<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
 
                                   FORM 10-Q
          /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
               For the quarterly period ended September 27, 1997
 
                                       OR
 
          / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
 
             For the transition period from ________ to __________
 
Commission file number 1-11113
 
                            RIVERWOOD HOLDING, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)
 
                  Delaware                                      58-2205241
       (State or other jurisdiction of                       (I.R.S. Employer
       incorporation or organization)                       Identification No.)

 
                                1013 Centre Road
                                   Suite 350
                           Wilmington, Delaware 19805
                    ----------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)
 
                    c/o Riverwood International Corporation
                                 (770) 644-3000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)
 
    Indicate by check mark whether the registrant (1) has filed all reports 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 ___
 
    At November 3 ,1997 there were 7,105,900 shares and 500,000 shares of the
registrant's Class A and Class B common stock, respectively, outstanding.
 

<PAGE>

                        PART I. FINANCIAL INFORMATION*
 
*   As used in this Form 10-Q, unless the context otherwise requires, "RIC"
    refers to the corporation formerly named Riverwood International
    Corporation, the "Predecessor" or the "Predecessor Company" refers to RIC
    and its subsidiaries in respect of periods prior to the Merger (as defined
    herein), the "Company" refers to the registrant, Riverwood Holding, Inc., a
    Delaware corporation formerly named New River Holding, Inc. ("Holding") and
    its subsidiaries, "RIC Holding" refers to RIC Holding, Inc., a Delaware
    corporation, successor by merger to RIC and a wholly owned subsidiary of
    Holding, and "Riverwood" refers to Riverwood International Corporation, a
    Delaware corporation formerly named Riverwood International USA, Inc. and a
    wholly owned subsidiary of RIC Holding.
 
                                     I-1

<PAGE>

                            RIVERWOOD HOLDING, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                           (In thousands of dollars)
                                  (unaudited)
 
<TABLE>
<CAPTION>
                                                                                               Company
                                                                                      ---------------------------
                                                                                      September 27,  December 31,
ASSETS                                                                                    1997         1996
                                                                                      -------------  ------------
<S>                                                                                   <C>            <C>
Current Assets
  Cash and equivalents..............................................................   $    12,553    $   17,357
  Receivables, net of allowances....................................................       140,692       153,864
  Inventories.......................................................................       200,271       211,965
  Prepaid expenses..................................................................         9,763         8,113
  Deferred tax assets...............................................................         1,864         2,897
                                                                                      -------------  ------------
Total Current Assets................................................................       365,143       394,196

Property, Plant and Equipment, net of accumulated depreciation of $177,948 in 1997
  and $85,768 in 1996...............................................................     1,670,630     1,675,217
Investments in Net Assets of Equity Affiliates......................................       135,313       125,030
Goodwill, net of accumulated amortization of $12,191 in 1997 and $5,900 in 1996.....       296,444       318,543
Other Assets........................................................................       169,388       158,501
                                                                                      -------------  ------------
Total Assets........................................................................   $ 2,636,918    $2,671,487
                                                                                      -------------  ------------
                                                                                      -------------  ------------
LIABILITIES
Current Liabilities
  Short-term debt...................................................................   $    20,160    $   18,173
  Accounts payable..................................................................       118,283       125,014
  Compensation and employee benefits................................................        40,494        38,017
  Income taxes payable..............................................................         9,863        42,031
  Other accrued liabilities.........................................................       130,283       112,205
                                                                                      -------------  ------------
Total Current Liabilities...........................................................       319,083       335,440

Long-Term Debt, less current portion................................................     1,683,564     1,567,259
Deferred Income Taxes...............................................................        21,956        19,722
Other Noncurrent Liabilities........................................................        81,257        85,467
                                                                                      -------------  ------------
Total Liabilities...................................................................     2,105,860     2,007,888
                                                                                      -------------  ------------
Contingencies and Commitments (Note 5)

Redeemable Common Stock, at current redemption value................................         8,880         9,390
                                                                                      -------------  ------------
SHAREHOLDERS' EQUITY
Nonredeemable Common Stock..........................................................            75            75
Capital in Excess of Par Value......................................................       751,153       751,153
(Accumulated Deficit)...............................................................      (216,150)     (105,136)
Cumulative Currency Translation Adjustment..........................................       (12,900)        8,117
                                                                                      -------------  ------------
Total Shareholders' Equity..........................................................       522,178       654,209
                                                                                      -------------  ------------
Total Liabilities and Shareholders' Equity..........................................   $ 2,636,918    $2,671,487
                                                                                      -------------  ------------
                                                                                      -------------  ------------
</TABLE>
 
           See Notes to Condensed Consolidated Financial Statements.
 
                                     I-2

<PAGE>

                            RIVERWOOD HOLDING, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                           (In thousands of dollars)
                                  (unaudited)
 
    On March 27, 1996, Holding, through its wholly owned subsidiary RIC Holding,
acquired all of the outstanding shares of common stock of RIC. The purchase
method of accounting was used to record assets acquired and liabilities assumed
by Holding. As a result of the Merger, purchase accounting, the effect of the
disposition of substantially all of the U.S. Timberlands/Wood Products business
segment (see Note 8) and certain Other Costs of the Predecessor, the
accompanying financial statements of the Predecessor and the Company are not
comparable in all material respects since the financial statements report
results of operations and cash flows of these two separate entities.
 
<TABLE>
<CAPTION>
                                                                        Company                             Predecessor
                                               ----------------------------------------------------------  -------------
                                               Three Months   Three Months    Nine Months    Six Months    Three Months
                                                   Ended          Ended          Ended          Ended          Ended
                                               September 27,  September 28,  September 27,  September 28,    March 27,
                                                   1997           1996           1997           1996           1996
                                               -------------  -------------  -------------  -------------  -------------
<S>                                            <C>            <C>            <C>            <C>            <C>
Net Sales....................................   $   284,875    $   291,645    $   846,097    $   585,529    $   293,649
Cost of Sales................................       245,611        250,564        739,545        502,959        232,701
Selling, General and Administrative..........        29,154         31,854         90,417         63,485         30,936
Research, Development and Engineering........         1,062          2,506          3,590          4,260          2,031
Other Costs..................................       --             --             --             --              11,114
Other Expenses, net..........................         1,533          3,677          6,523          5,669          1,217
                                               -------------  -------------  -------------  -------------  -------------
Income from Operations.......................         7,515          3,044          6,022          9,156         15,650
Interest Income..............................           598            373            816            599            329
Interest Expense.............................        43,812         51,385        124,743        101,227         26,392
                                               -------------  -------------  -------------  -------------  -------------
(Loss) from Continuing Operations before
  Income Taxes and Equity in Net Earnings of
  Affiliates.................................       (35,699)       (47,968)      (117,905)       (91,472)       (10,413)
Income Tax Expense (Benefit).................         1,612            916          4,341         (1,356)        (3,436)
                                               -------------  -------------  -------------  -------------  -------------
(Loss) from Continuing Operations before
  Equity in Net Earnings of Affiliates.......       (37,311)       (48,884)      (122,246)       (90,116)        (6,977)
Equity in Net Earnings of Affiliates.........         5,230          5,678         13,695         10,300          4,927
                                               -------------  -------------  -------------  -------------  -------------
(Loss) from Continuing Operations............       (32,081)       (43,206)      (108,551)       (79,816)        (2,050)
Income from Discontinued Operations, net of
  tax of $0..................................       --              17,452        --              32,808        --
                                               -------------  -------------  -------------  -------------  -------------
(Loss) before Extraordinary Item.............       (32,081)       (25,754)      (108,551)       (47,008)        (2,050)
Extraordinary Loss on Early Extinguishment of
  Debt, net of tax of $0.....................         2,463        --               2,463        --             --
                                               -------------  -------------  -------------  -------------  -------------
Net (Loss)...................................   $   (34,544)   $   (25,754)   $  (111,014)   $   (47,008)   $    (2,050)
                                               -------------  -------------  -------------  -------------  -------------
                                               -------------  -------------  -------------  -------------  -------------
</TABLE>
 
           See Notes to Condensed Consolidated Financial Statements.
 
                                     I-3

<PAGE>

                            RIVERWOOD HOLDING, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (In thousands of dollars)
                                  (unaudited)
 
    On March 27, 1996, Holding, through its wholly owned subsidiary RIC Holding,
acquired all of the outstanding shares of common stock of RIC. The purchase
method of accounting was used to record assets acquired and liabilities assumed
by Holding. As a result of the Merger, purchase accounting, the effect of the
disposition of substantially all of the U.S. Timberlands/Wood Products business
segment (see Note 8) and certain Other Costs of the Predecessor, the
accompanying financial statements of the Predecessor and the Company are not
comparable in all material respects since the financial statements report
results of operations and cash flows of these two separate entities.
 
<TABLE>
<CAPTION>
                                                        Company                Predecessor
                                             ------------------------------  --------------
                                              Nine Months      Six Months     Three Months
                                                 Ended           Ended            Ended
                                             September 27,   September 28,      March 27,
                                                  1997            1996            1996
                                             -------------   -------------   --------------
<S>                                          <C>             <C>             <C>
Cash Flows from Operating Activities:
Net (Loss).................................    $ (111,014)     $  (47,008)     $   (2,050)
Noncash Items Included in Net (Loss):
  Depreciation, amortization and cost of
    timber harvested.......................       100,219          73,528          24,438
  Deferred income taxes....................         4,206          (3,101)         (3,574)
  Pension, postemployment and
    postretirement expense, net of benefits
    paid...................................         3,723           1,113           1,861
  Equity in net earnings of affiliates, net
    of dividends...........................       (10,978)         (8,284)         (4,927)
  Extraordinary loss on early
    extinguishment of debt, net............         2,463          --              --
  Amortization of deferred debt issuance
    costs..................................         9,111           8,045             619
  Other, net...............................           589          --              (2,350)
(Increase) Decrease in Current Assets, net
  of effects from the Merger:
  Receivables..............................         9,984         (16,660)         14,737
  Inventories..............................         9,769          (6,820)        (14,659)
  Prepaid expenses.........................        (2,095)          3,262           8,298
Increase (Decrease) in Current Liabilities,
  net of effects from the Merger:
  Accounts payable.........................        (1,977)        (13,518)         18,182
  Compensation and employee benefits.......         3,909          (4,084)        (10,248)
  Income taxes payable.....................         1,226          (4,426)         (3,343)
  Other accrued liabilities................        17,292          17,811          12,360
Decrease in Other Noncurrent Liabilities...        (7,635)         (4,063)         (2,569)
                                             --------------  --------------  --------------
Net Cash Provided by (Used in) Operating
  Activities...............................        28,792          (4,205)         36,775
                                             --------------  --------------  --------------
Cash Flows from Investing Activities:
Acquisition of RIC, net of cash acquired...        --          (1,365,202)         --
Payment of Merger Related Costs............       (34,410)         --              --
Purchases of Property, Plant and
  Equipment................................      (126,893)        (74,369)        (44,074)
Acquisition of Equipment Previously Leased
  Under Operating Leases...................        --             (46,742)         --
Proceeds from Marketable Securities Held to
  Maturity.................................        --                 167             439
Proceeds from Sale of Assets...............         7,478           3,214             623
Proceeds from Tax Matters Settlement.......        16,800          --              --
Increase in Other Assets...................        (9,304)        (12,260)         (8,004)
                                             --------------  --------------  --------------
Net Cash Used in Investing Activities......      (146,329)     (1,495,192)        (51,016)
                                             --------------  --------------  --------------
Cash Flows from Financing Activities:
Issuance of Debt...........................       250,000       1,848,215          12,669
Increase in Debt Issuance Costs............        (7,746)        (92,820)         --
Net (Decrease) Increase in Notes Payable...       (18,718)        146,909          (3,000)
Proceeds from Issuance of Common Stock.....        --             761,143             838
Payments on Debt...........................      (108,227)        (30,244)         (2,833)
Predecessor Debt Paid at Merger............        --          (1,118,461)         --
Repurchases of Redeemable Common Stock.....          (510)         --              --
Dividends..................................        --              --              (2,630)
                                             --------------  --------------  --------------
Net Cash Provided by Financing
  Activities...............................       114,799       1,514,742           5,044
                                             --------------  --------------  --------------
Effect of Exchange Rate Changes on Cash....        (2,066)          1,161            (638)
                                             --------------  --------------  --------------
Net (Decrease) Increase in Cash and
  Equivalents..............................        (4,804)         16,506          (9,835)
Cash and Equivalents at Beginning of
  Period...................................        17,357               1          35,870
                                             --------------  --------------  --------------
Cash and Equivalents at End of Period......    $   12,553      $   16,507      $   26,035
                                             --------------  --------------  --------------
                                             --------------  --------------  --------------
</TABLE>
 
           See Notes to Condensed Consolidated Financial Statements.
 
