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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 March 31, 2002

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.)

3350 Riverwood Parkway, S.E.
Suite 1400
Atlanta, Georgia 30339
(Address of principal executive offices)
(Zip Code)

(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 required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  [  ]         
No [X]

At May 6, 2002 there were 7,064,180 shares and 500,000 shares of the
registrants Class A and Class B common stock, respectively, outstanding.





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|                                                   |                                                                                               |                                                                          |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION                     
|                                                   | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                                                   |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS                                   
|                                                   |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
|                                                   |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                         
|                                                   |                                                                                               | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                    
|                                                   | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                   | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                            
|PART II  OTHER INFORMATION                       
|SIGNATURE                                         
|RECONCILIATION OF INCOME FROM OPERATIONS TO EBITDA



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PART I.   FINANCIAL INFORMATION




ITEM 1.   FINANCIAL STATEMENTS



As used in this Form 10-Q, unless the context otherwise requires, RIC refers
to the corporation formerly named Riverwood International Corporation; the
Predecessor refers to RIC and its subsidiaries in respect of periods prior to
the acquisition on March 27, 1996 by Holding, through its wholly-owned
subsidiaries, of RIC (the Merger); the Company refers to the registrant,
Riverwood Holding, Inc., a Delaware corporation (Holding) and its
subsidiaries; and Riverwood refers to Riverwood International Corporation, a
Delaware corporation and an indirect wholly-owned subsidiary of Holding.

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RIVERWOOD HOLDING, INC.




CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands of dollars)


|                                                                                                        |                                                |   |             |         |              |   |           |         | 
|------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | - | ----------- | ------- | ------------ | - | --------- | ------- | 
|                                                                                                        |                                                |   | March 31,   |         | December 31,
|                                                                                                        |                                                |   | 2002        |         | 2001        
|                                                                                                        |                                                |   |             |         |             
|                                                                                                        |                                                |   | (unaudited) |         |              |   |          
|ASSETS                                                                                                  |                                                |   |             |         |              |   |           |        
|Current Assets:                                                                                         |                                                |   |             |         |              |   |           |        
|                                                                                                        | Cash and Equivalents                           |   | $           | 19,562  |              |   | $         | 26,107  | 
|                                                                                                        | Receivables, Net of Allowances                 |   |             | 147,650 |              |   |           | 140,099 | 
|                                                                                                        | Inventories                                    |   |             | 186,225 |              |   |           | 181,305 | 
|                                                                                                        | Prepaid Expenses                               |   |             | 9,436   |              |   |           | 6,770   | 
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Total Current Assets                                                                                    |                                                |   | 362,873     |         |              |   | 354,281   |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Property, Plant and Equipment, Net of Accumulated
Depreciation of $687,284 in 2002 and $659,945 in 2001 |                                                |   | 1,272,098   |         |              |   | 1,289,915 |        
|Goodwill                                                                                                |                                                |   | 276,482     |         |              |   | 276,482   |        
|Other Assets                                                                                            |                                                |   | 134,546     |         |              |   | 136,914   |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Total Assets                                                                                            |                                                | $ | 2,045,999   |         |              | $ | 2,057,592 |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|LIABILITIES                                                                                             |                                                |   |             |         |              |   |           |        
|Current Liabilities:                                                                                    |                                                |   |             |         |              |   |           |        
|                                                                                                        | Short-Term Debt                                |   | $           | 10,388  |              |   | $         | 11,817  | 
|                                                                                                        | Accounts Payable and Other Accrued Liabilities |   |             | 212,234 |              |   |           | 225,029 | 
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Total Current Liabilities                                                                               |                                                |   | 222,622     |         |              |   | 236,846   |        
|Long-Term Debt, Less Current Portion                                                                    |                                                |   | 1,534,556   |         |              |   | 1,523,082 |        
|Other Noncurrent Liabilities                                                                            |                                                |   | 72,418      |         |              |   | 73,738    |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Total Liabilities                                                                                       |                                                |   | 1,829,596   |         |              |   | 1,833,666 |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Contingencies and Commitments (Note 4)                                                                  |                                                |   |             |         |              |   |           |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Redeemable
Common Stock, at Current Redemption Value                                                    |                                                |   | 7,941       |         |              |   | 8,061     |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|SHAREHOLDERS EQUITY                                                                                    |                                                |   |             |         |              |   |           |        
|Nonredeemable Common Stock                                                                              |                                                |   | 75          |         |              |   | 75        |        
|Capital in Excess of Par Value                                                                          |                                                |   | 748,753     |         |              |   | 748,753   |        
|Accumulated Deficit                                                                                     |                                                |   | (501,486    | )       |              |   | (493,771  | )      
|Accumulated Derivative Instruments Loss                                                                 |                                                |   | (3,420      | )       |              |   | (4,570    | )      
|Cumulative Currency Translation Adjustment                                                              |                                                |   | (35,460     | )       |              |   | (34,622   | )      
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Total Shareholders Equity                                                                              |                                                |   | 208,462     |         |              |   | 215,865   |        
|                                                                                                        |                                                |   |             |         |              |   |           |        
|Total Liabilities and Shareholders Equity                                                              |                                                | $ | 2,045,999   |         |              | $ | 2,057,592 |        
|                                                                                                        |                                                |   |             |         |              |   |           |        

See Notes to Condensed Consolidated Financial Statements.

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RIVERWOOD HOLDING, INC.




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


AND COMPREHENSIVE (LOSS)
(In thousands of dollars)
(unaudited)


|                                                                        |                                          |   |                    |       |           |   |         |        |  
|----------------------------------------------------------------------- | ---------------------------------------- | - | ------------------ | ----- | --------- | - | ------- | ------ | -
|                                                                        |                                          |   | Three Months Ended
|                                                                        |                                          |   |                   
|                                                                        |                                          |   | March 31,          |       | March 31,
|                                                                        |                                          |   | 2002               |       | 2001     
|                                                                        |                                          |   |                    |       |          
|Net Sales                                                               |                                          | $ | 300,112            |       |           | $ | 288,600 |       
|Cost of Sales                                                           |                                          |   | 240,589            |       |           |   | 237,881 |       
|Selling, General and Administrative                                     |                                          |   | 28,607             |       |           |   | 30,776  |       
|Research, Development and Engineering                                   |                                          |   | 1,315              |       |           |   | 1,170   |       
|Other (Income) Expense, Net                                             |                                          |   | (1,580             | )     |           |   | 7,956   |       
|                                                                        |                                          |   |                    |       |           |   |         |       
|Income from Operations                                                  |                                          |   | 31,181             |       |           |   | 10,817  |       
|Interest Income                                                         |                                          |   | 455                |       |           |   | 206     |       
|Interest Expense                                                        |                                          |   | 39,060             |       |           |   | 40,214  |       
|                                                                        |                                          |   |                    |       |           |   |         |       
|(Loss) before Income Taxes                                              |                                          |   | (7,424             | )     |           |   | (29,191 | )     
|Income Tax Expense                                                      |                                          |   | 291                |       |           |   | 474     |       
|                                                                        |                                          |   |                    |       |           |   |         |       
|(Loss) before Cumulative Effect of a
Change in Accounting Principle     |                                          |   | (7,715             | )     |           |   | (29,665 | )     
|Cumulative Effect of a Change in Accounting
Principle, Net of Tax of $0 |                                          |   |                   |       |           |   | (499    | )     
|                                                                        |                                          |   |                    |       |           |   |         |       
|Net (Loss)                                                              |                                          |   | (7,715             | )     |           |   | (30,164 | )     
|                                                                        |                                          |   |                    |       |           |   |         |       
|Other
Comprehensive (Loss), Net of Tax:                                 |                                          |   |                    |       |           |   |         |       
|                                                                        | Derivative Instruments Gain (Loss)       |   |                    | 1,150 |           |   |         | (1,059 | )
|                                                                        | Foreign Currency Translation Adjustments |   |                    | (838  | )         |   |         | (5,138 | )
|                                                                        |                                          |   |                    |       |           |   |         |       
|Comprehensive
(Loss)                                                    |                                          | $ | (7,403             | )     |           | $ | (36,361 | )     
|                                                                        |                                          |   |                    |       |           |   |         |       

See Notes to Condensed Consolidated Financial Statements.

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RIVERWOOD HOLDING, INC.




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In thousands of dollars)
(unaudited)


|                                                                           |                                                                                   |   |                    |         |                |   |         |         |  
|-------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | - | ------------------ | ------- | -------------- | - | ------- | ------- | -
|                                                                           |                                                                                   |   | Three Months Ended
|                                                                           |                                                                                   |   |                   
|                                                                           |                                                                                   |   | March 31, 2002     |         | March 31, 2001
|                                                                           |                                                                                   |   |                    |         |               
|Cash Flows from Operating Activities:                                      |                                                                                   |   |                    |         |                |   |         |        
|Net (Loss)                                                                 |                                                                                   | $ | (7,715             | )       |                | $ | (30,164 | )      
|Noncash Items Included in Net (Loss):                                      |                                                                                   |   |                    |         |                |   |         |        
|                                                                           | Depreciation and Amortization                                                     |   |                    | 32,134  |                |   |         | 41,268  |  
|                                                                           | Cumulative Effect of a Change in Accounting Principle                             |   |                    |        |                |   |         | 499     |  
|                                                                           | Deferred Income Taxes                                                             |   |                    | 901     |                |   |         | (1,491  | )
|                                                                           | Pension, Postemployment and Postretirement Benefits
Expense, Net of Contributions |   |                    | 1,375   |                |   |         | 1,228   |  
|                                                                           | Amortization of Deferred Debt Issuance Costs                                      |   |                    | 1,784   |                |   |         | 1,968   |  
|                                                                           | Other, Net                                                                        |   |                    | (2,851  | )              |   |         | 5,228   |  
|Changes in Operating Assets & Liabilities, Net of Subsidiary Consolidated: |                                                                                   |   |                    |         |                |   |         |        
|                                                                           | Receivables                                                                       |   |                    | (8,109  | )              |   |         | 9,155   |  
|                                                                           | Inventories                                                                       |   |                    | (5,439  | )              |   |         | (23,006 | )
|                                                                           | Prepaid Expenses                                                                  |   |                    | (2,829  | )              |   |         | 2,745   |  
|                                                                           | Accounts Payable and Other Accrued Liabilities                                    |   |                    | (11,737 | )              |   |         | (6,736  | )
|                                                                           | Other Noncurrent Liabilities                                                      |   |                    | 79      |                |   |         | 402     |  
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Net Cash (Used in) Provided by Operating Activities                        |                                                                                   |   | (2,407             | )       |                |   | 1,096   |        
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Cash Flows from Investing Activities:                                      |                                                                                   |   |                    |         |                |   |         |        
|Purchases of Property, Plant and Equipment                                 |                                                                                   |   | (12,282            | )       |                |   | (13,457 | )      
|Cash Acquired of Subsidiary Consolidated                                   |                                                                                   |   |                   |         |                |   | 17,985  |        
|(Increase) Decrease in Other Assets                                        |                                                                                   |   | (1,624             | )       |                |   | 232     |        
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Net Cash (Used in) Provided by Investing Activities                        |                                                                                   |   | (13,906            | )       |                |   | 4,760   |        
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Cash Flows from Financing Activities:                                      |                                                                                   |   |                    |         |                |   |         |        
|Net Increase in Notes Payable                                              |                                                                                   |   | 10,111             |         |                |   | 5,887   |        
|Repurchases of Redeemable Common Stock, Net                                |                                                                                   |   | (120               | )       |                |   |        |        
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Net Cash Provided by Financing Activities                                  |                                                                                   |   | 9,991              |         |                |   | 5,887   |        
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Effect of Exchange Rate Changes on Cash                                    |                                                                                   |   | (223               | )       |                |   | (3,123  | )      
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Net
(Decrease) Increase in Cash and Equivalents                            |                                                                                   |   | (6,545             | )       |                |   | 8,620   |        
|Cash and Equivalents at Beginning of Period                                |                                                                                   |   | 26,107             |         |                |   | 18,417  |        
|                                                                           |                                                                                   |   |                    |         |                |   |         |        
|Cash and Equivalents at End of Period                                      |                                                                                   | $ | 19,562             |         |                | $ | 27,037  |        
|                                                                           |                                                                                   |   |                    |         |                |   |         |        

See Notes to Condensed Consolidated Financial Statements.

