Smurfit-Stone Container Corporation is a leading integrated manufacturer of paperboard and packaging. In 2001, the company faced challenging market conditions as demand for corrugated containers declined nearly 6%, yet Smurfit-Stone maintained profitability through cost reductions and debt refinancing. The company realized synergies from acquisitions, reduced interest costs through debt refinancing, and continued to generate free cash flow while keeping capital expenditures below depreciation.

1. S M U R F I T- S T O N E C O N TA I N E R C O R P O R AT I O N 2001 ANNUAL REPORT
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2. one
Commitment
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Focus
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Company
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Strategy
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Smurfit-Stone
Smurfit-Stone at a Glance
Foldout
2001 Financial Highlights
1
Letter to Shareholders
2
Board of Directors and Officers
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Smurfit-Stone Form 10-K
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Stockholder Information
Inside back cover

3. Smurfit-Stone Container Corporation
Smurfit-Stone’s folding
cartons are used to package
everything from food
is the industry’s leading integrated
products to pharmaceuticals.
We also offer a full range
manufacturer of paperboard and
of services for creating the
perfect packaging solution.
packaging. Smurfit-Stone is a leading
producer of containerboard, including
white top linerboard and recycled
medium; corrugated containers;
multiwall bags; clay-coated recycled
boxboard; solid bleached sulfate;
Brand messages don’t
stop with packaging. They
folding cartons; paper tubes and cores;
are carried through on the
shipper trays, countertop,
and labels. In addition, Smurfit-Stone
end-aisle, and retail-ready
displays. Our design group
specializes in display
is the world’s largest paper recycler.
solutions.
TM
Lithoflute, bag packaging,
labels, laminations and
The company operates about 300
flexible packaging are just
some of the product lines
that comprise our consumer
facilities worldwide and employs
packaging division, which
can deliver an unmatched
approximately 38,500 people.
portfolio of primary
packaging solutions
to customers.
A sense of pride and
ownership by employees
helps Smurfit-Stone achieve
unparalleled levels of
quality and service.
We partner with
customers to provide all
the resources to help build
brand awareness and meet
market objectives. In
today’s retail environment,
packaging must have
aesthetic appeal. Smurfit-
Stone delivers high-impact
packaging that creates
added marketing value.

4. S M U R F I T- S TO N E
AT A G L A N C E
CONTAINERBOARD AND CORRUGATED CONTAINERS CONSUMER PACKAGING RECYCLED FIBER
2001 Revenues . . . . . . . . . . . . . . . . . . . . . $5,744 million 2001 Revenues . . . . . . . . . . . . . . . . . . . . . $1,767 million 2001 Revenues . . . . . . . . . . . . . . . . . . . . . $274 million
2001 North American Production (Units in M Tons) 2001 Shipments and Production (Units in M Tons) 2001 Volume (Units in M Tons)
Containerboard . . . . . . . . . . . . . . . . . . . . 6,640 Folding cartons sold . . . . . . . . . . . . . . . . . 523 Recovered fiber collected . . . . . . . . . . . . . 6,714
Solid bleached sulfate (SBS) Multiwall bags sold . . . . . . . . . . . . . . . . . 256
and bleached paperboard . . . . . . . . . . . 306 Tubes and cores sold . . . . . . . . . . . . . . . . 141 DESCRIPTION
Market pulp . . . . . . . . . . . . . . . . . . . . . . . 545 Clay-coated recycled boxboard
Smurfit-Stone’s recycling division provides a secure source of recovered fiber for the
Kraft paper . . . . . . . . . . . . . . . . . . . . . . . . 287 produced . . . . . . . . . . . . . . . . . . . . . . . . 569
company’s mills and has a broad product line that includes all grades of recovered
Uncoated recycled boxboard produced . . 118
Corrugated containers sold . . . . . . . . . . . 79.1 billion square feet
paper. Smurfit-Stone waste reduction services provides single-source waste manage-
ment and recycling solutions to businesses.
DESCRIPTION
DESCRIPTION
The consumer packaging division offers a wide portfolio of primary packaging
Containerboard and corrugated containers represent Smurfit-Stone’s largest PRODUCT LINES
products and solutions that includes folding cartons, multiwall and specialty bags,
business segment, with 69 percent of the company’s sales. This segment supplies
Old corrugated containers Coated book stock
flexible packaging, LithofluteTM labels, and industrial packaging products. The various
,
hundreds of national and international manufacturers, as well as thousands of
operations within this business segment share many of the same customers and serve Old newspapers Double-lined kraft corrugated cuttings
local and regional customers.
the same consumer product markets, with high-graphics printing as a core manufactur-
Mixed papers Sorted white ledger
ing competency. With cross-trained sales teams supported by creative and technical
PRODUCT LINES Magazines Hard white shavings
resources, the consumer packaging division delivers added value to its customers.
Sorted office paper Aluminum cans, glass, and plastic
Unbleached kraft linerboard Market pulp
PRODUCT LINES
White top linerboard Export-specific linerboard,
INDUSTRY POSITION
including SBS, white top, and
Coated white top PaperCanTM
Folding cartons
high-performance grades World’s largest paper recycler
Bleached paperboard Bag packaging Clay-coated recycled boxboard
Semi-chemical and recycled medium,
Solid bleached sulfate Flexible packaging Uncoated recycled boxboard
including high-performance grades FACILITIES
Kraft paper Labels Tubes and cores
23 reclamation plants
Laminations Partitions
CAPABILITIES 1 waste reduction services office
TM
Lithoflute
9 brokerage offices
Full range of high-quality Full line of specialty products and
CAPABILITIES
corrugated containers custom, die-cut boxes to display
packaged merchandise
Innovative packaging solutions and LithofluteTM: combines corrugated
Folding carton converting capabilities
high-quality graphics Graphic capabilities include include gluing, tray forming, windowing, strength with folding carton graphics
pre-print and post-print flexography, waxing, and laminating printability
Point-of-purchase display design
label applications
and manufacturing Labels: foil, printed paper and heat- Bag packaging: multiwall, consumer,
transfer labels, including high-speed specialty, and flexible intermediate
heat-transfer labels for plastic containers bulk containers INTERNATIONAL AND OTHER
INDUSTRY POSITION
Laminations: film, foil, and paper Plastic sacks and coextruded 2001 Revenues . . . . . . . . . . . . . . . . . . . . . $592 million
Largest containerboard producer
performance films
Flexible packaging: polyethylene bags, 2001 Production (Units in M Tons)
Largest white top linerboard producer
pouches, and sheeting and tubing Containerboard . . . . . . . . . . . . . . . . . . . . 411
Largest corrugated container supplier
Coated recycled boxboard . . . . . . . . . . . . 78
INDUSTRY POSITION Corrugated containers sold . . . . . . . . . . . 12.3 billion square feet
FACILITIES
A leading supplier of folding cartons
5 strategically located CustomerONETM
21 paper and paperboard mills DESCRIPTION
Largest manufacturer of multiwall bags
Packaging Centers
1.1 million acres of Canadian timberland
Largest producer of clay-coated recycled boxboard Our international operations, which produce containerboard, coated recycled boxboard,
144 corrugated container plants and corrugated containers, are located predominantly in Europe.
A leading producer of paper tubes and cores
Smurfit-Stone owns 50 percent of Smurfit-MBI, Canada’s second-largest corrugated
container producer. Jefferson Smurfit Group plc owns the other 50 percent. FACILITIES
18 tube and core facilities 3 lamination facilities
17 folding carton plants 3 partition plants
12 bag packaging plants 3 uncoated, recycled board mills
5 flexible packaging facilities 2 pre-press operations
4 label plants 2 contract packaging plants
1 PaperCanTM plant
4 clay-coated recycled boxboard mills
4 technical and graphics centers 1 bag packaging equipment facility

