceed against any collateral securing that indebtedness. Our assets or cash flow may not be sufficient to fully repay the borrowing under the senior secured credit facility or the senior subordinated notes, either upon maturity or if accelerated upon an event of default. In addition, any event of default or declaration of acceleration under one debt instrument could also result in an event of default under one or more of our other debt instruments.

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Under our senior secured credit facility, we will pledge as collateral all of the capital stock of our domestic subsidiaries, 65% of the capital stock of our foreign subsidiaries and all of the assets of our domestic subsidiaries. As of September 30, 2002, the book value of the assets of our domestic subsidiaries that will be pledged as collateral was $313.2 million.

The Market For Custom PET Packaging May Not Grow As Large Or As Quickly As We Anticipate

To the extent that the custom PET market does not grow as large or as quickly as we anticipate, our growth and profitability may be lower than we currently expect. We believe that one of the keys to our future success will be our ability to sell more custom PET products. Partly because of the more complex technologies required for custom PET, our margins are higher for custom PET products than for conventional PET products. We believe that an increasing number of products will convert from glass, metal and other packaging to custom PET packaging. A slow rate of conversion would limit our growth.

If We Lose PepsiCo As A Customer Or If PepsiCo Reduces The Number Of Containers That It Purchases From Us, Our Net Sales And Profitability May Decline

PepsiCo may in its discretion terminate its new five-year Supply Agreement with us if we materially breach any of our obligations under the agreement or if a third party acquires more than 20% of our outstanding capital stock or United States-based PET assets. The loss of PepsiCo as a customer would cause our net sales and profitability to decline significantly. Our sales to PepsiCo accounted for approximately 35% of our 2001 revenue and in 2002 PepsiCo acquired another of our customers that accounted for approximately 2.5% of our 2001 revenue. In addition, notwithstanding PepsiCo’s commitment to purchase containers from us in certain geographic regions, PepsiCo may purchase containers from a third party for such regions under several circumstances, including our failure to meet our supply obligations and our failure to meet the quality standards required by the Supply Agreement.

We Enjoy Limited Protection For Our Intellectual Property And The Loss Of Our Intellectual Property Rights Would Negatively Impact Our Ability To Compete In The PET Industry

If we are unable to maintain the proprietary nature of our technologies, we may lose the ability to generate royalties in the future by licensing our technologies and our competitors may use our technologies to compete with us. We have a number of patents covering various aspects of our design and construction of our products, including our Oxbar technology. Our patents may not withstand challenge in litigation, and patents do not ensure that competitors will not develop competing products, design around our patents or infringe upon our patents. The costs of litigation to defend our patents could be substantial and may outweigh the benefits of enforcing our rights under our patents. We market our products internationally, and the patent laws of foreign countries may offer less protection than the patent laws of the United States. Not all of our domestic patents have been registered in other countries. We also rely on trade secrets, know-how and other unpatented proprietary technology, and others may independently develop the same or similar technology or otherwise obtain access to our unpatented technology. To protect our trade secrets, know-how and other proprietary information, we require employees, consultants, advisors and collaborators to enter into confidentiality agreements with us. These agreements may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of this information. In addition, we have from time to time received letters from third parties suggesting that we may be infringing their intellectual property rights and third parties may bring infringement suits against us. If the claims of these third parties are successful, we may be required to seek licenses from these third parties. In addition, other parties use oxygen barrier technologies, and we have not determined whether these technologies may infringe upon our patents.

If We Lose An Existing Lawsuit Regarding Oxbar, Our Ability To Use And License Oxbar For Certain Applications Would Be Impaired

An existing lawsuit challenges our ability to use and sublicense certain applications of Oxbar. Crown Cork & Seal Technologies Corporation, or CCK Technologies, holds the patents related to Oxbar and will contribute these

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patents to us upon the completion of this offering. CCK Technologies is the plaintiff in a patent infringement suit regarding Oxbar for use in certain plastic containers. Oxbar may be combined with various plastic materials, including PET, for use in various forms of packaging. An intervenor in the suit is asserting that it has the exclusive right under a license from CCK Technologies to use and sublicense certain combinations of Oxbar as used in, among other things, PET packaging. CCK Technologies is contesting the intervenor’s claim to the extent it relates to PET packaging. Although we have not earned any revenue from licensing Oxbar, we believe that licensing Oxbar represents a potential source of revenue. If we lose the Oxbar action, the amount of revenue that we may earn by licensing Oxbar will likely be reduced because the intervenor will have the exclusive right to license certain applications of Oxbar. In addition, the patent infringement claim could not proceed against the alleged infringer as the intervenor purports to have granted the alleged infringer a sublicense. If successful, the intervenor may also assert claims against our right to use Oxbar in certain PET applications.

A Third Party Has The Right To Sublicense Our Oxbar-Related Patents, Which May Weaken The Competitive Advantages Of Our Oxbar Technology

Our Oxbar technology is subject to a worldwide royalty-free cross-license with Rexam AB, which owns several patents relating to oxygen-scavenging technology. The cross-license agreement gives both parties the right to use and sublicense each other’s oxygen scavenging technology patents, but not each other’s know-how. The competitive advantages that we believe can be achieved through Oxbar may not be fully realized to the extent that Rexam uses Oxbar to compete with us or sublicenses Oxbar to any of our existing or potential competitors. We are in the process of negotiating a new agreement with Rexam to modify our respective rights to Oxbar, but this agreement may not be concluded.

