.
.
.
EXHIBIT 99.1 -- SFAS NO. 87 -- BASED PENSION-PLAN PROJECTIONS
(AS OF SEPTEMBER 30, 2003, MEASUREMENT DATE)
<Table>
<Caption>
SFAS NO. 87 BASIS
-------------------------------
PRETAX OVER (UNDER)
PENSION INCOME* FUNDED**
(In millions) --------------- -------------
2003............... $64 $(466)
2004............... 49 (326)
2005............... 49 (297)
2006***............ 30 (156)
2007............... 29 (12)
2008............... 30 26
2009............... 26 66
2010............... 24 110
2011............... 23 156
2012............... 22 205
2013............... 22 257
</Table>
* Noncash pension income worldwide.
Under SFAS No. 87, noncash pension income is projected to decline from $64
million in 2003 to $49 million in 2004 driven primarily by the amortization of
unrecognized actuarial losses and a half-point decline (from 6.75% to 6.25%) in
the discount rate used to measure pension obligations.
Going forward, noncash pension income is projected to be relatively flat except
in 2006 when it is anticipated that the use of new U.S. Treasury Department
mortality tables, reflecting longer life expectancies, becomes effective. Use of
the updated mortality tables will increase pension obligations and decrease
pension income.
A half-point change in the assumed rate of return on plan assets results in an
average change in pension income of $25 million/year over the 2004-2013 period.
A half-point change in the assumed discount rate results in an average change in
pension income of $10 million/year over the next five years.
** Funded status -- qualified U.S. plans only
SFAS No. 87's funded status compares the fair market value of plan assets at the
measurement date with an estimate of what the plans' projected benefit
obligations (PBO) could be settled for in the market. This estimate is
calculated by discounting the plans' future benefit obligations at a discount
rate (6.75% and 6.25% at September 30, 2002, and 2003, respectively) roughly
equivalent to the composite yield on a portfolio of high-quality corporate bonds
constructed with durations to match the plans' future benefit obligations.
Funding status does not include the company's relatively minor foreign and
nonqualified plans.
The projections included in this exhibit were prepared based on management's
current reasonable good-faith expectations and represent point-in-time
calculations. These calculations are affected by multiple variables which can
work independently or in concert to materially affect the projections shown.
Such variables include: actual versus assumed rates of return on assets;
discount rates used in calculating liabilities; changes in governmental
regulations; and actuarial assumptions, such as expectations regarding employee
compensation, demographics, turnover, and estimated age and life expectancies.
The company's worldwide pension plans' SFAS No. 87 funded status is disclosed in
Note 15. On an SFAS No. 87 basis, Pactiv's pension plans were underfunded by
$587 million as of September 30, 2002. On the same basis, the pension plans'
underfunding at September 30, 2003, was $527 million, $60 million lower than at
the 2002 measurement date, driven by the strong return on plan assets (20%)
realized over the previous twelve months, partially offset by the impact of
using a lower discount rate in 2003 (6.75% versus 7.25% in 2002) to calculate
PBO.
Going forward, two factors are expected to continue to improve the pension
plans' funded status under SFAS No. 87. First, as a result of continuing to
follow the established long-term investment strategy for the pension plans, U.S.
plan assets are expected to earn a compound annual rate of return of 9%. Second,
with interest rates at historically low levels and forecasted to rise over the
next twelve to fifteen months, the U.S. plans' PBO are projected to decline.
Consequently, using the assumptions specified below, Pactiv projects that the
pension plans' funded status will improve to a $257 million positive position by
2008.
It is important to note that cash funding requirements of Pactiv's U.S.
qualified pension plans are not in any way determined by the aforementioned SFAS
No. 87 calculations. Cash funding requirements are governed by ERISA, and
related projections are included in Exhibit 99.2 attached to this Form 10-K.
Assumptions:
(1) Expected and actual rate of return on plan assets: 9%/year
(2) Discount rate
<Table>
2003.................... 6.75%
2004.................... 6.25%
2005.................... 6.50%
2006.................... 6.75%
2007.................... 7.00%
2008-13................. 7.25%
</Table>
***(3) Effective 2006, use of the U.S. Treasury Department's updated mortality
tables (reflecting longer life expectancies) is expected to become
effective.
The projections included in this exhibit were prepared based on management's
current reasonable good-faith expectations and represent point-in-time
calculations. These calculations are affected by multiple variables which can
work independently or in concert to materially affect the projections shown.
Such variables include: actual versus assumed rates of return on assets;
discount rates used in calculating liabilities; changes in governmental
regulations; and actuarial assumptions, such as expectations regarding employee
compensation, demographics, turnover, and estimated age and life expectancies.