5. S M U R F I T- S TO N E
20 01 F I N A N C I A L
HIGHLIGHTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) 2001 2000 1999
Summary of Operations
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,377 $ 8,796 $ 7,423
Income from operations . . . . . . . . . . . . . . . . . . . . . . . 623 939 869
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . (455) (527) (563)
Income from continuing operations before
extraordinary item . . . . . . . . . . . . . . . . . . . . . . . . . . 83 219 163
Net income available to common stockholders . . . . . 66 224 157
Basic Earnings per Share
Income from continuing operations before
extraordinary item . . . . . . . . . . . . . . . . . . . . . . . . . . $ .30 $ .94 $ .75
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 .96 .72
Weighted average shares outstanding (in millions) . . 244 233 217
Diluted Earnings per Share
Income from continuing operations before
extraordinary item . . . . . . . . . . . . . . . . . . . . . . . . . . $ .29 $ .93 $ .74
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 .96 .71
Weighted average shares outstanding (in millions) . . 245 234 220
Other Financial Data
Net cash provided by operating activities . . . . . . . . . . $ 598 $ 807 $ 183
Capital investments and acquisitions . . . . . . . . . . . . . 232 994 156
Net working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 470 73
Property, plants, equipment and timberland, net . . . . 5,426 5,670 4,419
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,652 11,195 9,859
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,966 5,342 4,793
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . 2,485 2,528 1,847
Number of employees . . . . . . . . . . . . . . . . . . . . . . . . . 38,500 39,700 36,300
S M U R F I T- S T O N E 2001 PAG E N O .
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6. L E T T E R TO
SHAREHOLDERS
Dear Shareholder,
Our accomplishments in 2001 mark a turning point for our relatively young but highly
experienced company. In the nearly three-and-a-half years since Jefferson Smurfit
Corporation and Stone Container Corporation merged, we have staked a claim to
leadership in paper-based packaging. We developed a new operating model that
emphasizes profitability throughout the economic cycle and focuses on leadership
qualities such as disciplined operating and financial management, safety, customer
satisfaction, and shareholder value.
The validity of that strategy is evident in Smurfit-Stone’s An important source of earnings has been synergies
performance. We maintained profitability in 2001 in from integrating major acquisitions. We achieved approx-
the face of an almost 6 percent drop in demand for the imately $60 million in synergies after the acquisition
corrugated container industry — the worst performance of St. Laurent Paperboard Inc. on top of the $350 million
in 20 years and the first time in 25 years that demand targeted and realized in the combination of Jefferson
declined two years in a row. From the 1998 merger Smurfit Corporation and Stone Container.
through year-end 2001, our stock value increased In 2001, we benefited from declining interest rates
23.4 percent compared with a 10.8 percent rise in the and refinancings undertaken early in the year to simplify
Dow Jones Industrial Average and a slight decline for our balance sheet and reduce interest costs. The refi-
peer companies. nancings resulted in annualized interest savings of
In the face of substantial economic and market $25 million. Continued debt reduction also contributed to
challenges, we remain intent on fully integrating our the $72 million decrease in interest expense. We have no
operations and wringing additional costs from our significant maturities until 2003, but will continue to seek
structure. The continuing strength of the dollar and the ways to refinance our debt and build financial flexibility.
persistent manufacturing recession provide even more We continue to maintain capital expenditures at
reason for this focus. By managing our resources as an reduced levels while pursuing growth-related business
integrated system and capitalizing on the strengths that initiatives. Capital expenditures in 2001, excluding
we have assembled, we are positioning Smurfit-Stone acquisitions, totaled $189 million. The 2000 amount,
to improve growth when the economy and our markets excluding acquisitions, was $363 million, which reflected
turn upward. a higher-than-usual level of environmental compliance
spending in our mill system. We expect to keep capital
expenditures well below depreciation levels in 2002.
CA P I TA L I Z I N G O N S T R E N G T H S
As a result of this cost and capital discipline, we
By any measure, 2001 was a difficult year for our continued to generate significant free cash flow to
business. Even so, Smurfit-Stone’s commitment to reduce debt. At December 31, 2001, outstanding debt
achieving profitability throughout the economic cycle was just under $5 billion, a reduction of $376 million
delivered earnings of $66 million, or $0.27 per diluted from the prior year.
share, on sales of $8.4 billion. In 2000, income available
to common shareholders was $224 million, or $0.96
per diluted share, and sales were $8.8 billion.
PAG E N O . 2001 S M U R F I T- S T O N E
2 A N N UA L R E P O R T C O N TA I N E R
C O R P O R AT I O N