Rapid Changes In Available Technologies Could Render Our Products And Services Obsolete

Significant technological changes could render our existing technology or our products and services obsolete. The markets in which we operate are characterized by rapid technological change, frequent new product and service introductions and evolving industry standards. We attribute much of our recent competitive success to our existing technology, and our ability to compete may dissipate if our existing technology is rendered obsolete. If we are unable to successfully respond to these developments or do not respond in a cost-effective way, our net sales and profitability may decline. To be successful, we must adapt to rapidly changing markets by continually improving our products and services and by developing new products and services to meet the needs of our customers. Our ability to develop these products and services will depend, in part, on our ability to license leading technologies useful in our business and develop new offerings and technology that address the needs of our customers. Similarly, the equipment that we use may be rendered obsolete by new technologies. A significant investment in new equipment may reduce our profitability.

We May Have Difficulty Replacing Key Personnel

We believe that our success will depend on continued employment by us of senior management and key technical personnel. If one or more of these persons are unable or unwilling to continue in their present positions, and if we are unable to attract and retain other comparable personnel, our business and operations could be disrupted. Certain members of our senior management have years of industry experience, and it would be difficult to find new personnel with comparable experience. Because our business is highly specialized, we believe that it would also be difficult to replace our key technical personnel. There is no guarantee that our key senior management and technical personnel will be able or willing to continue working with us after this offering. In addition, we do not currently maintain key man insurance for any of our senior managers or technical personnel.

Demand For Our Products May Fluctuate As Our Customers Change Their Product Lines And Marketing Strategies

A reduction in demand for PET packaging may reduce our net sales and negatively impact our prospects for future growth. From time to time our customers change product lines, eliminate product lines and reduce the

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amount that they spend on marketing product lines. As a result, our customers’ demand for PET packaging may fluctuate or decrease permanently.

Consolidation Of Our Customers May Increase Our Customers’ Negotiating Leverage And Harm Our Business

The consolidation of our customers may reduce our net sales and profitability. If one of our larger customers acquires one of our smaller customers, or if two of our customers merge, the combined customer’s negotiating leverage with us may increase and our business with the combined customer may become less profitable. In addition, if one of our customers is acquired by a company that has a relationship with one of our competitors, we may lose that customer’s business.

We Operate In A Very Competitive Business Environment And We May Lose Business To Other Forms Of Packaging Or To Our Competitors In The PET Industry

Competition from producers of other forms of packaging and our competitors within the PET industry may cause our customers to purchase other types of packaging or to purchase PET containers from our competitors, which may reduce our net sales and profitability. PET containers compete in the packaging market with glass bottles, metal cans, paperboard cartons and other materials. Changes in the relative cost and quality of other packaging materials may reduce the market for PET containers. In addition, competition within the PET industry is intense and increases in productivity and other factors have increased pricing pressure. Some of our competitors have greater financial, technical and marketing resources than we do. Our current or potential competitors may offer products at a lower cost or products that are superior to ours. In addition, our competitors may be more effective and efficient in integrating new technologies. Although we typically sell to our customers pursuant to long-term contracts, our contracts typically provide that our customers may purchase from an alternative source if we cannot provide products that are of similar quality at an equivalent price. If we lose a significant amount of business from one or more customers, our net sales and profitability may decline.

In addition to competition with other independent suppliers of PET packaging, some of our potential customers produce their own PET containers. Coca-Cola, one of the largest end-users of conventional PET containers in the United States, self-manufactures its own PET preforms and blows its own bottles. Our customers, including PepsiCo, could develop or expand in-house preform production and bottle blowing capacity in the future, which may reduce our sales to those customers and our profitability.

If We Do Not Have Adequate Funds To Make All Capital Expenditures That Are Necessary To Grow With Our Markets And Maintain Our Facilities, Our Business May Be Impaired And Our Profitability Reduced

If we do not have adequate funds to make our capital expenditures or if the expected benefits of capital expenditures are not achieved, our business may be impaired and our profitability reduced. Our business is capital intensive, and our equipment is currently operating at near full capacity. We expect to have substantial capital needs in the near future for capacity expansion. If we do not have funds available to satisfy our capital expenditure requirements, we may not be able to pursue our strategy for profitable growth. We cannot be certain that our capital needs will not be larger than expected. We also can not be certain that the expected benefits of any capital expenditures will be achieved.

Increases In The Price Of Resin May Impact Our Financial Results And May Deter The Growth Of The PET Market

We use large quantities of plastic resin in manufacturing our products and increases in the price of resin may increase our cost of products sold, reduce our profitability and reduce our prospects for growth. Resin is the principal raw material used in the manufacture of our products. Resin is subject to substantial price fluctuations. Resin is a petroleum product and resin prices may fluctuate with prices in the worldwide oil market. Political or economic events in oil producing countries such as those in the Middle East may impact the price of resin. We

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generally do not have long-term supply contracts with our resin suppliers and are therefore subject to the risk of fluctuations in the price of resin. Although most of our contracts permit us to pass the price of resin through to our customers, market conditions may not permit us to fully pass through any future resin price increases. Significant increases in resin prices, coupled with an inability to promptly pass such increases on to customers, may increase our cost of products sold and reduce our profitability. A sustained increase in the price of resin may slow the rate of conversion of alternative packaging materials, such as glass and metal, to PET, or may make these alternative packaging materials more attractive than PET. If this reduces the demand for PET packaging, it may significantly reduce our prospects for growth.

