##### Table of Contents



FORM 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


|                                             |  |                                                                                         
|-------------------------------------------- |  | ----------------------------------------------------------------------------------------
|x                                            |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|                                             |  |                                                                                         
|For the quarterly period ended June 30, 2003
|                                             |  |                                                                                         
|OR                                          
|                                             |  |                                                                                         
|o                                            |  | 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: 001-14060           

GRAPHIC PACKAGING INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)


|                                                                                     |  |                                                
|------------------------------------------------------------------------------------ |  | -----------------------------------------------
|Colorado
(State or other jurisdiction of
incorporation or organization)              |  | 84-1208699
(I.R.S. Employer Identification No.)
|4455 Table Mountain Drive, Golden, Colorado
(Address of principal executive offices) |  | 80403
(Zip Code)                               

(303) 215-4600
(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 x |  | No o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

|      |  |     
|----- |  | ----
|Yes x |  | No o

There were 36,136,176 shares of common stock outstanding as of August 1, 2003.





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TABLE OF CONTENTS



|                                             |                                                                                               |  |  |  |  |  |  | 
|-------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION               
|                                             | Item 1. Financial Statements                                                                 
|                                             | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                             | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           
|                                             | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION                  
|                                             | Item 1. Legal Proceedings                                                                    
|                                             | Item 4. Submission of Matters to a Vote of the Shareholders                                  
|                                             | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                  
|Exhibit Index                               
|EX-31 Certifications Pursuant to Section 302
|EX-32 Certifications Pursuant to Section 906



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##### Table of Contents






PART I. FINANCIAL INFORMATION




Item 1. Financial Statements

GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)

|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |         | 
|----------------------------------------------------------------------------------------- | ------------------------------------------- | - | ------------------ | ------- | ---------------- | - | ------- | ------- | ---- | - | ------- | ------- |  | - | --------- | ------- | 
|                                                                                          |                                             |   | Three months ended |         | Six months ended
|                                                                                          |                                             |   | June 30,           |         | June 30,        
|                                                                                          |                                             |   |                    |         |                 
|                                                                                          |                                             |   | 2003               |         | 2002             |   | 2003    |         | 2002
|                                                                                          |                                             |   |                    |         |                  |   |         |         |     
|Net sales                                                                                 |                                             | $ | 274,994            |         |                  | $ | 263,917 |         |      | $ | 535,877 |         |  | $ | 527,641   |        
|                                                                                          | Cost of goods sold                          |   |                    | 242,527 |                  |   |         | 231,022 |      |   |         | 474,701 |  |   |           | 460,454 | 
|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        
|Gross profit                                                                              |                                             |   | 32,467             |         |                  |   | 32,895  |         |      |   | 61,176  |         |  |   | 67,187    |        
|                                                                                          | Selling, general and administrative expense |   |                    | 18,483  |                  |   |         | 15,808  |      |   |         | 35,151  |  |   |           | 30,695  | 
|                                                                                          | Merger and acquisition transaction costs    |   |                    | 1,331   |                  |   |         |        |      |   |         | 4,029   |  |   |           |        | 
|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        
|Operating income                                                                          |                                             |   | 12,653             |         |                  |   | 17,087  |         |      |   | 21,996  |         |  |   | 36,492    |        
|Interest expense                                                                          |                                             |   | (9,697             | )       |                  |   | (12,453 | )       |      |   | (19,113 | )       |  |   | (23,749   | )      
|Loss on early extinguishment of debt                                                      |                                             |   |                   |         |                  |   |        |         |      |   |        |         |  |   | (15,766   | )      
|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        
|Income (loss) before income taxes and cumulative
effect of change in accounting principle |                                             |   | 2,956              |         |                  |   | 4,634   |         |      |   | 2,883   |         |  |   | (3,023    | )      
|Income tax (expense) benefit                                                              |                                             |   | (1,212             | )       |                  |   | (1,808  | )       |      |   | (1,182  | )       |  |   | 1,178     |        
|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        
|Income (loss) before cumulative effect of change in
accounting principle                  |                                             |   | 1,744              |         |                  |   | 2,826   |         |      |   | 1,701   |         |  |   | (1,845    | )      
|Cumulative effect of change in goodwill accounting,
net of tax of $0                      |                                             |   |                   |         |                  |   |        |         |      |   |        |         |  |   | (180,000  | )      
|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        
|Net income (loss)                                                                         |                                             |   | 1,744              |         |                  |   | 2,826   |         |      |   | 1,701   |         |  |   | (181,845  | )      
|Preferred stock dividends declared                                                        |                                             |   | 2,500              |         |                  |   | 2,500   |         |      |   | 5,000   |         |  |   | 5,000     |        
|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        
|Net income (loss) attributable to common
shareholders                                     |                                             |   | ($756              | )       |                  | $ | 326     |         |      |   | ($3,299 | )       |  |   | ($186,845 | )      
|                                                                                          |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        
|See Notes to Consolidated Financial Statements.                                           |                                             |   |                    |         |                  |   |         |         |      |   |         |         |  |   |           |        

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)

|                                                                                   |  |                    |        |                  |  |      |        |      |  |  |        |   |  |  |        |  
|---------------------------------------------------------------------------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                                                   |  | Three months ended |        | Six months ended
|                                                                                   |  | June 30,           |        | June 30,        
|                                                                                   |  |                    |        |                 
|                                                                                   |  | 2003               |        | 2002             |  | 2003 |        | 2002
|                                                                                   |  |                    |        |                  |  |      |        |     
|Net income (loss) attributable to common
shareholders per basic and diluted share: |  |                    |        |                  |  |      |        |      |  |  |        |   |  |  |        |  
|Before cumulative effect of change in
accounting principle                         |  |                    | ($0.02 | )                |  | $    | 0.01   |      |  |  | ($0.10 | ) |  |  | ($0.21 | )
|Cumulative effect of change in goodwill
accounting                                 |  |                    |       |                  |  |      |       |      |  |  |       |   |  |  | (5.55  | )
|                                                                                   |  |                    |        |                  |  |      |        |      |  |  |        |   |  |  |        |  
|                                                                                   |  |                    | ($0.02 | )                |  | $    | 0.01   |      |  |  | ($0.10 | ) |  |  | ($5.76 | )
|                                                                                   |  |                    |        |                  |  |      |        |      |  |  |        |   |  |  |        |  
|Weighted average shares outstanding  basic                                        |  |                    | 33,709 |                  |  |      | 32,567 |      |  |  | 33,648 |   |  |  | 32,456 |  
|                                                                                   |  |                    |        |                  |  |      |        |      |  |  |        |   |  |  |        |  
|Weighted average shares outstanding  diluted                                      |  |                    | 33,709 |                  |  |      | 34,093 |      |  |  | 33,648 |   |  |  | 32,456 |  
|                                                                                   |  |                    |        |                  |  |      |        |      |  |  |        |   |  |  |        |  
|See Notes to Consolidated Financial Statements.                                    |  |                    |        |                  |  |      |        |      |  |  |        |   |  |  |        |  

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In thousands)

|                                                |                                                                                                                 |   |                    |    |                  |   |       |       |      |   |       |      |   |  |           |       |  
|----------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | - | ------------------ | -- | ---------------- | - | ----- | ----- | ---- | - | ----- | ---- | - |  | --------- | ----- | -
|                                                |                                                                                                                 |   | Three months ended |    | Six months ended
|                                                |                                                                                                                 |   | June 30,           |    | June 30,        
|                                                |                                                                                                                 |   |                    |    |                 
|                                                |                                                                                                                 |   | 2003               |    | 2002             |   | 2003  |       | 2002
|                                                |                                                                                                                 |   |                    |    |                  |   |       |       |     
|Net income (loss)                               |                                                                                                                 | $ | 1,744              |    |                  | $ | 2,826 |       |      | $ | 1,701 |      |   |  | ($181,845 | )    
|Other comprehensive income (loss):              |                                                                                                                 |   |                    |    |                  |   |       |       |      |   |       |      |   |  |           |      
|                                                | Foreign currency translation adjustments                                                                        |   |                    | 85 |                  |   |       | 355   |      |   |       | (132 | ) |  |           | 341   |  
|                                                | Recognition of hedge results to interest expense
during the period, net of tax of $882 and $1,819,
respectively |   |                    |   |                  |   |       | 1,421 |      |   |       |     |   |  |           | 2,928 |  
|                                                | Amortization of cancelled interest rate swap, net of
tax of $137 and $183, respectively                         |   |                    |   |                  |   |       | 220   |      |   |       |     |   |  |           | 293   |  
|                                                | Change in fair value of cash flow hedges during the
period, net of tax of $82 and $130, respectively            |   |                    |   |                  |   |       | (132  | )    |   |       |     |   |  |           | (208  | )
|                                                |                                                                                                                 |   |                    |    |                  |   |       |       |      |   |       |      |   |  |           |      
|Other comprehensive income (loss)               |                                                                                                                 |   | 85                 |    |                  |   | 1,864 |       |      |   | (132  | )    |   |  | 3,354     |      
|                                                |                                                                                                                 |   |                    |    |                  |   |       |       |      |   |       |      |   |  |           |      
|Comprehensive income (loss)                     |                                                                                                                 | $ | 1,829              |    |                  | $ | 4,690 |       |      | $ | 1,569 |      |   |  | ($178,491 | )    
|                                                |                                                                                                                 |   |                    |    |                  |   |       |       |      |   |       |      |   |  |           |      
|See Notes to Consolidated Financial Statements. |                                                                                                                 |   |                    |    |                  |   |       |       |      |   |       |      |   |  |           |      

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEET
(In thousands, except share data)

|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |         |         |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | -------------------- | ------- | -------- | ------- | ------------ | ------- | ------- | ------- | 
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         | June 30, |         | December 31,
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         | 2003     |         | 2002        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |             
|ASSETS                                                                                                                                                                 |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Current assets:                                                                                                                                                        |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Cash and cash equivalents                                                                                                                                              |                                                                                                                                                                 | $                          | 6,959                |         |          | $       | 28,626       |        
|Accounts receivable, net                                                                                                                                               |                                                                                                                                                                 |                            | 76,899               |         |          |         | 63,546       |        
|Inventories:                                                                                                                                                           |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|                                                                                                                                                                       |                                                                                                                                                                 | Finished                   |                      |         | 63,693   |         |              |         | 50,771  |        
|                                                                                                                                                                       |                                                                                                                                                                 | In process                 |                      |         | 9,754    |         |              |         | 11,298  |        
|                                                                                                                                                                       |                                                                                                                                                                 | Raw materials              |                      |         | 26,924   |         |              |         | 25,174  |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Total inventories                                                                                                                                                      |                                                                                                                                                                 |                            | 100,371              |         |          |         | 87,243       |        
|Other assets                                                                                                                                                           |                                                                                                                                                                 |                            | 22,589               |         |          |         | 21,686       |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            | Total current assets |         |          | 206,818 |              |         |         | 201,101 | 
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Properties, net                                                                                                                                                        |                                                                                                                                                                 |                            | 399,248              |         |          |         | 410,592      |        
|Goodwill, net                                                                                                                                                          |                                                                                                                                                                 |                            | 391,803              |         |          |         | 379,696      |        
|Other assets                                                                                                                                                           |                                                                                                                                                                 |                            | 28,099               |         |          |         | 29,477       |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Total assets                                                                                                                                                           |                                                                                                                                                                 | $                          | 1,025,968            |         |          | $       | 1,020,866    |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                   |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Current maturities of long-term debt                                                                                                                                   |                                                                                                                                                                 | $                          | 3,626                |         |          | $       | 3,432        |        
|Accounts payable                                                                                                                                                       |                                                                                                                                                                 |                            | 93,673               |         |          |         | 82,106       |        
|Interest payable                                                                                                                                                       |                                                                                                                                                                 |                            | 9,958                |         |          |         | 11,117       |        
|Other current liabilities                                                                                                                                              |                                                                                                                                                                 |                            | 56,118               |         |          |         | 58,334       |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|                                                                                                                                                                       |                                                                                                                                                                 | Total current liabilities  |                      |         | 163,375  |         |              |         | 154,989 |        
|Long-term debt                                                                                                                                                         |                                                                                                                                                                 |                            | 471,512              |         |          |         | 474,899      |        
|Pension liability                                                                                                                                                      |                                                                                                                                                                 |                            | 43,191               |         |          |         | 42,310       |        
|Other long-term liabilities                                                                                                                                            |                                                                                                                                                                 |                            | 42,789               |         |          |         | 41,630       |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|                                                                                                                                                                       |                                                                                                                                                                 | Total liabilities          |                      |         | 720,867  |         |              |         | 713,828 |        
|Shareholders equity                                                                                                                                                   |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Preferred stock, nonvoting, 20,000,000 shares authorized:                                                                                                              |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|                                                                                                                                                                       | Series A, $0.01 par value, no shares issued or outstanding
Series B, $0.01 par value, 1,000,000 shares issued and
outstanding at stated value of $100 per share |                            |                      | 100,000 |          |         |              | 100,000 |        
|Common stock, $0.01 par value 100,000,000 shares authorized
and 33,723,676 and 33,477,300 issued and outstanding at
June 30, 2003, and December 31, 2002, respectively |                                                                                                                                                                 |                            | 337                  |         |          |         | 335          |        
|Paid-in capital                                                                                                                                                        |                                                                                                                                                                 |                            | 412,231              |         |          |         | 416,048      |        
|Unearned compensation                                                                                                                                                  |                                                                                                                                                                 |                            | (2,112               | )       |          |         | (2,421       | )      
|Retained deficit                                                                                                                                                       |                                                                                                                                                                 |                            | (177,511             | )       |          |         | (179,212     | )      
|Accumulated other comprehensive loss                                                                                                                                   |                                                                                                                                                                 |                            | (27,844              | )       |          |         | (27,712      | )      
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|                                                                                                                                                                       |                                                                                                                                                                 | Total shareholders equity |                      |         | 305,101  |         |              |         | 307,038 |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|Total liabilities and shareholders equity                                                                                                                             |                                                                                                                                                                 | $                          | 1,025,968            |         |          | $       | 1,020,866    |        
|                                                                                                                                                                       |                                                                                                                                                                 |                            |                      |         |          |         |              |        
|See Notes to Consolidated Financial Statements.                                                                                                                        |                                                                                                                                                                 |                            |                      |         |          |         |              |        