7. PATRICK J. MOORE
President and
Chief Executive Officer
MICHAEL W. J. SMURFIT
Chairman of the Board
Underlying the difficult conditions in our business Despite the economic downturn and shrinking
was a 3.9 percent decline in U.S. industrial production demand, prices have remained relatively stable compared
in 2001, also the worst in 20 years. These conditions to past downturns. Our corrugated container prices
caused us to shift our approach to managing downtime. declined 3 percent on average in 2001 compared to
We now select paper machines for indefinite closure 2000. Prices for folding cartons rose 3 percent, reflecting
based on market conditions and cost structure, rather an improved product mix.
than following the traditional practice of taking recurring
outages in response to market challenges. TRANSITIONS
In the past three-and-one-half years we have shut
In January 2002, Ray Curran retired as chief executive
down 1.8 million tons of inefficient production capacity,
officer and a member of the board of directors. Patrick J.
including closing six mills representing almost 19 percent
Moore, who as Smurfit-Stone’s chief financial officer
of our total 1998 capacity. We also closed more than a
took a leadership role in cost reduction programs and
dozen container facilities, focusing primarily on markets
efforts to strengthen the balance sheet, succeeded him.
where we had overlapping operations following the
Charles A. Hinrichs, who had been vice president and
merger. These actions have helped us produce to orders
treasurer, succeeded Pat as vice president and CFO. In
rather than build inventory and have contributed sig-
addition, James P. Davis, who had been an area manager
nificant cost savings.
in the corrugated container division, was promoted to
Our North American containerboard production in
vice president and general manager.
2001 was 6.6 million tons, or about 85 percent of present
William N. Wandmacher continues to run our
capacity. We consume about three-fourths of that pro-
containerboard mill and forest resources business and
duction in our own converting operations and sell the
in 2001 added the containerboard sales function to
rest on the open market. We are the largest supplier to
his responsibilities. Our recycling operations provide
independent corrugated container producers in North
necessary raw materials for our mills, and David C.
America and remain committed to that market. The
Stevens continues to lead our recycling business.
acquisition of St. Laurent Paperboard in 2000 enhanced
our ability to deliver higher-grade, higher-margin paper-
board and packaging.
S M U R F I T- S T O N E 2001 PAG E N O .
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8. In addition to Patrick J. Moore, (facing page)
the company’s Executive Committee CHARLES A. HINRICHS
members are (left to right): Vice President and
Chief Financial Officer
JOHN M. RICONOSCIUTO
Vice President of Operations, WILLIAM N. WANDMACHER
Consumer Packaging Division Vice President and
General Manager,
Containerboard Mill and
F. SCOTT MACFARLANE
Vice President and Forest Resources Division
General Manager,
Consumer Packaging Division JAMES P. DAVIS
Vice President and
General Manager,
Corrugated Container Division
We combined several product groups early in 2002 PRIORITIES FOR 2002
to form a new division that includes our folding carton,
Smurfit-Stone has made exceptional progress in the
multiwall bag, flexible packaging, label, lamination,
most demanding business environment in more than
tube and core, and partition operations. These businesses
two decades. 2002 promises further economic challenges.
produce high-graphics packaging as a core manufacturing
We will continue to pursue leadership strategies.
competency and share many of the same customers.
Along with making sure we have the capabilities
F. Scott Macfarlane heads up this consumer packaging
to meet our customers’ expectations, we are focused
division, with John M. Riconosciuto managing the
on leveraging the system we have built to maximize the
manufacturing processes in this portion of our business.
efficiency of our asset base. The scale of our container-
The reorganization streamlines our operations and gives
board operations allows us to manufacture the right
customers one point of contact across all packaging
products, on machines best suited to that process, in
product lines.
the best location. This gives us an advantage in applying
Corrugated containers, or secondary packaging,
our system’s flexibility and improving supply chain
satisfy a wide range of customer needs such as package
management. We will pursue additional opportunities
strength, cost, efficiency, and point-of-purchase appeal.
to leverage the system.
Since the 1998 merger, we have created and fine tuned
Economic conditions are likely to force continued
the industry’s largest containerboard and corrugated
mill downtime, as we remain committed to producing
container system. Pat Moore has assembled the team
to customer demand. We will continue to make these
that will direct the entire system — mills, board sales,
decisions with an eye on meeting customers’ needs and
and corrugated production and marketing. The aim is to
an ability to grow when the business climate improves.
increase market share around the needs of our customers.
Although we are cautious about macroeconomic
factors in the near term, we have set aggressive sales
targets and are encouraging rational growth initiatives
across our businesses even as we push for greater
efficiency and lower costs.
PAG E N O . 2001 S M U R F I T- S T O N E
4 A N N UA L R E P O R T C O N TA I N E R
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9. Safety remains our top operating priority. By following Smurfit-Stone’s considerable strengths and our
the precepts of our Smurfit-Stone Accident-Free Environ- commitment to making our organization even better
ment, or SAFE process, we achieved the industry’s top give us confidence that we can cope effectively with
ranking among major paperboard packaging companies significant challenges. We continue to deliver higher
in 2001 in terms of incidents reported under guidelines customer value. That, along with the commitment of
of the Occupational Safety and Health Administration. our employees and our disciplined approach to financial
We are proud of our No. 1 ranking, but we continue to and operational management, represents the foundation
strive to meet the goal of eliminating accidents. for increasing shareholder value. We are encouraged
The SAFE process of shared goals and responsibility by the accomplishments of 2001 and look forward to
offers a prototype for building a workplace in which continued progress in 2002.
continuous improvement is normal operating procedure,
supported by comprehensive employee training. The
process puts into practice the values of quality, safety,
customer satisfaction, value creation, ethical behavior,
productivity, and environmental responsibility that
express CustomerONE, our operating philosophy. Michael W.J. Smurfit
TM
Our major financial goals continue to be debt reduction, Chairman of the Board
maintaining financial flexibility, and enhancing share-
holder value.
The market environment will continue to be tough.
The United States and substantial portions of the
global economy have been in a recession, exacerbated
by global tensions and the events of September 11. Patrick J. Moore
We remain committed to the strategic direction we President and Chief Executive Officer
adopted in 1998 when we combined Jefferson Smurfit
Corporation and Stone Container.
S M U R F I T- S T O N E 2001 PAG E N O .
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10. Smurfit-Stone has a proven track record for bringing better
packaging value to customers. For example, our corrugated
container division manages packaging for Home Depot’s
imported private label brands across several categories, includ-
ing indoor/outdoor lighting, ceiling fans, bathroom fixtures, and
vinyl floor tile. We worked with Home Depot to develop the
right packaging solution for its private label floor tile. Sales for
Home Depot’s private label floor tile have increased more than
200 percent since the new packaging was implemented. At left:
Smurfit-Stone’s Duane Luckie (sitting), director of operations,
Bentonville, Arkansas, and Home Depot’s Ed Smith, global
support packaging and graphics manager.

