8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: January 29, 2002
(Date of Earliest Event Reported)
Commission file number: 1-3203
CHESAPEAKE CORPORATION
(Exact name of registrant as specified in its charter)
Virginia	54-0166880
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1021 East Cary Street
Richmond, Virginia	23219
(Address of principal executive offices)	Zip Code
Registrant's telephone number, including area code: 804-697-1000
Not Applicable
(Former name, former address, and former fiscal year, if changed since last report)
Page 1 of 4 Pages.
Exhibit Index Appears on Page 4

ITEM 5. OTHER EVENTS
On January 29, 2002, Chesapeake Corporation "Chesapeake" issued a press release announcing fourth quarter and fiscal 2001 earnings. The information contained in the press release, which is attached as Exhibit 99.1 to this report, is incorporated herein by reference. On January 29, 2002, Chesapeake held a conference call with investors to discuss the fourth quarter and fiscal 2001 earnings. The script of this conference call, which is attached as Exhibit 99.2 to this report, is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c)	Exhibits
	99.1	Press release, issued on January 29, 2002, announcing fourth quarter and fiscal 2001 earnings
	99.2	Conference call script, held on January 29, 2002, discussing fourth quarter and fiscal 2001 earnings
Page 2

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.

		CHESAPEAKE CORPORATION
		(Registrant)
Date:  January 29, 2002	BY:	/s/ Christine R. Vlahcevic
		Christine R. Vlahcevic
		Controller
		(Principal Accounting Officer)
Page 3

EXHIBIT INDEX
Exhibit No.	Description of Exhibit
99.1	Press release, issued on January 29, 2002, announcing fourth quarter and fiscal 2001 earnings
99.2	Conference call script, held on January 29, 2002, discussing fourth quarter and fiscal 2001 earnings
Page 4

EX-99.1

Exhibit 99.1

CHESAPEAKE REPORTS FOURTH QUARTER

AND FISCAL 2001 RESULTS

HIGHLIGHTS

• Fourth quarter earnings per share from continuing operations before restructuring charges of $0.65, up 132 percent from prior year's $0.28 per share

• Full year 2001 earnings per share from continuing operations before restructuring charges of $1.30, up 31 percent from prior year's $0.99 per share

• EBITDA before restructuring charges of $121 million for full year 2001

• Implemented senior management realignment to reflect global focus

• Completed the divestitures of discontinued operations

• Successfully executed sale of £ 115 million of Senior Subordinated Notes

Richmond, Va. - Chesapeake Corporation (NYSE:CSK) today announced fourth quarter and full year results for 2001.

FOURTH QUARTER RESULTS

Income from continuing operations for the fourth quarter of 2001, before a restructuring charge, was $9.9 million, or $0.65 per share, up 132 percent over fourth quarter 2000 net income from continuing operations, before a restructuring charge, of $4.3 million, or $0.28 per share. Results for the 2001 fourth quarter included a gain on the sale of the Thatcham paperboard packaging facility in the UK of approximately $0.18 per share, for which the Company incurred closing costs of approximately $0.08 per share in the first half of 2001. After restructuring charges, income from continuing operations for the fourth quarter ended December 30, 2001, was $5.6 million, or $0.37 per share, compared to net income from continuing operations for the fourth quarter of 2000 of $2.3 million, or $0.15 per share. The fourth quarter of 2001 included an after-tax restructuring charge of approximately $4.3 million related primarily to corporate downsizing and severance costs in the Paperboard Packaging segment. The fo urth quarter of 2000 included restructuring costs of approximately $2.0 million after taxes related to severance in the closure of the Thatcham paperboard packaging facility.

Cash basis earnings per share, defined as income from continuing operations before restructuring and goodwill amortization per share, was $0.88 for the quarter ended December 30, 2001, up 69 percent when compared to cash basis earnings per share of $0.52 for the quarter ended December 31, 2000.

