RECENT DEVELOPMENTS

     On October 20, 1998, two of Stone's Preferred Stockholders filed a
complaint against Stone in Delaware Chancery Court.  The plaintiffs allege
that Stone is violating its certificate of incorporation by failing to call
a meeting of Preferred Stockholders for the purpose of electing two
directors by those Stockholders.  The plaintiffs also allege that, in
connection with its pending merger with JSC, Stone is seeking to change the
Preferred Stockholders' rights without a two-thirds class vote of the
Preferred Stockholders and that such Stockholders should be entitled to
vote with respect to the Merger.  Among other things, the plaintiffs are
seeking injunctive relief with respect to the Merger.

     On November 4, 1998, Stone reported a net loss of $275.5 million for
the third quarter ended September 30, 1998, or $2.66 per share of Stone
common stock, which does not include any tax benefit on losses incurred by
its U.S. operations.  Stone's net loss for the third quarter ended
September 30, 1997 was $98.7 million, or $1.01 per share of Stone common
stock, and its net loss for the second quarter ended June 30, 1998 was
$158.6 million, or $1.59 per share of Stone common stock.  Stone's revenue
for the third quarter ended September 30, 1998 was $1.22 billion, compared
to $1.18 billion for the third quarter ended September 30, 1997, and $1.27
billion for the second quarter ended June 30, 1998.

     Stone's net loss for the third quarter of 1998 included a non-
recurring charge for asset write-downs, and losses related to downtime at
its paper mills to balance inventories.  Additionally, the results included
foreign exchange losses incurred by a Canadian affiliate.  Pursuant to
accounting standards, Stone's net loss for the third quarter of 1998 also
included the impact of establishing reserves against deferred tax assets on
net operating loss carryforwards, which may not be realizable in the
future.