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RIVERWOOD HOLDING, INC.




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(unaudited)


NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION

The accompanying Condensed Consolidated Financial Statements of the Company
included herein have been prepared by the Company without an 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 accounting principles generally accepted
in the United States of America 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, 2001 was derived from audited financial statements.

Holding and RIC Holding, Inc., a wholly-owned subsidiary, conducted no
significant business and have no independent assets or operations other than in
connection with the Merger and related transactions through March 27, 1996.
Holding and RIC Holding, Inc. fully and unconditionally guarantee substantially
all of the debt of Riverwood.

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 year ended December 31, 2001.

The preparation of the Condensed Consolidated Financial Statements in
conformity with accounting principles generally accepted in the United States
of America 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.

The Companys condensed consolidated financial statements include all significant
subsidiaries in which the Company has the ability to exercise control over operating and financial policies. Intercompany
transactions and balances are eliminated in consolidation.

During 2000, the Emerging Issues Task Force (EITF) issued EITF 00-10,
Accounting for Shipping and Handling Fees and Costs.Previously, the Company
recognized shipping and handling costs as a reduction to Net Sales. EITF 00-10
requires shipping and handling costs to be included in Cost of Sales.
Accordingly, shipping and handling costs have been reclassified to Cost of
Sales for all periods presented.

The Company has reclassified the presentation of certain prior period
information to conform with the current presentation format.

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NOTE 3  INVENTORIES

The major classes of inventories were as follows:

|                          |  |                |         |                   |  |   |         | 
|------------------------- |  | -------------- | ------- | ----------------- |  | - | ------- | 
|(In thousands of dollars) |  | March 31, 2002 |         | December 31, 2001
|                          |  |                |         |                  
|Finished goods            |  | $              | 89,921  |                   |  | $ | 87,728  | 
|Work-in-process           |  |                | 11,229  |                   |  |   | 12,194  | 
|Raw materials             |  |                | 49,206  |                   |  |   | 45,656  | 
|Supplies                  |  |                | 35,869  |                   |  |   | 35,727  | 
|                          |  |                |         |                   |  |   |         | 
|Total                     |  | $              | 186,225 |                   |  | $ | 181,305 | 
|                          |  |                |         |                   |  |   |         | 

NOTE 4  CONTINGENCIES AND COMMITMENTS

The Company is committed to compliance with all applicable foreign, federal,
state and local environmental laws and regulations. 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 adopt or revise rules and regulations.

In 1998, the U.S. Environmental Protection Agency adopted regulations
(generally referred to as the cluster rules) that mandate more stringent
controls on air and water discharges from the United States pulp and paper
mills. The Company estimates that 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 a seven-year period that began in 2000. As of March 31,
2002, the Company estimates that it has spent approximately one-third of that
amount for such compliance.

In late 1995, the Louisiana Department of Environmental Quality (DEQ)
notified the Predecessor of potential liability for the remediation of
hazardous substances at a wood treatment site in Shreveport, Louisiana that the
Predecessor or its predecessors previously operated, and at a former oil
refinery site in Caddo Parish, Louisiana which is on land that the Company
previously owned. In response to these notices, 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. Subsequent to receipt in May 1996 of a Special Demand Letter from
DEQ to remediate the site in Shreveport, the Company performed a soil and
groundwater investigation at the site pursuant to an agreement with DEQ. In
August 2001, the Company entered into a Cooperative Agreement for Remedial
Action with DEQ and the landowners of the site, as well as a Mutual Release and
Settlement Agreement with the landowners. Under the Cooperative Agreement, the
Company will develop the remedial design and carry out the specified
remediation at the site. The Company has engaged a qualified contractor and
expects completion of the work by the end of 2002. In September 1996, the
Company received a Special Demand Letter from DEQ to remediate the site in
Caddo Parish. The Company performed a waste inventory and treatability study at
the site and subsequently met with DEQ in October 1999. On July 6, 2000, the
Company and DEQ entered into a Settlement Agreement that describes in detail
the remedial actions necessary for the Company to obtain full release of all
future liability at this site. The Company has contracted with a vendor to
perform the remedial actions as outlined in the Settlement Agreement and the
work is currently proceeding. The Company no longer owns the site since
transferring the property to another entity on October 22, 2000. The Company
anticipates the remedial actions outlined in the Settlement Agreement will be
completed during the second quarter of 2002 and, at that time, expects to be
relieved of any future liability.

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The Company is involved in environmental remediation projects for certain
properties currently or formerly owned or operated by the Company, certain
properties divested by the Company for which responsibility was retained, and
waste disposal sites where waste was shipped by the Predecessor or its
predecessors or for which the Company might have corporate successor liability.
Some of these projects are being addressed under federal and state statutes,
such as the Comprehensive Environmental
Response, Compensation and Liability Act and analogous state laws. The
Companys costs in certain instances cannot be reliably estimated until the
remediation process is substantially underway or liability at multi-party sites
has been addressed. 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 in excess of accrued reserves 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 ordinary
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.

The Company has been a plaintiff in actions against The MeadWestvaco
Corporation, successor by merger to The Mead Corporation, and R.A. Jones Co.
Inc. claiming infringement of the Companys patents for its packaging machines.
The patents in suit were found infringed but invalid by a jury in a trial
against R.A. Jones in August 2001. This finding of invalidity has been appealed
to the Court of Appeals for the Federal Circuit. The suit against MeadWestvaco
was dismissed by mutual agreement pending the outcome of the appeal of the
decision in the case against R.A. Jones.

NOTE 5  BUSINESS SEGMENT INFORMATION

The Company reports its results in two business segments: Coated Board and
Containerboard. These segments are evaluated by the chief operating decision
maker based primarily on income from operations and EBITDA. The Coated Board
business segment includes the production and sale of coated board for cartons
from its West Monroe, Louisiana and Macon, Georgia mills and white
lined chip board from its mill in
Sweden; carton converting facilities in the United States, the United Kingdom,
Spain, France and Brazil; 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.

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Business segment information is as follows:

|                            |  |                    |         |           |  |   |         |  
|--------------------------- |  | ------------------ | ------- | --------- |  | - | ------- | -
|                            |  | Three Months Ended
|                            |  |                   
|                            |  | March 31,          |         | March 31,
|(In thousands of dollars)   |  | 2002               |         | 2001     
|                            |  |                    |         |          
|NET SALES:                  |  |                    |         |           |  |   |         |  
|Coated Board                |  | $                  | 280,954 |           |  | $ | 260,994 |  
|Containerboard              |  |                    | 19,158  |           |  |   | 27,606  |  
|                            |  |                    |         |           |  |   |         |  
|                            |  | $                  | 300,112 |           |  | $ | 288,600 |  
|                            |  |                    |         |           |  |   |         |  
|INCOME FROM OPERATIONS:     |  |                    |         |           |  |   |         |  
|Coated Board                |  | $                  | 44,450  |           |  | $ | 26,309  |  
|Containerboard              |  |                    | (8,276  | )         |  |   | (3,476  | )
|Corporate And Eliminations  |  |                    | (4,993  | )         |  |   | (12,016 | )
|                            |  |                    |         |           |  |   |         |  
|                            |  | $                  | 31,181  |           |  | $ | 10,817  |  
|                            |  |                    |         |           |  |   |         |  
|Credit Agreement EBITDA(A): |  |                    |         |           |  |   |         |  
|Coated Board                |  | $                  | 69,635  |           |  | $ | 64,273  |  
|Containerboard              |  |                    | (5,049  | )         |  |   | 594     |  
|Corporate And Eliminations  |  |                    | (1,880  | )         |  |   | (5,683  | )
|                            |  |                    |         |           |  |   |         |  
|                            |  | $                  | 62,706  |           |  | $ | 59,184  |  
|                            |  |                    |         |           |  |   |         |  

The following represents a reconciliation of Income
from Operations to Credit Agreement EBITDA:

|                                    |                           |      |                    |      |           |   |        |       | 
|----------------------------------- | ------------------------- | ---- | ------------------ | ---- | --------- | - | ------ | ----- | 
|                                    |                           |      | Three Months Ended
|                                    |                           |      |                   
|                                    |                           |      | March 31,          |      | March 31,
|(In thousands of dollars)           |                           | 2002 |                    | 2001
|                                    |                           |      |                    |     
|Income from Operations              |                           | $    | 31,181             |      |           | $ | 10,817 |      
|Add:  Depreciation and amortization |                           |      | 32,134             |      |           |   | 41,268 |      
|                                    | Other non-cash charges(B) |      |                    | (609 | )         |   |        | 7,099 | 
|                                    |                           |      |                    |      |           |   |        |      
|Credit Agreement EBITDA(A)          |                           | $    | 62,706             |      |           | $ | 59,184 |      
|                                    |                           |      |                    |      |           |   |        |      

Notes:

(A)  Credit Agreement EBITDA is calculated based on the definitions
 of EBITDA and GAAP contained in the Companys Senior Secured Credit Agreement.
Credit Agreement 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, and other non-cash charges deducted in
determining consolidated net income, extraordinary items and the cumulative
effect of accounting changes and earnings of, but including dividends from,
non-controlled affiliates. The Company believes that EBITDA provides useful
information regarding the Companys ability to service debt, but should not be
considered in isolation or as a substitute for the Condensed Consolidated Statements of
Operations or cash flow data. The Company's definition of EBITDA may not be comparable
to other companies definitions of EBITDA.

(B)  Other non-cash charges include non-cash charges for LIFO accounting,
pension, postretirement and postemployment benefits, and amortization of
premiums on hedging contracts deducted in determining net income.