FULL FISCAL YEAR RESULTS

Net income from continuing operations for the fiscal year ended December 30, 2001, before restructuring charges, was $19.8 million, or $1.30 per share, an increase of 25 percent over fiscal year 2000 net income from continuing operations, before a restructuring charge, of $15.9 million, or $0.99 per share. After restructuring charges, net income from continuing operations for fiscal year 2001 was $10.5 million, or $0.69 per share, compared to net income from continuing operations of $11.2 million, or $0.70 per share, for fiscal year 2000. Cash basis earnings per share was $2.25 for the fiscal year ended December 30, 2001, compared to $1.72 for the fiscal year ended December 31, 2000.

MANAGEMENT COMMENTS

Chesapeake's Chairman, President and Chief Executive Officer Thomas H. Johnson said, "We are quite pleased with our fourth quarter results, particularly in light of weakened global economic conditions. The results highlight the benefits of our chosen markets and sector focus. This quarter completes a year of transformation for Chesapeake, during which we have attained solid financial targets while effecting significant change through several strategic initiatives designed to create a more streamlined and focused pure-play specialty packaging company. We have now concluded the divestiture of our discontinued operations and have substantially completed the corporate headquarters restructuring program, enabling us to reduce overhead costs significantly in 2002. In addition, we have improved our financial flexibility through the sale of our senior subordinated notes in November."

Johnson continued, "Chesapeake is now positioned to enter a phase of strengthening our balance sheet and continuing our market growth as a global leader in specialty packaging. As we look ahead to 2002, we are cautiously optimistic in anticipating modest increases in the operating results of our core business segments, driven primarily by operational performance improvement and lower overhead costs, while enhancing the value of our products and services for our customers."

SEGMENT REVIEW

The comparability of reported segment results in fiscal 2001 and 2000 is impacted by the acquisitions made in 2000. Therefore, financial results for 2000 are also presented on a pro forma basis, which reflects all acquisitions and divestitures that occurred during 2000 as if they had occurred at the beginning of 2000.

Net sales of the Paperboard Packaging segment increased to $167.5 million for the fourth quarter of 2001 from net sales of $163.5 million for the fourth quarter of 2000. Net sales of $671.4 million for the full year ended December 30, 2001, increased from net sales of $547.1 million for full year ended December 31, 2000, primarily due to the acquisitions completed in 2000.

Earnings before restructuring/special charges, interest and taxes ("EBIT") for the Paperboard Packaging segment of $19.3 million for the fourth quarter of 2001 increased 34 percent compared with fourth quarter 2000 EBIT of $14.4 million, due primarily to the impact of the Thatcham facility sale and the favorable impact of higher volume in the tobacco markets, offset in part by lower margins in food and household markets and lower volume in luxury packaging markets.

Net sales of the Plastic Packaging segment for the fourth quarter of 2001 were $23.2 million, down 4 percent compared to net sales of $24.1 million for the fourth quarter of 2000. Net sales for full year 2001 of $98.5 million decreased $3.3 million from pro forma 2000 sales for the comparable period. These sales decreases are primarily due to reduced pricing in food and beverage markets as a result of increased competitive pressures.

EBIT for the Plastic Packaging segment of $0.4 million for the fourth quarter and $3.0 million for the full year ended December 30, 2001, decreased $1.5 million and $4.2 million, respectively, from EBIT for the comparable periods of 2000. The lower EBIT reflects competitive pricing pressure in the food and beverage market sector and volatile raw material costs.

The Company is continuing its effort to maximize the financial return from its remaining land holdings. EBIT for the Land Development segment for the fourth quarter of 2001 of $6.9 million increased $1.6 million compared with results for the fourth quarter of 2000. EBIT for full year 2001 of $15.0 million decreased $0.5 million from EBIT reported for the full year of 2000 due to the mix of acreage sold.

FINANCE

Chesapeake's debt net of cash at December 30, 2001 was $469.8 million, down $180.8 million compared to December 31, 2000, due to the application of the net cash proceeds from the sales of discontinued operations to pay down debt. The net debt-to-capital ratio at December 30, 2001 was 50 percent compared to 53 percent at December 31, 2000. During the fourth quarter of 2001, the Company completed the sale of £ 115 million of 10 3/8 percent Senior Subordinated Notes and amended its senior credit facility.