PepsiCo May Choose To Supply Us With Resin, Which May Reduce Our Ability To Negotiate Favorable Resin Purchase Contracts

PepsiCo may choose to supply us with an increasing amount of resin, which may reduce our profitability. Because we are a large purchaser of resin, we enjoy significant leverage in negotiating resin purchase agreements. To the extent that PepsiCo exercises this right with respect to an increasing amount of resin, the amount of resin that we purchase will decline and we may lose some of our leverage in negotiating resin purchase agreements. If we have to pay higher prices for resin, our costs will increase and we may not be able to offer our customers pricing terms as favorable as those we offer now or as favorable as those offered by our competitors.

Interruptions In The Supply Of Resin Could Disrupt Our Operations

If our suppliers are unable to meet our requirements for resin, it may prevent us from manufacturing our products. Our suppliers may not continue to provide resin to us at attractive prices, or at all, and we may not be able to obtain resin in the future from these or other suppliers on the scale and within the time frames we require. Any failure to obtain resin on a timely basis at an affordable cost, or any significant delays or interruptions of supply, could prevent us from supplying our customers on a timely basis.

Expansion of our operations might place a significant strain on our suppliers, some of whom have limited resources and production capacity. Certain of our suppliers, in turn, rely on sole or limited sources of supply for components included in the resin that they sell to us. Failure of our suppliers to adjust to meet such increasing demand may prevent them from continuing to supply resin in the quantities and at the quality and the times required by us, or at all.

We Depend On A Small Number Of Suppliers For Some Of Our Manufacturing Equipment And An Interruption In Our Supply Of Manufacturing Equipment Would Harm Our Ability To Expand

Our business relies on specialized manufacturing equipment that is produced by a small number of suppliers. If any of these suppliers increases its prices significantly, goes out of business or is otherwise unable to meet our requirements for necessary equipment, we may be unable to expand our operations. This may significantly reduce our prospects for growth.

Our Business Is Seasonal And Cool Summer Weather May Result In Lower Sales

Unseasonably cool weather during a summer could reduce our net sales and profitability. A significant portion of our revenue is attributable to the sale of beverage containers. Demand for beverages tends to peak during the summer months. In the past, significant changes in summer weather conditions have affected the demand for beverages, which in turn affects the demand for beverage containers manufactured by us.

Our International Operations Subject Us To Foreign Currency Risk And Other Instabilities

In 2001, we derived approximately 22% of our revenue from sales in foreign currencies. In our financial statements, we translate local currency financial results into United States dollars based on average exchange

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rates prevailing during a reporting period. Our most significant foreign currency exposures are to the British pound and the euro. During times of a strengthening United States dollar, our reported international revenue and earnings will be reduced because the local currency will translate into fewer United States dollars. In addition, we may face restrictions on our ability to repatriate funds from our international operations.

As a result of our international operations, we are also subject to risks associated with operating in foreign countries, including changes in governmental policies and regulations, war, acts of terrorism, and other sources of instability. We are also at risk for acts of terrorism in the United States. These risks may negatively impact our financial condition and results of operations.

Higher Energy Costs And Interrupted Power Supplies May Increase Our Operating Costs And Limit Our Ability To Supply Our Customers

Electrical power is vital to our operations, and we rely on a continuous power supply to conduct our business. If energy costs substantially increase in the future, we could experience a significant increase in operating costs. In addition, frequent power interruptions may limit our ability to supply our customers and negatively impact our business.

We Are Subject To Costs And Liabilities Related To Environmental And Health And Safety Standards

Our facilities and operations are subject to federal, state, local and foreign environmental and employee safety laws and regulations, including those regarding the use, storage, handling, generation, transportation, treatment, emission and disposal of certain substances. The nature of our operations exposes us to the risk of liabilities or claims with respect to environmental and worker health and safety matters.

Currently, we are involved in a small number of compliance and remediation efforts primarily concerning wastewater discharge and possible soil and groundwater contamination, including investigations and certain other activities at our Didam, Netherlands facility for which we have recorded an accrual of $200,000. Based on information presently available, we do not believe that the cost of these efforts will be material. However, environmental and health and safety matters cannot be predicted with certainty, and actual costs may increase materially.

We Face Product Liability Risks And The Risk Of Negative Publicity If Our Products Fail

Our business is exposed to products liability risk and the risk of negative publicity if our products fail. Although we maintain insurance for products liability claims, the amount and scope of our insurance may not be adequate to cover a products liability claim that is successfully asserted against us. In addition, products liability insurance could become more expensive and difficult to maintain and, in the future, may not be available on commercially reasonable terms or at all.

In addition, we are exposed to the products liability risk and negative publicity affecting our customers and suppliers. Because many of our customers are food, beverage and other consumer products companies, with their own products liability risks, our sales may decline if any of our customers are sued on a products liability claim. We may also suffer a decline in sales from the negative publicity associated with such a lawsuit or with adverse public perceptions in general regarding our products or our customers’ products that use our containers.

