RESULTS OF OPERATIONS


                                                                          Three Months Ended September 30,                  Nine Months Ended September 30,
                                                                             2009                     2008                    2009                     2008

Net Sales                                                                   100.0 %                  100.0 %                 100.0 %                  100.0 %
Cost of sales (exclusive of depreciation shown below)                        67.7                     68.9                    66.8                     68.2
Selling, research & development and administration                           13.6                     13.6                    15.2                     14.3
Depreciation and amortization                                                 7.0                      6.1                     7.0                      6.2
Facilities Consolidation and Severance Expenses                               0.5                        -                     0.5                        -

Operating Income                                                             11.2                     11.4                    10.5                     11.3
Other income (expense)                                                       (0.7 )                   (0.5 )                  (0.8 )                   (0.3 )

Income before income taxes                                                   10.5                     10.9                     9.7                     11.0


Net income                                                                    7.1 %                    7.5 %                   6.6 %                    7.5 %


Effective Tax Rate                                                           32.5 %                   31.9 %                  32.0 %                   31.7 %

                                           Three Months Ended September 30,                                         Nine Months Ended September 30,
                                 2009          % of Total            2008         % of Total             2009         % of Total              2008         % of Total

Domestic                  $   135,652                  28 %     $ 138,116                 26 %     $  382,778                 28 %     $   401,532                 25 %
Europe                        273,142                  58 %       321,165                 60 %        779,710                 58 %       1,016,384                 63 %
Other Foreign                  64,874                  14 %        72,899                 14 %        183,504                 14 %         197,841                 12 %

COST OF SALES (EXCLUSIVE OF DEPRECIATION SHOWN BELOW) Our cost of sales as a percent of net sales decreased to 67.7% in the third quarter of 2009 compared to 68.9% in the third quarter of 2008.
The following factors positively impacted our cost of sales percentage in the third quarter of 2009:
Cost Savings Efforts. Due to the current economic condition, we have implemented cost reduction programs to bring costs in line with current production levels. Mix of Products Sold. Compared to the prior year, our Pharma segment sales represented a larger percentage of our overall sales. This positively impacts our cost of sales percentage as margins on our pharmaceutical products typically are higher than the overall company average.
Strengthening of the U.S. Dollar. We are a net importer from Europe into the U.S. of products produced in Europe with costs denominated in Euros. As a result, when the U.S. dollar or other currencies strengthen against the Euro, products produced in Europe (with costs denominated in Euros) and sold in currencies that are stronger compared to the Euro, have a positive impact on cost of sales as a percentage of net sales.
The following factor negatively impacted our cost of sales percentage in the third quarter of 2009:

Underutilized Overhead Costs in Certain Operations. Several of our business operations, especially in the Beauty & Home business segment, saw a decrease in unit volumes. As a result of these lower production levels, overhead costs were underutilized, thus negatively impacting cost of goods sold as a percentage of net sales.
Our cost of sales as a percent of net sales decreased to 66.8% in the first nine months of 2009 compared to 68.2% in the first nine months of 2008. The decrease is primarily due to the same factors mentioned above.
SELLING, RESEARCH & DEVELOPMENT AND ADMINISTRATIVE Our Selling, Research & Development and Administrative expenses ("SG&A") decreased by approximately $8.2 million in the third quarter of 2009 compared to the same period a year ago. Changes in currency rates accounted for approximately $1.8 million of the decrease in SG&A in the quarter. The remainder of the decrease is due primarily to cost savings efforts as mentioned above. For the quarter ended September 30, 2009, SG&A as a percentage of net sales remained consistent at 13.6% when compared to the prior year.
SG&A decreased by approximately $25.5 million for the nine months ended September 30, 2009 compared to the same period a year ago. Changes in currency rates accounted for approximately $13.9 million of the decrease in SG&A. The remainder of the decrease is due primarily to the reasons mentioned above. SG&A as a percentage of net sales increased primarily due to lower sales volumes. For the nine months ended September 30, 2009, the percentage increased to 15.2% compared to 14.3% of net sales in the same period of the prior year.
DEPRECIATION AND AMORTIZATION Depreciation and amortization expenses increased approximately $0.5 million in the second quarter of 2009 to $33.0 million compared to $32.5 million in the third quarter of 2008. Changes in foreign currency rates accounted for a $1.3 million decrease, resulting in a net increase of $1.8 million on a constant currency basis. The increase is related to the write-off of certain license agreements that were deemed to have no value in the third quarter plus higher than normal capital expenditures during 2008. Depreciation and amortization as a percentage of net sales increased to 7.0% in the third quarter of 2009 compared to 6.1% for the same period a year ago due to the decrease in sales.
Depreciation and amortization decreased approximately $5.3 million in the first nine months of 2009 to $94.6 million compared to $99.9 million for the first nine months of 2008. Changes in foreign currency rates accounted for an $8.1 million decrease for a net increase of $2.8 million on a constant currency basis. The explanation for this increase is the same as the third quarter comments above. Depreciation and amortization as a percentage of sales increased to 7.0% of net sales for the nine months ended September 30, 2009 compared to 6.2% in the same period of the prior year.
FACILITIES CONSOLIDATION AND SEVERANCE Facilities consolidation and severance expenses were $2.6 million (0.5% of sales) in the third quarter of 2009. There were no corresponding expenses in 2008. The amount represents the recognition of expenses related to the Company's previously announced plan to consolidate several facilities and reduce headcount. The total amount recorded since the program was initiated during the second quarter of 2009 is $5.7 million (0.5% of sales). The total costs associated with the consolidation/severance programs are estimated to be approximately $7 million. Annual savings are estimated to be in the range of $3 million to $4 million primarily beginning in 2010.
OPERATING INCOME Operating income decreased approximately $7.6 million in the third quarter of 2009 to $52.9 million compared to $60.5 million in the same period in the prior year. The decrease is primarily due to the decrease in sales of our products, particularly in the Beauty & Home segment, the strengthening of the U.S. dollar compared to the Euro which is having a negative impact on the translation of our results in U.S. dollars and the impact of the facilities consolidation and severance program as discussed above. Operating income as a percentage of net sales decreased to 11.2% in the third quarter of 2009 compared to 11.4% for the same period in the prior year.
Operating income decreased approximately $41.6 million in the first nine months of 2009 to $141.5 million compared to $183.1 million in the same period in the prior year. The decrease is primarily due to the same reasons mentioned above when discussing the third quarter results. Operating income as a percentage of sales decreased to 10.5% in the first nine months of 2009 compared to 11.3% for the same period in the prior year.
NET OTHER EXPENSE Net other expenses in the third quarter of 2009 increased to $3.4 million from $2.2 million in the same period in the prior year. Interest income decreased by $2.7 million due to lower interest rates earned on investments.
Net other expenses for the nine months ended September 30, 2009 increased to $11.2 million from $4.8 million in the same period in the prior year mainly due to decreased interest income of $7.6 million.

                  NET INCOME ATTRIBUTABLE TO APTARGROUP, INC.
We reported net income of $33.5 million and $88.6 million in the third quarter
and nine months ended September 30, 2009, respectively, compared to
$39.7 million and $121.8 million for the same periods in the prior year.
                             BEAUTY & HOME SEGMENT
Operations that sell spray and lotion dispensing systems primarily to the
personal care, fragrance/cosmetic and household markets form the Beauty & Home
segment.


