<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                        FORM 10-Q FINANCIAL INFORMATION*

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

                  For the quarterly period ended April 1, 2001
                                                 -------------

                                       OR

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

     For the transition period from _________________ to __________________


                        Commission file number: 33-88496*

                               S.D. WARREN COMPANY
                               -------------------
             (Exact name of registrant as specified in its charter)


Pennsylvania                                                         23-2366983
--------------------------------------------------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

225 Franklin Street, Boston, Massachusetts                                02110
--------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)

                                 (617) 423-7300
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __ No __ Not Applicable X*




--------------------------------------------------------------------------------
*This report is being voluntarily filed with the Securities and Exchange
Commission (the "Commission") pursuant to the registrant's contractual
obligations to file with the Commission all financial information that would be
required to be filed on a Form 10-Q. The registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.


<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001



NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Company wishes to caution readers that this Report on Form 10-Q for S.D.
Warren Company and subsidiaries (the "Company") contains certain
"forward-looking statements" as that term is defined under the Private
Securities Litigation Reform Act of 1995. The words "believe," "anticipate,"
"intend," "estimate," "plan," "assume," and other similar expressions which are
predictions of or indicate future events and future trends which do not relate
to historical matters identify forward-looking statements. Reliance should not
be placed on forward-looking statements because they involve known and unknown
risks, uncertainties and other factors which are in some cases beyond the
control of the Company and may cause the actual results, performance or
achievements of the Company to differ materially from anticipated future
results, performance or achievements expressed or implied by such
forward-looking statements. Certain factors that may cause such differences
include, but are not limited to the following: (a) increased competition from
either domestic or foreign paper producers, including increases in competitive
capacity through construction of new mills or conversion of older facilities to
produce competitive products, (b) variations in demand for the Company's
products, (c) changes in the cost or availability of the raw materials used by
the Company, particularly market pulp and wood, and energy, (d) costs of
compliance with new environmental laws and regulations, (e) decisions by the
Company to make a significant acquisition or a significant increase in
production capacity, (f) competitive pricing pressures for the Company's
products, (g) unanticipated manufacturing disruptions, and (h) changes in
environmental, tax and other laws and regulations. These and other factors that
might cause differences between actual and anticipated results, performance, and
achievements are discussed in greater detail in this Report on Form 10-Q. See
also "Market Overview" under Part I, Item 2, Management's Discussion and
Analysis of Results of Operations and Financial Condition.






                                       1

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               PAGE NO.
<S>                                                                                                            <C>
PART I - FINANCIAL INFORMATION

   ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

      Condensed Consolidated Statements of Operations for the three and six months ended March 29, 2000 and
      April 1, 2001 ...........................................................................................3, 4

      Condensed Consolidated Balance Sheets at September 27, 2000 and April 1, 2001...............................5

      Condensed Consolidated Statements of Cash Flows for the six months ended March 29, 2000 and
      April 1, 2001 ..............................................................................................6

      Notes to Unaudited Condensed Consolidated Financial Statements..............................................7


   ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION.................14

   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK............................................20

PART II - OTHER INFORMATION......................................................................................21

      Item 1.    Legal Proceedings...............................................................................21

      Item 2.    Changes in Securities...........................................................................21

      Item 3.    Default upon Senior Securities..................................................................21

      Item 4.    Submission of Matters to a Vote of Security Holders.............................................21

      Item 5.    Other Information...............................................................................21

      Item 6.    Exhibits and Reports on Form 8-K................................................................21

   SIGNATURE.....................................................................................................22

</TABLE>


                                       2
<PAGE>


                      S.D. WARREN COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            (IN MILLIONS, UNAUDITED)

<TABLE>
<CAPTION>
                                                   Three Months              Three Months
                                                       Ended                     Ended
                                                  March 29, 2000             April 1, 2001
                                                  --------------             -------------
<S>                                               <C>                        <C>

Net sales                                              $386.9                    $366.0
Cost of goods sold                                      303.1                     314.7
                                                      --------                  --------
Gross profit                                             83.8                      51.3
Selling, general and administrative expense              38.9                      38.0
                                                      --------                  --------
Income from operations                                   44.9                      13.3
Other income, net                                         2.0                       2.1
Interest expense                                         15.7                      11.4
                                                      --------                  --------
Income before income taxes                               31.2                       4.0
Income tax expense                                       12.4                       1.6
                                                      --------                  --------
Income before extraordinary items                        18.8                       2.4
Extraordinary items, net of tax                         (10.6)                        -
                                                      --------                  --------
Net income applicable to common stockholder              $8.2                      $2.4
                                                      ========                  ========
</TABLE>


 See accompanying notes to unaudited condensed consolidated financial statements

                                       3

<PAGE>
                      S.D. WARREN COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                            (IN MILLIONS, UNAUDITED)



<TABLE>
<CAPTION>

                                                  Six Months                  Six Months
                                                    Ended                       Ended
                                                March 29, 2000               April 1, 2001
                                                --------------               -------------
<S>                                             <C>                          <C>
Net sales                                           $748.7                       $754.6
Cost of goods sold                                   590.0                        647.0
                                                   --------                     --------
Gross profit                                         158.7                        107.6
Selling, general and administrative expense           76.7                         78.1
                                                   --------                     --------
Income from operations                                82.0                         29.5
Other income, net                                      3.3                          4.7
Interest expense                                      32.1                         23.1
                                                   --------                     --------
Income before income taxes                            53.2                         11.1
Income tax expense                                    21.2                          4.4
                                                   --------                     --------
Income before extraordinary items                     32.0                          6.7
Extraordinary items, net of tax                      (10.6)                           -
                                                   --------                     --------
Net income applicable to common stockholder         $ 21.4                       $  6.7
                                                   ========                     ========
</TABLE>


