<PAGE>
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, 1999
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
---------------------
SMURFIT-STONE CONTAINER CORPORATION SAVINGS PLAN
JEFFERSON SMURFIT CORPORATION HOURLY SAVINGS PLAN
SMURFIT PACKAGING CORPORATION SAVINGS PLAN
SMURFIT-STONE CONTAINER CORPORATION HOURLY 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>
Financial Statements and Supplemental Schedule
Smurfit-Stone Container Corporation
Hourly Employees' Deferred Income
Savings Plan (formerly the Stone
Container Corporation Hourly Employees' Deferred Income Savings Plan)
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Smurfit-Stone Container Corporation
Hourly Savings Plan (formerly the Stone
Container Corporation Hourly Employees'
Deferred Income Savings Plan)Stone Container Corporation
Hourly Employees' Deferred Income Savings Plan
Financial Statements and Supplemental Schedule
Years ended December 31, 1999 and 1998
Contents
Report of Independent Auditors.......................................... 1
Financial Statements
Statements of Net Assets Available for Benefits......................... 3
Statements of Changes in Net Assets Available for Benefits.............. 4
Notes to Financial Statements........................................... 5
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
at End of Year......................................................... 12
<PAGE>
Report of Independent Auditors
Administration Committee
Smurfit-Stone Container Corporation
Retirement Plans
We have audited the accompanying statements of net assets available for benefits
of the Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income Savings Plan) as
of December 31, 1999 and 1998, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1999. 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.
Except as explained in the following paragraph, we conducted our audits in
accordance with auditing standards generally accepted in the United States.
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.
As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, investment assets held by Bankers Trust Company, the
trustee of the Plan through July 1, 1999, and transactions in those assets were
excluded from the scope of our audit of the Plan's 1998 financial statements,
except for comparing the information provided by the trustee, which is
summarized in Note 4, with the related information included in the financial
statements.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the Plan's financial statements as
of December 31, 1998. The form and content of the information included in the
1998 financial statements, other than that derived from the information
certified by the trustee, have been audited by
1
<PAGE>
us and, in our opinion, are presented in compliance with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1999 and changes in its net assets available for benefits for the
year then ended in conformity with accounting principles generally accepted in
the United States.
Our audit of the Plan's financial statements as of and for the year ended
December 31, 1999 was made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the financial
statements for the year ended December 31, 1999 and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ Ernest & Young LLP
June 14, 2000
2
<PAGE>
Smurfit-Stone Container Corporation
Hourly Savings Plan (formerly the Stone
Container Corporation Hourly Employees'
Deferred Income Savings Plan)
Statements of Net Assets Available for Benefits
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------------
<S> <C> <C>
Assets
Investments at fair value:
Mutual funds $ 103,095,624 $ -
Common trust funds 1,796,458 -
Common stock 569,947 -
Investments at contract value:
Guaranteed investment contract funds 27,733,131 -
Participation in Master Trust - 123,600,048
--------------------------------
Total investments 133,195,160 123,600,048
Cash 64,843 -
Receivables:
Employee contribution 29,350 1,407,527
Employer contribution 1,079 76,713
--------------------------------
Total receivables 30,429 1,484,240
--------------------------------
Net assets available for benefits $ 133,290,432 $125,084,288
================================
</TABLE>
See accompanying notes.
3
<PAGE>
Smurfit-Stone Container Corporation
Hourly Savings Plan (formerly the Stone
Container Corporation Hourly Employees'
Deferred Income Savings Plan)
Statements of Changes in Net Assets Available for Benefits
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998
--------------------------------------
<S> <C> <C>
Additions:
Income from Master Trust $ 1,412,384 $ 19,632,333
Net investment income 4,956,036 -
Net realized and unrealized appreciation of
investments 4,827,940 -
Employee contributions 16,092,150 17,158,625
Employer contributions 3,139,690 3,321,921
-------------------------------
30,428,200 40,112,879
Deductions:
Withdrawals by participants (21,270,668) (5,885,768)
Transfer of participant accounts to Jefferson Smurfit
Corporation Hourly Savings Plan (934,656) -
Administrative expenses (16,732) (10,846)
-------------------------------
(22,222,056) (5,896,614)
-------------------------------
Change in net assets available for benefits 8,206,144 34,216,265
Net assets available for benefits, beginning of year 125,084,288 90,868,023
-------------------------------
Net assets available for benefits, end of year $133,290,432 $125,084,288
===============================
</TABLE>
See accompanying notes.
4
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income
Savings Plan)
Notes to Financial Statements
December 31, 1999 ad 1998
1. Description of the Plan
The following description of the Smurfit-Stone Container Corporation Hourly
Savings Plan (formerly the Stone Container Corporation Hourly Employees'
Deferred Income Savings Plan) (the Plan) provides only general information.
Participants should refer to the plan agreement for a more complete description
of the Plan's provisions.
General
The Plan is a defined contribution plan covering hourly employees of Stone
Container Corporation (the Company).
Company Merger
On November 18, 1998, the Company became a wholly owned subsidiary of Jefferson
Smurfit Corporation (JSC) as a result of a merger with a subsidiary of JSC.
Effective with this merger, JSC changed its name to Smurfit-Stone Container
Corporation (SSCC).
Eligibility
Any employee who is an hourly employee of the Company will be eligible to
participate in the Plan according to specifications included in the applicable
supplement to the plan document.
Contributions
Each participant may elect to defer compensation in a percentage set forth in
the applicable plan supplement up to the maximum amount permitted by the
Internal Revenue Code (IRC) and subject to the other limitations included in
various supplements to the plan document. Participants may change their
contribution percentages and fund investment elections at specified dates during
the year.
The Company shall contribute, on behalf of each participant who is eligible to
share in employer contributions, a matching contribution equal to a percentage
of each participant's deferred compensation, subject to various limitations
outlined in
5
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income
Savings Plan)
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Contributions (continued)
supplements to the plan document. Participants are immediately vested in the
matching contributions of the Company and earnings thereon.
