<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
----------
Commission file numbers: 0-23876 and 1-03439
---------------------
JEFFERSON SMURFIT CORPORATION SAVINGS PLAN
JEFFERSON SMURFIT CORPORATION HOURLY SAVINGS PLAN
SMURFIT PACKAGING CORPORATION SAVINGS PLAN
STONE CONTAINER CORPORATION DEFERRED INCOME SAVINGS PLAN
(Full title of the plans)
SMURFIT-STONE CONTAINER CORPORATION
150 North Michigan Avenue
Chicago, Illinois 60601
(Name of issuer of the securities held pursuant to the plans
and address of its principal executive office)
<PAGE> 2
Financial Statements
and Supplemental Schedules
Jefferson Smurfit Corporation
Savings Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
<PAGE> 3
Jefferson Smurfit Corporation
Savings Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1998 and 1997
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors...................................................................... 1
Financial Statements
Statements of Net Assets Available for Plan Benefits, With Fund Information......................... 2
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information...................................................................................... 13
Notes to Financial Statements....................................................................... 24
Supplemental Schedules
Line 27a - Assets Held for Investment............................................................... 31
Line 27d - Schedule of Reportable Transactions...................................................... 32
</TABLE>
<PAGE> 4
Report of Independent Auditors
Administrative Committee
Jefferson Smurfit Corporation Retirement Plans
We have audited the accompanying statements of net assets available for plan
benefits of Jefferson Smurfit Corporation Savings Plan as of December 31, 1998
and 1997, and the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits at December
31, 1998 and 1997, and the changes in its net assets available for plan benefits
for the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment as of December 31, 1998 and schedule of reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are not
a required part of the financial statements. The fund information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to represent the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
June 18, 1999 /s/ Ernst & Young LLP
1
<PAGE> 5
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
T. ROWE PRICE PERSONAL
SSCC COMMON JS GROUP EQUITY INCOME STRATEGY MOBIL STOCK
STOCK FUND STOCK FUND FUND BALANCED FUND FUND SUBTOTAL
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $ 39,347,025 $ 15,525,763 $104,717,763 $ 27,680,920 $111,466,663 $298,738,134
Participant loans -- -- -- -- -- --
---------------------------------------------------------------------------------------
Net assets available for
plan benefits $ 39,347,025 $ 15,525,763 $104,717,763 $ 27,680,920 $111,466,663 $298,738,134
=======================================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 6
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE T. ROWE PRICE
PREVIOUS PAGE PRICE NEW INTERNATIONAL FIDELITY FIDELITY VALUE
SUBTOTAL HORIZONS FUND STOCK FUND CONTRA FUND FUND SUBTOTAL
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $298,738,134 $ 16,363,111 $ 5,646,344 $ 3,979,719 $ 1,172,106 $325,899,414
Participant loans -- -- -- -- -- --
---------------------------------------------------------------------------------------
Net assets available for
plan benefits $298,738,134 $ 16,363,111 $ 5,646,344 $ 3,979,719 $ 1,172,106 $325,899,414
=======================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 7
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
PUTNAM NEW T. ROWE PRICE EQUITY PERSONAL
PREVIOUS PAGE OPPORTUNITIES BLENDED STABLE INDEX TRUST STRATEGY
SUBTOTAL FUND VALUE FUND (S&P 500) INCOME FUND SUBTOTAL
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $325,899,414 $ 7,060,662 $ 58,870,098 $ 9,613,534 $ 1,835,787 $403,279,495
Participant loans -- -- -- -- -- --
---------------------------------------------------------------------------------------
Net assets available for
plan benefits $325,899,414 $ 7,060,662 $ 58,870,098 $ 9,613,534 $ 1,835,787 $403,279,495
=======================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 8
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
PERSONAL T. ROWE PRICE T. ROWE PRICE T. ROWE PRICE
PREVIOUS PAGE STRATEGY SUMMIT CASH SPECTRUM BLUE CHIP
SUBTOTAL GROWTH FUND RESERVES FUND INCOME FUND GROWTH FUND SUBTOTAL
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $403,279,495 $2,159,121 $3,207,055 $1,626,895 $14,499,090 $424,771,656
Participant loans - - - - - -
-----------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $403,279,495 $2,159,121 $3,207,055 $1,626,895 $14,499,090 $424,771,656
=====================================================================================================
</TABLE>
See accompanying notes.
5
<PAGE> 9
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS
PAGE PARTICIPANT
SUBTOTAL LOANS TOTAL
------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value $424,771,656 $ -- $424,771,656
Participant loans -- 5,907,231 5,907,231
------------------------------------------
Net assets available for plan
benefits $424,771,656 $ 5,907,231 $430,678,887
==========================================
</TABLE>
See accompanying notes.
6
<PAGE> 10
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE
T. ROWE PRICE PERSONAL
SSCC COMMON JS GROUP EQUITY INCOME ARCH BALANCED STRATEGY
STOCK FUND STOCK FUND FUND FUND BALANCED FUND SUBTOTAL
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $ 27,613,176 $ 26,666,426 $107,782,570 $ -- $ 24,956,545 $187,018,717
Participant loans -- -- -- -- -- --
----------------------------------------------------------------------------------------
27,613,176 26,666,426 107,782,570 -- 24,956,545 187,018,717
Receivables:
Accrued employer
contributions 28,764 -- -- -- -- 28,764
----------------------------------------------------------------------------------------
Net assets available for
plan benefits $ 27,641,940 $ 26,666,426 $107,782,570 $ -- $ 24,956,545 $187,047,481
========================================================================================
</TABLE>
See accompanying notes.
7
<PAGE> 11
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
AETNA VIP ARCH EMERGING
PREVIOUS PAGE INTEREST MOBIL STOCK CONTRACT GROWTH
SUBTOTAL INCOME FUND FUND FUND FUND SUBTOTAL
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $187,018,717 $ -- $104,319,212 $ -- $ -- $291,337,929
Participant loans -- -- -- -- -- --
------------ ------------ ------------ ------- ------------ ------------
187,018,717 -- 104,319,212 -- -- 291,337,929
Receivables:
Accrued employer
contributions 28,764 -- -- -- -- 28,764
------------ ------------ ------------ ------- ------------ ------------
Net assets available for
plan benefits $187,047,481 $ -- $104,319,212 $ -- $ -- $291,366,693
============ ============ ============ ======= ============ ============
</TABLE>
See accompanying notes.
8
<PAGE> 12
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE
PRICE NEW T. ROWE PRICE FIDELITY
PREVIOUS PAGE HORIZONS INTERNATIONAL FIDELITY VALUE
SUBTOTAL FUND STOCK FUND CONTRA FUND FUND SUBTOTAL
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $291,337,929 $ 16,388,957 $ 4,783,744 $ 1,321,344 $ 967,629 $314,799,603
Participant loans -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
291,337,929 16,388,957 4,783,744 1,321,344 967,629 314,799,603
Receivables:
Accrued employer
contributions 28,764 -- -- -- -- 28,764
------------ ------------ ------------ ------------ ------------ ------------
Net assets available for
plan benefits $291,366,693 $ 16,388,957 $ 4,783,744 $ 1,321,344 $ 967,629 $314,828,367
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes.
9
<PAGE> 13
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PUTNAM NEW BLENDED EQUITY PERSONAL
PREVIOUS PAGE OPPORTUNITIES STABLE VALUE INDEX TRUST STRATEGY INCOME
SUBTOTAL FUND FUND (S&P 500) FUND SUBTOTAL
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $314,799,603 $ 3,153,006 $ 57,834,386 $ 3,761,275 $ 1,117,981 $380,666,251
Participant loans -- -- -- -- -- --
---------------------------------------------------------------------------------------
314,799,603 3,153,006 57,834,386 3,761,275 1,117,981 380,666,251
Receivables:
Accrued employer
contributions 28,764 -- -- -- -- 28,764
---------------------------------------------------------------------------------------
Net assets available for
plan benefits $314,828,367 $ 3,153,006 $ 57,834,386 $ 3,761,275 $ 1,117,981 $380,695,015
=======================================================================================
</TABLE>
See accompanying notes.
10
<PAGE> 14
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE
PERSONAL T. ROWE PRICE T. ROWE PRICE T. ROWE PRICE
PREVIOUS PAGE STRATEGY SUMMIT CASH SPECTRUM BLUE CHIP
SUBTOTAL GROWTH FUND RESERVES FUND INCOME FUND GROWTH FUND SUBTOTAL
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $380,666,251 $ 1,302,955 $ 1,007,171 $ 1,566,866 $ 6,383,661 $390,926,904
Participant loans -- -- -- -- -- --
---------------------------------------------------------------------------------------
380,666,251 1,302,955 1,007,171 1,566,866 6,383,661 390,926,904
Receivables:
Accrued employer
contributions 28,764 -- -- -- -- 28,764
---------------------------------------------------------------------------------------
Net assets available for
plan benefits $380,695,015 $ 1,302,955 $ 1,007,171 $ 1,566,866 $ 6,383,661 $390,955,668
=======================================================================================
</TABLE>
See accompanying notes.
11
<PAGE> 15
Jefferson Smurfit Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS
PAGE PARTICIPANT
SUBTOTAL LOANS TOTAL
------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value $390,926,904 $ - $390,926,904
Participant loans - 6,015,381 6,015,381
------------------------------------------------
390,926,904 6,015,381 396,942,285
Receivables:
Accrued employer contributions
28,764 - 28,764
------------------------------------------------
Net assets available for plan
benefits $390,955,668 $ 6,015,381 $396,971,049
================================================
</TABLE>
See accompanying notes.
12
<PAGE> 16
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE T. ROWE PRICE
PRICE PERSONAL
SSCC COMMON JS GROUP EQUITY STRATEGY MOBIL STOCK
STOCK FUND STOCK FUND INCOME FUND BALANCED FUND FUND SUBTOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 673,140 $ -- $ 5,118,593 $ 1,583,462 $ -- $ 7,375,195
Employer 7,100,388 -- -- -- -- 7,100,388
Net investment income:
Interest on guaranteed group
annuity contracts -- -- -- -- -- --
Other investment income -- 816,200 8,046,135 1,574,330 3,067,300 13,503,965
---------------------------------------------------------------------------------------------
7,773,528 816,200 13,164,728 3,157,792 3,067,300 27,979,548
Net realized and unrealized
appreciation (depreciation) of
investments 4,186,248 (8,639,894) 1,335,865 1,844,977 19,516,870 18,244,066
Transfers by participants 257,936 (774,703) (10,371,388) (572,242) (3,856,639) (15,317,036)
Transfers to SSCC Common Stock from
JS Group Stock Fund 816,200 (816,200) -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 25,406 -- 35,444 3,633 -- 64,483
Forfeitures (169,728) (19,884) -- -- -- (189,612)
Withdrawals by participants (1,287,818) (1,706,165) (8,105,884) (1,914,879) (11,575,463) (24,590,209)
Loan repayments by participants 106,794 -- 912,520 218,775 -- 1,238,089
Administrative expenses (3,481) (17) (36,092) (13,681) (4,617) (57,888)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan 11,705,085 (11,140,663) (3,064,807) 2,724,375 7,147,451 7,371,441
benefits
Net assets available for plan
benefits, beginning of year 27,641,940 26,666,426 107,782,570 24,956,545 104,319,212 291,366,693
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 39,347,025 $ 15,525,763 $ 104,717,763 $ 27,680,920 $ 111,466,663 $298,738,134
=============================================================================================
</TABLE>
See accompanying notes.
13
<PAGE> 17
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE
PREVIOUS PRICE NEW T. ROWE PRICE
PAGE HORIZONS INTERNATIONAL FIDELITY FIDELITY VALUE
SUBTOTAL FUND STOCK FUND CONTRA FUND FUND SUBTOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 7,375,195 $ 2,037,735 $ 682,145 $ 237,230 $ 195,026 $ 10,527,331
Employer 7,100,388 -- -- -- -- 7,100,388
Net investment income:
Interest on guaranteed group
annuity contracts -- -- -- -- -- --
Other investment income 13,503,965 845,042 205,104 290,796 181,871 15,026,778
---------------------------------------------------------------------------------------------
27,979,548 2,882,777 887,249 528,026 376,897 32,654,497
Net realized and unrealized
appreciation (depreciation)
of investments 18,244,066 45,852 527,112 412,455 (221,905) 19,007,580
Transfers by participants (15,317,036) (1,880,948) (273,738) 1,942,377 41,852 (15,487,493)
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 64,483 -- 942 -- -- 65,425
Forfeitures (189,612) -- -- -- -- (189,612)
Withdrawals by participants (24,590,209) (1,344,247) (350,641) (245,225) (7,438) (26,537,760)
Loan repayments by participants 1,238,089 281,672 75,728 22,683 16,042 1,634,214
Administrative expenses (57,888) (10,952) (4,052) (1,941) (971) (75,804)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan 7,371,441 (25,846) 862,600 2,658,375 204,477 11,071,047
benefits
Net assets available for plan
benefits, beginning of year 291,366,693 16,388,957 4,783,744 1,321,344 967,629 314,828,367
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 298,738,134 $ 16,363,111 $ 5,646,344 $ 3,979,719 $ 1,172,106 $325,899,414
=============================================================================================
</TABLE>
See accompanying notes.
14
<PAGE> 18
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PUTNAM NEW BLENDED EQUITY PERSONAL
PAGE OPPORTUNITIES STABLE VALUE INDEX TRUST STRATEGY INCOME
SUBTOTAL FUND FUND (S&P 500) FUND SUBTOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 10,527,331 $ 764,947 $ 2,488,524 $ 925,553 $ 192,749 $ 14,899,104
Employer 7,100,388 -- -- -- -- 7,100,388
Net investment income:
Interest on guaranteed group
annuity contracts -- -- 3,432,225 _ -- 3,432,225
Other investment income 15,026,778 214,123 -- -- 76,008 15,316,909
---------------------------------------------------------------------------------------------
32,654,497 979,070 5,920,749 925,553 268,757 40,748,626
Net realized and unrealized
appreciation (depreciation) of
investments 19,007,580 826,871 -- 1,622,592 79,079 21,536,122
Transfers by participants (15,487,493) 2,434,920 1,766,335 3,496,941 803,186 (6,986,111)
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 65,425 4,317 -- 4,877 -- 74,619
Forfeitures (189,612) -- -- -- -- (189,612)
Withdrawals by participants (26,537,760) (412,291) (7,053,837) (270,802) (459,811) (34,734,501)
Loan repayments by participants 1,634,214 78,105 482,585 78,072 27,365 2,300,341
Administrative expenses (75,804) (3,336) (80,120) (4,974) (770) (165,004)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 11,071,047 3,907,656 1,035,712 5,852,259 717,806 22,584,480
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, beginning of year 314,828,367 3,153,006 57,834,386 3,761,275 1,117,981 380,695,015
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 325,899,414 $ 7,060,662 $ 58,870,098 $ 9,613,534 $ 1,835,787 $ 403,279,495
=============================================================================================
</TABLE>
See accompanying notes.
15
<PAGE> 19
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PERSONAL SUMMIT T. ROWE PRICE T. ROWE PRICE
PAGE STRATEGY GROWTH CASH RESERVES SPECTRUM BLUE CHIP
SUBTOTAL FUND FUND INCOME FUND GROWTH FUND SUBTOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 14,899,104 $ 353,146 $ 145,795 $ 234,074 $ 1,702,015 $ 17,334,134
Employer 7,100,388 -- -- -- -- 7,100,388
Net investment income:
Interest on guaranteed group
annuity contracts 3,432,225 -- -- -- -- 3,432,225
Other investment income 15,316,909 85,018 91,214 134,847 230,443 15,858,431
---------------------------------------------------------------------------------------------
40,748,626 438,164 237,009 368,921 1,932,458 43,725,178
Net realized and unrealized
appreciation (depreciation)
of investments 21,536,122 148,846 -- (20,988) 2,342,709 24,006,689
Transfers by participants (6,986,111) 278,914 2,388,607 81,874 4,236,716 --
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 74,619 -- 25 (1,491) 110 73,263
Forfeitures (189,612) -- (975) -- -- (190,587)
Withdrawals by participants (34,734,501) (72,275) (666,617) (395,829) (584,314) (36,453,536)
Loan repayments by participants 2,300,341 64,281 245,479 29,091 194,159 2,833,351
Administrative expenses (165,004) (1,764) (3,644) (1,549) (6,409) (178,370)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan 22,584,480 856,166 2,199,884 60,029 8,115,429 33,815,988
benefits
Net assets available for plan
benefits, beginning of year 380,695,015 1,302,955 1,007,171 1,566,866 6,383,661 390,955,668
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 403,279,495 $ 2,159,121 $ 3,207,055 $ 1,626,895 $ 14,499,090 $ 424,771,656
=============================================================================================
</TABLE>
See accompanying notes.
16
<PAGE> 20
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS
PAGE PARTICIPANT
SUBTOTAL LOANS TOTAL
-----------------------------------------------
<S> <C> <C> <C>
Contributions:
Employees $ 17,334,134 $ -- $ 17,334,134
Employer 7,100,388 -- 7,100,388
Net investment income:
Interest on guaranteed group
annuity contracts 3,432,225 -- 3,432,225
Other investment income 15,858,431 463,117 16,321,548
-----------------------------------------------
43,725,178 463,117 44,188,295
Net realized and unrealized
appreciation (depreciation) of
investments 24,006,689 -- 24,006,689
Transfers by participants -- -- --
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 73,263 -- 73,263
Forfeitures (190,587) -- (190,587)
Withdrawals by participants (36,453,536) 2,262,084 (34,191,452)
Loan repayments by participants 2,833,351 (2,833,351) --
Administrative expenses (178,370) -- (178,370)
-----------------------------------------------
Net increase (decrease) in net
assets available for plan 33,815,988 (108,150) 33,707,838
benefits
Net assets available for plan
benefits, beginning of year 390,955,668 6,015,381 396,971,049
-----------------------------------------------
Net assets available for plan
benefits, end of year $ 424,771,656 $ 5,907,231 $ 430,678,887
===============================================
</TABLE>
See accompanying notes.