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)

|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |           |          |         |  
|----------------------------------------------- | ---------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------- | ------- | ---------------- | ------- | ------- | --------- | -------- | ------- | -
|                                                |                                                                                          |                                                                                  |                           |         | Six months ended
|                                                |                                                                                          |                                                                                  |                           |         |                 
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |           | June 30,
|                                                |                                                                                          |                                                                                  |                           |         | 2003             |         | 2002   
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |        
|Cash flows from operating activities:           |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|                                                | Net income (loss)                                                                        |                                                                                  | $                         | 1,701   |                  |         |         | ($181,845 | )       
|                                                | Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |                                                                                  |                           |         |                  |         |         |           |         
|                                                |                                                                                          | Depreciation                                                                     |                           |         | 31,201           |         |         |           | 30,716   |        
|                                                |                                                                                          | Amortization of debt issuance costs                                              |                           |         | 1,152            |         |         |           | 1,945    |        
|                                                |                                                                                          | Loss on early extinguishment of debt                                             |                           |         |                 |         |         |           | 15,766   |        
|                                                |                                                                                          | Goodwill impairment                                                              |                           |         |                 |         |         |           | 180,000  |        
|                                                |                                                                                          | Compensation expense settled in stock                                            |                           |         | 1,422            |         |         |           | 2,237    |        
|                                                |                                                                                          | Change in current assets and current liabilities, net of effects of
acquisition: |                           |         |                  |         |         |           |          |        
|                                                |                                                                                          |                                                                                  | Accounts receivable       |         |                  | (13,353 | )       |           |          | (14,935 | )
|                                                |                                                                                          |                                                                                  | Inventory                 |         |                  | (11,511 | )       |           |          | (5,554  | )
|                                                |                                                                                          |                                                                                  | Other current assets      |         |                  | (903    | )       |           |          | 5,833   |  
|                                                |                                                                                          |                                                                                  | Accounts payable          |         |                  | 9,967   |         |           |          | (11,337 | )
|                                                |                                                                                          |                                                                                  | Interest payable          |         |                  | (1,159  | )       |           |          | 8,610   |  
|                                                |                                                                                          |                                                                                  | Other current liabilities |         |                  | (2,216  | )       |           |          | 8,540   |  
|                                                |                                                                                          | Other                                                                            |                           |         | 2,172            |         |         |           | 423      |        
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|Net cash provided by operating activities       |                                                                                          |                                                                                  | 18,473                    |         |                  |         | 40,399  |          
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|Cash flows from investing activities:           |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|                                                |                                                                                          | Capital expenditures                                                             |                           |         | (13,956          | )       |         |           | (15,454  | )      
|                                                |                                                                                          | Acquisition of J.D. Cahill Co. assets                                            |                           |         | (18,088          | )       |         |           |         |        
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|Net cash used in investing activities           |                                                                                          |                                                                                  | (32,044                   | )       |                  |         | (15,454 | )        
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|Cash flows from financing activities:           |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|                                                |                                                                                          | Proceeds from borrowings                                                         |                           |         | 139,547          |         |         |           | 613,100  |        
|                                                |                                                                                          | Repayment of debt                                                                |                           |         | (142,740         | )       |         |           | (619,343 | )      
|                                                |                                                                                          | Preferred stock dividends paid                                                   |                           |         | (5,000           | )       |         |           | (5,000   | )      
|                                                |                                                                                          | Debt issuance costs                                                              |                           |         |                 |         |         |           | (15,922  | )      
|                                                |                                                                                          | Common stock issuance and other                                                  |                           |         | 97               |         |         |           | 436      |        
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|Net cash used in financing activities           |                                                                                          |                                                                                  | (8,096                    | )       |                  |         | (26,729 | )        
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|Cash and cash equivalents:                      |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|                                                | Net decrease in cash and cash equivalents                                                |                                                                                  |                           | (21,667 | )                |         |         | (1,784    | )       
|                                                | Balance at beginning of period                                                           |                                                                                  |                           | 28,626  |                  |         |         | 6,766     |         
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|                                                | Balance at end of period                                                                 |                                                                                  | $                         | 6,959   |                  |         | $       | 4,982     |         
|                                                |                                                                                          |                                                                                  |                           |         |                  |         |         |          
|See Notes to Consolidated Financial Statements. |                                                                                          |                                                                                  |                           |         |                  |         |         |          

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Significant Accounting Policies

Nature of Operations and Basis of Presentation:Graphic Packaging
International Corporation (the Company or GPIC) is a manufacturer of packaging
products used by consumer product companies as primary packaging for their
end-use products.

The consolidated financial statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures included herein
are adequate to make the information presented not misleading. A description
of the Companys accounting policies and other financial information is
included in the audited financial statements filed with the Securities and
Exchange Commission in the Companys Form 10-K/A for the year ended December
31, 2002.

In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to fairly state the financial
position of the Company at June 30, 2003, and the results of operations and
cash flows for the periods presented. All such adjustments are of a normal
recurring nature. The results of operations for the three and six month
periods ended June 30, 2003 are not necessarily indicative of the results that
may be achieved for the full fiscal year and cannot be used to indicate
financial performance for the entire year.

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

Segment Information:The Companys reportable segments are based on its
method of internal reporting, which is based on product category. The Company
has one reportable segment  Packaging. In addition, the Companys holdings and
operations outside the United States are nominal. Therefore, no additional
segment information is provided herein.

Goodwill Accounting:SFAS No. 142, Goodwill and Other Intangible
Assets, became effective on January 1, 2002 for the Company. This statement
establishes new accounting and reporting standards that, among other things,
eliminate amortization of goodwill and certain intangible assets with
indefinite useful lives. The Company does not have any intangible assets with
indefinite useful lives; however, as required by the new standard, the
Companys goodwill will be evaluated annually for impairment using a fair-value
based approach and, if there is impairment, the carrying amount of goodwill
will be written down to its implied fair value. Management re-evaluated the
Companys goodwill for impairment upon signing the merger agreement discussed
in Note 5 below. Management determined that the Companys goodwill is not
impaired.

Effective January 1, 2002, the Company assigned the carrying value of its
goodwill, totaling $560 million, to one reporting unit. Management completed
the transitional impairment testing of the Companys goodwill and determined
that the Companys goodwill was impaired by $180 million at January 1, 2002.
The fair value of the goodwill was derived using the discounted cash flow
method. The transitional impairment loss is reflected as a cumulative effect
of change in accounting principle in the accompanying statement of operations.
Future impairments of goodwill, if any, will be charged to operating income in
the period in which impairment arises.

Of the $560 million carrying value of goodwill at December 31, 2001, $418
million was deductible for Federal income tax purposes and $142 million was not
deductible. The $180 million goodwill impairment charge consists of
approximately $131 million of deductible goodwill and approximately $49 million
of non-deductible goodwill. The $131 million tax deductible portion of the
impairment charge resulted in a deferred tax benefit/asset of approximately $50
million. The Company recorded a 100% valuation allowance against the
approximately $50 million deferred tax asset resulting from recognition of the
transitional goodwill impairment loss. Therefore, the cumulative effect of
change in accounting principle reflected in the accompanying statement of
operations is net of $0 tax benefit.

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Stock-Based Compensation:The Company applies Accounting Principles Board
Opinion No. 25 and related interpretations in accounting for its stock-based
compensation plans. Accordingly, no compensation expense has been recognized
for stock options or the employee stock purchase plan as all options were
granted at the market price. If the Company had elected to recognize
compensation cost based on the fair value of the stock options at grant date as
allowed by SFAS No. 123, Accounting for Stock-Based Compensation, pre-tax
compensation expense of $0.3 million and $0.4 million would have been recorded
for the quarterly periods ended June 30, 2003 and 2002, respectively; and $1.6
million and $0.8 million would have been recorded for the six month periods
ended June 30, 2003 and 2002, respectively. Net loss attributable to common
shareholders and loss per share would have been reduced to the pro forma
amounts indicated below:

|                                                                                                                                            |             |  |                             |        |                           |   |                                       |      |      |  |         |        |   |  |           |        |  
|------------------------------------------------------------------------------------------------------------------------------------------- | ----------- |  | --------------------------- | ------ | ------------------------- | - | ------------------------------------- | ---- | ---- |  | ------- | ------ | - |  | --------- | ------ | -
|                                                                                                                                            |             |  | Three Months Ended June 30, |        | Six Months Ended June 30,
|                                                                                                                                            |             |  |                             |        |                          
|                                                                                                                                            |             |  | 2003                        |        | 2002                      |   | 2003                                  |      | 2002
|                                                                                                                                            |             |  |                             |        |                           |   |                                       |      |     
|                                                                                                                                            |             |  |                             |        |                           |   | (in thousands, except per share data) |      |      |  |         |        |  
|Net income (loss) attributable to
common shareholders, as reported                                                                          |             |  | ($756                       | )      |                           | $ | 326                                   |      |      |  | ($3,299 | )      |   |  | ($186,845 | )     
|Deduct: Total stock-based employee
compensation expense determined
under fair value based method for
all awards, net of related tax effects |             |  | (177                        | )      |                           |   | (244                                  | )    |      |  | (944    | )      |   |  | (488      | )     
|                                                                                                                                            |             |  |                             |        |                           |   |                                       |      |      |  |         |        |   |  |           |       
|Pro forma net income (loss)
attributable to common shareholders                                                                             |             |  | ($933                       | )      |                           | $ | 82                                    |      |      |  | ($4,243 | )      |   |  | ($187,333 | )     
|                                                                                                                                            |             |  |                             |        |                           |   |                                       |      |      |  |         |        |   |  |           |       
|Income (loss) per sharebasic and
diluted:                                                                                                  |             |  |                             |        |                           |   |                                       |      |      |  |         |        |   |  |           |       
|                                                                                                                                            | As reported |  |                             | ($0.02 | )                         |   | $                                     | 0.01 |      |  |         | ($0.10 | ) |  |           | ($5.76 | )
|                                                                                                                                            |             |  |                             |        |                           |   |                                       |      |      |  |         |        |   |  |           |       
|                                                                                                                                            | Pro forma   |  |                             | ($0.03 | )                         |   | $                                     |     |      |  |         | ($0.13 | ) |  |           | ($5.77 | )
|                                                                                                                                            |             |  |                             |        |                           |   |                                       |      |      |  |         |        |   |  |           |       

Note 2. Loss on Early Extinguishment of Debt

It is the Companys policy to implement all new accounting pronouncements
as they are issued and become effective for the Company. During the first half
of 2003, one new accounting pronouncement was adopted.

In connection with its first quarter 2002 refinancing transactions, the
Company incurred a non-cash charge in 2002 to write off its remaining
unamortized debt issuance costs associated with the refinanced debt of $15.8
million, pretax, which was reflected as an extraordinary loss in the 2002
statement of operations. The FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections, in April 2002. SFAS No. 145 includes, among other things, the
rescission of SFAS No. 4, which required that gains and losses from early
extinguishment of debt be classified as an extraordinary item, net of related
income tax effects. Under the new guidance of SFAS No. 145, losses from early
extinguishment of debt are classified as extraordinary items only when the
losses are considered unusual in nature and infrequent in occurrence. SFAS No.
145 was effective for the Company on January 1, 2003, at which time the Company
reclassified its first quarter 2002 loss on early extinguishment of debt ($.30
per share) as a non-extraordinary item.

Note 3. Acquisition of J.D. Cahill Co.

On March 6, 2003, the Company acquired the business of J.D. Cahill Co.,
Inc. in an asset acquisition for approximately $20.0 million, consisting of
approximately $18.1 million in cash and assumption of approximately $1.9
million of liabilities. The assets acquired and liabilities assumed, which
consisted of inventories, fixed assets, intangible assets and accounts payable,
were valued at approximately $7.9 million, resulting in goodwill of $12.1
million. The change in the carrying amount of the Companys goodwill during the
first half of 2003 relates entirely to the Cahill acquisition. Consolidated
operating results for the first half of 2003 include the results of Cahill
beginning March 6, 2003. Among other expected benefits, the Company expects to
avoid approximately $10 million of future capital spending as a result of this
acquisition.

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Note 4. New Accounting Pronouncements

Financial Accounting Standards Board Interpretation (FIN) No. 46,
Consolidation of Variable Interest Entities, was issued in January 2003. FIN
No. 46 defines a variable interest entity as a legal entity in which, among
other things, the equity investments at risk are not sufficient to finance the
operating and closing activities of the entity without additional subordinated
financial support from the entitys investors. The Company is a partner in the
Kalamazoo Valley Group Partnership (KVG), which qualifies as a variable
interest entity, as defined by FIN No. 46. KVG is a partnership formed to
develop and operate a landfill for the partners disposal of paper residuals
from their respective paperboard mills. KVG borrowed $1.5 million for the
construction of the landfill, of which approximately $300 thousand remains
unpaid at June 30, 2003. The partners contribute capital annually to meet the
partnerships operating losses. The Companys annual contribution for the past
two years has been approximately $200 thousand. The landfill has been in
operation since December 1997; however, since 2000, two of the other partners
have closed their paperboard mills and one minority partner was permitted to
withdraw by the bankruptcy court. The Company is evaluating its alternatives
and liabilities under the partnership agreement and related note, while
continuing to use the landfill. However, if the partnership were to close the
landfill, the Companys share of estimated closing costs, perpetual care
obligations and debt repayment would approximate $2.5 million under the terms
of the partnership agreement. The Company accounts for its interest in KVG
using the equity method. The investment balance at June 30, 2003 was
negligible. Management is also evaluating its accounting method in light of the
new requirements under FIN No. 46, and may conclude that its interest in KVG
should be consolidated into the Companys accounts. FIN No. 46 is effective for
the Companys 2003 third quarter.