11. {
one
Commitment
Not since the early 1980s has the packaging industry In that spirit, we are implementing a long-term vision
faced an economic environment as difficult as the that positions our business for accelerated profitable
downturn that started in the second half of 2000. growth and an increased presence among top-tier North
U.S. manufacturing, Smurfit-Stone’s key market for American manufacturers. We aim to emerge from these
corrugated containers, slid into negative growth difficult times a stronger company, well-positioned to
months before the recession’s official start and has capitalize on opportunities, setting the pace in an industry
yet to pick up. The sustained strength of the dollar where market expectations quickly change.
against other currencies continues to make domestic We are committed to being not only the premier paper
products less competitive in the global market. One and packaging company but also one of the best large
measure of how these trends affect our industry: box industrial companies in North America. We are convinced
shipments declined 5.8 percent in 2001, the biggest that our commitment to quality, customer satisfaction,
year-over-year decrease in 20 years and the only and operating excellence will fulfill the expectations of
two-year slide in annual shipments in 25 years. our customers, who demand exceptional value in products
Just maintaining a steady stream of business could and services. We believe that our commitment to provide
be deemed acceptable in these tough times. That’s employees with a stimulating working environment, safe
not good enough for Smurfit-Stone. We believe it is surroundings, and fair compensation in exchange for
our responsibility to help shape the future in ways their talents will help us recruit and retain the best in
that deliver value for customers and shareholders, and our industry. We trust that our commitment to be a good
make ourselves a supplier and employer of choice. corporate citizen and environmental steward will help
guide us in continuing to bring value to the communities
in which we operate. We further believe that our commit-
ment to maintaining financial discipline will deliver value
to investors, who press for continuing growth, sustained
profitability, and superior returns.
{
Our North Chicago corrugated container plant consistently is among our highest
volume facilities while utilizing minimal equipment capital expenditures. The reason?
Continuous innovation and process improvement by all employees. In the large photo
at left, Cesar Rosario helps ensure that the bundling process operates smoothly.
S M U R F I T- S T O N E 2001 PAG E N O .
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12. We combined several product groups
early in 2002 in a new division that
includes our folding carton, multiwall
bag, flexible packaging, label, lami-
nation, tube and core, and partition
operations. Many of these businesses
produce high-graphics packaging as a
core manufacturing competency and
share many of the same customers.