 See accompanying notes to unaudited condensed consolidated financial statements

                                       4

<PAGE>


                      S.D. WARREN COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (IN MILLIONS, EXCEPT FOR SHARE DATA)

<TABLE>
<CAPTION>

                                                         September 27,             April 1,
                                                             2000                    2001
                                                         -------------           -----------
                                                                                 (unaudited)
<S>                                                      <C>                     <C>
                    ASSETS
Current Assets:
         Cash and cash equivalents                        $   39.5                $   25.0
         Trade accounts receivable, net                       74.7                    49.5
         Other receivables                                    18.2                    18.8
         Inventories, net                                    210.1                   221.4
         Deferred income taxes                                12.3                    13.5
         Other current assets                                 19.6                    18.4
                                                          --------                --------
              Total current assets                           374.4                   346.6
Plant assets, net                                            977.1                 1,002.5
Goodwill, net                                                 75.0                    73.1
Deferred financing fees, net                                  12.9                    11.7
Other assets, net                                             33.0                    31.9
                                                          --------                --------
               Total assets                               $1,472.4                $1,465.8
                                                          ========                ========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
         Current maturities of long-term debt             $   14.8                $   14.0
         Accounts payable                                    155.1                   135.9
         Accrued and other current liabilities               110.3                    90.0
                                                          --------                --------
               Total current liabilities                     280.2                   239.9
                                                          --------                --------
Long-term debt:
         Term loans                                          211.2                   224.3
         Exchange debentures                                 134.0                   134.4
         Revenue bonds                                       106.9                   106.9
                                                          --------                --------
               Total long-term debt                          452.1                   465.6
Deferred income taxes                                        129.0                   136.5
Other liabilities                                            120.3                   126.3
                                                          --------                --------
               Total liabilities                             981.6                   968.3
                                                          --------                --------
Stockholder's equity:
         Common stock ($.01 par value; 1,000 shares
         authorized; 100 shares issued and outstanding)          -                       -
         Capital in excess of par value                      321.4                   321.4
         Retained earnings                                   169.4                   176.1
                                                          --------                --------
               Total stockholder's equity                    490.8                   497.5
                                                          --------                --------
               Total liabilities and stockholder's
                 equity                                   $1,472.4                $1,465.8
                                                          --------                --------
</TABLE>

 See accompanying notes to unaudited condensed consolidated financial statements

                                       5

<PAGE>


                      S.D. WARREN COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (IN MILLIONS, UNAUDITED)

<TABLE>
<CAPTION>

                                                                                           Six Months Ended
                                                                                    ------------------------------
                                                                                    March 29,             April 1,
                                                                                      2000                  2001
                                                                                    ---------             --------
<S>                                                                                 <C>                   <C>

Cash Flows from Operating Activities:
         Net income                                                                   $ 21.4               $  6.7
         Adjustments to reconcile net income to net cash provided by
                  operating activities:
                  Depreciation and amortization                                         48.9                 50.6
                  Deferred income taxes                                                 (1.3)                 6.3
                  Non-cash extraordinary items                                           6.8                    -
                  Other non-cash items                                                     -                  0.4
         Changes in assets and liabilities:
                     Trade and other accounts receivable, net                           12.0                 24.6
                     Inventories, net                                                  (31.6)               (11.3)
                     Accounts payable, accrued and other current liabilities           (11.1)               (39.5)
                     Other assets and liabilities                                       16.4                  8.5
                                                                                      ------               ------
                        Net cash provided by operating activities                       61.5                 46.3
                                                                                      ------               ------
Cash Flows from Investing Activities:
         Investment in plant assets                                                    (27.1)               (73.0)
                                                                                      ------               ------
                        Net cash used in investing activities                          (27.1)               (73.0)
                                                                                      ------               ------

Cash Flows from Financing Activities:
         Repayments of short-term borrowings                                               -                 (7.8)
         Proceeds from long-term borrowings                                            213.8                 30.0
         Repayments of long-term debt                                                 (254.4)               (10.0)
         Other financing activities                                                     (0.3)                   -
                                                                                      ------               ------
                  Net cash  provided by (used in) financing activities                 (40.9)                12.2
                                                                                      ------               ------
Net change in cash and cash equivalents                                                 (6.5)               (14.5)
                                                                                      ------               ------
Cash and cash equivalents:
         Beginning of period                                                            73.8                 39.5
                                                                                      ------               ------
         End of period                                                                $ 67.3               $ 25.0
                                                                                      ------               ------

Supplemental Cash Flow Information:
         Cash paid during the period for:
                  Interest                                                            $ 28.0               $ 25.2
                                                                                      ======               ======
                  Income taxes                                                        $  0.3               $  2.0
                                                                                      ======               ======
</TABLE>


 See accompanying notes to unaudited condensed consolidated financial statements

                                       6

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  BASIS OF PRESENTATION

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include
the accounts of S.D. Warren Company and its subsidiaries, doing business as
Sappi Fine Paper North America ("SFPNA" or the "Company"). Intercompany balances
and transactions have been eliminated in the preparation of the accompanying
unaudited condensed consolidated financial statements.

The Company is a direct wholly owned subsidiary of SDW Holdings Corporation
("Holdings"). Holdings is an indirect wholly owned subsidiary of Sappi Limited
("Sappi").