In April 2003, the FASB issued SFAS No. 149. "Amendment of Statement 133
on Derivative Instruments and Hedging Activities, or SFAS No. 149. This
statement will be applied prospectively and is effective for contracts entered
into or modified after June 30, 2003. SFAS No. 149 will be applicable to
existing contracts and new contracts entered into after June 30, 2003. The
Company does not expect that the adoption of SFAS No. 149 will have a material
effect on its financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Liabilities and Equity, or SFAS
No. 150. SFAS No. 150 establishes standards for classification of certain
financial instruments that have characteristics of both liabilities and equity
in the statement of financial position. SFAS No. 150 is effective for all
contracts created or modified after the date the statement was issued and
otherwise effective for the Company July 1, 2003. Management does not expect
the adoption of SFAS 150 to have a material impact on its financial statements.

Note 5. Proposed Merger with Riverwood

On March 25, 2003, GPIC entered into a merger agreement with Riverwood
Holding, Inc. to effect a stock-for-stock merger with Riverwood. Riverwood will
be the accounting acquiror of GPIC and will survive as the new public company
listed on the New York Stock Exchange. The new company will take the name
Graphic Packaging Corporation. Prior to the merger, Riverwood will complete a
15.21 to 1 stock split of its common stock. GPIC shareholders are expected to
receive one share of Riverwood common stock for each share of GPIC common stock
they hold. As a condition to closing the merger, the Grover C. Coors Trust will
convert its preferred shares into 48,484,848 shares of common stock. Assuming
the conversion occurs on August 8, 2003, Riverwood will pay the Grover C. Coors
Trust an estimated $19.8 million as consideration for early conversion of the
preferred stock. Immediately after the merger, GPIC shareholders will own
approximately 42.5% and Riverwood shareholders will own approximately 57.5% of
the combined company on a fully diluted basis.

On May 12, 2003, the thirty-day waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (HSR) expired. Accordingly, the condition to
the merger requiring the expiration or termination of the HSR waiting period
has been satisfied. In addition to this and other conditions to the merger, the
merger must be approved by two-thirds of the combined voting power of GPIC
common stock and two thirds of the preferred stock voting as a separate class.
The Coors family shareholders, who collectively owned approximately 65.1% of the
combined voting power of the Company before the merger, signed a voting agreement with
Riverwood in which they agreed to vote in favor of the merger. At a meeting of the shareholders held on August 7, 2003, the merger was approved and is expected to be consummated on August 8, 2003.

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The combined company has commitment letters from a banking syndicate for
financing totaling $1.6 billion at the time of merger. Management estimates
that up to $1.3 billion will be drawn at the time of merger to repay existing
bank debt and to pay transaction costs. The combined company may also refinance
GPICs and Riverwoods senior and senior subordinated notes in the principal
amount of $850 million. Assuming the GPIC existing senior bank credit facility
and the senior subordinated notes are refinanced, a loss on early
extinguishment of debt will occur totaling approximately $20 million,
consisting of cash tender premiums and non-cash unamortized debt issuance
costs.

For the six months ended June 30, 2003, the Company incurred approximately
$3.5 million of merger related costs. Management expects to incur an estimated
additional $9 million of transaction costs prior to closing for merger
related investment banking, legal and accounting fees. For the six months ended
June 30, 2003, the Company also incurred approximately $500 thousand evaluating
acquisitions that were not consummated.

Relating to the proposed merger, Riverwood filed a registration
statement with the Securities and Exchange Commission which contains a proxy
statement/prospectus that was sent to GPIC shareholders on July 18, 2003.

Note 6. Guarantees, Commitments and Contingencies

In the ordinary course of business, the Company is subject to various
pending claims, lawsuits and contingent liabilities, including claims by
current or former employees. In each of these cases, the Company is vigorously
defending against them. Although the eventual outcome cannot be predicted, it
is managements opinion that disposition of these matters will not have a
material adverse effect on the Companys consolidated financial position,
results of operations or cash flows.

On February 19, 2002, Chinyun Kim filed a putative class action claim in
District Court, Jefferson County, Colorado against the Company and certain of
its shareholders and directors. The complaint alleges that the defendants
breached their fiduciary duties in connection with the issuance on August 15,
2000, of the Companys Series B Preferred Stock to the Grover C. Coors Trust
(the Trust). Plaintiff is seeking damages in the amount of $43 million or,
alternatively, to require transfer to the class of some or all of the Trusts
GPIC common stock into which the convertible preferred stock will be converted.
The court dismissed plaintiffs claim against the Company for breach of
fiduciary duty while allowing the plaintiff to proceed against the named
directors and shareholders, including certain Coors family trusts. The Company
is continuing to provide a defense to this action pursuant to its
indemnification obligations. Currently, discovery is being conducted. By
order dated June 12, 2003, the court certified a class comprised of all owners
of GPIC common stock as of August 2, 2000, excluding the defendants and members
of the Coors family and their affiliates and excluding any additional shares
purchased by class members after August 2, 2000. The Company believes that the
transaction was in the best interest of the Company and its shareholders.

On April 2, 2003, two separate lawsuits were filed in District Court,
Jefferson County, Colorado, against the Company, the Companys directors and
Riverwood relating to the merger between GPIC and Riverwood pursuant to the
merger agreement. The complaints were filed by Robert F. Smith and Harold
Lightweis, on behalf of themselves and all others similarly situated. Each of
the two complaints alleges breach of fiduciary duties by the Companys
directors to the Companys public shareholders in connection with the merger
and that Riverwood aided and abetted the alleged breach. The complaint alleges
that the Coors family stockholders negotiated the merger consideration in their
own interest and not in the interest of the public stockholders. The complaint
seeks an injunction against consummation of the merger, rescission of the
merger if it is consummated, unspecified damages, costs and other relief
permitted by law and equity. On July 3, 2003, a third lawsuit was filed in
District Court of Jefferson County in Colorado, on behalf of a purported class
of the Companys stockholders against the Company, the Companys directors and
Riverwood, alleging that the Companys directors breached their fiduciary
duties to the stockholders of the Company in connection with the negotiation of
the proposed merger and that the Company and Riverwood aided and abetted the
alleged breach. The complaint alleges that the defendants negotiated the terms
of the merger in their own interest and in the interest of certain other
insiders (including the Coors family stockholders), to the detriment of

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the public stockholders. The complaint, which is encaptioned James A. Bederka,
On behalf of Himself and All Other Similarly Situated v. Riverwood Holdings
Inc., et al., seeks certain equitable relief, including an injunction against
the consummation of the merger, rescission of the merger if it is consummated,
rescission of the sale on August 15, 2000 of the convertible preferred stock to
the Trust and injunction against the conversion of the convertible preferred
stock and costs. We believe that these three lawsuits are without merit.

During its normal course of business, the Company has entered into certain
indemnification agreements with directors and officers of the Company to the
maximum extent permitted under the laws of the State of Colorado, which are
insured under directors and officers liability policies.

In connection with the sale of various businesses, the Company has
periodically agreed to guarantee the collectibility of accounts receivable and
indemnify purchasers for certain liabilities for a specified period of time.
Such liabilities include, but are not limited to, environmental matters and the
indemnification periods generally last for 2 to 15 years. At June 30, 2003, the
Company has accrued approximately $3.0 million related to these guarantees and
indemnifications.

In connection with the resale of its aluminum business in 1999, the
Company guaranteed accounts receivable owed by the former owner of the
business. After the resale, the former owner refused to pay the amounts owed,
equal to $2.4 million. Pursuant to the terms of the resale agreement, the
Company paid this amount and sued the former owner in the United States
District Court for the District of Colorado on April 18, 2000. The former
owner counterclaimed for an additional $11.0 million for certain spare parts,
and the Company amended its claim to seek an additional $16.0 million in
overpayment for raw materials to run the business prior to resale. This claim
increased from $14.3 million to $16.0 million after making an adjustment for
certain offsets to which the Company was entitled. The parties have filed
motions for summary judgment. The Company does not believe that this
litigation will have a material adverse effect on its consolidated financial
position, results of operations or cash flows.

Note 7. Related Party Supply
Agreement

On December 28,
1992, the Company was spun off from Adolph Coors Company (ACCo) and
since that time ACCo has had no ownership interest in the Company.
However, certain Coors family trusts have significant interests in
both GPIC and ACCo. The Company has also entered into various
business arrangements with the Coors family trusts and related
entities from time-to-time since the spin-off. The Companys
policy is to negotiate market prices and competitive terms with all
parties, including related parties.

The Company
originated as the packaging division of Coors Brewing Company, a
subsidiary of ACCo. At the time of spin-off from ACCo the Company
entered into an agreement with Coors Brewing to continue to supply
their packaging needs. The initial agreement had a stated term of five
years and has resulted in substantial revenues for GPIC. The Company
continues to sell packaging products to Coors Brewing. Coors Brewing
accounted for approximately 11% of the Companys consolidated
gross sales in the second quarter of 2003 and 2002. The loss of Coors
Brewing as a customer in the foreseeable future could have a material
effect on the Companys results of operations. In the first
quarter of 2003, the Company executed a new supply agreement,
effective April 1, 2003, with Coors Brewing that will not expire
until December 31, 2006.

Note 8. Shareholders Rights Plan

On June 1, 2000, the Company effected a dividend distribution of
shareholder rights (the Rights) that carry certain conversion rights in the
event of a significant change in beneficial ownership of the Company. One right
is attached to each share of the Companys common stock outstanding and is not
detachable until such time as beneficial ownership of 15% or more of the
Companys outstanding common stock has occurred (a Triggering Event) by a
person or group of affiliated or associated persons (an Acquiring Person). Each
Right entitles each registered holder (excluding the Acquiring Person) to
purchase from the Company one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $.01 per share, at a purchase price of
$42.00. Registered holders receive shares of the Companys common stock valued
at twice the exercise price of the Right upon exercise. Upon a Triggering
Event, the Company is entitled to exchange one share of the Companys common
stock for each right outstanding or to redeem the Rights at the price of $.001
per Right. The Rights will expire on June 1, 2010.

In connection with the proposed merger, the Company and the rights agent
amended the terms of the rights agreement so that the execution and delivery of
the merger agreement and voting agreement and the consummation of the
transactions contemplated by the merger agreement will not constitute a
triggering event. This means that holders of the Companys common stock will
not obtain the detachable rights in connection with the proposed merger.

Note 9. Supplemental Information

Graphic Packaging Corporation (GPC), a wholly-owned subsidiary of GPIC,
issued $300 million of senior subordinated notes on February 28, 2002. The
senior subordinated notes are jointly and severally as well as fully and
unconditionally guaranteed by GPIC and its other domestic subsidiaries. The
Companys foreign subsidiaries and a real estate development partnership do not
guarantee the senior subordinated notes.

The accompanying supplemental financial information presents condensed
consolidating financial statements of (a) Graphic Packaging Corporation (the
Issuer); (b) Graphic Packaging International Corporation (the
Parent); (c) the guarantor subsidiaries; (d) the nonguarantor
subsidiaries; and (e) the Company on a consolidated basis.

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GPC and GPIC were co-borrowers under the Companys senior bank debt and
subordinated debt agreements in effect prior to the refinancing transactions on
February 28, 2002. Interest expense under these borrowing agreements was
recorded by GPC. In addition, GPC incurred $2.5 million of interest expense in
the three months ended June 30, 2003 and 2002, and $5.0 million of interest
expense in the six months ended June 30, 2003 and 2002, pursuant to a $100
million intercompany loan from GPIC.

The following condensed consolidating financial statements are presented
on the equity method. Under this method, investments in subsidiaries are
recorded at cost and adjusted for the parent companys share of the
subsidiaries cumulative results of operations, capital contributions,
distributions and other equity changes. The elimination entries relate
primarily to investments in subsidiaries, intercompany loans and other
intercompany transactions.