13. {
one
Focus
Throughout Smurfit-Stone, we are assessing strengths The ability to assess acquisition fit and achieve
and sharpening our understanding of the most effective related synergies represents a core competency for
ways to apply our capabilities. In a sector of the economy Smurfit-Stone. Acquisitions, both large and small, are
that saw the recession coming earlier than most, our evaluated on their ability to strengthen product lines,
strategy has been tested and proven solid as we main- extend operating flexibility, improve scale, and achieve
tained profitability in the worst demand year in 20 for cost savings.
the paper and packaging industry. That tells us that we Smurfit-Stone has built a solid track record of cash
are not just surviving but moving forward. Our progress and financial management capabilities. This expertise
rests on a number of strengths. has enabled us to take advantage of refinancing opportu-
Smurfit-Stone is the leading producer of corrugated nities, reduce overall interest expense, and accelerate debt
containers, containerboard, and multiwall bags; the reduction. We will continue to build financial flexibility
world’s largest paper recycler; and a leader in folding car- and maximize our competitive advantage in these areas.
tons. With our focus on growth, we intend to strengthen To succeed as a top-tier company, we must control
our leadership in packaging product lines where we set costs, particularly in these challenging economic times.
the market pace as well as those in which we are not No. 1. We are constantly assessing internal processes to keep
We measure our success against this initiative in part pace with technological advances and reduce admin-
through customer service and product quality, as well as istrative costs. We are streamlining processes and order
volume and margin. To that end we have implemented management to make it easier for customers to do
performance excellence standards across our operations. business with Smurfit-Stone. And we are leveraging
Our extensive capabilities in primary and secondary our purchasing scale to maximize supply chain efficiency.
packaging mean we can serve large national customers As we work to implement these strategies, we will
as well as broaden local and regional relationships. continue to focus on safety as our top operating priority.
We are dedicating resources to capture market niches
through product development and add-on acquisitions.
{
Providing total packaging solutions and adding value to our customers’ products set Smurfit-Stone
apart from our competitors. Our Stone Mountain, Georgia, folding carton facility is renowned for its
high level of customer service and satisfaction. In the large photo at left, Shawn Newman inspects
cartons as they come off the diecutter.
S M U R F I T- S T O N E 2001 PAG E N O .
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14. Smurfit-Stone’s board sales group is
dedicated to serving the independent
corrugated container market. Our board
sales technical services team brings
together a wide range of packaging
experts who work with containerboard
mill personnel and field sales managers
to aggressively seek out ways to support
customers by phone, e-mail, or on site.

15. {
one
Company
Our CustomerONE philosophy ties internal processes Looking at our business from the customers’ per-
TM
to market realities. CustomerONE focuses on delivering spective led us to combine our consumer packaging
TM
value to all four of our key constituencies: customers and specialty packaging divisions, a transition begun in
and business partners, employees, shareholders, and early 2002. This single operating unit better positions the
the communities in which we live and work. group to serve customers who increasingly want to do
CustomerONE recognizes that each task or trans- business with one provider capable of delivering a broad
TM
action represents an opportunity to deliver an excellent array of packaging products. Combining these operations
customer experience. Meeting customer service goals delivers a more effective sales process, reduces control-
requires a market-driven mindset of adding value for lable costs, and enhances manufacturing efficiencies by
customers, not just delivering product, and making having one management team responsible for leveraging
products customers want, not just trying to sell them the division’s core competencies in high-graphics printing.
what we make. Smurfit-Stone has the broadest range
of packaging substrates in the industry, including kraft AC Q U I S I T I O N S
and white top linerboard, solid bleached sulfate, bleached
Product innovations, add-on acquisitions to complement
paperboard, coated white top, coated and uncoated recy-
existing manufacturing capabilities, and sales and market-
cled boxboard, and multiwall bag papers. These product
ing synergies are other ways Smurfit-Stone builds on our
lines likewise allow us to offer the industry’s broadest
leadership role while focusing on providing packaging
range of packaging alternatives to our customers.
solutions to our customers.
During 2001, we enhanced our graphics capabilities
by purchasing a pre-print facility in Atlanta. Corrugated
containers — part of our largest business segment — also
expanded its bulk laminating capabilities.
{
Our Florence, South Carolina, containerboard mill has the highest operating efficiency of the
21 mill facilities in our system. Employees such as Linda Freeman (large photo at left) constantly
review their processes as they work toward the objective of overall machine efficiency to deliver
the highest quality product to our customers.
S M U R F I T- S T O N E 2001 PAG E N O .
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16. INNOVATIVE MANUFACTURING
KIRBY DALEY
Foreman IN BATHURST, NEW BRUNSWICK
Electrical and
The strong dollar, combined
Instrumentation Dept.
with an extended manufacturing
Bathurst Mill
recession, has created capacity
management challenges for
ANNE HECKBERT
Personnel Clerk Smurfit-Stone’s containerboard
Bathurst Mill
mills. Since the 1998 merger of
Jefferson Smurfit Corporation
and Stone Container Corporation,
and the subsequent 2000 acquisition
of St. Laurent Paperboard,
We purchased a rotogravure press for our Another way Smurfit-Stone reaches out to customers
DI-NA-CAL® heat transfer label operations to add is through our recently expanded and enhanced web site.
production capacity and improve turnaround time At www.smurfit-stone.com, visitors can click on direct
for our customers. DI-NA-CAL® also introduced label links to our extensive collection of packaging resources.
design technology that virtually eliminates product The site helps customers find solutions and information
counterfeiting. In 2001, we acquired a multiwall bag on packaging options that they may not have considered.
packaging operation in Eastman, Georgia. The plant
integrated quickly within the Smurfit-Stone system and M A N U F AC T U R I N G P R O C E S S E S
expanded our geographic reach. In the second half of
Just as CustomerONE is bringing a unified mindset
TM
2001, we extended our flexible packaging capabilities
to our sales and marketing efforts, it is fostering creative
with the addition of the Toronto plastic bag manufac-
thinking in our operating decisions.
turing facility of A.T. Plastics, which manufactures
The strategic shift in our containerboard mill system
plastic sacks and coextruded performance films.
from a traditional volume orientation to one which
We have renewed our focus on sales and marketing
focuses on overall machine efficiency and lower produc-
to promote Smurfit-Stone’s full complement of packaging
tion costs is helping meet the challenge of managing sub-
solutions capabilities, generate new sales leads, and
stantial downtime brought about by the weak economy.
cultivate cross-selling opportunities. One example of
Our downtime strategy has proven effective on a system-
cross-selling is the cooperative effort among the corru-
wide basis. This was especially true when energy costs
gated container division’s pre-print and display group
spiked up and made a particular paper machine too
operations and consumer packaging’s Lithoflute group TM
expensive to operate. That machine was quickly shut
that has created our Fluted High Graphics team. This
down and production shifted to a more cost-effective
team specializes in innovative packaging and promotion
machine in the system.
solutions that use advanced graphics and printing
We use sophisticated supply chain management tools
techniques.
to improve efficiency. Our supply chain is improving the
entire scope of mill product manufacturing, including
coordinated internal and external containerboard orders,
raw material procurement and delivery, and finished
product distribution.
PAG E N O . 2001 S M U R F I T- S T O N E
12 A N N UA L R E P O R T C O N TA I N E R
C O R P O R AT I O N

