<B>Smurfit-Stone Reports, Sees Tough Market Ahead</B>

Smurfit-Stone Container Corp. reported net income available to common shareholders of $67 million for the fourth quarter, compared to net income of $286 million in 1999. Sales for the period were $2.2 billion compared to $2.0 billion in the fourth quarter of 1999.

For the full year, the company reported net income available to common shareholders of $224 million, compared to net income of $157 million in 1999. The 1999 results included after-tax gains on the sale of non-core assets of $268 million. Sales for the full year were $8.8 billion compared to $7.4 billion in 1999. Smurfit-Stone's sales and earnings include the results of St. Laurent Paperboard Inc. since June 1, 2000.

Commenting on the quarterly results, Ray Curran, president and CEO, said the favorable year-over-year profit comparison resulted primarily from higher average prices for the company's paperboard and packaging products. In addition, the acquisition of St. Laurent added approximately $45 million of operating profits this quarter. These additions more than offset the impact of higher interest expense and energy costs, and substantial mill downtime. The company took 320,000 tons of downtime in its containerboard mill system during the quarter, including 259,000 tons to manage inventory. Total downtime for the quarter represented about 17 percent of the company's containerboard capacity.

Product prices were unchanged in the fourth quarter compared to third quarter levels, with the exception of recycled fiber, which declined. Despite the pricing stability, operating profits decreased from third quarter levels, primarily because of a drop in demand for corrugated containers and market pulp, which prompted further downtime. Energy costs continued to trend upward during the quarter, although the impact was offset by the lower recycled fiber costs.

"The packaging business faced many challenges in 2000. In a year of overall economic growth, a strong dollar resulted in a drop in US manufacturing activity and domestic packaging demand," Curran said. "We countered these negatives through inventory management and successful implementation of product price increases."

Looking ahead to the next two quarters, Smurfit-Stone anticipates several factors that will put downward pressure on current profit levels. These include sluggish packaging demand in a weakening overall economy, reduced containerboard pricing and high energy costs. "In this climate, Smurfit-Stone will focus on producing to orders only and generating cash flow. Substantial economic downtime is anticipated. We need a weaker dollar to generate the economic stimulus to revitalize containerboard demand," Curran said.