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Smurfit-Stone Reports First Quarter Earnings
Chicago, Illinois, USA, 25 April 2006 — Smurfit-Stone Container Corporation (Nasdaq: SSCC) today reported a net loss available to common stockholders of USD 64 million, or USD 0.25 per diluted share, for the first quarter of 2006.

These results compare with a net loss available to common stockholders of USD 19 million, or USD 0.07 per diluted share, for the first quarter of 2005. First quarter 2006 results include gains totaling USD 0.06 per diluted share from the divestiture of the Port St. Joe joint venture interest and a non-cash foreign currency translation adjustment.

A restructuring charge of USD 0.02 per diluted share primarily related to the closure of three corrugated container facilities. Net sales for the period were comparable to the year-ago period, at USD 2.1 billion.

Commenting on the first quarter, Patrick J. Moore, chairman, president, and chief executive officer, said, "Current market conditions are improving, and we are optimistic about the outlook for our business. However, as we had expected, year-over-year results were negatively impacted by higher costs, especially energy and freight, and lower containerboard and corrugated prices, despite benefits achieved from our strategic initiatives."

Smurfit-Stone's containerboard and corrugated containers segment reported a first quarter 2006 operating profit of USD 9 million, a USD 14 million sequential improvement. However, results were below the prior year first quarter profit of USD 66 million due to lower prices and higher costs as discussed above. Containerboard production decreased sequentially as a result of two fewer production days and additional scheduled maintenance downtime.

Containerboard inventories declined and stood at seasonally low levels at the end of the first quarter. Average domestic linerboard prices increased 10% sequentially, while corrugated container prices improved 3.6% in the first quarter of 2006, as compared to the fourth quarter of 2005

First quarter 2006 consumer packaging profits of USD 16 million were up USD 1 million year-over-year, but down USD 4 million on a sequential basis.

Total reported debt at the end of the quarter was USD 4719 million, an increase of USD 148 million from year end levels, principally due to higher working capital levels.

The company benefited USD 35 million from its strategic initiatives in the first quarter compared to cost levels before the commencement of the initiatives.

Cumulative initiative benefits, including savings realized in 2005, total USD 80 million. Initiative benefits were driven by facility closures, including two containerboard mills and five corrugated plants. As a result of these activities and improved productivity, total headcount has been reduced by more than 2200 since June 2005.

Commenting on the outlook, Moore said, "Prices for our products have rebounded, and we are entering a seasonally stronger period for packaging demand. Furthermore, we will continue to generate benefits from our strategic initiatives. These factors will have a meaningful impact on our future financial results.

We are encouraged by these trends and anticipate second quarter results to improve significantly, but not to breakeven levels. We expect to return to profitability in the third quarter."

Visit the investors' page of the company Web site for further discussion.

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