17
<PAGE> 21
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE T. ROWE PRICE
PRICE ARCH PERSONAL
SSCC COMMON JS GROUP EQUITY BALANCED STRATEGY
STOCK FUND STOCK FUND INCOME FUND FUND BALANCED FUND SUBTOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 664,649 $ -- $ 5,566,233 $ -- $ 1,663,345 $ 7,894,227
Employer 6,927,257 -- -- -- -- 6,927,257
Net investment income:
Interest on guaranteed group
annuity contracts -- -- -- -- -- --
Other investment income -- 441,833 10,766,932 -- 1,286,708 12,495,473
---------------------------------------------------------------------------------------------
7,591,906 441,833 16,333,165 -- 2,950,053 27,316,957
Net realized and unrealized
appreciation (depreciation) of
investments (3,593,270) (2,263,188) 14,001,563 -- 2,519,609 10,664,714
Transfers by participants (506,330) (203,718) (5,281,030) (179) (1,250,206) (7,241,463)
Transfers to SSCC Common Stock from
JS Group Stock Fund 441,833 (441,833) -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 27,734 8,063 30,637 -- 9,538 75,972
Forfeitures (187,695) (42,320) -- -- -- (230,015)
Withdrawals by participants (1,554,740) (1,518,207) (7,124,809) -- (1,983,630) (12,181,386)
Loan repayments by participants 77,090 -- 871,597 -- 216,779 1,165,466
Administrative expenses (3,630) (19) (32,153) -- (14,895) (50,697)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan 2,292,898 (4,019,389) 18,798,970 (179) 2,447,248 19,519,548
benefits
Net assets available for plan
benefits, beginning of year 25,349,042 30,685,815 88,983,600 179 22,509,297 167,527,933
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 27,641,940 $ 26,666,426 $ 107,782,570 $ -- $ 24,956,545 $ 187,047,481
============= ============= ============= ======== ============ =============
</TABLE>
See accompanying notes.
18
<PAGE> 22
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS ARCH EMERGING
PAGE INTEREST INCOME MOBIL STOCK AETNA VIP GROWTH
SUBTOTAL FUND FUND CONTRACT FUND FUND SUBTOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 7,894,227 $ -- $ -- $ -- $ -- $ 7,894,227
Employer 6,927,257 -- -- -- -- 6,927,257
Net investment income:
Interest on guaranteed group
annuity contracts -- -- -- -- -- --
Other investment income 12,495,473 -- 3,182,018 -- -- 15,677,491
---------------------------------------------------------------------------------------------
27,316,957 -- 3,182,018 -- -- 30,498,975
Net realized and unrealized
appreciation (depreciation)
of investments 10,664,714 -- 16,622,739 -- -- 27,287,453
Transfers by participants (7,241,463) (51,754,042) (2,239,524) (9,824,482) (16) (71,059,527)
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 75,972 -- -- -- -- 75,972
Forfeitures (230,015) -- -- -- -- (230,015)
Withdrawals by participants (12,181,386) -- (7,476,384) -- -- (19,657,770)
Loan repayments by participants 1,165,466 -- -- -- -- 1,165,466
Administrative expenses (50,697) -- (624) -- -- (51,321)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan 19,519,548 (51,754,042) 10,088,225 (9,824,482) (16) (31,970,767)
benefits
Net assets available for plan
benefits, beginning of year 167,527,933 51,754,042 94,230,987 9,824,482 16 323,337,460
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $187,047,481 $ -- $ 104,319,212 $ -- $ -- $ 291,366,693
=============================================================================================
</TABLE>
See accompanying notes.
19
<PAGE> 23
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE T. ROWE PRICE
PREVIOUS PRICE NEW INTERNATIONAL
PAGE HORIZONS STOCK FIDELITY FIDELITY VALUE
SUBTOTAL FUND FUND CONTRA FUND FUND SUBTOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 7,894,227 $ 2,477,996 $ 777,301 $ 141,452 $ 111,684 $ 11,402,660
Employer 6,927,257 -- -- -- -- 6,927,257
Net investment income:
Interest on guaranteed group
annuity contracts -- -- -- -- -- --
Other investment income 15,677,491 395,945 249,634 108,501 130,501 16,562,072
---------------------------------------------------------------------------------------------
30,498,975 2,873,941 1,026,935 249,953 242,185 34,891,989
Net realized and unrealized
appreciation (depreciation)
of investments 27,287,453 990,037 (170,003) 11,924 (78,332) 28,041,079
Transfers by participants (71,059,527) (1,830,422) 997,300 1,133,159 794,497 (69,964,993)
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 75,972 14,940 1,245 -- -- 92,157
Forfeitures (230,015) -- -- -- -- (230,015)
Withdrawals by participants (19,657,770) (915,551) (287,200) (88,486) (4,972) (20,953,979)
Loan repayments by participants 1,165,466 313,698 94,606 14,926 14,369 1,603,065
Administrative expenses (51,321) (4,466) (2,239) (132) (118) (58,276)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan (31,970,767) 1,442,177 1,660,644 1,321,344 967,629 (26,578,973)
benefits
Net assets available for plan
benefits, beginning of year 323,337,460 14,946,780 3,123,100 -- -- 341,407,340
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 291,366,693 $ 16,388,957 $ 4,783,744 $ 1,321,344 $ 967,629 $ 314,828,367
=============================================================================================
</TABLE>
See accompanying notes.
20
<PAGE> 24
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PUTNAM NEW BLENDED EQUITY PERSONAL
PAGE OPPORTUNITIES STABLE VALUE INDEX TRUST STRATEGY INCOME
SUBTOTAL FUND FUND (S&P 500) FUND SUBTOTAL
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 11,402,660 $ 565,311 $ 2,914,881 $ 344,687 $ 84,944 $ 15,312,483
Employer 6,927,257 -- -- -- -- 6,927,257
Net investment income:
Interest on guaranteed group
annuity contracts -- -- 3,553,843 -- -- 3,553,843
Other investment income 16,562,072 66,574 -- 7 52,480 16,681,133
---------------------------------------------------------------------------------------------
34,891,989 631,885 6,468,724 344,694 137,424 42,474,716
Net realized and unrealized
appreciation (depreciation) of
investments 28,041,079 354,591 -- 487,442 27,611 28,910,723
Transfers by participants (69,964,993) 2,103,222 56,306,243 2,996,662 953,641 (7,605,225)
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 92,157 16,374 52,954 -- -- 161,485
Forfeitures (230,015) -- -- -- -- (230,015)
Withdrawals by participants (20,953,979) (18,265) (5,458,824) (96,883) (12,727) (26,540,678)
Loan repayments by participants 1,603,065 65,298 524,396 30,013 12,618 2,235,390
Administrative expenses (58,276) (99) (59,107) (653) (586) (118,721)
---------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan (26,578,973) 3,153,006 57,834,386 3,761,275 1,117,981 39,287,675
benefits
Net assets available for plan
benefits, beginning of year 341,407,340 -- -- -- -- 341,407,340
---------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 314,828,367 $ 3,153,006 $ 57,834,386 $ 3,761,275 $ 1,117,981 $ 380,695,015
=============================================================================================
</TABLE>
See accompanying notes.
21
<PAGE> 25
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PERSONAL SUMMIT T. ROWE PRICE T. ROWE PRICE
PAGE STRATEGY GROWTH CASH RESERVES SPECTRUM BLUE CHIP
SUBTOTAL FUND FUND INCOME FUND GROWTH FUND SUBTOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 15,312,483 $ 373,603 $ 359,278 $ 158,345 $ 1,016,410 $ 17,220,119
Employer 6,927,257 -- -- -- -- 6,927,257
Net investment income:
Interest on guaranteed group
annuity contracts 3,553,843 -- -- -- -- 3,553,843
Other investment income 16,681,133 34,363 32,351 66,187 36,451 16,850,485
--------------------------------------------------------------------------------------------
42,474,716 407,966 391,629 224,532 1,052,861 44,551,704
Net realized and unrealized
appreciation (depreciation)
of investments 28,910,723 87,199 -- 30,017 827,139 29,855,078
Transfers by participants (7,605,225) 792,399 904,637 1,439,635 4,468,554 --
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- -- -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 161,485 -- -- -- 26,448 187,933
Forfeitures (230,015) -- 12,102 -- -- (217,913)
Withdrawals by participants (26,540,678) (20,115) (599,759) (141,913) (88,454) (27,390,919)
Loan repayments by participants 2,235,390 35,904 303,184 15,238 98,211 2,687,927
Administrative expenses (118,721) (398) (4,622) (643) (1,098) (125,482)
--------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan 39,287,675 1,302,955 1,007,171 1,566,866 6,383,661 49,548,328
benefits
Net assets available for plan
benefits, beginning of year 341,407,340 -- -- -- -- 341,407,340
--------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 380,695,015 $ 1,302,955 $ 1,007,171 $ 1,566,866 $ 6,383,661 $ 390,955,668
============================================================================================
</TABLE>
See accompanying notes.
22
<PAGE> 26
Jefferson Smurfit Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS
PAGE PARTICIPANT
SUBTOTAL LOANS TOTAL
-----------------------------------------------
<S> <C> <C> <C>
Contributions:
Employees $ 17,220,119 $ -- $ 17,220,119
Employer 6,927,257 -- 6,927,257
Net investment income:
Interest on guaranteed group
annuity contracts 3,553,843 -- 3,553,843
Other investment income 16,850,485 471,898 17,322,383
-----------------------------------------------
44,551,704 471,898 45,023,602
Net realized and unrealized
appreciation (depreciation) of
investments 29,855,078 -- 29,855,078
Transfers by participants -- -- --
Transfers to SSCC Common Stock from
JS Group Stock Fund -- -- --
Transfer of participant accounts
from Jefferson Smurfit
Corporation Hourly Savings Plan
and Smurfit Packaging
Corporation Savings Plan 187,933 -- 187,933
Forfeitures (217,913) -- (217,913)
Withdrawals by participants (27,390,919) 2,176,162 (25,214,757)
Loan repayments by participants 2,687,927 (2,687,927) --
Administrative expenses (125,482) -- (125,482)
-----------------------------------------------
Net increase (decrease) in net
assets available for plan 49,548,328 (39,867) 49,508,461
benefits
Net assets available for plan
benefits, beginning of year 341,407,340 6,055,248 347,462,588
-----------------------------------------------
Net assets available for plan
benefits, end of year $ 390,955,668 $ 6,015,381 $ 396,971,049
===============================================
</TABLE>
See accompanying notes.
23
<PAGE> 27
Jefferson Smurfit Corporation
Savings Plan
Notes to Financial Statements
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of Jefferson Smurfit Corporation Savings Plan (the
Plan) are reported on the accrual basis. The current values of investments have
been determined by T. Rowe Price as trustee for 1998 and 1997 and have been
based on closing prices if traded on national stock exchanges or bid prices for
bonds. The immediate participation contracts and participant loans are valued at
cost which approximates market. The differences between the current value and
the cost of investments are reflected in the statements of changes in net assets
available for plan benefits as part of net realized and unrealized appreciation
(depreciation) of investments. The cost of securities sold is based on the
weighted average method.
As of January 1, 1997, the Plan changed the plan trustee from Mercantile Bank of
St. Louis to T. Rowe Price. As of October 1, 1996, funds were transferred into
an omnibus account, and investment options were changed from the various Arch
funds to T. Rowe Price funds.
Administrative expenses are paid by the Plan. In 1997, the Plan changed its
allocation of administrative expenses to participant accounts from a prorated
method to allocating expenses to a participant's most stable fund.
The preparation of financial statements in conformity with generally accepted
accounting principles requires plan management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
On November 18, 1998, Jefferson Smurfit Corporation merged with Stone Container
Corporation (Stone) (the Merger) and changed its name from Jefferson Smurfit
Corporation to Smurfit-Stone Container Corporation (SSCC). A wholly owned
subsidiary of SSCC, Jefferson Smurfit (U.S.) (JSC (U.S.) is the plan sponsor.
Upon consummation of the Merger, JSC (U.S.) (the Company) and Stone approved the
merger of Stone Container Corporation Deferred Income Savings Plan into the Plan
as of July 1, 1999 (Plan Merger). There are not expected to be changes in the
operation or tax status of the Plan or benefits, eligibility, or vesting for
participants of the Plan.
The Plan is a contributory employee benefit plan of the Company and adopting
subsidiaries and affiliates. The Plan is composed of three components: (i) a
cash or deferred compensation component (401(k) component); (ii) an after-tax
voluntary contribution component (ATC component); and (iii) an employer matching
contribution component.
24
<PAGE> 28
Jefferson Smurfit Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The Plan is administered by an Administrative Committee (Committee) of SSCC
consisting of officers or other employees of the Company or its adopting
subsidiaries and affiliates. The Committee prescribes forms for use by
participants and may make administrative and procedural recommendations.
Employees eligible to participate in the Plan generally consist of all employees
of the Company and adopting subsidiaries and affiliates, except for (1) those
employees covered by a collective bargaining agreement which provides for
retirement benefits, (2) nonresident aliens, and (3) substantially all hourly
employees.
Under the 401(k) provisions, employees may elect to have a portion of their
salary deferred and contributed to the Plan to be invested in one or more of 15
investment options available under the Plan. The participants' ATC contributions
are invested in one or more of 15 investment options available under the Plan.
Contributions are made semimonthly.
Under the employer contribution provisions, each employer contributes, for each
of its employees who are participants, an amount equal to 65 percent of the
401(k) contributions authorized by such employee for 1998 and 1997,
respectively, to a maximum of $5,000 ($4,750 in 1997) in one calendar year, to
the extent the rate of such contributions, in effect from time to time, does not
exceed 3.9 percent of the participant's compensation (matching contributions).
The 401(k) contributions authorized by a participant in excess of 6 percent of
participant compensation for any pay period are disregarded for purposes of
matching contributions.
Participant contributions to the 401(k) plan which are made via payroll
withholdings are limited to the lesser of $10,000 and $9,500 or 15 percent of
participant compensation for calendar years 1998 and 1997. Participant
contributions to the ATC are limited to 15 percent of participant compensation,
not to exceed 20 percent of participant compensation in total when combined with
401(k) contributions. Total contributions credited to a participant's account
(combined 401(k), ATC, and matching contributions components) are limited to the
lesser of $30,000 or 25 percent of compensation. These limitations are
determined on a calendar year basis.
Terminating participants of the Plan are paid the current value of their 401(k)
account, their ATC account, and the vested portion of their employer match
account. Participants may elect a cash distribution or a stock distribution from
the SSCC Common Stock Fund or the Mobil Stock Fund. All other distributions are
in cash.
25
<PAGE> 29
Jefferson Smurfit Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Each participant has a fully vested and nonforfeitable interest in the value of
his or her proportional share of the investment funds in which his or her 401(k)
contributions and ATC contributions are invested. Employer contributions vest
over a five-year period based on participant years of service. The nonvested
portion of a terminating participant's account constitutes a forfeiture and is
applied to reduce future employer contributions.
If a participant, who has forfeited all or a part of his or her account, is
reemployed before 60 months have elapsed after his or her employment ended, any
amount he or she forfeited will be restored to his or her account from amounts
forfeited currently by other participants.
Upon enrollment in the Plan, contributions may be directed into the following
funds by the participant or employer:
SSCC Common Stock Fund - Effective August 1, 1994, all employer
contributions are invested in shares of SSCC common stock. Employees
may elect to invest in shares of SSCC common stock.
JS Group Stock Fund - Employer contributions prior to August 1, 1994
were invested in Jefferson Smurfit Group plc common stock. After August
1, 1994, dividends received by the JS Group Stock Fund were invested in
shares of SSCC common stock and transferred to the SSCC Common Stock
Fund.
Arch Balanced Fund - Employee contributions prior to October 1, 1996
were invested in shares of a registered investment company that invests
in common stocks, bonds, and money market securities to obtain a stable
long-term total return.
Interest Income Fund - Employee contributions prior to October 1, 1996
were invested in shares of a registered investment company that invests
in insurance contracts which provide a specified rate of investment
income for a specified period of time and under which the payment of
principal is guaranteed.
Aetna VIP Contract Fund - After-tax employee contributions prior to
January 1, 1997 were invested in "Immediate Participation Contracts"
issued by a legal reserve life insurance company selected by the
Company.
26
<PAGE> 30
Jefferson Smurfit Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Arch Emerging Growth Fund - Employee contributions prior to October 1,
1996 were invested in shares of a registered investment company that
invests in the common stock of emerging or established small to
medium-sized companies with a primary objective of capital appreciation
rather than current income.
T. Rowe Price Equity Income Fund - Effective October 1, 1996, employee
contributions are invested in shares of a registered investment company
that invests in common stocks of established companies that have
long-term capital appreciation and dividend income.
T. Rowe Price Personal Strategy Balanced Fund - Effective October 1,
1996, employee contributions are invested in shares of a registered
investment company that invests in common stocks, bonds, and money
market securities to provide return over time consistent with an
emphasis on both capital appreciation and income.
T. Rowe Price New Horizons Fund - Effective October 1, 1996, employee
contributions are invested in shares of a registered investment company
that invests in common stocks of small growth companies in a broad
range of industries.
T. Rowe Price International Stock Fund - Effective October 1, 1996,
employee contributions are invested in shares of a registered
investment company that invests in common stocks of established
non-U.S. companies.