Investments
T. Rowe Price Trust Company was appointed trustee effective July 1, 1999. Prior
to that time, the assets were held by Bankers Trust Company, the predecessor
trustee. The trustee holds the Plan's assets and executes investment
transactions.
Upon enrollment in the Plan, contributions may be directed into 14 T. Rowe Price
funds and SSCC common stock by the participant or employer.
Distributions
The balance in a participant's account is distributable upon termination of the
participant's employment for any reason, including death, retirement, permanent
disability, resignation, or dismissal. The distribution will be made in the form
of a lump-sum payment. Participants who have attained the age of 70 1/2 receive
distributions in accordance with the Internal Revenue Service (IRS) minimum
required distribution rules.
Termination
Although it has not expressed any intent to do so, the Company reserves the
right to discontinue the Plan at any time. If the Plan is terminated, each
participant's account balance will be distributed as directed by the participant
or to the named beneficiaries.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are presented on the accrual basis of
accounting.
6
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income
Savings Plan)
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Investment Valuation
Prior to July 1, 1999, the Plan participated in the Stone Container Corporation
Defined Contribution Master Trust (the Master Trust). The financial statements
of the Plan disclose the Plan's allocated share of the assets and the investment
earnings and losses of the Master Trust.
Master Trust investment transactions include dividend and interest income, gain
or loss on sales, and net appreciation or depreciation in the fair value of
investments. These transactions were allocated to the Plan based on the Plan's
beneficial interest, as defined, in the Master Trust. These amounts represent
the Plan's share of income from the Master Trust and are presented in the
accompanying statements of changes in net assets available for benefits.
The market value of the Master Trust investments was determined by the trustee
as follows:
Cash and cash equivalents - Value based on cost reported by the
trustee, which approximates fair value
Mutual funds - Value based on prices reported by the
issuing registered investment company
Common trust funds - Value based on prices reported by the
issuing registered investment company
Common stock - Value based on quoted prices in active
markets at the last reported sales
price on the last business day of the
year
Fixed income funds - Value equals contract value or cost
plus accrued interest, which
approximates fair value
7
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income
Savings Plan)
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Investment Valuation (continued)
The Plan's investments are stated at fair value, except for its investment in an
investment contract fund, which is valued at contract value. Shares of mutual
funds are valued at quoted market prices which represent the net asset value of
shares held by the Plan at year-end. The Company stock is valued at its quoted
market price.
Administrative Expenses
Administrative fees charged by the investment manager are paid by the Plan.
Other fees including trustee, legal, and accounting fees are paid by the
Company.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires 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.
3. Investments
The fair value of individual investments that represent 5 percent or more of the
Plan's net assets is as follows:
December 31,
1999
---------------
T. Rowe Price Personal Strategy Balanced Fund
(982,445 shares) $15,954,905
T. Rowe Price Equity Income Fund (1,413,901 shares) 35,078,894
T. Rowe Price Blue Chip Growth Fund (1,263,868 shares) 45,928,963
T. Rowe Price Frozen Fixed Income Fund (23,088,489
shares) 23,088,489
8
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income
Savings Plan)
Notes to Financial Statements (continued)
4. Participation in Master Trust
At December 31, 1998, the plan assets were held in a Master Trust which was
administered by Bankers Trust Company. The Plan's pro rata share of net assets
available for benefits held in the Master Trust was approximately 35 percent at
December 31, 1998. The Plan had no pro rata share of net assets available for
benefits held in the Master Trust subsequent to July 1, 1999.
The Master Trust held investments in common stock of SSCC having a market value
of $25,367,768 as of December 31, 1998.
Master Trust investments include the following:
<TABLE>
<CAPTION>
December 31,
1998
---------------
<S> <C>
Cash and cash equivalents $ 8,328,971
Receivables 1,989,464
Investments:
Mutual funds 196,036,599
SSCC common stock 25,367,768
Fixed income funds 86,454,373
Pooled investment funds 33,659,262
---------------
351,836,437
Accrued liabilities (1,682,452)
---------------
Net assets available for benefits $350,153,985
===============
</TABLE>
The following table presents investment income of the Master Trust:
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------
<S> <C> <C>
Net appreciation in fair value of
investments $14,419,084 $33,852,289
Dividends 2,168,337 15,479,093
Interest 2,660,581 5,501,969
-----------------------------
Total investment income 19,248,002 54,833,351
Administrative expenses (47,772) (66,707)
-----------------------------
Net investment income $19,200,230 $54,766,644
=============================
</TABLE>
9
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income
Savings Plan)
Notes to Financial Statements (continued)
4. Participation in Master Trust (continued)
The average yield for investment contracts was 6.56 percent for 1999 and 1998.
The crediting interest rate as of December 31, 1998 for the investment contracts
was 6.4 percent.
The following table presents the change in the net appreciation (depreciation)
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:
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------
<S> <C> <C>
Mutual funds $16,852,396 $24,928,683
Common stock (2,433,312) 8,923,606
----------- -----------
Net appreciation in fair value of
investments $14,419,084 $33,852,289
=========== ===========
</TABLE>
5. Fund With Guaranteed Investment Contracts
The Plan has investments in a fund which holds guaranteed investment contracts
for the exclusive benefit of plan participants. The fund is credited with
earnings on the underlying investments and charged for plan withdrawals and
administrative expenses. The investment in the guaranteed investment contract
fund is included in the financial statements at contract value (which represents
contributions made under the contract, plus earnings, less withdrawals and
administrative expenses), because the underlying contracts are fully benefit-
responsive. For example, participants may ordinarily direct the withdrawal or
transfer of all or a portion of their investment at contract value. There are
no reserves against contract value for credit risk of the contract issuer or
otherwise. The fair value of the investment contracts at December 31, 1999 was
$27,733,131. The average yield and crediting interest rates were approximately
6.5 percent for 1999.