Our Operations and Profitability Could Suffer If We Experience Labor Relations Problems

A prolonged work stoppage or strike could prevent us from operating our manufacturing facilities. The contract with our union employees in our Didam, Netherlands facility expires on September 30, 2003 and the contract with our union employees in our Sherburn, England facility expires on December 31, 2003. We believe that our employee relations are good and that we will be able to reach new agreements on satisfactory terms.

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However, we may not be able to reach new agreements without a work stoppage or strike and any new agreements that are reached may not be reached on terms satisfactory to us.

We Have A Significant Amount Of Goodwill And A Writedown Of Goodwill Could Result In Lower Reported Net Income And A Reduction Of Our Net Worth

We have a significant amount of goodwill and a writedown of our goodwill would reduce our net worth. At September 30, 2002, we had $331.8 million of goodwill. In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.” We adopted this standard on January 1, 2002 and recorded a charge for the cumulative effect of a change in accounting for $50.1 million. Under the new standard we will no longer amortize goodwill reflected on our balance sheet. We are, however, required to evaluate goodwill reflected on our balance sheet to determine whether the goodwill is impaired under the guidelines of the standard. Accordingly, we will need to test the value of our goodwill for impairment at least annually and, under certain circumstances, recognize an impairment charge.

One circumstance that may indicate the need for an immediate impairment review would be if our book value was in excess of our market capitalization. This could occur at any time after the completion of this offering. As the initial public offering price of our common stock moves closer to the low end of the expected price range of $12.00 to $14.00 per share, it becomes more likely that we will need to perform an impairment review, though we may be required to perform an impairment review even at the top of the range. If we recognize an impairment charge, our net worth will be reduced.

Risks Related To Our Relationship With Crown

If Crown Owns A Significant Portion Of Our Common Stock Upon Completion Of This Offering, Crown Would Be Able To Influence Us

Because Crown’s interests may differ from ours, actions Crown takes with respect to us as a stockholder may not be favorable to us. After the completion of this offering, if the underwriters do not exercise their over-allotment option in full, Crown could own up to 12.5% of our common stock. With such an ownership interest, Crown would be able to influence the outcome of corporate actions requiring stockholder approval. As a result, Crown would be in a position to influence most of our significant corporate actions.

Transitional Arrangements And Agreements With Crown Are Not The Result Of Arm’s Length Negotiations And May Not Be Sustained On The Same Terms

The transitional arrangements and other contractual agreements that we will have with Crown after the completion of this offering will have been made in the context of a parent-subsidiary relationship and negotiated in the overall context of this offering. As a result, these agreements are not on arm’s length terms, and are not representative of the terms that we might have reached with unaffiliated third parties or of the terms of future agreements that we may enter into with unaffiliated third parties. As a result of a material breach relating to us or Crown, Crown may cease to provide these services.

Our Business May Be Disrupted As We Develop Internal Information Technology And Other Services

We are a wholly owned subsidiary of Crown and have received information technology and other corporate services from Crown. Following the completion of this offering we will no longer be wholly owned by Crown, but Crown will continue to provide services to us for a period of time pursuant to contracts between Crown and us. We plan to develop our own corporate service capabilities over time. The development and implementation of these capabilities may divert management’s attention and involve significant costs. We expect the development of our own information technology systems to be particularly demanding. Our business may be disrupted as we begin the transition to internal corporate services.

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We Could Be Liable For Crown’s Pension Obligations

Under certain circumstances we may be liable for Crown’s pension obligations. The Crown pension plans are subject to the Employee Retirement Income Security Act of 1974, or ERISA, and if all Crown pension plans terminated as of December 31, 2001, would have been underfunded by approximately $670 million. Under ERISA, the Pension Benefit Guaranty Corporation, or PBGC, has the authority to terminate an underfunded plan under certain circumstances. If the Crown pension plans were terminated prior to the completion of this offering, we could be held liable for the underfunding. We have discussed this situation with the PBGC, and as a result of these discussions, prior to the completion of this offering we will assume the Crown pension plan that covers all of our current and former hourly employees and certain of our former salaried employees. Provided we assume such plan, the PBGC has indicated that it does not intend to take any action now with respect to the Crown pension plans as a result of this offering. However, if the remaining Crown pension plans are terminated within five years of the completion of this offering, the PBGC may bring a claim under ERISA to hold us liable for the Crown plans’ underfunding if it is determined that a principal purpose of this offering was to evade pension liability. We do not believe that is the case. Because Crown will use its proceeds from this offering to pay a portion of its debt, we believe it is unlikely that we would be liable for any such claim, but we may not prevail. Excluding the Crown pension plan that Constar will assume, if all the Crown pension plans terminated as of December 31, 2001, these plans would have been underfunded by approximately $645 million. The actual amount for which Constar may become liable in the future depends on the future funding status of Crown’s pension plans. In any case, if any of these claims are brought against us in the future, they may be costly to defend and they may reduce our liquidity and the price of our stock.

