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KELLOGG COMPANY TO ADOPT FAS NO. 106 IN FOURTH QUARTER

 BATTLE CREEK, Mich., Dec. 18 /PRNewswire/ -- Kellogg Company (NYSE: K) announced today that it will adopt Financial Accounting Standard No. 106 in the current (fourth) quarter. This Standard requires that the estimated cost of postretirement benefits other than pensions be accrued over the period earned rather than expensed as incurred. It must be implemented by major U.S. companies no later than the first quarter of 1993.
 The new Standard will be applied by the company retroactively to Jan. 1, 1992. Previously reported 1992 quarterly results will be restated.
 The net effect of the adoption will be an after-tax charge to net earnings of $269.7 million ($424.8 million before tax), or $1.13 per share, for the year ending Dec. 31, 1992. This charge has two components: $251.6 million or $1.05 per share is a one-time cumulative adjustment, and $18.1 million or $0.08 per share is related to current year expenses. The charge is consistent with estimates disclosed in the company's 1991 Annual Report.
 There will be no cash flow impact from the charge to earnings. Both Moody's and Standard and Poor's have confirmed that this charge will not affect the company's debt ratings, which are the highest available.
 KELLOGG COMPANY
 Effect of Adoption of FAS No. 106
 1992 Quarters
 (millions)
 1ST 2ND 3RD 4TH TOTAL
 Reduction in earnings before income
 taxes and cumulative effect of
 change in accounting principle $7.1 $7.1 $7.1 $7.2 $28.5
 Income taxes (2.6) (2.6) (2.6) (2.6) (10.4)
 Reduction in earnings before
 cumulative effect of change in
 accounting principle 4.5 4.5 4.5 4.6 18.1
 Cumulative effect of change in
 accounting for nonpension
 postretirement benefits 251.6 --- --- --- 251.6
 Reduction in net earnings $256.1 $4.5 $4.5 $4.6 $269.7
 Reduction in net earnings per
 share after adoption of
 FAS No. 106 $1.07 $.02 $.02 $.02 $1.13
 -0- 12/18/92
 /CONTACT: Neil G. Nyberg of Kellogg, 616-961-3799/
 (K)


CO: Kellogg Company ST: Michigan IN: FOD SU:

DH -- DE015 -- 8363 12/18/92 16:06 EST
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Publication:PR Newswire
Date:Dec 18, 1992
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