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NOTE 6  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to fluctuations in interest rates on its variable rate
debt and fluctuations in foreign currency transaction cash flows. The Company
actively monitors these fluctuations and uses derivative instruments from time
to time to manage its exposure. In accordance with its risk management
strategy, the Company uses derivative instruments only for the purpose of
managing risk associated with fluctuations in the cash flow of the underlying
exposures identified by management. The Company does not trade or use
derivative instruments with the objective of earning financial gains on
interest or currency rates, nor does it use leveraged instruments or
instruments where there are no underlying exposures identified. The Companys
use of derivative instruments may result in short-term gains or losses and may
increase volatility in its earnings.

On January 1, 2001, the Company adopted
Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended by SFAS
No. 137, Accounting for Derivative Instruments and Hedging
Activities  Deferral of the Effective Date of FASB
Statement No. 133, and SFAS No. 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities
(SFAS No. 133), which requires all
derivative instruments to be measured at fair value and recognized on the
balance sheet as either assets or liabilities. In addition, all derivative
instruments used in hedging relationships must be designated, reassessed and
documented pursuant to the provisions of SFAS No. 133. Upon adoption of SFAS
No. 133, the Company recognized a one-time after-tax transition adjustment to
decrease earnings by approximately $0.5 million and decrease other
comprehensive income by approximately $1.1 million. These amounts have been
presented as a cumulative effect of change in accounting principle in the
accompanying Condensed Consolidated Statement of Operations and Comprehensive (Loss) for
the year ended December 31, 2001.

The following is a summary of the Companys derivative instruments as of March
31, 2002 and the accounting policies it employs:

Hedges of Anticipated Cash Flows

The following is a reconciliation of current period changes in the fair value
of the interest rate swap agreements and foreign currency forward and option
contracts which have been recorded as Accumulated Derivative Instruments Loss
in the accompanying Condensed Consolidated Balance Sheet at March 31, 2002 and
as Derivative Instruments Gain (Loss) in the accompanying Condensed Consolidated
Statement of Operations and Comprehensive (Loss) for the Three Months Ended
March 31, 2002.

|                                      |  |   |        |  
|------------------------------------- |  | - | ------ | -
|(In thousands of dollars)             |  |   |        |  
|                                      |  |   |        |  
|SFAS No. 133 transition adjustment    |  | $ | (1,094 | )
|Reclassification to earnings          |  |   | 3,898  |  
|Current period decrease in fair value |  |   | (7,374 | )
|                                      |  |   |        |  
|Balance at December 31, 2001          |  |   | (4,570 | )
|Reclassification to earnings          |  |   | 942    |  
|Current
period increase in fair value |  |   | 208    |  
|                                      |  |   |        |  
|Balance at March 31, 2002             |  | $ | (3,420 | )
|                                      |  |   |        |  

During the first three months ended March 31, 2002, there was no ineffective
portion related to the changes in fair value of the interest rate swap
agreements, or foreign currency forward and option contracts and there were no
amounts excluded from the measure of effectiveness. The balance of $3.4 million
recorded in Accumulated Derivative Instruments Loss at March 31, 2002 is
expected to be reclassified into future earnings, contemporaneously with and
offsetting changes in the related hedged exposure. The estimated amount to be
reclassified into future earnings as interest expense over the next twelve
months through March 31, 2003 is approximately $3.4 million. The actual amount
that will be reclassified to future earnings over the next twelve months will
vary from this amount as a result of changes in market
conditions. No amounts were reclassified to earnings during the first quarter
of 2002 in connection with forecasted transactions that were no longer
considered probable of occurring.

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The Company uses interest rate swap agreements to fix 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 differential to be paid or received
under these agreements is recognized as an adjustment to interest expense
related to the debt. At March 31, 2002, the Company had interest rate swap
agreements with a notional amount of $225 million, which expire on various
dates through the year 2002, under which the Company will pay fixed rates of
4.75 percent to 6.53 percent and receive three-month LIBOR. At December 31,
2001, the Company had interest rate swap agreements with a notional amount of
$225 million, which expire on various dates through the year 2002, under which
the Company will pay fixed rates of 4.75 percent to 6.53 percent and receive
three-month LIBOR.

Derivatives not Designated as Hedges

The Company has foreign currency forward contracts used to hedge the exposure
associated with foreign currency denominated receivables. These contracts are
presently being marked-to-market through the income statement and will continue
to be marked-to-market through the income statement.

The Company enters into fixed price natural gas contracts designed to
effectively hedge prices for a substantial portion of its natural gas
requirements at its two U.S. mills. The purpose of the fixed price natural gas
contracts is to eliminate or reduce price risk with a focus on making cash
flows more predictable. As of March 31, 2002, the Company had entered into
contracts to hedge substantially all of its natural gas requirements for its
two U.S. mills through December 31, 2002. The contract price and fair value of
these natural gas contracts was approximately $16.6 million and $14.1 million,
respectively. These contracts are not accounted for as derivative instruments
under SFAS No. 133,
as they qualify for the normal purchase exemption.

NOTE 7  NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 141 (SFAS No. 141), Business
Combinations, which was effective as of January 1, 2002. SFAS No. 141 requires
the purchase method of accounting for business combinations initiated after
June 30, 2001 and eliminates the pooling-of-interests method. The Company
adopted SFAS No. 141 on January 1, 2002 and the adoption did not have a
significant impact on its financial position and results of operations.

In June 2001, the FASB issued SFAS No.
142 (SFAS No. 142), Goodwill and Other Intangible Assets, which was
effective January 1, 2002. SFAS No. 142 requires, among other things, the
discontinuance of goodwill amortization. In addition, the standard includes
provisions for the reclassification of certain existing recognized intangibles
as goodwill, reassessment of the useful lives of existing recognized
intangibles, reclassification of certain intangibles out of previously reported
goodwill and the identification of reporting units for purposes of assessing
potential future impairments of goodwill. SFAS No. 142 also requires the
Company to complete a transitional goodwill impairment test six months from the
date of adoption. The adoption of SFAS No. 142 resulted in the
discontinuation of amortization of goodwill recorded at December 31, 2001 of
approximately $8 million annually. Intangible assets with a determinable life
will continue to be amortized over that period. The Company adopted
SFAS No. 142 on January 1, 2002 and is in the process of implementing
SFAS No. 142 and does not believe that any impairment charges will
result from the adoption. The following table shows Net (Loss)
for the first quarter of 2002 and adjusted Net (Loss) for the first quarter of
2001 exclusive of goodwill amortization.

11



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|                               |  |                    |        |           |  |   |         |  
|------------------------------ |  | ------------------ | ------ | --------- |  | - | ------- | -
|                               |  | Three Months Ended
|                               |  |                   
|                               |  | March 31,          |        | March 31,
|(In thousands of dollars)      |  | 2002               |        | 2001     
|                               |  |                    |        |          
|Net (Loss)                     |  | $                  | (7,715 | )         |  | $ | (30,164 | )
|Plus: Amortization of Goodwill |  |                    |       |           |  |   | 1,935   |  
|                               |  |                    |        |           |  |   |         |  
|Adjusted Net (Loss)            |  | $                  | (7,715 | )         |  | $ | (28,229 | )
|                               |  |                    |        |           |  |   |         |  

The following table displays the intangible assets that continue
to be subject to amortization and aggregate amortization expense
as well as intangible assets not subject to amortization as of
March 31, 2002 and December 31, 2001:

|                               |            |                      |        |              |  |              |        |        |  |   |        |         | 
|------------------------------ | ---------- | -------------------- | ------ | ------------ |  | ------------ | ------ | ------ |  | - | ------ | ------- | 
|                               |            |                     
|                               |            | As of March 31, 2002
|                               |            |                     
|                               |            | Gross Carrying       |        | Accumulated  |  | Net Carrying
|                               |            | Amount               |        | Amortization |  | Amount      
|                               |            |                      |        |              |  |             
|Amortized intangible assets:   |            |                      |        |              |  |              |        |        |  |   |        |        
|                              
|                              
|                              
|                              
|                               | Patents    |                      | $      | 24,063       |  |              | $      | 8,385  |  |   | $      | 15,678  | 
|                              
|                              
|                              
|                              
|                               | Licenses   |                      |        | 3,598        |  |              |        | 1,059  |  |   |        | 2,539   | 
|                              
|                              
|                              
|                              
|                               | Trademarks |                      |        | 39,635       |  |              |        | 11,865 |  |   |        | 27,770  | 
|                               |            |                      |        |              |  |              |        |        |  |   |        |        
|                               |            | $                    | 67,296 |              |  | $            | 21,309 |        |  | $ | 45,987 |        
|                               |            |                      |        |              |  |              |        |        |  |   |        |        
|Unamortized intangible assets: |            |                      |        |              |  |              |        |        |  |   |        |        
|                               | Goodwill   |                      | $      | 276,482      |  |              |        |       |  |   | $      | 276,482 | 
|                               |            |                      |        |              |  |              |        |        |  |   |        |        

|                               |            |                         |        |              |  |              |        |        |  |   |        |         | 
|------------------------------ | ---------- | ----------------------- | ------ | ------------ |  | ------------ | ------ | ------ |  | - | ------ | ------- | 
|                               |            |                        
|                               |            | As of
December 31, 2001
|                               |            |                        
|                               |            | Gross Carrying          |        | Accumulated  |  | Net Carrying
|                               |            | Amount                  |        | Amortization |  | Amount      
|                               |            |                         |        |              |  |             
|Amortized intangible assets:   |            |                         |        |              |  |              |        |        |  |   |        |        
|                              
|                              
|                              
|                              
|                               | Patents    |                         | $      | 23,926       |  |              | $      | 7,986  |  |   | $      | 15,940  | 
|                              
|                              
|                              
|                              
|                               | Licenses   |                         |        | 3,598        |  |              |        | 997    |  |   |        | 2,601   | 
|                              
|                              
|                              
|                              
|                               | Trademarks |                         |        | 39,624       |  |              |        | 11,370 |  |   |        | 28,254  | 
|                               |            |                         |        |              |  |              |        |        |  |   |        |        
|                               |            | $                       | 67,148 |              |  | $            | 20,353 |        |  | $ | 46,795 |        
|                               |            |                         |        |              |  |              |        |        |  |   |        |        
|Unamortized intangible assets: |            |                         |        |              |  |              |        |        |  |   |        |        
|                               | Goodwill   |                         | $      | 321,976      |  |              | $      | 45,494 |  |   | $      | 276,482 | 
|                               |            |                         |        |              |  |              |        |        |  |   |        |        

Amortization expense for intangible assets subject
to amortization was approximately $0.9 million for the first three
months of 2002, and is expected to be approximately $4 million
annually for the next five fiscal years.

In August 2001, the FASB issued SFAS No.
144 (SFAS No. 144), Accounting for the Impairment or Disposal of Long-Lived
Assets, which was effective January 1, 2002. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets,
as well as eliminating the exception to consolidation for a subsidiary for
which control is likely to be temporary. The Company adopted SFAS No. 144 on
January 1, 2002 and the adoption did not have a significant impact on its
financial position and results of operations.

