Overview

INTRODUCTION

Smurfit-Stone Container Corporation (NASDAQ: SSCC) is the industry’s leading integrated manufacturer of paperboard and paper-based packaging. The company is the largest North American producer of containerboard and corrugated containers, and is a leading producer of kraft paper packaging, bleached paperboard, and point-of-purchase displays. SSCC is one of the world’s largest paper recyclers, a key raw material for its products.

As North America’s largest paperboard packaging company, Smurfit-Stone continues to identify developing retail trends, creating innovative packaging concepts and speeding them to market. In the process, Smurfit-Stone is changing customer perceptions of what packaging can do and what the company can deliver.

Smurfit-Stone’s combination of production capabilities and innovation form one of the broadest product ranges of any paper-based packaging producer and give the company the ability to meet the growing demand for value-added packaging.

HISTORY

SSCC was formed in November 1998, with the merger of Jefferson Smurfit Corporation (JSC) and Stone Container Corporation (Stone). JSC’s roots go back to 1974, when Dublin, Ireland-based Jefferson Smurfit Group (JSG) acquired partial interest in Time Industries, a Chicago-based paper and packaging company. JSG established a major presence in the United States with the 1981 acquisition of the Alton Box Board Company and the 1982 acquisition of Diamond International’s packaging operations. In 1983, JSG’s U.S. operations reorganized. The majority of these operations became subsidiaries of JSC. JSC went on to establish a leadership position in the U.S. paper and packaging industry with its 1986 acquisition of 50 percent of Container Corporation of America (CCA) from Mobil Corporation. Morgan Stanley Leveraged Equity Fund II (MSLEF II) purchased the other half of CCA. JSC restructured as a privately held company in 1989, jointly owned by JSG and MSLEF II. As part of the restructuring, JSC acquired the remainder of CCA. In 1994, JSC recapitalized as a publicly traded company.

Stone Container was founded in 1926 as J.H. Stone and Company. In 1945, it incorporated under the name Stone Container Corporation. In the 1950s, Stone expanded outside of Chicago, buying and building corrugated container plants in Pennsylvania, Ohio, Indiana, and Michigan. The company acquired facilities from Continental Group in 1983 and acquired additional facilities from Champion International in 1986.

The merger of JSC and Stone brought together two leaders of the paper-based packaging industry. In conjunction with the merger closing, JSG purchased 20 million shares of JSC’s stock from MSLEF II and certain other investors. In May 2000, SSCC acquired St. Laurent Paperboard, Inc. In September 2002, the company acquired MeadWestvaco’s Stevenson, Alabama, containerboard mill and related operations. That same month, JSG privatized and distributed its stake in SSCC. Today, neither JSG nor MSLEF II are stockholders of SSCC. In March 2003, SSCC exchanged its European assets for JSG’s 50 percent ownership of Smurfit-MBI, a Canadian packaging company, and $189 million cash. SSCC now owns 100 percent of Smurfit-MBI. As a result of this transaction, SSCC became focused almost exclusively on the North American market.

In order to simplify and consolidate the company’s debt financing activities, in November 2004 Smurfit-Stone’s two primary operating companies, Stone Container Corporation and JSC(U.S.), were merged into a single operating company, Smurfit-Stone Container Enterprises, Inc. (SSCE), a wholly owned subsidiary of SSCC.

In June 2006, Smurfit-Stone sold its consumer packaging division to Texas Pacific Group, and paid down debt with the proceeds. The sale consisted of 40 folding carton, label, flexible packaging, and multiwall and specialty bag facilities; as well as four boxboard mills. As a result of this transaction, Smurfit-Stone is now fully focused on the paperboard and corrugated container market.

BUSINESS SEGMENTS

In 2006, Smurfit-Stone had one reportable business segment. The containerboard and corrugated containers segment which accounted for 95 percent of net sales and included the company’s containerboard mills and corrugated container operations. The reclamation operations accounted for 5 percent of net sales and consisted of recycling operations, including collection centers and brokerage sales offices.

SSCC 2006 Revenue: $7.2 Billion