OUTLOOK FOR 2002

The outlook for 2002 reflects the discontinuation of amortization of the Company's goodwill as the Company will adopt FAS 142 under US generally accepted accounting principals. For 2002, the Company now expects revenue in the range of $780 million to $820 million, EBITDA in the range of $125 million to $135 million and earnings from continuing operations, before restructuring activities, in the range of $1.60 to $1.80 per share. Earnings per share anticipates improvement in operating results which is expected to be more than offset by higher interest and income tax costs. Additionally, restructuring activities intended to further integrate the recent paperboard packaging acquisitions are expected to result in charges in the range of $0.10 to 0.15 per share. Except as otherwise indicated, the outlook does not reflect the potential impact of any acquisitions, divestitures, or other structural changes in the Company's continuing operations that may be completed after the date of this release or flu ctuations in foreign exchange rates.

Chesapeake Corporation, headquartered in Richmond, Virginia, is a global leader in specialty packaging. Chesapeake is a leading European folding carton, leaflet and label supplier and a leader in plastics packaging for niche markets. Chesapeake has over 50 locations in North America, Europe, Africa and Asia. Chesapeake's website is www.cskcorp.com.

This news release, including the comments by Thomas H. Johnson, contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause Chesapeake's actual results to differ materially from those expressed in the forward-looking statements including, but not limited to: competitive products and pricing; production costs, particularly for raw materials such as folding carton and plastics materials; fluctuations in demand; possible recessionary trends in U.S. and global economies; government policies and regulations affecting the environment; interest rates; fluctuations in foreign exchange rates; the ability of the Company to remain in compliance with its debt covenants; and other risks that are detailed from time to time in reports filed by the Company with the Securities and Exchange Commission.

