million for the three months ended March 30, 2003. Approximately one third of the amount recorded within OCI is expected to be recognized as interest expense in the next twelve months. Failure to properly document the Company's interest rate swaps as cash flow hedges would result in income statement recognition of all or part of the cumulative $2.3 million unrealized loss recorded in OCI as of March 30, 2003.

The Company entered into interest rate swap agreements to hedge the exposure to increasing rates with respect to its prior senior credit agreement. These interest rate swaps were accounted for as cash flow hedges. In connection with the closing of the Senior Credit Agreement (as hereinafter defined) on February 14, 2003 these swaps no longer qualified for hedge accounting. As such, the Company recorded a non-cash charge of approximately $4.8 million within interest expense as a result of the reclassification into expense of the remaining unrealized loss on existing interest rate swap agreements applicable to indebtedness under its prior senior credit agreement. These interest rate swap agreements expire at various points through September 2003. The effective portion of the change in fair value of these swaps prior to February 14, 2003 was recorded in OCI and was an unrealized gain of $1.5 million. The change in fair value of these swaps after February 14, 2003 was recognized in earnings and resulted in a reduction of interest expense of $1.3 million for the three months ended March 30, 2003.

Liquidity and Capital Resources

In the three months ended March 30, 2003, the Company funded, through its various borrowing arrangements, $10.0 million of operating activities and $18.9 million of investing activities.

The Company's Senior Credit Agreement currently consists of two term loans to the Operating Company with initial term loan commitments totaling $670.0 million and a revolving loan facility to the Operating Company totaling $150.0 million. The unused availability of the revolving credit facility under the Senior Credit Agreement at March 30, 2003 was $110.4 million. The obligations of the Operating Company under the Senior Credit Agreement are guaranteed by Holdings and certain other subsidiaries of Holdings. The term loans are payable in quarterly installments and require payments of $2.5 million in 2003, $5.0 million in 2004, $25.0 million in 2005, $50.0 million in 2006, $50.0 million in 2007, $235.0 million in 2008, $235.0 million in 2009 and $67.5 million in 2010. The Company expects to fund scheduled debt repayments from cash from operations and unused lines of credit. The revolving loan facility expires on the earlier of February 14, 2008 and the Term Loan maturity date.

The Senior Credit Agreement contains certain affirmative and negative covenants as to the operations and financial condition of the Company, as well as restrictions on the payment of dividends and other distributions to Holdings. Substantially all domestic tangible and intangible assets of the Company are pledged as collateral pursuant to the terms of the Senior Credit Agreement.

The Company's other indebtedness included the issuance of $225.0 million of senior subordinated notes due 2008 and the issuance of $169.0 million aggregate principal amount at maturity of Senior Discount Notes due 2009 which yielded gross proceeds of $100.6 million. At March 30, 2003, the aggregate accreted value of the Senior Discount Notes was $169.0 million. The Senior Subordinated Notes are unconditionally guaranteed on a senior subordinated basis by Holdings and mature on January 15, 2008, with interest payable on $150.0 million at a fixed rate of 8.75% and with interest payable on $75.0 million at LIBOR plus 3.625%. The Senior Discount Notes mature on January 15, 2009, with cash interest payable semi-annually beginning July 15, 2003 at 10.75%. The effective interest rate to maturity on the Senior Discount Notes is 10.75%. At March 30, 2003, the Company's total indebtedness was $1,120.4 million.

As market conditions warrant, the Company and its major equityholders, including Blackstone Capital Partners III Merchant Bank Fund L.P. and its affiliates, may from time to time repurchase debt securities issued by the Company, in privately negotiated or open market transactions, by tender offer or otherwise.