6. Tax Status
The IRS has determined and informed the Company by a letter dated July 31, 1995
that the Plan is designed in accordance with applicable sections of the IRC. The
Plan has been amended since receiving the determination letter. However, the
Plan's administrator believes the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
10
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the
Stone Container Corporation Hourly Employees' Deferred Income
Savings Plan)
Notes to Financial Statements (continued)
7. Transfer of Plan Assets
During 1998, the Company sold a facility known as Snowflake Mill. During 1999,
in connection with this transaction, approximately $8.5 million of participant
accounts was transferred out of the Plan to the new employer. This distribution
is included as part of the total withdrawals by participants.
8. 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.
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
1998
------------
<S> <C>
Net assets available for the benefits per the
financial statements $125,084,288
Amounts payable to withdrawing participants (1,060,088)
------------
Net assets available for benefits per the Form 5500 $124,024,200
============
</TABLE>
The following is a reconciliation of withdrawals by participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
----------- -----------
<S> <C> <C>
Withdrawals by participants per the financial
statements $21,270,668 $ 5,885,768
Add amounts payable to withdrawing participants at
December 31, 1998 - 1,060,088
Less amounts payable to withdrawing participants at
December 31, 1998 and 1997 (1,060,088) (1,277,206)
----------- -----------
Withdrawals by participants per the Form 5500 $20,210,580 $ 5,668,650
=========== ===========
</TABLE>
11
<PAGE>
Supplemental Schedule
<PAGE>
Smurfit-Stone Container Corporation Hourly Savings Plan (formerly the Stone
Container Corporation Hourly Employees' Deferred Income
Savings Plan)
EIN: 36-2041256
Plan # 043
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at
End of Year
December 31, 1999
<TABLE>
<CAPTION>
Current
Identity of Issuer Description of Assets Cost Value
---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SSCC Common Stock Fund:
SSCC common stock* 23,263 shares $ 473,465 $ 569,947
T. Rowe Price Blended Stable 4,644,642 shares of mutual
Value Fund* fund 4,644,642 4,644,642
T. Rowe Price Frozen Fixed 23,088,489 shares of mutual
Income Fund* fund 23,088,489 23,088,489
T. Rowe Price International 8,920 shares of mutual fund
Stock Fund* 158,176 169,755
T. Rowe Price New Horizons 11,734 shares of mutual fund 299,018 323,042
Fund*
T. Rowe Price Personal 982,445 shares of mutual
Strategy Balanced Fund* fund 16,203,598 15,954,905
T. Rowe Price Equity Income 1,413,901 shares of mutual 40,630,638 35,078,894
Fund* fund
Fidelity Value Fund 3,443 shares of mutual fund 152,463 150,848
Fidelity Contra Fund 22,901 shares of mutual fund 1,406,579 1,374,535
Putnam New Opportunities Fund 33,964 shares of mutual fund 2,716,960 3,089,375
Equity Index Trust (S&P 500) 46,625 shares of mutual fund 1,652,661 1,796,458
T. Rowe Price Personal 3,428 shares of mutual fund
Strategy Income Fund* 44,736 44,663
T. Rowe Price Personal 7,392 shares of mutual fund
Strategy Growth Fund* 142,867 143,998
T. Rowe Price Summit Cash 758,613 shares of mutual
Reserves Fund* fund 758,613 758,613
T. Rowe Price Spectrum Income 7,286 shares of mutual fund
Fund* 79,091 78,033
T. Rowe Price Blue Chip Growth 1,263,868 shares of mutual
Fund* fund 42,667,619 45,928,963
----------------------------
$135,119,615 $133,195,160
=============================
</TABLE>
*Parties in interest.
12
<PAGE>
Financial Statements
and Supplemental Schedules
Smurfit-Stone Container Corporation
Savings Plan (formerly the Jefferson
Smurfit Corporation Savings Plan)
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Financial Statements
and Supplemental Schedules
Years ended December 31, 1999 and 1998
Contents
<TABLE>
<S> <C>
Report of Independent Auditors............................................. 1
Financial Statements
Statements of Net Assets Available for Plan Benefits....................... 2
Statements of Changes in Net Assets Available for Plan Benefits............ 3
Notes to Financial Statements.............................................. 4
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
at End of Year............................................................ 10
Schedule H, Line 4j - Schedule of Reportable Transactions.................. 11
</TABLE>
<PAGE>
Report of Independent Auditors
Administrative Committee
Smurfit-Stone Container Corporation
Retirement Plans
We have audited the accompanying statements of net assets available for plan
benefits of Smurfit-Stone Container Corporation Savings Plan (formerly the
Jefferson Smurfit Corporation Savings Plan) as of December 31, 1999 and 1998,
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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the changes in net assets available for plan benefits for
the years then ended, in conformity with accounting principles generally
accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year as of December 31, 1999 and schedule of
reportable transactions for the year then ended are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ Ernst & Young LLP
June 14, 2000
1
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
December 31
1999 1998
------------------------------------
<S> <C> <C>
Assets
Investments, at fair value $737,281,146 $424,771,656
Employee contributions receivable 497,839 -
Employer contributions receivable 431,366 -
Participant loans 7,712,106 5,907,231
------------------------------------
Net assets available for plan benefits $745,922,457 $430,678,887
====================================
</TABLE>
See accompanying notes.