NOTE 8  SUBSEQUENT EVENT

On April 23, 2002, the Company borrowed $250 million pursuant to an amendment
to its senior secured credit agreement and will apply the proceeds
therefrom to redeem in full the 1996 senior notes, which is expected to occur
on May 23, 2002. In addition, the Company borrowed approximately $12 million
under its revolving credit facility to pay fees, costs and expenses
related to the refinancing transaction.

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##### Table of Contents






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

Overview

In connection with the Merger, the Company entered into a credit agreement that
provided for senior secured credit facilities consisting of a term loan
facility and a $400 million revolving credit facility. Such credit agreement,
term loan facility and revolving facility, as in effect prior to the August 10,
2001 amendment and restatement discussed below, are referred to herein as the
Prior Credit Agreement, the Prior Term Loan Facility and the Prior
Revolving Facility, respectively. In addition, Riverwood International
Machinery, Inc., a wholly-owned subsidiary of Riverwood, entered into a credit
agreement providing for a $140 million secured revolving credit facility (the
Machinery Facility) for the purpose of financing or refinancing packaging
machinery. In connection with the Merger, the Company also completed an
offering of $250 million aggregate principal amount of 10 1/4 percent Senior
Notes due 2006 (the 1996 Senior Notes) and $400 million aggregate principal
amount of 10 7/8 percent Senior Subordinated Notes due 2008 (the 1996 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 principal
amount of 10 5/8 percent Senior Notes due 2007 (the Initial Notes). The net
proceeds of this offering were applied to prepay certain revolving credit
borrowings under the Prior Revolving Facility (without any commitment reduction) and
to refinance certain tranche A term loans and other borrowings under
the Prior Credit
Agreement. A registration statement under the Securities Act of 1933, as
amended, registering senior notes of the Company identical in all material
respects to the Initial Notes (the Exchange Notes) offered in exchange for
the Initial Notes became effective October 1, 1997. On November 3, 1997, the
Company completed its exchange offer of the Initial Notes for the Exchange
Notes. The Initial Notes and the Exchange Notes are referred to herein as the
1997 Notes.

In connection with the sale of Igaras on October 3, 2000, the Company entered
into Amendment No. 5 dated September 12, 2000, effective October 3, 2000, to
the Prior Credit Agreement. Pursuant to the amendment, the Company applied $120
million and $25 million of the sale proceeds to its 2001 and 2002 term loan
maturities under the Prior Term Loan Facility, respectively. The Company
recognized a loss on the early extinguishment of debt of approximately $2.1
million in the fourth quarter of 2000. The Company applied the remaining
portion of the proceeds (approximately $48 million) to the Prior Revolving Facility
(without any commitment reduction). In connection with Amendment No. 5, the
Company canceled its Machinery Facility. In addition, certain of the financial
covenants included in the Prior Credit Agreement were amended.

On June 21, 2001, the Company completed an offering of $250 million principal
amount of 10 5/8 percent Senior Notes due 2007 (the Initial 2001 Notes). The
Initial 2001 Notes were sold at a price of 103 percent of par. The proceeds
from this offering of approximately $251.5 million, net of approximately $6
million of transaction fees and expenses, were applied to prepay a portion of
the outstanding borrowings under the Prior Term Loan Facility. During the
second quarter of 2001, the Company recorded a non-cash, extraordinary charge
to earnings of approximately $2.8 million, net of tax of nil, related to the
write-off of the applicable portion of deferred debt issuance costs on the term
loans. In connection with this offering, on June 6, 2001, the Company entered
into Amendment No. 6 to the Prior Credit Agreement. The amendment modified
certain financial and other covenants, including minimum EBITDA requirements,
in the Prior Credit Agreement to reflect recent financial results and market
and operating conditions. A registration statement under the Securities Act
registering senior notes of the Company identical in all material respects to
the Initial 2001 Notes (the Exchange 2001 Notes) offered in exchange for the
Initial 2001 Notes became effective on August 27, 2001. On October 5, 2001, the
Company completed its exchange offer of the Initial 2001 Notes for the Exchange
2001 Notes. The Initial 2001 Notes and the Exchange 2001 Notes are referred to
herein as the 2001 Notes.

On August 10, 2001, the Company entered into an amendment and restatement of
the Prior Credit Agreement (the Senior Secured Credit Agreement) with certain
lenders providing for senior secured credit facilities with aggregate
commitments not to exceed $635 million (together with the 2002 Term Loan
Facility referred to below, the Facilities), including a $335 million term
loan facility (the Term Loan Facility) and a $300 million revolving credit
facility (the Revolving Facility). The proceeds of the initial borrowings
under the Facilities of approximately $386.0 million, including $51.0 million
in revolving credit borrowings, were applied to repay in full the outstanding
borrowings under the Prior Term Loan Facility and the Prior Revolving Facility
and to pay approximately $12 million of the $14 million of fees and expenses
incurred in connection with the amendment and restatement of the Prior Credit
Agreement. During the third quarter of 2001, the Company recorded a non-cash,
extraordinary charge to earnings of approximately $6.0 million, net of tax of
nil, related to the write-off of the applicable remaining deferred debt
issuance costs on the Prior Term Loan Facility and the Prior Revolving
Facility.

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##### Table of Contents



In April 2002, the Company entered into an amendment of the Senior Secured
Credit Agreement which provided for a new, tranche B, term loan facility of
$250 million (2002 Term Loan Facility). The 2002 Term Loan Facility was drawn
on April 23, 2002 and the proceeds, together with borrowings under the
Revolving Facility of approximately $12.0 million, are to be used to redeem the
1996 Senior Notes which is expected to occur on May 23, 2002 and to pay related fees, costs and expenses.
In the second quarter of 2002, the Company expects to record a non-cash
extraordinary charge to earnings of approximately $3.3 million, net of tax,
related to the write-off of the remaining deferred debt issuance costs on the
1996 Senior Notes and an extraordinary charge of approximately $8.6 million,
net of tax, related to the call premium paid upon redemption of the 1996 Senior
Notes.

On May 3, 2002, Holding filed a Form S-1 registration statement with the
Securities and Exchange Commission for the registration under the Securities
Act of 1933 of $350 million of its common stock in a proposed initial public
offering. Concurrently with the proposed initial public offering, the Company
anticipates borrowing additional amounts under the Senior Secured Credit
Agreement through an add-on term loan and selling senior notes. The Company
intends to use the net proceeds from these proposed
financings to repay in full the 1997 Notes, the 2001 Notes and the 1996 Senior
Subordinated Notes and to repay a portion of the amounts outstanding under the
Revolving Facility. There can be no assurance that any of these financing
transactions will be completed.

General

The Company reports its results in two business segments: Coated Board
(relating to the Companys coated unbleached kraft paperboard
(CUK Board) used in its beverage multiple packaging
and consumer products packaging businesses) and Containerboard. The Coated
Board business segment includes the production and sale of coated board for
cartons from the Companys West Monroe, Louisiana and Macon, Georgia mills and
white lined chip board (WLC) from its mill in Sweden; carton converting
facilities in the United States, the United Kingdom, Spain, France and Brazil; 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 Company intends to stop producing linerboard as it continues
to shift production capacity to higher margin CUK Board.

The table below sets forth Net Sales, Income from
Operations, and EBITDA.  The Company believes that EBITDA provides useful information regarding the
Companys ability to service debt, but should not be considered in isolation or as
a substitute for the Condensed Consolidated Statements of Operations or cash flow data.
The Companys definition of EBITDA may not be comparable to other companies definitions
of EBITDA.

14



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##### Table of Contents



|                                   |                            |      |                    |         |           |   |         |         |  
|---------------------------------- | -------------------------- | ---- | ------------------ | ------- | --------- | - | ------- | ------- | -
|                                   |                            |      | Three Months Ended
|                                   |                            |      |                   
|                                   |                            |      | March 31,          |         | March 31,
|(In thousands of dollars)          |                            | 2002 |                    | 2001   
|                                   |                            |      |                    |        
|Net Sales:                         |                            |      |                    |         |           |   |         |        
|                                   | Coated Board               |      | $                  | 280,954 |           |   | $       | 260,994 |  
|                                   | Containerboard             |      |                    | 19,158  |           |   |         | 27,606  |  
|                                   |                            |      |                    |         |           |   |         |        
|Net Sales                          |                            | $    | 300,112            |         |           | $ | 288,600 |        
|                                   |                            |      |                    |         |           |   |         |        
|Income from Operations:            |                            |      |                    |         |           |   |         |        
|                                   | Coated Board               |      | $                  | 44,450  |           |   | $       | 26,309  |  
|                                   | Containerboard             |      |                    | (8,276  | )         |   |         | (3,476  | )
|                                   | Corporate and Eliminations |      |                    | (4,993  | )         |   |         | (12,016 | )
|                                   |                            |      |                    |         |           |   |         |        
|Income from Operations             |                            | $    | 31,181             |         |           | $ | 10,817  |        
|                                   |                            |      |                    |         |           |   |         |        
|Credit
Agreement EBITDA (A):       |                            |      |                    |         |           |   |         |        
|                                   | Coated Board               |      | $                  | 69,635  |           |   | $       | 64,273  |  
|                                   | Containerboard             |      |                    | (5,049  | )         |   |         | 594     |  
|                                   | Corporate And Eliminations |      |                    | (1,880  | )         |   |         | (5,683  | )
|                                   |                            |      |                    |         |           |   |         |        
|Credit Agreement EBITDA (A)        |                            |      | 62,706             |         |           |   | 59,184  |        
|Less:
Certain non-cash charges (B) |                            |      | (904               | )       |           |   | (3,398  | )      
|                                   |                            |      |                    |         |           |   |         |        
|EBITDA (B)                         |                            | $    | 61,802             |         |           | $ | 55,786  |        
|                                   |                            |      |                    |         |           |   |         |        

Notes:



|(A) |  | Credit Agreement EBITDA is calculated based on the definitions of EBITDA and GAAP
contained in the Companys Senior Secured Credit Agreement.
Credit Agreement 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, and other non-cash charges
deducted in determining consolidated net income, extraordinary items and
the cumulative effect of accounting changes and earnings of, but including
dividends from, non-controlled affiliates.                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(B) |  | For purposes of Credit Agreement
EBITDA, as reported above, the Company adds back to income from
operations non-cash charges for pension, post-retirement and
post-employment benefits, and expenses (credits) relating to changes
in GAAP subsequent to March 1996, which are excluded from EBITDA, as
reported above. EBITDA is defined as income
from operations before depreciation and amortization expense, loss
(gain) on asset write-downs/unusual asset disposals, loss on
impairment of assets and LIFO related expenses (credits) plus
dividends from equity investments recorded in the relevant period.
This definition of EBITDA conforms to the presentation in the
Form S-1 registration statement for Holdings proposed
initial public offering.

A reconciliation of Income from Operations to EBITDA is set
forth in Exhibit 99 of this Form 10-Q.