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##### Table of Contents



GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING INCOME STATEMENT

Three Months Ended June 30, 2003
(in thousands)

|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |      |   |  |   |         |  
|---------------------------------------------------------------------------------------- |  | ------ | ------- | ------ |  | ------------ | ------ | ------------ |  | ------------ | ---- | ------------ |  | - | ----- | - |  | ------------ | ---- | - |  | - | ------- | -
|                                                                                         |  |        |         |        |  |              |        |              |  | Guarantor    |      | Nonguarantor |  |   |       |   |  | Consolidated
|                                                                                         |  | Issuer |         | Parent |  | Subsidiaries |        | Subsidiaries |  | Eliminations |      | Total       
|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |             
|Net sales                                                                                |  | $      | 273,511 |        |  | $            |       |              |  | $            |     |              |  | $ | 1,483 |   |  | $            |     |   |  | $ | 274,994 |  
|Cost of goods sold                                                                       |  |        | 241,197 |        |  |              |       |              |  |              |     |              |  |   | 1,330 |   |  |              |     |   |  |   | 242,527 |  
|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |      |   |  |   |         |  
|Gross profit                                                                             |  |        | 32,314  |        |  |              |       |              |  |              |     |              |  |   | 153   |   |  |              |     |   |  |   | 32,467  |  
|Selling, general and
administrative expense
and merger and
acquisition transaction
costs |  |        | 19,814  |        |  |              |       |              |  |              |     |              |  |   |      |   |  |              |     |   |  |   | 19,814  |  
|Equity in (earnings) of
subsidiaries
subsidiaries                                        |  |        | 115     |        |  |              | (219   | )            |  |              | (53  | )            |  |   |      |   |  |              | 157  |   |  |   |        |  
|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |      |   |  |   |         |  
|Operating income                                                                         |  |        | 12,385  |        |  |              | 219    |              |  |              | 53   |              |  |   | 153   |   |  |              | (157 | ) |  |   | 12,653  |  
|Interest (expense) income                                                                |  |        | (11,935 | )      |  |              | 2,500  |              |  |              | (6   | )            |  |   | (256  | ) |  |              |     |   |  |   | (9,697  | )
|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |      |   |  |   |         |  
|Income (loss) before taxes                                                               |  |        | 450     |        |  |              | 2,719  |              |  |              | 47   |              |  |   | (103  | ) |  |              | (157 | ) |  |   | 2,956   |  
|Income tax (expense)
benefit                                                             |  |        | (185    | )      |  |              | (1,114 | )            |  |              | (79  | )            |  |   | 102   |   |  |              | 64   |   |  |   | (1,212  | )
|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |      |   |  |   |         |  
|Net income (loss)                                                                        |  |        | 265     |        |  |              | 1,605  |              |  |              | (32  | )            |  |   | (1    | ) |  |              | (93  | ) |  |   | 1,744   |  
|Preferred stock dividends
declared                                                       |  |        |        |        |  |              | (2,500 | )            |  |              |     |              |  |   |      |   |  |              |     |   |  |   | (2,500  | )
|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |      |   |  |   |         |  
|Net income (loss)
attributable to common
shareholders                                    |  | $      | 265     |        |  |              | ($895  | )            |  |              | ($32 | )            |  |   | ($1   | ) |  |              | ($93 | ) |  |   | ($756   | )
|                                                                                         |  |        |         |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |      |   |  |   |         |  

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING INCOME STATEMENT

Three Months Ended June 30, 2002
(in thousands)

|                                                  |  |        |         |        |  |              |         |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |         |  
|------------------------------------------------- |  | ------ | ------- | ------ |  | ------------ | ------- | ------------ |  | ------------ | ---- | ------------ |  | - | ----- | - |  | ------------ | ------- | - |  | - | ------- | -
|                                                  |  |        |         |        |  |              |         |              |  | Guarantor    |      | Nonguarantor |  |   |       |   |  | Consolidated
|                                                  |  | Issuer |         | Parent |  | Subsidiaries |         | Subsidiaries |  | Eliminations |      | Total       
|                                                  |  |        |         |        |  |              |         |              |  |              |      |             
|Net sales                                         |  | $      | 262,199 |        |  | $            |        |              |  | $            |     |              |  | $ | 1,718 |   |  | $            |        |   |  | $ | 263,917 |  
|Cost of goods sold                                |  |        | 229,779 |        |  |              |        |              |  |              |     |              |  |   | 1,243 |   |  |              |        |   |  |   | 231,022 |  
|                                                  |  |        |         |        |  |              |         |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |         |  
|Gross profit                                      |  |        | 32,420  |        |  |              |        |              |  |              |     |              |  |   | 475   |   |  |              |        |   |  |   | 32,895  |  
|Selling, general and
administrative expense       |  |        | 15,787  |        |  |              |        |              |  |              |     |              |  |   | 21    |   |  |              |        |   |  |   | 15,808  |  
|Equity in (earnings) of
subsidiaries
subsidiaries |  |        | (250    | )      |  |              | (10,926 | )            |  |              | (402 | )            |  |   |      |   |  |              | 11,578  |   |  |   |        |  
|                                                  |  |        |         |        |  |              |         |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |         |  
|Operating income                                  |  |        | 16,883  |        |  |              | 10,926  |              |  |              | 402  |              |  |   | 454   |   |  |              | (11,578 | ) |  |   | 17,087  |  
|Interest (expense) income                         |  |        | (14,968 | )      |  |              | 2,500   |              |  |              |     |              |  |   | 15    |   |  |              |        |   |  |   | (12,453 | )
|                                                  |  |        |         |        |  |              |         |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |         |  
|Income before taxes                               |  |        | 1,915   |        |  |              | 13,426  |              |  |              | 402  |              |  |   | 469   |   |  |              | (11,578 | ) |  |   | 4,634   |  
|Income tax (expense)
benefit                      |  |        | (757    | )      |  |              | (5,227  | )            |  |              | (319 | )            |  |   | (21   | ) |  |              | 4,516   |   |  |   | (1,808  | )
|                                                  |  |        |         |        |  |              |         |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |         |  
|Net income                                        |  |        | 1,158   |        |  |              | 8,199   |              |  |              | 83   |              |  |   | 448   |   |  |              | (7,062  | ) |  |   | 2,826   |  
|Preferred stock
dividends declared                |  |        |        |        |  |              | (2,500  | )            |  |              |     |              |  |   |      |   |  |              |        |   |  |   | (2,500  | )
|                                                  |  |        |         |        |  |              |         |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |         |  
|Net income attributable
to common shareholders    |  | $      | 1,158   |        |  | $            | 5,699   |              |  | $            | 83   |              |  | $ | 448   |   |  |              | ($7,062 | ) |  | $ | 326     |  
|                                                  |  |        |         |        |  |              |         |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |         |  

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING INCOME STATEMENT

Six Months Ended June 30, 2003
(in thousands)

|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |              |   |       |      |   |   |              |     |  |   |         |        |  
|---------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | - | ------- | ------- | ------ | - | ------------ | ------- | ------------ | - | ------------ | ---- | ------------ | - | ----- | ---- | - | - | ------------ | --- |  | - | ------- | ------ | -
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   | Guarantor    |      | Nonguarantor |   |       |      |   |   | Consolidated
|                                                                                         |                                                                           |   | Issuer  |         | Parent |   | Subsidiaries |         | Subsidiaries |   | Eliminations |      | Total       
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |             
|Net sales                                                                                |                                                                           | $ | 532,835 |         |        | $ |             |         |              | $ |             |      |              | $ | 3,042 |      |   | $ |             |     |  | $ | 535,877 |       
|Cost of goods sold                                                                       |                                                                           |   | 471,786 |         |        |   |             |         |              |   |             |      |              |   | 2,915 |      |   |   |             |     |  |   | 474,701 |       
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |              |   |       |      |   |   |              |     |  |   |         |       
|Gross profit                                                                             |                                                                           |   | 61,049  |         |        |   |             |         |              |   |             |      |              |   | 127   |      |   |   |             |     |  |   | 61,176  |       
|Selling, general and
administrative expense
and merger and
acquisition transaction
costs |                                                                           |   | 39,180  |         |        |   |             |         |              |   |             |      |              |   |      |      |   |   |             |     |  |   | 39,180  |       
|Equity in (earnings) of
subsidiaries                                                     |                                                                           |   | 167     |         |        |   | 1,326        |         |              |   | (26          | )    |              |   |      |      |   |   | (1,467       | )   |  |   |        |       
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |              |   |       |      |   |   |              |     |  |   |         |       
|Operating income (loss)                                                                  |                                                                           |   | 21,702  |         |        |   | (1,326       | )       |              |   | 26           |      |              |   | 127   |      |   |   | 1,467        |     |  |   | 21,996  |       
|Interest (expense) income                                                                |                                                                           |   | (23,833 | )       |        |   | 5,000        |         |              |   |             |      |              |   | (280  | )    |   |   |             |     |  |   | (19,113 | )     
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |              |   |       |      |   |   |              |     |  |   |         |       
|Income (loss) before taxes                                                               |                                                                           |   | (2,131  | )       |        |   | 3,674        |         |              |   | 26           |      |              |   | (153  | )    |   |   | 1,467        |     |  |   | 2,883   |       
|Income tax (expense)
benefit                                                             |                                                                           |   | 873     |         |        |   | (1,506       | )       |              |   | (70          | )    |              |   | 123   |      |   |   | (602         | )   |  |   | (1,182  | )     
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |              |   |       |      |   |   |              |     |  |   |         |       
|Net income (loss)                                                                        |                                                                           |   | (1,258  | )       |        |   | 2,168        |         |              |   | (44          | )    |              |   | (30   | )    |   |   | 865          |     |  |   | 1,701   |       
|Preferred stock dividends
declared                                                       |                                                                           |   |        |         |        |   | (5,000       | )       |              |   |             |      |              |   |      |      |   |   |             |     |  |   | (5,000  | )     
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |              |   |       |      |   |   |              |     |  |   |         |       
|                                                                                         | Net income (loss)
attributable to common
shareholders common
shareholders |   |         | ($1,258 | )      |   |              | ($2,832 | )            |   |              | ($44 | )            |   |       | ($30 | ) |   | $            | 865 |  |   | $       | (3,299 | )
|                                                                                         |                                                                           |   |         |         |        |   |              |         |              |   |              |      |              |   |       |      |   |   |              |     |  |   |         |       

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##### Table of Contents



GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING INCOME STATEMENT

Six Months Ended June 30, 2002
(in thousands)

|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  
|---------------------------------------------------------------------------------- |  | ------ | --------- | ------ |  | ------------ | ------ | ------------ |  | ------------ | ---- | ------------ |  | - | ----- | - |  | ------------ | ------- | - |  | - | --------- | -
|                                                                                   |  |        |           |        |  |              |        |              |  | Guarantor    |      | Nonguarantor |  |   |       |   |  | Consolidated
|                                                                                   |  | Issuer |           | Parent |  | Subsidiaries |        | Subsidiaries |  | Eliminations |      | Total       
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |             
|Net sales                                                                          |  | $      | 524,551   |        |  | $            |       |              |  | $            |     |              |  | $ | 3,090 |   |  | $            |        |   |  | $ | 527,641   |  
|Cost of goods sold                                                                 |  |        | 457,898   |        |  |              |       |              |  |              |     |              |  |   | 2,556 |   |  |              |        |   |  |   | 460,454   |  
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  
|Gross profit                                                                       |  |        | 66,653    |        |  |              |       |              |  |              |     |              |  |   | 534   |   |  |              |        |   |  |   | 67,187    |  
|Selling, general and
administrative expense                                        |  |        | 30,651    |        |  |              |       |              |  |              |     |              |  |   | 44    |   |  |              |        |   |  |   | 30,695    |  
|Equity in (earnings) of
subsidiaries
subsidiaries                                  |  |        | (269      | )      |  |              | (4,695 | )            |  |              | (460 | )            |  |   |      |   |  |              | 5,424   |   |  |   |          |  
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  
|Operating income                                                                   |  |        | 36,271    |        |  |              | 4,695  |              |  |              | 460  |              |  |   | 490   |   |  |              | (5,424  | ) |  |   | 36,492    |  
|Interest (expense) income                                                          |  |        | (28,745   | )      |  |              | 5,000  |              |  |              |     |              |  |   | (4    | ) |  |              |        |   |  |   | (23,749   | )
|Loss on early
extinguishment of debt                                               |  |        | (15,766   | )      |  |              |       |              |  |              |     |              |  |   |      |   |  |              |        |   |  |   | (15,766   | )
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  
|Income (loss) before
taxes and cumulative
effect of change in
accounting principle |  |        | (8,240    | )      |  |              | 9,695  |              |  |              | 460  |              |  |   | 486   |   |  |              | (5,424  | ) |  |   | (3,023    | )
|Income tax (expense)
benefit                                                       |  |        | 3,213     |        |  |              | (3,781 | )            |  |              | (369 | )            |  |   |      |   |  |              | 2,115   |   |  |   | 1,178     |  
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  
|Income (loss) before
cumulative effect of
change in accounting
principle           |  |        | (5,027    | )      |  |              | 5,914  |              |  |              | 91   |              |  |   | 486   |   |  |              | (3,309  | ) |  |   | (1,845    | )
|Cumulative effect of
change in goodwill
accounting, net of tax                     |  |        | (180,000  | )      |  |              |       |              |  |              |     |              |  |   |      |   |  |              |        |   |  |   | (180,000  | )
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  
|Net income (loss)                                                                  |  |        | (185,027  | )      |  |              | 5,914  |              |  |              | 91   |              |  |   | 486   |   |  |              | (3,309  | ) |  |   | (181,845  | )
|Preferred stock
dividends declared                                                 |  |        |          |        |  |              | (5,000 | )            |  |              |     |              |  |   |      |   |  |              |        |   |  |   | (5,000    | )
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  
|Net income (loss)
attributable to common
shareholders                              |  |        | ($185,027 | )      |  | $            | 914    |              |  | $            | 91   |              |  | $ | 486   |   |  |              | ($3,309 | ) |  |   | ($186,845 | )
|                                                                                   |  |        |           |        |  |              |        |              |  |              |      |              |  |   |       |   |  |              |         |   |  |   |           |  