Fidelity Contra Fund - Effective January 1, 1997, employee
contributions are invested in shares of a registered investment company
that invests in common stocks that are considered undervalued with
potential for capital growth.
Fidelity Value Fund - Effective January 1, 1997, employee contributions
are invested in shares of a registered investment company that invests
in the stock of companies that possess valuable assets or are
considered undervalued.
Putnam New Opportunities Fund - Effective January 1, 1997, employee
contributions are invested in shares of a registered investment company
that invests in stocks of emerging industries offering long-term
growth.
27
<PAGE> 31
Jefferson Smurfit Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
T. Rowe Price Blended Stable Value Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered
investment company that invests in high-quality insurance companies and
banks seeking to maintain a stable $1 per share price.
Equity Index Trust (S&P 500) - Effective January 1, 1997, employee
contributions are invested in shares of the stocks that make up the
Standard & Poor's 500 Index.
T. Rowe Price Personal Strategy Income Fund - Effective January 1,
1997, employee contributions are invested in shares of a registered
investment company that invests in bonds, common stocks, and money
market securities to provide the highest total return over time
consistent with a primary emphasis on income and a secondary emphasis
on capital appreciation.
T. Rowe Price Personal Strategy Growth Fund - Effective January 1,
1997, employee contributions are invested in shares of a registered
investment company that invests in common stocks, bonds, and money
market securities to provide the highest total return over time with an
emphasis on capital appreciation.
T. Rowe Price Summit Cash Reserves Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered
investment company that invests in high-quality money market securities
seeking to maintain a stable $1 per share price.
T. Rowe Price Spectrum Income Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered
investment company that invests in four domestic bond funds, an
international bond fund, an income-oriented bond fund, and a money
market fund to provide a high level of current income.
T. Rowe Price Blue Chip Growth Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered
investment company that invests in common stocks of large, well-known
companies in growing markets.
In addition to the above, former employees of Container Corporation of America
may have a portion of their plan investment held in shares of Mobil Corporation
common stock. Contributions are no longer permitted into this fund.
28
<PAGE> 32
Jefferson Smurfit Corporation
Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The fair value of individual investments that represent 5 percent or more of the
Plan's net assets is as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------
<S> <C>
SSCC common stock (2,460,546 shares) $ 39,347,025
Mobil Corporation common stock
(1,279,388 shares) 111,466,663
T. Rowe Price Equity Income Fund
(3,978,638 shares) 104,717,763
T. Rowe Price Personal Strategy Balanced Fund
(1,740,938 shares) 27,680,920
T. Rowe Price Blended Stable Value Fund
(58,870,098 shares) 58,870,098
<CAPTION>
DECEMBER 31, 1997
-----------------
<S> <C>
SSCC common stock (1,954,915 shares) 27,613,176
JS Group shares (9,568,834 shares) 26,666,426
Mobil Corporation common stock
(1,445,115 shares) 104,319,212
T. Rowe Price Equity Income Fund
(4,134,352 shares) 107,782,570
T. Rowe Price Personal Strategy Balanced Fund
(1,683,977 shares) 24,956,545
T. Rowe Price Blended Stable Value Fund
(57,834,386 shares) 57,834,386
</TABLE>
29
<PAGE> 33
Jefferson Smurfit Corporation
Savings Plan
Notes to Financial Statements (continued)
4. PLAN TAX STATUS
The Internal Revenue Service ruled on May 30, 1996 that the Plan continues to
qualify under Section 401(a) and meets the requirements under Section 401(k) of
the Internal Revenue Code (IRC), and therefore, the related trust is not subject
to tax under present income tax law. The Committee is not aware of any course of
action or series of events that has occurred that might adversely affect the
Plan's qualified status.
Participants are not subject to federal income tax on amounts contributed to
their 401(k) or employer matching contribution accounts under the Plan or on
earnings attributable to such contributions, until such time as these amounts
are distributed to or withdrawn by them.
5. YEAR 2000 (UNAUDITED)
Computer programs which have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. Beginning in the year 2000,
this could result in a system failure or miscalculations causing disruptions of
operations, including a temporary inability to process transactions or engage in
normal business activities.
The Company has completed testing for its internal systems which impact the
processing of transactions on behalf of the Plan. The only major system related
to the Plan which is noncompliant is the payroll system, which is currently in
the process of being updated to a new year 2000-compliant system. The payroll
system and all other systems are expected to be year 2000-compliant by mid-1999.
The Plan has obtained formal communications with its service providers to
determine the extent to which the Plan's interface systems are vulnerable to
those third parties' failure to resolve their own year 2000 issues. The Plan's
review of this communication is expected to be complete by mid-1999.
Substantially all of the costs of the year 2000 inquiries and the systems
updates are being paid by the Company with no effect on plan assets. The Plan
believes the necessary modifications and replacement of computer systems will be
completed in a timely manner, and as a result, the year 2000 issue is not
expected to pose significant operational or financial problems for the Plan.
30
<PAGE> 34
Supplemental Schedules
<PAGE> 35
Jefferson Smurfit Corporation Savings Plan
EIN: 36-2659288
Plan #062
Line 27a - Assets Held for Investment
December 31, 1998
<TABLE>
<CAPTION>
SHARES/ CURRENT
DESCRIPTION UNITS VALUE COST
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SSCC Common Stock Fund* 2,460,546 $ 39,347,025 $ 35,140,585
JS Group Stock Fund* 8,672,642 15,525,763 24,169,907
Mobil Stock Fund 1,279,388 111,466,663 92,578,498
T. Rowe Price Equity Income Fund 3,978,638 104,717,763 103,958,875
T. Rowe Price Personal Strategy Balanced Fund 1,740,938 27,680,920 26,056,458
T. Rowe Price New Horizons Fund 701,076 16,363,111 16,270,139
T. Rowe Price International Stock Fund 376,674 5,646,344 5,195,982
Fidelity Contra Fund 70,078 3,979,719 3,590,594
Fidelity Value Fund 25,288 1,172,106 1,358,578
Putnam New Opportunities Fund 120,840 7,060,662 6,253,553
T. Rowe Price Blended Stable Value Fund 58,870,098 58,870,098 58,870,098
Equity Index Trust (S&P 500) 301,743 9,613,534 8,122,854
T. Rowe Price Personal Strategy Income Fund 138,341 1,835,787 1,776,398
T. Rowe Price Personal Strategy Growth Fund 117,985 2,159,121 2,020,668
T. Rowe Price Summit Cash Reserves Fund 3,207,055 3,207,055 3,207,055
T. Rowe Price Spectrum Income Fund 141,469 1,626,895 1,643,595
T. Rowe Price Blue Chip Growth Fund 473,826 14,499,090 12,278,999
Participant Loans* -- 5,907,231 --
---------------------------------
$ 430,678,887 $ 402,492,836
=================================
</TABLE>
* Parties in interest. The interest rate on participant loans issued during the
year ended December 31, 1998 ranged from 6.72 percent to 10.3 percent.
31
<PAGE> 36
Jefferson Smurfit Corporation Savings Plan
EIN: 36-2659288
Plan #062
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET ON
DESCRIPTION OF PURCHASE SELLING COST TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED ASSET PRICE PRICE OF ASSET DATE (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - Series of transactions in excess of 5% of the current value of plan assets
SSCC Common Stock Fund Common Stock $ 565,018 $ -- $ 565,018 $ 565,018 $ --
Common Stock (319,740) (359,507) (319,740) (359,507) 39,767
T. Rowe Price Blended Stable Value Investment
Fund Contract 2,828,270 -- 2,828,270 2,828,270 --
Investment
Contract (3,185,592) (3,185,592) (3,185,592) (3,185,592) --
T. Rowe Price Equity Income Fund Mutual Fund 734,145 -- 734,145 734,145 --
Mutual Fund (978,107) (1,146,206) (978,107) (1,146,206) 168,099
</TABLE>
Categories (i), (ii), and (iv) were not applicable.
32
<PAGE> 37
Financial Statements
and Supplemental Schedules
Jefferson Smurfit Corporation
Hourly Savings Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
<PAGE> 38
Jefferson Smurfit Corporation
Hourly Savings Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1998 and 1997
CONTENTS
Report of Independent Auditors.............................................. 1
Financial Statements
Statements of Net Assets Available for Plan Benefits,
With Fund Information.................................................... 2
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information.................................................... 12
Notes to Financial Statements............................................... 22
Supplemental Schedules
Line 27a - Assets Held for Investment....................................... 29
Line 27d - Schedule of Reportable Transactions.............................. 30
<PAGE> 39
Report of Independent Auditors
Administrative Committee
Jefferson Smurfit Corporation
Retirement Plans
We have audited the accompanying statements of net assets available for plan
benefits of Jefferson Smurfit Corporation Hourly Savings Plan as of December 31,
1998 and 1997, and the related statements of changes in net assets available for
plan benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits at December
31, 1998 and 1997, and the changes in its net assets available for plan benefits
for the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment as of December 31, 1998 and schedule of reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are not
a required part of the financial statements. The fund information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
June 18, 1999 /s/ Ernst & Young LLP
<PAGE> 40
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
SSCC JS T. ROWE PRICE PERSONAL
COMMON GROUP EQUITY STRATEGY
STOCK STOCK INCOME BALANCED
FUND FUND FUND FUND SUBTOTAL
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $9,701,901 $835,963 $20,631,014 $7,868,341 $39,037,219
---------------------------------------------------------------------------------
Net assets available for
plan benefits $9,701,901 $835,963 $20,631,014 $7,868,341 $39,037,219
=================================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 41
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS NEW INTERNATIONAL
PAGE HORIZONS STOCK FIDELITY
SUBTOTAL FUND FUND CONTRA FUND SUBTOTAL
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $39,037,219 $8,634,766 $1,608,218 $681,378 $49,961,581
----------------------------------------------------------------------------------
Net assets available for
plan benefits $39,037,219 $8,634,766 $1,608,218 $681,378 $49,961,581
==================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 42
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS PUTNAM NEW T. ROWE PRICE EQUITY
PAGE FIDELITY OPPORTUNITIES BLENDED STABLE INDEX TRUST
SUBTOTAL VALUE FUND FUND VALUE FUND (S&P 500) SUBTOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $49,961,581 $126,910 $1,401,948 $9,337,998 $1,567,337 $62,395,774
-------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $49,961,581 $126,910 $1,401,948 $9,337,998 $1,567,337 $62,395,774
=================================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 43
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PERSONAL PERSONAL T. ROWE PRICE T. ROWE PRICE
PAGE STRATEGY STRATEGY SUMMIT CASH SPECTRUM
SUBTOTAL INCOME FUND GROWTH FUND RESERVES FUND INCOME FUND SUBTOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $62,395,774 $222,690 $384,028 $676,999 $332,876 $64,012,367
-------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $62,395,774 $222,690 $384,028 $676,999 $332,876 $64,012,367
=================================================================================================
</TABLE>
See accompanying notes.
5
<PAGE> 44
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
PREVIOUS BLUE CHIP
PAGE GROWTH
SUBTOTAL FUND TOTAL
-----------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value $64,012,367 $3,639,166 $67,651,533
-----------------------------------------------------
Net assets available for
plan benefits $64,012,367 $3,639,166 $67,651,533
=====================================================
</TABLE>
See accompanying notes.
6
<PAGE> 45
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
<CAPTION>
ARCH T. ROWE PRICE
SSCC JS GROWTH T. ROWE PRICE PERSONAL
COMMON GROUP AND EQUITY STRATEGY
STOCK STOCK INCOME INCOME BALANCED
FUND FUND FUND FUND FUND SUBTOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $6,310,843 $1,398,913 $ - $18,030,372 $6,581,829 $32,321,957
-------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $6,310,843 $1,398,913 $ - $18,030,372 $6,581,829 $32,321,957
=================================================================================================
</TABLE>
See accompanying notes.
7
<PAGE> 46
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS INTEREST NEW INTERNATIONAL
PAGE INCOME HORIZONS STOCK FIDELITY
SUBTOTAL FUND FUND FUND CONTRA FUND SUBTOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $32,321,957 $ - $7,457,600 $1,158,467 $223,177 $41,161,201
-------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $32,321,957 $ - $7,457,600 $1,158,467 $223,177 $41,161,201
=================================================================================================
</TABLE>
See accompanying notes.
8
<PAGE> 47
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS PUTNAM NEW T. ROWE PRICE EQUITY
PAGE FIDELITY OPPORTUNITIES BLENDED STABLE INDEX TRUST
SUBTOTAL VALUE FUND FUND VALUE FUND (S&P 500) SUBTOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $41,161,201 $57,612 $576,468 $7,895,802 $461,272 $50,152,355
-------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $41,161,201 $57,612 $576,468 $7,895,802 $461,272 $50,152,355
=================================================================================================
</TABLE>
See accompanying notes.
9
<PAGE> 48
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PERSONAL PERSONAL T. ROWE PRICE T. ROWE PRICE
PAGE STRATEGY STRATEGY SUMMIT CASH SPECTRUM
SUBTOTAL INCOME FUND GROWTH FUND RESERVES FUND INCOME FUND SUBTOTAL
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $50,152,355 $36,727 $150,697 $177,422 $108,157 $50,625,358
-------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $50,152,355 $36,727 $150,697 $177,422 $108,157 $50,625,358
=================================================================================================
</TABLE>
See accompanying notes.
10
<PAGE> 49
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits,
With Fund Information (continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE
PREVIOUS BLUE CHIP GROWTH
PAGE FUND
SUBTOTAL TOTAL
-----------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value $50,625,358 $1,392,823 $52,018,181
-----------------------------------------------------
Net assets available for
plan benefits $50,625,358 $1,392,823 $52,018,181
=====================================================
</TABLE>
See accompanying notes.
11
<PAGE> 50
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
SSCC JS T. ROWE PRICE PERSONAL
COMMON GROUP EQUITY STRATEGY
STOCK STOCK INCOME BALANCED
FUND FUND FUND FUND SUBTOTAL
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employees $ 408,126 $ - $ 3,438,477 $1,237,037 $ 5,083,640
Employer 2,065,641 - - - 2,065,641
Net investment income:
Interest on guaranteed group
annuity contracts - - - - -
Other investment income - 43,638 1,549,285 442,080 2,035,003
-----------------------------------------------------------------------------------
2,473,767 43,638 4,987,762 1,679,117 9,184,284
Net realized and unrealized
appreciation (depreciation)
of investments 931,595 (471,783) 155,949 494,675 1,110,436
Transfers by participants 273,012 (23,181) (1,499,542) (444,412) (1,694,123)
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund
43,638 (43,638) - - -
Transfers of participant
accounts (to)/from Jefferson
Smurfit Savings Plan and
other plans (31,043) - (35,444) (3,633) (70,120)
Forfeitures (11,622) (953) - - (12,575)
Withdrawals by participants (286,104) (67,033) (995,099) (430,324) (1,778,560)
Administrative expenses (2,185) - (12,984) (8,911) (24,080)
-----------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 3,391,058 (562,950) 2,600,642 1,286,512 6,715,262
Net assets available for plan
benefits, beginning of year 6,310,843 1,398,913 18,030,372 6,581,829 32,321,957
===================================================================================
Net assets available for plan
benefits, end of year $9,701,901 $ 835,963 $20,631,014 $7,868,341 $39,037,219
===================================================================================
</TABLE>
See accompanying notes.
12
<PAGE> 51
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS T. ROWE PRICE T. ROWE PRICE
PAGE NEW HORIZONS INTERNATIONAL FIDELITY
SUBTOTAL FUND STOCK FUND CONTRA FUND SUBTOTAL
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employees $ 5,083,640 $1,984,303 $ 455,662 $175,339 $ 7,698,944
Employer 2,065,641 - - - 2,065,641
Net investment income:
Interest on guaranteed
group annuity contracts - - - - -
Other investment income 2,035,003 441,444 58,458 49,452 2,584,357
----------------------------------------------------------------------------------
9,184,284 2,425,747 514,120 224,791 12,348,942
Net realized and unrealized
appreciation
(depreciation) of 1,110,436 109,155 145,825 74,537 1,439,953
investments
Transfers by participants (1,694,123) (991,721) (128,876) 161,797 (2,652,923)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - -
Transfers of participant
accounts (to)/from
Jefferson Smurfit Savings
Plan and other plans (70,120) - (942) - (71,062)
Forfeitures (12,575) - - - (12,575)
Withdrawals by participants (1,778,560) (364,023) (79,839) (2,746) (2,225,168)
Administrative expenses (24,080) (1,992) (537) (178) (26,787)
----------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 6,715,262 1,177,166 449,751 458,201 8,800,380
Net assets available for plan
benefits, beginning of year 32,321,957 7,457,600 1,158,467 223,177 41,161,201
==================================================================================
Net assets available for plan
benefits, end of year $39,037,219 $8,634,766 $1,608,218 $681,378 $49,961,581
==================================================================================
</TABLE>
See accompanying notes.