17. Smurfit-Stone has been committed
to producing containerboard
to orders, rather than building
inventory. Our Bathurst, New
Brunswick, mill has been among ALBAN ST. PIERRE
Technical Assistant
our most innovative in dealing
Utility Group
with the challenges of market Bathurst Mill BRYAN SCOTT
constraints and achieving overall Mechanical Foreman
machine efficiency. Bathurst Mill
We constantly evaluate our manufacturing processes. F I S CA L S T R U C T U R E
For example, the Bathurst and Matane mills revised
We are targeting reductions in selling, general and
the method of scheduling machine downtime for
administrative expenses as a percentage of sales through
maintenance from typical 12-hour blocks to variable
streamlining processes and creating greater efficiencies
periods based on how long it takes to complete the
without sacrificing effectiveness or inhibiting growth
task. The conventional approach often delayed standard
initiatives. We are investing in technology to improve
maintenance items because they couldn’t be completed
internal and external transaction processes. Besides
in the time allotted. Now we plan for 36 to 48 hours
delivering savings, the process concentrates on putting
of downtime to minimize the maintenance carryover.
resources to use in ways that affirm Smurfit-Stone’s
As a result, machines come back on line more efficiently,
market leadership position and generates profitable
manufacturing quality is more consistent, and more of
growth as the market improves.
the maintenance is completed by our employees rather
The budget process is another tool we are using
than contract labor.
to align the strengths of the expanded Smurfit-Stone
Being the world’s largest paper recycler gives
system. We are moving toward a business improvement
Smurfit-Stone the advantage of a guaranteed recycled
process directly related to value creation by more quickly
fiber supply for our mills. Similarly, a large proportion
recognizing target variances, potential pricing deteriora-
of the linerboard we manufacture is converted in our
tion, and opportunities to manage controllable costs.
own corrugated container plants. Our goal is to be
Smurfit-Stone brings together the legacies of a number
the supplier of choice for the sizable independent
of companies and cultures. Through the principles of
corrugated container market. We supply independents
CustomerONE we are creating a common culture in
TM
about 2 million tons of product each year. Our board
which everyone is treated like a customer, we are respon-
sales group is adding value for those customers by
sive to opportunities, and we embrace new and better
providing consulting and technical advice through a
ways of doing business.
newly formed technical group in West Point, Virginia.
S M U R F I T- S T O N E 2001 PAG E N O .
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C O R P O R AT I O N

18. Smurfit-Stone is a market leader in bag
packaging products, including multiwall,
consumer, specialty and flexible bags;
flexible intermediate bulk containers; and
bag packaging equipment. Smurfit-Stone
provides a coordinated approach to
analyze customer needs and provide
both the packaging and packaging
equipment systems that best suit the
product and production.