2
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-------------------------------------
<S> <C> <C>
Contributions:
Employees $ 23,014,872 $ 17,334,134
Employer 9,703,318 7,100,388
Net investment income:
Interest on guaranteed group annuity contracts 3,514,856 3,432,225
Investment income 27,550,263 16,321,548
-------------------------------------
63,783,309 44,188,295
Net realized and unrealized appreciation of investments 72,842,203 24,006,689
Transfer of participant accounts from Jefferson Smurfit
Corporation Hourly Savings Plan and Smurfit
Packaging Corporation Savings Plan 572,490 73,263
Transfer of participant accounts from Stone Container
Corporation Salary Deferred Income Savings Plan 227,690,560 -
Transfer of participant accounts from related Stone
pension plans 5,615,000 -
Forfeitures (231,667) (190,587)
Withdrawals by participants (54,976,824) (34,191,452)
Administrative expenses (51,501) (178,370)
-------------------------------------
Net increase in net assets available for plan benefits 315,243,570 33,707,838
Net assets available for plan benefits, beginning of year 430,678,887 396,971,049
-------------------------------------
Net assets available for plan benefits, end of year $745,922,457 $430,678,887
=====================================
</TABLE>
See accompanying notes.
3
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Notes to Financial Statements
December 31, 1999
1. Description of the Plan
The following description of the Smurfit-Stone Container Corporation Savings
Plan (the Plan) provides only general information. Participants should refer to
the plan document for a more complete description of the Plan's provisions.
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 Corporation (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. As a result, the participant balances of
the Stone Container Corporation Deferred Income Savings Plan were transferred
into the Plan on that date.
Effective July 1, 1999, the Plan changed its name from the Jefferson Smurfit
Corporation Savings Plan to the Smurfit-Stone Container Corporation Savings
Plan.
General
The Plan is a defined contribution plan covering employees of the Company and
its 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. It is subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute from 1 to 15 percent of eligible
compensation as defined by the Plan. Participants may also contribute amounts on
an after-tax basis. The Company makes matching contributions up to the lesser of
65 percent of the first 6 percent of eligible compensation deferred by a
participant or half of the elective contribution limit ($5,000 in 1999 and
1998). Employer contributions are made in the form of cash invested in SSCC
common stock until an employee reaches the age of 55, at which time all employer
contributions may be directed into investment options desired by the
participant. All contributions are subject to applicable limitations.
4
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Accounts
Each participant's account is credited with the participant's contribution,
allocations of the Company's contribution, and plan earnings and is charged with
an allocation of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company's matching contribution portion of accounts plus
actual earnings thereon is based on years of continuous service. A participant
is 100 percent vested after five years of service, vesting in 20 percent of the
employer match each year. Forfeitures of nonvested amounts are used to offset
future Company contributions.
Investment Options
Upon enrollment in the Plan, contributions may be directed into one of 15
investment options offered by the Plan. These investment choices offer a variety
depending upon the participant's investment objectives. The investment options
are primarily trusteed funds, other than the company stock fund, in which
employee contributions and employer matching contributions are invested in
common stock of SSCC.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their account balance,
excluding Company matching contributions. Loan transactions are treated as a
transfer to (from) the investment fund from (to) the participant loan fund. Loan
terms range from 1 to 5 years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account and
bear interest at a rate commensurate with local prevailing rates as determined
quarterly by the plan administrator. Interest rates currently range from 6.62
percent to 7.45 percent. Principal and interest is paid ratably through monthly
payroll deductions.
5
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Notes to Financial Statements (continued)
2. Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are reported on the accrual basis of
accounting.
Investment Valuation and Income Recognition
The investments of the Plan in mutual funds are valued at fair value as
determined by the trustee. Common stock is based on closing stock prices on
national stock exchanges. Participant loans are valued at cost which
approximates market.
Dividend income is accrued on the ex-dividend date.
Purchases and sales of securities are recorded on a trade-date basis. Realized
gains and losses from security transactions are reported on the average cost
method.
Administrative Expenses
Investment manager expenses and other administrative expenses are paid by the
Plan. Legal expenses are paid by the Company.
Reclassifications
Certain 1998 account balances were reclassified to correspond to 1999 asset
classifications.
Use of Estimates
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.
Payment of Benefits
Benefits are recorded when paid.
6
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the 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,
1999
--------------------
<S> <C>
SSCC common stock (4,484,504 shares) $109,968,179
Exxon Mobil Corporation common stock (1,428,472 shares) 115,081,949
T. Rowe Price Frozen Fixed Income Fund (60,160,224 shares) 60,160,224
T. Rowe Price Equity Income Fund (5,182,656 shares) 128,581,692
T. Rowe Price Personal Strategy Balanced Fund (3,521,021 shares) 57,181,381
T. Rowe Price Blended Stable Value Fund (67,401,588 shares) 67,401,588
T. Rowe Price Blue Chip Growth Fund (1,942,311 shares) 70,583,583
</TABLE>
<TABLE>
<CAPTION>
December 31,
1998
--------------------
<S> <C>
SSCC common stock (2,460,546 shares) $ 39,347,025
Exxon 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
</TABLE>
7
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Notes to Financial Statements (continued)
3. Investments (continued)
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $72,842,203 and $24,006,689, respectively, as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------------------
<S> <C> <C>
Mutual funds $ 2,023,250 $ 8,943,465
Common stock 70,818,953 15,063,224
</TABLE>
4. Nonparticipant-Directed Investments
Information about the significant components of the changes in net assets
relating to SSCC common stock and Jefferson Smurfit (JS) Group common stock is
as follows:
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------------------
<S> <C> <C>
Beginning balance, SSCC common stock fund $ 39,347,025 $27,641,940
Contribution 10,265,666 7,773,528
Net appreciation 39,280,039 4,186,248
Benefits paid to participants (3,526,850) (1,287,818)
Transfers from participant-directed investments
and JS Group stock 24,602,299 1,074,136
Other - (41,009)
-----------------------------------------
Ending balance, SSCC common stock fund $109,968,179 $39,347,025
=========================================
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------------------
<S> <C> <C>
Beginning balance, JS Group common stock $15,525,763 $26,666,426
Net appreciation (depreciation) and income 10,126,054 (7,823,694)
Forfeitures (22,108) (19,901)
Benefits paid to participants (1,308,048) (1,706,165)
Transfers to participant-directed investments and
SSCC common stock (426,451) (1,590,903)
-----------------------------------------
Ending balance, JS Group common stock fund $23,895,210 $15,525,763
=========================================
</TABLE>
8
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
Notes to Financial Statements (continued)
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants would become 100 percent vested in their employer contributions.