                                     I-4


<PAGE>

                           RIVERWOOD HOLDING, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (unaudited)


NOTE 1--ORGANIZATION AND BASIS OF PRESENTATION
 
    Holding and its wholly owned subsidiaries RIC Holding and the corporation
formerly named CDRO Acquisition Corporation ("Acquisition Corp.") were
incorporated in 1995 to acquire the stock of RIC.
 
    On March 27, 1996, Holding, through its wholly owned subsidiaries, acquired
all of the outstanding shares of common stock of RIC. On such date, Acquisition
Corp. was merged (the "Merger") into RIC. RIC, as the surviving corporation in
the Merger, became a wholly owned subsidiary of RIC Holding. On March 28, 1996,
RIC transferred substantially all of its properties and assets to Riverwood,
other than the capital stock of Riverwood, and RIC was merged (the "Subsequent
Merger") into RIC Holding. Thereupon, Riverwood was renamed "Riverwood
International Corporation." Upon consummation of the Subsequent Merger, RIC
Holding, as the surviving corporation in the Subsequent Merger, became the
direct parent company of Riverwood.
 
    Holding and its subsidiaries RIC Holding and Acquisition Corp. conducted no
significant business other than in connection with the Merger and related
transactions through March 27, 1996.
 
    The condensed consolidated financial statements included herein have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in the financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim periods presented have been made. The Condensed Consolidated Balance
Sheet as of December 31, 1996 was derived from audited financial statements.
Operating results for the interim periods are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1997.
 
    In connection with the Merger, the purchase method of accounting was used to
establish and record a new cost basis for the assets acquired and liabilities
assumed. The difference between the purchase price and the fair market values of
the assets acquired and liabilities assumed was recorded as goodwill.
 
    The condensed consolidated financial statements presented herein for the
three months ended March 27, 1996, represent the Predecessor's results of
operations and cash flows prior to the Merger and, consequently, are stated on
the Predecessor's historical cost basis. The condensed consolidated financial
statements as of September 27, 1997, and for the three and nine months then
ended and for the three and six months ended September 28, 1996, reflect the
adjustments which were made to record the Merger and represent the Company's new
cost basis. On October 18, 1996, the Company sold substantially all of the
assets of the U.S. Timberlands/Wood Products business segment (see Note 8). The
operating results for the U.S. Timberlands/Wood Products business segment were
classified as discontinued operations for periods beginning March 28, 1996 and
ending October 18, 1996 (the date of the sale). The operating results for the
U.S. Timberlands/Wood Products business segment have not been reclassified as
discontinued operations in the Predecessor's Condensed Consolidated Statement of
Operations or Condensed Consolidated Statement of Cash Flows for the three
months ended March 27, 1996. Accordingly, the financial statements of the
Predecessor for periods prior to March 28, 1996 are not comparable in all
material respects with the financial statements subsequent to the Merger date.
The most significant differences relate to amounts recorded for inventory,
property, plant and equipment, intangibles and debt which resulted in increased
cost of sales, amortization, depreciation and interest expense in the three and
nine months ended September 28, 1997, and for the three and six months ended
September 28, 1996, and will continue to do so in future periods.
 
                                     I-5

<PAGE>

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
    For a summary of the Company's significant accounting policies, please refer
to the Company's report on Form 10-K filed with the Securities and Exchange
Commission for the nine-month period ended December 31, 1996. For a summary of
RIC's significant accounting policies, please refer to the financial statements
incorporated by reference in RIC's annual report filed with the Securities and
Exchange Commission under Form 10-K for the year ended December 31, 1995.
 
    The Company has reclassified the presentation of certain prior period
information to conform with the current presentation format.
 
    The preparation of the condensed consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the condensed consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual amounts could differ
from those estimates.
 
NOTE 3--INVENTORIES
 
    The major classes of inventories were as follows:
 
<TABLE>
<CAPTION>
                                                                             September 27, 1997  December 31, 1996
                                                                             ------------------  -----------------
                                                                                    (In thousands of dollars)
<S>                                                                          <C>                 <C>
Finished goods.............................................................     $     86,874             89,412
Work-in-process............................................................           14,390             12,496
Raw materials..............................................................           64,827             71,075
Supplies...................................................................           34,180             38,982
                                                                                    --------           --------
      Total................................................................     $    200,271        $   211,965
                                                                                    --------           --------
                                                                                    --------           --------
</TABLE>
 
    In the fourth quarter of 1996, the Company adopted the Last-in, First-out
("LIFO") method of determining the cost of principally all of its inventories
effective March 28, 1996. Prior to the fourth quarter of 1996, the Company
determined the cost of principally all of its inventories using the First-in,
First-out ("FIFO") method. Accordingly, the three and six months ended September
28, 1996 have been restated to reflect the adoption of the LIFO method effective
March 28, 1996 as follows:
 
<TABLE>
<CAPTION>
                                                                                             (Loss)
                                                                                             Income
                                                                                              From         Net
                                                                               Net Sales   Operations     (Loss)
                                                                               ----------  -----------  ----------
                                                                                     (In thousands of dollars)
<S>                                                                            <C>         <C>          <C>
Three months ended September 28, 1996 as originally reported.................  $  291,645   $   3,460   $  (26,167)
Three months ended September 28, 1996 LIFO adjustment........................      --            (416)         413
                                                                               ----------  -----------  ----------
Three months ended September 28, 1996 as restated............................  $  291,645   $   3,044   $  (25,754)
                                                                               ----------  -----------  ----------
                                                                               ----------  -----------  ----------

Six months ended September 28,1996 as originally reported....................  $  585,529   $ (16,831)  $  (77,427)
Six months ended September 28, 1996 LIFO adjustment..........................      --          25,987       30,419
                                                                               ----------  -----------  ----------
Six months ended September 28, 1996 as restated..............................  $  585,529   $   9,156   $  (47,008)
                                                                               ----------  -----------  ----------
                                                                               ----------  -----------  ----------
</TABLE>
 
                                     I-6

<PAGE>

NOTE 4--INVESTMENTS IN NET ASSETS OF EQUITY AFFILIATES
 
    The Company has investments in affiliates that are accounted for using the
equity method of accounting. The most significant investment is the Company's 50
percent investment in Igaras Papeis e Embalagens S.A. ("Igaras").
 
    The following represents the summarized income statement information for
Igaras, of which the Company recognizes 50 percent in its results of operations:
 
<TABLE>
<CAPTION>
                                                                Company                             Predecessor
                                       ----------------------------------------------------------  -------------
                                       Three Months   Three Months    Nine Months    Six Months    Three Months
                                           Ended          Ended          Ended          Ended          Ended
                                       September 27,  September 28,  September 27,  September 28,    March 27,
                                           1997           1996           1997           1996           1996
                                       -------------  -------------  -------------  -------------  -------------
                                                                 (In thousands of dollars)
<S>                                    <C>            <C>            <C>            <C>            <C>

Net Sales............................    $  60,579      $  58,458     $   175,667    $   115,206     $  59,573
Cost of Sales........................       42,062         38,675         122,427         76,613        39,127
                                       -------------  -------------  -------------  -------------  -------------
Gross Profit.........................    $  18,517      $  19,783          53,240    $    38,593     $  20,446
                                       -------------  -------------  -------------  -------------  -------------
                                       -------------  -------------  -------------  -------------  -------------
Income from Operations...............    $  12,589      $  14,885          35,334    $    27,935     $  14,275
                                       -------------  -------------  -------------  -------------  -------------
                                       -------------  -------------  -------------  -------------  -------------
Net Income...........................    $   9,765      $  11,309     $    25,847    $    20,066     $  10,249
                                       -------------  -------------  -------------  -------------  -------------
                                       -------------  -------------  -------------  -------------  -------------
</TABLE>
 
    During the third, second, and first quarters of 1997 and the third and
second quarters of 1996, the Company received dividends from Igaras of $1.0
million, $0.9 million, nil, $0.7 million and $1.0 million, respectively, net of
taxes of $0.2 million, $0.2 million, nil, nil and nil, respectively. During the
first quarter of 1996, the Predecessor did not receive a dividend from Igaras.
The Company received net dividends from its affiliates, other than Igaras, that
are accounted for using the equity method totaling $0.8 million and $0.4 million
in the first quarter of 1997 and second quarter of 1996, respectively.
 
NOTE 5--CONTINGENCIES AND COMMITMENTS
 
    The Company is committed to compliance with all applicable laws and
regulations throughout the world. Environmental law is, however, dynamic rather
than static. As a result, costs, which are unforeseeable at this time, may be
incurred when new laws are enacted, and when environmental agencies promulgate
or revise rules and regulations.
 
    In late 1993, the U.S. Environmental Protection Agency (the "EPA") proposed
regulations (generally referred to as the "cluster rules") that would mandate
more stringent controls on air and water discharges from the United States pulp
and paper mills. In 1996, the EPA released additional information regarding the
proposed cluster rules. Based on this information, the Company expects that the
cluster rules may be finally promulgated in 1997 and estimates the capital
spending that may be required to comply with the cluster rules could reach $55
million to be spent at its two U.S. paper mills over an eight-year period
beginning in 1997. The Company anticipates that the majority of this spending
for compliance with the cluster rules will occur later in the eight-year period.
The Company had no capital spending during the first nine months of 1997 related
to compliance with the cluster rules.
 
    In late 1995, The Louisiana Department of Environmental Quality ("DEQ") 
notified the Company that the Predecessor may be liable for the remediation 
of hazardous substances at a wood treatment site in Shreveport, Louisiana, 
that the Predecessor or its predecessor previously operated, and at a former 
oil refinery site in Caddo Parish, Louisiana that the Company currently owns. 
Neither the Company nor the Predecessor ever operated the oil refinery. In 
response to the DEQ, the Company has provided additional information 
concerning these sites and has commenced its own evaluation of any claims and 
remediation liabilities for which it may be responsible. The Company received 
a letter from the DEQ dated May 20, 1996, requesting a plan for soil and 
groundwater sampling of the wood treatment site. The Company first met with 
the DEQ on July 18, 1996, and then submitted a soil sampling plan to the DEQ. 
The Company expects approval of this sampling plan in the second half of 
1997. On September 6, 1996, the Company received from the DEQ a letter 
requesting remediation of the former oil refinery site in Caddo Parish, 
Louisiana. The Company met with the DEQ on February 17, 1997 to discuss these 
matters. The Company anticipates entering into a cooperative agreement with 
the DEQ to perform a phased-in evaluation of soil and groundwater conditions 
at the Shreveport site. The Company is in discussions with the DEQ regarding 
the participation of other responsible parties in any clean-up of hazardous 
substances at both of these sites.
 
    The Company is engaged in environmental remediation projects for certain
properties currently owned or operated by the Company and certain properties
divested by the Company for which responsibility was retained for pre-existing
conditions. The Company's costs in
 
                                     I-7

<PAGE>

some instances cannot be estimated until the remediation process is
substantially underway. To address these contingent environmental costs, the
Company has accrued reserves when such costs are probable and can be reasonably
estimated. The Company believes that, based on current information and
regulatory requirements, the accruals established by the Company for
environmental expenditures are adequate. Based on current knowledge, to the
extent that additional costs may be incurred that exceed the accrued reserves,
such amounts are not expected to have a material impact on the results of
operations, cash flows or financial condition of the Company, although no
assurance can be given that material costs will not be incurred in connection
with clean-up activities at these properties, including the Shreveport and Caddo
Parish sites referred to above.
 
    The Company is a party to a number of lawsuits arising out of the conduct of
its business. While there can be no assurance as to their ultimate outcome, the
Company does not believe that these lawsuits will have a material impact on the
results of operations, cash flows or financial condition of the Company.
 