15



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##### Table of Contents



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 and energy 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 cartonboard, which historically has been principally
sold in the open market. The Companys 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 first three months of 2002, the Company
elected to take 14 days, or approximately 5,000 tons, of medium market related
downtime at its U.S. mills that resulted in approximately $1.0 million of
under-absorbed fixed costs. The Company expects to take an additional 32 days,
or approximately 13,000 tons, of medium market related downtime throughout the
remainder of 2002 on its medium machine, but the amount of downtime could
change depending upon market conditions. The downtime results from a number of
factors, but principally a weak containerboard market. As a result of the
expected downtime during 2002, the Company estimates the impact on earnings at
its U.S. mills for the remainder of 2002 to be approximately $2.3 million
related to the under-absorption of fixed costs.

Energy, including natural gas, fuel oil and electricity, represents a
significant portion of the Companys manufacturing costs. During the first
three months of 2002, the Companys financial results were
positively affected by approximately $2 million compared to the first three months of 2001 due to a decrease in its
energy costs, principally at its U.S. mills. Until recently, the Companys results had not been
significantly affected by the volatility of energy costs. The Company entered
into fixed price contracts designed to mitigate the impact of future energy
cost increases through 2002, and will continue to evaluate its hedge position.

The Company is pursuing a number of long-term initiatives designed to improve
productivity and profitability. The Company completed a profit center
reorganization of its operations, completed a global restructuring program,
implemented a number of cost saving measures and effected several management
changes. The Company is continuing to implement a global Total Quality Systems
(TQS) initiative which uses statistical process control to help design and
manage all types of activities including production and maintenance.

In addition, the Company is continuing to implement a strategy focused on the
expansion into the high-growth segments of the consumer products packaging market. The
Company has identified a number of new end-use markets and strategic alliance
partners to position the Company to provide a broad portfolio of new and
enhanced products to generate additional growth in the consumer
products packaging
market.

The Company expects capital expenditures will range from $65 million to $80
million in 2002 as the Company invests to improve its process capabilities, in
packaging machinery, and to comply with environmental cluster rules. 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. As part of this
effort, the Company initiated a $25.6 million global restructuring program,
focused on the Companys European operations, in the fourth quarter of 1998
aimed at achieving annualized savings and cost avoidance of approximately $20
million. The Company
completed the restructuring activities during 2001. Finally, the Company is
continuing to focus on reducing working capital and increasing liquidity.

16



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##### Table of Contents



Packaging machinery placements during the first three months of 2002 increased
approximately 113 percent when compared to 2001. This increase was partially
due to the timing of shipments. The Company expects packaging machinery
placements for 2002 to be higher when compared to 2001 and be comparable to
2000 as a result of a 16 percent increase in packaging machinery orders in 2001
when compared to 2000. The Company has been and will continue to be selective
in future packaging machinery placements to ensure appropriate returns.

Outlook

The Company expects that its 2002 full year EBITDA will exceed its 2001 EBITDA,
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 increasing worldwide beverage and North
American consumer products sales volumes above 2001 levels, improving U.S. mill
throughput, continued cost savings from other actions taken to date and stable
pricing for the Companys products. In 2002, the Company expects sales volume
increases in its worldwide beverage markets, and continued growth in its North
American consumer products markets. The Company expects containerboard sales
and margins to be negatively affected in 2002 due to the negative market
pressures on containerboard pricing and sales volumes. The Company believes
that energy costs will continue to negatively impact its results for 2002 but
the negative impact is expected to be lower than in 2001.

Significant Accounting Policies

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires the
Company 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 financial statements and the reported amounts of revenues and
expenses during the reporting period. These estimates and assumptions are based
on historical experience and various other factors that are believed to be
reasonable under the circumstances. Actual results could differ from these
estimates under different assumptions or conditions.

The Company believes the following accounting policies are the most critical
since these policies require significant judgment or involve complex
estimations that are important to the portrayal of the Companys financial
conditions and operating results:



| |  | The Company recognizes revenue when pervasive evidence of a sales
arrangement exists, delivery has occurred, the price to the buyer is
fixed and determinable, and the collectibility of the sales price is
reasonably assured, which is primarily when goods are shipped to
customers. Revenues received in advance from packaging machinery use
agreements are recognized on a straight-line basis over the term of
the agreements. Customer returns and allowances are provided for based
on estimates.           
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | The Companys inventories are stated at the lower of cost or market.
Cost of inventories is determined principally on the last-in,
first-out (LIFO) basis. Average cost basis is used to determine the
cost of supplies inventories. Inventories are stated net of an
allowance for slow-moving and obsolete inventory, which is based on
estimates. If the condition of the inventories or the state of the
Companys business would deteriorate, additional allowances may be
required which would reduce income.

17



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##### Table of Contents





| |  | The Company reviews long-lived assets, including goodwill and certain
identifiable intangibles for impairment whenever events or
circumstances indicate that the carrying value of an asset may not
be recoverable. Upon determination that the carrying value of the assets is
impaired, the Company would record an impairment charge or loss.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | The Company faces uncertainties relating to pending litigation and
environmental remediation obligations. The Company records accruals for
such items based on estimates developed in consultation with legal counsel
and environmental consultants at the time when the liability is probable
and reasonably estimated. While there can be no assurance as to the
ultimate outcome of any current lawsuits, claims or investigations
relating to such uncertainties, the Company does not believe that such
uncertainties will have a material adverse impact on the results of
operations, cash flows or financial condition of the Company. However,
future uncertainties may have a material adverse impact on the results of
operations, cash flows or financial condition of the Company.

RESULTS OF OPERATIONS

The following discussion of the Companys results of operations is based upon
the first three months ended March 31, 2002 and 2001. The Company has
reclassified the presentation of Net Sales and Cost of Sales information to
conform with the current presentation format and Emerging Issues Task Force
00-10, Accounting for Shipping and Handling Fees and Costs".

|                                      |                            |      |                    |         |            |      |            |        |   |   |         |         |  
|------------------------------------- | -------------------------- | ---- | ------------------ | ------- | ---------- | ---- | ---------- | ------ | - | - | ------- | ------- | -
|                                      |                            |      | Three Months Ended
|                                      |                            |      |                   
|                                      |                            |      |                    |         |            |      | % Increase |        |   |   |        
|                                      |                            |      |                    |         |            |      | (Decrease) |        |   |   |        
|                                      |                            |      | March 31,          |         | From Prior |      | March 31, 
|(In thousands of dollars)             |                            | 2002 |                    | Period  |            | 2001
|                                      |                            |      |                    |         |            |     
|Net Sales:                            |                            |      |                    |         |            |      |            |        |   |   |         |        
|                                      | Coated Board               |      | $                  | 280,954 |            |      |            | 7.6    | % |   | $       | 260,994 |  
|                                      | Containerboard             |      |                    | 19,158  |            |      |            | (30.6  | ) |   |         | 27,606  |  
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|Net Sales                             |                            |      | 300,112            |         |            |      | 4.0        |        |   |   | 288,600 |        
|Cost of Sales                         |                            |      | 240,589            |         |            |      | 1.1        |        |   |   | 237,881 |        
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|Gross Profit                          |                            |      | 59,523             |         |            |      | 17.4       |        |   |   | 50,719  |        
|Selling, General and Administrative   |                            |      | 28,607             |         |            |      | (7.0       | )      |   |   | 30,776  |        
|Research, Development and
Engineering |                            |      | 1,315              |         |            |      | 12.4       |        |   |   | 1,170   |        
|Other (Income) Expense, Net           |                            |      | (1,580             | )       |            |      | (100.0     | )      |   |   | 7,956   |        
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|Income from Operations                |                            | $    | 31,181             |         |            |      | 188.3      |        |   | $ | 10,817  |        
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|Income from Operations:               |                            |      |                    |         |            |      |            |        |   |   |         |        
|                                      | Coated Board               |      | $                  | 44,450  |            |      |            | 69.0   | % |   | $       | 26,309  |  
|                                      | Containerboard             |      |                    | (8,276  | )          |      |            | (138.1 | ) |   |         | (3,476  | )
|                                      | Corporate And Eliminations |      |                    | (4,993  | )          |      |            | 58.4   |   |   |         | (12,016 | )
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|Income from Operations                |                            | $    | 31,181             |         |            |      | 188.3      |        |   | $ | 10,817  |        
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|Other Financial Data:                 |                            |      |                    |         |            |      |            |        |   |   |         |        
|                                      |                            |      |                    |         |            |      |            |        |   |   |         |        
|Net Sales:                            |                            |      |                    |         |            |      |            |        |   |   |         |        
|                                      | Carrierboard               |      | $                  | 197,036 |            |      |            | 11.1   | % |   | $       | 177,405 |  
|                                      | Cartonboard                |      |                    | 56,164  |            |      |            | 3.7    |   |   |         | 54,165  |  
|                                      | White lined chip board     |      |                    | 19,035  |            |      |            | (4.7   | ) |   |         | 19,972  |  
|                                      | Containerboard             |      |                    | 19,158  |            |      |            | (30.6  | ) |   |         | 27,606  |  
|                                      | Other
(A)                  |      |                    | 8,719   |            |      |            | (7.8   | ) |   |         | 9,452   |  



|      |  |                                                                                                                                    
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------
|Note:
|     
|(A)   |  | Other primarily represents
revenue recognized from packaging machinery service and use
agreements and sales of certain by-products.

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##### Table of Contents



Paperboard Shipments

The following represents shipments of Coated Board and Containerboard to
outside customers. Shipments of Coated Board represent sales to customers of
carrierboard and cartonboard. 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, kraft paper and
various other items. Other primarily represents shipments of certain
by-products. Total shipments for the three months ended March 31, 2002
and 2001 were as follows:

|                       |              |      |                    |        |            |      |            |      |   |  |       |       | 
|---------------------- | ------------ | ---- | ------------------ | ------ | ---------- | ---- | ---------- | ---- | - |  | ----- | ----- | 
|                       |              |      | Three Months Ended
|                       |              |      |                   
|                       |              |      |                    |        |            |      | % Increase |      |   |  |      
|                       |              |      |                    |        |            |      | (Decrease) |      |   |  |      
|                       |              |      | March 31,          |        | From Prior |      | March 31, 
|(In thousands of tons) |              | 2002 |                    | Period |            | 2001
|                       |              |      |                    |        |            |     
|Coated Board           |              |      |                    |        |            |      |            |      |   |  |       |      
|                       | Carrierboard |      |                    | 154.3  |            |      |            | 17.7 | % |  |       | 131.1 | 
|                       | Cartonboard  |      |                    | 90.5   |            |      |            | 7.6  |   |  |       | 84.1  | 
|White Lined Chip Board |              |      | 39.3               |        |            |      | (0.8       | )    |   |  | 39.6  |      
|Containerboard         |              |      | 57.5               |        |            |      | (21.8      | )    |   |  | 73.5  |      
|Other                  |              |      | 6.5                |        |            |      | 6.6        |      |   |  | 6.1   |      
|                       |              |      |                    |        |            |      |            |      |   |  |       |       | 
|                       |              |      | 348.1              |        |            |      | 4.1        |      |   |  | 334.4 |      
|                       |              |      |                    |        |            |      |            |      |   |  |       |       | 

FIRST QUARTER 2002 COMPARED WITH FIRST QUARTER 2001

Net Sales

As a result of the factors described below, the Companys Net Sales in the
first quarter of 2002 increased by $11.5 million, or 4.0 percent, compared with
the first quarter of 2001. Net Sales in the Coated Board business segment
increased by $20.0 million in the first quarter of 2002, or 7.6 percent, to
$281.0 million from $261.0 million in the first quarter of 2001, due primarily
to higher sales volume in North American beverage carton markets
(resulting, in large part, from increased volumes under a multi-year
agreement with a beer customer) and, to a
lesser extent, higher sales volume in North American consumer products markets
and international beverage and consumer products markets. These increases were
somewhat offset by the negative impact of foreign currency exchange
rates on sales in international markets. Net
Sales in the Containerboard business segment decreased by $8.4 million, or 30.6
percent, to $19.2 million in the first quarter of 2002 from $27.6 million in
the first quarter of 2001, due principally to lower volumes and pricing.