13
<PAGE> 52
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE
PREVIOUS PUTNAM NEW PRICE BLENDED EQUITY
PAGE FIDELITY VALUE OPPORTUNITIES STABLE VALUE INDEX TRUST
SUBTOTAL FUND FUND FUND (S&P 500) SUBTOTAL
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 7,698,944 $ 55,721 $ 381,305 $1,416,228 $ 393,332 $ 9,945,530
Employer 2,065,641 - - - - 2,065,641
Net investment income:
Interest on guaranteed
group annuity contracts - - - 498,769 - 498,769
Other investment income 2,584,357 17,511 42,763 - 17,309 2,661,940
-----------------------------------------------------------------------------------------------
12,348,942 73,232 424,068 1,914,997 410,641 15,171,880
Net realized and unrealized
appreciation
(depreciation) of
investments 1,439,953 (17,297) 163,196 - 226,782 1,812,634
Transfers by participants (2,652,923) 16,028 260,488 491,686 498,318 (1,386,403)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts (to)/from
Jefferson Smurfit Savings
Plan and other plans (71,062) - (4,317) - (4,877) (80,256)
Forfeitures (12,575) - - - - (12,575)
Withdrawals by participants (2,225,168) (2,605) (17,785) (957,189) (23,815) (3,226,562)
Administrative expenses (26,787) (60) (170) (7,298) (984) (35,299)
-----------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 8,800,380 69,298 825,480 1,442,196 1,106,065 12,243,419
Net assets available for plan
benefits, beginning of year 41,161,201 57,612 576,468 7,895,802 461,272 50,152,355
===============================================================================================
Net assets available for plan
benefits, end of year $49,961,581 $126,910 $1,401,948 $9,337,998 $1,567,337 $62,395,774
===============================================================================================
</TABLE>
See accompanying notes.
14
<PAGE> 53
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE T. ROWE PRICE
PREVIOUS PERSONAL PERSONAL SUMMIT CASH T. ROWE PRICE
PAGE STRATEGY STRATEGY RESERVES SPECTRUM
SUBTOTAL INCOME FUND GROWTH FUND FUND INCOME FUND SUBTOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 9,945,530 $ 64,027 $159,510 $111,022 $121,750 $10,401,839
Employer 2,065,641 - - - - 2,065,641
Net investment income:
Interest on guaranteed
group annuity contracts 498,769 - - - - 498,769
Other investment income 2,661,940 6,437 15,151 16,752 17,346 2,717,626
----------------------------------------------------------------------------------------------
15,171,880 70,464 174,661 127,774 139,096 15,683,875
Net realized and unrealized
appreciation
(depreciation) of
investments 1,812,634 8,043 22,062 - (3,929) 1,838,810
Transfers by participants (1,386,403) 109,918 44,418 438,195 122,964 (670,908)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts (to)/from
Jefferson Smurfit Savings
Plan and other plans (80,256) - - (25) - (80,281)
Forfeitures (12,575) - - 12,575 - -
Withdrawals by participants (3,226,562) (2,052) (7,023) (69,487) (32,527) (3,337,651)
Administrative expenses (35,299) (410) (787) (9,455) (885) (46,836)
----------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 12,243,419 185,963 233,331 499,577 224,719 13,387,009
Net assets available for plan
benefits, beginning of year 50,152,355 36,727 150,697 177,422 108,157 50,625,358
==============================================================================================
Net assets available for plan
benefits, end of year $62,395,774 $222,690 $384,028 $676,999 $332,876 $64,012,367
==============================================================================================
</TABLE>
See accompanying notes.
15
<PAGE> 54
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS T. ROWE PRICE
PAGE BLUE CHIP
SUBTOTAL GROWTH FUND TOTAL
----------------------------------------------------------
<S> <C> <C> <C>
Contributions:
Employees $10,401,839 $ 1,012,592 $11,414,431
Employer 2,065,641 - 2,065,641
Net investment income:
Interest on guaranteed group
annuity contracts 498,769 - 498,769
Other investment income 2,717,626 57,975 2,775,601
----------------------------------------------------------
15,683,875 1,070,567 16,754,442
Net realized and unrealized
appreciation (depreciation) of
investments 1,838,810 583,386 2,422,196
Transfers by participants (670,908) 670,908 -
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund
- - -
Transfers of participant accounts
(to)/from Jefferson Smurfit
Savings Plan and other plans (80,281) (5,923) (86,204)
Forfeitures - - -
Withdrawals by participants (3,337,651) (70,611) (3,408,262)
Administrative expenses (46,836) (1,984) (48,820)
----------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 13,387,009 2,246,343 15,633,352
Net assets available for plan
benefits, beginning of year 50,625,358 1,392,823 52,018,181
==========================================================
Net assets available for plan
benefits, end of year $64,012,367 $3,639,166 $67,651,533
==========================================================
</TABLE>
See accompanying notes.
16
<PAGE> 55
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE
SSCC JS ARCH T. ROWE PRICE PERSONAL
COMMON GROUP GROWTH AND EQUITY STRATEGY
STOCK STOCK INCOME INCOME BALANCED
FUND FUND FUND FUND FUND SUBTOTAL
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 348,322 $ - $ - $ 3,334,620 $1,222,108 $ 4,905,050
Employer 1,910,160 - - - - 1,910,160
Net investment income:
Interest on guaranteed group
annuity contracts - - - - - -
Other investment income - 22,928 - 1,721,965 321,710 2,066,603
--------------------------------------------------------------------------------------------------
2,258,482 22,928 - 5,056,585 1,543,818 8,881,813
Net realized and unrealized
appreciation (depreciation)
of investments (809,405) (116,714) - 1,998,643 603,828 1,676,352
Transfers by participants (47,416) (4,370) (1,993) (395,669) (241,953) (691,401)
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund
22,928 (22,928) - - - -
Transfers of participant
accounts (to)/from Jefferson
Smurfit Savings Plan and
other plans (29,148) (8,063) - (39,323) (9,867) (86,401)
Forfeitures (4,656) (1,186) - - - (5,842)
Withdrawals by participants (210,132) (49,977) - (535,777) (227,888) (1,023,774)
Administrative expenses (480) - - (19,099) (12,930) (32,509)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 1,180,173 (180,310) (1,993) 6,065,360 1,655,008 8,718,238
Net assets available for plan
benefits, beginning of year 5,130,670 1,579,223 1,993 11,965,012 4,926,821 23,603,719
==================================================================================================
Net assets available for plan
benefits, end of year $ 6,310,843 $ 1,398,913 $ - $ 18,030,372 $6,581,829 $ 32,321,957
==================================================================================================
</TABLE>
See accompanying notes.
17
<PAGE> 56
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS INTEREST T. ROWE PRICE T. ROWE PRICE
PAGE INCOME NEW HORIZONS INTERNATIONAL FIDELITY CONTRA
SUBTOTAL FUND FUND STOCK FUND FUND SUBTOTAL
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 4,905,050 $ - $2,169,060 $ 475,652 $ 90,640 $ 7,640,402
Employer 1,910,160 - - - - 1,910,160
Net investment income:
Interest on guaranteed
group annuity contracts - - - - - -
Other investment income 2,066,603 - 178,918 60,415 18,157 2,324,093
------------------------------------------------------------------------------------------------
8,881,813 - 2,347,978 536,067 108,797 11,874,655
Net realized and unrealized
appreciation
(depreciation) of 1,676,352 - 418,049 (48,212) 5,142 2,051,331
investments
Transfers by participants (691,401) (6,946,320) (487,491) (51,166) 111,762 (8,064,616)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts (to)/from
Jefferson Smurfit Savings
Plan and other plans (86,401) - (15,895) (1,245) - (103,541)
Forfeitures (5,842) - - - - (5,842)
Withdrawals by participants (1,023,774) - (279,217) (45,748) (2,253) (1,350,992)
Administrative expenses (32,509) - (2,458) (1,036) (271) (36,274)
------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 8,718,238 (6,946,320) 1,980,966 388,660 223,177 4,364,721
Net assets available for plan
benefits, beginning of year 23,603,719 6,946,320 5,476,634 769,807 - 36,796,480
------------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $32,321,957 $ $7,457,600 $1,158,467 $223,177 $41,161,201
================================================================================================
</TABLE>
See accompanying notes.
18
<PAGE> 57
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS PUTNAM NEW T. ROWE PRICE EQUITY
PAGE FIDELITY VALUE OPPORTUNITIES BLENDED STABLE INDEX TRUST
SUBTOTAL FUND FUND VALUE FUND (S&P 500) SUBTOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 7,640,402 $25,893 $231,432 $1,435,503 $123,067 $ 9,456,297
Employer 1,910,160 - - - - 1,910,160
Net investment income:
Interest on guaranteed
group annuity contracts - - - 442,259 - 442,259
Other investment income 2,324,093 7,246 12,121 - - 2,343,460
----------------------------------------------------------------------------------------------
11,874,655 33,139 243,553 1,877,762 123,067 14,152,176
Net realized and unrealized
appreciation
(depreciation) of 2,051,331 (3,261) 57,828 - 45,411 2,151,309
investments
Transfers by participants (8,064,616) 28,605 293,906 6,508,158 297,890 (936,057)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts (to)/from
Jefferson Smurfit Savings
Plan and other plans (103,541) - (16,374) (58,163) - (178,078)
Forfeitures (5,842) - - - - (5,842)
Withdrawals by participants (1,350,992) (795) (2,260) (418,549) (4,537) (1,777,133)
Administrative expenses (36,274) (76) (185) (13,406) (559) (50,500)
-----------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 4,364,721 57,612 576,468 7,895,802 461,272 13,355,875
Net assets available for plan
benefits, beginning of year 36,796,480 - - - - 36,796,480
----------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $41,161,201 $57,612 $576,468 $7,895,802 $461,272 $50,152,355
==============================================================================================
</TABLE>
See accompanying notes.
19
<PAGE> 58
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PERSONAL PERSONAL T. ROWE PRICE T. ROWE PRICE
PAGE STRATEGY STRATEGY GROWTH SUMMIT CASH SPECTRUM
SUBTOTAL INCOME FUND FUND RESERVES FUND INCOME FUND SUBTOTAL
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 9,456,297 $25,484 $ 70,631 $ 51,928 $ 55,383 $ 9,659,723
Employer 1,910,160 - - - - 1,910,160
Net investment income:
Interest on guaranteed
group annuity contracts 442,259 - - - - 442,259
Other investment income 2,343,460 1,557 3,888 16,259 4,297 2,369,461
------------------------------------------------------------------------------------------------
14,152,176 27,041 74,519 68,187 59,680 14,381,603
Net realized and unrealized
appreciation
(depreciation) of 2,151,309 1,133 6,035 - 1,927 2,160,404
investments
Transfers by participants (936,057) 8,863 70,853 59,588 47,868 (748,885)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts (to)/from
Jefferson Smurfit Savings
Plan and other plans (178,078) - - 51,021 - (127,057)
Forfeitures (5,842) - - - - (5,842)
Withdrawals by participants (1,777,133) - (187) (200) (626) (1,778,146)
Administrative expenses (50,500) (310) (523) (1,174) (692) (53,199)
-------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 13,355,875 36,727 150,697 177,422 108,157 13,828,878
Net assets available for plan
benefits, beginning of year 36,796,480 - - - - 36,796,480
------------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $50,152,355 $36,727 $150,697 $177,422 $108,157 $50,625,358
================================================================================================
</TABLE>
See accompanying notes.
20
<PAGE> 59
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS
PAGE T. ROWN PRICE BLUE
SUBTOTAL CHIP GROWTH FUND TOTAL
----------------------------------------------------------
<S> <C> <C> <C>
Contributions:
Employees $ 9,659,723 $ 526,805 $10,186,528
Employer 1,910,160 - 1,910,160
Net investment income:
Interest on guaranteed group
annuity contracts 442,259 - 442,259
Other investment income 2,369,461 7,900 2,377,361
----------------------------------------------------------
14,381,603 534,705 14,916,308
Net realized and unrealized
appreciation (depreciation) of
investments 2,160,404 148,815 2,309,219
Transfers by participants (748,885) 748,885 -
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund - - -
Transfers of participant accounts
(to)/from Jefferson Smurfit
Savings Plan and other plans (127,057) (26,448) (153,505)
Forfeitures (5,842) - (5,842)
Withdrawals by participants (1,778,146) (11,370) (1,789,516)
Administrative expenses (53,199) (1,764) (54,963)
----------------------------------------------------------
Net increase (decrease) in
net assets available for
plan benefits 13,828,878 1,392,823 15,221,701
Net assets available for plan
benefits, beginning of year 36,796,480 - 36,796,480
===========================================================
Net assets available for plan
benefits, end of year $50,625,358 $1,392,823 $52,018,181
===========================================================
</TABLE>
See accompanying notes.
21
<PAGE> 60
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of Jefferson Smurfit Corporation Hourly Savings Plan
(the Plan) are reported on the accrual basis. The current values of investments
have been determined by T. Rowe Price as trustee for 1998 and 1997 and have been
based on closing prices if traded on national stock exchanges or bid prices for
bonds. The differences between the current value and the cost of investments are
reflected in the statements of changes in net assets available for plan benefits
as part of net realized and unrealized appreciation (depreciation) of
investments. The cost of securities sold is based on the weighted average
method.
As of January 1, 1997, the Plan changed the plan trustee from Mercantile Bank of
St. Louis to T. Rowe Price. As of October 1, 1996, funds were transferred into
an omnibus account, and investment options were changed from the various Arch
funds to T. Rowe Price funds.
Administrative expenses are paid by the Plan. In 1997, the Plan changed the
allocation of administrative expenses to participant accounts from a prorated
method to allocating expenses to a participant's most stable fund.
The preparation of financial statements in conformity with generally accepted
accounting principles requires plan management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Plan was established January 1, 1992 and is a contributory employee benefit
plan of Jefferson Smurfit Corporation (Company) and adopting subsidiaries and
affiliates. The Plan is composed of two components: (i) a cash or deferred
compensation component (401(k) component) and (ii) an employer matching
contribution component.
22
<PAGE> 61
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The Plan is administered by an Administrative Committee (Committee) of the
Company consisting of officers or other employees of the Company or its adopting
subsidiaries and affiliates. The Committee prescribes forms for use by
participants and may make administrative and procedural recommendations.
Employees eligible to participate in the Plan consist of those hourly employees
of the Company and adopting subsidiaries and affiliates to whom the terms of the
Plan have been extended including those covered by a collective bargaining
agreement which provides for participation in the Plan.
Under the 401(k) provisions, employees may elect to have a portion of their
wages deferred and contributed to the Plan to be invested in one or more of 15
investment options available under the Plan. Contributions are made every two
weeks or weekly depending upon the plant location.
For those employee groups covered by a collective bargaining agreement providing
for employer contributions, each employer contributes, for each of its employees
who are participants, an amount equal to 50 percent of the 401(k) contributions
authorized by such employee to a maximum dollar amount during one calendar year,
as provided in the collective bargaining agreement.
Participant contributions to the 401(k) which are made via payroll withholdings
are limited to the lesser of $10,000 and $9,500 or 15 percent of participant
compensation for 1998 and 1997, respectively. Total contributions credited to a
participant's account (combined 401(k) and matching contributions components)
are limited to the lesser of $30,000 or 25 percent of compensation. These
limitations are determined on a calendar year basis.
Terminated participants of the Plan are paid the current value of their 401(k)
account and the vested portion of their employer match account. Participants may
elect a cash distribution or a stock distribution from the SSCC Common Stock
Fund. All other distributions are in cash.
Each participant has a fully vested and nonforfeitable interest in the value of
his or her proportional share of the investment funds in which his or her 401(k)
contributions are invested. Employer contributions vest over a five-year period
based on participant years
23
<PAGE> 62
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
of service. The nonvested portion of a terminating participant's account
constitutes a forfeiture and is applied to reduce future employer contributions.
If a participant, who has forfeited all or a part of his or her account, is
reemployed before 60 months have elapsed after his or her employment ended, any
amount he or she forfeited will be restored to his or her account from amounts
forfeited currently by other participants.
Upon enrollment in the Plan, contributions may be directed into the following
funds by the participant or employer:
SSCC Common Stock Fund - Effective August 1, 1994, all employer
contributions are invested in shares of Jefferson Smurfit Corporation
common stock. On November 18, 1998, Jefferson Smurfit Corporation merged
with Stone Container Corporation, and the Company was renamed Smurfit-Stone
Container Corporation (SSCC). Employees may elect to invest in shares of
SSCC common stock.
JS Group Stock Fund - Employer contributions prior to August 1, 1994
were invested in Jefferson Smurfit Group plc common stock. After August 1,
1994, dividends received by the JS Group Stock Fund were invested in shares
of SSCC common stock and transferred to the SSCC Common Stock Fund.
Arch Growth and Income Fund - Employee contributions prior to October 1,
1996 were invested in shares of a registered investment company that
invests in stocks of larger corporations.
Interest Income Fund - Employee contributions prior to October 1, 1996 were
invested in shares of a registered investment company that invests in
insurance contracts which provide a specified rate of investment income for
a specified period of time and under which the payment of principal is
guaranteed.
T. Rowe Price Personal Strategy Balanced Fund - Effective October 1,
1996, employee contributions are invested in shares of a registered
investment company that invests in common stocks, bonds, and money market
securities to provide total return over time consistent with an emphasis on
both capital appreciation and income.
24
<PAGE> 63
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
T. Rowe Price Equity Income Fund - Effective October 1, 1996, employee
contributions are invested in shares of a registered investment company
that invests in common stocks of established companies that have long-term
capital appreciation and dividend income.
T. Rowe Price International Stock Fund - Effective October 1, 1996,
employee contributions are invested in shares of a registered investment
company that invests in common stocks of established non-U.S. companies.
T. Rowe Price New Horizons Fund - Effective October 1, 1996, employee
contributions are invested in shares of a registered investment company
that invests in common stocks of small-growth companies in a broad range of
industries.
Fidelity Contra Fund - Effective January 1, 1997, employee
contributions are invested in shares of a registered investment company
that invests in common stocks that are considered undervalued with
potential for capital growth.
Fidelity Value Fund - Effective January 1, 1997, employee contributions
are invested in shares of a registered investment company that invests in
the stock of companies that possess valuable assets or are considered
undervalued.
Putnam New Opportunities Fund - Effective January 1, 1997, employee
contributions are invested in shares of a registered investment company
that invests in stocks of emerging industries offering long-term growth.
T. Rowe Price Blended Stable Value Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered investment
company that invests in high-quality insurance companies and banks seeking
to maintain a stable $1 per share price.
