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Smurfit-Stone Reaffirms Its Financial Flexibility Amid Uncertain Economic Conditions; Announces Favorable Resolution of Tax Matters

Friday 10. October 2008 - Liquidity improved in third quarter 2008 - Presently expect to remain in compliance with all financial covenants through the next twelve months - Resolution of Canadian tax matters will positively impact third quarter 2008 earnings by $0.33 per share - Reporting third quarter 2008 results October 22 after market close; teleconference 9 a.m. ET October 23

Smurfit-Stone Container Corporation (NASDAQ:SSCC) today reaffirmed its financial flexibility amid uncertain economic conditions and announced the favorable resolution of certain Canadian income tax matters.

Smurfit-Stone Reaffirms its Financial Flexibility

Commenting on the company’s financial position, Patrick J. Moore, chairman and CEO, said: “Maintaining financial flexibility is a top priority at Smurfit-Stone. Following unprecedented cost inflation earlier this year, we successfully raised our selling prices in the third quarter. Furthermore, mill production, box shipments and liquidity improved from the second quarter. We are in compliance with all financial covenants in our credit facilities and presently expect to remain in compliance into the fourth quarter of 2009.”

Regarding the company’s business outlook, Moore said: “We expect higher average selling prices and lower costs will drive sequentially improved financial performance in the fourth quarter. Smurfit-Stone remains focused on all necessary actions to ensure sufficient financial flexibility during these challenging economic conditions.”

Resolution of Tax Matters

As previously disclosed, the Canada Revenue Agency (“CRA”) is examining the company’s tax returns for the tax years 1999 through 2005. In connection with the examination, the CRA was considering certain significant adjustments to taxable income related to the company’s acquisition of a Canadian company. The company was informed by the CRA that this matter has been resolved in Smurfit-Stone’s favor. As a result of this favorable ruling, the company will reduce its liability for unrecognized tax benefits and record an income tax benefit of approximately $84 million in the quarter ended September 30, 2008, which will positively impact earnings by approximately $0.33 per share.