Chesapeake Corporation
Financial Information (Unaudited)
(In millions except per share data)
		Fourth Quarter						Fiscal Year
INCOME STATEMENT		2001			2000			2001			2000
Net sales from continuing operations	$	201.2		$	194.3		$	790.5		$	654.7
Costs and expenses:
Cost of products sold		157.9			149.9			629.3			508.3
Selling, general, and administrative expenses		26.8			31.0			110.0			99.0
Other income (expenses), net (a)		5.6			3.6			9.4			8.6
EBIT from continuing operations before restructuring/special charges		22.1			17.0			60.6			56.0
Restructuring and other items (b) (c) (d)		6.9			2.6			14.6			10.3
Interest expense, net (e)		(7.8	)		(9.6	)		(31.3	)		(28.1	)
Income from continuing operations before taxes		7.4			4.8			14.7			17.6
Income tax expense		1.8			2.5			4.2			6.4
Income from continuing operations		5.6			2.3			10.5			11.2
Loss from discontinued operations, net of taxes		-			(22.0	)		-			(33.4	)
Gain (loss) on sale of discontinued operations, net of taxes (e) (f) (g)		3.5			(43.6	)		112.4			(43.6	)
Extraordinary item, net of taxes (h)		-			-			-			(1.5	)
Net income (loss)		9.1			(63.3	)		122.9			(67.3	)
Diluted earnings per share:
Earnings from continuing operations	$	0.37		$	0.15		$	0.69		$	0.70
Loss from discontinued operations, net of taxes		-			(1.45	)		-			(2.09	)
Gain (loss) on sale of discontinued operations, net of taxes (e) (f) (g)		0.23			(2.89	)		7.40			(2.72	)
Extraordinary item, net of taxes (h)		-			-			-			(0.09	)
Net income (loss)	$	0.60		$	(4.19	)	$	8.09		$	(4.20	)
Weighted average shares and equivalents outstanding - diluted		15.3			15.1			15.2			16.0
Other items:
EBITDA from continuing operations before restructuring/special charges (b) (c) (d)	$	37.1		$	31.6		$	120.9		$	109.2
Depreciation from continuing operations		11.4			10.8			45.9			41.5
Goodwill amortization from continuing operations		3.6			3.8			14.4			11.7
Capital expenditures for continuing operations		9.1			17.2			38.1			51.1
Income from continuing operations before restructuring/special charges (b) (c) (d)		9.9			4.3			19.8			15.9
Income from continuing operations before restructuring/special charges        per share (b) (c) (d)	$	0.65		$	0.28		$	1.30		$	0.99
Income from continuing operations before goodwill amortization and        restructuring/special charges (i)		13.5			8.1			34.2			27.6
Income from continuing operations before goodwill amortization and        restructuring/special charges per share (i)	$	0.88		$	0.52		$	2.25		$	1.72
(a) The fourth quarter and full year results for fiscal 2001 included a gain on the sale of a facility of $2.8 million, net of taxes, or $0.18 per share
(b) The fourth quarter and full year results for fiscal 2001 included restructuring costs of approximately $4.3 million, net of taxes ($0.28 per share), and $9.3 million, net of taxes ($0.61 per share), respectively.
(c) The fourth quarter of fiscal 2000 included restructuring costs of approximately $2.0 million, net of taxes, or $0.13 per share.
(d) Full year 2000 results include: a special charge associated with the net acquisition costs for the Shorewood tender offer of $2.6 million, offset by a $2.6 million tax benefit; and a restructuring charge of $4.7 million after taxes, or $0.29 per share.
(e) The fourth quarter and full year results for fiscal 2001 include interest expense allocated to discontinued operations of $0.1 million and $6.6 million, respectively. The fourth quarter and full year results for fiscal 2000 include allocations of interest expense to discontinued operations of $3.4 million and $11.0 million, respectively.
(f) The fourth quarter 2001 results included an after-tax revision to the gain on sale of discontinued operations of $3.5 million, or $0.23 per share.
(g) Full year results for fiscal 2001 include an after-tax gain on the sale of the Company's 5 percent equity interest in a tissue joint venture with Georgia-Pacific (which is classified as a discontinued operation) of $140.6 million, or $9.25 per share, offset in part by an after-tax revision to the estimated loss on the planned sale of discontinued operations of $28.2 million, or $1.85 per share.
(h) The extraordinary item consisted of the recognition of deferred finance costs associated with the early extinguishment of debt.
(i) Income from continuing operations before amortization and restructuring/special charges excludes the after-tax effect of noncash goodwill amortization expense.

BALANCE SHEET	Dec. 30,	Dec. 31,
	2001	2000
Assets
Current assets:
Cash and short-term investments	$20.1	$31.2
Accounts receivable, net	124.7	126.4
Inventories	98.3	94.5
Other current assets	18.2	56.2
Total current assets	261.3	308.3
Property, plant, and equipment, net	338.3	372.2
Goodwill	529.4	554.8
Net assets of discontinued operations	-	225.8
Other assets	119.7	79.8
Total assets	$1,248.7	$1,540.9
Liabilities and Stockholders' Equity
Current portion of long-term debt	$1.6	$47.1
Taxes payable	12.1	13.0
Other current liabilities	207.4	211.7
Total current liabilities	221.1	271.8
Long-term debt	488.3	634.7
Other long-term liabilities	61.4	43.4
Postretirement benefits other than pensions	13.2	15.6
Deferred income taxes	34.3	226.2
Stockholders' equity	430.4	349.2
Total liabilities and stockholders' equity	$1,248.7	$1,540.9