6. Plan Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated May 30, 1996 that the Plan is designed in accordance with applicable
sections of the Internal Revenue Code (IRC). The Plan has been amended since
receiving the determination letter. However, the Plan's administrator believes
the Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
9
<PAGE>
Supplemental Schedules
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
EIN: 36-2659288
Plan #062
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at
End of Year
December 31, 1999
<TABLE>
<CAPTION>
Description of Current
Identity of Issuer Assets Cost Value
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SSCC Common Stock Fund* 4,484,504 $ 73,374,898 $109,968,179
JS Group Stock Fund* 7,970,118 14,270,749 23,895,210
Exxon Mobil Stock Fund 1,428,472 96,597,629 115,081,949
T. Rowe Price Frozen Fixed Income Fund* 60,160,224 60,160,224 60,160,224
T. Rowe Price Equity Income Fund* 5,182,656 140,073,715 128,581,692
T. Rowe Price Personal Strategy Balanced Fund 3,521,021 57,180,788 57,181,381
T. Rowe Price New Horizons Fund* 848,255 20,177,123 23,352,457
T. Rowe Price International Stock Fund* 725,573 11,378,100 13,807,650
Fidelity Contra Fund 214,039 12,630,128 12,846,620
Fidelity Value Fund 38,205 1,836,611 1,673,781
Putnam New Opportunities Fund 237,858 15,567,084 21,635,588
T. Rowe Price Blended Stable Value Fund* 67,401,588 67,401,588 67,401,588
Equity Index Trust (S&P 500) 524,617 17,412,840 20,213,482
T. Rowe Price Personal Strategy Income Fund* 138,282 1,825,366 1,801,808
T. Rowe Price Personal Strategy Growth Fund* 139,584 2,598,697 2,719,097
T. Rowe Price Summit Cash Reserves Fund* 4,897,583 4,897,583 4,897,583
T. Rowe Price Spectrum Income Fund* 138,121 1,561,946 1,479,274
T. Rowe Price Blue Chip Growth Fund* 1,942,311 63,909,506 70,583,583
Participant loans* - 7,712,106
------------------------------------
$662,854,575 $744,993,252
====================================
</TABLE>
*Parties in interest.
10
<PAGE>
Smurfit-Stone Container Corporation Savings Plan
(formerly the Jefferson Smurfit Corporation Savings Plan)
EIN: 36-2659288
Plan #062
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
Description of Purchase Selling Cost
Identity of Party Involved Asset Price Price of Asset
-----------------------------------------------------------------------------------------------------------------------
<S> <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 $40,092,495 $ - $40,092,495
Common stock - 8,386,715 5,956,403
</TABLE>
<TABLE>
<CAPTION>
Current Value
of Asset on
Transaction Net Gain
Identity of Party Involved Date (Loss)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SSCC Common Stock Fund $40,092,495 $ -
8,386,715 2,430,312
</TABLE>
There were no category (i), (ii), or (iv) transactions.
11
<PAGE>
Financial Statements
and Supplemental Schedules
Jefferson Smurfit Corporation
Hourly Savings Plan
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Jefferson Smurfit Corporation
Hourly Savings Plan
Financial Statements
and Supplemental Schedules
Years ended December 31, 1999 and 1998
Contents
<TABLE>
<S> <C>
Report of Independent Auditors.............................................. 1
Financial Statements
Statements of Net Assets Available for Plan Benefits........................ 2
Statements of Changes in Net Assets Available for Plan Benefits............. 3
Notes to Financial Statements............................................... 4
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes at End of Year.................................................. 9
Schedule H, Line 4j - Schedule of Reportable Transactions................... 10
</TABLE>
<PAGE>
Report of Independent Auditors
Administrative Committee
Smurfit-Stone Container 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,
1999 and 1998, 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the changes in net assets available for plan benefits for
the years then ended, in conformity with accounting principles generally
accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year as of December 31, 1999 and schedule of
reportable transactions for the year then ended are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
June 14, 2000
1
<PAGE>
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
December 31
1999 1998
--------------------------------------
<S> <C> <C>
Assets
Cash $ 3,416 $ -
Investments, at fair value 88,123,321 67,651,533
--------------------------------------
Net assets available for plan benefits $88,126,737 $67,651,533
======================================
</TABLE>
See accompanying notes.
2
<PAGE>
Jefferson Smurfit Corporation Hourly Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-------------------------------------
<S> <C> <C>
Contributions:
Employees $11,629,244 $11,414,431
Employer 2,153,031 2,065,641
Net investment income:
Interest and dividend income 4,890,178 3,274,370
-------------------------------------
18,672,453 16,754,442
Net realized and unrealized appreciation of 9,855,625 2,422,196
investments
Transfers of participant accounts to Jefferson
Smurfit Corporation Savings Plan and other plans (459,080) (86,204)
Withdrawals by participants (7,480,280) (3,408,262)
Administrative expenses (113,514) (48,820)
-------------------------------------
Net increase in net assets available for plan benefits 20,475,204 15,633,352
Net assets available for plan benefits, beginning of 67,651,533 52,018,181
year
-------------------------------------
Net assets available for plan benefits, end of year $88,126,737 $67,651,533
=====================================
</TABLE>
See accompanying notes.