    On December 6, 1995, Forrest Kelly Clay, a former shareholder of the
Predecessor, commenced a purported class action lawsuit in the United States
District Court for the Northern District of Georgia, against the Company and
certain officers of the Company (the "Individual Defendants," and together with
the Company, the "Defendants"). In his complaint, Clay alleges that the
Defendants violated the federal securities laws by disseminating misleading
statements and by omissions concerning the strategic alternatives that the
Predecessor was considering, including its potential sale to a third-party
investor. The complaint also alleged that the Individual Defendants, through
their exercise of stock appreciation rights ("SARs"), violated the federal
securities laws by trading in the Predecessor's securities while in possession
of material, non-public information. The complaint generally seeks damages in an
unspecified amount, as well as other relief. On June 2, 1997, the court granted
Defendants' Motion for Summary Judgment and dismissed the action in its
entirety. The court based its ruling on the fact that (i) none of the statements
attributable to the Company concerning its review of strategic alternatives was
false and (ii) there is no causal relationship between plaintiff's purchase of
Riverwood common stock and the Individual Defendants' exercise of SARs.
Plaintiff filed his Notice of Appeal to the United States Court of Appeals for
the Eleventh Circuit on June 5, 1997. A briefing schedule has been set and all
of the briefs are expected to be before the Court as of mid-December. At that
juncture, the Court will determine whether oral argument is necessary.
 
NOTE 6--OTHER COSTS
 
    Other Costs incurred by the Predecessor in 1996 included expenses associated
with stock-based compensation plans, expenses related to RIC's review of
strategic alternatives and provision for environmental reserves.
 
NOTE 7--INCOME TAXES
 
    During the first nine months of 1997, the Company recognized an income tax
expense of $4.3 million on a (Loss) from Continuing Operations before Income
Taxes and Equity in Net Earnings of Affiliates of $117.9 million. During the six
months ended September 28, 1996, the Company recognized an income tax benefit of
$1.4 million on a (Loss) from Continuing Operations before Income Taxes and
Equity in Net Earnings of Affiliates of $91.5 million. The 1997 expense and 1996
benefit differed from the statutory federal income tax rate because of valuation
allowances established on net operating loss carryforward tax assets in the U.S.
and certain international locations where the realization of benefits is
uncertain.
 
    In the first quarter of 1996, the Predecessor recognized an income tax
benefit of $3.4 million on a (Loss) from Continuing Operations before Income
Taxes and Equity in Net Earnings of Affiliates of $10.4 million.

    In connection with the Merger, the former majority owner of the Company
agreed to bear the cost of a Section 338(h)(10) election for federal tax
purposes and for purposes of state taxes for which the former majority owner and
the Company filed returns on a combined basis. The Company agreed to bear the
cost of this election for the purposes of other state taxes ("stand-alone
taxes") including Louisiana income tax. During 1997, the Company has paid $33.1
million in estimated stand-alone taxes relating to the election, including $27.5
million in Louisiana income tax. The Company's calculation of its Louisiana tax
was based on state law in effect at the time of the Merger, including a 1993
amendment. In May 1997, the Louisiana Supreme Court declared the 1993 amendment
to be void under the Louisiana Constitution, retroactive to 1993. It is possible
that the voiding of the 1993 amendment could result in the Company being
required to pay significant additional Louisiana income tax relating to the
election (plus potential penalties and statutory interest on the additional
taxes). The Company's Louisiana tax return for the period that includes the
Merger is due November 17, 1997. After consultation with Louisiana tax counsel,
the Company intends to file its Louisiana income tax return for the period ended
March 27, 1996 (which is due November 17, 1997) in reliance on the Louisiana tax
law in effect at the time of the Merger, without the payment of any additional
tax due to the voiding of the 1993 amendment. There can be no assurance,
however, that the Company would ultimately prevail on this issue if Louisiana
were to challenge such filing position. If the Company were not to prevail in
such a challenge, significant additional Louisiana income tax relating to the
election could be payable. Management estimates that the maximum amount of such
additional tax is approximately $47 million (plus potential penalties and
statutory interest on any additional tax). Management believes that the
additional tax ultimately paid (if any) would be substantially less than the
estimated maximum amount, although no
 
                                     I-8

<PAGE>

assurance can be given in this regard. The Company and its advisors are
continuing to study this situation. Since the law is unclear and the amounts
involved could be significant, it may be several years before this matter is
resolved.
 
NOTE 8--DISPOSITION OF BUSINESSES AND OPERATING ACTIVITIES
 
    On October 18, 1996, the Company sold substantially all of the assets of the
U.S. Timberlands/Wood Products business segment for approximately $550 million
in cash. In addition, the buyer assumed certain specified preclosing
liabilities. Under the terms of the agreement for such sale, the Company and the
buyer, Plum Creek Timber Company, L.P., entered into a twenty-year supply
agreement with a ten-year renewal option for the purchase by the Company, at
market-based prices, of a majority of the Company's requirements for pine
pulpwood and residual chips at its paper mill in West Monroe, Louisiana (the
"West Monroe Mill"), as well as a portion of the Company's needs for hardwood
pulpwood at the West Monroe Mill. The Company did not realize any gain or loss
on the sale. The operating results for the U.S. Timberlands/Wood Products
business segment were classified as discontinued operations for periods
beginning March 28, 1996 and ending October 18, 1996 (the date of the sale). The
operating results of the U.S. Timberlands/Wood Products business segment have
not been reclassified as discontinued operations in the Predecessor's Condensed
Consolidated Statements of Operations or Condensed Consolidated Statements of
Cash Flows for periods prior to the Merger.
 
    In connection with and following the Merger, the Company decided in 1996 to
exit certain businesses and operating activities, including the sale or closure
of the Company's last dedicated folding carton converting plant in the United
States, located in Kankakee, Illinois, packaging machinery manufacturing plants
in Marietta, Georgia and Koln, Germany, a beverage multiple packaging converting
plant in Bakersfield, California and the trucking transportation operations in
West Monroe, Louisiana, as well as the consolidation and realignment of certain
other operations in the United States, Australia and Europe. The cost of exiting
these businesses and operating activities was approximately $40.9 million which
was accrued during 1996 as a purchase accounting adjustment. These costs related
principally to the severance of approximately 750 employees, relocation and
other plant closure costs. At September 27, 1997, $18.0 million of this total
was unspent and accrued in Other accrued liabilities on the Condensed
Consolidated Balance Sheets. During the first nine months of 1997, $14.6 million
was paid out and charged against the accrual and related primarily to severance
costs.
 
NOTE 9--PRO FORMA DATA
 
    The following unaudited pro forma financial data has been prepared assuming
that the Merger and related financings were consummated on January 1, 1996 and
excluding the results of operations of the U.S. Timberlands/Wood Products
business segment from the period presented. This pro forma financial data is
presented for informational purposes and is not necessarily indicative of the
operating results that would have occurred had the Merger been consummated on
January 1, 1996, nor is it necessarily indicative of future operations.
 
                                                                 Three Months
                                                                    Ended
                                                                March 27, 1996
                                                               ----------------
                                                               (in thousands of
                                                                    dollars)

Net Sales..............................................          $   258,706
Net Loss...............................................          $   (31,696)

NOTE 10--LONG-TERM DEBT
 
    On July 28, 1997, the Company completed an offering of $250 million
principal amount of Senior Notes due 2007, bearing interest at 10 5/8 percent
(the "1997 Notes"). The net proceeds of this offering were applied to prepay
certain revolving credit borrowings under the Company's senior secured credit
agreement (without any commitment reduction), and to refinance certain Tranche A
term loans and other borrowings thereunder. A registration statement under the
Securities Act of 1933, as amended, registering senior notes of the Company
identical in all material respects to the 1997 Notes (the "New Notes") offered
in exchange for the 1997 Notes became effective October 1, 1997. On November 3,
1997, the Company completed its exchange offer of the 1997 Notes for the New
Notes. During the third quarter of 1997, the Company recorded a non-cash,
extraordinary charge to earnings of approximately $2.5 million, net of tax of
$0, related to the write-off of the applicable portion of deferred debt issuance
costs on the Tranche A term loans.
 
    In connection with this refinancing, the Company's senior secured lenders
have modified certain financial covenants to reflect, among other things, the
Company's recent financial results. After giving effect to such refinancing,
outstanding revolving borrowings under the senior secured agreement at September
27, 1997 were approximately $95 million and scheduled principal payments on the
term loans thereunder are approximately $3 million, $4 million, $4 million, $120
million, $173 million, $184 million, and $156 million for 1998 through 2004,
respectively. The covenant modifications include reductions in permitted capital
expenditures, the elimination of the
 
                                     I-9

<PAGE>

minimum consolidated net worth requirement, and reductions in minimum EBITDA (as
defined) and interest coverage ratio requirements. The amended covenants also
specify permitted capital expenditures (subject to certain carryover allowances
and other adjustments) of no more than $175 million, $140 million, $140 million,
and $135 million for 1997 through 2000, respectively, and $130 million per year
thereafter. The amended covenants specify, among other changes, the following
amended minimum EBITDA and interest coverage ratio requirements for each four
quarter period ending during the following test periods:
 
                                                         Interest Coverage
Period                                     EBITDA              Ratio
------------------------------------   --------------   ------------------

December 31, 1996-December 30, 1997     $130 million        0.80 to 1.00
December 31, 1997-December 30, 1998     $140 million        0.85 to 1.00
December 31, 1998-December 30, 1999     $200 million        1.00 to 1.00
December 31, 1999-December 30, 2000     $265 million        1.25 to 1.00
December 31, 2000-December 30, 2001     $325 million        1.50 to 1.00
December 31, 2001-December 30, 2002     $350 million        1.75 to 1.00
December 31, 2002-December 30, 2003     $375 million        2.00 to 1.00
Thereafter                              $400 million        2.25 to 1.00


NOTE 11--REDEEMABLE COMMON STOCK
 
    During the third quarter of 1997, the Company repurchased 6,000 shares of
Redeemable Common Stock for $85 per share.
 
                                     I-10

<PAGE>

INDEPENDENT ACCOUNTANTS' REPORT
 
To the Shareholders and Directors
of Riverwood Holding, Inc.
 
    We have reviewed the accompanying condensed consolidated balance sheet of
Riverwood Holding, Inc. and its subsidiaries as of September 27, 1997, and the
related condensed consolidated statements of operations for the three and nine
month periods ended September 27, 1997 and the three and six months ended
September 28, 1996 and condensed consolidated statements of cash flows for the
nine months ended September 27, 1997 and the six months ended September 28,
1996. These financial statements are the responsibility of the Company's
management. We were furnished with the report of other accountants dated
November 3, 1997, on their review of the interim financial information of Igaras
Papeis e Embalagens S.A. (Igaras) for the three and nine months ended September
30, 1997, the Company's investment in which is accounted for by use of the
equity method. The Company's equity of $131,533,000 in Igaras' net assets at
September 27, 1997, and of $4,875,000 and $12,683,000 in Igaras' net income for
the three and nine month periods ended September 27, 1997, respectively, are
included in the accompanying financial statements.
 
    We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
 
    Based on our review and the report of other accountants, we are not aware of
any material modifications that should be made to such condensed consolidated
financial statements for them to be in conformity with generally accepted
accounting principles.
 
    We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Riverwood Holding, Inc. and
subsidiaries as of December 31, 1996, and the related consolidated statements of
operations, shareholders' equity, and cash flows for the nine-month period ended
December 31, 1996 and the three-month period ended March 27, 1996 (Predecessor).
The consolidated statements of operations, shareholders' equity and cash flows
for the nine-month period ended December 31, 1996 and the consolidated
statements of shareholders' equity for the three-month period ended March 27,
1996 (Predecessor) are not presented herein. In our report dated March 17, 1997,
we expressed an unqualified opinion on those consolidated financial statements,
based on our audit and the report of other auditors. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1996 and condensed consolidated statements of operations and
cash flows for the three-month period ended March 27, 1996, are fairly stated,
in all material respects, in relation to the consolidated financial statements
from which they have been derived.
 
DELOITTE & TOUCHE LLP
 
Atlanta, Georgia
November 3, 1997
 
                                    I-11


<PAGE>

Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
 
OVERVIEW
 
    As a result of the Merger, purchase accounting, the effect of the
disposition of substantially all of the assets of the U.S. Timberlands/Wood
Products business segment and certain Other Costs of the Predecessor, the
results of operations of the Company for periods subsequent to the Merger are
not comparable in all material respects to the results of operations of the
Predecessor for periods prior to the Merger.
 