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET

At June 30, 2003
(in thousands)

|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |          |         |           | 
|--------------------------------------------------------------------------------------------- | --------------------------- | --------------------------------------------- | -------------------------- | -------- | ------- | --------- | ------- | ------- | ------------ | ------- | ------------ | -------- | ------------ | ----- | ------------ | -------- | ---- | -------- | --------- | -------- | ------------ | --------- | --------- | -------- | ------- | --------- | 
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          | Guarantor    |       | Nonguarantor |          |      |          |           |          | Consolidated
|                                                                                              |                             |                                               |                            |          | Issuer  |           | Parent  |         | Subsidiaries |         | Subsidiaries |          | Eliminations |       | Total       
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |             
|ASSETS
Current assets
Cash and cash equivalents                                               |                             | $                                             | 1,441                      |          |         | $         | 2,375   |         |              | $       |             |          |              | $     | 3,143        |          |      | $        |          |          |              | $         | 6,959     |         
|                                                                                              | Accounts receivable         |                                               |                            | 74,169   |         |           |         | 2,437   |              |         |              |         |              |       |              | 293      |      |          |           |         |              |           |           | 76,899   |        
|                                                                                              | Inventories                 |                                               |                            | 99,775   |         |           |         |        |              |         |              |         |              |       |              | 596      |      |          |           |         |              |           |           | 100,371  |        
|                                                                                              | Other assets                |                                               |                            | 22,500   |         |           |         |        |              |         |              |         |              |       |              | 24,059   |      |          |           | (23,970  | )            |           |           | 22,589   |        
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|                                                                                              |                             |                                               | Total current assets       |          |         | 197,885   |         |         |              | 4,812   |              |          |              |      |              |          |      | 28,091   |           |          |              | (23,970   | )         |          |         | 206,818   | 
|                                                                                              | Properties, net             |                                               |                            | 390,656  |         |           |         |        |              |         |              |         |              |       |              | 8,592    |      |          |           |         |              |           |           | 399,248  |        
|                                                                                              | Goodwill, net               |                                               |                            | 391,803  |         |           |         |        |              |         |              |         |              |       |              |         |      |          |           |         |              |           |           | 391,803  |        
|                                                                                              | Other assets                |                                               |                            | 27,924   |         |           |         | 816,839 |              |         |              | 6,554    |              |       |              | 18,393   |      |          |           | (841,611 | )            |           |           | 28,099   |        
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|                                                                                              |                             |                                               | Total assets               |          | $       | 1,008,268 |         |         | $            | 821,651 |              |          | $            | 6,554 |              |          | $    | 55,076   |           |          |              | ($865,581 | )         |          | $       | 1,025,968 | 
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|LIABILITIES AND
SHAREHOLDERS
EQUITY
Current liabilities
Current maturities of
long-term debt |                             | $                                             | 2,129                      |          |         | $         |        |         |              | $       |             |          |              | $     | 1,497        |          |      | $        |          |          |              | $         | 3,626     |         
|                                                                                              | Accounts payable            |                                               |                            | 93,290   |         |           |         |        |              |         |              |         |              |       |              | 383      |      |          |           |         |              |           |           | 93,673   |        
|                                                                                              | Interest payable            |                                               |                            | 9,958    |         |           |         |        |              |         |              |         |              |       |              |         |      |          |           |         |              |           |           | 9,958    |        
|                                                                                              | Other current liabilities   |                                               |                            | 52,635   |         |           |         | 24,359  |              |         |              | 2,525    |              |       |              | 569      |      |          |           | (23,970  | )            |           |           | 56,118   |        
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|                                                                                              |                             |                                               | Total current liabilities  |          |         | 158,012   |         |         |              | 24,359  |              |          |              | 2,525 |              |          |      | 2,449    |           |          |              | (23,970   | )         |          |         | 163,375   | 
|Long-term debt                                                                                |                             |                                               | 471,512                    |          |         |           |        |         |              |         |             |          |              |       | 233,281      |          |      |          | (233,281  | )        |              |           | 471,512   |         
|Other long-term liabilities                                                                   |                             |                                               | 187,957                    |          |         |           | 1,863   |         |              |         |             |          |              |       |             |          |      |          | (103,840  | )        |              |           | 85,980    |         
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|                                                                                              | Total liabilities           |                                               |                            | 817,481  |         |           |         | 26,222  |              |         |              | 2,525    |              |       |              | 235,730  |      |          |           | (361,091 | )            |           |           | 720,867  |        
|Shareholders equity:                                                                         |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|                                                                                              | Preferred stock             |                                               |                            |         |         |           |         | 100,000 |              |         |              |         |              |       |              |         |      |          |           |         |              |           |           | 100,000  |        
|                                                                                              | Common stock                |                                               |                            |         |         |           |         | 337     |              |         |              | 1,829    |              |       |              | 1,540    |      |          |           | (3,369   | )            |           |           | 337      |        
|                                                                                              | Paid-in capital             |                                               |                            | 413,637  |         |           |         | 447,937 |              |         |              | 241,459  |              |       |              | (180,057 | )    |          |           | (512,857 | )            |           |           | 410,119  |        
|                                                                                              | Retained earnings (deficit) |                                               |                            | (195,959 | )       |           |         | 247,155 |              |         |              | (239,259 | )            |       |              | (1,184   | )    |          |           | 11,736   |              |           |           | (177,511 | )      
|                                                                                              |                             | Accumulated other
comprehensive income
(loss) |                            |          | (26,891 | )         |         |         |             |         |              |          |             |       |              |          | (953 | )        |           |          |             |           |           |          | (27,844 | )        
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|                                                                                              |                             |                                               | Total shareholders
equity |          |         | 190,787   |         |         |              | 795,429 |              |          |              | 4,029 |              |          |      | (180,654 | )         |          |              | (504,490  | )         |          |         | 305,101   | 
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         
|Total liabilities and
shareholders equity                                                    |                             | $                                             | 1,008,268                  |          |         | $         | 821,651 |         |              | $       | 6,554        |          |              | $     | 55,076       |          |      |          | ($865,581 | )        |              | $         | 1,025,968 |         
|                                                                                              |                             |                                               |                            |          |         |           |         |         |              |         |              |          |              |       |              |          |      |          |           |          |              |           |           |         

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING BALANCE SHEET

At December 31, 2002
(in thousands)

|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |          |         | 
|--------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------- | --------- | -------- | ------- | ------ | ------- | ------------ | ------- | ------------ | ----- | ------------ | ----- | ------------------ | ------- | -------- | -------- | - | --------- | -------- | -------- | - | --------- | -------- | ------- | 
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       | Guarantor    |       | Nonguarantor       |         |          |          |   |           |          |          |  
|                                                                                              |                                      |                            |           | Issuer   |         | Parent |         | Subsidiaries |         | Subsidiaries |       | Eliminations |       | Consolidated Total
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                   
|ASSETS
Current assets
Cash and cash equivalents                                               |                                      | $                          | 25,565    |          |         | $      |        |              |         | $            |      |              |       | $                  | 3,061   |          |          | $ |          |          |          | $ | 28,626    |         
|                                                                                              | Accounts receivable                  |                            |           | 60,231   |         |        |         | 2,437        |         |              |       |             |       |                    |         | 878      |          |   |           |         |          |   |           | 63,546   |        
|                                                                                              | Inventories                          |                            |           | 86,740   |         |        |         |             |         |              |       |             |       |                    |         | 503      |          |   |           |         |          |   |           | 87,243   |        
|                                                                                              | Other assets                         |                            |           | 21,609   |         |        |         |             |         |              |       | 1            |       |                    |         | 24,046   |          |   |           | (23,970  | )        |   |           | 21,686   |        
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|                                                                                              |                                      | Total current assets       |           |          | 194,145 |        |         |              | 2,437   |              |       |              | 1     |                    |         |          | 28,488   |   |           |          | (23,970  | ) |           |          | 201,101 | 
|                                                                                              | Properties, net                      |                            |           | 401,889  |         |        |         |             |         |              |       |             |       |                    |         | 8,703    |          |   |           |         |          |   |           | 410,592  |        
|                                                                                              | Goodwill, net                        |                            |           | 379,696  |         |        |         |             |         |              |       |             |       |                    |         |         |          |   |           |         |          |   |           | 379,696  |        
|                                                                                              | Other assets                         |                            |           | 29,781   |         |        |         | 561,410      |         |              |       | 6,880        |       |                    |         | 18,393   |          |   |           | (586,987 | )        |   |           | 29,477   |        
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|Total assets                                                                                  |                                      | $                          | 1,005,511 |          |         | $      | 563,847 |              |         | $            | 6,881 |              |       | $                  | 55,584  |          |          |   | ($610,957 | )        |          | $ | 1,020,866 |         
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|LIABILITIES AND
SHAREHOLDERS EQUITY
Current liabilities
Current maturities of
long-term debt |                                      | $                          | 1,976     |          |         | $      |        |              |         | $            |      |              |       | $                  | 1,456   |          |          | $ |          |          |          | $ | 3,432     |         
|                                                                                              | Accounts payable                     |                            |           | 81,519   |         |        |         | 24           |         |              |       |             |       |                    |         | 563      |          |   |           |         |          |   |           | 82,106   |        
|                                                                                              | Interest payable                     |                            |           | 11,117   |         |        |         |             |         |              |       |             |       |                    |         |         |          |   |           |         |          |   |           | 11,117   |        
|                                                                                              | Other current liabilities            |                            |           | 55,426   |         |        |         | 23,691       |         |              |       | 2,536        |       |                    |         | 651      |          |   |           | (23,970  | )        |   |           | 58,334   |        
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|                                                                                              |                                      | Total current liabilities  |           |          | 150,038 |        |         |              | 23,715  |              |       |              | 2,536 |                    |         |          | 2,670    |   |           |          | (23,970  | ) |           |          | 154,989 | 
|Long-term debt                                                                                |                                      |                            | 472,798   |          |         |        |        |              |         |              |      |              |       |                    | 235,383 |          |          |   | (233,282  | )        |          |   | 474,899   |         
|Other long-term liabilities                                                                   |                                      |                            | 185,968   |          |         |        | 1,826   |              |         |              |      |              |       |                    |        |          |          |   | (103,854  | )        |          |   | 83,940    |         
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|                                                                                              | Total liabilities                    |                            |           | 808,804  |         |        |         | 25,541       |         |              |       | 2,536        |       |                    |         | 238,053  |          |   |           | (361,106 | )        |   |           | 713,828  |        
|Shareholders equity:                                                                         |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|                                                                                              | Preferred stock                      |                            |           |         |         |        |         | 100,000      |         |              |       |             |       |                    |         |         |          |   |           |         |          |   |           | 100,000  |        
|                                                                                              | Common stock                         |                            |           |         |         |        |         | 335          |         |              |       | 1,829        |       |                    |         | 1,540    |          |   |           | (3,369   | )        |   |           | 335      |        
|                                                                                              | Paid-in capital                      |                            |           | 418,299  |         |        |         | 192,984      |         |              |       | 241,774      |       |                    |         | (182,077 | )        |   |           | (257,353 | )        |   |           | 413,627  |        
|                                                                                              | Retained earnings (deficit)          |                            |           | (194,701 | )       |        |         | 244,987      |         |              |       | (239,258     | )     |                    |         | (1,111   | )        |   |           | 10,871   |          |   |           | (179,212 | )      
|                                                                                              | Accumulated other
comprehensive loss |                            |           | (26,891  | )       |        |         |             |         |              |       |             |       |                    |         | (821     | )        |   |           |         |          |   |           | (27,712  | )      
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|                                                                                              |                                      | Total shareholders
equity |           |          | 196,707 |        |         |              | 538,306 |              |       |              | 4,345 |                    |         |          | (182,469 | ) |           |          | (249,851 | ) |           |          | 307,038 | 
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         
|Total liabilities and
shareholders equity                                                    |                                      | $                          | 1,005,511 |          |         | $      | 563,847 |              |         | $            | 6,881 |              |       | $                  | 55,584  |          |          |   | ($610,957 | )        |          | $ | 1,020,866 |         
|                                                                                              |                                      |                            |           |          |         |        |         |              |         |              |       |              |       |                    |         |          |          |   |           |          |          |   |           |         

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2003
(in thousands)

|                                          |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |          |  
|----------------------------------------- | ------------------------------------ | - | ------- | -------- | ------ | - | ------------ | ------ | ------------ | - | ------------ | - | ------------ | - | -- | ----- |  | - | ------------ | - |  | - | ------- | -------- | -
|                                          |                                      |   |         |          |        |   |              |        |              |   | Guarantor    |   | Nonguarantor |   |    |       |  |   | Consolidated
|                                          |                                      |   | Issuer  |          | Parent |   | Subsidiaries |        | Subsidiaries |   | Eliminations |   | Total       
|                                          |                                      |   |         |          |        |   |              |        |              |   |              |   |             
|Net cash provided by
operating activities |                                      | $ | 11,113  |          |        | $ | 7,278        |        |              | $ |             |   |              | $ | 82 |       |  | $ |             |   |  | $ | 18,473  |         
|                                          |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         
|Cash flows from investing
activities:     |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         
|                                          | Capital expenditures                 |   |         | (13,956  | )      |   |              |       |              |   |              |  |              |   |    |      |  |   |              |  |  |   |         | (13,956  | )
|                                          | Acquisition of J.D
Cahill Co. assets |   |         | (18,088  | )      |   |              |       |              |   |              |  |              |   |    |      |  |   |              |  |  |   |         | (18,088  | )
|                                          |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         
|Net cash used in
investing activities     |                                      |   | (32,044 | )        |        |   |             |        |              |   |             |   |              |   |   |       |  |   |             |   |  |   | (32,044 | )       
|Cash flows from financing
activities:     |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         
|                                          | Proceeds from borrowings             |   |         | 139,547  |        |   |              |       |              |   |              |  |              |   |    |      |  |   |              |  |  |   |         | 139,547  |  
|                                          | Repayment of debt                    |   |         | (142,740 | )      |   |              |       |              |   |              |  |              |   |    |      |  |   |              |  |  |   |         | (142,740 | )
|                                          | Preferred stock
dividends paid       |   |         |         |        |   |              | (5,000 | )            |   |              |  |              |   |    |      |  |   |              |  |  |   |         | (5,000   | )
|                                          | Common stock issuance
and other      |   |         |         |        |   |              | 97     |              |   |              |  |              |   |    |      |  |   |              |  |  |   |         | 97       |  
|                                          |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         
|Net cash used in
financing activities     |                                      |   | (3,193  | )        |        |   | (4,903       | )      |              |   |             |   |              |   |   |       |  |   |             |   |  |   | (8,096  | )       
|Cash and cash equivalents:                |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         
|                                          | Net increase (decrease)              |   |         | (24,124  | )      |   |              | 2,375  |              |   |              |  |              |   |    | 82    |  |   |              |  |  |   |         | (21,667  | )
|                                          | Balance at beginning of
period       |   |         | 25,565   |        |   |              |       |              |   |              |  |              |   |    | 3,061 |  |   |              |  |  |   |         | 28,626   |  
|                                          |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         
|                                          | Balance at end of period             |   | $       | 1,441    |        |   | $            | 2,375  |              |   | $            |  |              |   | $  | 3,143 |  |   | $            |  |  |   | $       | 6,959    |  
|                                          |                                      |   |         |          |        |   |              |        |              |   |              |   |              |   |    |       |  |   |              |   |  |   |         |         