3
<PAGE>
Jefferson Smurfit Corporation
Hourly Saving Plan
Notes to Financial Statements
December 31, 1999
1. Description of Plan
The following description of the Jefferson Smurfit Corporation (the Company)
Hourly Savings Plan (the Plan) provides only general information. Participants
should refer to the plan document for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan established January 1, 1992, covering
all hourly employees of the Company and its adopting subsidiaries and
affiliates. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). The Company is a wholly owned subsidiary of
Smurfit-Stone Container Corporation (SSCC).
Contributions
Each year, participants may contribute from 1 to 15 percent of eligible
compensation as defined by the Plan. The Company contributes 50 percent of
eligible compensation that a participant contributes to the Plan subject to
maximum dollar amounts as provided by the Plan or applicable collective
bargaining agreements. At the discretion of the Company, employer contributions
may be in the form of cash invested in SSCC common stock. All contributions are
subject to applicable limitations.
Participant Accounts
Each participant's account is credited with the participant's contribution,
allocations of the Company's contribution, and plan earnings and is charged with
an allocation of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company's matching contribution portion of their
accounts plus actual earnings thereon is based on years of continuous service. A
participant is 100 percent vested after five years of service. Forfeitures of
nonvested amounts are used to offset future Company contributions.
4
<PAGE>
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Investment Options
Upon enrollment in the Plan, contributions may be directed into one of 15
investment options offered by the Plan. These investment choices offer a variety
depending upon the participant's investment objectives. The investment options
are primarily trusteed funds, other than the SSCC Company Stock Fund, in which
employee contributions and employer matching contributions are invested in
common stock of SSCC.
Payment of Benefits
On termination of service due to death, disability, or retirement, a participant
may elect to receive either a lump-sum amount equal to the value of the
participant's vested interest in his or her account (other than the SSCC Company
Stock Fund) or an annuity. Participant balances in the SSCC Company Stock Fund
are distributable in shares of SSCC common stock or cash, at the participant's
election. All other distributions are in cash.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are reported on the accrual basis of
accounting.
Investment Valuation and Income Recognition
Investments in mutual funds are valued at fair value as determined by the
trustee. Common stock is based on closing stock prices on national stock
exchanges.
Dividend income is accrued on the ex-dividend date.
Purchases and sales of securities are recorded on a trade-date basis. Realized
gains and losses from security transactions are reported on the average cost
method.
Administrative Expenses
Investment manager expenses are paid by the Plan. Other administrative expenses
are paid by the Company.
5
<PAGE>
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Reclassifications
Certain 1998 balances were reclassified to conform to the 1999 classifications.
Use of Estimates
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.
Payment of Benefits
Benefits are recorded when paid.
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,
1999
--------------------
<S> <C>
SSCC common stock (640,028 shares)* $15,680,684
T. Rowe Price Blue Chip Growth Fund (175,178 shares) 6,365,983
T. Rowe Price Blended Stable Value Fund (11,219,723 shares) 11,219,723
T. Rowe Price New Horizons Fund (412,796 shares) 11,364,264
T. Rowe Price Personal Strategy Balanced Fund (500,207 shares) 8,123,355
T. Rowe Price Equity Income Fund (800,391 shares) 19,857,703
</TABLE>
*Nonparticipant-directed.
6
<PAGE>
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
3. Investments (continued)
<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
</TABLE>
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $9,855,625 and $2,422,196, respectively, as follows:
<TABLE>
<CAPTION>
1999 1998
----------------------------------------
<S> <C> <C>
Mutual funds $3,734,788 $1,467,709
Common stock 6,120,837 954,487
----------------------------------------
$9,855,625 $2,422,196
========================================
</TABLE>
4. Nonparticipant-Directed Investments
Information about the significant components of the changes in net assets
relating to the SSCC common stock fund and the Jefferson Smurfit (JS) Group
common stock fund is as follows:
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------------------
<S> <C> <C>
Beginning balance, SSCC common stock fund $ 9,701,901 $6,310,843
Contributions 2,539,778 2,462,145
Net appreciation 5,587,834 929,410
Benefits paid to participants (1,329,428) (286,104)
Transfers to participant-directed investments (to)
from other SSCC plans (819,401) 285,607
-----------------------------------------
Ending balance, SSCC common stock fund $15,680,684 $9,701,901
=========================================
</TABLE>
7
<PAGE>
Jefferson Smurfit Corporation
Hourly Savings Plan
Notes to Financial Statements (continued)
4. Nonparticipant-Directed Investments (continued)
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------------------
<S> <C> <C>
Beginning balance, JS Group common stock fund $ 835,963 $1,398,913
Net appreciation (depreciation) and dividends 533,002 (428,145)
Distributions (104,012) (67,033)
Forfeitures (165) (953)
Transfers to SSCC common stock fund (26,783) (66,819)
-----------------------------------------
Ending balance, JS Group common stock fund $1,238,005 $ 835,963
=========================================
</TABLE>
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants would become 100 percent vested in their employer contributions.
6. Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated June 17, 1996 that the Plan is designed in accordance with applicable
sections of the Internal Revenue Code (IRC). Although the Plan has been amended
since receiving the determination letter, the Plan's administrator believes the
Plan is designed and is currently being operated in compliance with the
applicable requirements of the IRC.