	First		Second		Third		Fourth		Fiscal
	Quarter		Quarter		Quarter		Quarter		Year
BUSINESS SEGMENT HIGHLIGHTS:
AS REPORTED FROM CONTINUING OPERATIONS:
Net sales:
2001
Paperboard Packaging	$172.0		$155.2		$176.7		$167.5		$671.4
Plastic Packaging	25.9		26.8		22.6		23.2		98.5
Land Development	0.3		4.5		5.3		10.5		20.6
	$198.2		$186.5		$204.6		$201.2		$790.5
2000
Paperboard Packaging	$122.0		$128.2		$133.4		$163.5		$547.1
Plastic Packaging	9.9		27.3		25.1		24.1		86.4
Land Development	2.3		4.8		7.4		6.7		21.2
	$134.2		$160.3		$165.9		$194.3		$654.7
EBIT before nonrecurring items:
2001
Paperboard Packaging	$14.4		$12.5		$15.9		$19.3		$62.1
Plastic Packaging	1.6		1.7		(0.7	)	0.4		3.0
Land Development	0.0		3.3		4.8		6.9		15.1
Corporate/Other	(5.7	)	(5.6	)	(3.7	)	(4.5	)	(19.5	)
	$10.3		$11.9		$16.3		$22.1		$60.6
2000
Paperboard Packaging	$9.1		$11.7		$15.5		$14.4		$50.7
Plastic Packaging	1.0		2.5		1.8		1.9		7.2
Land Development	2.0		3.4		4.8		5.3		15.5
Corporate/Other	(5.0	)	(4.7	)	(3.1	)	(4.6	)	(17.4	)
	$7.1		$12.9		$19.0		$17.0		$56.0
PRO FORMA - FROM CONTINUING OPERATIONS
Net sales:
2000
Paperboard Packaging	$181.2		$162.0		$168.0		$167.1		$678.3
Plastic Packaging	25.3		27.3		25.1		24.1		101.8
Land Development	2.3		4.8		7.4		6.7		21.2
	$208.8		$194.1		$200.5		$197.9		$801.3
EBIT before nonrecurring items:
2000
Paperboard Packaging	$13.0		$14.9		$19.8		$14.8		$62.5
Plastic Packaging	1.3		2.5		1.8		1.9		7.5
Land Development	2.0		3.4		4.8		5.3		15.5
Corporate/Other	(5.0	)	(4.7	)	(3.1	)	(4.6	)	(17.4	)
	$11.3		$16.1		$23.3		$17.4		$68.1
* Pro forma amounts reflect all acquisitions and divestitures that occurred during 2000 as if they had occurred at the beginning of fiscal 2000.

EX-99.2

Exhibit 99.2

4Q CONFERENCE CALL SCRIPT

JANUARY 29, 2002

Joel Mostrom

Good morning and welcome to Chesapeake Corporation's fourth quarter conference call. I'm Joel Mostrom, vice president and treasurer, and joining me today are Tom Johnson, chairman and chief executive officer and Andy Kohut, our chief financial officer.

Tom will begin with comments regarding the overall results of the quarter and year. Andy will then provide a few more details for the quarter, and Tom will conclude with some comments on 2002. After that, we will be available for questions.

Before we get started, I want to advise all participants that this call is being recorded by Chesapeake Corporation and is copyrighted material. It cannot be recorded or rebroadcast without Chesapeake's express permission. Furthermore, the comments on this call may include "forward-looking statements" as defined in the Private Securities Litigation Reform Act. The accuracy of such forward-looking statements is subject to a number of risks, uncertainties and assumptions that may cause Chesapeake's actual results to differ materially from those expressed in the forward-looking statements. Certain of those risks, uncertainties and assumptions are set forth in the summary of this conference call, which will be posted on the Company's web site at the conclusion of this call.

Now I will turn the call over to Tom.

Tom Johnson

Good morning everyone. Earlier today we reported fourth quarter earnings from continuing operations before restructuring charges of $.65 per share, up 132% from $.28 per share for the same period last year. With respect to full year 2001 results, earnings from continuing operations before restructuring charges were $1.30 per share, up 31% from last year's results of $.99 per share.

Fourth quarter revenue of $201 million was up 3.5% from the same period last year and up 3.9% on a local currency basis. Full year revenue of $790 million was down 1.3% from pro forma sales last year, but up 3.3% on a local currency basis.