19. {
one
Strategy
Customers expect their suppliers to work as partners. Our strategic decision to depart from the industry’s
Packaging has to sell products in addition to protecting traditional production-centered orientation, which
them. At the same time, investors are becoming impatient magnifies cyclical peaks and valleys, has made Smurfit-
with the paper and packaging industry’s historical cyclical- Stone a more nimble player in the packaging market.
ity. Smurfit-Stone’s strategic goals take these realities into As logical as that strategic shift appears, it is a challenge
account and point the company toward top-tier status. to execute. Gearing production to customer demand
Our first steps were to combine Jefferson Smurfit Cor- holds far-reaching implications for operating decisions.
poration and Stone Container and to reinforce our capa-
bilities in high-end, higher-margin product lines with the FINANCIAL FLEXIBILITY
addition of St. Laurent. Those actions made us the largest
As a mature industry in a rapidly changing marketplace,
paper-based packaging producer and opened up more
consolidation is likely to continue. The situation may
opportunities to match production to market demand.
offer opportunities for Smurfit-Stone to acquire and
Scale is a key aspect of our packaging leadership.
integrate companies and business units. Financial flex-
We aim to increase market share in our corrugated
ibility is a necessary component of being able to respond
container business, even as we expand our range and
to these opportunities. Strategically, we will continue to
presence in higher-margin specialty packaging. The
manage our finances to maximize cash flow by expanding
mere size of our company makes Smurfit-Stone a
revenues, achieving operating and administrative cost
more attractive partner for the kinds of customers
savings, paying down debt, and refinancing debt to
who themselves are consolidators in their industries.
reduce interest expense.
These customers increasingly seek single-source providers
with a broad range of packaging products, the ability to
handle technology-based order management and the
resources to help develop packaging solutions.
{
Product innovations, acquisitions to complement existing manufacturing capabilities, and sales and
marketing synergies are ways we build on our leadership role while focusing on providing packaging
solutions to our customers. In 2001, Smurfit-Stone grew our bag packaging capabilities by acquiring
a plant in Eastman, Georgia. The plant integrated quickly into the Smurfit-Stone system. In the
large photo at left, Allan Hon oversees the finishing process during a production run in Eastman.
S M U R F I T- S T O N E 2001 PAG E N O .
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C O N TA I N E R A N N UA L R E P O R T
C O R P O R AT I O N

20. FOCUS ON SAFETY DAVE NEILL
Bakersfield Recycling
Safety is Smurfit-Stone’s top operating priority, and in
Plant Superintendent
2001 we became the safest company in our industry. Since
implementing the Smurfit-Stone Accident-Free Environment
(SAFE) process in 1995, we have experienced a 79 percent
drop in accidents. Our Bakersfield, California, recycling
facility has gone seven years without an OSHA recordable
accident, tops in the entire division. Bakersfield utilizes the
team approach to safety, which means total participation
from employees in the office to the loading dock.
MARIANNE SANDERS
Bakersfield Recycling
Accounts Payable Clerk
The second part of the strategy relates to operational
BA L A N C E D S T R AT E G Y
excellence, realigning production methods to provide
Executing our growth strategy requires our operating consistently higher-quality products to customers, and
divisions to improve returns quickly to offset the negative managing manufacturing processes more efficiently by
impact of a weak economy. At the same time, managers paying closer attention to areas such as waste reduction,
are positioning our operations for greater growth as the starch usage, and one-box setups. These steps recognize
economy improves. An example of how we tackle that customers’ preferences for fast service, consistent quality,
challenge is the balanced strategy, the three-part plan and shorter order-fill times, which translate to a high
being pursued in our corrugated container division. comfort level with Smurfit-Stone’s ability to deliver
The first component of the division’s balanced strategy as promised.
is achieving profitable revenue growth. For national The third prong focuses on developing and equipping
accounts, this involves identifying the major companies our people to be able to profitably grow our revenue.
that fit well with our strategies and resources. On a local We intend to further develop the leadership skills of
level, it involves understanding the market and targeting our existing employees while dramatically improving
the accounts that move us closer to realizing our sales our recruiting process. Most importantly, we are making
plans. We will look beyond the problems of the day and it clear to every employee what his or her specific role is
find ways to emerge from these difficult market conditions in the balanced strategy execution.
as a stronger, more competitive selling machine.
T H E PAC K AG I N G S O L U T I O N S C O M PA N Y
Our corporate and division initiatives can be expressed
in a single phrase that identifies Smurfit-Stone’s goals
and identity — the packaging solutions company. This
phrase incorporates market and industry trends that
drove the creation of the company, and it continues
to point to opportunities for profitable growth.
PAG E N O . 2001 S M U R F I T- S T O N E
16 A N N UA L R E P O R T C O N TA I N E R
C O R P O R AT I O N