8
<PAGE>
Supplemental Schedules
<PAGE>
Jefferson Smurfit Corporation Hourly Savings Plan
EIN: 36-2659288
Plan #063
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
Shares/ Current
Description Units Cost Value
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SSCC common stock fund* 640,028 $10,840,435 $15,680,684
JS Group common stock fund* 412,930 736,590 1,238,005
T. Rowe Price Equity Income Fund* 800,391 21,080,833 19,857,703
T. Rowe Price Personal Strategy Balanced Fund* 500,207 7,972,191 8,123,355
T. Rowe Price New Horizons Fund* 412,796 9,717,105 11,364,264
T. Rowe Price International Stock Fund* 125,765 1,926,356 2,393,309
Fidelity Contra Fund 30,892 1,821,104 1,854,167
Fidelity Value Fund 6,790 329,271 297,490
Putnam New Opportunities Fund 42,894 2,754,097 3,901,624
T. Rowe Price Blended Stable Value Fund* 11,219,723 11,219,723 11,219,723
Equity Index Trust (S&P 500) 86,239 2,877,053 3,322,803
T. Rowe Price Personal Strategy Income Fund* 18,877 249,486 245,968
T. Rowe Price Personal Strategy Growth Fund* 30,174 561,083 587,790
T. Rowe Price Summit Cash Reserves Fund* 1,247,072 1,247,072 1,247,072
T. Rowe Price Spectrum Income Fund* 39,531 448,662 423,381
T. Rowe Price Blue Chip Growth Fund* 175,178 5,526,338 6,365,983
------------------------------------
$79,307,399 $88,123,321
====================================
</TABLE>
*Parties in interest.
9
<PAGE>
Jefferson Smurfit Corporation Hourly Savings Plan
EIN: 36-2659288
Plan #063
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 1999
<TABLE>
<CAPTION>
Description of Purchase Selling Cost
Identity of Party Involved Asset Price Price of Asset
----------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of the current value of plan assets
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SSCC common stock fund Common stock $3,319,871 $ - $3,319,871
Common stock 2,148,713 2,825,324 2,148,713
</TABLE>
<TABLE>
<CAPTION>
Current Value
of Asset on
Transaction Net Gain
Identity of Party Involved Date (Loss)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SSCC common stock fund $3,319,871 $ -
2,825,324 676,611
</TABLE>
There were no category (i), (ii), or (iv) transactions.
10
<PAGE>
Financial Statements
and Supplemental Schedule
Smurfit Packaging Corporation
Savings Plan
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE>
Smurfit Packaging Corporation
Savings Plan
Financial Statements
and Supplemental Schedule
Years ended December 31, 1999 and 1998
Contents
<TABLE>
<S> <C>
Report of Independent Auditors.......................................... 1
Financial Statements
Statements of Net Assets Available for Plan Benefits.................... 2
Statements of Changes in Net Assets Available for Plan Benefits......... 3
Notes to Financial Statements........................................... 4
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets Held
for Investment Purposes at End of Year................................. 9
</TABLE>
<PAGE>
Report of Independent Auditors
Administrative Committee
Smurfit-Stone Container 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, 1999
and 1998, 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the changes in net assets available for plan benefits for
the years then ended, in conformity with accounting principles generally
accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes at end of year as of December 31, 1999 is presented for
the purpose of additional analysis and is not a required part of the basic
financial statements, but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. This supplemental schedule
is the responsibility of the Plan's management. The supplemental schedule has
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Ernst & Young LLP
June 14, 2000
1
<PAGE>
Smurfit Packaging Corporation Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
December 31
1999 1998
----------------------------------------
<S> <C> <C>
Assets
Investments, at fair value $23,679,354 $20,627,082
Participant loans 346,023 405,032
Employee contribution receivable 40,752 -
Employer contribution receivable 35,560 -
----------------------------------------
Net assets available for plan benefits $24,101,689 $21,032,114
========================================
</TABLE>
See accompanying notes.
2
<PAGE>
Smurfit Packaging Corporation Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------------------
<S> <C> <C>
Contributions:
Employees $ 1,076,188 $ 1,135,730
Employer 474,957 453,989
Net investment income 1,107,279 921,735
-----------------------------------------
2,658,424 2,511,454
Net realized and unrealized appreciation of
investments 3,530,870 1,499,275
Transfers of participant account(s) (to) from
Jefferson Smurfit Corporation Savings Plan (1,802) 12,941
Withdrawals by participants (3,105,553) (2,668,720)
Administrative expenses (12,364) (14,662)
-----------------------------------------
Net increase in net assets available for plan
benefits 3,069,575 1,340,288
Net assets available for plan benefits, beginning
of year 21,032,114 19,691,826
-----------------------------------------
Net assets available for plan benefits, end of year $24,101,689 $21,032,114
=========================================
</TABLE>
See accompanying notes.
3
<PAGE>
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements
December 31, 1999
1. Description of Plan
The following description of the Smurfit Packaging Corporation Savings Plan (the
Plan) provides only general information. Participants should refer to the plan
document for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan established April 1, 1994 covering all
salaried employees of Smurfit Packaging Corporation (the Company) and its
adopting subsidiaries and affiliates other than nonresident aliens, employees
covered by a collective bargaining agreement unless specifically included, and
leased employees. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute from 1 to 15 percent of eligible
compensation as defined by the Plan. Participants may also contribute rollover
amounts representing distributions from other qualified defined benefit or
contribution plans. The Company contributes 65 percent of participant
contributions to the Plan subject to maximum dollar amounts as provided by the
Plan. Employee contributions and employer match amounts may be invested in
mutual funds available through the Plan or Smurfit-Stone Container Corporation
(SSCC) common stock. All contributions are subject to applicable limitations.
Participant Accounts
Each participant's account is credited with the participant's contribution,
allocations of the Company's contribution, and plan earnings and is charged with
an allocation of administrative expenses. Allocations are based on participant
earnings or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's vested
account.
Vesting
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company's matching contribution portion of their
accounts plus actual earnings thereon is based on years of continuous service. A
participant is 100 percent vested after five years of service. Forfeitures of
nonvested amounts are used to offset future Company contributions.
4
<PAGE>
Smurfit Packaging Corporation
Saving Plan
Notes to Financial Statements (continued)
1. Description of Plan (continued)
Investment Options
Upon enrollment in the Plan, contributions may be directed into one of 15
investment options offered by the Plan. These investment choices offer a variety
of investment objectives depending upon the participant's investment objectives.