Equity Index Trust (S&P 500) - Effective January 1, 1997, employee
contributions are invested in shares of the stocks that make up the
Standard & Poor's 500 Index.
25
<PAGE> 64
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
T. Rowe Price Personal Strategy Income Fund - Effective January 1,
1997, employee contributions are invested in shares of a registered
investment company that invests in bonds, common stocks, and money market
securities to provide the highest total return over time consistent with a
primary emphasis on income and a secondary emphasis on capital
appreciation.
T. Rowe Price Personal Strategy Growth Fund - Effective January 1,
1997, employee contributions are invested in shares of a registered
investment company that invests in common stocks, bonds, and money market
securities to provide the highest total return over time with an emphasis
on capital appreciation.
T. Rowe Price Summit Cash Reserves Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered investment
company that invests in high-quality money market securities seeking to
maintain a stable $1 per share price.
T. Rowe Price Spectrum Income Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered investment
company that invests in four domestic bond funds, an international bond
fund, an income-oriented bond fund, and a money market fund to provide a
high level of current income.
T. Rowe Price Blue Chip Growth Fund - Effective January 1, 1997,
employee contributions are invested in shares of a registered investment
company that invests in common stocks of large, well-known companies in
growing markets.
26
<PAGE> 65
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The fair value of individual investments that represent 5 percent or more of the
Plan's net assets is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1998
--------------------
<S> <C>
SSCC Common Stock (611,681 shares) $ 9,701,901
T. Rowe Price Blue Chip Growth Fund (118,927 shares) 3,639,166
T. Rowe Price Blended Stable Value Fund (9,337,998 shares) 9,337,998
T. Rowe Price New Horizons Fund (369,956 shares) 8,634,766
T. Rowe Price Personal Strategy Balanced Fund (494,864 shares) 7,868,341
T. Rowe Price Equity Income Fund (783,853 shares) 20,631,014
DECEMBER 31,
1997
--------------------
SSCC Common Stock (446,785 shares) 6,310,843
T. Rowe Price Blended Stable Value Fund (7,895,802 shares) 7,895,802
T. Rowe Price New Horizons Fund (320,069 shares) 7,457,600
T. Rowe Price Personal Strategy Balanced Fund (444,118 shares) 6,581,829
T. Rowe Price Equity Income Fund (691,614 shares) 18,030,372
</TABLE>
27
<PAGE> 66
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
4. PLAN TAX STATUS
The Internal Revenue Service ruled on June 17, 1996 that the Plan continues to
qualify under Section 401(a) and meets the requirements under Section 401(k) of
the Internal Revenue Code (IRC), and therefore, the related trust is not subject
to tax under present income tax law. The Administrative Committee is not aware
of any course of action or series of events that has occurred that might
adversely affect the Plan's qualified status.
Participants are not subject to federal income tax on amounts contributed to
their 401(k) or employer matching contribution amounts under the Plan or on
earnings attributable to such contributions, until such time as these amounts
are distributed to or withdrawn by them.
5. YEAR 2000 (UNAUDITED)
Computer programs which have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. Beginning in the year 2000,
this could result in a system failure or miscalculations causing disruptions of
operations, including a temporary inability to process transactions or engage in
normal business activities.
The Company has completed testing for its internal systems which impact the
processing of transactions on behalf of the Plan. The only major system related
to the Plan which is noncompliant is the payroll system, which is currently in
the process of being updated to a new year 2000-compliant system. The payroll
system and all other systems are expected to be year 2000-compliant by mid-1999.
The Plan has obtained formal communications from its service providers to
determine the extent to which the Plan's interface systems are vulnerable to
those third parties' failure to resolve their own year 2000 issues. The Plan's
review of these communications is expected to be complete by mid-1999.
Substantially all of the costs of the year 2000 inquiries and the systems
updates are being paid by the Company with no effect on plan assets. The Plan
believes the necessary modifications and replacement of computer systems will be
completed in a timely manner, and as a result, the year 2000 issue is not
expected to pose significant operational or financial problems for the Plan.
28
<PAGE> 67
SUPPLEMENTAL SCHEDULES
<PAGE> 68
Jefferson Smurfit Corporation Hourly Savings Plan
EIN: 36-2659288
Plan #063
Line 27a - Assets Held for Investment
December 31, 1998
<TABLE>
<CAPTION>
SHARES/ CURRENT
DESCRIPTION UNITS VALUE COST
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SSCC Common Stock Fund* 611,681 $ 9,701,901 $ 8,799,133
JS Group Stock Fund* 466,966 835,963 1,301,340
T. Rowe Price Equity Income Fund 783,853 20,631,014 20,537,286
T. Rowe Price Personal Strategy Balanced Fund 494,864 7,868,341 7,416,752
T. Rowe Price New Horizons Fund 369,956 8,634,766 8,521,755
T. Rowe Price International Stock Fund 107,286 1,608,218 1,480,706
Fidelity Contra Fund 11,998 681,378 609,364
Fidelity Value Fund 2,738 126,910 144,657
Putnam New Opportunities Fund 23,994 1,401,948 1,229,350
T. Rowe Price Blended Stable Value Fund 9,337,998 9,337,998 9,337,998
Equity Index Trust (S&P 500) 49,194 1,567,337 1,340,554
T. Rowe Price Personal Strategy Income Fund 16,782 222,690 214,648
T. Rowe Price Personal Strategy Growth Fund 20,985 384,028 361,602
T. Rowe Price Summit Cash Reserves Fund 676,999 676,999 676,999
T. Rowe Price Spectrum Income Fund 28,946 332,876 336,964
T. Rowe Price Blue Chip Growth Fund 118,927 3,639,166 3,081,200
-------------------------------
$67,651,533 $65,390,308
===============================
</TABLE>
* Parties in interest.
29
<PAGE> 69
Jefferson Smurfit Corporation Hourly Savings Plan
EIN: 36-2659288
Plan #063
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT VALUE
DESCRIPTION OF PURCHASE SELLING COST OF ASSET ON NET GAIN
IDENTITY OF PARTY INVOLVED ASSET PRICE PRICE OF ASSET TRANSACTION DATE (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of the current value of plan assets
<S> <C> <C> <C> <C> <C> <C>
SSCC Common Stock Fund Common Stock $ 3,070,729 $ - $ 3,070,729 $ 3,070,729 $ -
Common Stock (555,613) (609,912) (555,613) (609,912) 54,299
T. Rowe Price Blended Stable Value Fund Investment
Contract 10,901,024 - 10,901,024 10,901,024 -
Investment
Contract (9,458,611) (9,458,611) (9,458,611) (9,458,611) -
T. Rowe Price New Horizons Fund Mutual Fund 2,365,086 - 2,365,086 2,365,086 -
Mutual Fund (1,230,852) (1,297,076) (1,230,852) (1,297,076) 66,224
T. Rowe Price Equity Income Fund Mutual Fund 4,859,616 - 4,859,616 4,859,616 -
Mutual Fund (2,127,356) (2,379,480) (2,127,356) (2,379,480) 252,124
</TABLE>
Categories (i), (ii), and (iv) are not applicable.
30
<PAGE> 70
Financial Statements
and Supplemental Schedules
Smurfit Packaging Corporation
Savings Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
<PAGE> 71
Smurfit Packaging Corporation
Savings Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
CONTENTS
<S> <C>
Report of Independent Auditors....................................................................... 1
Financial Statements
Statements of Net Assets Available for Plan Benefits, With Fund Information.......................... 2
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information............................................................................. 13
Notes to Financial Statements........................................................................ 24
Supplemental Schedules
Line 27a - Assets Held for Investment................................................................ 31
Line 27d - Schedule of Reportable Transactions....................................................... 33
</TABLE>
<PAGE> 72
Report of Independent Auditors
Administrative Committee
Jefferson Smurfit Corporation Retirement Plans
We have audited the accompanying statements of net assets available for plan
benefits of Smurfit Packaging Corporation Savings Plan as of December 31, 1998
and 1997, and the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits at December
31, 1998 and 1997, and the changes in its net assets available for plan benefits
for the years then ended, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment as of December 31, 1998 and schedule of reportable
transactions for the year then ended are presented for purposes of complying
with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974 and are not
a required part of the financial statements. The fund information in the
statements of net assets available for plan benefits and the statements of
changes in net assets available for plan benefits is presented for purposes of
additional analysis rather than to represent the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
June 18, 1999 /s/ Ernst & Young LLP
1
<PAGE> 73
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
SSCC T. ROWE PRICE PERSONAL
COMMON JS GROUP EQUITY STRATEGY
STOCK STOCK INCOME BALANCED MOBIL
FUND FUND FUND FUND STOCK FUND SUBTOTAL
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $2,306,085 $589,191 $4,679,141 $1,079,829 $5,881,637 $14,535,883
--------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $2,306,085 $589,191 $4,679,141 $1,079,829 $5,881,637 $14,535,883
==================================================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 74
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE T. ROWE
PREVIOUS PRICE PRICE
PAGE NEW HORIZONS INTERNATIONAL FIDELITY FIDELITY
SUBTOTAL FUND STOCK FUND CONTRA FUND VALUE FUND SUBTOTAL
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $14,535,883 $846,271 $280,106 $171,680 $22,517 $15,856,457
-----------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $14,535,883 $846,271 $280,106 $171,680 $22,517 $15,856,457
=====================================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 75
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
PUTNAM T. ROWE PRICE
PREVIOUS NEW T. ROWE PRICE EQUITY PERSONAL
PAGE OPPORTUNITIES BLENDED STABLE INDEX TRUST STRATEGY INCOME
SUBTOTAL FUND VALUE FUND (S&P 500) FUND SUBTOTAL
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $15,856,457 $368,708 $2,503,732 $468,758 $43,422 $19,241,077
-----------------------------------------------------------------------------------------------------
Net assets available for
plan benefits $15,856,457 $368,708 $2,503,732 $468,758 $43,422 $19,241,077
=====================================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 76
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE T. ROWE PRICE
PREVIOUS PERSONAL SUMMIT T. ROWE PRICE T. ROWE PRICE
PAGE STRATEGY CASH RESERVES SPECTRUM INCOME BLUE CHIP
SUBTOTAL GROWTH FUND FUND FUND GROWTH FUND SUBTOTAL
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $19,241,077 $132,736 $96,163 $53,920 $1,103,186 $20,627,082
=======================================================================================================
Net assets available for
plan benefits $19,241,077 $132,736 $96,163 $53,920 $1,103,186 $20,627,082
=======================================================================================================
See accompanying notes.
</TABLE>
5
<PAGE> 77
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS
PAGE PARTICIPANT
SUBTOTAL LOANS TOTAL
------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments, at fair value $20,627,082 $405,032 $21,032,114
==================================================================
Net assets available for
plan benefits $20,627,082 $405,032 $21,032,114
==================================================================
</TABLE>
See accompanying notes.
6
<PAGE> 78
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
ARCH T. ROWE PRICE
GROWTH T. ROWE PRICE PERSONAL
SSCC AND EQUITY STRATEGY
COMMON JS GROUP INCOME INCOME BALANCED
STOCK FUND STOCK FUND FUND FUND FUND SUBTOTAL
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $1,832,770 $1,138,843 $ - $5,012,922 $1,031,873 $9,016,408
Participant loans - - - - - -
===========================================================================================
Net assets available for
plan benefits $1,832,770 $1,138,843 $ - $5,012,922 $1,031,873 $9,016,408
===========================================================================================
</TABLE>
See accompanying notes.
7
<PAGE> 79
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
ARCH
PREVIOUS INTEREST MOBIL AETNA VIP EMERGING
PAGE INCOME STOCK CONTRACT GROWTH
SUBTOTAL FUND FUND FUND FUND SUBTOTAL
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $9,016,408 $ - $5,156,589 $ - $ - $14,172,997
Participant loans - - - - - -
----------------------------------------------------------------------------------------------
Net assets available for
plan benefits $9,016,408 $ - $5,156,589 $ - $ - $14,172,997
==============================================================================================
</TABLE>
See accompanying notes.
8
<PAGE> 80
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE
PRICE ARCH T. ROWE
PREVIOUS NEW INTER- PRICE FIDELITY
PAGE HORIZONS NATIONAL INTERNATIONAL CONTRA
SUBTOTAL FUND FUND STOCK FUND FUND SUBTOTAL
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $14,172,997 $808,989 $ - $243,763 $86,580 $15,312,329
Participant loans - - - - - -
===============================================================================================
Net assets available for
plan benefits $14,172,997 $808,989 $ - $243,763 $86,580 $15,312,329
===============================================================================================
</TABLE>
See accompanying notes.
9
<PAGE> 81
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE
PUTNAM PRICE EQUITY
PREVIOUS FIDELITY NEW BLENDED INDEX
PAGE VALUE OPPORTUNITIES STABLE TRUST
SUBTOTAL FUND FUND VALUE FUND (S&P 500) SUBTOTAL
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $15,312,329 $45,685 $155,784 $2,861,069 $259,790 $18,634,657
Participant loans - - - - - -
================================================================================================
Net assets available for
plan benefits $15,312,329 $45,685 $155,784 $2,861,069 $259,790 $18,634,657
================================================================================================
</TABLE>
See accompanying notes.
10
<PAGE> 82
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE T. ROWE
PRICE PRICE T. ROWE
PREVIOUS PERSONAL PERSONAL PRICE T. ROWE PRICE
PAGE STRATEGY STRATEGY SUMMIT CASH SPECTRUM INCOME
SUBTOTAL INCOME FUND GROWTH FUND RESERVES FUND FUND SUBTOTAL
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $18,634,657 $19,013 $82,724 $51,523 $23,192 $18,811,109
Participant loans - - - - - -
===============================================================================================
Net assets available for
plan benefits $18,634,657 $19,013 $82,724 $51,523 $23,192 $18,811,109
===============================================================================================
</TABLE>
See accompanying notes.
11
<PAGE> 83
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
T. ROWE PRICE
PREVIOUS BLUE CHIP
PAGE GROWTH PARTICIPANT
SUBTOTAL FUND LOANS TOTAL
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at fair value $18,811,109 $469,102 $ - $19,280,211
Participant loans - - 411,615 411,615
---------------------------------------------------------------------
Net assets available for
plan benefits $18,811,109 $469,102 $411,615 $19,691,826
=====================================================================
</TABLE>
See accompanying notes.
12
<PAGE> 84
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE PRICE
T. ROWE PERSONAL
SSCC PRICE EQUITY STRATEGY MOBIL
COMMON JS GROUP INCOME BALANCED STOCK
STOCK FUND STOCK FUND FUND FUND FUND SUBTOTAL
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 26,309 $ - $ 244,227 $ 88,864 $ - $ 359,400
Employer 412,726 - 14,125 6,947 - 433,798
Net investment income:
Interest on guaranteed group
annuity contracts - - - - - -
Other investment income - 32,916 366,358 62,737 157,365 619,376
--------------------------------------------------------------------------------------------------
439,035 32,916 624,710 158,548 157,365 1,412,574
Net realized and unrealized
appreciation (depreciation)
of investments 258,351 (319,637) 78,372 73,447 1,028,468 1,119,001
Transfers by participants (2,116) (90,748) (145,551) 26,609 (95,554) (307,360)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund 32,916 (32,916) - - - -
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan 5,637 - - - - 5,637
Forfeitures (23,697) (700) - - - (24,397)
Withdrawals by participants (236,512) (138,524) (946,557) (218,534) (364,901) (1,905,028)
Loan repayments by
participants 199 - 59,310 10,702 - 70,211
Administrative expenses (498) (43) (4,065) (2,816) (330) (7,752)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 473,315 (549,652) (333,781) 47,956 725,048 362,886
Net assets available for plan
benefits, beginning of year 1,832,770 1,138,843 5,012,922 1,031,873 5,156,589 14,172,997
--------------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $2,306,085 $ 589,191 $4,679,141 $1,079,829 $5,881,637 $14,535,883
==================================================================================================
</TABLE>
See accompanying notes.
13
<PAGE> 85
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE T. ROWE
PREVIOUS PRICE NEW PRICE
PAGE HORIZONS INTERNATIONAL FIDELITY FIDELITY VALUE
SUBTOTAL FUND STOCK FUND CONTRA FUND FUND SUBTOTAL
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 359,400 $148,004 $ 51,297 $ 47,913 $ 12,247 $ 618,861
Employer 433,798 8,778 3,542 1,425 683 448,226
Net investment income:
Interest on guaranteed group
annuity contracts - - - - - -
Other investment income 619,376 42,159 10,011 12,488 3,039 687,073
--------------------------------------------------------------------------------------------------
1,412,574 198,941 64,850 61,826 15,969 1,754,160
Net realized and unrealized
appreciation (depreciation)
of investments 1,119,001 10,130 29,378 17,469 (2,714) 1,173,264
Transfers by participants (307,360) 39,047 13,089 20,462 (20,191) (254,953)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan 5,637 - - - - 5,637
Forfeitures (24,397) - - - - (24,397)
Withdrawals by participants (1,905,028) (236,311) (72,886) (14,579) (16,208) (2,245,012)
Loan repayments by
participants 70,211 25,678 2,031 - - 97,920
Administrative expenses (7,752) (203) (119) (78) (24) (8,176)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 362,886 37,282 36,343 85,100 (23,168) 498,443
Net assets available for plan
benefits, beginning of year 14,172,997 808,989 243,763 86,580 45,685 15,358,014
--------------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $14,535,883 $846,271 $280,106 $171,680 $ 22,517 $ 15,856,457
==================================================================================================
</TABLE>
See accompanying notes.
