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CHESAPEAKE ADOPTS NEW ACCOUNTING RULES AND TAKES RESTRUCTURING CHARGES

 RICHMOND, Va., Jan. 12 /PRNewswire/ -- Chesapeake Corporation (NYSE: CSK) announced that it will adopt new, required accounting rules for postretirement health benefits (SFAS 106) and for income taxes (SFAS 109) in 1992. The accounting changes, which have no effect on cash flow, will result in a net onetime, after-tax charge of $9.7 million, or 46 cents per share.
 The onetime effect will consist of a transition obligation charge of $19.1 million pretax, or $11.9 million after tax, to accrue for the costs of future health benefits for retirees and current employees after retirement, and a credit of $2.2 million to net income from changing the method of accounting for income taxes. For 1992, net income before the cumulative effect of accounting changes will not be impacted by the adoption of these new accounting rules.
 Chesapeake will also take a pretax charge of $5.5 million in the fourth quarter of 1992 to cover costs of restructuring and costs associated with the sale of its wood treating business. The charges include the write-off of some older equipment associated with the start-up of a new recovery boiler at its West Point, Va., mill and the reorganization of the Finess consumer products business. On an after-tax basis, the charge amounts to $3.4 million, or 15 cents per share.
 "The restructuring is consistent with our long-term strategic plans and will strengthen the focus on our core businesses. Recent price declines in the commodity segments of our industry further strengthen our resolve to enhance our position in specialty markets," said J. Carter Fox, president and chief executive officer of Chesapeake Corporation.
 Chesapeake Corporation, a Fortune 500 company headquartered in Richmond, is an integrated paper and forest products company. Chesapeake's primary businesses include tissue and kraft paper products and packaging. Other businesses are treated wood, land development and consumer tissue products.
 -0- 1/12/93
 /CONTACT: Andrew J. Kohut, chief financial officer, Chesapeake Corporation, 804-697-1153/
 (CSK)


CO: Chesapeake Corporation ST: Virginia IN: PAP SU: ACC

DC -- DC009 -- 3951 01/12/93 10:59 EST
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Publication:PR Newswire
Date:Jan 12, 1993
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