The Merger and Purchased Asset Costs
 
    On March 27, 1996, Holding, through its wholly owned subsidiaries, acquired
all of the outstanding shares of common stock of RIC. On such date, Acquisition
Corp., Holding's acquisition subsidiary, was merged into RIC in the Merger. RIC,
as the surviving corporation of the Merger, became a wholly owned subsidiary of
RIC Holding. On March 28, 1996, RIC transferred substantially all of its
properties and assets to Riverwood, other than the capital stock of Riverwood,
and RIC was merged in the Subsequent Merger into RIC Holding. Upon consummation
of the Subsequent Merger, RIC Holding, as the surviving corporation in the
Subsequent Merger, became the direct parent company of Riverwood.
 
    The Merger was accounted for as a purchase in accordance with APB Opinion
No. 16, "Business Combinations" ("APB 16"). Purchase accounting results in
increased cost of sales, amortization and depreciation. Additionally, the
post-Merger capital structure has resulted and will continue to result in higher
reported interest expense. The condensed consolidated financial statements for
the three months ended March 27, 1996 have been prepared on the historical cost
basis using accounting principles that had been adopted by the Predecessor. As a
result of the Merger, purchase accounting and the effect of the disposition of
substantially all of the U.S. Timberlands/Wood Products business segment,
operating results subsequent to the Merger are not comparable in all material
respects to the operating results prior to the Merger.
 
    Certain expenses and costs are excluded from the Company's Net (Loss) in
determining EBITDA (as defined below), including amortization, depreciation or
expenses associated with the write-up of inventory, fixed assets and intangible
assets in accordance with APB 16 and APB Opinion No. 17, "Intangible Assets",
collectively referred to as the "Purchased Asset Costs."
 
    During the three months ended September 27, 1997, the Company's Income from
Operations included Purchased Asset Costs as follows:
 
<TABLE>
<CAPTION>
                                                                           Coated Board    Containerboard      Total
                                                                           -------------  -----------------  ---------
                                                                                    (In thousands of dollars)
<S>                                                                        <C>            <C>                <C>
Cost of sales (excluding depreciation expense)...........................    $     717        $      --      $     717
Depreciation expense.....................................................        4,827              911          5,738
Amortization of intangible assets........................................        1,180               --          1,180
                                                                                ------            -----      ---------
Net Impact on Income from Operations.....................................    $   6,724        $     911      $   7,635
                                                                                ------            -----      ---------
                                                                                ------            -----      ---------
</TABLE>
 
    During the three months ended September 28, 1996, the Company's Income from
Operations included Purchased Asset Costs as follows:
 
<TABLE>
<CAPTION>
                                                               Coated Board    Containerboard      Corporate      Total
                                                               -------------  -----------------  -------------  ---------
                                                                              (In thousands of dollars)
<S>                                                            <C>            <C>                <C>            <C>
Cost of sales (excluding depreciation expense)...............    $     197        $      --        $      --    $     197
Depreciation expense.........................................        5,731              743               43        6,517
Amortization of intangible assets............................        1,093              (43)              44        1,094
                                                                 ---------        ---------        ---------    ---------
Net Impact on Income from Operations.........................    $   7,021        $     700        $      87    $   7,808
                                                                 ---------        ---------        ---------    ---------
                                                                 ---------        ---------        ---------    ---------
</TABLE>
 
                                    I-12

<PAGE>

    During the nine months ended September 27, 1997, the Company's Income from
Operations included Purchased Asset Costs as follows:
 
<TABLE>
<CAPTION>
                                                                          Coated board   Containerboard     Total
                                                                          -------------  ---------------  ---------
                                                                                  (In thousands of dollars)
<S>                                                                       <C>            <C>              <C>
Cost of sales (excluding depreciation expense)..........................   $     1,229      $      --     $   1,229
Depreciation expense....................................................        14,483          2,733        17,216
Amortization of intangible assets.......................................         3,098             --         3,098
                                                                           -----------      ---------     ---------
Net Impact on Income from Operations....................................   $    18,810      $   2,733     $  21,543
                                                                           -----------      ---------     ---------
                                                                           -----------      ---------     ---------
</TABLE>
 
    During the six months ended September 28, 1996, the Company's Income from
Operations included Purchased Asset Costs as follows:
 
<TABLE>
<CAPTION>
                                                              Coated Board   Containerboard     Corporate      Total
                                                              -------------  ---------------  -------------  ---------
                                                                            (In thousands of dollars)
<S>                                                           <C>            <C>              <C>            <C>
Cost of sales (excluding depreciation expense)..............   $       396      $      --       $      --    $     396
Depreciation expense........................................        15,214          2,010             (21)      17,203
Amortization of intangible assets...........................         1,288            (93)             67        1,262
                                                               -----------      ---------       ---------    ---------
Net Impact on Income from Operations........................   $    16,898      $   1,917       $      46    $  18,861
                                                               -----------      ---------       ---------    ---------
                                                               -----------      ---------       ---------    ---------
</TABLE>
 
Sale of U.S. Timberlands/Wood Products
 
    On October 18, 1996, the Company sold substantially all of the assets of the
U.S. Timberlands/Wood Products business segment for approximately $550 million
in cash. In addition, the buyer assumed certain specified preclosing
liabilities. Under the terms of the agreement for such sale, the Company and the
buyer, Plum Creek Timber Company, L.P., entered into a 20-year supply agreement
with a 10-year renewal option for the purchase by the Company, at market-based
prices, of a majority of the West Monroe Mill's requirements for pine pulpwood
and residual chips, as well as a portion of the Company's needs for hardwood
pulpwood at the West Monroe Mill. The Company did not realize any gain or loss
on the sale. The operating results for the U.S. Timberlands/Wood Products
business segment were classified as discontinued operations for periods
beginning March 28, 1996 and ending October 18, 1996 (the date of the sale).
Discontinued operations have not been segregated in the statements of cash flows
nor have they been reclassified as discontinued operations in the Predecessor's
statements of operations and balance sheets.
 
Other Costs of Predecessor
 
    Prior to March 28, 1996, the Predecessor Company incurred expenses
associated with stock-based compensation plans, expenses related to RIC's review
of strategic alternatives and provision for environmental reserves. These
expenses were classified as Other Costs on the Predecessor's Condensed
Consolidated Statements of Operations. Stock-based compensation expense was
allocated to each of the business segments based upon the responsibility of the
individuals holding or exercising the stock incentive benefits. During the three
months ended March 27, 1996, $1.2 million, $0.1 million, $0.2 million and $0.8
million of stock-based compensation expenses were allocated to the Coated Board,
Containerboard and U.S. Timberlands/Wood Products business segments and
Corporate and Eliminations, respectively. Expenses related to RIC's review of
strategic alternatives and environmental reserves were included in Corporate and
Eliminations for business segment reporting purposes.
 
                                    I-13

<PAGE>

GENERAL
 
    The Company reports its results in two business segments: Coated Board and
Containerboard. The operating results of the U.S. Timberlands/Wood Products
business segment have been classified as discontinued operations for the period
beginning March 28, 1996 through the date of the sale. The results of the
operations of the U.S. Timberlands/Wood Products business segment have not been
classified as discontinued operations in the Predecessor's Consolidated
Statements of Operations for periods prior to the Merger. The Coated Board
business segment includes the production and sale of coated unbleached kraft
paperboard ("CUK Board") for packaging cartons from the paper mill in Macon,
Georgia (the "Macon Mill") and at the West Monroe Mill, and white lined chip
board ("WLC") at its paper mill in Norrkoping, Sweden (the "Swedish Mill"),
converting operations at facilities in the United States, Australia and Europe;
and the design, manufacture and installation of packaging machinery related to
the assembly of beverage cartons. The Containerboard business segment includes
the production and sale of linerboard, corrugating medium and kraft paper from
paperboard mills in the United States. The discontinued U.S. Timberlands/Wood
Products business segment included timberlands and operations engaged in the
supply of pulpwood to the West Monroe Mill from the Company's former U.S.
timberlands, as well as the manufacture and sale of lumber and plywood.
 
    The table below sets forth Net Sales, Income (Loss) from Operations and
EBITDA. EBITDA is defined as consolidated net income (exclusive of non-cash
charges resulting from purchase accounting during the periods subsequent to the
Merger) before consolidated interest expense, consolidated income taxes,
consolidated depreciation and amortization, cost of timber harvested and other
non-cash charges deducted in determining consolidated net income and
extraordinary items and the cumulative effect of accounting changes and earnings
of, but including dividends from, non-controlled affiliates. EBITDA excludes the
EBITDA of Igaras but includes dividends actually received from Igaras, excludes
Other Costs of the Predecessor and excludes Purchased Asset Costs resulting from
purchase accounting during periods subsequent to the Merger. The Company
believes that EBITDA provides useful information regarding the Company's debt
service ability, but should not be considered in isolation or as a substitute
for the Statements of Operations or cash flow data.
 
<TABLE>
<CAPTION>
                                                                Company                             Predecessor                   
                                       ----------------------------------------------------------  --------------
                                       Three Months   Three Months    Nine Months    Six Months     Three Months
                                           Ended          Ended          Ended          Ended          Ended
                                         Sept. 27,      Sept. 28,      Sept. 27,      Sept. 28,      March 27,
                                           1997           1996           1997           1996           1996
                                       -------------  -------------  -------------  -------------  --------------
                                                                 (In thousands of dollars)
<S>                                    <C>            <C>            <C>            <C>            <C>
Net Sales (Segment Data):
  Coated Board.......................   $   262,986    $   252,293    $   775,114    $   518,524     $  234,608
  Containerboard.....................        21,889         39,352         70,983         67,005         25,496
  U.S. Timberlands/Wood Products.....            --             --             --             --         37,336
  Intersegment Eliminations..........            --             --             --             --         (3,791)
                                       -------------  -------------  -------------  -------------  --------------
Net Sales............................   $   284,875    $   291,645    $   846,097    $   585,529     $  293,649
                                       -------------  -------------  -------------  -------------  --------------
                                       -------------  -------------  -------------  -------------  --------------
Income (Loss) from Operations
  (Segment Data):
  Coated Board.......................   $    17,996    $    20,563    $    53,082    $    40,331     $   24,638
  Containerboard.....................        (6,385)       (12,207)       (31,923)       (19,467)        (5,955)
  U.S. Timberlands/Wood Products.....            --             --             --             --         13,868
  Corporate and Eliminations.........        (4,096)        (5,312)       (15,137)       (11,708)       (16,901)
                                       -------------  -------------  -------------  -------------  --------------
Income from Operations...............   $     7,515    $     3,044    $     6,022    $     9,156     $   15,650
                                       -------------  -------------  -------------  -------------  --------------
                                       -------------  -------------  -------------  -------------  --------------
EBITDA (Segment Data):
  Coated Board.......................        49,188         46,574    $   141,519         99,020     $   47,174
  Containerboard.....................        (2,002)        (7,398)       (14,751)        (9,662)        (1,242)
  U.S. Timberlands/Wood Products.....       --              22,145        --              41,079         16,766
  Corporate and Eliminations.........        (1,823)        (4,018)        (8,672)        (8,295)        (6,565)
                                       -------------  -------------  -------------  -------------  --------------
EBITDA...............................   $    45,363    $    57,303    $   118,096    $   122,142     $   56,133
                                       -------------  -------------  -------------  -------------  --------------
                                       -------------  -------------  -------------  -------------  --------------
</TABLE>
 
                                    I-14

<PAGE>

    In the fourth quarter of 1996, the Company adopted the LIFO method of
determining the cost of principally all its inventories effective March 28,
1996. Prior to the fourth quarter of 1996, the Company determined the cost of
all its inventories using the FIFO method. Accordingly, 1996 operating results
have been restated to reflect the adoption of the LIFO method effective March
28, 1996. For a discussion of the impact of this accounting change on the
Condensed Consolidated Financial Statements, see Note 3 to the Condensed
Consolidated Financial Statements.
 