14
<PAGE> 86
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE
PUTNAM PRICE T. ROWE PRICE
PREVIOUS NEW BLENDED EQUITY INDEX PERSONAL
PAGE OPPORTUNITIES STABLE VALUE TRUST (S&P STRATEGY
SUBTOTAL FUND FUND 500) INCOME FUND SUBTOTAL
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 618,861 $ 93,346 $ 96,383 $ 34,375 $15,989 $ 858,954
Employer 448,226 5,521 5,977 3,225 1,111 464,060
Net investment income:
Interest on guaranteed group
annuity contracts - - 166,667 - - 166,667
Other investment income 687,073 11,045 - - 1,635 699,753
--------------------------------------------------------------------------------------------------
1,754,160 109,912 269,027 37,600 18,735 2,189,434
Net realized and unrealized
appreciation (depreciation)
of investments 1,173,264 42,465 - 98,353 2,269 1,316,351
Transfers by participants (254,953) 94,566 (205,898) 116,668 (606) (250,223)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan 5,637 - - - - 5,637
Forfeitures (24,397) - - - - (24,397)
Withdrawals by participants (2,245,012) (37,566) (431,076) (43,998) (248) (2,757,900)
Loan repayments by
participants 97,920 3,669 14,176 580 4,534 120,879
Administrative expenses (8,176) (122) (3,566) (235) (275) (12,374)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 498,443 212,924 (357,337) 208,968 24,409 587,407
Net assets available for plan
benefits, beginning of year 15,358,014 155,784 2,861,069 259,790 19,013 18,653,670
--------------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 15,856,457 $368,708 $2,503,732 $468,758 $43,422 $ 19,241,077
==================================================================================================
</TABLE>
See accompanying notes.
15
<PAGE> 87
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
T. ROWE
T. ROWE PRICE PRICE T. ROWE T. ROWE
PREVIOUS PERSONAL SUMMIT CASH PRICE PRICE BLUE
PAGE STRATEGY RESERVES SPECTRUM CHIP GROWTH
SUBTOTAL GROWTH FUND FUND INCOME FUND FUND SUBTOTAL
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 858,954 $ 60,997 $ 16,936 $16,533 $ 182,310 $ 1,135,730
Employer 464,060 2,687 852 922 9,084 477,605
Net investment income:
Interest on guaranteed group
annuity contracts 166,667 - - - - 166,667
Other investment income 699,753 5,165 4,670 3,424 15,865 728,877
--------------------------------------------------------------------------------------------------
2,189,434 68,849 22,458 20,879 207,259 2,508,879
Net realized and unrealized
appreciation (depreciation)
of investments 1,316,351 10,425 - (1,139) 173,638 1,499,275
Transfers by participants (250,223) (22,651) 13,183 11,918 247,773 -
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan 5,637 - - 1,491 5,813 12,941
Forfeitures (24,397) - 781 - - (23,616)
Withdrawals by participants (2,757,900) (7,784) (11,619) (2,084) (9,373) (2,788,760)
Loan repayments by
participants 120,879 1,546 20,430 81 9,878 152,814
Administrative expenses (12,374) (373) (593) (418) (904) (14,662)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 587,407 50,012 44,640 30,728 634,084 1,346,871
Net assets available for plan
benefits, beginning of year 18,653,670 82,724 51,523 23,192 469,102 19,280,211
--------------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 19,241,077 $132,736 $ 96,163 $53,920 $1,103,186 $ 20,627,082
==================================================================================================
</TABLE>
See accompanying notes.
16
<PAGE> 88
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS
PAGE PARTICIPANT
SUBTOTAL LOANS TOTAL
------------------------------------------------------
<S> <C> <C> <C>
Contributions:
Employees $ 1,135,730 $ - $ 1,135,730
Employer 477,605 - 477,605
Net investment income:
Interest on guaranteed group
annuity contracts 166,667 - 166,667
Other investment income 728,877 26,191 755,068
------------------------------------------------------
2,508,879 26,191 2,535,070
Net realized and unrealized
appreciation (depreciation) of
investments 1,499,275 - 1,499,275
Transfers by participants - - -
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - -
Transfers of participant accounts
from Jefferson Smurfit
Corporation Savings Plan 12,941 - 12,941
Forfeitures (23,616) - (23,616)
Withdrawals by participants (2,788,760) 120,040 (2,668,720)
Loan repayments by
participants 152,814 (152,814) -
Administrative expenses (14,662) - (14,662)
------------------------------------------------------
Net increase (decrease) in net
assets available for plan benefits 1,346,871 (6,583) 1,340,288
Net assets available for plan
benefits, beginning of year 19,280,211 411,615 19,691,826
------------------------------------------------------
Net assets available for plan
benefits, end of year $ 20,627,082 $ 405,032 $21,032,114
======================================================
</TABLE>
See accompanying notes.
17
<PAGE> 89
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE
T. ROWE PRICE
ARCH PRICE PERSONAL
SSCC GROWTH AND EQUITY STRATEGY
COMMON JS GROUP INCOME INCOME BALANCED
STOCK FUND STOCK FUND FUND FUND FUND SUBTOTAL
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 43,598 $ - $ - $ 369,143 $ 129,253 $ 541,994
Employer 591,607 - - - - 591,607
Net investment income:
Interest on guaranteed group
annuity contracts - - - - - -
Other investment income - 18,956 - 491,975 52,232 563,163
------------------------------------------------------------------------------------------
635,205 18,956 - 861,118 181,485 1,696,764
Net realized and unrealized
appreciation (depreciation) of
investments (209,684) (92,283) - 606,726 98,961 403,720
Transfers by participants (260,356) (8,584) (16,010) (22,371) (42,012) (349,333)
Transfers to SSCC Common Stock
Fund from JS Group Stock
Fund 18,956 (18,956) - - - -
Transfers of participant accounts
from Jefferson Smurfit
Corporation Savings Plan and
Smurfit Packaging Corporation
401(k) Savings Plan 15,473 - - 1,369 329 17,171
Forfeitures (20,024) (4,397) - - - (24,421)
Withdrawals by participants (55,694) (48,862) - (286,155) (77,756) (468,467)
Loan repayments by participants 122 - - 85,835 8,652 94,609
Administrative expenses (83) - - (1,338) (1,674) (3,095)
-------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
available for plan benefits 123,915 (154,126) (16,010) 1,245,184 167,985 1,366,948
Net assets available for plan
benefits, beginning of year 1,708,855 1,292,969 16,010 3,767,738 863,888 7,649,460
-------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $1,832,770 $1,138,843 $ - $5,012,922 $1,031,873 $9,016,408
===========================================================================================
</TABLE>
See accompanying notes.
18
<PAGE> 90
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
AETNA ARCH
PREVIOUS INTEREST MOBIL VIP EMERGING
PAGE INCOME STOCK CONTRACT GROWTH
SUBTOTAL FUND FUND FUND FUND SUBTOTAL
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 541,994 $ - $ - $ - $ - $ 541,994
Employer 591,607 - - - - 591,607
Net investment income:
Interest on guaranteed group
annuity contracts - - - - - -
Other investment income 563,163 - 149,455 - - 712,618
------------------------------------------------------------------------------------------
1,696,764 - 149,455 - - 1,846,219
Net realized and unrealized
appreciation (depreciation)
of investments 403,720 - 772,060 - - 1,175,780
Transfers by participants (349,333) (2,794,891) 3,082 (205,535) (403) (3,347,080)
Transfers to SSCC Common
Stock Fund from JS Group
Stock Fund - - - - - -
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan and Smurfit Packaging
Corporation 401(k) Savings
Plan 17,171 - - - - 17,171
Forfeitures (24,421) - - - - (24,421)
Withdrawals by participants (468,467) - (42,259) - - (510,726)
Loan repayments by participants
94,609 - - - - 94,609
Administrative expenses (3,095) - (76) - - (3,171)
------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 1,366,948 (2,794,891) 882,262 (205,535) (403) (751,619)
Net assets available for plan
benefits, beginning of year 7,649,460 2,794,891 4,274,327 205,535 403 14,924,616
------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $9,016,408 $ - $ 5,156,589 $ - $ - $14,172,997
==========================================================================================
</TABLE>
See accompanying notes.
19
<PAGE> 91
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE
T. ROWE PRICE
PRICE ARCH INTER-
PREVIOUS NEW INTER- NATIONAL FIDELITY
PAGE HORIZONS NATIONAL STOCK CONTRA
SUBTOTAL FUND FUND FUND FUND SUBTOTAL
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 541,994 $ 187,863 $ - $ 53,722 $24,473 $ 808,052
Employer 591,607 - - - - 591,607
Net investment income:
Interest on guaranteed group
annuity contracts - - - - - -
Other investment income 712,618 19,504 - 12,816 7,118 752,056
------------------------------------------------------------------------------------------
1,846,219 207,367 - 66,538 31,591 2,151,715
Net realized and unrealized
appreciation (depreciation)
of investments 1,175,780 69,435 - (12,265) 1,425 1,234,375
Transfers by participants (3,347,080) 11,599 (52) 88,561 53,568 (3,193,404)
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund - - - - - -
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan and Smurfit Packaging
Corporation 401(k) Savings
Plan 17,171 955 - - - 18,126
Forfeitures (24,421) - - - - (24,421)
Withdrawals by participants (510,726) (210,728) - (20,404) - (741,858)
Loan repayments by participants 94,609 39,153 - 1,296 10 135,068
Administrative expenses (3,171) (73) - - (14) (3,258)
------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits (751,619) 117,708 (52) 123,726 86,580 (423,657)
Net assets available for plan
benefits, beginning of year 14,924,616 691,281 52 120,037 - 15,735,986
------------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $14,172,997 $ 808,989 $ - $243,763 $86,580 $15,312,329
==========================================================================================
</TABLE>
See accompanying notes.
20
<PAGE> 92
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
PUTNAM T. ROWE
NEW PRICE EQUITY
PREVIOUS OPPOR- BLENDED INDEX
PAGE FIDELITY TUNITIES STABLE TRUST (S&P
SUBTOTAL VALUE FUND FUND VALUE FUND 500) SUBTOTAL
------------ ------------ ------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 808,052 $ 8,887 $ 66,588 $ 182,435 $ 18,298 $ 1,084,260
Employer 591,607 -- -- -- -- 591,607
Net investment income:
Interest on guaranteed group
annuity contracts -- -- -- 178,207 -- 178,207
Other investment income 752,056 6,095 3,403 -- -- 761,554
------------ ----------- ------------- ----------- ------------ -----------
2,151,715 14,982 69,991 360,642 18,298 2,615,628
Net realized and unrealized
appreciation (depreciation)
of investments 1,234,375 (3,862) 14,783 -- 28,382 1,273,678
Transfers by participants (3,193,404) 35,198 70,691 2,633,150 183,797 (270,568)
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund -- -- -- -- -- --
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan and Smurfit Packaging
Corporation 401(k) Savings
Plan 18,126 -- -- 5,125 66,432 89,683
Forfeitures (24,421) -- -- -- -- (24,421)
Withdrawals by participants (741,858) (643) (1,456) (145,989) (37,250) (927,196)
Loan repayments by participants 135,068 10 1,794 16,767 157 153,796
Administrative expenses 3,258 -- (19) (8,626) (26) (11,929)
------------ ----------- ------------- ----------- ----------- -----------
Net increase (decrease) in net
assets available for plan
benefits (423,657) 45,685 155,784 2,861,069 259,790 2,898,671
Net assets available for plan
benefits, beginning of year 15,735,986 -- -- -- -- 15,735,986
============ =========== ============= =========== =========== ===========
Net assets available for plan
benefits, end of year $ 15,312,329 $ 45,685 $ 155,784 $ 2,861,069 $ 259,790 $18,634,657
============ =========== ============= =========== =========== ===========
</TABLE>
See accompanying notes.
21
<PAGE> 93
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE T. ROWE T. ROWE
PRICE PRICE PRICE T. ROWE
PERSONAL PERSONAL SUMMIT PRICE
PREVIOUS STRATEGY STRATEGY CASH SPECTRUM
PAGE INCOME GROWTH RESERVES INCOME
SUBTOTAL FUND FUND FUND FUND SUBTOTAL
------------ ----------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Employees $ 1,084,260 $ 14,712 $ 56,517 $ 12,904 $ 16,209 $ 1,184,602
Employer 591,607 -- -- -- -- 591,607
Net investment income:
Interest on guaranteed group
annuity contracts 178,207 -- -- -- -- 178,207
Other investment income 761,554 851 2,521 1,705 1,100 767,731
------------ ----------- ------------ ----------- ---------- ------------
2,615,628 15,563 59,038 14,609 17,309 2,722,147
Net realized and unrealized
appreciation (depreciation)
of investments 1,273,678 417 5,293 -- 731 1,280,119
Transfers by participants (270,568) (524) 17,971 16,323 6,415 (230,383)
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund -- -- -- -- -- --
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan and Smurfit Packaging
Corporation 401(k) Savings
Plan 89,683 -- -- 932 -- 90,615
Forfeitures (24,421) -- -- -- -- (24,421)
Withdrawals by participants (927,196) -- -- (7,070) (1,110) (935,376)
Loan repayments by participants 153,796 3,646 625 27,027 -- 185,094
Administrative expenses (11,929) (89) (203) (298) (153) (12,672)
------------ ----------- ------------ ---------- ---------- ------------
Net increase (decrease) in net
assets available for plan
benefits 2,898,671 19,013 82,724 51,523 23,192 3,075,123
Net assets available for plan
benefits, beginning of year 15,735,986 -- -- -- -- 15,735,986
============ =========== ============ ========== ========== ============
Net assets available for plan
benefits, end of year $ 18,634,657 $ 19,013 $ 82,724 $ 51,523 $ 23,192 $ 18,811,109
============ =========== ============ ========== ========== ============
</TABLE>
See accompanying notes.
22
<PAGE> 94
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits,
With Fund Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
T. ROWE
PRICE BLUE
PREVIOUS CHIP
PAGE GROWTH PARTICIPANT
SUBTOTAL FUND LOANS TOTAL
------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
Contributions:
Employees $ 1,184,602 $ 180,120 $ -- $ 1,364,722
Employer 591,607 -- -- 591,607
Net investment income:
Interest on guaranteed group
annuity contracts 178,207 -- -- 178,207
Other investment income 767,731 2,672 27,821 798,224
------------- ------------- ----------- ------------
2,722,147 182,792 27,821 2,932,760
Net realized and unrealized
appreciation (depreciation)
of investments 1,280,119 52,989 -- 1,333,108
Transfers by participants (230,383) 230,383 -- --
Transfers to SSCC Common Stock
Fund from JS Group Stock Fund -- -- -- --
Transfers of participant
accounts from Jefferson
Smurfit Corporation Savings
Plan and Smurfit Packaging
Corporation 401(k) Savings
Plan 90,615 -- -- 90,615
Forfeitures (24,421) -- -- (24,421)
Withdrawals by participants (935,376) (2,294) 266,724 (670,946)
Loan repayments by participants 185,094 5,671 (190,765) --
Administrative expenses (12,672) (439) -- (13,111)
------------- ------------- ----------- -------------
Net increase (decrease) in net
assets available for plan
benefits 3,075,123 469,102 103,780 3,648,005
Net assets available for plan
benefits, beginning of year 15,735,986 -- 307,835 16,043,821
============= ============= =========== =============
Net assets available for plan
benefits, end of year $ 18,811,109 $ 469,102 $ 411,615 $ 19,691,826
============= ============= =========== =============
</TABLE>
See accompanying notes.
23
<PAGE> 95
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Smurfit Packaging Corporation Savings Plan (the
Plan) are reported on the accrual basis. The current values of investments have
been determined by T. Rowe Price as trustee for 1998 and 1997 and have been
based on closing prices if traded on national stock exchanges or bid prices for
bonds. The immediate participation contracts and participant loans are valued at
cost which approximates market. The differences between the current value and
the cost of investments are reflected in the statements of changes in net assets
available for plan benefits as part of net realized and unrealized appreciation
(depreciation) of investments. The cost of securities sold is based on the
weighted average method.
As of January 1, 1997, the Plan changed the Plan's trustee from Mercantile Bank
of St. Louis to T. Rowe Price. As of October 1, 1996, funds were transferred
into an omnibus account, and investment options were changed from the various
Arch funds to T. Rowe Price funds.
Administrative expenses are paid by the Plan. In 1997, the Plan changed the
allocation of administrative expenses to participant accounts from a prorated
method to allocating expenses to a participant's most stable fund.
The preparation of financial statements in conformity with generally accepted
accounting principles requires plan management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Plan is a contributory employee benefit plan of Smurfit Packaging
Corporation (Company) and adopting subsidiaries and affiliates. The Plan is
composed of three components: (i) a cash or deferred compensation component
(401(k) component); (ii) an after-tax voluntary contribution component (ATC
component); and (iii) an employer matching contribution component.
24
<PAGE> 96
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The Plan is administered by an Administrative Committee (Committee) consisting
of officers or other employees of the Company or its adopting subsidiaries and
affiliates. The Committee prescribes forms for use by participants and may make
administrative and procedural recommendations.
Employees eligible to participate in the Plan generally consist of all employees
of the Company and adopting subsidiaries and affiliates, except for (1) those
employees covered by a collective bargaining agreement which provides for
retirement benefits, (2) nonresident aliens, and (3) substantially all hourly
employees.
Under the 401(k) provisions, employees may elect to have a portion of their
salary deferred and contributed to the Plan to be invested in one or more of 15
investment options available under the Plan. The participants' ATC contributions
are invested in an immediate participation contract or in one or more of 15
investment options available under the Plan in 1998 and 1997. Contributions are
made bimonthly.