The fourth quarter and full year results were in line with our expectations and conclude a solid year of performance, despite an uncertain and weakening global economy.

2001 was a significant year for Chesapeake in many ways. In January of last year we announced the sale of the businesses that constituted our Merchandising and Specialty Packaging segment. The sales of the businesses in that segment were completed during the fourth quarter of 2001.

Also during the year we:

• completed the sale of our remaining 5% interest in the tissue joint venture with Georgia-Pacific
• completed a successful debt offering that will provide us greater financial flexibility
• and made significant strides in reducing corporate overhead

I mention these events of 2001, because it underscores how much was accomplished on a number of strategic fronts while still achieving our operational and financial targets, and never losing sight of providing our customers great value and great service.

By creating stronger synergies within our operations, completing the divestitures of our discontinued operations, "rightsizing" the corporate staff, and taking steps to provide greater financial flexibility. Chesapeake is now a leaner and more cost-efficient organization that can meet our customer's needs today and into the future.

I will come back later with some comments on 2002 after Andy reviews the 2001 financials in more detail; now here's Andy Kohut.

Andy Kohut

Thanks and good morning. Before I get to the details of our continuing operations, let me touch on a few details related to our discontinued operations.

As Tom said, we completed the final sale transactions for our discontinued operations during the fourth quarter as both the sale of our permanent display business and the sale of our remaining interest in the Color-Box joint venture were completed during the quarter. For these businesses we received approximately $50 million of which about 2/3rds was in cash. Additionally, early in the 1Q02, we received an earlier than anticipated payment of $21 million relating to a note receivable from the purchaser of our U.S. temporary display business.

Moving on to the financial results for continuing operations:

In the fourth quarter we recorded a restructuring charge of $4.3 million after-taxes or $0.28 per share. This provision primarily related to actions taken to further reduce corporate overhead costs and was in addition to reductions associated with the voluntary separation program. Combined, these actions result in the reduction of about 50 positions from the corporate Headquarters staff in Richmond and reflect our global focus. The severance benefits paid for the voluntary separation program were funded primarily by surplus assets in our U. S. salaried pension plan which still remains over funded. We project an annualized pretax savings from these actions of $5 to 6 million per year for continuing operations.

Please also note that the fourth quarter included a $2.8 million after-tax gain, or $0.18 per share, on the sale of the Thatcham paperboard packaging facility. Earlier in fiscal year 2001, the Company incurred costs totaling approximately $1.3 million after taxes, or $0.08 per share for relocating equipment from this facility.

With regard to our segment performance I'd like to start with our largest business segment -- Paperboard Packaging.

Fourth quarter sales of $168 million were up 2% from the reported figure in the fourth quarter of last year due to higher volumes in the tobacco sector and, to a lesser extent, the pharmaceutical sector. Premium branded sales, which include the more consumer sensitive fine spirits and confectionery sectors, reported fourth quarter sales that were essentially flat compared to last year, despite the effects of September 11. We have begun the combination of two operations in Scotland to lower our cost position while increasing our throughput capability in this sector. We continue to monitor order backlog activity in the more economically sensitive sectors for any signs of weakening.

The Paperboard Packaging segment's EBIT for the quarter was $19.3 million, up from $14.4 million in the fourth quarter of 2000. As I mentioned previously, included in the fourth quarter is the sale of our Thatcham facility which improved EBIT by approximately $4.0 million. The proceeds from this sale helped offset costs incurred earlier in the year associated with the combining of this factory with another in our system during 2001 to create a very cost effective factory for the food and household sector. The remaining improvement was due to volume increases in the Tobacco sector.

The Plastic Packaging segment's fourth quarter sales of $23.2 million were down about 4% from last year's fourth quarter sales but up 5% on a local currency basis. Volumes and prices were down in the food and beverage markets due to competition.

The Plastics segment reported EBIT of $400,000 in the fourth quarter due to sales volume declines as well as lower operating margins resulting from lower selling prices and volatile plastic resin costs. Despite this decline in performance, EBITDA margins were in the 14% range for the year.