BUSINESS

The Company manufactures printing, publishing and specialty papers and has pulp
operations vertically integrated with certain of its manufacturing facilities.
The Company currently operates four paper mills with total annual production
capacity of approximately 1.5 million tons of paper. The Company also owns a
sheeting facility in Allentown, Pennsylvania, with annual sheeting capacity of
approximately 100,000 tons, and has other sheeting capabilities located at its
Muskegon, Michigan mill (205,000 tons annually) and Mobile, Alabama mill
(144,000 tons annually). The Company also operates several regional distribution
facilities. Together these represent the Company's single line of business.

CONTROL BY SAPPI

The Company is a wholly owned subsidiary of Holdings. On March 30, 2000, Sappi
acquired through an indirect wholly-owned subsidiary the 24.93% equity interest
in Holdings previously held by Heritage Springer Limited, a British Virgin
Islands company. Sappi now indirectly owns 100% of the issued and outstanding
common stock of Holdings.

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, the accompanying unaudited condensed consolidated
financial statements include all adjustments, consisting of normal recurring
adjustments, necessary for the fair presentation of the Company's financial
position and results of operations. The accompanying unaudited condensed
consolidated financial statements should be read in conjunction with the audited
financial statements included in the Company's Annual Report on Form 10-K for
the fiscal year ended September 27, 2000. The unaudited condensed consolidated
results of operations for the three and six months ended April 1, 2001 are not
necessarily indicative of results that could be expected for a full year.

COMPREHENSIVE INCOME

The Company's only component of comprehensive income is Net Income.


                                       7

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001

RECLASSIFICATIONS

Certain reclassifications have been made to prior year amounts to conform with
the current year presentation.

NOTE 2.  ACCOUNTING PRONOUNCEMENTS

In June 2000, the Financial Accounting Standards Board, ("FASB"), issued
Statement of Financial Accounting Standards No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities," an amendment to
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," issued in June 1998. SFAS No. 133 (as
amended by SFAS No. 138) was adopted by the Company in the first quarter of
fiscal year 2001. SFAS No. 133 establishes accounting and reporting standards
for derivative instruments, including derivative instruments embedded in other
contracts, and for hedging activities. The Company reviews its contracts on an
ongoing basis. The Company has evaluated SFAS No. 133 (as amended by SFAS No.
138) and has determined that there is no significant effect on the Company's
consolidated financial statements.

In September 2000, the FASB issued Statement of Financial Accounting Standards
No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities-a replacement of FASB Statement No. 125"("SFAS
No. 140"). This statement replaces SFAS No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities." This
statement revises the standard for accounting for securitizations and other
transfers of financial assets and collateral and requires certain disclosures,
but carries over most of SFAS No. 125's provisions without consideration. The
accounting requirements of SFAS No. 140 are effective for transfers and
servicing of financial assets and extinguishments of liabilities occurring after
March 31, 2001, and must be applied prospectively. The disclosures related to
securitization transactions are required for fiscal years ending after December
15, 2000, and comparative disclosures for prior periods are not required. The
Company does not expect the impact of the accounting requirements of this
statement to have a material effect on the Company's consolidated financial
statements.


NOTE 3.  RELATED PARTY TRANSACTIONS

The Company sells products to certain Sappi subsidiaries (Sappi Europe, Sappi
UK, Sappi South Africa, Specialty Pulp Services, and U.S. Paper). These
subsidiaries then resell the Company's products to external customers at market
prices and remit the proceeds from such sales to the Company, net of a 5% sales
commission. Net of commissions, the Company shipped $30.8 million and $61.3
million to certain Sappi subsidiaries for the three and six months ended April
1, 2001, respectively. For the same periods in the prior fiscal year, the
Company shipped $33.3 million and $68.0 million net of commissions, to these
Sappi subsidiaries, respectively. At April 1, 2001 and September 27, 2000,
interaffiliate trade and non-trade receivables totaled $27.4 million and $35.6
million, respectively.


                                       8
<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001

The Company also imports products from certain affiliates (Sappi UK, Hannover
Papier and KNP Leykam) for sale to the Company's North American customers. The
Company resells these products at market prices and remits the proceeds, net of
a 5% sales commission, to the Sappi affiliates. Net of commissions, the Company
imported approximately $22.9 million and $54.0 million of products from these
Sappi affiliates for the three and six months ended April 1, 2001 and $25.6
million and $48.9 million for the three and six months ended March 29, 2000,
respectively. Accounts payable at April 1, 2001 and September 27, 2000, included
$32.9 million and $28.3 million, respectively, due to subsidiaries of Sappi.

In addition to the above, the Company has contracted through a management
services agreement with Sappi Fine Paper Plc ("SFP") to provide management
advisory services. The aggregate fee paid by the Company is limited to an annual
amount of $1.0 million. The aggregate fees charged to the Company by SFP were
$2.4 million and $5.1 million for the three and six months ended April 1, 2001,
respectively, and $2.3 million and $4.6 million for the three and six months
ended March 29, 2000, respectively. The accompanying condensed consolidated
balance sheets at April 1, 2001 and September 27, 2000 include accrued
management advisory service fees of $18.5 million and $14.4 million,
respectively.