Under the employer contribution provisions, each employer contributes, for each
of its employees who are participants, an amount equal to 65 percent of the
401(k) contributions authorized by such employee for 1998 and 1997,
respectively, to a maximum of $5,000 ($4,750 in 1997) in one calendar year, to
the extent the rate of such contributions, in effect from time to time, does not
exceed 3.9 percent in 1998 and 1997 of the participant's compensation (matching
contributions). The 401(k) contributions authorized by a participant in excess
of 6 percent of participant compensation for any pay period are disregarded for
purposes of matching contributions. Effective November 18, 1998, employer
contributions are invested in the same manner as the employee's election.
Participant contributions to the 401(k) plan which are made via payroll
withholdings are limited to the lesser of $10,000 and $9,500 or 15 percent of
participant compensation for calendar years 1998 and 1997. Participant
contributions to the ATC are limited to 15 percent of participant compensation,
not to exceed 20 percent of participant compensation in total when combined with
401(k) contributions. Total contributions credited to a participant's account
(combined 401(k), ATC, and matching contribution components) are limited to the
lesser of $30,000 or 25 percent of compensation. These limitations are
determined on a calendar year basis.
25
<PAGE> 97
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Terminated participants of the Plan are paid the current value of their 401(k)
account, their ATC account, and the vested portion of their employer match
account. Participants may elect a cash distribution or a stock distribution from
the SSCC Common Stock Fund or the Mobil Stock Fund. All other distributions are
in cash.
Each participant has a fully vested and nonforfeitable interest in the value of
his or her proportional share of the investment funds in which his or her 401(k)
contributions and ATC contributions are invested. Employer contributions vest
over a five-year period based on participant years of service. The nonvested
portion of a terminating participant's account constitutes a forfeiture and is
applied to reduce future employer contributions. If a participant, who has
forfeited all or a part of his or her account, is reemployed before 60 months
have elapsed after his or her employment ended, any amount he or she forfeited
will be restored to his or her account from amounts forfeited currently by other
participants.
Upon enrollment in the Plan, contributions may be directed into the following
funds by the participant or employer:
SSCC Common Stock Fund - Effective August 1, 1994 and prior to November 18,
1998, all employer contributions are invested in shares of Jefferson
Smurfit Corporation (JSC) common stock. On November 18, 1998, JSC merged
with Stone Container Corporation, and the company was renamed Smurfit-Stone
Container Corporation (SSCC). Effective November 18, 1998, employer
contributions are invested in the same manner as the employee's election.
JS Group Stock Fund - Employer contributions prior to August 1, 1994 were
invested in Jefferson Smurfit Group plc common stock. After August 1, 1994,
dividends received by the JS Group Stock Fund were invested in shares of
SSCC common stock and transferred to the SSCC Common Stock Fund.
26
<PAGE> 98
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
T. Rowe Price Personal Strategy Balanced Fund - Effective October 1, 1997,
employee contributions are invested in shares of a registered investment
company that invests in common stocks, bonds, and money market securities
to provide the highest total return over time consistent with an emphasis
on both capital appreciation and income.
T. Rowe Price Equity Income Fund - Effective October 1, 1997, employee
contributions are invested in shares of a registered investment company
that invests in common stocks of established companies that have long-term
capital appreciation and dividend income.
T. Rowe Price New Horizons Fund - Effective October 1, 1997, employee
contributions are invested in shares of a registered investment company
that invests in common stocks of small growth companies in a broad range of
industries.
T. Rowe Price International Stock Fund - Effective October 1, 1997,
employee contributions are invested in shares of a registered investment
company that invests in common stocks of established non-U.S. companies.
Fidelity Contra Fund - Effective January 1, 1998, employee contributions
are invested in shares of a registered investment company that invests in
common stocks that are considered undervalued with potential for capital
growth.
Fidelity Value Fund - Effective January 1, 1998, employee contributions are
invested in shares of a registered investment company that invests in the
stock of companies that possess valuable assets or are considered
undervalued.
Putnam New Opportunities Fund - Effective January 1, 1998, employee
contributions are invested in shares of a registered investment company
that invests in stocks of emerging industries offering long-term growth.
27
<PAGE> 99
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
T. Rowe Price Blended Stable Value Fund - Effective January 1, 1998,
employee contributions are invested in shares of a registered investment
company that invests in high-quality insurance companies and banks seeking
to maintain a stable $1 per share price.
Equity Index Trust (S&P 500) - Effective January 1, 1998, employee
contributions are invested in shares of the stocks that make up the
Standard & Poor's 500 Index.
T. Rowe Price Personal Strategy Income Fund - Effective January 1, 1998,
employee contributions are invested in shares of a registered investment
company that invests in bonds, common stocks, and money market securities
to provide the highest total return over time consistent with a primary
emphasis on income and a secondary emphasis on capital appreciation.
T. Rowe Price Personal Strategy Growth Fund - Effective January 1, 1998,
employee contributions are invested in shares of a registered investment
company that invests in common stocks, bonds, and money market securities
to provide the highest total return over time with an emphasis on capital
appreciation.
T. Rowe Price Summit Cash Reserves Fund - Effective January 1, 1998,
employee contributions are invested in shares of a registered investment
company that invests in high-quality money market securities seeking to
maintain a stable $1 per share price.
T. Rowe Price Spectrum Income Fund - Effective January 1, 1998, employee
contributions are invested in shares of a registered investment company
that invests in four domestic bond funds, an international bond fund, an
income-oriented bond fund, and a money market fund to provide a high level
of current income.
T. Rowe Price Blue Chip Growth Fund - Effective January 1, 1998, employee
contributions are invested in shares of a registered investment company
that invests in common stocks of large, well-known companies in growing
markets.
In addition to the above, former employees of Container Corporation of America
may have a portion of their plan investment held in shares of Mobil Corporation
common stock. Contributions are no longer permitted into this fund.
28
<PAGE> 100
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
The fair value of individual investments that represent 5 percent or more of the
Plan's net assets is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1998
--------------
<S> <C>
SSCC common stock (145,859 shares) $ 2,306,085
T. Rowe Price Blended Stable Value Fund
(2,503,732 shares) 2,503,732
Mobil Corporation common stock (67,508 shares) 5,881,637
T. Rowe Price Equity Income Fund (177,779 shares) 4,679,141
T. Rowe Price Personal Strategy Balanced Fund (67,914 shares)
1,079,829
T. Rowe Price Blue Chip Growth Fund (36,052 shares) 1,103,186
<CAPTION>
DECEMBER 31,
1997
--------------
<S> <C>
SSCC common stock (129,754 shares) 1,832,770
JS Group shares (408,655 shares) 1,138,843
T. Rowe Price Blended Stable Value Fund (2,861,069 shares) 2,861,069
Mobil Corporation common stock (71,433 shares) 5,156,589
T. Rowe Price Equity Income Fund (192,287 shares) 5,012,922
T. Rowe Price Personal Strategy Balanced Fund (69,627 shares) 1,031,873
</TABLE>
29
<PAGE> 101
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
4. PLAN TAX STATUS
The Internal Revenue Service ruled on May 30, 1996 that the Plan qualifies under
Section 401(a) and meets the requirements under Section 401(k) of the Internal
Revenue Code (IRC), and therefore, the related trust is not subject to tax under
present income tax law. Once qualified, the Plan is required to operate in
conformity with the IRC to maintain its qualification. The Committee is not
aware of any course of action or series of events that has occurred that might
adversely affect the Plan's qualified status.
Participants are not subject to federal income tax on amounts contributed to
their 401(k) or employer matching contribution amounts under the Plan or on
earnings attributable to all contributions, until such time as these amounts are
distributed to or withdrawn by participants.
5. YEAR 2000 (UNAUDITED)
Computer programs which have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. Beginning in the year 2000,
this could result in a system failure or miscalculations causing disruptions of
operations, including a temporary inability to process transactions or engage in
normal business activities.
The Company has completed testing for its internal systems which impact the
processing of transactions on behalf of the Plan. The only major system related
to the Plan which is noncompliant is the payroll system, which is currently in
the process of being updated to a new year 2000-compliant system. The payroll
system and all other systems are expected to be year 2000-compliant by mid-1999.
The Plan has obtained formal communications from its service providers to
determine the extent to which the Plan's interface systems are vulnerable to
those third parties' failure to resolve their own year 2000 issues. The Plan's
review of these communications is expected to be complete by mid-1999.
Substantially all of the costs of the year 2000 inquiries and the systems
updates are being paid by the Company with no effect on plan assets. The Plan
believes the necessary modifications and replacement of computer systems will be
completed in a timely manner, and as a result, the year 2000 issue is not
expected to pose significant operational or financial problems for the Plan.
30
<PAGE> 102
Supplemental Schedules
<PAGE> 103
Smurfit Packaging Corporation Savings Plan
EIN: 43-1531057
Plan #003
Line 27a - Assets Held for Investment
December 31, 1998
<TABLE>
<CAPTION>
SHARES/ CURRENT
DESCRIPTION UNITS VALUE COST
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SSCC Common Stock Fund:
Jefferson Smurfit common stock* 145,839 $ 2,306,085 $ 2,097,256
JS Group Stock Fund:
JS Group shares* 329,120 589,191 917,191
T. Rowe Price Blended Stable Value Fund 2,503,732 2,503,732 2,503,732
Mobil Stock Fund:
Shares of Mobil Corporation common stock 67,508 5,881,637 4,884,675
T. Rowe Price International Stock Fund 18,686 280,106 257,306
T. Rowe Price New Horizons Fund 36,258 846,271 838,152
T. Rowe Price Personal Strategy Balanced Fund 67,914 1,079,829 1,016,291
T. Rowe Price Equity Income Fund 177,779 4,679,141 4,649,449
Fidelity Value Fund 486 22,517 25,739
Fidelity Contra Fund 3,023 171,680 155,745
Putnam New Opportunities Fund 6,310 368,708 326,831
Equity Index Trust (S&P 500) 14,713 468,758 382,958
</TABLE>
31
<PAGE> 104
Smurfit Packaging Corporation Savings Plan
EIN: 43-1531057
Plan #003
Line 27a - Assets Held for Investment (continued)
December 31, 1998
<TABLE>
<CAPTION>
SHARES/ CURRENT
DESCRIPTION UNITS VALUE COST
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
T. Rowe Price Personal Strategy Income Fund 3,272 43,422 41,659
T. Rowe Price Personal Strategy Growth Fund 7,253 132,736 124,323
T. Rowe Price Summit Cash Reserves Fund 96,163 96,163 96,163
T. Rowe Price Spectrum Income Fund 4,689 53,920 54,863
T. Rowe Price Blue Chip Growth Fund 36,052 1,103,186 936,296
Participant Loans* -- 405,032 --
-------------------------------
$ 21,032,114 $ 19,308,629
===============================
</TABLE>
* Parties in interest. The interest rate on participant loans issued during the
year ended December 31, 1998 ranged from 6.72 percent to 10.3 percent.
32
<PAGE> 105
Smurfit Packaging Corporation Savings Plan
EIN: 43-1531057
Plan #003
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT VALUE
OF ASSET ON
DESCRIPTION OF PURCHASE SELLING COST TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED ASSET PRICE PRICE OF ASSET DATE (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of the current value of plan assets
<S> <C> <C> <C> <C> <C> <C>
T. Rowe Price Blended Stable Investment $ 12,033,579 $ -- $ 12,033,579 $ 12,033,579 $ --
Value Fund Contract
Investment (10,997,377) (10,997,377) (10,997,377) (10,997,377) --
Contract
T. Rowe Price Equity Income Mutual Fund 13,105,074 - 13,105,074 13,105,074 --
Fund Mutual Fund (15,326,323) (17,540,345) (15,326,323) (17,540,345) 2,214,022
</TABLE>
Categories (i), (ii), and (iv) are not applicable.
33
<PAGE> 106
Financial Statements
Stone Container Corporation
Deferred Income Savings Plan
Years ended December 31, 1998 and 1997
with Report of Independent Auditors
<PAGE> 107
Stone Container Corporation
Deferred Income Savings Plan
Financial Statements
Years ended December 31, 1998 and 1997
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors...................................................................... 1
Financial Statements
Statements of Net Assets Available for Plan Benefits, With Fund Information......................... 2
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information...................................................................................... 6
Notes to Financial Statements....................................................................... 10
</TABLE>
<PAGE> 108
Report of Independent Auditors
Administrative Committee
Stone Container Corporation
Deferred Income Savings Plan
We have audited the accompanying statement of net assets available for plan
benefits of the Stone Container Corporation Deferred Income Savings Plan as of
December 31, 1998 and the related statement of changes in net assets available
for plan benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. Other auditors have
audited the financial statements of the Plan for the year ended December 31,
1997. Their report dated June 23, 1998 expressed an unqualified opinion on those
statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1998 and the changes in its net assets available for plan benefits
for the year then ended, in conformity with generally accepted accounting
principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The fund information in the statements of net
assets available for plan benefits and the statements of changes in net assets
available for plan benefits is presented for purposes of additional analysis
rather than to represent the net assets available for plan benefits and changes
in net assets available for plan benefits of each fund. The fund information has
been subjected to the auditing procedures applied in our audit of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
June 18, 1999 /s/ Ernst & Young LLP
1
<PAGE> 109
Stone Container Corporation Deferred Income Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME MONEY MARKET COMPANY STOCK
FUND EQUITY FUND FUND FUND SUBTOTAL
------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $ 65,361,854 $ 86,073,009 $ 211,034 $ 25,454,679 $177,100,576
Receivables:
Accrued employer
contributions -- -- -- 4,778,893 4,778,893
------------ ------------ ------------ ------------ ------------
Net assets available for
plan benefits $ 65,361,854 $ 86,073,009 $ 211,034 $ 30,233,572 $181,879,469
============ ============ ============ ============ ============
</TABLE>
See accompanying notes.
2
<PAGE> 110
Stone Container Corporation Deferred Income Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS PAGE SMALL COMPANY INTERNATIONAL
SUBTOTAL BALANCED FUND GROWTH FUND EQUITY FUND TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $177,100,576 $ 31,202,898 $ 3,070,103 $ 3,926,243 $215,299,820
Receivables:
Accrued employer
contributions 4,778,893 -- -- -- 4,778,893
------------------------------------------------------------------------
Net assets available for
plan benefits $181,879,469 $ 31,202,898 $ 3,070,103 $ 3,926,243 $220,078,713
========================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 111
Stone Container Corporation Deferred Income Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
FIXED INCOME MONEY MARKET COMPANY STOCK
FUND EQUITY FUND FUND FUND SUBTOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $ 63,250,133 $ 66,175,173 $ 213,211 $ 14,833,057 $144,471,574
Receivables:
Accrued employer
contributions -- -- -- 4,578,194 4,578,194
------------------------------------------------------------------------
Net assets available for plan
benefits $ 63,250,133 $ 66,175,173 $ 213,211 $ 19,411,251 $149,049,768
========================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 112
Stone Container Corporation Deferred Income Savings Plan
Statements of Net Assets Available for Plan Benefits, With Fund Information
(continued)
December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS PAGE SMALL COMPANY INTERNATIONAL
SUBTOTAL BALANCED FUND GROWTH FUND EQUITY FUND TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value $144,471,574 $ 27,163,784 $ 2,889,269 $ 2,802,298 $177,326,925
Receivables:
Accrued employer
contributions 4,578,194 -- -- -- 4,578,194
------------------------------------------------------------------------
Net assets available for plan
benefits $149,049,768 $ 27,163,784 $ 2,889,269 $ 2,802,298 $181,905,119
========================================================================
</TABLE>
See accompanying notes.
5
<PAGE> 113
Stone Container Corporation Deferred Income Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
FIXED INCOME MONEY MARKET COMPANY STOCK
FUND EQUITY FUND FUND FUND SUBTOTAL
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employees $ 3,622,254 $ 5,902,507 $ -- $ 1,440,687 $ 10,965,448
Employer -- -- -- 4,778,893 4,778,893
----------------------------------------------------------------------------------
3,622,254 5,902,507 -- 6,219,580 15,744,341
Investment income from Master
Trust 4,112,658 18,075,659 8,140 8,416,223 30,612,680
Transfers to (from) other plans (53,043) (46,240) -- (34,376) (133,659)
Transfers by participants 1,698,918 665,075 2,826 (2,634,414) (267,595)
Withdrawals by participants (7,215,023) (4,699,165) (13,143) (1,144,692) (13,072,023)
Administrative expenses (54,043) -- -- -- (54,043)
----------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 2,111,721 19,897,836 (2,177) 10,822,321 32,829,701
Net assets available for plan
benefits, beginning of year 63,250,133 66,175,173 213,211 19,411,251 149,049,768
----------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 65,361,854 $ 86,073,009 $ 211,034 $ 30,233,572 $ 181,879,469
==================================================================================
</TABLE>
See accompanying notes.
6
<PAGE> 114
Stone Container Corporation Deferred Income Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1998
<TABLE>
<CAPTION>
PREVIOUS
PAGE BALANCED SMALL COMPANY INTERNATIONAL
SUBTOTAL FUND GROWTH FUND EQUITY FUND TOTAL
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employees $ 10,965,448 $ 2,839,651 $ 532,813 $ 600,817 $ 14,938,729
Employer 4,778,893 -- -- -- 4,778,893
---------------------------------------------------------------------------------
15,744,341 2,839,651 532,813 600,817 19,717,622
Investment income from Master
Trust 30,612,680 3,011,610 (288,342) 463,279 33,799,227
Transfers to (from) other
plans (133,659) (13,889) -- -- (147,548)
Transfers by participants (267,595) (115,688) 116,309 266,974 --
Withdrawals by participants (13,072,023) (1,682,570) (179,946) (207,125) (15,141,664)
Administrative expenses (54,043) -- -- -- (54,043)
---------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 32,829,701 4,039,114 180,834 1,123,945 38,173,594
Net assets available for plan
benefits, beginning of year 149,049,768 27,163,784 2,889,269 2,802,298 181,905,119
---------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 181,879,469 $ 31,202,898 $ 3,070,103 $ 3,926,243 $ 220,078,713
=================================================================================
</TABLE>
See accompanying notes.
