Smurfit-Stone Container 2006 Annual Report

Driving change Smurfit-Stone Container Corporation 2006 ANNUAL REPORT Delivering results Smurfit-Stone is structured for growth in 2007. The company achieved significant operating earnings improvement in 2006. Despite inflation on key input costs, we delivered solid results that reflected improved product pricing, excellent supply chain management, and benefits from our strategic initiatives. Financial Highlights (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) 2006 2005 2004 summary of operating results Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,157 Containerboard and corrugated containers segment profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433 Loss from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70) Net loss available to common stockholders . . . . . . . . . . . . . . . . . (71) basic and diluted earnings per share ............. $ 6,812 191 (378) (339) $ (1.53) (1.33) 255 $ 221 285 8 (4) 4,289 9,114 4,571 1,882 33,500 ............. $ 6,716 321 (100) (57) $ (.44) (.23) 253 273 232 32 148 4,682 9,583 4,498 2,259 35,300 ............. ............. ............. ............. ............. ............. Loss from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Net loss available to common stockholders . . . . . . . . . . . . . . . . . Weighted average shares outstanding (in millions) . . . . . . . other financial data (.32) (.28) 255 ............. ............. ............. ............. ............. ............. Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . $ 265 Capital investments and acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . 274 Proceeds from property disposals and sale of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 980 Working capital, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (141) Property, plant, equipment and timberland, net . . . . . . . . . . 3,774 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,777 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,634 Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,807 Number of employees ........................................... ............. ............. ............. ............. $ ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. ............. 25,200 Company Profile Smurfit-Stone Container Corporation’s innovative packaging solutions help our customers grow their businesses and profits. As North America’s premier packaging company, Smurfit-Stone (NASDAQ: SSCC) is the industry’s leading integrated manufacturer of paperboard and paper-based packaging. Smurfit-Stone also is one of the world’s largest paper recyclers. The company has led the industry in safety performance every year since 2001 and conducts its business in compliance with the environmental, health and safety principles of the American Forest & Paper Association. Smurfit-Stone operated approximately 180 facilities and employed approximately 25,200 people at year-end 2006. 6-9 16 2-5 smurfit-stone at a glance letter to stockholders: delivering on strategies for results 10-15 delivering results: customer satisfaction board of directors, corporate officers and division officers 17 smurfit-stone container corporation form 10-k inside back cover stockholder information SMURFIT-STONE CONTAINER CORPORATION 1 Containerboard and Corrugated Containers containerboard Smurfit-Stone is the world’s largest containerboard producer and a supplier of market pulp. It produces a full line of commodity and specialty paperboards for conversion into corrugated containers and related products. The containerboard operations consumed approximately 2.6 million tons of reclaimed fiber in 2006, and Smurfit-Stone is one of the largest producers of 100 percent recycled containerboard products. 2006 production: Containerboard . . . . . . . . . . . . . . . . . 7,402,000 tons Bleached liner / 313,000 tons solid bleached sulfate . . . . . . . . Market pulp . . . . . . . . . . . . . . . . . . . . . 564,000 tons Kraft paper . . . . . . . . . . . . . . . . . . . . . . 199,000 tons facilities In 2006, Smurfit-Stone’s containerboard operations, consisting of 19 mills, produced a wide range of paper grades including: Kraft linerboard Corrugated medium White top linerboard Solid bleached sulfate Solid bleached linerboard Specialty bleached paperboard Bleached pulp Kraft paper Market pulp products and services Innovative packaging solutions High-quality graphics Full range of corrugated container products Graphic and structural design expertise Point-of-purchase (P-O-P) display consulting, design, and manufacturing Preprint and post-print flexography and label applications Full line of specialty products and custom die-cut boxes to display packaged merchandise Bulk packaging Packaging equipment Packaging systems Corrugated pallets Multiwall boxes Bag-in-box containers Product testing Radio frequency identification Branding support Contract packaging Lamination Research and development Supply chain management Forest resources Pulp and paper services Board sales technical support corrugated containers Smurfit-Stone is the industry’s leading supplier of corrugated containers, which are made from highquality linerboard and corrugating medium supplied by SSCC’s network of paper mills. SSCC is a trusted supplier to hundreds of national and international manufacturers, as well as thousands of local and regional customers. 