Gross Profit

As a result of the factors discussed below, the Companys Gross Profit for the
first quarter of 2002 increased by $8.8 million, or 17.4 percent, to $59.5
million from $50.7 million in the first quarter of 2001. The Companys gross
profit margin increased to 19.8 percent in the first quarter of 2002 from 17.6
percent in the first quarter of 2001. Gross Profit in the Coated Board business
segment increased by $11.8 million, or 21.4 percent, to $66.8 million in the
first quarter of 2002 from $55.0 million in the first quarter of 2000, while
its gross profit margin increased to 23.8 percent in the first quarter of 2002
from 21.1 percent in the first quarter of 2001. The increase in Coated Board
Gross Profit was due primarily to worldwide cost reductions, higher Net Sales
and lower depreciation expense. Gross Profit in the Containerboard business
segment decreased by $4.5 million to a loss of $7.2 million in the first
quarter of 2002 from a loss of $2.7 million in the first quarter of 2001, while
its gross profit margin decreased to (37.7) percent in the first quarter of
2002 from (9.8) percent in the first quarter of 2001. The decrease in
Containerboard Gross Profit resulted principally from lower volumes and
pricing.

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Selling, General and Administrative

Selling, General and Administrative expenses decreased $2.2 million, or 7.0
percent, to $28.6 million in the first quarter of 2002 from $30.8 million in
the first quarter of 2001, due primarily to lower warehousing expenses recorded
in the first quarter of 2002 and, to a lesser extent, certain non-recurring operating charges that
were recorded in the first quarter of 2001. As a percentage of Net Sales,
Selling, General and Administrative expenses decreased from 10.7 percent in the
first quarter of 2001 to 9.5 percent in the first quarter of 2002.

Research, Development and Engineering

Research, Development and Engineering expenses increased $0.1 million, or 12.4
percent, to $1.3 million in the first quarter of 2002 from $1.2 million in the
first quarter of 2001, due primarily to higher research and development
investing relating to the Companys new Z-Flute® product.

Other (Income) Expense, Net

Other (Income) Expense, Net, was $(1.6) million in the first quarter of 2002 as
compared to $8.0 million in the first quarter of 2001. This change was
principally due to certain non-recurring operating charges that were recorded
in the first quarter of 2001 primarily relating to a litigation reserve and an
asset retirement, the cessation of goodwill amortization in the first quarter
of 2002 and hedging related gains recorded in the first quarter of 2002.

Income from Operations

Primarily as a result of the factors discussed above, the Companys Income from
Operations in the first quarter of 2002 increased by $20.4 million, or 188.3
percent, to $31.2 million from $10.8 million in the first quarter of 2001,
while the Companys operating margin increased to 10.4 percent in the first
quarter of 2002 from 3.7 percent in the first quarter of 2001. Income from
Operations in the Coated Board business segment increased by $18.2 million, or
69.0 percent, to $44.5 million in the first quarter of 2002 from $26.3 million
in the first quarter of 2001, while the operating margin increased to 15.8
percent in the first quarter of 2002 from 10.1 percent in the first quarter of
2001, primarily as a result of the factors described above. Income from
Operations in the Containerboard business segment decreased by $4.8 million to
a loss of $8.3 million in the first quarter of 2002 from a loss of $3.5 million
in the first quarter of 2001, while the operating margin decreased to (43.2)
percent in the first quarter of 2002 from (12.6) percent in the first quarter
of 2001, primarily as a result of the factors described above.

Fluctuations in U.S. Currency Exchange Rates

The strengthening of the U.S. dollar currency exchange rates as compared to the
Euro, other European currencies, and the Japanese Yen had a modest negative
impact on Net Sales, Gross Profit, Income from Operations, and operating
expenses during the first quarter of 2002.

INTEREST INCOME, INTEREST EXPENSE, INCOME TAX EXPENSE AND CUMULATIVE EFFECT OF
A CHANGE IN ACCOUNTING PRINCIPLE

Interest Income

Interest Income increased by $0.3 million to $0.5 million in the first three
months of 2002 from $0.2 million in the first three months of 2001.

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Interest Expense

Interest Expense decreased by $1.1 million to $39.1 million in the first three
months of 2002 from $40.2 million in the first three months of 2001 due
primarily to lower average interest rates.

Income Tax Expense

During the first three months of 2002, the Company recognized an income tax
expense of $0.3 million on a (Loss) before Income Taxes of $(7.4) million.
During the first three months of 2001, the Company recognized an income tax
expense of $0.5 million on a (Loss) before Income Taxes of $(29.2) million.
These expenses differed from the statutory federal income tax rate primarily
because of valuation allowances established on net operating loss carryforward
tax assets in the U.S. and certain international locations where the
realization of such benefits is not more likely than not.

Cumulative Effect of a Change in Accounting Principle

On January 1, 2001, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended by SFAS
No. 137, Accounting for Derivative Instruments and Hedging
Activities  Deferral of the Effective Date of FASB
Statement No. 133, and SFAS No. 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities
(SFAS No. 133), which requires all
derivative instruments to be measured at fair value and recognized on the
balance sheet as either assets or liabilities. In addition, all derivative
instruments used in hedging relationships must be designated, reassessed and
documented pursuant to the provisions of SFAS No. 133. Upon adoption of SFAS
No. 133, the Company recognized a one-time after-tax transition adjustment to
decrease earnings by approximately $0.5 million.

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 $6.5 million in the first three
months of 2002 compared to December 31, 2001 primarily as a result of the
purchases of property, plant and equipment ($12.3 million) and cash used in
Operating Activities ($2.4 million) offset by net cash provided by Financing
Activities ($10.0 million). Depreciation and amortization during the first
three months of 2002 totaled approximately $32.1 million, and is expected to be
approximately $125 million to $135 million for the full year 2002.

The Companys cash flows from its operations and EBITDA are subject to moderate
seasonality with demand usually increasing in the spring and summer due to the
seasonality of worldwide beverage multiple packaging markets.

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, ongoing operating costs, and working
capital.

As of March 31, 2002, the Company had outstanding approximately $1,536 million
of long-term debt, consisting primarily of $250 million aggregate principal
amount of the 1996 Senior Notes, $400 million of the 1996 Senior Subordinated
Notes, $250 million of the 1997 Notes, $250 million of the 2001 Notes, $335
million outstanding under the Term Loan Facility and $47 million under the
Revolving Facility, and other debt issues and facilities.

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In April 2002, the Company entered into an amendment of the Senior Secured
Credit Agreement which provided for the 2002 Term Loan Facility. The 2002 Term
Loan Facility was drawn on April 23, 2002 and the proceeds, together with
borrowings under the Revolving Facility of approximately $12.0 million, are to
be used to redeem the 1996 Senior Notes which is expected to occur on May 23, 2002 and to pay related
fees, costs and expenses.

On May 3, 2002, Holding filed a Form S-1 registration statement with the
Securities and Exchange Commission for the registration under the Securities
Act of 1933 of $350 million of its common stock in a proposed initial public
offering. Concurrently with the proposed initial public offering, the Company
anticipates borrowing additional amounts under the Senior Secured Credit
Agreement through an add-on term loan and selling senior notes. The Company
intends to use the net proceeds from these proposed financings to repay in full
the 1997 Notes, the 2001 Notes and the 1996 Senior Subordinated Notes and to
repay a portion of the amounts outstanding under the Revolving Facility. There
can be no assurance that any of these proposed financing transactions will be
completed.

The following discussion of the Companys debt service requirements, covenant
restrictions and financing sources and cash flows does not give effect to any
of the proposed financing transactions.

Debt Service

Principal and interest payments under the 2001 Term Loan Facility, the
Revolving Facility and the 2002 Term Loan Facility, together with interest
payments on the 2001 Notes, 1997 Notes and 1996 Senior Subordinated Notes,
represent significant liquidity requirements for the Company. The 2001 Term
Loan Facility matures on December 31, 2006 and amortizes in semi-annual
installments of $37.5 million beginning June 30, 2003 and of $46.25 million
beginning June 30, 2005, amounting to principal payments of $75.0 million,
$75.0 million, $92.5 million and $92.5 million in 2003, 2004, 2005 and 2006
respectively. The 2002 Term Loan Facility amortizes in semi-annual installments
of $1.25 million in 2002 and $2.5 million annually in each of 2003, 2004, 2005
and 2006 with the remaining principal due at maturity on March 31, 2007. The
Revolving Facility matures on December 31, 2006.

The loans under the Facilities bear interest at floating rates based upon the
interest rate option elected by the Company. The term loans under the 2001 Term
Loan Facility bore interest as of March 31, 2002 at an average rate per annum
of 4.71 percent. The 1997 Notes, the 2001 Notes and the 1996 Senior
Subordinated Notes bear interest at rates of 10 5/8 percent, 10 5/8 percent and
10 7/8 percent, respectively.

Interest expense in 2002 is expected to be approximately $151 million,
including approximately $7 million of non-cash amortization of deferred debt
issuance costs (giving effect to the 2002 Term Loan Facility and the redemption
of the 1996 Senior Notes). During the first three months of 2002, cash paid for
interest was approximately $34.0 million.

The Company expects that its working capital and business needs will require it
to continue to have access to the Revolving Facility or a similar revolving
credit facility after the maturity date, and that 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
Company has in the past refinanced and in the future may seek to refinance its
debt prior to the respective maturities of such debt.

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Covenant Restrictions

The Senior Secured Credit Agreement, which governs the Facilities, imposes
restrictions on the Companys ability to make capital expenditures and both the
Senior Secured Credit Agreement and the indentures governing the 1996 Senior
Subordinated Notes, the 1997 Notes and the 2001 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, meet its capital spending program, provide for
unanticipated capital investments or take advantage of business
opportunities. The covenants contained in the Senior Secured Credit Agreement,
among other things, restrict the ability of the Company and its subsidiaries to
dispose of assets, incur additional indebtedness, incur guarantee obligations,
prepay other indebtedness or amend other debt instruments, pay dividends,
create liens on assets, enter into sale and leaseback transactions, make
investments, loans or advances, make acquisitions, engage in mergers or
consolidations, change the business conducted by Riverwood and its
subsidiaries, make capital expenditures and engage in certain transactions with
affiliates. The covenants contained in the indentures governing the 1996 Senior
Subordinated Notes, the 1997 Notes and the 2001 Notes also impose restrictions
on the operation of the Companys business.