We Could Be Liable For Income Taxes Owed By Crown

In previous years, our tax results were consolidated with those of Crown and its United States subsidiaries, and we could be liable for income taxes owed by Crown for those years. Following this offering, we will no longer be part of the federal consolidated group or any state combined or consolidated group including Crown and its United States subsidiaries. However, with respect to the years during which we were part of this consolidated group, we are severally liable for the federal income tax liability of each other member of the consolidated group. We could also be jointly and severally liable for state tax liabilities of each other member of a combined or consolidated group for state tax purposes for the years that included us or any of our subsidiaries and Crown or any of its subsidiaries. Certain of our non-United States subsidiaries were also part of a combined tax group including subsidiaries of Crown. We could similarly be liable for foreign taxes of each other member of such a combined tax group for years that our non-United States subsidiaries were included in a combined tax group. Consequently, the Internal Revenue Service or other taxing authority may seek payment of any of the foregoing taxes from us. Disputes or assessments could arise during future audits by the Internal Revenue Service or other taxing authorities in amounts that we cannot quantify.

If Crown Is Unable To Meet Its Financial Obligations, Including Obligations To Its Lenders, Pension Plan Obligations And Payments To Settle Asbestos-Related Claims, Its Own Creditors May Pursue Claims Against Us

If Crown is unable to meet its own financial obligations, including obligations to its lenders, pension plan obligations and payments to settle asbestos-related claims, Crown’s creditors may try to bring their claims for payment against us. If these claims are successful, they may exceed the value of our stockholders’ equity. Crown is highly leveraged and, as of September 30, 2002, the aggregate amount of its outstanding indebtedness due prior to December 31, 2003 was approximately $2.82 billion. A significant portion of Crown’s operating cash flow is used for the payment of principal and interest, funding pension plan obligations and for payments to settle asbestos-related claims brought against Crown. As a result of downgrades in Crown’s credit ratings during 2000 and 2001 and the uncertainties regarding its asbestos-related liabilities, Crown may not be able to access the capital markets in the future, or successfully repay, refinance or restructure its debt. No claims have been asserted against us by Crown’s own creditors, and asbestos-related claims against Crown have not involved our business. While we believe it is unlikely that our historical relationship with Crown would result in liability for claims by Crown’s

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creditors, we may not prevail in such a claim. In any case, if any of these claims are brought against us in the future, they may be costly to defend and they may reduce the price of our stock. We may also have joint liability with Crown for certain taxes, pension obligations and other similar statutory obligations, as discussed in the two immediately preceding risk factors.

Our Directors May Have Conflicts Of Interest Because Of Their Ownership Of Crown Stock And Because Some Of Them Are Also Directors Or Executive Officers Of Crown

Some of our directors own Crown common stock and participate in incentive compensation programs of Crown. This could create, or appear to create, potential conflicts of interest when our directors are faced with decisions that could have different implications for Crown than they do for us. In addition, three of our eight directors are also directors or executive officers of Crown. These directors will owe fiduciary duties to the stockholders of each company and may have conflicts of interest in matters involving or affecting us and Crown. Under our certificate of incorporation and the corporate agreement between us and Crown we have renounced any interests or expectation in being offered any business opportunity presented to Crown or any of its affiliates. In the event that one of our directors who is also a director, officer or employee of Crown or any of its affiliates acquires knowledge of a potential transaction or matter which may be a corporate opportunity for us, that director will have no duty to communicate or present the corporate opportunity to us. In addition, that director may communicate or present the corporate opportunity to Crown or any of its affiliates and will not be liable to us or our stockholders for breach of any fiduciary duty as one of our directors by reason of the fact that Crown or any of its affiliates pursues or acquires the corporate opportunity for itself, directs the corporate opportunity to another person or does not communicate information regarding such corporate opportunity to us.

If Any Transfers Of Assets To Us By Crown Are Deemed To Be Fraudulent Conveyances, We May Be Required To Return The Assets To Crown

If any transfers of assets to us by Crown in connection with this offering are found to be fraudulent conveyances, we may be required to return the assets to Crown or may be held liable to Crown or its creditors for damages alleged to have resulted from the conveyances. In connection with this offering Crown will transfer to us various assets, including intellectual property, as described in “Relationship with Crown Cork & Seal Company, Inc.—License Agreements,” and equity interests in certain Crown affiliates, as described in “—Transfers of Certain Interests.” A court could hold a transfer to be a fraudulent conveyance if Crown received less than reasonably equivalent value and Crown was insolvent at the time of the transfer, was rendered insolvent by the transfer or was left with unreasonably small capital to engage in its business. A transfer may also be held to be a fraudulent conveyance if it was made to hinder, delay or defraud creditors. We believe that Crown is receiving reasonably equivalent value and that Crown is not acting to hinder, delay or defraud creditors, and we therefore do not believe that any of the transfers to us by Crown in connection with this offering would constitute a fraudulent conveyance even if Crown were later determined to have been rendered insolvent or left with unreasonably small capital. However, a court applying the relevant legal standards may not reach the same conclusion. In a recent evidentiary ruling in In re W.R. Grace & Co., the federal bankruptcy court for the District of Delaware held that under the Uniform Fraudulent Transfer Act, whether a transferor is rendered insolvent by a transfer depends on the actual liabilities of the transferor, and not what the transferor knows about such liabilities at the time of the transfer. Therefore, under that court’s analysis, liabilities that are unknown, or that are known to exist but whose magnitude is not fully appreciated at the time of the transfer, may be taken into account in the context of a future determination of insolvency. If the principle articulated by that court is upheld, it would make it very difficult to know whether a transferor is solvent at the time of transfer, and would increase the risk that a transfer may in the future be found to be a fraudulent conveyance.