Covenant compliance EBITDA is not intended to represent cash flow from operations as defined by generally accepted accounting principles and should not be used as an alternative to net income as an indicator of operating performance or to cash flow as a measure of liquidity. Covenant compliance EBITDA is calculated in the Senior Credit Agreement and Indentures by adding minority interest,

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extraordinary items, interest expense, interest income, income taxes, depreciation and amortization expense, impairment charges, the ongoing $1.0 million per year fee paid pursuant to the Blackstone monitoring agreement, non-cash equity income in earnings of joint ventures, other non-cash charges, Recapitalization expenses, special charges and unusual items and certain other charges to net (loss) income. Covenant compliance EBITDA is included because covenants in the Company's debt agreements are tied to ratios based on that measure. For example, the Senior Credit Agreement requires that the Operating Company maintain a ratio of covenant compliance EBITDA to interest starting at a minimum of 2.25x and a ratio of net debt to covenant compliance EBITDA starting at a maximum of 5.50x, in each case for the most recent four quarter period. The ability of the Operating Company to incur additional debt and make certain restricted payments under the Indentures is tied to a ratio of covenant compliance EBITDA to interest expense of 1.75 to 1, except that the Operating Company may incur certain debt and make certain restricted payments without regard to the ratio, such as up to $650 million under the Senior Credit Agreement and investments equal to 10% of the Operating Company's total assets. While covenant compliance EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements, these terms are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation. Covenant compliance EBITDA is calculated as follows:

				Three Months Ended
				March 30, 2003				March 31, 2002
				(In millions)
Net (loss) income				$	(4.6	)		$	3.2
Interest expense, net					30.9				22.0
Income tax expense					1.7				0.2
Depreciation and amortization					17.6				17.5
Impairment charges					0.6				—
Fees paid pursuant to the Blackstone monitoring agreement					0.3				0.3
Minority interest					0.3				0.3
Certain other charges (1)(2)					2.1				3.2
Covenant compliance EBITDA				$	48.9			$	46.7

(1)

The three months ended March 30, 2003 include costs related to global reorganization of $2.1 million. The three months ended March 31, 2002 include costs related to global reorganization of $3.1 million and other costs of $0.1 million.

(2)

Does not include project startup costs, which are included in the calculation of covenant compliance EBITDA under the Senior Credit Agreement and Indentures. These startup costs were $0.5 million and $1.1 million for the three months ended March 30, 2003 and March 31, 2002, respectively.

Management believes that capital investment to maintain and upgrade property, plant and equipment is important to remain competitive. Management estimates that on average the annual capital expenditures required to maintain the Company's facilities are approximately $30 million per year. Additional capital expenditures beyond this amount will be required to expand capacity. Capital expenditures for the three months ended March 30, 2003 were $18.9 million. For the fiscal year 2003, the Company expects to incur approximately $135.0 million of capital expenditures. However, total capital expenditures for 2003 will depend on the size and timing of growth related opportunities. The Company's principal sources of cash to fund ongoing operations and capital requirements have been and are expected to continue to be net cash provided by operating activities and borrowings under the Senior Credit Agreement. Management believes that these sources will be sufficient to fund the Company's ongoing operations and its foreseeable capital requirements.

On July 9, 2002, the Company and Graham Engineering amended the equipment sales, service and licensing agreement to, among other things, (i) limit the Company's existing rights in exchange for a perpetual license in the event Graham Engineering proposes to sell its rotary extrusion blow molding equipment business or assets to certain of the Company's significant competitors; (ii) clarify that the

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Company's exclusivity rights under the equipment sales, service and licensing agreement do not apply to certain new generations of Graham Engineering equipment; (iii) provide Graham Engineering certain recourse in the event the Company decides to buy certain high output extrusion blow molding equipment from any supplier other than Graham Engineering; and (iv) obligate the Company, retroactive to January 1, 2002 and subject to certain credits and carry-forwards, to make payments for products and services to Graham Engineering in the amount of at least $12.0 million per calendar year, or else pay Graham Engineering a shortfall payment.

Under the Senior Credit Agreement, the Operating Company is subject to restrictions on the payment of dividends or other distributions to Holdings; provided that, subject to certain limitations, the Operating Company may pay dividends or other distributions to Holdings:

•

in respect of overhead, tax liabilities, legal, accounting and other professional fees and expenses;

•

to fund purchases and redemptions of equity interests of Holdings or BMP/Graham Holdings Corporation held by then present or former officers or employees of Holdings, the Operating Company or their subsidiaries or by any employee stock ownership plan upon that person's death, disability, retirement or termination of employment or other circumstances with annual dollar limitations; and

•

to finance the payment of cash interest on the Senior Discount Notes or any notes issued pursuant to a refinancing of the Senior Discount Notes.