Business Trends and Initiatives
 
    The Company's cash flow from operations and EBITDA are influenced by sales
volume and selling prices for its products and raw material costs, and are
affected by a number of significant business, economic and competitive factors.
Many of these factors are not within the Company's control. Historically, in the
Coated Board business segment, the Company has experienced stable pricing for
its integrated beverage carton products, and moderate cyclical pricing for its
folding cartonboard, which is principally sold in the open market. The Company's
folding cartonboard sales are affected by competition from competitors' CUK
Board and other substrates - solid bleached sulfate (SBS), recycled clay coated
news (CCN) and, internationally, WLC--as well as by general market conditions.
In the Containerboard business segment, conditions in the cyclical worldwide
commodity paperboard markets have a substantial impact on the Company's
Containerboard sales. During the third quarter of 1997, the Company realized
improvement in its containerboard selling prices consistent with industry
trends. During the third quarter of 1997, the Company announced price increases
of $40 per ton each for beverage carrierboard and folding cartonboard and $50
per ton each for corrugating medium, linerboard and kraft paper, in each case
for shipments beginning October 1, 1997. The Company expects to begin realizing
a portion of these price increases beginning in 1998, though no assurance can be
given that such price increases will be accepted by the customers.
 
    The Company is pursuing a number of long-term initiatives designed to
improve productivity and profitability while continuing to implement its Coated
Board business strategy. In June 1997, the Company completed the upgrade of the
second Macon Mill paperboard machine to begin CUK Board production. During the
third quarter of 1997, the Company produced approximately 26,000 tons of CUK
Board on the second Macon Mill paperboard machine and, in addition to the
approximately 90,000 tons of linerboard produced on this paper machine during
the first half of 1997, expects to produce approximately 80,000 tons of both
linerboard and CUK Board on this paper machine during the last half of 1997,
with no downtime expected. The Company expects that the second Macon Mill
paperboard machine will be able to produce approximately 275,000 tons of CUK
Board in 18 to 24 months following the June 1997 start-up. In addition, the
Company has taken actions to increase open market folding cartonboard sales
volume above 1996 levels, has undertaken a profit center reorganization of its
operations, implemented a number of cost savings measures and effected several
management changes and, as part of its ongoing reevaluation of current
operations and assets, has reduced planned capital expenditures and begun a
Company-wide inventory reduction initiative. Inventory increased by
approximately $14 million in the third quarter of 1997 as compared to the second
quarter of 1997 principally due to seasonal increases in beverage carrierboard
and to logistics issues related to export shipments that have since been
corrected. The Company continues to evaluate its current operations and assets
with a view to rationalizing its operations and improving profitability, in
particular with respect to its international converting assets and strategy.
 
    The Company continues to shift its mix of packaging machinery placements
from the U.S. to international locations. Packaging machinery placements for the
first nine months of 1997 were approximately equal to the number of packaging
machines placed during the year ended December 31, 1996.
 
Outlook
 
    The Company expects that its 1997 full year EBITDA will exceed its 1996 
EBITDA (excluding the results of the former U.S. Timberlands/Wood Products 
business segment), although no assurance can be given in this regard. The 
achievement of this expectation is dependent upon (among other things) a 
number of profit improvement initiatives, including improving U.S. mill 
throughput as the successful start-up of the second Macon Mill paper 
machine continues, significantly increasing open market folding cartonboard 
sales volumes above 1996 levels, selling price improvements for 
containerboard products, improvements in international converting operations 
and continued cost savings from actions taken to date. The Company 
anticipates that the cost savings from actions taken to date will reduce 
expenditures by approximately $30 million on an annualized basis, over half 
of which is expected to be realized during 1997. Management expects to 
identify an additional $10 million of annualized cost savings to be acted 
upon in 1998 (see "--Business Trends and Initiatives"). The Company expects 
that it will achieve continued sales volume increases in its international 
beverage and U.S. soft drink carton markets in 1998 while its U.S. beer 
carton volume will remain relatively flat, consistent with U.S. brewers 
trading market share, though no assurance can be given that this volume 
growth will be achieved.
 
                                    I-15

<PAGE>

RESULTS OF OPERATIONS
 
    The following is a discussion of the Company's results of operations on a
pro forma basis. The discussion is based upon (a) the three-month period ended
September 27, 1997, exclusive of the net effect of Purchased Asset Costs made in
that period, in comparison to the three-month period ended September 28, 1996,
also exclusive of the net effect of Purchased Asset Costs made in that period
and (b) the nine-month period ended September 27, 1997, exclusive of the net
effect of Purchased Asset Costs made in that period, in comparison to the
six-month period ended September 28, 1996, exclusive of the net effect of
Purchased Asset Costs made in that period, plus the three-month period ended
March 27, 1996, exclusive of Other Costs and the U.S. Timberlands/Wood Products
business segment results of operations (the "first nine months of 1996" or "nine
months ended September 28, 1996"), as follows:
 
<TABLE>
<CAPTION>
                                                       Pro Forma Three Months Ended            Pro Forma Nine Months Ended
                                                   -------------------------------------  -------------------------------------
                                                                % Increase                             % Increase
                                                                (Decrease)                             (Decrease)
                                                   Sept. 27,    From Prior     Sept. 28,   Sept. 27,    From Prior    Sept. 28,
                                                      1997        Period         1996        1997        Period         1996
                                                   ----------  -------------  ----------  ----------  -------------  ----------
                                                                          (In thousands of dollars)
<S>                                                <C>         <C>            <C>         <C>         <C>            <C>
Net Sales (Segment Data):
  Coated Board...................................  $  262,986          4.2    $  252,293  $  775,114          2.9    $  753,133
  Containerboard.................................      21,889        (44.4)       39,352      70,983        (23.3)       92,501
                                                   ----------        -----    ----------  ----------        -----    ----------
Net Sales........................................     284,875         (2.3)      291,645     846,097          0.1       845,634
Cost of Sales....................................     238,155         (3.4)      246,578     721,100          2.8       701,575
                                                   ----------        -----    ----------  ----------        -----    ----------
Gross Profit.....................................      46,720          3.7        45,067     124,997        (13.2)      144,059
Selling, General and Administrative..............      29,153         (8.7)       31,928      90,417         (4.0)       94,159
Research, Development and Engineering............       1,061        (57.7)        2,506       3,590        (42.7)        6,269
Other Expense, net...............................         354        (37.7)          568       3,425         (5.5)        3,624
                                                   ----------        -----    ----------  ----------        -----    ----------
Income from Operations...........................  $   16,152         60.5    $   10,065  $   27,565        (31.1)   $   40,007
                                                   ----------        -----    ----------  ----------        -----    ----------
                                                   ----------        -----    ----------  ----------        -----    ----------
Income (Loss) from Operations (Segment Data):
  Coated Board...................................  $   25,721         (8.2)   $   28,027  $   71,892        (14.1)   $   83,651
  Containerboard.................................      (5,474)        57.0       (12,739)    (29,190)       (18.6)      (24,616)
  Corporate......................................      (4,095)        21.6        (5,223)    (15,137)        20.4       (19,028)
                                                   ----------        -----    ----------  ----------        -----    ----------
Income from Operations...........................  $   16,152         60.5    $   10,065  $   27,565        (31.1)   $   40,007
                                                   ----------        -----    ----------  ----------        -----    ----------
                                                   ----------        -----    ----------  ----------        -----    ----------
</TABLE>
 
THIRD QUARTER 1997 COMPARED WITH THIRD QUARTER 1996
 
Paperboard Shipments
 
    The following represents shipments of coated board and containerboard to 
outside customers. Shipments of coated board represent sales to customers of 
beverage carrierboard, folding cartonboard, and WLC (other than from the 
Swedish Mill). Shipments from the Swedish Mill represent sales to customers 
of WLC produced at this mill. Shipments of containerboard represent sales to 
customers of linerboard, corrugating medium, and kraft paper. Total shipments 
for the third quarters of 1997 and 1996 were as follows:
 
                                                       Three Months Ended
                                                       ------------------
                                                      Sept. 27,  Sept. 28,
                                                        1997       1996
                                                      ---------  ---------
                                                     (In thousands of tons)

Coated Board....................................        237.4      214.2
Swedish Mill....................................         32.6       30.0
Containerboard..................................         87.7      153.1
                                                       -------    -------
                                                        357.7      397.3
                                                       -------    -------
                                                       -------    -------


                                    I-16

<PAGE>
 
Net Sales
 
    Principally as a result of the factors described below, the Company's Net 
Sales in the third quarter of 1997 decreased by $6.8 million, or 2.3 percent, 
compared with the third quarter of 1996. Net Sales in the Coated Board 
business segment increased $10.7 million, or 4.2 percent, in the third 
quarter of 1997 to $263.0 million from $252.3 million in the third quarter of 
1996, due primarily to increased sales volume in international and U.S. 
beverage markets and U.S. folding cartonboard markets combined with improved 
selling prices and product mix in U.S. beverage markets. These improvements 
were offset somewhat by lower selling prices in U.S. folding cartonboard 
markets and lower selling prices and sales volume in international folding 
cartonboard markets. Net Sales in the Containerboard business segment 
decreased $17.5 million, or 44.4 percent, to $21.9 million in the third 
quarter of 1997 from $39.4 million in the third quarter of 1996, due 
principally to a significant decrease in containerboard volumes as a result 
of the significant decline in containerboard markets worldwide that began in 
the latter part of 1995 and continued into the second quarter of 1997. 
Although below 1996 levels, the Company's containerboard selling prices for 
the third quarter of 1997 have improved over the second quarter of 1997.
 
Gross Profit
 
    Primarily as a result of the factors discussed below, the Company's Gross 
Profit for the third quarter of 1997 increased $1.6 million, or 3.7 percent, 
to $46.7 million from $45.1 million in the third quarter of 1996. The 
Company's gross profit margin increased to 16.4 percent for the third quarter 
of 1997 from 15.5 percent in the third quarter of 1996. In the Containerboard 
business segment, Gross Profit increased $6.0 million to a loss of $4.4 
million in the third quarter of 1997 as compared to a loss of $10.4 million 
in the third quarter of 1996, due principally to significantly lower sales 
volume of containerboard (which was being sold at below related production 
costs) and lower production costs, offset somewhat by lower selling prices. 
Gross profit in the Coated Board business segment decreased by $4.2 million, 
or 7.5 percent, to $51.7 million in the third quarter of 1997 as compared to 
$55.9 million in the third quarter of 1996, while that segment's gross profit 
margin decreased to 19.6 percent in the third quarter of 1997 from 22.2 
percent in the third quarter of 1996. These decreases resulted principally 
from lower worldwide folding cartonboard selling prices.
 
Selling, General and Administrative
 
    Selling, General and Administrative expenses decreased $2.8 million, or 8.7
percent, to $29.1 million in the third quarter of 1997 as compared to $31.9
million in the third quarter of 1996. As a percentage of Net Sales, Selling,
General and Administrative expenses decreased to 10.2 percent in the third
quarter of 1997 from 10.9 percent in the same period of 1996. These decreases
were due principally to Company cost reduction initiatives which began in early
1997, offset somewhat by higher costs relating to the implementation of a new
computerized information system (see "--Liquidity and Capital Resources--Upgrade
of Information Systems and Year 2000 Compliance").
 
Research, Development and Engineering
 
    Research, Development and Engineering expenses decreased by $1.4 million to
$1.1 million, due principally to reduced research and development activities on
packaging machinery resulting from the closure of the packaging machinery
facilities in Marietta, Georgia and Koln, Germany in April and June 1997,
respectively.
 
Other Expenses, net
 
    Other Expenses, net, decreased by approximately $0.2 million to $0.4
million.
 
Income from Operations
 
    Primarily as a result of the factors described above, the Company's Income
from Operations in the third quarter of 1997 increased by $6.1 million, or 60.5
percent, to $16.2 million from $10.1 million in the third quarter of 1996, while
operating margin as a percent of Net Sales increased to 5.7 percent from 3.5
percent. (Loss) from Operations in the Containerboard business segment decreased
$7.2 million to a loss of $5.5 million in the third quarter of 1997 from a
(Loss) from Operations of $12.7 million in the third quarter of 1996, primarily
as a result of the factors described above. Income from Operations in the Coated
Board business segment decreased $2.3 million, or 8.2 percent, to $25.7 million
in the third quarter of 1997 from $28.0 million in the third quarter of 1996,
while operating margin as a percent of Net Sales decreased to 9.8 percent from
11.1 percent for the same periods, primarily as a result of the factors
described above.
 