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GRAPHIC PACKAGING INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2002
(in thousands)

|                                                    |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |          |   | 
|--------------------------------------------------- | ------------------------------- | - | ------- | -------- | - | ------ | ------ | ------------ | - | ------------ | ------- | ------------ |  | ------------ | ------ | ------ | - | - | ------ | ------------ | - | - | ------- | -------- | - | 
|                                                    |                                 |   |         |          |   |        |        |              |   |              |         | Guarantor    |  | Nonguarantor |        |        |   |   |        | Consolidated
|                                                    |                                 |   |         | Issuer   |   | Parent |        | Subsidiaries |   | Subsidiaries |         | Eliminations |  | Total       
|                                                    |                                 |   |         |          |   |        |        |              |   |              |         |              |  |             
|Net cash provided by (used
in) operating activities |                                 | $ | 37,767  |          |   | $      | 3,588  |              |   |              | ($1,200 | )            |  | $            | 244    |        |   | $ |       |              |   | $ | 40,399  |         
|                                                    |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |         
|Cash flows from investing
activities:               |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |         
|                                                    | Capital expenditures            |   |         | (15,454  | ) |        |        |             |   |              |         |             |  |              |        |       |   |   |        |              |   |   |         | (15,454  | )
|                                                    | Other investing
activities      |   |         |         |   |        |        |             |   |              |         | 1,200        |  |              |        |       |   |   |        | (1,200       | ) |   |         |         |  
|                                                    |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |         
|Net cash provided by (used
in) investing activities |                                 |   | (15,454 | )        |   |        |       |              |   |              | 1,200   |              |  |              |       |        |   |   | (1,200 | )            |   |   | (15,454 | )       
|Cash flows from financing
activities:               |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |         
|                                                    | Proceeds from borrowings        |   |         | 613,100  |   |        |        |             |   |              |         |             |  |              |        |       |   |   |        |             |   |   |         | 613,100  |  
|                                                    | Repayment of debt               |   |         | (619,343 | ) |        |        |             |   |              |         |             |  |              |        |       |   |   |        |             |   |   |         | (619,343 | )
|                                                    | Preferred stock
dividends paid  |   |         |         |   |        |        | (5,000       | ) |              |         |             |  |              |        |       |   |   |        |             |   |   |         | (5,000   | )
|                                                    | Debt issuance costs             |   |         | (15,922  | ) |        |        |             |   |              |         |             |  |              |        |       |   |   |        |             |   |   |         | (15,922  | )
|                                                    | Common stock issuance
and other |   |         |         |   |        |        | 436          |   |              |         |             |  |              |        | (1,200 | ) |   |        | 1,200        |   |   |         | 436      |  
|                                                    |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |         
|Net cash used in financing
activities               |                                 |   | (22,165 | )        |   |        | (4,564 | )            |   |              |        |              |  |              | (1,200 | )      |   |   | 1,200  |              |   |   | (26,729 | )       
|Cash and cash equivalents:                          |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |         
|                                                    | Net increase (decrease)         |   |         | 148      |   |        |        | (976         | ) |              |         |             |  |              |        | (956   | ) |   |        |             |   |   |         | (1,784   | )
|                                                    | Balance at beginning of
period  |   |         | 1,145    |   |        |        | 976          |   |              |         |             |  |              |        | 4,645  |   |   |        |             |   |   |         | 6,766    |  
|                                                    |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |         
|                                                    | Balance at end of period        |   | $       | 1,293    |   |        | $      |             |   |              | $       |             |  |              | $      | 3,689  |   |   | $      |             |   |   | $       | 4,982    |  
|                                                    |                                 |   |         |          |   |        |        |              |   |              |         |              |  |              |        |        |   |   |        |              |   |   |         |          |   | 

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are the leading manufacturer of folding cartons in North America
according to Paperboard Packaging Magazine(January 2003). We have achieved
our leadership position by focusing our operations on the folding carton
segment of the fiber-based product packaging industry. Our business strategy
is to maintain and improve our customer relationships and market leadership,
while leveraging our low cost position.

GPIC was incorporated in Colorado in August 1992 as a holding company for
the packaging, ceramics, aluminum and developmental businesses formerly owned
by Adolph Coors Company, or ACCo. In December 1992, ACCo distributed to its
shareholders all outstanding shares of GPICs stock. During our initial years,
we operated packaging, ceramics, aluminum and various developmental businesses.
Through various acquisitions and divestitures, a spin-off and other
transactions, we are now strategically focused on the folding carton segment of
the fiber-based product packaging industry.

As discussed below, we recently announced our intention to merge with
Riverwood Holding, Inc. (Riverwood) in the third quarter of 2003. Riverwood is
an integrated provider of paperboard packaging solutions to multinational
beverage and consumer products companies.

Segment Information

Our reportable segments are based on our method of internal reporting,
which is based on product category. Since 1999, we have operated principally in
the United States and in only one reportable segment.

Factors That Impact Our Business

Sales.We sell our products primarily to major consumer product
manufacturers in non-cyclical industries, such as food and beverage providers.
Sales are driven primarily by consumer buying habits in the markets our
customers serve. Recent economic conditions in the United States have had a
significant impact on consumer buying even in non-cyclical industries. New
product introductions and promotional activity by our customers, and our
introduction of innovative packaging solutions, also impact our sales.

Our products are used in the following end-use markets:



| |  |  | food  cereal; desserts; frozen and microwave foods; pet foods;
prepared foods; snacks; and food service products;
| | - |  | ------------------------------------------------------------------------------------------------------------------
|
| |  |  | household products  dishwasher and laundry detergent; sporting goods;
healthcare; and tissues and papers;        
|
| |  |  | beverage  bottle and can carriers and cases; and                                                                 
|
| |  |  | tobacco   fliptop boxes and cartons.                                                                             

We market our products directly to our customers through a relatively
small internal sales force. Our top 20 customers represent approximately 80%
of our gross sales in the first six months of 2003. Our competition includes
other large national folding carton companies, as well as numerous smaller
regional companies. Our primary competitors include: Caraustar Industries,
Inc., Field Container Company, L.P., Gulf States Paper Corporation,
MeadWestvaco, Rock-Tenn Company and Smurfit-Stone Container Corporation. We
work to maintain our market share through quality, service, efficiency,
innovation, competitive pricing and strategic sourcing to our customers.

In addition, we believe that we have the opportunity to expand the folding
carton market by developing new products that can replace other types of
packaging. Our research and development organization is closely involved with
our customers in the development of new packaging alternatives.

Cost of Goods Sold.Our costs of goods sold consist primarily of
recycled paper fiber, purchased paperboard, paper, aluminum foil, ink, plastic
films, resins and labor, which are all variable cost components. Energy is
also a component of our costs, particularly or our Kalamazoo, Michigan recycled
paperboard mill, where

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##### Table of Contents



energy represents approximately 14% of cost of goods sold year-to-date.
Consolidated variable costs are estimated to be 79% and fixed costs to be 21%
of total costs year-to-date.

In light of rising margin pressure throughout our industry, we have
aggressively reduced costs. We have controlled costs in our converting
facilities by coordinating and determining the optimal configuration of
equipment among our facilities. A substantial portion of our production is
centrally planned and can be allocated among different plants in the system in
order to take advantage of equipment optimization, capacity scheduling,
staffing and freight. Our ability to work as an integrated business, as
opposed to different units, has given us opportunities to reduce production
overhead costs and to take advantage of economies of scale in purchasing,
customer service, freight and other areas common to all of our facilities. We
have adopted a company-wide Six Sigma process to reduce our variable
manufacturing costs. The term Six Sigma refers to a measure of business
capability. A company that performs at a Six Sigma level has demonstrated one
of the following:



| | 1. |  | the amount of variation in its process is so tightly
controlled that there are six standard deviations
between the mean and the nearest customer specification (upper and
lower control limit); or
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | the company produces products with a defect rate of not more
than 3.4 defects for every
1 million opportunities.                                                                                  

To achieve Six Sigma, we identify and address the cost of poor quality in
both manufacturing and transactional processes through a disciplined project
methodology (Measure, Analyze, Improve, and Control) executed by skilled
project leaders called Black Belts and Green Belts. We currently have 25
dedicated and numerous shared resources focused on achieving our Six Sigma
objectives.

We have also taken steps to reduce our fixed manufacturing and corporate
overhead costs, consisting of selling, general and administrative costs. In
addition to closing plants and moving equipment and business to other
facilities, we have also undertaken downsizing initiatives to reduce fixed
personnel costs and are using the Six Sigma program to make our non-production
business processes more cost effective.

Results of Operations

Net sales for the three months ended June 30, 2003 were $275.0 million, an
increase of $11.1 million, or 4.2%, compared to the second quarter of 2002.
Sales for the six months ended June 30, 2003 were $535.9 million, an increase
of $8.3 million, or 1.6 %, compared to the same period in 2002. Net sales
related to the March 6, 2003 J.D. Cahill Co. acquisition were $5.7 million in
the second quarter of 2003 and $7.2 million in the six months ended June 30,
2003. Excluding the Cahill sales in 2003, net sales increased by $5.4 million
or 2% quarter over quarter and increased by $1.1 million or 0.2% comparing the
six month periods. We started to see stronger orders from our largest
customers, beginning at the end of the first quarter of 2003, although
increases in volume continue to be somewhat softened by pressures on pricing.
We have added new business during the first half of 2003, totaling $6.7 million
in sales, that also contributed to the improvement year-over-year.

Gross profit, as a percentage of net sales, was 11.8% for the second
quarter of 2003 and 11.4% for the six months ended June 30, 2003. Gross
profit, as a percentage of net sales, was 12.5% and 12.7% for the comparable
periods in 2002. Price pressure and product mix contributed to the lower
margins in 2003. Product mix issues in the first half of 2003 included costs
such as scrap and learning curve inefficiencies associated with the
introduction of new business.

Selling, general and administrative expenses, before merger and
acquisition costs, were $18.5 million, or 6.7% of net sales, for the three
months ended June 30, 2003, and $35.2 million, or 6.6% of net sales, for the
six months ended June 30, 2003. In the comparable periods of 2002, these
expenses were $15.8 million and $30.7 million, or 6.0% and 5.8% as a percentage
of sales, respectively. The quarter-on-quarter increase relates to
additional overhead expenses from the acquired J.D. Cahill business,
additional legal expenses associated with litigation and patent
activity, increased marketing efforts, and other general
administrative spending. Increases from the previous year, in
addition to those listed above, include additional depreciation and
other expenses related to our information systems that had been
placed in service during 2002 as well as changes in benefit plan
expenses.

Our merger and acquisition activities in the first half of 2003 resulted
in related expenses totaling $4.0 million, which are non-recurring to our
business and separately presented in our statement of operations. We
anticipate that our total merger and acquisition expenses, including costs
related to the Riverwood merger will total approximately $13 million in 2003.

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Interest expense decreased $2.8 million, or 22%, in the second quarter of
2003, compared to the second quarter of 2002. Year-to-date 2003 interest
expense is lower than year-to-date 2002 by $4.6 million, or 20%, primarily as a
result of lower debt balances, lower market interest rates, and the absence of
unfavorable interest swap agreements that were in place during the first half
of 2002.

The effective tax rate for the first half of 2003 was approximately 41%,
compared to 39% in the first half of 2002. The effective tax rate could
increase in the future due to merger-related costs that we expect will be
nondeductible upon consummation of the Riverwood merger.

New Accounting Pronouncements

Financial Accounting Standards Board Interpretation (FIN) No. 46,
Consolidation of Variable Interest Entities, was issued in January 2003. FIN
No. 46 defines a variable interest entity as a legal entity in which, among
other things, the equity investments at risk are not sufficient to finance the
operating and closing activities of the entity without additional subordinated
financial support from the entitys investors. We are a partner in the
Kalamazoo Valley Group Partnership (KVG), which qualifies as a variable
interest entity, as defined by FIN No. 46. KVG is a partnership formed to
develop and operate a landfill for the partners disposal of paper residuals
from their respective paperboard mills. KVG borrowed $1.5 million for the
construction of the landfill, of which approximately $300 thousand remains
unpaid at June 30, 2003. The partners contribute capital annually to meet the
partnerships operating losses. Our annual contribution for the past two years
has been approximately $200 thousand. The landfill has been in operation since
December 1997; however, since 2000, two of the other partners have closed their
paperboard mills and one minority partner was permitted to withdraw by the
bankruptcy court. We are evaluating our alternatives and liabilities under the
partnership agreement and related note, while continuing to use the landfill.
However, if the partnership were to close the landfill, our share of estimated
closing costs, perpetual care obligations and debt repayment would approximate
$2.5 million under the terms of the partnership agreement. We account for our
interest in KVG using the equity method. The investment balance at June 30,
2003 was negligible. Management is also evaluating its accounting method in
light of the new requirements under FIN No. 46, and may conclude that its
interest in KVG should be consolidated into our accounts. FIN No. 46 is
effective for our 2003 third quarter.

In April 2003, the FASB issued SFAS No. 149. "Amendment of Statement 133
on Derivative Instruments and Hedging Activities, or SFAS No. 149. This
statement will be applied prospectively and is effective for contracts entered
into or modified after June 30, 2003. SFAS No. 149 will be applicable to
existing contracts and new contracts entered into after June 30, 2003. We do
not expect that the adoption of SFAS No. 149 will have a material effect on our
financial statements.

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Liabilities and Equity, or SFAS
No. 150. SFAS No. 150 establishes standards for classification of certain
financial instruments that have characteristics of both liabilities and equity
in the statement of financial position. SFAS No. 150 is effective for all
contracts created or modified after the date the statement was issued and
otherwise effective for us July 1, 2003. We do not expect the adoption of SFAS
150 to have a material impact on our financial statements.