Risk Factors Relating To Our Common Stock

Future Sales Of Our Shares By Crown Could Cause Our Common Stock Price To Decline

Sales of a substantial number of shares of our common stock by Crown in the public market or the perception that sales by Crown could occur following this offering could reduce the market price of our common

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stock. In particular, Crown is highly leveraged, has other financial obligations and has been the subject of litigation regarding asbestos-related liabilities. Our stock price may decline if the shares of our common stock held by Crown are sold to satisfy these obligations, or if investors become concerned that such sales may take place. The shares of our common stock held by Crown are pledged to Crown’s creditors, who have the right to sell the shares under some circumstances. Crown is not subject to any contractual obligation to maintain its ownership position in our shares, except that it has agreed not to sell or otherwise dispose of any shares of our common stock for a period of 180 days after the completion of this offering, subject to certain exceptions, including exceptions relating to Crown’s pledge to its creditors of our common stock owned by Crown. We have entered into an agreement with Crown under which Crown may require us to register for resale its shares of our common stock.

Provisions Of Our Certificate Of Incorporation And Bylaws Or Delaware Law May Discourage, Delay Or Prevent A Change Of Control Of Our Company Or Changes In Our Management And Therefore Depress The Price Of Our Common Stock

Delaware corporate law and our certificate of incorporation and bylaws contain provisions that could discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions, among other things:

•

establish a classified board of directors so that not all members of our board may be elected at one time;

•

authorize the issuance of “blank check” preferred stock that our board could issue to increase the number of outstanding shares and to discourage a takeover attempt;

•

eliminate the ability of our stockholders to act by written consent or to call special meetings of stockholders;

•

eliminate cumulative voting in the election of directors, which would allow less than a majority of our stockholders to elect director candidates; and

•

establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

We will also be afforded the protections of Section 203 of the Delaware General Corporation Law, which would prevent us from engaging in a business combination with a 15% or greater stockholder for a period of three years from the date it acquired such status unless certain board or stockholder approvals are obtained. Section 203 may discourage takeover attempts that might result in a premium over the market price for the shares of our common stock.

The Initial Public Offering Price Of Our Common Stock May Not Be Indicative Of The Market Price After This Offering And Our Stock Price May Be Volatile

Prior to this offering, there has been no public market for our common stock and an active market for our common stock may not develop or be sustained after this offering. The initial public offering price of our common stock will be determined by negotiations between us and representatives of the underwriters and may not be indicative of the market price of the common stock after this offering. Among the factors that could affect our stock price are:

•

actual or anticipated variations in our quarterly operating results;

•

new sales formats or new products or services offered by us and our competitors;

•

changes in financial estimates prepared by securities analysts;

•

conditions or trends in the packaging industry in general and the PET container and preform industry in particular;

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•

announcements by us and our competitors of technological innovations;

•

announcements by us or our competitors of significant acquisitions, strategic partnerships or joint ventures;

•

our capital commitments;

•

additions or departures of our key personnel; and

•

sales of our common stock.

Many of these factors are beyond our control. These factors may decrease the market price of our common stock, regardless of our operating performance.

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FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Statements that include the words “expect,” “believe,” “intend,” “plan,” “anticipate,” “project,” “will,” “may,” “could,” “should,” “pro forma,” “continues,” “estimates,” “potential,” “predicts,” “goal,” “objective” and similar statements of a future nature identify forward-looking statements. In addition, this prospectus contains forecasts of future growth in markets we serve. These forecasts were prepared by entities that are not affiliated with us or the underwriters and are based on assumptions formulated by those entities without consultation with us or the underwriters. These forward-looking statements and forecasts are subject to risks, uncertainties and assumptions, including, among other things:

•

Continued conversion from metal, glass and other materials for packaging to plastic packaging;

•

Increasing demand for packaging requiring our proprietary technologies and know-how;

•

Our ability to protect our existing technologies and to develop new technologies;

•

Our ability to control costs;

•

The terms upon which we acquire resin and our ability to reflect those terms in our sales;

•

Our debt levels and our ability to obtain financing and service debt;

•

Our ability to comply with restrictive covenants contained in the instruments governing our indebtedness;

•

Our additional costs incurred as an independent public company;

•

Legal and regulatory proceedings and developments;

•

General economic and political conditions;

•

Weather conditions;

•

Our ability to identify trends in our markets and to offer new solutions that address the changing needs of these markets;

•

Our ability to successfully execute our business model;

•

Our ability to compete successfully against competitors; and

•

The other risks described above in “Risk Factors.”

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this prospectus might not occur and the forecasts included in this prospectus may not be accurate. The forward-looking statements in this prospectus are made as of the date of this prospectus.