                                    I-17

<PAGE>
 
FIRST NINE MONTHS OF 1997 COMPARED WITH FIRST NINE MONTHS OF 1996
 
Paperboard Shipments
 
    The following represents shipments of coated board and containerboard to 
outside customers. Shipments of coated board represent sales to customers of 
beverage carrierboard, folding cartonboard, and WLC (other than from the 
Swedish Mill). Shipments from the Swedish Mill represent sales to customers 
of WLC produced at this mill. Shipments of containerboard represent sales to 
customers of linerboard, corrugating medium, and kraft paper. Total shipments 
for the first nine months of 1997 and 1996 were as follows:
 
                                                           Nine Months Ended
                                                           -----------------
                                                          Sept. 27,  Sept. 28,
                                                            1997       1996
                                                          ---------  ---------
                                                         (In thousands of tons)

Coated Board........................................        700.3        635.0
Swedish Mill........................................        101.5         90.6
Containerboard......................................        293.0        330.4
                                                          -------      -------
                                                          1,094.8      1,056.0
                                                          -------      -------
                                                          -------      -------

Net Sales
 
    Principally as a result of the factors described below, the Company's Net 
Sales in the first nine months of 1997 increased by $0.5 million, or 0.1 
percent, compared with the first nine months of 1996. Net Sales in the Coated 
Board business segment increased $22.0 million, or 2.9 percent, in the first 
nine months of 1997 to $775.1 million from $753.1 million in the first nine 
months of 1996, due primarily to increased sales volume in international and 
U.S. beverage markets and U.S. folding cartonboard markets combined with 
improved selling prices, lower distribution costs and product mix in U.S. 
beverage markets. These improvements were offset somewhat by lower selling 
prices in U.S. folding cartonboard markets and lower selling prices and sales 
volume in international folding cartonboard markets. Net Sales in the 
Containerboard business segment decreased $21.5 million, or 23.3 percent, to 
$71.0 million in the first nine months of 1997 from $92.5 million in the 
first nine months of 1996, due primarily to a decrease in containerboard 
selling prices and sales volume as a result of the significant decline in 
containerboard markets worldwide that began in the latter part of 1995 and 
has continued into the second quarter of 1997. Although below 1996 levels, 
the Company's containerboard selling prices for the third quarter of 1997 
have improved over the second quarter of 1997.
 
Gross Profit
 
    Principally as a result of the factors discussed below, the Company's 
Gross Profit for the first nine months of 1997 decreased $19.1 million, or 
13.2 percent, to $125.0 million from $144.1 million in the first nine months 
of 1996. The Company's gross profit margin decreased to 14.8 percent for the 
first nine months of 1997 from 17.0 percent in the first nine months of 1996. 
In the Containerboard business segment, Gross Profit decreased $6.1 million 
to a loss of $25.2 million in the first nine months of 1997 as compared to a 
loss of $19.1 million in the first nine months of 1996. This decrease was due 
principally to lower selling prices of containerboard. Gross profit in the 
Coated Board business segment decreased by $12.5 million, or 7.6 percent, to 
$151.9 million in the first nine months of 1997 as compared to $164.4 million 
in the first nine months of 1996, while that segment's gross profit margin 
decreased to 19.6 percent in the first nine months of 1997 from 21.8 percent 
in the first nine months of 1996. This decrease in the gross profit resulted 
principally from lower selling prices in worldwide folding cartonboard 
markets, offset somewhat by lower production costs at the Company's U.S. 
integrated beverage business.
 
Selling, General and Administrative
 
    Selling, General and Administrative expenses decreased $3.8 million, or 4.0
percent, to $90.4 million in the first nine months of 1997 as compared to $94.2
million in the first nine months of 1996 and as a percentage of Net Sales,
Selling, General and Administrative expenses decreased to 10.7 percent in the
first nine months of 1997 from 11.1 percent in the same period of 1996. This
decrease was due principally to Company cost reduction initiatives which began
in early 1997, offset somewhat by higher costs relating to the implementation of
a new computerized information system (see "--Liquidity and Capital
Resources--Upgrade of Information Systems and Year 2000 Compliance").
 
Research, Development and Engineering
 
    Research, Development and Engineering expenses decreased by $2.7 million to
$3.6 million due principally to reduced research and development
 
                                     I-18

<PAGE>

activities on packaging machinery resulting from the closure of the packaging
machinery facilities in Marietta, Georgia and Koln, Germany in April and June
1997, respectively.
 
Other Expenses, net
 
    Other Expenses, net, decreased by approximately $0.2 million to $3.4
million.
 
Income from Operations
 
    Primarily as a result of the factors described above, the Company's Income
from Operations in the first nine months of 1997 decreased by $12.4 million, or
31.1 percent, to $27.6 million from $40.0 million in the first nine months of
1996, while the operating margin as a percent of Net Sales decreased to 3.3
percent from 4.7 percent. (Loss) from Operations in the Containerboard business
segment increased $4.6 million to a loss of $29.2 million in the first nine
months of 1997 from a (Loss) from Operations of $24.6 million in the first nine
months of 1996, primarily as a result of the factors described above. Income
from Operations in the Coated Board business segment decreased $11.8 million, or
14.1 percent, to $71.9 million in the first nine months of 1997 from $83.7
million in the first nine months of 1996, while the operating margin as a
percent of Net Sales decreased to 9.3 percent from 11.1 percent for the same
periods, primarily as a result of the factors described above.
 
U.S. DOLLAR CURRENCY EXCHANGE RATES
 
    Fluctuations in U.S. dollar currency exchange rates did not have a
significant impact on Net Sales, Gross Profit, operating expenses or Income from
Operations of the Company during the third quarter or first nine months of 1997
as compared to the same periods of 1996.
 
INTEREST INCOME, INTEREST EXPENSE, INCOME TAXES AND EQUITY IN
  NET EARNINGS OF AFFILIATES
 
Interest Income
 
    Interest income increased $0.2 million to $0.6 million in the third quarter
of 1997, compared to the third quarter of 1996, related mainly to monies
received in the third quarter of 1997 relating to a tax settlement (see
"--Liquidity and Capital Resources--Tax Matters Relating to the Merger").
Interest income decreased $0.1 million to $0.8 million in the first nine months
of 1997 compared to the first nine months of 1996, primarily as a result of
lower average balances of cash and equivalents in 1997 as compared to 1996.
 
Interest Expense
 
    Interest Expense decreased $7.6 million to $43.8 million in the third
quarter of 1997 from $51.4 million in the third quarter of 1996. The decrease
related principally to a reduction of debt level resulting from the repayment of
term loans and a portion of the revolving credit facility from the net proceeds
of the sale of substantially all of the assets of the U.S. Timberlands/Wood
Products business segment in October 1996 (see Note 8 in Notes to Condensed
Consolidated Financial Statements). Interest expense decreased $2.9 million to
$124.7 million in the first nine months of 1997 from $127.6 million in the same
period of 1996, primarily as a result of the reduction in debt related to the
October 1996 repayment of term loans from a portion of the proceeds of the sale
of substantially all of the assets of the U.S. Timberlands/Wood Products
business segment, offset to some extent by the incremental indebtedness incurred
in connection with the Merger in March 1996.
 
Income Tax Expense (Benefit)
 
    During the third quarter and first nine months of 1997, the Company
recognized an income tax expense of $1.6 million and $4.3 million, respectively,
on a (Loss) from Continuing Operations before Income Taxes and Equity in Net
Earnings of Affiliates of $35.7 million and $117.9 million, respectively. During
the three and six months ended September 28, 1996, the Company recognized an
income tax expense (benefit) of $0.9 million and $(1.4) million on a (Loss) from
Continuing Operations before Income Taxes and Equity in Net Earnings of
Affiliates of $48.0 million and $91.5 million, respectively. These income tax
amounts differed from the statutory federal income tax rate because of valuation
allowances established on net operating loss carryforward tax assets in the U.S.
and certain international locations where the realization of benefits is
uncertain. Cash paid for income taxes during the first nine months of 1997 was
$35.9 million relating principally to the Merger (see "--Liquidity and Capital
Resources--Tax Matters Relating to the Merger").
 
In the first quarter of 1996, the Predecessor recognized an income tax 
benefit of $3.4 million on a (Loss) from Continuing Operations before Income 
Taxes and Equity in Net Earnings of Affiliates of $10.4 million.

                                     I-19


<PAGE>

Equity in Net Earnings of Affiliates
 
    Equity in Net Earnings of Affiliates is comprised primarily of the Company's
equity in net earnings of Igaras, an integrated containerboard producer located
in Brazil, which produces linerboard, corrugating medium, corrugated boxes and
beverage cartons, and is accounted for using the equity method. Equity in Net
Earnings of Affiliates decreased $0.5 million to $5.2 million in the third
quarter of 1997 from $5.7 million in the third quarter of 1996, resulting
primarily from lower interest income at Igaras during the quarter. Equity in Net
Earnings of Affiliates decreased $1.5 million to $13.7 million in the first nine
months of 1997 from $15.2 million in the first nine months of 1996, primarily as
a result of the decline in containerboard markets worldwide and lower interest
income at Igaras, offset somewhat by a decrease in Igaras' income taxes.
 
    During the third, second and first quarters of 1997 and the third and second
quarters of 1996, the Company received dividends from Igaras of $1.0 million,
$0.9 million, nil, $0.7 million and $1.0 million, respectively, net of taxes of
$0.2 million, $0.2 million, nil, nil and nil, respectively. During the first
quarter of 1996, the Predecessor did not receive a dividend from Igaras. The
Company received net dividends from its affiliates, other than Igaras, that are
accounted for using the equity method of accounting totaling $0.8 million and
$0.4 million in the first quarter of 1997 and second quarter of 1996,
respectively.
 
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
 
    The Company broadly defines liquidity as its ability to generate sufficient
cash flow from operating activities to meet its obligations and commitments. In
addition, liquidity includes the ability to obtain appropriate debt and equity
financing and to convert into cash those assets that are no longer required to
meet existing strategic and financial objectives. Therefore, liquidity cannot be
considered separately from capital resources that consist of current or
potentially available funds for use in achieving long-range business objectives
and meeting debt service commitments.
 
Cash Flows
 
    Cash and equivalents decreased by approximately $4.8 million in the first
nine months of 1997 primarily as a result of $146.3 million of net cash used in
investing activities, offset in part by $114.8 million and $28.8 million of net
cash provided by financing and operating activities, respectively. Cash used in
investing activities related principally to the purchases of property, plant and
equipment (see "--Liquidity and Capital Resources--Capital Expenditures"). Cash
provided by financing activities resulted primarily from net debt borrowings
(see "--Liquidity and Capital Resources"). Cash provided by operating activities
resulted principally from lower seasonal working capital requirements and as a
result of the Company's ongoing program to reduce inventories (see "--Business
Trends and Initiatives"), and a reduction in receivables of approximately $10.0
million. Depreciation and amortization during the first nine months of 1997
totaled approximately $100.2 million, and is expected to be approximately $135
million to $140 million for fiscal 1997.
 
    The Company's Coated Board business segment experiences seasonality
principally due to the seasonality of the worldwide multiple packaging beverage
segment. Historically, the Company's Coated Board business segment reports its
strongest sales in the second and third quarters of the fiscal year driven by
the seasonality of the Company's integrated beverage business.
 