Related Party Transaction

On December 28, 1992,
our company was spun off from ACCo and since that time ACCo has had
no ownership interest in our company. However, certain Coors family
trusts have significant interests in both GPIC and ACCo. We have also
entered into various business arrangements with the Coors family
trusts and related entities from time-to-time since our spin-off. Our
policy is to negotiate market prices and competitive terms with all
third parties, including related parties.

Our company
originated as the packaging division of the Coors Brewing Company, a
subsidiary of ACCo. At the time of spin-off from ACCo, we entered
into an agreement with Coors Brewing to continue to supply their
packaging needs. The initial agreements had a stated term of five
years and have resulted in substantial revenues for us. We continue
to sell packaging products to Coors Brewing. Coors Brewing accounted
for approximately 11% of our consolidated gross sales in the second
quarter of 2003 and 2002. The loss of Coors Brewing as a customer in
the foreseeable future could have a material effect on our results of
operations. In the fist quarter of 2003, we executed a new supply
agreement, effective April 1, 2003, with Coors Brewing that will not
expire until December 31, 2006.

Liquidity and Capital Resources

We generate our liquidity from both internal and external sources and use
it to fund short-term working capital needs, capital expenditures (estimated to
be $42 million in 2003), preferred stock dividends and acquisitions.

Capital Structure

On February 28, 2002, we refinanced our then existing senior bank credit
facility with $300 million of senior subordinated notes, carrying interest at 8
5/8%, payable semi-annually and due in 2012, and a new $450 million senior bank
credit facility. This refinancing provided the financial flexibility to
consider acquisitions and converted a significant amount of our borrowings into
long-term borrowings. We collectively refer to these transactions as the
Refinancing Transactions.

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We used the net proceeds from the Refinancing Transactions to repay our
then existing bank debt, to repurchase our then existing $50.0 million of
subordinated notes at par, and to pay related interest, fees and expenses. In
connection with the Refinancing Transactions, we incurred a non-cash charge to
write off our then remaining unamortized debt issuance costs from the
refinanced debt. These costs were $15.8 million before taxes at February 28,
2002.

In connection with the Riverwood merger (discussed below), a change of
control will occur as defined in the $300 million senior subordinated bond
indenture. Under the terms of the indenture, the change of control requires us
to commence an offer to purchase all of the senior subordinated notes at 101%
of the principal amount outstanding. As of August 1, 2003, we have received
acceptance on $297.9 million of an anticipatory offer to purchase these bonds
at a price of 102.25% of the principle amount outstanding. In addition, these
bondholders have consented to remove a majority of the financial covenants contained
in the bond indenture. Consequently, these bonds will be refinanced in
connection with the merger, as well as the $450 million senior bank credit
facility and any additional bondholders that accept an offer to purchase
subsequent to the merger.

In the event the Riverwood merger is not consummated, we intend to fund
future working capital needs, capital expenditures, preferred stock dividends
and acquisitions through cash flow generated from operations and borrowings
under our senior bank credit facility. One of our wholly-owned subsidiaries,
Graphic Packaging Corporation (GPC), is the borrower under the senior bank
credit facility and the senior subordinated notes, and GPIC has guaranteed the
loans. The senior bank credit facility consists of a $275.0 million,
five-year revolving credit facility, or the Revolver, and a $175.0 million,
seven-year term loan, or the Term Loan. The Revolver bears interest at LIBOR
or Prime Rate plus a spread tied to our leverage, with a single principal
payment due at maturity. At August 1, 2003, the Revolvers interest rate was
5.25%. The Term Loan bears interest at LIBOR or Prime Rate plus a spread, with
principal amortization of 1% a year and the balance due at maturity. At August
1, 2003, the Term Loans interest rate was 5.75%. The facilities must also be
prepaid with an annual cash flow recapture calculation, and with certain
proceeds from asset sales, and debt or equity offerings. The senior bank
credit facility is secured with first priority liens on all of GPICs, GPCs
and our domestic subsidiaries material assets. The facility limits our
ability to pay dividends other than permitted dividends on the preferred stock,
and imposes limitations on the incurrence of additional debt, acquisitions,
capital expenditures, repurchase of Company stock and sale of assets.

Our borrowings consist of the following (in thousands):

|                                                                               |  |          |         |              |  |   |         | 
|------------------------------------------------------------------------------ |  | -------- | ------- | ------------ |  | - | ------- | 
|                                                                               |  | June 30, |         | December 31,
|                                                                               |  | 2003     |         | 2002        
|                                                                               |  |          |         |             
|Seven-year term loan due 2009 (variable interest rate at 3.87%)                |  | $        | 172,375 |              |  | $ | 173,250 | 
|Five-year revolving credit facility due 2007 (variable interest rate
at 3.37%) |  |          |        |              |  |   |        | 
|8-5/8% senior subordinated notes due 2012                                      |  |          | 300,000 |              |  |   | 300,000 | 
|Various notes payable (1)                                                      |  |          | 2,763   |              |  |   | 5,081   | 
|                                                                               |  |          |         |              |  |   |         | 
|Total                                                                          |  |          | 475,138 |              |  |   | 478,331 | 
|Less current maturities                                                        |  |          | 3,626   |              |  |   | 3,432   | 
|                                                                               |  |          |         |              |  |   |         | 
|Long-term maturities                                                           |  | $        | 471,512 |              |  | $ | 474,899 | 
|                                                                               |  |          |         |              |  |   |         | 



---

|(1) |  | The notes bear interest at rates ranging from 4.00% to 13.06% and mature
from 2003 through 2008.
|--- |  | ------------------------------------------------------------------------------------------------

Our maturities of long-term debt as of June 30, 2003 are as follows (in
thousands):

|                          |  |   |         | 
|------------------------- |  | - | ------- | 
|2003 (next twelve months) |  | $ | 3,626   | 
|2004                      |  |   | 2,103   | 
|2005                      |  |   | 2,018   | 
|2006                      |  |   | 1,920   | 
|Thereafter                |  |   | 465,471 | 
|                          |  |   |         | 
|                          |  | $ | 475,138 | 
|                          |  |   |         | 

We maintain an interest rate risk-management strategy that uses derivative
instruments to minimize significant, unanticipated earnings fluctuations that
may arise from volatility in interest rates. Our specific goals are

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to (1) manage interest rate sensitivity by modifying the re-pricing or
maturity characteristics of some of our debt and (2) lower (where possible) the
cost of our borrowed funds. In accordance with our interest rate
risk-management strategy, we had contracts in place at December 31, 2001 to
hedge the interest rates on our variable rate borrowings in the form of swap
agreements on $225.0 million of borrowings and cap agreements on $350.0 million
of borrowings. The swap agreements locked in an average LIBOR rate of 6.5%.
$150 million of the caps provided upside protection to us if LIBOR moved above
6.75%, and $200.0 million of the caps provided upside protection to us if LIBOR
moved above 8.13%. The hedging instruments expired in 2002 and were not
replaced, principally because a significant portion of our referenced debt
carries a fixed rate.

Our capital structure also includes $100 million of Series B preferred
stock, issued on August 15, 2000 to the Grover C. Coors Trust, a related party.
The Series B preferred stock is convertible into shares of our common stock at
$2.0625 per share and is entitled to receive a dividend payable quarterly at an
annual rate of 10%. We may redeem the Series B preferred stock beginning on
August 15, 2005 at 105% of par. This premium decreases by 1% per year until
August 15, 2010, at which time we can elect to redeem the shares at par. The
Series B preferred stock has a liquidation preference over our common stock and
is entitled to one vote for every two shares held on an as-converted basis.

Cash Flows

Cash and cash equivalents decreased $21.7 million during the first half of
2003, which was the net effect of positive cash flows from operations totaling
$18.5 million, capital expenditures of $14.0 million, the purchase of J.D.
Cahill Co., Inc. assets for $18.1 million and cash used in financing activities
of $8.1 million. Cash provided by operating activities decreased $21.9 million
in the first half of 2003 compared to the comparable period in 2002 due
primarily to reduced operating income and a use of cash for working capital of
$19.2 million in the first half of 2003, compared to a use of cash of $8.8
million in the first six months of 2002. The increase in cash used for working
capital in 2003 results primarily from increases in inventories due to stronger
sales and accrued interest and other accrued liabilities. Cash used for
capital expenditures declined in the first half of 2003 compared to the same
period in 2002 primarily due to reduced spending on the Companys enterprise
resource planning system and other information technology projects.

Working Capital

Our working capital levels are dependent upon our ability to manage our
inventories, collect our receivables on a timely basis, and maintain favorable
terms with our vendors. Low working capital levels are desirable to us, as we
strive to maximize cash flow and reduce our debt. We believe that our working
capital position is very favorable when compared to our industry. Our working
capital can be negatively impacted if our operations run less efficiently,
particularly at times when business is moved among plants or new plants are
acquired, or if inventories build up due to lower than planned sales during a
period.

We currently expect that cash flows from operations and borrowings under
our credit facility will be adequate to meet our needs for working capital,
post-retirement obligations, temporary financing for capital expenditures and
debt repayments for the foreseeable future. Our working capital position
(including current maturities of long term debt) at June 30, 2003 was $43.4
million. We had $19.1 million borrowed against our revolver at August 1, 2003,
with $247.5 million of availability under our $275.0 million facility, due to
$8.4 million of letters of credit outstanding. Our letters of credit are used
as security against our self-insurance obligations and an outstanding note
payable.

During 2002 and 2003, we funded our capital requirements with net cash
from operations and borrowings under our revolving credit facility. We expect
our capital expenditures for 2003 to be approximately $42 million for planned
capital expenditures for upgrades and replacements of equipment and systems as
a result of ordinary business operations. We also plan to expand certain
existing equipment and facilities in order to meet expected capacity needs.

Pension Plan Assumptions

We contributed $6.5 million, $2.3 million and $1.4 million to our defined
benefit retirement plan in 2002, 2001 and 2000, respectively. Contributions to
the pension plan in the first half of 2003 totaled $2.5 million. We
expect to contribute a total of $10.0 million to the plan in 2003.

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Our retirement plan assets and liabilities are measured at December 31
each year for financial reporting purposes. Market returns on assets invested
in by the defined benefit retirement plan trust were negative during the past
year. Additionally, because of the declines in interest rates and a
corresponding decrease in the discount rates used to estimate our pension
liability, we recorded after-tax charges to other comprehensive income of $12.8
million and $13.8 million to reflect minimum pension liabilities in 2002 and
2001, respectively. If asset returns do not improve or interest rates remain
low, additional funding may be required to the defined benefit retirement plan.

Proposed Merger with Riverwood

On March 25, 2003, we entered into a merger agreement with Riverwood
Holding, Inc. to effect a stock-for-stock merger with Riverwood. Riverwood will
be the accounting acquiror of GPIC and will survive as the new public company
listed on the New York Stock Exchange. The new company will take the name
Graphic Packaging Corporation. Prior to the merger, Riverwood will complete a
15.21 to 1 stock split of its common stock. GPIC shareholders are expected to
receive one share of Riverwood common stock for each share of GPIC common stock
they hold. As a condition to closing the merger, the Grover C. Coors Trust will
convert its preferred shares into 48,484,848 shares of common stock. Assuming
the conversion occurs on August 8, 2003, Riverwood will pay the Grover C. Coors
Trust an estimated $19.8 million as consideration for early conversion of the
preferred stock. Immediately after the merger, GPIC shareholders will own
approximately 42.5% and Riverwood shareholders will own approximately 57.5% of
the combined company on a fully diluted basis.

On May 12, 2003, the thirty-day waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (HSR) expired. Accordingly, the condition to
the merger requiring the expiration or termination of the HSR waiting period
has been satisfied. In addition to this and other conditions to the merger, the
merger must be approved by two-thirds of the combined voting power of GPIC
common stock and two-thirds of the preferred stock voting as a separate class.
The Coors family shareholders, who collectively owned approximately 65.1% of the
combined voting power of the Company before the merger, signed a voting agreement with
Riverwood in which they agreed to vote in favor of the merger. At a meeting of the shareholders held on August 7, 2003, the merger was approved and is expected to be consummated on August 8, 2003.

The combined company has commitment letters from a banking syndicate for
financing totaling $1.6 billion at the time of merger. We estimate that up to
$1.3 billion will be drawn at the time of merger and this, together with the
new issuance of $850 million of senior subordinated notes, will be used to
repay existing bank debt, transaction costs and to refinance GPICs and
Riverwoods senior and senior subordinated notes. Assuming the GPIC existing
senior bank credit facility and the senior subordinated notes are refinanced, a
loss on early extinguishment of debt will occur totaling approximately $20 million, consisting of cash tender premiums and non-cash unamortized debt
issuance costs.

For the six months ended June 30, 2003, we incurred approximately $3.5
million of merger related costs. We expect to incur an estimated additional
$9 million of transaction costs prior to closing for merger related
investment banking, legal and accounting fees. For the six months ended June
30, 2003, we also incurred approximately $500 thousand evaluating acquisitions
that were not consummated.

Relating to the proposed merger, Riverwood filed a registration
statement with the Securities and Exchange Commission which contains a proxy
statement/prospectus that was sent to GPIC shareholders on July 18, 2003.




Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

As of August 1, 2003, the Companys capital structure includes $191.5
million that bears interest based upon an underlying rate that fluctuates with
short-term interest rates, specifically LIBOR or Prime Rate. As of August 1,
2002, the Companys capital structure included $202.8 million of debt that
bears interest based upon an underlying rate that fluctuated with short-term
interest rates, specifically LIBOR. At August 1, 2002, the Company

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had interest rate swap agreements that locked LIBOR at 5.94% on $65
million of its borrowings. With the Companys interest rate protection
contracts in place last year, a 1% rise in interest rates would have impacted
annual pre-tax results by approximately $1.4 million. Currently, a 1% rise in
interest rates would impact the Companys annual pre-tax results by
approximately $1.9 million.