NOTE 4.  INVENTORIES, NET (IN MILLIONS)

<TABLE>
<CAPTION>

                                                     SEPTEMBER 27, 2000    APRIL 1, 2001
                                                     ------------------    -------------

<S>                                                  <C>                    <C>

Finished products                                      $94.0                  $113.2
Work in process                                         37.5                    27.1
Pulp, logs and pulpwood                                 37.4                    35.4
Maintenance parts and other supplies                    41.2                    45.7
                                                      ------                  ------
                                                      $210.1                  $221.4
                                                      ======                  ======
</TABLE>

NOTE 5.  FORCE MAJEURE EVENT

On November 2, 1999, a paper machine malfunction caused a fire at the Muskegon,
Michigan mill. The fire resulted in the temporary closure of the mill, but
operations were restored at the mill, excluding the affected paper machine,
within 24 hours of the incident. The Company commenced producing paper on the
affected paper machine during the second week of December 1999. Total losses are
not expected to exceed the Company's insurance coverage limits, net of
deductibles, which include both business interruption and property loss
coverage. The Company has recorded a receivable from its insurance company for
property damage of $27.0 million, of which $24.3 million has been collected as
of April 1, 2001. In addition, the Company has recorded an $8.0 million recovery
for the business interruption claim caused by damages incurred with respect to
the Muskegon fire, all of which has been collected from the insurance carrier as
of April 1, 2001.


                                       9
<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001

NOTE 6.  ENVIRONMENTAL AND SAFETY MATTERS

The Company is subject to a wide variety of environmental laws and regulations
relating to, among other matters, air emissions, wastewater discharges past and
present landfill operations and hazardous waste management. These laws include
the Federal Clean Air Act, the Clean Water Act, the Resource Conservation and
Recovery Act and their respective state counterparts. The Company will continue
to incur significant capital and operating expenditures to maintain compliance
with applicable federal and state environmental laws. These expenditures include
costs of compliance with federal worker safety laws, landfill expansions and
wastewater treatment system upgrades.

In 1995, the Company, as one of several industrial plaintiffs, initiated
litigation in state court against the County of Muskegon (the "County")
challenging an Ordinance governing the County's industrial wastewater
pretreatment program. The lawsuit challenged, among other things, the treatment
capacity availability and local effluent limit provisions of the Ordinance. In
1996, the state trial court ruled substantially in favor of the Company. In
1998, a state appeals court affirmed the lower court's ruling. However, in
February 1999, the County passed a similar ordinance in connection with a
federal consent decree. If the Company and other plaintiffs do not prevail in
any future appeal regarding the consent decree or are not successful in ongoing
negotiations with government authorities, the Company may not be able to obtain
additional treatment capacity for future expansions and the County could impose
stricter permit limits.

In June 1997, the United States and Environmental Protection Agency ("EPA") sued
the County in federal court for failure (a) to meet its discharge permit limits
for the wastewater facility and (b) to develop and enforce an industrial
pretreatment program. A group of industrial users, including the Company and a
group of municipalities filed motions to intervene in the EPA lawsuit to protect
the earlier state court ruling. In December 1998, however, the federal court
approved a motion filed by the County to terminate the industrial users' rights
to discharge certain pollutant loadings, but not the right to discharge certain
volumes of wastewater to the system. The court also authorized the County to
readopt the Ordinance previously invalidated by the state courts. The Company
has appealed the federal ruling, and the appeal is pending. The Company also
believes that under Michigan contract law, related contracts and county bond
resolutions, the County does not have the authority to unilaterally terminate
the service agreements and may pursue litigation on these issues. If the Company
and other plaintiffs do not prevail on their appeal, or in any future litigation
regarding the Ordinance, or are not successful in ongoing negotiations with
government authorities, the Company may not be able to obtain additional
treatment capacity for future expansions and the County could impose stricter
permit limits. This, in turn, could result in substantial expenditures to add
pretreatment at the Muskegon facility or potential fines being levied by the
County.

In April 1998, the EPA issued final regulations that impose new air and water
quality standards aimed at further reductions of pollutants from pulp and paper
mills, particularly those conducting bleaching operations (generally referred to
as the "cluster rules"). Compliance with the cluster rules is required beginning
in April 2001 for the Somerset, Maine and Muskegon, Michigan mills.
Approximately $70.0 million has already been incurred, primarily for required
improvements at the Somerset and Muskegon mills.

The Company believes that future capital expenditures for environmental
compliance, the bulk of which are for cluster rules compliance at Muskegon, will
aggregate approximately $5.0 million to $15.0 million through fiscal year 2002.

                                      10
<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


NOTE 7.  COMMITMENTS AND CONTINGENCIES

The Company has a long-term agreement (the "Energy Agreement") with Mobile
Energy Services Corporation ("MESC") to buy electric power and steam for the
Mobile paper mill at rates that provide for MESC to recover fuel and capital
costs. Kimberly-Clark has closed their pulp mill at the Mobile site effective
September 1999. The closure of the Kimberly-Clark pulp mill may result in a MESC
default under certain bond indentures. In January 1999, MESC filed for
bankruptcy. The Company continues to evaluate the impact on continued MESC
operations of the closure of the Kimberly-Clark pulp mill (see Note 10). Loss of
biomass and black liquor fuels historically provided to MESC by the pulp mill
resulted in increased energy rates in Mobile during fiscal year 2000 and the six
months ended April 1, 2001.