                                                          Three Months Ended September 30,                  Nine Months Ended September 30,
                                                             2009                     2008                    2009                     2008
Net Sales                                        $        239,621         $        271,654        $        665,234         $        844,328
Segment Income (1)                                         16,815                   21,409                  38,769                   76,451
Segment Income as a percentage of Net Sales                   7.0 %                    7.9 %                   5.8 %                    9.1 %

(1) Segment income is defined as earnings before net interest, stock option and corporate expenses, income taxes and certain unusual items. The Company evaluates performance of its business units and allocates resources based upon segment income. For a reconciliation of segment income to income before income taxes, see Note 9 - Segment information to the Consolidated Financial Statements in Item 1. Net sales for the quarter ended September 30, 2009 decreased 12% in the third quarter of 2009 to $239.6 million compared to $271.7 million in the third quarter of the prior year. Acquisitions did not have a material impact on the sales growth in the third quarter. Exchange rate changes negatively impacted sales by approximately 5% during the quarter. Excluding changes in exchange rates, sales decreased 7% in the third quarter of 2009 compared to the same quarter of the prior year. The decrease is primarily due to continued weak demand from the fragrance / cosmetics market in North America and Europe, which decreased 15% from the third quarter of 2008. This weakness was partially offset by continued strong demand from South America. We also benefited from improved sales in the personal care market as demand for our lotion pumps increased related to consumers heightened interest in cleanliness in light of H1N1 concerns. Net sales for the first nine months of 2009 decreased 21% in the first nine months of 2009 to $665.2 million compared to $844.3 million in the first nine months of the prior year. The strengthening U.S. dollar compared to the Euro negatively impacted sales and represented approximately 8% of the 21% decrease in sales. Acquisitions did not materially impact the sales growth in the first nine months of 2009. Excluding changes in exchange rates, sales decreased 13% for the first nine months of 2009 compared to the same period of the prior year. Sales of our products excluding foreign currency changes to the fragrance/cosmetic market decreased approximately 20% in the first nine months of 2009 compared to the first nine months of 2008. Sales excluding foreign currency changes to the personal care market decreased approximately 2% in the first nine months of 2009 compared to the first nine months of 2008. Segment income in the third quarter of 2009 decreased approximately 21% to $16.8 million compared to $21.4 million reported in the same period in the prior year. Acquisitions did not materially impact segment income in the quarter. The decrease in segment income is due primarily to underutilized overhead and the negative impact of a $1.2 million charge related to severance expenses. The segment has implemented cost savings activities in an effort to offset this decrease in segment income. Excluding the charge for severance expenses, Beauty & Home segment income declined 16% or $3.3 million. Segment income in the first nine months of 2009 decreased approximately 49% to $38.8 million compared to $76.5 million reported in the same period in the prior year. Acquisitions had an immaterial impact on segment income in the first nine months. Profitability decreased primarily due to under absorbed fixed costs and $1.5 million of severance expenses, as mentioned above. Unit volumes continue to be lower when compared to last year. A focus during the first nine months of the year has been on cost savings activities in an effort to offset as much as possible the negative impact of these volume reductions.
CLOSURES SEGMENT The Closures segment designs and manufactures primarily dispensing closures. These products are sold primarily to the personal care, household and food/beverage markets.

                                                          Three Months Ended September 30,                  Nine Months Ended September 30,
                                                             2009                     2008                    2009                     2008

Net Sales                                        $        124,788         $        142,424        $        365,051         $        420,945
Segment Income                                             10,443                   12,280                  35,800                   35,597
Segment Income as a percentage of Net Sales                   8.4 %                    8.6 %                   9.8 %                    8.5 %