New Accounting Pronouncements Not Yet Adopted

In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. ("FIN") 46, "Consolidation of Variable Interest Entities." FIN 46 establishes accounting and disclosure requirements for ownership interests in entities that have certain financial or ownership characteristics (sometimes known as "Special Purpose Entities"). FIN 46 is applicable for variable interest entities created after January 31, 2003 and becomes effective in the first fiscal year or interim accounting period beginning after June 15, 2003 for variable interest entities created before February 1, 2003. Management does not believe that adoption of FIN 46 will have a significant impact on the Company's results of operations or financial position.

In April 2002, the FASB issued Statement of Financial Accounting Standards ("SFAS") 149 "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." This Statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS 133. This Statement is effective for contracts entered into or modified, and for hedging relationships designated after June 30, 2003. Other provisions of this statement that related to SFAS 133 Implementation Issues should continue to be applied in accordance with their respective effective dates. Management has not yet determined the impact that SFAS 149 will have on the Company's results of operations or financial position.

Subsequent Events

On March 31, 2003 the Company completed the sale of certain assets and liabilities of its German subsidiary, Graham Packaging Deutschland GmbH. The resulting losses were not significant.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

See the information set forth in Item 7A of Holdings' Annual Report on Form 10-K for the fiscal year ended December 31, 2002 for complete quantitative and qualitative disclosures about market risk. The following table provides disclosure as of March 30, 2003 for financial instruments that have experienced material changes in fair value since December 31, 2002.

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				Expected Maturity Date of Interest Rate Swap Agreements at March 30, 2003																												Fair Value March 30, 2003
				2003				2004				2005				2006				2007				Thereafter				Total
				(Dollars in thousands)
Derivatives matched against liabilities: Pay fixed swaps				$	300,000				—				—			$	300,000				—				—			$	600,000			$	(5,818	)
Pay rate					5.25	%			—				—				2.54	%			—				—				3.89	%
Receive rate					1.22	%			—				—				2.23	%			—				—				1.72	%

Item 4.    Controls and Procedures

(a)	Evaluation of Disclosure Controls and Procedures

The Company's principal executive officer and principal financial officer, after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) as of a date within ninety days before the filing date of this report, have concluded that as of such date the Company's disclosure controls and procedures were adequate and effective to ensure that material information relating to Holdings would be made known to them by others within the company.

(b)	Changes in Internal Controls

There were no significant changes in the Company's internal controls or in other factors that could significantly affect Holdings' disclosure controls and procedures subsequent to the date of their evaluation, nor were there any significant deficiencies or material weaknesses in Holdings' internal controls. As a result, no corrective actions were required or undertaken.

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PART II.    OTHER INFORMATION

Item 6.    Exhibits and Reports on Form 8-K

(a)	Exhibits

	Exhibit 99.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)	Reports on Form 8-K

	During the quarter ended March 30, 2003 the Company filed a Report on Form 8-K dated February 10, 2003 to report the Company's preliminary results for the quarter and the year ended December 31, 2002.

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SIGNATURE

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

Dated:    May 13, 2003

				GRAHAM PACKAGING HOLDINGS COMPANY (Registrant)
				By: BCP/Graham Holdings L.L.C.,             its General Partner
				By:				/s/ John E. Hamilton
								John E. Hamilton Chief Financial Officer (chief accounting officer and duly authorized officer)

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CERTIFICATION

I, Philip R. Yates, certify that:

1)	I have reviewed this quarterly report on Form 10-Q of Graham Packaging Holdings Company;

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

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

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

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

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

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

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

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

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

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

Date:    May 13, 2003

				By:				/s/ Philip R. Yates
								Philip R. Yates Chief Executive Officer

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CERTIFICATION

I, John E. Hamilton, certify that:

1)	I have reviewed this quarterly report on Form 10-Q of Graham Packaging Holdings Company;

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

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

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

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

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

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

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

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

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

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

Date:    May 13, 2003

				By:				/s/ John E. Hamilton
								John E. Hamilton Chief Financial Officer

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