The financial covenants in the Senior Secured Credit Agreement specify, among
other things, the following requirements for each four quarter period ended
during the following test periods:

|                                       |  |                          |  |                  |  |  |  | 
|-------------------------------------- |  | ------------------------ |  | ---------------- |  |  |  | 
|                                       |  | Consolidated             |  |                 
|                                       |  | Debt
to Credit Agreement |  | Consolidated    
|                                       |  | EBITDA                   |  | Interest
Expense
|Test Period                            |  | Leverage Ratio           |  | Ratio           
|                                       |  |                          |  |                 
|September 30, 2001 - December 30, 2002 |  | 5.85 to 1.00             |  | 1.75 to 1.00    
|December 31, 2002 - December 30, 2003  |  | 5.50 to 1.00             |  | 2.00 to 1.00    
|December 31, 2003 - December 30, 2004  |  | 5.00 to 1.00             |  | 2.10 to 1.00    
|December 31, 2004 - December 30, 2005  |  | 4.70 to 1.00             |  | 2.25 to 1.00    
|December 31, 2005 - December 30, 2006  |  | 4.40 to 1.00             |  | 2.25 to 1.00    
|December 31, 2006 - March 31, 2007     |  | 4.40 to 1.00             |  | 2.25 to 1.00    

At March 31, 2002, the Company was in compliance with the financial covenants
in the Senior Secured Credit Agreement. The Companys ability to comply in
future periods with the financial covenants in the Senior Secured Credit
Agreement will depend on its ongoing financial and operating performance, which
in turn will be subject to 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, raw
material and energy costs, and the Companys ability to successfully implement
its overall business and profitability strategies (see Outlook). If a
violation of any of the covenants occurred, the Company would attempt to get a
waiver or an amendment from its lenders, although no assurance can be given
that the Company would be successful in this regard. The Senior Secured Credit
Agreement and the indentures governing the 1996 Senior Subordinated Notes, 1997
Notes and 2001 Notes have covenants as well as certain cross-default or
cross-acceleration provisions; failure to comply with these covenants in any
agreement could result in a violation of such agreement which could, in turn,
lead to violations of other agreements pursuant to such cross-default or
cross-acceleration provisions.

Capital Expenditures

Capital spending for the first three months of 2002 was approximately $12.3
million, down 8.7 percent from $13.5 million in the first three months of 2001.
Capital spending during the first three months of 2002 related primarily to
improving the Companys process capabilities, manufacturing packaging machinery
and environmental cluster rules compliance. Total capital spending for 2002 is
expected to be between $65 million and $80 million, and is expected to relate
principally to improving the Companys process capabilities, the production of
packaging machinery and environmental cluster rules compliance. The Company
estimates that 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 a seven-year period that began in 2000 (see Environmental and Legal
Matters). As of March 31, 2002, the Company estimates that it has spent
approximately one-third of that amount for such compliance.

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Financing Sources and Cash Flows

The Revolving Facility matures on December 31, 2006. At March 31, 2002, the
Company and its U.S. and international subsidiaries had the following amounts
of commitments, amounts outstanding and amounts available under revolving
credit facilities:

|                          |  |                 |         |              |  |              |        |  |  |   |         | 
|------------------------- |  | --------------- | ------- | ------------ |  | ------------ | ------ |  |  | - | ------- | 
|                          |  | Total Amount of |         | Total Amount |  | Total Amount
|(In thousands of dollars) |  | Commitments     |         | Outstanding  |  | Available   
|                          |  |                 |         |              |  |             
|Revolving Facility        |  | $               | 300,000 |              |  | $            | 46,800 |  |  | $ | 252,558 | 
|International Facilities  |  |                 | 15,269  |              |  |              | 8,123  |  |  |   | 7,146   | 
|                          |  |                 |         |              |  |              |        |  |  |   |         | 
|                          |  | $               | 315,269 |              |  | $            | 54,923 |  |  | $ | 259,704 | 
|                          |  |                 |         |              |  |              |        |  |  |   |         | 

In accordance with its debt agreements, the Companys availability under its
Revolving Facility as of March 31, 2002 has been reduced by the amount of standby letter of credits issued
of approximately $0.6 million. The Company anticipates
pursuing additional working capital financing for its foreign operations as
necessary. The Company believes that cash generated from operations, together
with amounts available under its Revolving 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, 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 and demand for the Companys products, raw material and energy
costs, and the Companys ability to successfully implement its overall business
and profitability strategies.

Derivative Instruments and Hedging Activities

The Company is exposed to fluctuations in interest rates on its variable rate
debt and fluctuations in foreign currency transaction cash flows. The Company
actively monitors these fluctuations and uses derivative instruments from time
to time to manage its exposure. In accordance with its risk management
strategy, the Company uses derivative instruments only for the purpose of
managing risk associated with fluctuations in the cash flow of the underlying
exposures identified by management. The Company does not trade or use
derivative instruments with the objective of earning financial gains on
interest or currency rates, nor does it use leveraged instruments or
instruments where there are no underlying exposures identified. The Companys
use of derivative instruments may result in short-term gains or losses and may
increase volatility in its earnings.

On January 1, 2001, the Company adopted SFAS No. 133 which requires all
derivative instruments to be measured at fair value and recognized on the
balance sheet as either assets or liabilities. In addition, all derivative
instruments used in hedging relationships must be designated, reassessed and
documented pursuant to the provisions of SFAS No. 133. Upon adoption of SFAS
No. 133, the Company recognized a one-time after-tax transition adjustment to
decrease earnings by approximately $0.5 million and decrease other
comprehensive income by approximately $1.1 million. These amounts have been
presented as a cumulative effect of change in accounting principle in the
accompanying Condensed Consolidated Statement of Operations and Comprehensive (Loss) for
the year ended December 31, 2001.

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##### Table of Contents



The following is a summary of the Companys derivative instruments as of March
31, 2002 and the accounting policies it employs:

Hedges of Anticipated Cash Flows

The following is a reconciliation of current period changes in the fair value
of the interest rate swap agreements, and foreign currency forward and option
contracts which have been recorded as Accumulated Derivative Instruments Loss
in the accompanying Condensed Consolidated Balance Sheet at March 31, 2002 and
as Derivative Instruments Gain (Loss) in the accompanying Condensed Consolidated
Statement of Operations and Comprehensive (Loss) for the Three Months Ended
March 31, 2002.

|                                      |  |   |        |  
|------------------------------------- |  | - | ------ | -
|(In thousands of dollars)             |  |   |        |  
|                                      |  |   |        |  
|SFAS No. 133 transition adjustment    |  | $ | (1,094 | )
|Reclassification to earnings          |  |   | 3,898  |  
|Current
period decrease in fair value |  |   | (7,374 | )
|                                      |  |   |        |  
|Balance at December 31, 2001          |  |   | (4,570 | )
|Reclassification to earnings          |  |   | 942    |  
|Current period increase in fair value |  |   | 208    |  
|                                      |  |   |        |  
|Balance at March 31, 2002             |  | $ | (3,420 | )
|                                      |  |   |        |  

During the three months ended March 31, 2002, there was no ineffective portion
related to the changes in fair value of the interest rate swap agreements,
or foreign currency forward and option contracts and there were no amounts
excluded from the measure of effectiveness. The balance of $3.4 million
recorded in Accumulated Derivative Instruments Loss at March 31, 2002 is
expected to be reclassified into future earnings, contemporaneously with and
offsetting changes in the related hedged exposure. The estimated amount to be
reclassified into future earnings as interest expense over the next twelve
months through March 31, 2003 is approximately $3.4 million. The actual amount
that will be reclassified to future earnings over the next twelve months will
vary from this amount as a result of changes in market conditions. No amounts
were reclassified to earnings during the first quarter of 2002 in connection
with forecasted transactions that were no longer considered probable of
occurring.

The Company uses interest rate swap agreements to fix 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 differential to be paid or received
under these agreements is recognized as an adjustment to interest expense
related to the debt. At March 31, 2002, the Company had interest rate swap
agreements with a notional amount of $225 million, which expire on various
dates through the year 2002, under which the Company will pay fixed rates of
4.75 percent to 6.53 percent and receive three-month LIBOR.

Derivatives not Designated as Hedges

The Company has foreign currency forward contracts used to hedge the exposure
associated with foreign currency denominated receivables. These contracts are
presently being marked-to-market through the income statement and will continue
to be marked-to-market through the income statement.

The Company enters into fixed price natural gas contracts designed to
effectively hedge prices for a substantial portion of its natural gas
requirements at its two U.S. mills. The purpose of the fixed price natural gas
contracts is to eliminate or reduce price risk with a focus on making cash
flows more predictable. As of March 31, 2002, the Company had entered into
contracts to hedge substantially all of its natural gas requirements for its
two U.S. mills through December 31, 2002. The contract price and fair value of
these natural gas contracts was approximately $16.6 million and $14.1 million,
respectively. These contracts are not accounted for as derivative instruments
under SFAS No. 133,
as they qualify for the normal purchase exemption.

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Environmental and Legal Matters

The Company is committed to compliance with all applicable foreign, federal,
state and local environmental laws and regulations. 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 adopt or revise rules and regulations.

In 1998, the U.S. Environmental Protection Agency adopted regulations
(generally referred to as the cluster rules) that mandate more stringent
controls on air and water discharges from the United States pulp and paper
mills. The Company estimates that 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 a seven-year period that began in 2000. As of March 31,
2002, the Company estimates that it has spent approximately one-third of that
amount for such compliance.

In late 1995, the Louisiana Department of Environmental Quality (DEQ)
notified the Predecessor of potential liability for the remediation of
hazardous substances at a wood treatment site in Shreveport, Louisiana that the
Predecessor or its predecessors previously operated, and at a former oil
refinery site in Caddo Parish, Louisiana which is on land that the Company
previously owned. In response to these notices, 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. Subsequent to receipt in May 1996 of a Special Demand Letter from
DEQ to remediate the site in Shreveport, the Company performed a soil and
groundwater investigation at the site pursuant to an agreement with DEQ. In
August 2001, the Company entered into a Cooperative Agreement for Remedial
Action with DEQ and the landowners of the site, as well as a Mutual Release and
Settlement Agreement with the landowners. Under the Cooperative Agreement, the
Company will develop the remedial design and carry out the specified
remediation at the site. The Company has engaged a qualified contractor and
expects completion of the work by the end of 2002. In September 1996, the
Company received a Special Demand Letter from DEQ to remediate the site in
Caddo Parish. The Company performed a waste inventory and treatability study at
the site and subsequently met with DEQ in October 1999. On July 6, 2000, the
Company and DEQ entered into a Settlement Agreement that describes in detail
the remedial actions necessary for the Company to obtain full release of all
future liability at this site. The Company has contracted with a vendor to
perform the remedial actions as outlined in the Settlement Agreement and the
work is currently proceeding. The Company no longer owns the site since
transferring the property to another entity on October 22, 2000. The Company
anticipates the remedial actions outlined in the Settlement Agreement will be
completed during the second quarter of 2002 and, at that time, expects to be
relieved of any future liability.