7
<PAGE> 115
Stone Container Corporation Deferred Income Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
FIXED INCOME MONEY MARKET COMPANY
FUND EQUITY FUND FUND STOCK FUND SUBTOTAL
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employees $ 3,974,447 $ 5,252,703 $ -- $ 1,424,978 $ 10,652,128
Employer -- -- -- 4,578,194 4,578,194
------------------------------------------------------------------------------------
3,974,447 5,252,703 -- 6,003,172 15,230,322
Investment income from Master
Trust 3,974,341 13,371,571 11,844 (4,975,363) 12,382,393
Transfers to (from) other
plans (1,676,459) (1,308,322) (9,876) (819,739) (3,814,396)
Transfers by participants (2,635,829) 548,339 10 33,558 (2,053,922)
Withdrawals by participants (5,802,300) (3,234,642) (2,165) (790,496) (9,829,603)
Administrative expenses (25,120) -- -- -- (25,120)
------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits (2,190,920) 14,629,649 (187) (548,868) 11,889,674
Net assets available for plan
benefits, beginning of year 65,441,053 51,545,524 213,398 19,960,119 137,160,094
=================================================================================
Net assets available for plan
benefits, end of year $ 63,250,133 $ 66,175,173 $ 213,211 $ 19,411,251 $ 149,049,768
=================================================================================
</TABLE>
See accompanying notes.
8
<PAGE> 116
Stone Container Corporation Deferred Income Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits, With Fund
Information (continued)
Year ended December 31, 1997
<TABLE>
<CAPTION>
PREVIOUS
PAGE BALANCED SMALL COMPANY INTERNATIONAL
SUBTOTAL FUND GROWTH FUND EQUITY FUND TOTAL
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Contributions:
Employees $ 10,652,128 $ 2,554,569 $ 380,805 $ 441,600 $ 14,029,102
Employer 4,578,194 -- -- -- 4,578,194
------------------------------------------------------------------------------------
15,230,322 2,554,569 380,805 441,600 18,607,296
Investment income from Master
Trust 12,382,393 4,521,037 (79,325) 133,996 16,958,101
Transfers to (from) other
plans (3,814,396) (568,693) (46,899) (46,616) (4,476,604)
Transfers by participants (2,053,922) 632,068 361,322 1,060,532 --
Withdrawals by participants (9,829,603) (1,707,206) (68,613) (87,857) (11,693,279)
Administrative expenses (25,120) -- -- -- (25,120)
------------------------------------------------------------------------------------
Net increase (decrease) in net
assets available for plan
benefits 11,889,674 5,431,775 547,290 1,501,655 19,370,394
Net assets available for plan
benefits, beginning of year 137,160,094 21,732,009 2,341,979 1,300,643 162,534,725
------------------------------------------------------------------------------------
Net assets available for plan
benefits, end of year $ 149,049,768 $ 27,163,784 $ 2,889,269 $ 2,802,298 $ 181,905,119
====================================================================================
</TABLE>
See accompanying notes.
9
<PAGE> 117
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Stone Container Corporation Deferred Income
Savings Plan (the Plan) are reported on the accrual basis. The Plan participates
in the Stone Container Corporation Defined Contribution Master Trust (the Master
Trust). The financial statements of the Plan disclose only the Plan's allocated
share of the assets and the investment earnings and losses of the Master Trust
(see Note 4) by fund. During 1998 and 1997, the Master Trust included four other
defined contribution plans also sponsored by Stone Container Corporation (the
Company).
The value of investments of the Master Trust in mutual funds is determined by
Bankers Trust Company (the Trustee) based on prices reported by the issuing
registered investment company. Investment contracts and pooled investment funds
are valued at cost plus accrued interest, which approximates fair value. The
differences between the fair value and the cost of investment in the Master
Trust are reflected in the statements of changes in net assets available for
plan benefits as part of net investment income. The cost of securities is based
on the weighted average method.
Investment manager expenses for the fixed income fund are paid by the Plan. The
investment manager expenses for the fixed income fund for the years ended
December 31, 1998 and 1997, were $54,043 and $23,815, respectively. The majority
of other administrative expenses are paid by the Company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires plan management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Plan is a contributory employee benefit plan of the Company and adopting
subsidiaries. On November 18, 1998, the Company merged with a wholly owned
subsidiary of Jefferson Smurfit Corporation (JSC) (the Merger). Upon
consummation of the Merger, JSC changed its name to Smurfit-Stone Container
Corporation (SSCC). The Company and Jefferson Smurfit (U.S.), a wholly owned
subsidiary of SSCC, approved the merger of the Plan with the Jefferson Smurfit
Corporation Savings Plan (the JSC Plan) effective July 1, 1999 (the Plan
Merger). As a result of the Plan Merger, the Plan will be amended to conform to
the JSC Plan, and existing plan participant balances will be transferred into
the JSC Plan.
10
<PAGE> 118
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The Plan is administered by a committee (the Committee) appointed by the Company
consisting of officers or other employees of the Company or its adopting
subsidiaries. The Committee prescribes forms for use by participants and may
make administrative and procedural recommendations.
Employees eligible to participate in the Plan generally consist of all employees
of the Company and its adopting subsidiaries, except for (1) those employees
covered by a collective bargaining agreement which provides for retirement
benefits, (2) nonresident aliens, and (3) substantially all hourly employees.
The Plan is composed of two components: (i) a cash or deferred compensation
component (401(k) component) and (ii) an employer matching contribution
component. Under the 401(k) provisions, employees may elect to have a portion of
their salary deferred and contributed to the Plan to be invested in one or more
of the investment options available under the Plan.
Under the employer contribution provisions, each employer contributes, for each
of its employees who are participants, an amount equal to 50 percent of the
401(k) contributions authorized by such employee up to a maximum of $4,000 in
one calendar year, to the extent the rate of such contributions, in effect from
time to time, does not exceed 2.5 percent of the participant's compensation
(matching contributions). The 401(k) contributions authorized by a participant
in excess of 5 percent of the participant's compensation for any period are
disregarded for purposes of matching contributions. Participants must be
employed on the last day of the plan year to qualify for the employer matching
contribution, except in the case of death, permanent disability, or retirement
during the plan year. However, the Plan was amended to allow participants
involuntarily terminated as a result of the Merger to qualify for the employer
matching contributions even though they were not employed as of the last day of
the plan year.
Participant contributions to the 401(k) plan which are made via payroll
withholdings are limited to the lesser of $10,000 and $9,500 for 1998 and 1997,
respectively, or 15 percent of participant compensation for the year.
Terminating participants of the Plan are paid the current value of their 401(k)
account and the vested portion of their employer match account. Participant
balances in the Company stock fund are distributable in shares of SSCC common
stock. All other distributions are made in a lump-sum cash distribution or, upon
request, in the form of an annuity.
11
<PAGE> 119
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Each participant has a fully vested and nonforfeitable interest in the value of
his or her proportional share of the investment funds in which his or her 401(k)
contributions are invested. Effective January 1, 1997, participants become fully
vested in the 1997 and subsequent plan year employer matching contributions
after completion of five years of service from their date of hire.
Notwithstanding the foregoing, if as of March 2, 1997, participants have three
or more years of service from their date of hire, they are fully vested in their
December 31, 1996 account balance and all future employer matching
contributions. Prior to January 1, 1997, participants were fully vested, at all
times, in the Company's matching contributions and earnings thereon. The
nonvested portion of a terminating participant's account constitutes a
forfeiture and is applied to reduce future employer contributions.
Upon enrollment in the Plan, contributions may be directed into one of the
following funds by the participant or employer:
Fixed Income Fund - Employee contributions are invested in fixed income
contracts and pooled investment funds which provide for a specified
rate of investment income for a specified period of time and under
which the payment of principal is guaranteed.
Equity Fund - Employee contributions are invested in the shares of
mutual funds of registered investment companies which invest primarily
in common stock.
Money Market Fund - Employee contributions prior to December 31, 1989
were invested in money market and deposit accounts for a specified
period of time and under which the payment of principal is guaranteed.
Company Stock Fund - Employee contributions and the employer matching
contributions are invested solely in the common stock of SSCC.
Balanced Fund - Employee contributions are invested in the shares of
mutual funds of registered investment companies investing in common
stock, preferred stock, and corporate and government bonds.
12
<PAGE> 120
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Small Company Growth Fund - Employee contributions are invested in the
shares of mutual funds of registered investment companies which invest
primarily in common stock of smaller capitalized companies. Employee
contributions into this fund are limited to 25 percent of total
employee contributions in any one year under the terms of the Plan.
International Equity Fund - Employee contributions are invested in the
shares of mutual funds of registered investment companies which invest
primarily in the common stock of companies outside of the United
States.
3. PLAN TAX STATUS
The Internal Revenue Service ruled January 27, 1999 that the Plan continues to
qualify under Section 401(a) and meets the requirements under Section 401(k) of
the Internal Revenue Code (IRC), and therefore, the Plan is not subject to tax
under present income tax law. However, the Plan has been amended since receiving
this determination letter. The Plan's administrator and the Plan's counsel
believe that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
Participants are not subject to federal income tax on amounts contributed to
their 401(k) or employer matching contribution accounts under the Plan or on
earnings attributable to such contributions until such time as these amounts are
distributed to or withdrawn by them.
13
<PAGE> 121
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements (continued)
4. PARTICIPATION IN THE MASTER TRUST
At December 31, 1998 and 1997, the Plan's interest in the net assets of the
Master Trust was approximately 63 percent and 64 percent, respectively. The
following table presents the net assets held by the Master Trust as of December
31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
----------------------------
<S> <C> <C>
Investments, at fair value:
Cash and cash equivalents $ 8,328,971 $ 8,863,696
Mutual funds 196,036,599 170,355,345
Common stock 25,367,768 13,945,469
Fixed income funds 86,454,373 71,338,087
Pooled investment funds 33,659,262 13,088,507
----------------------------
Total investments 349,846,973 277,591,104
Accrued income 1,989,464 9,696,663
----------------------------
Total assets 351,836,437 287,287,767
Due to broker 1,682,452 9,412,739
----------------------------
Total liabilities 1,682,452 9,412,739
----------------------------
Net assets held by Master Trust $350,153,985 $277,875,028
===========================
</TABLE>
The Trustee computes the beneficial interest in the Master Trust for each
participating defined contribution plan on a monthly basis. The current month's
Master Trust investment transactions are allocated based on each plan's computed
share in the Master Trust at the end of the month, adjusted for the current
month's contributions less payments to beneficiaries and certain administrative
expenses. These allocated amounts are added to or subtracted from the prior
month's computed shares, as adjusted, to determine computed shares at the end of
the current month. Master Trust investment transactions allocated to the Plan
include dividend and interest income and net appreciation (depreciation) in the
fair value of investments. These amounts, net of allocated administrative
expenses, represent the Plan's share of investment income in the Master Trust
and are presented on the statements of changes in net assets available for plan
benefits.
14
<PAGE> 122
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements (continued)
4. PARTICIPATION IN THE MASTER TRUST (CONTINUED)
The following table represents investment income for the Master Trust for the
years ended December 31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
-------------------------
<S> <C> <C>
Net appreciation in fair value of investments $33,852,289 $14,323,840
Dividends 15,479,093 11,040,805
Interest 5,501,969 7,148,863
-------------------------
Total investment income 54,833,351 32,513,508
Administrative expenses 66,707 41,602
-------------------------
Net investment income $54,766,644 $32,471,906
=========================
</TABLE>
The average yield for investment contracts was 6.56 percent and 6.58 percent for
1998 and 1997, respectively. The crediting interest rate as of December 31, 1998
and 1997, for the investment contracts was 6.48 percent and 6.61 percent,
respectively.
The following table presents the change in the net appreciation in fair value of
investments (including gains and losses on investments sold during the year and
unrealized gains and losses on investments purchased and held during the year)
held by the Master Trust for the years ended December 31, 1998 and 1997:
<TABLE>
<CAPTION>
1998 1997
---------------------------
<S> <C> <C>
Mutual funds $ 24,928,683 $ 19,306,026
Common stock 8,923,606 (4,982,186)
---------------------------
Net appreciation in fair value of investments $ 33,852,289 $ 14,323,840
===========================
</TABLE>
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The Plan records payments to withdrawing participants at the time of
disbursement, in accordance with generally accepted accounting principles. Under
the rules for preparation of its Form 5500, the Plan reflects an accrual for the
amount to be paid to participants who have withdrawn from the Plan prior to
year-end. Amounts payable to participants at December 31, 1998 and 1997, were
$2,620,274 and $715,323, respectively.
15
<PAGE> 123
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements (continued)
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (CONTINUED)
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
-------------------------------
<S> <C> <C>
Net assets available for benefits per the financial statements $ 220,078,713 $ 181,905,119
Amounts payable to withdrawing participants (2,620,274) (715,323)
-------------------------------
Net assets available for benefits per the Form 5500 $ 217,458,439 $ 181,189,796
===============================
</TABLE>
The following is a reconciliation of withdrawals by participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1998 1997
----------------------------
<S> <C> <C>
Withdrawals by participants per the financial statements $ 15,141,664 $ 11,693,279
Add amounts payable to withdrawing participants at December
31, 1998 and 1997 2,620,274 715,323
Less amounts payable to withdrawing participants at December
31, 1997 and 1996 (715,323) (359,583)
----------------------------
Withdrawals by participants per the Form 5500 $ 17,046,615 $ 12,049,019
============================
</TABLE>
6. TRANSFER OF ASSETS WITH OTHER PLANS
Effective January 1, 1997, employees of S&G Packaging, LLC and US Forest
Industries, Inc. who were formerly participants in the Plan were transferred to
the S&G Packaging, LLC Employee Retirement Savings Plan and the US Forest
Industries, Inc. Salaried 401(k) Savings Plan, respectively. The net assets of
the Plan relating to these participants were transferred to the respective
plan's trustees.
16
<PAGE> 124
Stone Container Corporation Deferred Income Savings Plan
Notes to Financial Statements (continued)
7. YEAR 2000 (UNAUDITED)
Computer programs which have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. Beginning in the year 2000,
this could result in a system failure or miscalculations causing disruptions of
operations, including a temporary inability to process transactions or engage in
normal business activities.
The Company has completed testing for its internal systems which impact the
processing of transactions on behalf of the Plan. The only major system related
to the Plan which is noncompliant is the payroll system, which is currently in
the process of being updated to a new year 2000-compliant system. The payroll
system and all other systems are expected to be year 2000-compliant by mid-1999.
The Plan has obtained formal communications from its service providers to
determine the extent to which the Plan's interface systems are vulnerable to
those third parties' failure to resolve their own year 2000 issues. The Plan's
review of these communications is expected to be complete by mid-1999.
Substantially all of the costs of the year 2000 inquiries and the systems
updates are being paid by the Company with no effect on plan assets. The Plan
believes the necessary modifications and replacement of computer systems will be
completed in a timely manner, and as a result, the year 2000 issue is not
expected to pose significant operational or financial problems for the Plan.
17
<PAGE> 125
SIGNATURE
The Plans. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the Jefferson Smurfit Corporation
Savings Plan, the Jefferson Smurfit Corporation Hourly Savings Plan, the
Smurfit Packaging Corporation Savings Plan and the Stone Container Corporation
Deferred Income Savings Plan) have duly caused this annual report
to be signed by the undersigned thereunto duly authorized.
Jefferson Smurfit Corporation Savings Plan
Date: June 23, 1999 By: /s/ Patrick J. Moore
---------------------------------------
Patrick J. Moore
Title: Member, Administrative Committee of
Smurfit-Stone Container Corporation
Retirement Plans
Jefferson Smurfit Corporation Hourly Savings Plan
Date: June 23, 1999 By: /s/ Patrick J. Moore
---------------------------------------
Patrick J. Moore
Title: Member, Administrative Committee of
Smurfit-Stone Container Corporation
Retirement Plans
Smurfit Packaging Corporation Savings Plan
Date: June 23, 1999 By: /s/ Patrick J. Moore
---------------------------------------
Patrick J. Moore
Title: Member, Administrative Committee of
Smurfit-Stone Container Corporation
Retirement Plans
Stone Container Corporation Deferred Income
Savings Plan
Date: June 23, 1999 By: /s/ Patrick J. Moore
---------------------------------------
Patrick J. Moore
Title: Member, Administrative Committee of
Smurfit-Stone Container Corporation
Retirement Plans
<PAGE> 126
INDEX
Financial Statements and Supplemental Schedules for the years ended December 31,
1998 and 1997 for:
- Jefferson Smurfit Corporation Savings Plan
- Jefferson Smurfit Corporation Hourly Savings Plan
- Smurfit Packaging Corporation Savings Plan
- Stone Container Corporation Deferred Income Savings Plan
Exhibit 23.1 Consent of Independent Auditors
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Accountants
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-82578) pertaining to the Jefferson Smurfit Corporation Savings Plan,
the Jefferson Smurfit Corporation Hourly Savings Plan, the Smurfit Packaging
Corporation Savings Plan and the Stone Container Corporation Deferred Income
Savings Plan of our reports dated June 18, 1999, with respect to the
financial statements and schedules of Jefferson Smurfit Corporation Savings
Plan, the Jefferson Smurfit Corporation Hourly Savings Plan, the Smurfit
Packaging Corporation Savings Plan and the Stone Container Corporation Deferred
Income Savings Plan included in this Annual Report (Form 11-K)
for the year ended December 31, 1998.
/s/ Ernst & Young LLP
St. Louis, Missouri
June 23, 1999