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USE OF PROCEEDS

The net proceeds from the sale of shares of our common stock will be paid to Crown, the selling stockholder. We will not receive any proceeds from this offering. We anticipate that upon completion of this offering we will borrow $40.8 million under our revolving loan facility to pay refinancing fees, accrued interest on our $350 million note to Crown and $26.5 million of principal on our note to Crown. Our revolving loan facility will bear interest at a rate estimated to be LIBOR plus 350 basis points (subject to adjustment from time to time based on our leverage ratio) and will have a five-year maturity. Our term loan will bear interest at a rate estimated to be LIBOR plus 425 basis points and will have a seven-year maturity. The proceeds from the concurrent $175 million note offering, the proceeds of our $150 million term loan issued at 99% of face value and $26.5 million of our initial borrowings under our revolving loan facility will be used to pay our $350 million note to Crown. This note bears an interest rate of 4.3% and a maturity date of one year from October 15, 2002, the date of issuance.

We are currently a guarantor of the indebtedness under Crown’s credit facility, and our common stock held by Crown and substantially all of our assets are pledged to secure Crown’s indebtedness under its credit facility. Concurrently with the completion of this offering, Crown will use its proceeds from this offering and from our repayment of intercompany debt to pay a portion of its indebtedness, including under its credit facility, and Crown will obtain from the lenders under Crown’s credit facility a release of our guarantee of Crown’s indebtedness and their security interest in our assets and the common stock being offered by Crown. We do not intend to guarantee the indebtedness of Crown or pledge assets to secure the indebtedness of Crown in the future. Affiliates of certain of the underwriters are lenders under Crown’s credit facility.

DIVIDEND POLICY

We currently anticipate that, following the completion of this offering, all future earnings will be retained for use in our business and that we will not pay any cash dividends on our common stock in the foreseeable future. The payment of any future dividends will be at the discretion of our board of directors and will depend upon, among other things, future earnings, operations, capital requirements, our general financial condition and general business conditions. We are primarily a holding company. Our ability to pay dividends in the future will therefore also depend on our receipt of dividends from our subsidiaries. Our subsidiaries are legally distinct from us and have no obligation to pay dividends to us in the future. In addition, our ability to pay future dividends is restricted by the terms of our senior subordinated notes and senior secured credit facility, and may be restricted in the future by other agreements.

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CAPITALIZATION

The following table shows our capitalization as of September 30, 2002 stated on an actual basis and on an adjusted basis to give effect to the following events, as if each such event had occurred on September 30, 2002:

•

a 120,000 for one stock split that we effected on November 4, 2002;

•

the distribution to Crown of a note in the principal amount of $350 million;

•

the completion of our $175 million concurrent note offering, the completion of a $150 million term loan arrangement issued at 99% of face value and which amortizes at the rate of 1% per year, and the application of these proceeds to repay $323.5 million of our note to Crown;

•

our borrowing $40.8 million under our revolving loan facility to pay refinancing fees, accrued interest on our $350 million note to Crown and the remaining principal of $26.5 million on our note to Crown;

•

the completion of this offering at an assumed price of $13.00 per share and the issuance of 15,000 shares of restricted stock;

•

the capitalization by Crown of its other outstanding intercompany indebtedness with us; and

•

the retention by Crown of all liability for the pension benefits previously earned by our active salaried employees and certain of our former salaried employees.

The information presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our combined financial statements and related notes included elsewhere in this prospectus.

		At September 30, 2002
		Actual				As Adjusted
		(in millions)
Revolving loan facility			—			$	40.8
Term loan			—				148.5
Intercompany debt		$	20.4				—
Senior subordinated notes			—				175.0

Total debt			20.4				364.3

Minority interests			3.1				3.1
Common stock, par value $.01 per share; 1,000 shares authorized, actual; 100 shares issued and outstanding, actual; 75,000,000 shares authorized, as adjusted; 12,000,000 shares issued and outstanding, as adjusted			—				0.1
Preferred stock, par value of $.01 per share; no shares authorized, actual; no shares issued and outstanding, actual; 5,000,000 shares authorized, as adjusted; no shares issued and outstanding, as adjusted			—				—
Additional paid in capital			—				247.3
Unearned compensation—restricted stock awards			—				(0.2	)
Accumulated other comprehensive loss			—				(31.4	)
Owner’s net investment			533.7				—

Total equity			533.7				215.8

Total capitalization		$	557.2			$	583.2

Total debt to capitalization ratio			3.7	%			62.5	%

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DILUTION

Our net tangible book value at September 30, 2002 was approximately $201.9 million, or $16.83 per share, after giving effect to a 120,000 for one stock split. Net tangible book value per share is equal to our total tangible assets less our total liabilities, divided by the total number of shares of our common stock outstanding. After giving effect to:

•

the completion of our $175 million concurrent note offering and a $150 million term loan arrangement issued at 99% of face value, and the application of these proceeds to repay $323.5 million of our note to Crown;

•

our borrowing $40.8 million under our revolving loan facility to pay refinancing fees, accrued interest on our note to Crown and the remaining principal of $26.5 million on our note to Crown;

•

the completion of this offering at an assumed price of $13.00 per share and the issuance of 15,000 shares of restricted stock;

•

the capitalization by Crown of its other outstanding intercompany indebtedness with us; and

•

the retention by Crown of all liability for the pension benefits previously earned by our active salaried employees and certain of our former salaried employees;

our pro forma as adjusted net tangible book value at September 30, 2002 would have been approximately $(116.0) million, or $(9.67) per share. This represents an immediate decrease in net tangible book value of $24.94 per share to Crown, our sole existing stockholder, and an immediate dilution of $21.11 per share to new investors purchasing shares of our common stock in this offering. The following table illustrates the per share dilution to the new investors.


