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Investors: Timothy McKenna (investors), 312-580-4637
Media: Tom Lange (media), 314-746-1236

Smurfit-Stone Reports 4th Quarter Results:
Loss of $.17 Per Share, Excluding One-Time Charges

Chicago, January 26, 1999 - Smurfit-Stone Container Corporation (Nasdaq: SSCC) reported a net loss of $214 million, or $1.33 per diluted share, in the fourth quarter of 1998, compared to net income of $4 million, or $.04 per diluted share, in the fourth quarter of 1997. The loss includes charges of $310 million ($187 million after tax) to account for the previously announced restructuring primarily related to mill closures, costs related to the merger of Jefferson Smurfit Corporation and Stone Container Corporation and a reserve relating to the settlement of litigation.

Excluding the charges, the company reported a fourth quarter loss of $27 million, or $.17 per share. Sales for the quarter were $1.3 billion compared to $843 million in the fourth quarter of 1997.

For the full year 1998, the company reported a loss, before extraordinary item and the cumulative effect of an accounting change, of $184 million, or $1.48 per diluted share, compared to net income of $1 million, or $.01 per diluted share, in 1997. Excluding the fourth quarter charges discussed above, the company reported income of $3 million or $.02 per diluted share for 1998, before extraordinary item and the cumulative effect of an accounting change. The net loss for 1998 was $200 million, or $1.61 per diluted share. Sales for the full year were $3.8 billion compared to $3.2 billion in 1997.

Smurfit-Stone Container Corporation was formed on November 18, 1998 as a result of the merger of Jefferson Smurfit Corporation and Stone Container Corporation. Smurfit-Stone’s 1998 results include the results of Jefferson Smurfit Corporation for the fourth quarter and full year, and the results of Stone Container from the date of the merger through the end of the year.

Commenting on the results, Roger W. Stone, president and chief executive officer, said, "We worked aggressively to reduce inventories, taking significant downtime throughout the mill system, in addition to closing four containerboard mills and a market pulp facility. The cost of this downtime and price discounting in market pulp and containerboard were the primary negative factors affecting operations.

"On the positive side, our core packaging businesses performed well during the quarter. In corrugated containers, our largest business, domestic demand remained healthy. In fact, as a result of that demand and declining inventories we have advised our customers of a price increase for linerboard and medium effective February 1."

The charges of $310 million include the write-down of the value of mill capacity shut down during the quarter and related closure costs, a reserve relating to the recently announced settlement of litigation involving Cladwood® siding produced by Smurfit Newsprint Corporation, as well as costs associated with reducing manufacturing employment and overhead.

Looking ahead, Stone said, "In just ten weeks since the creation of Smurfit-Stone, we have initiated several of the steps of our strategic plan. We have shut down four containerboard mills and significantly reduced our exposure to the open market. We have begun implementing administrative cost savings. We have also begun the process of selling non-core assets. In addition, we foresee an improved supply-demand balance and are optimistic that our markets are improving. We begin the new year confident that we can achieve the full potential of our strategic plan."

Smurfit-Stone is the industry’s leading manufacturer of paper and paperboard based packaging, including corrugated containers, folding cartons, and industrial bags. It is the largest producer of containerboard and kraft paper, and the largest collector, marketer, and exporter of recovered fiber. The company operates more than 300 facilities worldwide.


SUPPLEMENTARY FINANCIAL INFORMATION
(in Millions)

Balance sheet data
12/31/98
12/31/97
Total debt
$6,632
$2,040
Cash flow data (twelve month ended Dec. 31)
1998
1997
Depreciation, depletion & goodwill amortization
168
127
Capital investment
284
182

 

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This document contains certain forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934, as amended, about Smurfit-Stone Container Corporation. Although the company believes that, in making any such statements, its expectations are based on reasonable assumptions, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected. When used in this document, the words "anticipates," "believes," "expects," "intends," and similar expressions as they relate to Smurfit-Stone Container Corporation or its management are intended to identify such forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Important factors that could cause actual results to differ materially from those in forward-looking statements, certain of which are beyond the control of Smurfit-Stone Container Corporation, include: the impact of general economic conditions in the U.S. and Canada and in other countries in which Smurfit-Stone Container Corporation and its subsidiaries currently do business (including Asia, Europe and Latin and South America); industry conditions, including competition and product and raw material prices; fluctuations in exchange rates and currency values; capital expenditure requirements; legislative or regulatory requirements, particularly concerning environmental matters; interest rates; access to capital markets; the timing of and value received in connection with asset divestitures; and obtaining required approvals, if any, of debt holders. The actual results, performance or achievement by Smurfit-Stone Container Corporation could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations and financial condition of Smurfit-Stone Container Corporation.
ainer Corporation.


© 1998 Smurfit-Stone Container Corporation

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