The investment options are primarily trusteed funds, other than the SSCC Stock
Fund, in which employee contributions and employer matching contributions are
invested in common stock of SSCC. In addition to the fund options, former
employees of Container Corporation of America may have a portion of their plan
investment held in shares of Exxon Mobil Corporation common stock. Contributions
are no longer permitted into this fund.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50 percent of their account balance,
excluding Company matching contributions. Loan transactions are treated as a
transfer to (from) the investment fund from (to) the participant loan fund. Loan
terms range from 1 to 5 years or up to 15 years for the purchase of a primary
residence. The loans are secured by the balance in the participant's account and
bear interest at a rate commensurate with local prevailing rates as determined
quarterly by the plan administrator. Interest rates range from 6 percent to 7.45
percent. Principal and interest is paid ratably through monthly payroll
deductions.
2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the Plan are reported on the accrual basis of
accounting.
Investment Valuation and Income Recognition
The investments of the Plan in mutual funds are valued at fair value as
determined by the trustee. Common stock is based on closing stock prices on
national stock exchanges. Participant loans are valued at cost which
approximates market.
Dividend income is accrued on the ex-dividend date.
Purchases and sales of securities are recorded on a trade-date basis. Realized
gains and losses from security transactions are reported on the average cost
method.
5
<PAGE>
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Administrative Expenses
Investment manager and other administrative expenses are paid by the Plan.
Certain other expenses are paid by the Company.
Reclassifications
Certain 1998 account balances were reclassified in order to correspond to 1999
asset classifications.
Use of Estimates
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.
Payment of Benefits
Benefits are recorded when paid.
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,
1999
--------------------
<S> <C>
SSCC common stock (124,069 shares) $3,039,702
T. Rowe Price Blended Stable Value Fund (2,666,166 shares) 2,666,166
Exxon Mobil Corporation common stock (64,860 shares) 5,225,308
T. Rowe Price Equity Income Fund (176,907 shares) 4,389,071
T. Rowe Price Blue Chip Growth Fund (58,011 shares) 2,108,117
</TABLE>
6
<PAGE>
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
3. Investments (continued)
<TABLE>
<CAPTION>
December 31,
1998
--------------------
<S> <C>
SSCC common stock (145,839 shares) $2,306,085
T. Rowe Price Blended Stable Value Fund (2,503,732 shares) 2,503,732
Exxon 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
</TABLE>
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated in
value by $3,530,870 and $1,499,275, respectively, as follows:
<TABLE>
<CAPTION>
1999 1998
----------------------------------------------------
<S> <C> <C>
Mutual funds $1,217,671 $ 532,093
Common stock 2,313,199 967,182
----------------------------------------------------
$3,530,870 $1,499,275
====================================================
</TABLE>
4. Nonparticipant-Directed Investments
Information about the significant components of the changes in net assets
relating to the Jefferson Smurfit (JS) Group common stock fund is as follows:
7
<PAGE>
Smurfit Packaging Corporation
Savings Plan
Notes to Financial Statements (continued)
4. Nonparticipant-Directed Investments (continued)
<TABLE>
<CAPTION>
Year ended December 31
1999 1998
-----------------------------------------
<S> <C> <C>
Beginning balance, JS Group common stock fund $589,191 $1,138,843
Net appreciation (depreciation) and dividends 382,105 (286,764)
Forfeitures (1,221) (700)
Benefits paid to participants (90,791) (138,524)
Transfers to participant-directed investments (6,442) (123,664)
-----------------------------------------
$872,842 $ 589,191
=========================================
</TABLE>
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contribution at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants would become 100 percent vested in their employer contributions.
6. Plan Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated May 30, 1996 that the Plan is designed in accordance with applicable
sections of the Internal Revenue Code (IRC). The Plan has been amended since
receiving the determination letter. However, the Plan's administrator believes
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 amounts under the Plan or on
earnings attributable to such contributions, until such time as these amounts
are distributed to or withdrawn by participants.
8
<PAGE>
Supplemental Schedule
<PAGE>
Smurfit Packaging Corporation Savings Plan
EIN: 43-1531057
Plan #003
Schedule H, Line 4i - Schedule of Assets Held for
Investment Purposes at End of Year
December 31, 1999
<TABLE>
<CAPTION>
Shares/ Current
Description Units Cost Value
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SSCC Common Stock Fund:
Shares of SSCC common stock* 124,069 $ 1,984,012 $ 3,039,702
JS Group Stock Fund:
JS Group shares* 291,132 521,184 872,842
T. Rowe Price Blended Stable Value Fund* 2,666,166 2,666,166 2,666,166
Exxon Mobil Stock Fund:
Shares of Exxon Mobil Corporation common stock 64,860 4,296,509 5,225,308
T. Rowe Price International Stock Fund* 23,006 350,178 437,808
T. Rowe Price New Horizons Fund* 43,322 1,015,406 1,192,646
T. Rowe Price Personal Strategy Balanced Fund* 71,246 1,134,823 1,157,037
T. Rowe Price Equity Income Fund* 176,907 4,648,826 4,389,071
Fidelity Value Fund 1,594 76,054 69,825
Fidelity Contra Fund 6,229 373,086 373,892
Putnam New Opportunities Fund 9,892 617,122 899,743
Equity Index Trust (S&P 500) 17,397 570,722 670,321
T. Rowe Price Personal Strategy Income Fund* 6,445 85,107 83,978
T. Rowe Price Personal Strategy Growth Fund* 11,895 220,994 231,722
T. Rowe Price Summit Cash Reserves Fund* 156,253 156,253 156,253
T. Rowe Price Spectrum Income Fund* 9,797 109,711 104,923
T. Rowe Price Blue Chip Growth Fund* 58,011 1,823,710 2,108,117
Participant loans, interest rates from 6.62% to 7.45% - 346,023
------------------------------------
$20,649,863 $24,025,377
====================================
</TABLE>
*Parties in interest.
9