Item 4. Controls and Procedures

We maintain a system of controls and procedures designed to provide
reasonable assurance as to the reliability of the financial statements and
other disclosures included in this report, as well as to safeguard assets from
unauthorized use or disposition. We evaluated the effectiveness of the design
and operation of our disclosure controls and procedures as defined in Exchange
Act Rule 13a-14 under supervision and with the participation of management,
including our Chief Executive Officer and Chief Financial Officer, as of June
30, 2003. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are
effective in timely alerting them to material information required to be
included in our periodic Securities and Exchange Commission filings. No
significant changes were made to our internal controls or in other factors that
could significantly affect these controls subsequent to the date of their
evaluation. The design of any system of controls and procedures is based in
part upon certain assumptions about the likelihood of future events. There can
be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions, regardless of how remote.

Factors That May Affect Future Results

Certain statements in this document constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements may include words such as anticipate, estimate,
expect, project, intend, plan, believe and other words and terms of
similar meaning in connection with any discussion of the timing or nature of
future operating or financial performance or other events. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Specifically, a) we
are dependent on key customers and strategic relationships, and the loss of key
customers or these relationships could adversely affect our business, financial
condition and results of operations; b) we face intense competition and, if we
are unable to compete successfully against other manufacturers of folding
cartons, we could lose customers and/or market share and our revenues may
decline; c) sales might be lower than expected due to the economy, lower
prices, loss of business and customer inventory adjustments; d) market share
estimations are based on third-party information that may be or become obsolete
or inaccurate; e) we have made and may make acquisitions, and are currently anticipating a merger with Riverwood Holding, Inc. which entails certain risks, and
we cannot guarantee that we will realize the expected benefits from
future acquisitions, the merger or that our existing operations will not be harmed as a result;
f) price fluctuations in
raw materials and energy costs could adversely affect our manufacturing costs
and ability to obtain the materials we need to manufacture our products; g) we
may not be able to adequately protect our intellectual property and proprietary
rights, which could harm our future success and competitive position; h) new
products in development may not become commercially viable and anticipated new
orders may not materialize; i) we are subject to environmental laws and other
governmental regulations, and costs related to compliance with, or any
liability for failure to comply with, existing or future laws and regulations
could adversely affect our business, financial condition and results of
operations; j) we may encounter difficulties in our restructuring and
reorganization efforts, which could prevent us from accommodating our existing
business and capturing new business; k) various Coors family trusts own a
significant interest in us and may exercise their control in a manner
detrimental to our other investors interests; l) terrorist attacks, such as
those that occurred on September 11, 2001, and acts of bioterrorism have
contributed to economic instability in the United States and further acts of
terrorism, bioterrorism, violence or war could affect the markets in which we
operate, our business operations, our expectations and other forward-looking
statements contained in this document; m) we may be subject to losses that
might not be covered in whole or in part by existing insurance coverage, and
these uninsured losses could adversely affect our business, financial condition
and results of operations; n) selling, general and administrative costs might
increase based on adding more staff and programs (including costs to meet
increasing corporate compliance requirements), and general cost increases; o)
we may be exposed to higher than predicted interest rates on our debt and on
any new debt we might incur; p) if we are unable to meet the financial
covenants on our debt, we could be subject to higher interest rates or possible
default (which could lead to our insolvency); q) we may not be able to maintain
our effective tax rate due to the current and future tax laws, our ability to
identify and use our tax credit s and other factors; r) purchase savings
initiatives, and cost

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reduction and efficiency programs, such as Six Sigma, might not realize
significant future benefits; s) we might not be able to maintain our position
as one of the lowest cost producers due to competitors more effectively
reducing their costs and improving efficiencies; t) capital expenditures may be
more or less than projected and may not be adequate to cover all possible
business requirements; u) the companys ability to generate cash flow may
differ from past performance and the cash that is generated may not be used to
reduce debt; v) the merger with Riverwood Holding may not result in a new
leader in the paperboard industry or improved financial strengths or growth
opportunities due to market conditions, customer response to the merger,
integration issues, and similar issues; and w) the merger with Riverwood
Holding may not be completed becaused of failure to meet other conditions detailed in the merger agreement. Investors are encouraged to read the proxy statement related to the
proposed merger with Riverwood Holding that was mailed in July.

These statements should be read in conjunction with the financial
statements and notes thereto included in the Companys Form 10-K/A for the year
ended December 31, 2002. The accompanying financial statements have not been
examined by independent accountants in accordance with generally accepted
auditing standards, but in the opinion of management, such financial statements
include all adjustments necessary to summarize fairly the Companys financial
position and results of operations. Except for certain reclassifications made
to consistently report the information contained in the financial statements,
all adjustments made to the interim financial statements presented are of a
normal recurring nature. The results of operations for the second quarter
ended June 30, 2003, may not be indicative of results that may be expected for
the year ending December 31, 2003.

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PART II. OTHER INFORMATION




Item 1. Legal Proceedings

On February 19, 2002, Chinyun Kim filed a putative class action claim in
District Court, Jefferson County, Colorado against the Company and certain of
its shareholders and directors. The complaint alleges that the defendants
breached their fiduciary duties in connection with the issuance on August 15,
2000, of the Companys Series B Preferred Stock to the Grover C. Coors Trust
(the Trust). Plaintiff is seeking damages in the amount of $43 million or,
alternatively, to require transfer to the class of some or all of the Trusts
GPIC common stock into which the convertible preferred stock will be converted.
The court dismissed plaintiffs claim against the Company for breach of
fiduciary duty while allowing the plaintiff to proceed against the named
directors and shareholders, including certain Coors family trusts. The Company
is continuing to provide a defense to this action pursuant to its
indemnification obligations. Currently, discovery is being conducted. By
order dated June 12, 2003, the court certified a class comprised of all owners
of GPIC common stock as of August 2, 2000, excluding the defendants and members
of the Coors family and their affiliates and excluding any additional shares
purchased by class members after August 2, 2000. The Company believes that the
transaction was in the best interest of the Company and its shareholders.

In connection with the resale of its aluminum business in 1999, the
Company guaranteed accounts receivable owed by the former owner of the
business. After the resale, the former owner refused to pay the amounts owed,
equal to $2.4 million. Pursuant to the terms of the resale agreement, the
Company paid this amount and sued the former owner in the United States
District Court for the District of Colorado on April 18, 2000. The former
owner counterclaimed for an additional $11.0 million for certain spare parts,
and the Company amended its claim to seek an additional $16.0 million in
overpayment for raw materials to run the business prior to resale. This claim
increased from $14.3 million to $16.0 million after making an adjustment for
certain offsets to which the Company was entitled. The parties have filed
motions for summary judgment. The Company does not believe that this
litigation will have a material adverse effect on its consolidated financial
position, results of operations or cash flows.

On April 2, 2003, two separate lawsuits were filed in District Court,
Jefferson County, Colorado, against the Company, the Companys directors and
Riverwood relating to the merger between GPIC and Riverwood pursuant to the
merger agreement. The complaints were filed by Robert F. Smith and Harold
Lightweis, on behalf of themselves and all others similarly situated. Each of
the two complaints alleges breach of fiduciary duties by the Companys
directors to the Companys public shareholders in connection with the merger
and that Riverwood aided and abetted the alleged breach. The complaint alleges
that the Coors family stockholders negotiated the merger consideration in their
own interest and not in the interest of the public stockholders. The complaint
seeks an injunction against consummation of the merger, rescission of the
merger if it is consummated, unspecified damages, costs and other relief
permitted by law and equity. On July 3, 2003, a third lawsuit was filed in
District Court of Jefferson County in Colorado, on behalf of a purported class
of the Companys stockholders against the Company, the Companys directors and
Riverwood, alleging that the Companys directors breached their fiduciary
duties to the stockholders of the Company in connection with the negotiation of
the proposed merger and that the Company and Riverwood aided and abetted the
alleged breach. The complaint alleges that the defendants negotiated the terms
of the merger in their own interest and in the interest of certain other
insiders (including the Coors family stockholders), to the detriment of the
public stockholders. The complaint, which is encaptioned James A. Bederka, On
behalf of Himself and All Other Similarly Situated v. Riverwood Holdings Inc.,
et al., seeks certain equitable relief, including an injunction against the
consummation of the merger, rescission of the merger if it is consummated,
rescission of the sale on August 15, 2000 of the convertible preferred stock to
the Trust and injunction against the conversion of the convertible preferred
stock and costs. We believe that these three lawsuits are without merit.

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Item 4. Submission of Matters to a Vote of the Shareholders

At the May 13, 2003 annual meeting of the Companys shareholders, the
following matters were submitted for a vote of the shareholders. The report of
the Inspectors of Election is below.

There were 57,946,100 shares of common stock (including voting rights of
preferred stock) entitled to vote at the meeting and a total of 50,709,614
shares (87.51%) were represented at the meeting.

(1)  Election of two directors for a three-year term.

|                 |  |     |            |          |  |  |           | 
|---------------- |  | --- | ---------- | -------- |  |  | --------- | 
|                 |  | FOR |            | WITHHOLD
|John D. Beckett  |  |     | 47,656,537 |          |  |  | 3,053,077 | 
|William K. Coors |  |     | 50,245,054 |          |  |  | 464,560   | 



| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | The other directors whose term of office continued after the
meeting are Jeffrey H. Coors, Harold R. Logan, Jr., James K.
Peterson and John H. Stookey.

(2)  Approval of an amendment and restatement to the Companys Executive
Incentive Plan to, among other things, add additional financial measures which
may be used to set financial goals for plan participants.

|           |  |         |         |         |  |                 |         |  |  |  |           | 
|---------- |  | ------- | ------- | ------- |  | --------------- | ------- |  |  |  | --------- | 
|FOR        |  | AGAINST |         | ABSTAIN |  | BROKER NON-VOTE
|46,507,801 |  |         | 700,568 |         |  |                 | 973,815 |  |  |  | 2,527,430 | 

At the August 7, 2003 special meeting of the Companys shareholders, the
following matter was submitted for a vote of the shareholders. The report of
the Inspectors of Election is below.

There were 57,966,100
shares of common stock and 1,000,000 shares of 10% Series B
Convertible Preferred Stock entitled to vote at the meeting. A total
of 46,064,883 shares of common stock (79.5%) and 1,000,000 shares of
Preferred Stock (100%) were represented at the meeting.

(1)  Approval of the Agreement and Plan of Merger by and among Riverwood
Holding, Inc., Riverwood Acquisition Sub LLC, and Graphic Packaging
International Corporation.

|           |  |         |  |         |  |                
|---------- |  | ------- |  | ------- |  | ---------------
|FOR        |  | AGAINST |  | ABSTAIN |  | BROKER NON-VOTE
|45,889,869 |  | 154,221 |  | 20,793  |  | 0              
|1,000,000  |  | 0       |  | 0       |  | 0              

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Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

|        |  |                                                                                                                                                                                                                                                                                                         
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                         
|Number  |  | Document Description                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                         
|2.1     |  | Amendment No. 1 to Agreement and Plan of Merger, dated as of July 11,
2003, among Riverwood Holding, Inc., Riverwood Acquisition Sub LLC and
Graphic Packaging International Corporation. (Incorporated by reference
to Amendment No. 3 of Form S-4 filed on July 17, 2003)                             
|2.2     |  | Amendment No. 1 to Voting Agreement, dated as of July 11, 2003,
between Riverwood Holding, Inc. and persons listed on the signature
pages thereof. (Incorporated by reference to Amendment No. 3 of Form
S-4 filed on July 17, 2003)                                                                    
|10.1    |  | Amendment No. 2 to Stockholders Agreement, dated as of June 12, 2003,
by and among Riverwood Holding, Inc., the Family Stockholders named
therein, Clayton Dubilier & Rice Fund V Limited Partnership and EXOR
Group S.A. (Incorporated by reference to Amendment No. 1 of Form S-4
filed June 13, 2003)
|31      |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                               
|32      |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                               

(b) Reports on Form 8-K

On April 16, 2003, the Company filed a Current Report on Form 8-K
disclosing two putative class action lawsuits relating to the proposed merger
transaction between the Company and Riverwood Holding, Inc.

On May 5, 2003, the Company filed a Current Report on Form 8-K disclosing
the first quarter 2003 earnings release on April 29, 2003, plus additional
disclosures made during the subsequent conference call.

31



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##### Table of Contents






SIGNATURES

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.

|                     |  |                                                                     
|-------------------- |  | --------------------------------------------------------------------
|                     |  | GRAPHIC PACKAGING INTERNATIONAL
CORPORATION                         
|                    
|Date: August 7, 2003 |  | By /s/ Luis E. LeonLuis E. Leon
(Chief Financial Officer)           
|                    
|Date: August 7, 2003 |  | By /s/ John S. NormanJohn S. Norman
(Vice President and  Controller)

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##### Table of Contents






Exhibit Index

|        |  |                                                                                                                                                                                                                                                                                                         
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                         
|Number  |  | Document Description                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                         
|2.1     |  | Amendment No. 1 to Agreement and Plan of Merger, dated as of July 11,
2003, among Riverwood Holding, Inc., Riverwood Acquisition Sub LLC and
Graphic Packaging International Corporation. (Incorporated by reference
to Amendment No. 3 of Form S-4 filed on July 17, 2003)                             
|2.2     |  | Amendment No. 1 to Voting Agreement, dated as of July 11, 2003,
between Riverwood Holding, Inc. and persons listed on the signature
pages thereof. (Incorporated by reference to Amendment No. 3 of Form
S-4 filed on July 17, 2003)                                                                    
|10.1    |  | Amendment No. 2 to Stockholders Agreement, dated as of June 12, 2003,
by and among Riverwood Holding, Inc., the Family Stockholders named
therein, Clayton Dubilier & Rice Fund V Limited Partnership and EXOR
Group S.A. (Incorporated by reference to Amendment No. 1 of Form S-4
filed June 13, 2003)
|31      |  | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.                                                                                                                                                                                                                               
|32      |  | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                               

33