Liquidity and Capital Resources
 
    The Company's liquidity needs arise primarily from debt service on the
substantial indebtedness incurred in connection with the Merger and from the
funding of its capital expenditures. In connection with the Merger, the Company
entered into a credit agreement (as amended, the "Senior Secured Credit
Agreement") that currently provides for senior secured credit facilities (the
"Senior Secured Credit Facilities") consisting of a term loan facility (the
"Term Loan Facility"), and a $400.0 million revolving credit facility (the
"Revolving Facility"). In addition, Riverwood International Machinery, Inc., a
wholly owned subsidiary of Riverwood, entered into a credit agreement (as
amended, the "Machinery Credit Agreement," and together with the Senior Secured
Credit Agreement, the "Credit Agreements") providing for a $140.0 million
secured revolving credit facility (the "Machinery Facility," and together with
the Senior Secured Credit Facilities, the "Facilities") for the purpose of
financing or refinancing packaging machinery. In connection with the Merger, the
Company also completed an offering of $250.0 million aggregate principal amount
of 10 1/4% Senior Notes due 2006 (the "1996 Senior Notes") and $400.0 million
aggregate principal amount of 10 7/8% Senior Subordinated Notes due 2008 (the
"Senior Subordinated Notes" and together with the 1996 Senior Notes, the "1996
Notes"). On July 28, 1997, the Company completed an offering of $250 million
aggregate principal amount of the 1997 Notes. The proceeds from this offering
were applied to prepay certain borrowings under the Revolving Facility and to
refinance certain Tranche A Term Loans and other borrowings under the Senior
Secured Credit Agreement (see Note 10 to the Condensed Consolidated Financial
Statements). See "--Debt Service." A registration statement under
 
                                    I-20

<PAGE>

the Securities Act of 1933, as amended, registering senior notes of the Company
identical in all material respects to the 1997 Notes (the "New Notes") offered
in exchange for the 1997 Notes became effective October 1, 1997. On November 3,
1997, the Company completed its exchange offer of the 1997 Notes for the New
Notes. As of September 27, 1997, the Company had outstanding approximately
$1,703.7 million of long-term debt, consisting primarily of $650 million
aggregate principal amount of the 1996 Notes, $250 million of the 1997 Notes,
$644 million outstanding under the Term Loan Facility and additional amounts
under the Revolving Facility, the Machinery Facility and other debt issues and
facilities. During the first nine months of 1997, the Company had a net decrease
in revolving credit facilities of approximately $18.7 million and repaid or
refinanced approximately $108.2 million of debt.
 
Debt Service
 
    Principal and interest payments under the Term Loan Facility, the Revolving
Facility and the Machinery Facility, together with interest payments on the 1997
Notes and 1996 Notes, represent significant liquidity requirements for the
Company. The Company applied $105.0 million of the proceeds from the 1997 Notes
in July 1997 to refinance a portion of the Tranche A Term Loans under the Term
Loan Facility, $50 million of the proceeds of the 1997 Notes to refinance the
Tranche D Loan under the Senior Secured Credit Agreement, and the remaining
proceeds from the 1997 Notes to prepay outstanding revolving credit borrowings
under the Revolving Facility. Scheduled term loan principal payments under the
Term Loan Facility have been reduced to reflect this application of proceeds.
Annual term loan amortization requirements under the Term Loan Facility, after
giving effect to the refinancing of the Term Loan Facility from a portion of the
proceeds of the 1997 Notes, will be approximately $3 million, $4 million, $4
million, $120 million, $173 million, $184 million and $156 million for each of
the years 1998 through 2004, respectively. This application of proceeds did not
involve any reduction in the current aggregate Revolving Facility commitment of
$400 million. In the third quarter of 1997, the Company recorded a non-cash,
extraordinary charge to earnings of approximately $2.5 million, net of tax,
related to the write-off of the applicable portion of deferred debt issuance
costs on the Tranche A Term Loans under the Term Loan Facility.
 
    The Revolving Facility will mature in March 2003 and the Machinery Facility
will mature in March 2001, with all amounts then outstanding becoming due. The
Company expects that its working capital and business needs will require it to
continue to have access to these or similar revolving credit facilities after
their respective maturity dates, and that the Company accordingly will have to
extend, renew, replace or otherwise refinance such facilities at or prior to
such dates. No assurance can be given that it will be able to do so. The loans
under the Facilities bear interest at floating rates based upon the interest
rate option elected by the Company. As of September 27, 1997, the Tranche A Term
Loans, Tranche B Term Loans and Tranche C Term Loans under the Term Loan
Facility bore interest at rates per annum equal to 8.13 percent, 8.63 percent
and 9.13 percent, respectively. Borrowings under each of the Revolving Facility
and the Machinery Facility bore interest as of September 27, 1997 at an average
rate per annum of 8.16 percent. The 1996 Senior Notes, the 1997 Notes and the
Senior Subordinated Notes bear interest at rates of 10 1/4 percent, 10 5/8
percent and 10 7/8 percent, respectively. Interest expense in 1997 is expected
to be approximately $170 million to $175 million, including approximately $10
million of non-cash amortization of deferred debt issuance costs. During the
first nine months of 1997, cash paid for interest was approximately $95.6
million. The Company's Australian revolving credit facility matures in September
1998, with all amounts then outstanding becoming due. The Company accordingly
will have to extend, renew, replace or otherwise refinance such facility at or
prior to such date. No assurance can be given that it will be able to do so. The
total amount outstanding under such facility was $22.0 million at September 27,
1997.
 
    The Company uses interest rate swaps and cap agreements to fix or cap a 
portion of its variable rate Term Loan Facility to a fixed rate in order to 
reduce the impact of interest rate changes on future income. The difference 
to be paid or received under these agreements is recognized as an adjustment 
to interest expense related to that debt.
 
Covenant Restrictions
 
    The Credit Agreements impose restrictions on the Company's ability to make
capital expenditures and both the Credit Agreements and the indentures governing
the 1996 Notes and the 1997 Notes limit the Company's ability to incur
additional indebtedness. Such restrictions, together with the highly leveraged
nature of the Company, could limit the Company's ability to respond to market
conditions, to meet its capital spending program, to provide for unanticipated
capital investments or to take advantage of business opportunities. The
covenants contained in the Credit Agreements also, among other things, restrict
the ability of the Company and its subsidiaries to dispose of assets, incur
guarantee obligations, repay the relevant 1996 Notes or the 1997 Notes, pay
dividends, create liens on assets, enter into sale and leaseback transactions,
make investments, loans or advances, make acquisitions, engage in mergers or
consolidations, make capital expenditures or engage in certain transactions with
affiliates, and otherwise restrict corporate activities. The covenants contained
in such indentures also impose restrictions on the operation of the Company's
business. At September 27, 1997, the Company was in compliance with the
financial covenants in the Credit Agreements.
 
    In connection with the offering of the 1997 Notes, certain financial and
other covenants in the Credit Agreements were amended to reflect the Company's
recent financial results and market and operating conditions, as well as the
consummation of the 1997 Notes offering and the prepayment of the term loans and
other borrowings. Covenant modifications included reductions in permitted
capital expenditures, the elimination of the minimum consolidated net worth
requirement, and reduction in minimum EBITDA and interest coverage ratio
requirements. See Note 10 to the Condensed Consolidated Financial Statements.
 
                                     I-21

<PAGE>

Capital Expenditures
 
    Capital spending for the first nine months of 1997 was approximately $127
million. During the first nine months of 1997, the Company completed projects to
modify the pulp mill at the Macon Mill and to convert the second paperboard
machine at the Macon Mill to CUK Board production. The cost of the pulp mill
modification, completed in February 1997, was approximately $32 million. The
paper machine conversion is expected to cost approximately $85 million.
Cumulative capital spending on this paper machine conversion project through
September 27, 1997, was approximately $81 million. For the first nine months of
1997, capital spending on these two projects totaled approximately $68 million.
Other capital spending during this period related primarily to increasing paper
production efficiencies, increasing converting capacity, manufacturing packaging
machinery and upgrading the Company's information systems. Total capital
spending for fiscal 1997 is expected to be approximately $155 million, and is
expected to relate principally to the pulp mill modification, the conversion of
the second paper machine at the Macon Mill, the production of packaging
machinery and the planned upgrading of the Company's information systems (which
is expected to cost up to approximately $30 million through 1999). 
See "--Upgrade of Information Systems and Year 2000 Compliance".
 
Financing Sources and Cash Flows
 
    In connection with and following the Merger, the Company decided in 1996 to
exit certain businesses and operating activities, including the sale or closure
of the Company's last dedicated folding carton converting plant in the United
States, located in Kankakee, Illinois, packaging machinery manufacturing plants
in Marietta, Georgia and Koln, Germany, a beverage multiple packaging converting
plant in Bakersfield, California and the trucking transportation operations in
West Monroe, Louisiana, as well as the consolidation and realignment of certain
operations in the United States, Australia and Europe. The cost of exiting these
businesses and operating activities was approximately $40.9 million which was
accrued during 1996 as a purchase accounting adjustment. The costs relate
principally to the severance of approximately 750 employees, relocation and
other plant closure costs. At September 27, 1997, $18.0 million of this total
was accrued in Other accrued liabilities on the Condensed Consolidated Balance
Sheets. During the first nine months of 1997, $14.6 million was paid out and
charged against the accrual and related primarily to severance costs.
 
    At September 27, 1997, the Company and its U.S. and international
subsidiaries had the following amounts undrawn under revolving credit
facilities:
 
<TABLE>
<CAPTION>
                                                                Total Amount      Total Amount      Total Amount
                                                                     Of           Outstanding       Available At
                                                                Commitments      Sept. 27, 1997    Sept. 27, 1997
                                                              ----------------  ----------------  ----------------
                                                                            (In thousands of dollars)
<S>                                                           <C>               <C>               <C>
Revolving Facility..........................................    $    400,000      $     95,000      $    305,000
Machinery Facility..........................................         140,000            15,000            41,000
International Facilities....................................          52,912            30,507            22,405
                                                                    --------          --------          --------
                                                                $    592,912      $    140,507      $    368,405
                                                                    --------          --------          --------
                                                                    --------          --------          --------
</TABLE>
 
    The Machinery Facility is limited by a borrowing base. During December 1996,
the commitment for the Australian revolving facility was reduced from
approximately $37 million to approximately $32 million. Undrawn Revolving
Facility availability is expected to be used to meet future working capital and
other business needs of the Company. The Company anticipates pursuing additional
working capital financing for its foreign operations as necessary, and possibly
implementing a receivables securitization program.
 
    As described above, the Company has substantial liquidity, but 
anticipates additional borrowings under the Revolving Facility throughout 
1997. The Company believes that cash generated from operations, together with 
amounts available under its Revolving Facility, the Machinery Facility and 
other available financing sources, will be adequate to permit the Company to 
meet its debt service obligations, capital expenditure program requirements, 
ongoing operating costs and working capital needs until the maturity of the 
Revolving Facility (assuming extension or refinancing of the Machinery 
Facility at its earlier maturity), although no assurance can be given in this 
regard. The Company's future financial and operating performance, ability to 
service or refinance its debt and ability to comply with the covenants and 
restrictions contained in its debt agreements (see "--Covenant 
Restrictions"), will be subject to future economic conditions and to 
financial, business and other factors, many of which are beyond the Company's 
control and will be substantially dependent on the selling prices for the 
Company's products and the Company's ability to successfully implement its 
overall business and profitability strategies.
 
    While the Company believes that Igaras has adequate liquidity, the Company
shares control of Igaras with its joint venture partner and future dividend
payments from Igaras, if any, would be subject to restrictions in the joint
venture agreement and would reflect only the Company's
 
                                    I-22

<PAGE>

remaining interest of 50 percent. Under the Igaras joint venture agreement,
Igaras is required to pay dividends equal to at least 25 percent of its net
profits. Due to currency fluctuations, inflation and changes in political and
economic conditions, earnings from Brazilian operations have been subject to
significant volatility. There can be no assurance that such volatility will not
recur in the future.
 
Environmental and Legal Matters
 
    The Company is committed to compliance with all applicable environmental
laws and regulations throughout the world. Environmental law is, however,
dynamic rather than static. As a result, costs, which are unforeseeable at this
time, may be incurred when new laws are enacted, and when environmental agencies
promulgate or revise rules and regulations.
 
    In late 1993, the EPA proposed regulations (generally referred to as the
"cluster rules") that would mandate more stringent controls on air and water
discharges from United States pulp and paper mills. In 1996, the EPA released
additional clarification of the proposed cluster rules. Based on this
information, the Company expects that the cluster rules may be finally
promulgated in 1997 and estimates the capital spending that may be required to
comply with the cluster rules could reach $55 million to be spent at its two
U.S. paper mills over an eight-year period beginning in 1997. The Company
anticipates that the majority of this spending for compliance with the cluster
rules will occur later in the eight-year period. The Company had no capital
spending during the first nine months of 1997 related to compliance with the
cluster rules.
 