80 billion square feet sold 5.3 million tons converted facilities Smurfit-Stone operated 136 corrugated container facilities at year-end 2006, as well as four packaging solutions centers and one training facility. These plants provide high-quality products, top-tier customer service, and unparalleled geographic reach with operations in 31 states, Canada, Mexico and Puerto Rico. Smurfit-Stone has equity ownership in three Asian corrugated container facilities, as well as two sheet plants and a lithographic printing plant. Recycling Operations recycling To serve our recycling-based mills, Smurfit-Stone has built one of the largest reclamation businesses in the industry and handled more than 6.6 million tons of recycled paper in 2006. Recycled volume processed: Recovered fiber . . . . . . . . . . . . . . . . . Non-fiber . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . Open-market shipments . . . . . . . . 6,614,000 tons 128,000 tons 6,742,000 tons 4,153,000 tons facilities At year-end 2006, Smurfit-Stone operated the following recycling facilities: 23 collection centers 12 sales offices (one in China) products and services Old corrugated containers Double-lined kraft Old newspapers Aluminum, glass and plastic Smurfit-Stone Waste Reduction Services (SWRS) is a single-source waste management and recycling service. 2 2006 ANNUAL REPORT smurfit-stone at a glance structure Smurfit-Stone implemented a new organizational structure in 2006, aligned with our cost and revenue objectives. Establishing a more effective organizational structure was a top priority when we launched our strategic initiatives, and it still is. The company has made great progress in this area. We have moved to a functional alignment in our sales and manufacturing operations, as well as corporate support roles, and we have strengthened our management team by bringing in new leaders and promoting our existing top performers. Delivering a leaner SMURFIT-STONE CONTAINER CORPORATION 3 smurfit-stone at a glance innovation Whether it’s corrugated packaging, mill products, recycling services, point-of-purchase displays, packaging equipment, or supply chain solutions, Smurfit-Stone delivers innovative and value-added products and services to our customers. Delivering Innovative Displays Smurfit-Stone’s display group is a full-service organization that understands the complexity and service needs of consumer products companies. Most importantly, we know how to help our customers sell more product. Our commitment to customers is to provide responsive, flexible service supported by our sales promotion centers and excellent working relationships with major retailers. We believe in partnering with our customers in a way that allows us to better understand their needs and, in turn, provide tailored display solutions. We can help shorten lead time, reduce costs and increase productivity through thoughtful analysis and insightful recommendations. Smurfit-Stone understands that consultation, graphic design, and structural design are all key components to the overall display creation process. 4 2006 ANNUAL REPORT Innovative Packaging META systems ™ The way a product looks on the shelf has a great deal to do with how quickly that product moves off the shelf. Smurfit-Stone’s META™ corrugated packaging system creates a case that translates into a true marketing advantage with four-, six- and eight-sided configurations and enhanced graphics for maximum shelf impact. META™ packaging delivers increased stacking strength with reduced material usage. Innovative Solutions SmartDisplay ™ Consumer goods companies are interested in electronic shelf labeling as a tool to measure point-of-purchase (P-O-P) performance, better manage inventory and potential shrinkage, and increase sales by ensuring that store shelves are always stocked with their products. To meet this need, Smurfit-Stone has developed SmartDisplay™ which has integrated , radio frequency identification (RFID) antennas and readers into the corrugated display. When stocked with RFID-tagged product, SmartDisplay™ enables retailers to obtain real-time data on P-O-P performance. With SmartDisplay™ retailers can digitally detect , when stock is running low and an order for more product can be automatically placed. SMURFIT-STONE CONTAINER CORPORATION 5 strategies for results dear fellow stockholders: We took bold steps to make important changes to our company during 2006 and are now in a stronger position to drive improvement and deliver results in 2007. While we were not satisfied with our financial performance, we believe the progress made in 2006 is not yet fully reflected in our results. Clearly, 2007 must be the year of execution at Smurfit-Stone. Just over a year ago, we redefined our strategy to strengthen Smurfit-Stone’s position as the industry’s leading paperboard and packaging provider. We launched our strategic initiatives with four goals that continue to serve as the blueprint for future growth: lowering the cost structure, driving profitable revenue growth, creating a high-performance team, and improving financial flexibility. We plan to invest approximately $400 million in incremental capital as part