Net sales for the quarter ended September 30, 2009 decreased approximately 12% in the third quarter of 2009 to $124.8 million compared to $142.4 million in the third quarter of the prior year. The strengthening U.S. dollar compared to the Euro negatively impacted sales and represented approximately 5% of the 12% decrease. Acquisitions accounted for a 2% increase in sales. Excluding changes in exchange rates and acquisitions, sales decreased 9% in the third quarter of 2009 compared to the same quarter of the prior year. Lower tooling sales contributed a $4.1 million decrease when comparing the third quarter of 2009 to the same period in the prior year. This represents a 51% decrease from the third quarter in 2008. Product sales, excluding foreign currency changes, to the personal care market decreased approximately 11% in the third quarter of 2009 compared to the same period in the prior year. The decrease is primarily due to the pass-through of resin cost decreases and weak demand in Europe. We continue to see strong demand for our food and beverage closures in North America and this offset some of the weakness in Europe.
Net sales for the first nine months of 2009 decreased approximately 13% to $365.1 million compared to $420.9 million in the first nine months of the prior year. Once again, the strengthening U.S. dollar compared to the Euro negatively impacted sales and represented approximately 8% of the 13% decrease. Acquisitions accounted for a 2% increase in sales. Excluding changes in exchange rates, sales decreased 7% for the first nine months of 2009 compared to the same period of the prior year. Sales excluding foreign currency changes to the personal care and household markets decreased approximately 11% and 20%, respectively, in the first nine months of 2009 compared to the same period in the prior year primarily due to the resin price pass through discussed above. This decrease was offset by a 10% increase in sales to the food/beverage market.
Segment income in the third quarter of 2009 decreased approximately 15% to $10.4 million compared to $12.3 million reported in the same period in the prior year. The primary cause for the decline is the negative impact of a $1.4 million charge relating to consolidation/severance expenses. Excluding the charge for consolidation/severance expenses, Closures segment income declined 4% or $0.5 million.
Segment income in the first nine months of 2009 increased approximately 1% to $35.8 million compared to $35.6 million reported in the same period of the prior year. Included in these results are approximately $4.2 million of consolidation/restructuring expenses. The increase in segment income is primarily due to cost savings and the normal delay in the pass-through of lower resin costs to our customers in the first half of 2009.

                                 PHARMA SEGMENT
Operations that sell dispensing systems to the pharmaceutical market form the
Pharma segment.


                                                          Three Months Ended September 30,                  Nine Months Ended September 30,
                                                             2009                     2008                    2009                     2008
Net Sales                                        $        109,258         $        118,102        $        315,705         $        350,479
Segment Income                                             31,269                   35,077                  91,752                  101,171
Segment Income as a percentage of Net Sales                  28.6 %                   29.7 %                  29.1 %                   28.9 %

Our net sales for the Pharma segment declined by 7% in the third quarter of 2009 to $109.3 million compared to $118.1 million in the third quarter of 2008. Changes in foreign currency rates negatively impacted the sales growth and accounted for approximately 4% of the 7% sales decline. The remaining 3% decline is primarily due to softer demand for our metered dose valves, but overall the segment reported relatively stable peformance.
Our net sales for the Pharma segment declined by 10% in the first nine months of 2009 to $315.7 million compared to $350.5 million in the first nine months of 2008. Changes in foreign currency rates negatively impacted the sales growth by approximately 8% for the first nine months of 2009.
Segment income in the third quarter of 2009 decreased approximately 11% to $31.3 million compared to $35.1 million reported in the same period in the prior year. The decrease in profit is primarily due to lower sales and the impact of changes in currency exchange rates.
Segment income in the first nine months of 2009 decreased approximately 9% to $91.8 million compared to $101.2 million reported in the same period in the prior year. The decrease in profitability for the first nine months of 2009 is primarily due to changes in currency exchange rates.
FOREIGN CURRENCY A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a material impact on the translation of the financial statements of our foreign entities. Our primary foreign exchange exposure is to the Euro, but we have foreign exchange exposure to South American and Asian currencies, among others. We manage our foreign exchange exposures principally with forward exchange contracts to hedge certain transactions and firm purchase and sales commitments denominated in foreign currencies. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial statements. Conversely, a strengthening U.S. dollar has a dilutive effect. In some

cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Changes in exchange rates on such inter-country sales could materially impact our results of operations.
QUARTERLY TRENDS Our results of operations in the last quarter of the year typically are negatively impacted by plant shutdowns in December. In the future, our results of operations in a quarterly period could be impacted by factors such as changes in product mix, changes in material costs, changes in growth rates in the industries to which our products are sold, recognition of equity based compensation expense for retirement eligible employees in the period of grant and changes in general economic conditions in any of the countries in which we do business.
LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity are cash flow from operations and our revolving credit facility. Cash and equivalents increased to $294.9 million from $192.1 million at December 31, 2008. Total short and long-term interest bearing debt increased in the first nine months of 2009 to $301.2 million from $291.5 million at December 31, 2008. The ratio of our Net Debt (interest bearing debt less cash and cash equivalents) to Net Capital (stockholder's equity plus Net Debt) decreased at the end of September 2009 to 0.5% compared to 8.1% at December 31, 2008.
In the first nine months of 2009, our operations provided approximately $222.1 million in cash flow compared to $203.2 million for the same period a year ago. In both periods, cash flow from operations was primarily derived from earnings before depreciation and amortization. The increase in cash flow from operations is due primarily to a reduction in working capital compared to the prior year. During the first nine months of 2009, we utilized the majority of the operating cash flows to finance capital expenditures and share repurchases.
We used $109.5 million in cash for investing activities during the first nine months of 2009, compared to $172.4 million during the same period a year ago. The decrease in cash used for investing activities is due primarily to $54.3 million less spent on capital expenditures in the first nine months of 2009 compared to the first nine months of 2008. Cash outlays for capital expenditures for 2009 are estimated to be approximately $130 million but could vary due to changes in exchange rates as well as the timing of capital projects. In 2008, approximately $6.3 million in cash was used to purchased the remaining 50% that it did not already own of Seaplast S.A., approximately $9.3 million in cash was used to acquire the bag-on-valve business of CCL Industries and approximately $4.1 million in cash was used to acquire 70% of the outstanding shares of Next Breath LLC. In 2009, approximately $7.6 million in cash was used to acquire Covit do Brasil.
We used approximately $26.5 million in cash on financing activities in the first nine months of 2009 compared to $30.9 million in cash provided in the first nine months of the prior year. The decrease in cash used by financing activities was not significant.
During the fourth quarter of 2009, we plan to repay a $100 million intercompany loan to the U.S. from a subsidiary in Europe. This repayment is expected to be funded by a dividend from Europe and increased borrowings in the U.S. under our revolving credit facility.
Our revolving credit facility and certain long-term obligations require us to satisfy certain financial and other covenants including:

Requirement Level at September 30, 2009 Debt to total capital ratio Maximum of 55% 19%

Based upon the above debt to total capital ratio covenant we would have the ability to borrow an additional $1.2 billion before the 55% requirement would be exceeded.
Our foreign operations have historically met cash requirements with the use of internally generated cash or borrowings. Foreign subsidiaries have financing arrangements with several foreign banks to fund operations located outside the U.S., but all these lines are uncommitted. Cash generated by foreign operations has generally been reinvested locally. The majority of our $294.9 million in cash and equivalents is located outside of the U.S.
We believe we are in a strong financial position and have the financial resources to meet business requirements in the foreseeable future. We have historically used cash flow from operations as our primary source of liquidity. In the event that customer demand would decrease significantly for a prolonged period of time and negatively impact cash flow from operations, we would have the ability to restrict and significantly reduce capital expenditure levels, which historically have been the most significant use of cash for us. A prolonged and significant reduction in capital expenditure levels could increase future repairs and maintenance costs as well as have a negative impact on operating margins if we were unable to invest in new innovative products.
On October 14, 2009, the Board of Directors declared a quarterly dividend of $0.15 per share payable on November 18, 2009 to stockholders of record as of October 28, 2008.
OFF-BALANCE SHEET ARRANGEMENTS We lease certain warehouse, plant and office facilities as well as certain equipment under noncancelable operating leases expiring at various dates through the year 2055. Most of the operating leases contain renewal options and certain equipment leases include options to purchase during or at the end of the lease term. Other than operating lease obligations, we do not have any off-balance sheet arrangements.

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