    In late 1995, the DEQ notified the Company that the Predecessor may be
liable for the remediation of hazardous substances at a wood treatment site in
Shreveport, Louisiana, that the Predecessor or its predecessor previously
operated, and at a former oil refinery site in Caddo Parish, Louisiana that the
Company currently owns. Neither the Company nor the Predecessor ever operated
the oil refinery. In response to the DEQ, the Company has provided additional
information concerning these sites and has commenced its own evaluation of any
claims and remediation liabilities for which it may be responsible. The Company
received a letter from the DEQ dated May 20, 1996, requesting a plan for soil
and groundwater sampling of the wood treatment site. The Company first met with
the DEQ on July 18, 1996, and then submitted a soil sampling plan to the DEQ.
The Company expects approval of this sampling plan in the second half of 1997.
On September 6, 1996, the Company received from the DEQ a letter requesting
remediation of the former oil refinery site in Caddo Parish, Louisiana. The
Company met with the DEQ on February 17, 1997 to discuss these matters. The
Company anticipates entering into a cooperative agreement with the DEQ to
perform a phased-in evaluation for evaluating soil and groundwater conditions at
the Shreveport site. The Company is in discussions with the DEQ regarding the
participation of other responsible parties in any clean up of hazardous
substances at both of these sites.
 
    The Company is engaged in environmental remediation projects for certain
properties currently owned or operated by the Company and certain properties
divested by the Company for which responsibility was retained for pre-existing
conditions. The Company's costs in some instances cannot be reliably estimated
until the remediation process is substantially underway. To address these
contingent environmental costs, the Company has accrued reserves when such costs
are probable and can be reasonably estimated. The Company believes that, based
on current information and regulatory requirements, the accruals established by
the Company for environmental expenditures are adequate. Based on current
knowledge, to the extent that additional costs may be incurred that exceed the
accrued reserves, such amounts are not expected to have a material impact on the
results of operations, cash flows, or financial condition of the Company,
although no assurance can be given that material costs will not be incurred in
connection with clean-up activities at these properties, including the
Shreveport and Caddo Parish sites referred to above.
 
    On December 6, 1995, Forrest Kelly Clay, a former shareholder of the 
Predecessor, commenced a purported class action lawsuit in the United States 
District Court for the Northern District of Georgia, against the Company and 
certain officials of the Company (the "Individual Defendants," and together 
with the Company, the "Defendants"). In his complaint, Clay alleges that the 
Defendants violated the federal securities laws by disseminating misleading 
statements and by omissions concerning the strategic alternatives that the 
Predecessor was considering, including its potential sale to a third-party 
investor. The complaint also alleged that the Individual Defendants, through 
their exercise of stock appreciation rights ("SARs"), violated the federal 
securities laws by trading in the Predecessor's securities while in 
possession of material, non-public information. The complaint generally seeks 
damages in an unspecified amount, as well as other relief. On June 2, 1997, 
the court granted Defendants' Motion for Summary Judgment and dismissed the 
action in its entirety. The court based its ruling on the fact that (i) none 
of the statements attributable to the Company concerning its review of 
strategic alternatives was false and (ii) there is no causal relationship 
between plaintiff's purchase of Riverwood common stock and the Individual 
Defendants' exercise of SARs.
 
                                    I-23

<PAGE>

Plaintiff filed his Notice of Appeal to the United States Court of Appeals for
the Eleventh Circuit on June 5, 1997. A briefing schedule has been set and all
of the briefs are expected to be before the Court as of mid-December. At that
juncture, the Court will determine whether oral argument is necessary.
 
Upgrade of Information Systems and Year 2000 Compliance
 
    The Company has begun to upgrade its information systems through an
initiative expected to cost up to approximately $30 million to be spent through
1999. When the upgrade is complete, the Company expects a major improvement in
its information systems and business processes. This initiative is expected to
be complete by June 1999. Capital spending on this project during the first nine
months of 1997 totaled approximately $4.7 million.
 
    In conjunction with the information systems upgrade, the Company is also in
the process of replacing its computer software applications and systems to
accommodate the "Year 2000" dating changes necessary to permit correct recording
of yearly dates for 2000 and later years. The Company does not expect that the
cost of its Year 2000 compliance program will be material to its financial
condition or results of operations (other than the initial investment in
information systems of up to approximately $30 million). The Company believes
that it will be able to achieve compliance by the end of 1999, but would
anticipate a material disruption in its operations as the result of any failure
by the Company to be in compliance. In the event that any of the Company's
significant suppliers or customers does not successfully and timely achieve
their Year 2000 compliance, the Company's business or operations could be
adversely affected.
 
Tax Matters Relating to the Merger
 
    In connection with the Merger, the former majority owner of the Company 
agreed to bear the cost of a Section 338(h)(10) election for federal tax 
purposes and for purposes of state taxes for which the former majority owner 
and the Company filed returns on a combined basis. The Company agreed to bear 
the cost of this election for the purposes of other state taxes ("stand-alone 
taxes") including Louisiana income tax. During 1997, the Company has paid 
$33.1 million in estimated stand-alone taxes relating to the election, 
including $27.5 million in Louisiana income tax. The Company's calculation of 
its Louisiana tax was based on state law in effect at the time of the Merger, 
including a 1993 amendment. In May 1997, the Louisiana Supreme Court declared 
the 1993 amendment to be void under the Louisiana Constitution, retroactive 
to 1993. It is possible that the voiding of the 1993 amendment could result 
in the Company being required to pay significant additional Louisiana income 
tax relating to the election (plus potential penalties and statutory interest 
on the additional taxes). The Company's Louisiana tax return for the period 
that includes the Merger is due November 17, 1997. After consultation with 
Louisiana tax counsel, the Company intends to file its Louisiana income tax 
return for the period ended March 27, 1996 (which is due November 17, 1997) 
in reliance on the Louisiana tax law in effect at the time of the Merger, 
without the payment of any additional tax due to the voiding of the 1993 
amendment. There can be no assurance, however, that the Company would 
ultimately prevail on this issue if Louisiana were to challenge such filing 
position. If the Company were not to prevail in such a challenge, significant 
additional Louisiana income tax relating to the election could be payable. 
Management estimates that the maximum amount of such additional tax is 
approximately $47 million (plus potential penalties and statutory interest on 
any additional tax). Management believes that the additional tax ultimately 
paid (if any) would be substantially less than the estimated maximum amount, 
although no assurance can be given in this regard. The Company and its 
advisors are continuing to study this situation. Since the law is unclear and 
the amounts involved could be significant, it may be several years before 
this matter is resolved.
 
    During the third quarter of 1997, the Company resolved certain tax issues
related to the Merger, pursuant to the Tax Matters Agreement, resulting in the
receipt of approximately $16.8 million (including $0.5 million of interest) in
cash from the former majority owner of the Company.
 
Information Concerning Forward-Looking Statements
 
    Certain of the statements contained in this report (other than the financial
statements and other statements of historical fact) are forward-looking
statements, including, without limitation, (i) the statements in "--Business
Trends and Initiatives" concerning (a) the improvements which the Company's
long-term initiatives, including, without limitation, its profit center
reorganization, are designed to achieve and (b) the Company's expectation that
the second Macon Mill paper machine will produce approximately 80,000 tons of
linerboard and CUK Board
 
                                    I-24

<PAGE>

during the last half of 1997 and that such machine will be able to produce 
approximately 275,000 tons of CUK Board in 18 to 24 months following the June 
1997 start-up; (ii) the statements in "--Outlook" concerning (a) the 
Company's expectation that its 1997 EBITDA will exceed its 1996 EBITDA 
(excluding the results of the former U.S. Timberlands/Wood Products business 
segment) as well as each of the factors which the Company believes support 
such expectation, (b) the Company's expectation that it will achieve a 
reduction of expenditures of approximately $30 million on an annualized 
basis, over half of which will be realized in 1997, and will identify an 
additional $10 million of annualized cost savings to be acted upon in 1998 
and (c) the Company's expectation that it will achieve continued sales volume 
increases in its international beverage and U.S. soft drink carton markets in 
1998, while its U.S. beer carton volume will remain relatively flat; (iii) 
the statements in "--Financial Condition, Liquidity and Capital 
Resources--Liquidity and Capital Resources" concerning (a) the Company's 
expectations that total capital spending for 1997 will be approximately $155 
million and that the planned upgrading of the Company's information systems 
will cost up to $30 million (and its belief that the Company will achieve 
Year 2000 compliance by the end of 1999), (b) the Company's belief that cash 
generated from operations, together with amounts available under available 
financing sources, will be adequate to permit the Company to meet its debt 
service obligations, capital expenditure program requirements, ongoing 
operating costs and working capital needs until the maturity of the Revolving 
Facility (assuming extension or refinancing of the Machinery Facility at its 
earlier maturity), (c) the Company's expectations with respect to capital 
spending that may be required to comply with the cluster rules and that, 
based on current knowledge, environmental costs are not expected to have a 
material impact on the results of operations, cash flows or financial 
condition of the Company and (d) the Company's beliefs and estimates in 
respect of certain Louisiana income tax matters relating to the Section 
338(h)(10) election, including, without limitation, management's belief that 
additional tax ultimately paid (if any) would be substantially less than $47 
million; and (iv) other statements as to management's or the Company's 
expectations and beliefs presented in this "Management's Discussion and 
Analysis of Financial Condition and Results of Operations."
 
    Forward-looking statements are made based upon management's current
expectations and beliefs concerning future developments and their potential
effects upon the Company. There can be no assurance that future developments
will be in accordance with management's expectations or that the effect of
future developments on the Company will be those anticipated by management. The
important factors described elsewhere in this report (including, without
limitation, those discussed in "--Financial Condition, Liquidity and Capital
Resources--Liquidity and Capital Resources--Environmental and Legal Matters"
and "--Tax Matters Relating to the Merger"), the Company's Report on Form 10-Q
for the quarterly period ended June 28, 1997, or in other Securities and
Exchange Commission filings, could affect (and in some cases have affected) the
Company's actual results and could cause such results to differ materially from
estimates or expectations reflected in such forward-looking statements.
 
    While the Company periodically reassesses material trends and uncertainties
affecting the Company's results of operations and financial condition in
connection with its preparation of management's discussion and analysis of
results of operations and financial condition contained in its quarterly and
annual reports, the Company does not intend to review or revise any particular
forward-looking statement referenced in this report in light of future events.
 
Accounting Changes
 
    In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131 establishes
standards for the way public companies report information about operating
segments in annual financial statements and requires that those companies report
selected information about operating segments in interim financial reports. SFAS
No. 131 is effective for fiscal years beginning after December 31, 1997. The
Company has not determined the impact that SFAS No. 131 will have on its
business segment disclosures.
 
                                    I-25

<PAGE>

                           PART II--OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS.
 
Not applicable
 
ITEM 2.   CHANGES IN SECURITIES.
 
Not applicable
 
ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.
 
Not applicable
 
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
Not applicable
 
ITEM 5.   OTHER INFORMATION.
 
Effective July 28, 1997, Thomas M. Gannon was appointed as Senior Vice 
President and Chief Financial Officer of the Company.
 
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits.

    99(a)  Reconciliation of (Loss) Income from Operations to EBITDA. Filed as
           an exhibit hereto.

    99(b)  Schedule of Coated Board and Containerboard Shipments. Filed as an 
           exhibit hereto.
 
(b) Reports on Form 8-K.
 
    Form 8-K dated July 11, 1997, and filed with the Securities and Exchange
    Commission on July 11, 1997, regarding the offering of Riverwood 
    International Corporation of $250 million principal amount of 10 5/8% 
    Senior Notes due 2007.
 
    Form 8-K dated July 11, 1997, and filed with the Securities and Exchange
    Commission on July 11, 1997, regarding the Company's financial performance,
    proposed Credit Agreement covenant modifications, completion of the Macon 
    Mill paper machine upgrade, upgrade of information systems, certain tax 
    matters and changes in management.


                                    II-1

<PAGE>

                                   SIGNATURE

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

                                ------------------------------------------
                                (Registrant)
 


Date: November 7, 1997          By:  /s/ Bill H. Chastain
                                     -------------------------------------
                                     Bill H. Chastain
                                     Secretary


Date: November 7, 1997          By:  /s/ Thomas M. Gannon
                                     -------------------------------------
                                     Thomas M. Gannon
                                     Senior Vice President and
                                     Chief Financial Officer
 
                                      II-2