of our three-year strategic initiatives program. Today, Smurfit-Stone is much better positioned for growth and our three-year transformation plan is well under way. This transformation plan is designed to deliver cost savings and revenue growth, with the full benefit realized by the end of 2008. We are pleased to report that we are on schedule and have aggressive plans for improved performance in 2007. Delivering on lower our cost structure Smurfit-Stone achieved $243 million in initiative savings in 2006, exceeding our goal of $240 million; has closed 17 container plants and two mills since launching initiatives in August 2005; reduced headcount by 2,100 during 2006 and by more than 3,600 since we kicked off our initiatives; reduced containerboard inventory levels by 12 percent in 2006; increased our capital investments in our container plants; and increased containerboard production in 2006 by almost 3 percent with two fewer mills. 6 2006 ANNUAL REPORT letter to stockholders We expect to deliver incremental initiative savings of $180 million in 2007 to achieve our cost reduction goal of $525 million by 2008. Our Recycling division exceeded its 2006 strategic initiatives target and in 2007 will be focused on specific efforts to drive profit improvement and deliver additional cost savings. A significant portion of our overall 2006 cost reduction success was driven by improved mill productivity. While we expect continued productivity improvement in the mills, our Container division’s scaling plan is a critical 2007 initiative. It reflects best-inclass manufacturing expertise, from business rebalancing and improved throughput, to machine and regional plant consolidation. Simply put, our scaling plan calls for an aggressive capital investment program focused on our box plant system to upgrade the manufacturing base and increase economies of scale; and we will specialize our manufacturing capabilities at select plants to support customers that require unique products and services. We will work toward aggressive goals for improving asset utilization and production. drive profitable revenue growth We increased segment operating profit by $242 million, to $452 million, partly as a result of increases in average containerboard and corrugated container prices. We will deliver organic growth during the three-year plan by focusing on our strategic advantage of industry-leading scale in our marketplace, and by investing in our portfolio of value-added products and services. We plan to grow the reclamation business in the areas of export and plastics, as well as with strategic acquisitions and other capital investments. Smurfit-Stone is clearly on the right track to leverage the scale and service capabilities of the largest packaging producer in North America. With a dynamic, focused strategy and a strong leadership team in place, we believe that our best days are ahead of us. create a high-performance organizational structure Smurfit-Stone led the industry in safety performance for the sixth consecutive year and realigned the sales and marketing organization to better focus on profitable sales growth. We moved to a functional alignment in our sales and manufacturing operations, as well as corporate support roles, and strengthened our management team by bringing in new leaders and promoting our existing top performers. We established a highly skilled new leadership team with more than half of the senior leaders new to their assignments during the past nine months. SMURFIT-STONE CONTAINER CORPORATION 7 letter to stockholders Smurfit-Stone’s talent management program is a critical component of the company’s transformation strategy. With a substantial upgrade in talent, we are more confident in our ability to deliver results. Shifting to a disciplined performance-based compensation program will reward top leaders appropriately for consistently driving change and delivering results. improve financial flexibility We decreased debt by $937 million, principally with the proceeds from the sale of the Consumer Packaging division. We are executing a comprehensive reinvestment program to modernize container plants. A focused approach to investing in our core business ensures that we continue to take costs out of our business by improving efficiencies. 2006 results Smurfit-Stone’s sales of $7.2 billion were up from the previous year’s $6.8 billion. For the full year, Smurfit-Stone reported a net loss available to common stockholders of $71 million, or $0.28 per diluted share, compared to a net loss available to common stockholders of $339 million, or $1.33 per diluted share in 2005. In 2006, our loss from continuing operations was $70 million, or $0.32 per diluted share, compared to a loss from continuing operations of $378 million, or $1.53 per diluted share in 2005. Operating results for 2006 included restructuring charges of $0.10 per share compared to $0.82 per share in 2005. 