Our land business continued strong sales activity in the fourth quarter of 2001 and reported EBIT of $6.9 million, an increase of $1.6 million over the EBIT reported in the fourth quarter of last year. Year to date EBIT in the land business of $15 million is slightly below the EBIT of $15.5 million reported in 2000.

Corporate Headquarters expenses in the fourth quarter were down slightly when compared year-over-year. The headquarters cost reduction plans did not materially affect our headquarters overhead costs until late in the 4^th quarter; however, more of the savings will be seen after the first quarter of 2002 and again, are expected to be $5-6 million lower on an annualized basis.

Net interest expense for the fourth quarter of 2001 was $7.8 million down $1.8 million from interest expense for the fourth quarter of 2000 of $9.6 million, due to the impact of the proceeds from the sales of discontinued operations and higher interest income. (Please note that the annual results for 2001 included $6.6 million of interest expense allocated to discontinued operations).

Finally, our full year tax rate before restructuring charges came to approximately 32.3% compared to 43% in 2000, due to greater use of foreign tax credits, and a better mix of income from lower tax jurisdictions. With the elimination of goodwill amortization the effective tax rate before restructuring charges for fiscal 2001 is approximately 22%. This rate will compare to an anticipated effective tax rate in 2002 of 24% to 27%. The tax rate for 2002 is expected to increase over 2001 due to anticipated changes in the utilization of foreign tax credits and to the mix of income from foreign tax jurisdictions.

During the fourth quarter we completed the issuance of 115 million pounds sterling of senior subordinated notes and the amendment of our $250 million senior credit facility. With this debt structure in place, we believe that we have the liquidity necessary to meet short and long term capital needs.

Net debt at the end of the fourth quarter stood at $470 million, up about $50 million over the balance at the end of the third quarter primarily relating to the final federal tax payment made in December associated with the gain on the sale of our discontinued businesses.

Capital spending for fiscal year 2001 of $38 million was below depreciation of $46 million as certain project spending was deferred into 2002 and will result in CAPEX exceeding depreciation levels by approximately $15 million in 2002 as numerous customer specific projects are being initiated. Remember that our long-term average spending is targeted at 1.1X depreciation in order to maintain and grow existing operations. Obviously, if business performance does not track as projected, spending will be reviewed.

Now, back to Tom for some closing remarks.

Tom Johnson

Thanks, Andy. Before we get to your questions I would like to wrap up today's remarks with a few comments on our outlook for 2002.

We remain cautiously optimistic as we move into 2002. Volumes in many of our target markets remain stable, however pricing in most sectors is very competitive. The depth and duration of the economic slowdown in the US and Europe are still not clear, however we do anticipate modest improvement in the operating results in our core businesses.

For 2002 we expect:

• Revenue in the range of $780 - $820 million.
• EBITDA in the range of $125 to $135 million, a 3% to 11% improvement due primarily to lower costs as a result of operating improvements.
• Earnings per share in the range of $1.60 to $1.80 per share reflecting the improvement in operations offset by higher interest costs and a higher tax rate in 2002.
• In addition we expect to spend the equivalent of $.10 to $.15 per share to further consolidate and optimize our factories with an expected payback of less than two years.
• Also, I would like to remind everyone that our earnings have a distinct seasonal pattern with the vast majority of our earnings to be realized in the second half of the year, with 2002 probably having an even more pronounced seasonal pattern than 2001.

In closing, we are pleased with the overall results of 2001 and the progress we have made on our strategic initiatives. These accomplishments position us well for 2002. We have established Chesapeake as one of the leading and perhaps best positioned premium packaging companies in Europe. We will continue to evaluate strategic initiatives that will strengthen our position as the premier packaging supplier for our targeted markets and remain committed to maintaining a strong balance sheet.

Now we would be happy to take your questions.

Joel Mostrom

I would like to thank you for participating in our call this morning. For your advanced planning, please note that our first quarter 2002 earning's conference call will be on April 23^rd, 2002 at 11:00 a.m. EST.