The Company is involved in environmental remediation projects for certain
properties currently or formerly owned or operated by the Company, certain
properties divested by the Company for which responsibility was retained, and
waste disposal sites where waste was shipped by the Predecessor or its
predecessors or for which the Company might have corporate successor liability.
Some of these projects are being addressed under federal and state statutes,
such as the Comprehensive Environmental Response, Compensation and Liability
Act and analogous state laws. The Companys costs in certain instances cannot
be reliably estimated until the remediation process is substantially underway
or liability at multi-party sites has been addressed. 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 in excess of
accrued reserves will not be
incurred in connection with clean-up activities at these properties, including
the Shreveport and Caddo Parish sites referred to above.

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The Company is a party to a number of lawsuits arising out of the ordinary
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.

The Company has been a plaintiff in actions against The MeadWestvaco
Corporation, successor by merger to The Mead Corporation, and R.A. Jones Co.
Inc. claiming infringement of the Companys patents for its packaging machines.
The patents in suit were found infringed but invalid by a jury in a trial
against R.A. Jones in August 2001. This finding of invalidity has been appealed
to the Court of Appeals for the Federal Circuit. The suit against MeadWestvaco
was dismissed by mutual agreement pending the outcome of the appeal of the
decision in the case against R.A. Jones.

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 Companys expectation regarding
downtime during 2002, (b) the improvements which the Companys long-term
initiatives, including, without limitation, its profit center reorganization
and global restructuring program, are designed to achieve, (c) the Companys
expectation that capital expenditures will range from $65 million to $80
million in 2002, and (d) the Companys expectation regarding packaging
machinery placements; (ii) the statements in Outlook concerning (a) the
Companys expectation that its 2002 EBITDA will exceed its 2001 EBITDA as well
as each of the factors which the Company believes support such expectation, (b)
the Companys expectations regarding sales volumes in its worldwide beverage
multiple packaging markets and continued growth in its North American consumer
products packaging markets, (c) the Companys expectation regarding
containerboard sales and margins, and (d) the Companys expectations regarding
increased energy costs; (iii) the statements in Financial Condition, Liquidity
and Capital Resources concerning (a) the Companys expectation that
depreciation and amortization for 2002 will be approximately $125 million to
$135 million, (b) the Companys expectation that 2002 interest expense will be
approximately $151 million including approximately $7 million of non-cash
amortization of deferred debt issuance costs (giving effect to the
2002 Term Loan Facility and the redemption of the 1996 Senior Notes), (c) the Companys expectation
that total capital spending for 2002 will range from $65 million to $80
million, (d) 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, and (e) 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 (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), the Companys Report on Form 10-K for the year ended December 31,
2001, 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.

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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.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued
SFAS No. 141 (SFAS No. 141), Business
Combinations, which was effective January 1, 2002. SFAS No. 141 requires the
purchase method of accounting for business combinations initiated after June
30, 2001 and eliminates the pooling-of-interests method. The Company adopted
SFAS No. 141 on January 1, 2002 and the adoption did not have a significant
impact on its financial position and results of operations.

In June 2001, the FASB issued SFAS No.
142 (SFAS No. 142), Goodwill and Other Intangible Assets, which was
effective January 1, 2002. SFAS No. 142 requires, among other things, the
discontinuance of goodwill amortization. In addition, the standard includes
provisions for the reclassification of certain existing recognized intangibles
as goodwill, reassessment of the useful lives of existing recognized
intangibles, reclassification of certain intangibles out of previously reported
goodwill and the identification of reporting units for purposes of assessing
potential future impairments of goodwill. SFAS No. 142 also requires the
Company to complete a transitional goodwill impairment test six months from the
date of adoption. The adoption of SFAS No. 142 resulted in the
discontinuation of amortization of goodwill recorded at December 31, 2001 of
approximately $8 million annually. Intangible assets with a determinable life
will continue to be amortized over that period. The Company adopted SFAS No.
142 on January 1, 2002 and is in the process of implementing
SFAS No. 142 and does not believe that any impairment charges will
result from the adoption. The following table shows Net (Loss) for the first quarter of 2002 and adjusted Net (Loss) for the first quarter of
2001 exclusive of goodwill amortization.

|                               |  |                    |        |           |  |   |         |  
|------------------------------ |  | ------------------ | ------ | --------- |  | - | ------- | -
|                               |  | Three Months Ended
|                               |  |                   
|                               |  | March 31,          |        | March 31,
|(In thousands of dollars)      |  | 2002               |        | 2001     
|                               |  |                    |        |          
|Net (Loss)                     |  | $                  | (7,715 | )         |  | $ | (30,164 | )
|Plus: Amortization of Goodwill |  |                    |       |           |  |   | 1,935   |  
|                               |  |                    |        |           |  |   |         |  
|Adjusted Net (Loss)            |  | $                  | (7,715 | )         |  | $ | (28,229 | )
|                               |  |                    |        |           |  |   |         |  

The following table displays the intangible assets that continue
to be subject to amortization and aggregate amortization expense
as well as intangible assets not subject to amortization as of
March 31, 2002 and December 31, 2001:

|                               |            |                      |        |              |  |              |        |        |  |   |        |         | 
|------------------------------ | ---------- | -------------------- | ------ | ------------ |  | ------------ | ------ | ------ |  | - | ------ | ------- | 
|                               |            |                     
|                               |            | As of March 31, 2002
|                               |            |                     
|                               |            | Gross Carrying       |        | Accumulated  |  | Net Carrying
|                               |            | Amount               |        | Amortization |  | Amount      
|                               |            |                      |        |              |  |             
|Amortized intangible assets:   |            |                      |        |              |  |              |        |        |  |   |        |        
|                              
|                              
|                              
|                              
|                               | Patents    |                      | $      | 24,063       |  |              | $      | 8,385  |  |   | $      | 15,678  | 
|                              
|                              
|                              
|                              
|                               | Licenses   |                      |        | 3,598        |  |              |        | 1,059  |  |   |        | 2,539   | 
|                              
|                              
|                              
|                              
|                               | Trademarks |                      |        | 39,635       |  |              |        | 11,865 |  |   |        | 27,770  | 
|                               |            |                      |        |              |  |              |        |        |  |   |        |        
|                               |            | $                    | 67,296 |              |  | $            | 21,309 |        |  | $ | 45,987 |        
|                               |            |                      |        |              |  |              |        |        |  |   |        |        
|Unamortized intangible assets: |            |                      |        |              |  |              |        |        |  |   |        |        
|                               | Goodwill   |                      | $      | 276,482      |  |              |        |       |  |   | $      | 276,482 | 
|                               |            |                      |        |              |  |              |        |        |  |   |        |        

|                               |            |                         |        |              |  |              |        |        |  |   |        |         | 
|------------------------------ | ---------- | ----------------------- | ------ | ------------ |  | ------------ | ------ | ------ |  | - | ------ | ------- | 
|                               |            |                        
|                               |            | As of
December 31, 2001
|                               |            |                        
|                               |            | Gross Carrying          |        | Accumulated  |  | Net Carrying
|                               |            | Amount                  |        | Amortization |  | Amount      
|                               |            |                         |        |              |  |             
|Amortized intangible assets:   |            |                         |        |              |  |              |        |        |  |   |        |        
|                              
|                              
|                              
|                              
|                               | Patents    |                         | $      | 23,926       |  |              | $      | 7,986  |  |   | $      | 15,940  | 
|                              
|                              
|                              
|                              
|                               | Licenses   |                         |        | 3,598        |  |              |        | 997    |  |   |        | 2,601   | 
|                              
|                              
|                              
|                              
|                               | Trademarks |                         |        | 39,624       |  |              |        | 11,370 |  |   |        | 28,254  | 
|                               |            |                         |        |              |  |              |        |        |  |   |        |        
|                               |            | $                       | 67,148 |              |  | $            | 20,353 |        |  | $ | 46,795 |        
|                               |            |                         |        |              |  |              |        |        |  |   |        |        
|Unamortized intangible assets: |            |                         |        |              |  |              |        |        |  |   |        |        
|                               | Goodwill   |                         | $      | 321,976      |  |              | $      | 45,494 |  |   | $      | 276,482 | 
|                               |            |                         |        |              |  |              |        |        |  |   |        |        

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Amortization expense for intangible assets subject
to amortization was approximately $0.9 million for the first three
months of 2002, and is expected to be approximately $4 million
annually for the next five fiscal years.

In August 2001, the FASB issued SFAS No.
144 (SFAS No. 144), Accounting for the Impairment or Disposal of Long-Lived
Assets, which was effective January 1, 2002. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets,
as well as eliminating the exception to consolidation for a subsidiary for
which control is likely to be temporary. The Company adopted SFAS No. 144 on
January 1, 2002 and the adoption did not have a significant impact on its
financial position and results of operations.




ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

For a discussion of certain market risks related to the Company, see Part II,
Item 7A, Quantitative and Qualitative Disclosure about Market Risk, in the
Companys Annual Report on Form 10-K for the fiscal period ended December 31,
2001. There have been no significant developments with respect to derivatives
or exposure to market risk during the first three months of 2002.




PART II  OTHER INFORMATION

ITEM 1.         Legal Proceedings.

Not applicable

ITEM 2.         Changes in Securities and Use of Proceeds.

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.

Not applicable

ITEM 6.         Exhibits and Reports on Form 8-K.



|(a) |  | Exhibits.                                                                                 
|--- |  | ------------------------------------------------------------------------------------------
|   
|    |  | 99         Reconciliation of Income from Operations to EBITDA. Filed as an exhibit
hereto.
|   
|(b) |  | Reports on Form 8-K.                                                                      



| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Filed on May 3, 2002 reporting intention for proposed initial public
offering of $350 million of common stock.

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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)           
|      |  |              |  |     |                         |     |  | (Registrant)             
|     
|     
|Date: |  | May 13, 2002 |  | By: |                         |     |  |                          
|      |  |              |  |     |                         | /s/ |  | Edward W. Stroetz Jr.    
|      |  |              |  |    
|      |  |              |  |     |                         |     |  | Edward W. Stroetz Jr.    
|      |  |              |  |     |                         |     |  | Secretary                
|     
|     
|Date: |  | May 13, 2002 |  | By: |                         |     |  |                          
|      |  |              |  |     |                         | /s/ |  | Daniel J. Blount         
|      |  |              |  |    
|      |  |              |  |     |                         |     |  | Daniel J. Blount         
|      |  |              |  |     |                         |     |  | Senior Vice President and
|      |  |              |  |     |                         |     |  | Chief Financial Officer  

30