A substantial majority of the Company's electricity requirements are satisfied
through its own generation or cogeneration agreements. The Company's power
requirements at its Somerset mill are currently satisfied through a cogeneration
agreement whereby the mill cogenerates electricity and sells the output to
Central Maine Power ("CMP") at a "wash rate" which matches the average rate the
mill pays for the power it consumes. The CMP agreement relating to the Somerset
mill historically also provided, but did not require, that the mill purchase
electricity from CMP at the same rate. The Somerset agreement expires in the
year 2012. Commencing March 1, 2000, as a result of deregulation of the Maine
power industry, CMP was no longer permitted to sell power to its customers.
Accordingly, the Company has entered into a new one-year agreement with a third
party to purchase all of Somerset's power needs through February 28, 2002. The
Company is currently evaluating the impact of deregulation on its energy rates
at Somerset. The Company also has recently entered into a one-year agreement
expiring March 21, 2002 with a third party pursuant to which the Westbrook mill
cogenerates electricity and sells any excess output not used by the mill to the
third party. Power sales revenue is recognized by the Company at the time that
power is provided to or used by CMP based on fixed rates per kilowatt-hour in
the case of the Westbrook agreement and variable rates per kilowatt-hour in the
case of the Somerset agreement.

The Company has a Supply Agreement with Plum Creek, with an initial term of 25
years and with three five-year renewal options. Under the supply agreement, the
Company will purchase hardwood pulpwood at an annual minimum of 300,000 to
375,000 tons, or approximately 13% of the Company's annual requirements, at
market prices.

In April 2000, the Lemelson Medical, Educational and Research Foundation,
Limited Partnership ("Lemelson") filed a lawsuit against Sappi and over 70 other
companies in the United States Court for the District of Arizona. The lawsuit
alleges that the defendants have infringed upon various machine vision and
automatic identification patents held by Lemelson. Lemelson seeks to enjoin the
defendants from further alleged acts of infringement and to collect unspecified
damages. Sappi was formally served with a summons with respect to this lawsuit
in September 2000. Lemelson has offered to license the patents alleged to be
infringed to the defendants, and based on the Company's understanding of the
terms that Lemelson has made available to other licensees, the Company believes
that obtaining the same or similar terms would not have a material adverse
effect upon the Company's operating results or financial position. However,
there can be no assurance either that, if sought, Sappi would be offered similar
terms to those made available to other licensees, or that, if defended, this
matter will not have a material adverse effect on the Company's operating
results or financial position.

                                       11
<PAGE>
                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001

In April 2000, 18 individuals filed a lawsuit against the Company,
Kimberly-Clark and several other defendants in Somerset County Court, Maine. The
plaintiffs allege that they suffered personal injury as a result of hazardous
waste from various sources, which was allegedly transported to and stored at a
local landfill during the period from 1976 through 1986. Plaintiffs have
recently amended their complaint to bring several new theories of liability,
which relate to the air and water discharges from the Somerset and Winslow mills
and land spreading. In addition the plaintiffs allege that the defendants
fraudulently concealed the character of their waste. In terms of Sappi's
purchase of the Company from Scott Paper Company in 1994, the Company is
indemnified for monitoring, clean up and any other costs relating to or arising
out of the affected landfill. While the Company does not believe that the
lawsuit will have a material adverse effect on its operating results or
financial position, including due to the possibility that the Company is
indemnified for this matter, there can be no assurance that this will be the
case.

The Company is also involved in various other lawsuits and administrative
proceedings. The relief sought in such lawsuits and proceedings includes
injunctions, damages and penalties. Although the final results in these suits
and proceedings cannot be predicted with certainty, it is the present opinion of
the Company, after consulting with legal counsel, that they will not have a
material effect on the Company's consolidated financial position, results of
operations or cash flows.

NOTE 8.  SEGMENTS AND OTHER RELATED INFORMATION

The Company's segments have been aggregated into a single reportable segment
since they have similar economic characteristics, products, production
processes, types of customers and distribution methods. Business segment revenue
for the three and six months ended March 29, 2000 and April 1, 2001 follow:

<TABLE>
<CAPTION>


                                                 THREE MONTHS ENDED                                  SIX MONTHS ENDED
                                     ---------------------------------------------       --------------------------------------
                                          MARCH 29,                APRIL 1,                 MARCH 29,              APRIL 1,
                                            2000                     2001                      2000                  2001
                                     --------------------     --------------------       -----------------     ----------------
<S>                                  <C>                      <C>                        <C>                   <C>

           Coated Papers                 $     276.4                   $265.2                $     544.8           $     556.0
           Uncoated Papers                      68.5                     63.3                      126.3                 123.7
           Specialty Papers and                 42.0                     37.5                       77.6                  74.9
           Other
                                     --------------------     --------------------       -----------------     ------------------
                Total                    $     386.9              $     366.0                $     748.7           $     754.6
                                     ====================     ====================       =================     ==================
</TABLE>




                                       12
<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


NOTE 9.  TRADE ACCOUNTS RECEIVABLE

In April 1996, the Company, through a bankruptcy remote subsidiary, S.D. Warren
Finance Co. ("SDWF"), entered into a receivable sales agreement that provided
the Company with a five-year $90 million revolving accounts receivable
securitization facility (the "A/R Facility"). The A/R Facility terminates on
April 23, 2001. Accordingly, in anticipation of this termination, the Company,
on April 4, 2001, through SDWF, entered into a receivables sales agreement that
provides the Company with a five-year $100 million revolving accounts receivable
securitization facility (the "A/R Facility II"). Under this facility and
pursuant to a purchase and contribution agreement between the Company and SDWF,
the company sells to SDWF, on a non-recourse basis, all rights and interests in
its accounts receivables. Pursuant to this receivables purchase agreement, SDWF,
in turn, securitizes certain interests in the accounts receivable pool owned by
SDWF under similar terms to a third party purchaser.