Assumed initial public offering price per share					$	13.00
Net tangible book value per share at September 30, 2002		$	16.83
Decrease per share attributable to this offering			26.50
Pro forma as adjusted net tangible book value per share after this offering						(9.67	)

Dilution per share to new investors in this offering					$	22.67

On November 4, 2002, we effected a 120,000 for one stock split, which increased the number of shares of our common stock owned by Crown to 12,000,000. Crown did not pay us any cash for these shares. In connection with this offering, Crown will sell 12,000,000 shares of our common stock, 10,500,000 of which will be sold to new investors and 1,500,000 of which will be resold to Crown. The number of shares of our common stock held by new investors will represent 87.5% of the total number of shares of our common stock outstanding after this offering. If the over-allotment option is exercised in full, the number of shares of our common stock held by new investors following this offering will increase to 12,000,000.

The foregoing discussion and tables exclude approximately 225,000 shares of common stock issuable upon the exercise of stock options to be issued on the date of this offering, including approximately 133,000 shares of stock issuable upon the exercise of stock options to be issued to certain of our executive officers and approximately 92,000 shares of common stock issuable upon the exercise of stock options to be issued to other employees, none of which are currently exercisable, at an exercise price equal to the initial public offering price of our common stock. If the stock options are exercised, our stockholders may experience further dilution. If the 133,000 stock options issued to certain of our executives were exercised, and the proceeds were not used to reacquire then-outstanding shares, the dilution to new investors in this offering would be $22.42 per share. The foregoing discussion and table includes approximately 15,000 shares of restricted stock to be issued to certain of our executive officers on the date of this offering. No cash will be paid to us in connection with these stock option and restricted stock grants.

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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

Our unaudited pro forma combined financial statements as of and for the nine months ended September 30, 2002 and for the year ended December 31, 2001, have been prepared from the combined financial statements that we present elsewhere in this prospectus. These statements reflect adjustments for the following:

•

a 120,000 for one stock split that we effected on November 4, 2002;

•

the distribution to Crown of a note in the principal amount of $350 million;

•

the completion of our $175 million senior subordinated note offering and our $150 million term loan arrangement issued at 99% of face value, and the application of these proceeds to repay $323.5 million of our note to Crown;

•

our borrowing $40.8 million under our revolving loan facility to pay refinancing fees, accrued interest on our $350 million note to Crown and the remaining principal of $26.5 million on our note to Crown;

•

the completion of this offering at an assumed price of $13.00 per share and the issuance of 15,000 shares of restricted stock;

•

the capitalization by Crown of its other outstanding intercompany indebtedness with us;

•

the retention by Crown of all liability for the pension benefits previously earned by our active salaried employees and certain of our former salaried employees; and

•

transactions described under “Relationship with Crown Cork & Seal Company, Inc.” as described in the notes to the pro forma combined financial information below.

These adjustments are more fully described in the notes to the pro forma combined financial information below.

For purposes of the pro forma combined statements of operations, these transactions are assumed to have occurred at the beginning of 2001. For purposes of the pro forma combined balance sheet, they are assumed to have occurred on September 30, 2002.

The pro forma combined statements of operations for the nine months ended September 30, 2002 exclude the cumulative effect of a change in accounting for goodwill.

The unaudited pro forma combined financial statements should not be considered indicative of actual results that would have been achieved had the transactions been completed as of the dates indicated and do not purport to indicate the balance sheet data or results of operations as of any future date or any future period.

The unaudited pro forma combined financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and the related notes included elsewhere in this prospectus.

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Pro Forma Combined Statements of Operations

		Year ended December 31, 2001												Nine Months ended September 30, 2002
		Actual				Pro Forma adjustments				Pro Forma				Actual				Pro Forma adjustments				Pro Forma
Net customer sales		$	742.8							$	742.8			$	546.8							$	546.8
Net affiliate sales			3.0								3.0				3.5								3.5

Net sales			745.8								745.8				550.3								550.3
Cost of products sold, excluding depreciation			648.7			$	(0.9	)(6)			647.8				458.5			$	(2.1	)(6)			456.4
Depreciation			56.5								56.5				41.6								41.6

Gross profit			40.6				0.9				41.5				50.2				2.1				52.3
Amortization of goodwill			12.2								12.2				0.0								0.0
Selling and administrative expense			9.1				6.4	(1)			15.5				7.2				4.5	(1)			11.7
Management charges			4.4				(4.4	)(1)			0.0				3.0				(3.0	)(1)			0.0
Research and technology expense			13.2				(3.2	)(2)			10.0				9.7				(2.2	)(2)			7.5
Provision for restructuring and asset impairment			2.0								2.0				0.0								0.0
Interest expense			10.4				21.0	(3)			31.4				1.7				21.9	(3)			23.6
Other expense/(income), net			0.1								0.1				0.0								0.0
Foreign exchange adjustments			0.5								0.5				0.2								0.2

Income/(loss) before income taxes and cumulative effect of a change in accounting			(11.3	)			(18.9	)			(30.2	)			28.4