2006 results reflect the sale of the company’s Consumer Packaging operation on June 30, 2006. We achieved significant operating earnings improvement in 2006. Despite inflation on all key input costs, we improved our year-over-year performance due to higher prices for our products, excellent supply chain management and cumulative benefits achieved during the first full year of our strategic initiatives program. looking ahead Our market is well balanced and inventories remain low while packaging demand is stable. We expect to deliver improved earnings in 2007 as we continue to achieve incremental benefits from our strategic initiatives. We expect these benefits to outstrip cost pressures. Smurfit-Stone is clearly on the right track to leverage the scale and service capabilities of the largest packaging producer in North America. With a dynamic, focused strategy and a strong leadership team in place, we believe that our best days are ahead of us. pat moore chairman and chief executive officer steve klinger president and chief operating officer 8 2006 ANNUAL REPORT steve klinger president and chief operating officer pat moore chairman and chief executive officer SMURFIT-STONE CONTAINER CORPORATION 9 Delivering improved productivity mill employees show commitment to continuous improvement Like everyone at Smurfit-Stone, the employees of our Containerboard Mill division were challenged in 2006 to respond to changes in the economy, the competitive climate, and our strategic initiatives. Mill employees rose to the challenge. Production at our containerboard mills was up nearly three percent over the prior year, despite two mill closures in 2005. 10 2006 ANNUAL REPORT Delivering results: customer satisfaction smurfit-stone’s long-term goal is clear We will be the safest and most profitable company in the industry. Achieving that goal will ensure that we consistently deliver innovative and cost effective packaging solutions and services to our customers. Safe work practices are engrained in Smurfit-Stone’s culture, and represent a core value of our CustomerONE® operating philosophy. In addition to being the premier provider of packaging solutions, we are proud to have been recognized every year since 2001 as the safest company in the industry. We achieved another year of outstanding safety results in 2006. Smurfit-Stone’s recordable case rate (RCR) of 1.15 was our best ever, and reflects our passion to provide a safe work environment for all employees, every day. That passion came to life when the Smurfit-MBI facility in Edmonton, AB, received the prestigious “Work Safe Alberta Best Performer Award” from Alberta Human Resources and Employment. This award recognized the outstanding improvements in safety management as the facility went from a disappointing 13 reportable incidents in 2001 to one in 2005. Edmonton employees followed their outstanding 2005 performance with 15 consecutive months without a recordable incident or near miss. Our Hodge, LA, mill recently celebrated one million accident-free manhours. The Pulp & Paper Safety Association reported that only six mills have achieved one million hours worked without a recordable incident as measured by the Occupational Safety and Health Administration (OSHA), and four of these mills are from Smurfit-Stone: Hodge; Stevenson, AL; Brewton, AL; and West Point, VA. SMURFIT-STONE CONTAINER CORPORATION 11 delivering results: customer satisfaction Another safety success story is our Nashville, TN, recycling facility, which has worked nine consecutive years with a 0.0 RCR as measured by OSHA (see more on page 14). implementing best practices Because a safe operation is a well-run operation, our emphasis on safety connects directly to our scaling and operational excellence initiatives, which are designed to help optimize our enterprise at every step. Our scaling plan involves investing capital in new machinery and technology so that we run significantly more volume with fewer plants. Scaling also ensures that our container facilities drive manufacturing specialization to the bottom line. We are implementing operational excellence to ensure that we are operating at the lowest possible cost and providing the highest possible value to our customers. Standardization and consistency are the drivers for achieving and maintaining excellence in the basics — safety, quality, waste and productivity. Our operational excellence approach details standardized policies, procedures and processes along with associated metrics, training and talent assessment plans. strategic investment Just as we are investing in people and processes, we are making strategic capital investments and shifting high-volume business to the larger, more efficient facilities (see page 13). These investments will yield substantial improvements in our manufacturing capabilities, enabling us to meet and exceed customer expectations at the lowest possible cost. One of our key operating principles is running production to demand rather than to capacity. As the first step in the implementation of our strategic initiatives, we eliminated more than a halfmillion tons of higher-cost mill capacity. Yet in spite of two mill closures in 2005, we achieved an even higher level of containerboard production in 2006 due to increased operating efficiency. Eliminating outmoded capacity and improving plant productivity alone is not a winning strategy. We are investing in our future and capitalizing on our large integrated system by driving economies of scale in the operations. Ultimately, we plan to reduce our corrugator base by more than 20 machines, to fewer than 90 corrugators. We also plan to eliminate more than 150 converting machines, including rotary die cutters and flexo folder gluers. We are encouraged by initial results. For example, our corrugated container operations delivered shipment levels in 2006 just below those of 2005 despite closing 15 box plants last year. We are investing in major capital initiatives primarily focused on new or updated state-of-the-art corrugated operations in key markets such as Atlanta, Dallas and Toronto. These investments will yield substantial improvement in our manufacturing capabilities and allow us to cost effectively meet customer demands. 