The A/R Facility II also restricts SDWF with respect to certain matters
including, among other things, the ability to incur liens, the ability to extend
credit terms beyond their stated maturity, make certain changes to its credit
policy and to create subsidiaries or change its line of business. In addition,
the A/R Facility II requires that SDWF maintain certain ratios related to the
performance of the underlying accounts receivable, including certain delinquency
ratios, a default ratio, and a loss-to-liquidation ratio.


NOTE 10.  SUBSEQUENT EVENTS

On May 4, 2001, the Company announced that it will exit the uncoated paper
business and close the Mobile, Alabama paper mill subject to the completion of a
final review. The closure of the mill would result in the phase-out of the
production of uncoated products and the permanent shutting of the paper machines
over the next several months. The Company has made no decisions regarding the
disposition of the site or the machinery at the mill. Closure of the mill would
lead to a charge for restructuring and other working capital items of
approximately $120 million after tax in the third quarter.




                                       13

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
         FINANCIAL CONDITION

MARKET OVERVIEW

The market for coated paper has historically experienced price fluctuations
driven by global supply and demand imbalances, inventory shifts, and the
availability and relative pricing of imported paper products. Coated free sheet
industry shipments from U.S. producers declined during the quarter ended
December 31, 2000 and again in the quarter ended April 1, 2001 (as compared on a
year over year basis). This was due in large part to an increase in coated
imports, a shift in demand from lightweight coated woodfree to coated
groundwood, and a general slowing of the U.S. economy. Increasing coated free
sheet imports, together with enhanced domestic production, have over the past
few years played a key role in placing downward pressure on coated free sheet
industry pricing. Similar to the quarter ended December 31, 2000, supply
exceeded demand during the quarter ended April 1, 2001, which continued to put
downward pressure on prices over the first six months of the fiscal year.

The uncoated paper market continues to suffer from a slowdown in demand and high
inventories. The Company's uncoated premium volume remains weak reflecting
market softness. Average pricing is down versus last year. The technical papers
market is beginning to reflect the seasonal slowdown.

Continued market softness, increased pulp and energy costs and downward pricing
pressures have contributed negatively to the Company's results of operations in
the uncoated paper business. On May 4, 2001, the Company announced that it will
exit the uncoated paper business and close the Mobile, Alabama paper mill
subject to the completion of a final review. The closure of the mill would
result in the phase-out of the production of uncoated products and the permanent
shutting of the paper machines over the next several months. The Company has
made no decisions regarding the disposition of the site or the machinery at the
mill. Closure of the mill would lead to a charge for restructuring and other
working capital items of approximately $120 million after tax in the third
quarter.

The Company's release papers products experienced 5% volume decline from the
second fiscal quarter 2000. Generally deteriorating economic conditions in the
U.S., combined with the slowdown in the automotive industry have dampened sales.
Selling prices have increased 4% over the last year due to improved product mix.
By product line, prices remain flat, with recent price increases offset by
exchange rate changes in the European market. For the first six months of 2001,
volume is down 3% and prices have increased 3% as compared to the same period
last year.

Any failure of the industry to maintain its current levels of shipments and
pricing or any prolonged or severe weakness in the market for any of the
Company's products in the future may adversely affect the Company's consolidated
financial position, results of operations and cash flow.

The following discussion and analysis should be read in conjunction with the
unaudited Condensed Consolidated Financial Statements and the Notes thereto.

                                       14
<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


THREE MONTHS ENDED APRIL 1, 2001 COMPARED TO THREE MONTHS ENDED MARCH 29, 2000

NET SALES

Net Sales for the three months ended April 1, 2001 were $366.0 million compared
to $386.9 million for the three months ended March 29, 2000, a decrease of $20.9
million or 5.4%. Paper shipment volume for the three months ended April 1, 2001
increased approximately 700 tons or 0.2% from the prior year's quarter ended
March 29, 2000. The decrease in net sales from the same prior year quarter
reflects the downward pricing pressures in the paper industry.

COST OF GOODS SOLD

Cost of goods sold for the three months ended April 1, 2001 was $314.7 million
compared to $303.1 million for the three months ended March 29, 2000. Cost of
goods sold on a per paper ton basis increased to $861 per ton for the three
months ended April 1, 2001 from $798 per ton for the corresponding prior year
quarter. The increase was primarily due to higher pulp and energy costs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Selling, general and administrative expense totaled $38.0 million for the three
months ended April 1, 2001 compared to $38.9 million for the three months ended
March 29, 2000.

OTHER INCOME, NET

Other income, net, of $2.1 million and $2.0 million for the three months ended
April 1, 2001 and March 29, 2000, respectively, includes interest income of $0.4
million and $1.6 million. For the three months ended April 1, 2001 and March 29,
2000, $0.4 million represented interest earned on the note receivable received
in exchange for the sale of the Company's timberlands.

EXTRAORDINARY ITEM

The premium paid of $10.5 million in connection with the purchase of $232.4
million face value of the Company's 12% Senior Subordinated Notes (the "Notes"),
together with the related $7.0 million of accelerated amortization of deferred
financing fees and other costs resulted in an extraordinary loss of $10.6
million (net of $6.9 million of tax benefits) in the three months ended March
29, 2000. There were no extraordinary items for the three months ended April 1,
2001.

INTEREST EXPENSE AND TAXES

Interest expense for the three months ended April 1, 2001 was $11.4 million
compared to $15.7 million for the three months ended March 29, 2000. The
decrease was primarily due to lower rates obtained on the debt incurred in
connection with the refinancing of the Notes. Interest expense includes the
amortization of deferred financing fees.

