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M.A. HANNA ANNOUNCES FASB CHARGES

 CLEVELAND, Jan. 8 /PRNewswire/ -- The M.A. Hanna Company (NYSE/MSE: MAH) announced today that it will adopt retroactively to the beginning of 1992 two non-cash accounting changes mandated by the Financial Accounting Standards Board.
 The adoption of these changes, which relate to how the company accounts for non-pension postretirement benefits and income taxes, will result in a net loss for the first six months of 1992. Cumulative charges will be approximately $11.5 million. Although the Financial Accounting Standards Board gives companies the option of spreading the liability for postretirement benefits over 20 years, Hanna will absorb these charges in 1992.
 "These one-time charges do not diminish Hanna's outstanding accomplishments in 1992," said Martin D. Walker, chairman and chief executive officer of Hanna. "Our income before the effects of these accounting changes will be substantially above last year and we expect strong growth in 1993. These changes do not affect cash flow."
 For the first nine months of 1992, earnings from continuing operations, before restating, increased 20 percent to $21.1 million, or $1.07 per share, fully diluted. Revenues for the first three quarters of 1992 were $985.4 million, a 17 percent increase over sales of $845.5 million for the same period of 1991. Shareholders' equity at Sept. 30, 1992, was $408.5 million.
 In addition to the one-time cumulative charge, the Financial Accounting Standard (FAS) 106 change will result in an ongoing charge of approximately 13 cents per share for 1992. There will be no effect on Hanna's income from continuing operations relative to FAS 109 in 1992.
 An explanation of the new accounting requirements and their effects on Hanna follows:
 Financial Accounting Standard 106 requires companies to account for the cost of medical and other postretirement benefits excluding pensions using the accrual method of accounting during the working lives of its associates. Hanna previously recorded these costs on a pay-as-you-go basis.
 Hanna's accumulated postretirement obligation, as calculated pursuant to FAS 106, will be approximately $33.6 million, net of related income tax benefit. It will be recorded as of the beginning of 1992.
 Financial Accounting Standard 109 requires companies to adjust deferred tax assets and liabilities whenever there is an enacted tax rate change, with a corresponding adjustment being reflected in current income tax expense. The new standard of accounting for income taxes also liberalizes the ability to recognize the benefit of certain deferred tax assetsv that was prohibited under the previous standard, FAS 96, which the company adopted as an accounting change in 1987.
 The cumulative effect of FAS 109, to be recorded as a benefit retroactively to the beginning of 1992, will be approximately $22.1 million.
 The net effect of the two adjustments will be $11.5 million which will result in a net loss in the restated financial statements for the first six months of 1992.
 M.A. Hanna is a leading specialty chemicals company. Primary businesses of M.A. Hanna are plastics and rubber compounding, color and additive concentrates, and distribution of engineered plastic shapes and resins.
 -0- 1/8/93
 /CONTACT: Barbara Gould (investor), 216-589-4085; or Andy Opila (media), 216-589-4018; both of M.A. Hanna/
 (MAH)


CO: M.A. Hanna ST: Ohio IN: CHM SU: ACC

KK -- CL007 -- 3173 01/08/93 16:40 EST
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Publication:PR Newswire
Date:Jan 8, 1993
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