12 2006 ANNUAL REPORT Delivering on capital investment focused capital investment will let us shift high-volume business to larger plants As part of our strategic initiatives program, Smurfit-Stone plans to invest approximately $400 million in incremental capital to modernize our manufacturing base and upgrade equipment, allowing us to build a lower cost infrastructure to support profitable growth. By investing in state-of-the-art equipment, implementing best practices, and driving operational efficiencies, we expect to increase throughput and take better advantage of our economies of scale. SMURFIT-STONE CONTAINER CORPORATION 13 Delivering best safety practices our winning safety process strives to eliminate all injuries and improve profitability Employees at Smurfit-Stone’s recycling facility in Nashville, TN, are focused on best safety practices. The plant’s employees have had nine consecutive years with a 0.0 recordable case rate (RCR), as measured by OSHA. It’s no accident that the plant has daily toolbox meetings that stress safety, and has long-time employees who are clearly safety leaders. To ensure that best safety practices permeate our operations, we are giving our plants detailed guidance including creating safety checklists, developing safety leadership teams, conducting daily toolbox meetings, and setting clear expectations on attendance, quality and safe job performance. 14 2006 ANNUAL REPORT delivering results: customer satisfaction sales and marketing Smurfit-Stone has established a unified, centralized, and focused sales and marketing organization to unlock the value of our manufacturing and service expertise, assist our customers in growing their businesses and profits, and better position Smurfit-Stone for revenue growth. The sales and marketing organization is a great resource for customers on key issues such as sustainability and innovation, and is focused on delivering superior levels of customer service, profitable business development, and seamless, value-added coordination with our manufacturing operations. internal efficiencies An important source of cost reduction has been greater coordination among our operating divisions. As an example, our Recycling division developed a cost-savings program for our Containerboard Mill division by building additional inventories during the fourth quarter of each year, to be used the following summer. By running our box operations as one common system, we have reduced the number of grade combinations required to produce packaging. This has allowed our mills to improve productivity by producing fewer paper grades. A more simplified, centrally managed supply chain keeps inventory levels low at the box plants. We are continuing to address efficiency improvement opportunities in all our operations, and in the areas of transportation and procurement. talent management The new talent management process lays out a disciplined approach to ensuring that we have the right people in the right jobs. Smurfit-Stone’s ability to attract top talent and combine it with the company’s existing top performers will accelerate our transformation and is critical to achieving our goal of becoming the safest and most profitable company in our industry. diversity Our ability to win in our industry and to consistently outperform our competitors depends entirely on the skills, experiences, expertise and commitment of every one of our employees. In order to gain a sustainable competitive business advantage, we must have the best and brightest employees — employees who believe that they really do make a difference when they come to work every day. Creating a diverse work environment provides a strong foundation for growth, will help ensure that our workforce population resembles our customer population, and allows us to more fully understand our customers’ needs. SMURFIT-STONE CONTAINER CORPORATION 15 Board of Directors patrick j. moore Chairman and Chief Executive Officer Smurfit-Stone Container Corporation Corporate Officers patrick j. moore Chairman and Chief Executive Officer Division Officers container daniel j. burger Vice President Strategic Planning joseph v. leblanc Vice President Research and Development containerboard mill alain l.m. boivin Vice President Mill Operations Northern Region steven j. klinger President and Chief Operating Officer paul w. mccann Vice President Procurement james r. boris Retired Chairman and CEO EVEREN Capital Corp. john j. caplice Vice President National Sales john e. davis Vice President Forest Resources roger p. becker Vice President Taxes ronald j. megna Assistant Secretary gary p. corcoran Vice President Sales, Marketing and Business Development Smurfit-MBI connie k. duckworth