For the three months ended April 1, 2001, income tax expense was $1.6 million,
compared to $12.4 million for the three months ended March 29, 2000 primarily
reflecting the change in the Company's earnings level.

                                       15

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


SIX MONTHS ENDED APRIL 1, 2001 COMPARED TO THE SIX MONTHS ENDED MARCH 29, 2000

The Company changed its financial closing calendar for fiscal year 2001 which
results in an additional five days being included in the first quarter ended
December 31, 2000.

NET SALES

Net Sales for the six months ended April 1, 2001 were $754.6 million compared to
$748.7 million for the six months ended March 29, 2000, an increase of $5.9
million or 0.8%. Paper shipment volume for the six months ended April 1, 2001
increased approximately 22,700 tons or 3% from the prior year's six months ended
March 29, 2000. However, the positive impact of increased volume shipments was
partially offset by downward pricing pressures that have impacted the paper
industry during the six months ended April 1, 2001.

COST OF GOODS SOLD

Cost of goods sold for the six months ended April 1, 2001 was $647.0 million
compared to $590.0 million for the six months ended March 29, 2000. Cost of
goods sold on a per paper ton basis increased to $860 per paper ton for the six
months ended April 1, 2001. Cost of goods sold for the six months ended March
29, 2000 is net of a $4.0 million business interruption insurance claim recovery
(see Note 6). Including this insurance recovery, cost of goods sold on a per
paper ton basis was $790 per ton for the corresponding prior year period. The
increase was primarily due to higher pulp and energy costs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE

Selling, general and administrative expense totaled $78.1 million for the six
months ended April 1, 2001 compared to $76.7 million for the six months ended
March 29, 2000. The increase over the prior year's quarter is primarily
attributable to the additional five days included in the quarter ended December
31, 2000.

OTHER INCOME, NET

Other income, net, of $4.7 million and $3.3 million for the six months ended
April 1, 2001 and March 29, 2000, respectively, includes interest income of $1.1
million and $3.1 million. For the six months ended April 1, 2001 and March 29,
2000, $0.9 million and $0.8 million, respectively, represented interest earned
on the note receivable received in exchange for the sale of the Company's
timberlands.

EXTRAORDINARY ITEM

The premium paid of $10.5 million in connection with the purchase of $232.4
million face value of the Company's Senior 12% Subordinated Notes (the "Notes"),
together with the related $7.0 million of accelerated amortization of deferred
financing fees and other costs, resulted in an extraordinary loss of $10.6
million (net of $6.9 million of tax benefits) in the six months ended March 29,
2000. There were no extraordinary items for the six months ended April 1, 2001.

                                       16

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


INTEREST EXPENSE AND TAXES

Interest expense for the six months ended April 1, 2001 was $23.1 million
compared to $32.1 million for the six months ended March 29, 2000. The decrease
was primarily due to lower rates obtained on the debt incurred in connection
with the refinancing of the Notes. Interest expense includes the amortization of
deferred financing fees.

For the six months ended April 1, 2001, income tax expense was $4.4 million,
compared to $21.2 million for the six months ended March 29, 2000. The decrease
in the current year primarily reflects the change in the Company's earnings
level. The prior period's tax expense is shown net of a $6.9 million tax benefit
relating to the extraordinary loss on the early redemption of the Notes.


LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $46.3 million for the six months
ended April 1, 2001 compared to $61.5 million for the six months ended March 29,
2000. This decrease of $15.2 million primarily reflects the change in the
Company's earnings level.

The Company's operating working capital was $63.8 million at April 1, 2001
compared to $37.6 million at September 27, 2000. Operating working capital is
defined as trade accounts receivable, other receivables and inventories less
accounts payable and accrued and other current liabilities. This increase
resulted primarily from increased inventory levels offset by lower receivables
and accounts payable and accrued and other current liabilities.

Capital expenditures for the six months ended April 1, 2001 were $73.0 million,
up from $27.1 million for the six months ended March 29, 2000. The increase of
$45.9 million for the six months ended April 1, 2001 over the six months ended
March 29, 2000 is primarily due to environmental compliance work at the
Company's Muskegon, Michigan location. Capital expenditures forecasts are
updated periodically and currently project approximately $109.0 million of
expenditures for the fiscal year ended September 30, 2001. In addition, the
Company believes that future capital expenditures for environmental compliance,
the bulk of which will be for cluster rules compliance at Muskegon, will
aggregate approximately $5.0 million to $15.0 million through fiscal year 2002.

The Company believes that cash generated by operations and amounts available
under its revolving credit facility will be sufficient to meet its ongoing
operating and capital expenditure requirements for the remainder of the fiscal
year.



                                       17
<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


Cash provided by financing activities for the six months ended April 1, 2001 was
$12.2 million compared to $40.9 million used in financing activities for the
corresponding period of the previous year. During the six months ended April 1,
2001, the Company received net long-term advances of $20.0 million on its
long-term revolving credit facility (the "Credit Facility"), thereby increasing
the total principal outstanding on the Facility to $160 million at April 1,
2001. Pursuant to the credit agreement, relating to the Credit Facility (the
"Credit Agreement"), the Company made payments of $4.2 million on the term loan,
thereby decreasing the total principal outstanding on the term loan to $78.2
million at April 1, 2001. In addition, the Company made payments of $3.6 million
on its Skowhegan Series C and D Revenue Bonds, thereby reducing the total
principal outstanding on the Revenue bonds to $106.9 million at April 1, 2001.