21. B OA R D O F D I R E C TO R S
A N D C O R P O R AT E A N D
DIVISION OFFICERS
B OA R D M E M B E R S C O R P O R AT E O F F I C E R S
Michael W. J. Smurfit James J. O’Connor Michael W. J. Smurfit James E. Burdiss Craig A. Hunt Mark R. O’Bryan
Chairman and CEO Retired Chairman of the Board Vice President and Vice President Vice President
Jefferson Smurfit Group plc Unicom Corporation/ Chief Information Officer Secretary and Procurement
Patrick J. Moore
Commonwealth Edison General Counsel
Patrick J. Moore President and James P. Davis Thomas A. Pagano
Company
President and CEO Chief Executive Officer Vice President and Paul K. Kaufmann Vice President
Smurfit-Stone Container Jerry K. Pearlman General Manager Vice President and Controller Planning
Charles A. Hinrichs
Corporation Retired Corrugated Container
Vice President and Leslie T. Lederer Lorne E. Parnell
Zenith Electronics Division
Leigh J. Abramson Chief Financial Officer Vice President Vice President
Corporation
Managing Director James D. Duncan Strategic Investment Pacific Operations
Robert A. Balke
Morgan Stanley & Co. Thomas A. Reynolds, III Vice President Dispositions
Vice President John M. Riconosciuto
Partner Corporate Sales
Alan E. Goldberg Corporate Sales and F. Scott Macfarlane Vice President of Operations
Winston & Strawn
Co-Managing Partner Marketing William G. Eustice Vice President and Consumer Packaging
Goldberg, Lindsay & Co. LLC Anthony P.J. Smurfit Vice President General Manager Division
Curtis A. Barton
Chief Executive Officer Corrugated Container Consumer Packaging
Howard E. Kilroy Vice President David C. Stevens
Smurfit Europe Division Division Division
Retired Environmental Affairs Vice President and
Jefferson Smurfit Group plc
Jefferson Smurfit Group plc Daniel J. Garand Richard P. Marra General Manager
Mathew J. Blanchard
Dermot F. Smurfit Vice President Assistant Treasurer Recycling Division
Vice President and
Deputy Chairman Supply Chain Operations
General Manager Timothy J. P. McKenna William N. Wandmacher
Jefferson Smurfit Group plc Board Sales Division Edwin C. Goffard Vice President Vice President and
President Investor Relations and General Manager
Cynthia S. Bowers
Europa Carton Communications Containerboard Mill and
Vice President
Forest Resources Division
Compensation and Benefits Michael F. Harrington Ronald J. Megna
Vice President Assistant Secretary
Human Resources
C O R R U G AT E D C O N TA I N E R D I V I S I O N C O N S U M E R PAC K AG I N G D I V I S I O N C O N TA I N E R B OA R D M I L L D I V I S I O N
Daniel J. Burger John L. Knudsen Edward A. Byczynski Curtiss M. Komen Alain L.M. Boivin Roger M. Jansen
Vice President and Vice President and Vice President Vice President Vice President Vice President
Regional Manager Regional Manager and Area Manager CPD Sales Mill Operations, SBS Sales
Multiwall/Specialty Central Region
LeRoy R. Crocker Rodney A. Myers George Q. Langstaff Eve K. Rae
Vice President and Vice President and J. Gregor Doman Vice President and Larry L. Burton Vice President
Regional Manager Regional Manager Vice President of Sales General Manager Vice President Pulp Sales
Folding Cartons Industrial Group Sales & Marketing
John J. Curry, Jr. Robert D. Nelson W. G. Stuart
Vice President and Vice President and L. David Fielder James B. Laurence John E. Davis Vice President
Regional Manager Regional Manager Vice President Vice President of Sales Vice President Mill Operations,
PaperCanTM Multiwall/Specialty Forest Resources Southern Region
Stephen P. Folan James S. Nolan
Vice President Vice President Michael L. Hempstead Donald W. McCalla Alain Dubuc
Sales and Marketing Corporate Sales Vice President and Vice President Vice President
Regional Manager CPD Marketing Mill Operations,
Roland F. Hauser Donald A. Petri
Folding Cartons Northern Region
Vice President and Vice President and Gary D. McDaniel
and Labels
Regional Manager Regional Manager Vice President and
Nathan S. Holmes General Manager
James A. Henderson Jerry D. Suiter RECYCLING DIVISION
Vice President and Flexible Packaging Group
Vice President and Vice President and
General Manager Michael R. Oswald Tom E. Squires
Regional Manager Director of Manufacturing John J. Moran
Boxboard Mills and Vice President Vice President
Vice President and
Lane W. Hunter Donald A. Tinkoff Lamination Operations Southeast Region
General Manager
Vice President and Vice President and
Gary R. Huston Multiwall Bags Mark C. Brantley James W. Pope
Regional Manager Regional Manager
Vice President Vice President Vice President
David J. Pietrowicz
Stephen E. Jevyak Boxboard Sales North Central Region International/Western Sales
Vice President and
Vice President and
Steven L. Kelchen General Manager Steve A. Miller Edward V. Tucciarone
Regional Manager
Vice President and Folding Cartons and Labels Vice President Vice President
Regional Manager West Region Eastern Sales
Michael L. Weisheit
Folding Cartons Vice President and
and Labels Regional Manager RESEARCH AND DEVELOPMENT
Fred W. Klatt Folding Cartons and Labels DIVISION
Vice President and
Area Manager Joseph V. LeBlanc
Multiwall/Specialty Vice President
T R A N S P O R TAT I O N / S U P P LY C H A I N
Terence J. Brown William C. Wanner
Vice President Vice President
Transportation Supply/Demand Operations
S M U R F I T- S T O N E 2001 PAG E N O .
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C O N TA I N E R A N N UA L R E P O R T
C O R P O R AT I O N

22. S TO C K H O L D E R
I N F O R M AT I O N
STOCKHOLDERS’
A N N UA L M E E T I N G
May 9, 2002 at 1:00 pm
The Sheraton Chicago Hotel & Towers
City Front Center
301 E. North Water Street
Chicago, IL 60611
REGISTRAR AND
T R A N S F E R AG E N T
Mellon Investor Services LLC
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
www.mellon-investor.com
Telephone: 888-213-0965
COMMON STOCK
Smurfit-Stone Container Corporation
Common Stock is traded on The Nasdaq
Stock Market under the symbol: SSCC.
PREFERRED STOCK
Smurfit-Stone’s 7% Series A Cumulative
Exchangeable Redeemable Convertible
Preferred Stock is traded on the Nasdaq
under the symbol: SSCCP.
I N V E S T O R I N F O R M AT I O N
Investor Relations and Communications
Smurfit-Stone Container Corporation
8182 Maryland Avenue
St. Louis, MO 63105
Telephone: 314-746-1223
Fax: 314-746-1347
www.smurfit-stone.com
Timothy McKenna
Vice President,
Investor Relations and Communications
St. Louis: 314-746-1254
Chicago: 312-580-4637
C O R P O R AT E H E A D Q UA R T E R S
Smurfit-Stone Container Corporation
150 North Michigan Avenue
Chicago, IL 60601-7568
Telephone: 312-346-6600

23. 150 North Michigan Avenue
Chicago, IL 60601-7568
(312) 346-6600
www.smurfit-stone.com