Founder and President Arzu, Inc. susan m. neumann Senior Vice President Communications george q. langstaff Vice President Regional Mill Operations jeffrey s. beyersdorfer Vice President and Treasurer alan e. goldberg Co-Managing Partner Goldberg Lindsay & Co., LLC mark r. o’bryan Senior Vice President Strategic Initiatives larry t. price Vice President Mill Operations mathew j. blanchard Vice President and General Manager Board Sales Division john p. crimmin Regional Vice President Sales william t. lynch, jr. President and CEO Liam Holdings, LLC michael r. oswald Senior Vice President and General Manager Recycling Division w. g. stuart Vice President Mill Operations Southern Region john n. eaton Vice President Packaging Solutions christopher j. brescia Vice President Government Affairs james j. o’connor Retired Chairman and CEO UNICOM Commonwealth Edison thomas a. pagano Senior Vice President Corporate Development colin fernie Vice President and General Manager Smurfit-MBI nina e. butler Vice President Environmental Affairs board sales larry l. burton Vice President Sales and Marketing jerry k. pearlman Retired Chairman and CEO Zenith Electronics e. lawrence quatmann Vice President Internal Audit james s. chou Vice President and Division Controller Containerboard Mill richard e. flamm Regional Vice President Manufacturing michael l. butler Vice President North American Containerboard Sales thomas a. reynolds, iii Partner Winston & Strawn LLP steven c. strickland Senior Vice President Sales Container Division robert a. miller Vice President International Sales and Marketing matthew t. denton Vice President Business Planning and Analysis roger m. jansen Vice President SBS Sales eugene c. sit Chairman, CEO and Chief Investment Officer Sit Investment Associates regina g. wyse Vice President and Division Controller Corrugated Container george a. moretti Vice President Sales ronald d. hackney Senior Vice President Human Resources brian p. mcgurk Vice President Integrated Sales and Sales Management william d. smithburg Retired Chairman, President and CEO The Quaker Oats Company w. dwight morris Regional Vice President Sales charles a. hinrichs Senior Vice President and Chief Financial Officer rodney a. myers Regional Vice President Manufacturing mark a. polivka Vice President Supply/Demand Operations craig a. hunt chairman emeritus sir michael w.j. smurfit, kbe Senior Vice President Secretary and General Counsel robert d. nelson Regional Vice President Sales eve k. rae Vice President Pulp Sales mack c. jackson Senior Vice President and General Manager Containerboard Mill Division james s. nolan Vice President Corporate Sales, Strategic Merchandising Solutions and Graphics andrew j. woodroffe Vice President Product Management and Technical Services paul k. kaufmann Senior Vice President Corporate Controller douglas m. keim Vice President Innovation Chief Marketing Officer thomas a. piggott Regional Vice President Sales recycling mark c. brantley Vice President Eastern Region frederick j. rossi Vice President Operational Excellence john l. knudsen Senior Vice President Manufacturing Container Division richard s. garmsen Vice President Western Region donald r. roy Regional Vice President Sales james b. wimbish Vice President Operational Excellence david f. koster Vice President Transportation and Distribution scott e. sherman Regional Vice President Manufacturing james w. pope Vice President International Sales tim j. sullivan Vice President Display and Graphics Sales edward v. tucciarone Vice President Domestic Sales bruce j. white Regional Vice President Manufacturing robert j. curran Vice President Business Development john t. yoder Regional Vice President Manufacturing 16 2006 ANNUAL REPORT Stockholder Information stockholders’ annual meeting May 9, 2007 at 10 a.m. Chicago Club 81 East Van Buren Street Chicago, IL 60605 common stock Smurfit-Stone Container Corporation Common Stock is traded on The NASDAQ National Market under the symbol: SSCC. investor information John Haudrich Senior Director, Investor Relations (314) 656-5375 Stephanie Meiners Director, Investor Relations (314) 656-5371 preferred stock registrar and transfer agent Mellon Investor Services LLC 480 Washington Boulevard Jersey City, N J 07310-1900 Telephone: (800) 676-0896 Foreign Stockholders: (201) 680-6610 TDD for Hearing Impaired: (800) 231-5469 TDD Foreign Stockholders: (201) 680-6578 www.melloninvestor.com/isd Smurfit-Stone’s 7% Series A Cumulative Exchangeable Redeemable Convertible Preferred Stock is traded on the NASDAQ Global Select Market under the symbol: SSCCP. corporate headquarters Smurfit-Stone Container Corporation 150 North Michigan Avenue Chicago, IL 60601 Telephone: (312) 346-6600 Smurfit-Stone Container Corporation Six CityPlace Drive Creve Coeur, MO 63141 Telephone: (314) 656-5300 www.smurfit-stone.com This report was printed on FSC certified Mohawk Paper Mills Options 100% PC Recycled stock and Mohawk Opaque stock, made with 100 percent and 30 percent post-consumer waste respectively. The papers were manufactured entirely with wind-generated electricity and are acid free. Smurfit-Stone Container Corporation 150 North Michigan Avenue Chicago, IL 60601 (312) 346-6600 Six CityPlace Drive Creve Coeur, MO 63141 (314) 656-5300 www.smurfit-stone.com