LONG-TERM DEBT

At April 1, 2001, long-term debt, excluding current maturities, was $465.6
million compared to $452.1 million at September 27, 2000.

OTHER ITEMS

FORCE MAJEURE EVENT

See Note 5 to the Unaudited Condensed Consolidated Financial Statements - Force
Majeure Event

ENVIRONMENTAL AND SAFETY MATTERS

The Company is subject to a wide variety of environmental laws and regulations
relating to, among other matters, air emissions, wastewater discharges, past and
present landfill operations and hazardous waste management. See Note 6 -
Environmental and Safety Matters in the Notes to Unaudited Condensed
Consolidated Financial Statements included in this Form 10-Q for a discussion of
these matters.

NEW ACCOUNTING PRONOUNCEMENTS

See Note 2 to the Unaudited Condensed Consolidated Financial Statements - New
Accounting Pronouncements

LONG-TERM CONTRACTS

See Note 7 to the Unaudited Condensed Consolidated Financial Statements -
Commitments and Contingencies.




                                       18

<PAGE>
                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


CONSIDERATIONS RELATING TO HOLDINGS' CASH OBLIGATIONS

The Company expects that it may make certain cash payments to Holdings or other
affiliates during fiscal 2001 to the extent cash is available and to the extent
it is permitted to do so under the terms of the Credit Agreement, and the
Indenture relating to the Company's 14% Subordinated Exchange Debentures due
2006, (the " Exchange Debentures"). Such payments may include, among other
things, (i) amounts under a tax sharing agreement between the Company and
Holdings necessary to enable Holdings to pay the Company's taxes, (ii) an
administrative fee to Holdings and amounts to cover specified costs and expenses
of Holdings, (iii) an annual advisory fee for management advisory services to
Sappi and/or its affiliates, the cash payment of which is limited to $1.0
million in any one year and (iv) any dividends that might be paid to Sappi. The
accompanying condensed consolidated balance sheets at April 1, 2001 and
September 27, 2000, respectively, include accrued management advisory fees of
$18.5 million and $14.4 million, respectively, the payment of which is subject
to the above mentioned limitations under the terms of its current financial
instruments.

Because Holdings has no material assets other than the outstanding common stock
of the Company (all of which is pledged to the lenders under the Company's
Credit Agreement) and all of the operations of Holdings (other than the
management of its investment in the Company) are currently conducted through the
Company and its subsidiaries, Holdings' ability to meet its cash obligations is
dependent upon the earnings of the Company and its subsidiaries and the
distribution or other provision of those earnings to Holdings. Holdings has no
material indebtedness outstanding (other than advances that may be owed from
time to time to the Company and guarantees in respect of indebtedness of the
Company and its subsidiaries). Holdings does, however, have various obligations
with respect to its equity securities (including in respect of registration
rights granted by Holdings) that have required and are likely to continue to
require cash expenditures by Holdings. The Company believes that the Credit
Agreement and the Indenture relating to the Exchange Debentures permit the
Company to pay a dividend or otherwise provide funds to Holdings to enable
Holdings to meet its known cash obligations for the foreseeable future, provided
that the Company meets certain conditions. Among such conditions are that the
Company maintain specified financial ratios and comply with certain financial
tests.




                                       19

<PAGE>
                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risk associated with changes in interest
rates. The Company's objective in managing its exposure to interest rate
change is to limit the impact of interest rate changes in earnings and cash
flow and to lower its overall borrowings costs. Short-term borrowings, if
required, are used to meet working capital requirements and long-term
borrowings are generally used to finance long-term investments. The Company's
financial instruments consist mainly of cash and cash equivalents, accounts
receivable, accounts payable and debt. The carrying amounts of cash, cash
equivalents, accounts receivable and accounts payable approximate fair value
due to the short-term nature of these instruments.

The Company's Credit Facility bears interest at rates which fluctuate with
changes in the Eurodollar rate. The majority of the Company's long-term debt,
approximately $241.2 million at April 1, 2001, is at fixed interest rates. The
Company's interest expense on its Credit Facility and the fair value of its
fixed long-term debt is sensitive to changes in market interest rates. The
effect of a 10% adverse change in market interest rates on the Company's
interest expense and the fair value of its long-term debt would not be
materially different than that disclosed in the Company's Annual Report on Form
10-K for the year ended September 27, 2000.

During the three and six months ended April 1, 2001, the Company did not engage
in foreign currency hedging activities. The currency exchange impact from the
Company's transactions with its affiliates was immaterial.


                                       20

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001



PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

                  Intentionally omitted.*


ITEM 2.  CHANGES IN SECURITIES

                  Intentionally omitted.*


ITEM 3.  DEFAULT UPON SENIOR SECURITIES

                  Intentionally omitted.*


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  Intentionally omitted.*


ITEM 5.  OTHER INFORMATION

                  Intentionally omitted.*


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

                  Intentionally omitted.*



--------------------------------------------------------------------------------

*  This report is being voluntarily filed with the Commission pursuant to the
   registrant's contractual obligations to file with the Commission all
   financial information that would be required to be filed on a Form 10-Q. The
   registrant is not required to file reports pursuant to Section 13 or 15(d) of
   the Securities Exchange Act of 1934.


                                       21

<PAGE>

                      S.D. WARREN COMPANY AND SUBSIDIARIES
                            FORM 10-Q, APRIL 1, 2001


                                    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.

                                 S.D. Warren Company

Date: May 11, 2001               By: /s/ Mark T. Becker
                                    --------------------------------
                                    Mark T. Becker
                                    Vice President, Treasurer and
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)














                                       22