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RJR NABISCO REPORTS THIRD QUARTER RESULTS

 RJR NABISCO REPORTS THIRD QUARTER RESULTS
 NEW YORK, Oct. 27 /PRNewswire/ -- RJR Nabisco Holdings Corp.


(NYSE: RN) today announced third quarter 1992 net income of $182 million ($.13 per common share), up 48 percent from net income of $123 million ($.07 per common share) in the quarter last year.
 The third quarter 1992 net income includes a $70 million ($.05 per common share) after-tax extraordinary charge related to the repurchase and retirement of approximately $511 million principal amount of hig-? cost debt that was offered to the company during the quarter. Absent the extraordinary charge, the company would have reported net income of $252 million ($.18 per common share) in the third quarter, a 105 percent increase over the year-ago quarter.
 "We continued to take advantage of favorable market conditions in the quarter to replace high-cost debt with lower-cost debt," said Louis V. Gerstner Jr., RJR Nabisco chairman and chief executive officer. "The refinancing of $2.8 billion that we have completed since the beginning of this year will produce significant interest savings for the company."
 The company said during the quarter it repurchased and retired $100 million of its 15 percent payment-in-kind subordinated debentures due 2001, $44 million (including interest) of its 17-3/8 percent senior converting debentures due 2009, $263 million principal amount ($205 million accreted amount) of its 15 percent subordinated discount debentures due 2001 and $105 million of other debentures. The extraordinary charge in the quarter is a result of the premium paid for the debentures and the write-off of related unamortized debt issuance costs.
 RJR Nabisco's third quarter operating income was $763 million, about even with the third quarter of 1991. Net sales were $4.02 billion, or 7 percent higher than $3.76 billion in the quarter last year.
 "The packaged-goods market in North America continues to be very competitive in response to consumers' reluctance to spend and the growth of generic or private-label products," Gerstner said. "Our response to this environment has been, and continues to be, to protect and build our long-term position at the expense of current results.
 "The international tobacco and food businesses showed strong sales growth, underscoring the strategic importance of our pursuit of new business opportunities in Eastern Europe, Latin America and Asia," Gerstner continued. "The sales and volume gains in domestic tobacco were fueled primarily by a surge in the savings segment and significant marketing investment. However, these factors also restrained earnings growth in that business. On the food side, our North American businesses continued to deliver solid results, thanks to a number of successful new product introductions."
 For the first nine months of 1992, net income, including a $351 million after-tax extraordinary charge related to debt repurchases and retirements, was $254 million, 23 percent higher than $207 million in 1991. Net income per common share was $.17, compared with $.05 per common share for the first nine months of 1991. Absent the extraordinary charge for the first nine months of 1992, the company would have reported net income of $605 million ($.43 per common share), a 192 percent increase from $207 million ($.05 per common share) reported for the first nine months of 1991. Nine-month operating income was $2.20 billion, up 1 percent from $2.18 billion last year. Net sales for the first nine months of 1992 were $11.65 billion, up 6 percent from $11.01 billion in the same period a year ago.
 Tobacco
 RJR Nabisco's worldwide tobacco business reported net sales of $2.33 billion in the third quarter, a 7 percent increase over $2.17 billion in the third quarter of 1991. Business unit contribution (operating income before amortization of trademarks and goodwill) was $712 million, about even with the third quarter last year.
 In international tobacco, net sales rose 14 percent and business unit contribution increased 18 percent over third quarter 1991. International volume increased 19 percent. Sales and business unit contribution increases reflect strong volume gains in Eastern Europe, Asia, the Western Hemisphere and the Middle East and favorable currency developments that more than offset slightly lower volume in Western Europe.
 Net sales in the domestic tobacco unit increased 4 percent from the third quarter last year and business unit contribution was 4 percent lower. Domestic volume was up 6 percent over the quarter last year, with increased savings volume more than offsetting lower full-price business. The effect of more favorable pricing and higher volume on domestic tobacco business unit contribution was more than offset by marketing expenditures that are part of an ongoing investment program to improve long-term market-share performance, as well as the increased percentage of sales in the lower-margin savings segment.
 For the first nine months of 1992, net sales for the company's worldwide tobacco business were $6.77 billion, 7 percent greater than $6.34 billion last year. Nine-month business unit contribution was $2.08 billion, slightly less than $2.09 billion for the first nine months of 1991.
 Food
 RJR Nabisco's food businesses reported third quarter 1992 net sales of $1.69 billion, 6 percent higher than $1.60 billion reported in the 1991 third quarter. Third quarter business unit contribution increased 2 percent to $232 million from $228 million in the year-ago quarter.
 Sales growth was strong in Latin America, as a result of both internal growth and acquisitions, and modest in North America, where the weak economy continued to restrain consumer spending. Business unit contribution reflected gains from slightly improved pricing in North America and Latin American sales gains that were offset by the effects of adverse currency developments in Brazil.
 For the first nine months of 1992, net sales for the company's food businesses were $4.88 billion, up 4 percent from the first nine months of 1991. Nine-month business unit contribution of $661 million for the food businesses was 6 percent higher than $625 million for the first nine months of 1991.
 RJR Nabisco Holdings Corp. is the indirect parent of RJR Nabisco, Inc., an international consumer products company. RJR Nabisco's major operating units are R.J. Reynolds Tobacco Co., R.J. Reynolds Tobacco International, Inc., the Nabisco Foods Group and Nabisco International, Inc.
 RJR NABISCO HOLDINGS CORP.
 CONSOLIDATED CONDENSED STATEMENTS OF INCOME
 (Dollars in millions except per share amounts)
 3 mos. ended 9 mos. ended
 9/30/92 9/30/91 9/30/92 9/30/91
 Net sales:
 Tobacco - domestic $ 1,591 $ 1,524 $ 4,691 $ 4,363
 Tobacco - international 736 643 2,077 1,979
 Total tobacco 2,327 2,167 6,768 6,342
 Total food 1,694 1,596 4,879 4,671
 Consolidated $ 4,021 $ 3,763 $ 11,647 $ 11,013
 Business unit contribution:
 Tobacco - domestic $ 553 $ 578 $ 1,645 $ 1,718
 Tobacco - international 159 135 432 371
 Total tobacco 712 713 2,077 2,089
 Total food 232 228 661 625
 Corporate (27) (27) (83) (75)
 Business unit contribution 917 914 2,655 2,639
 Amortization of trademarks
 and goodwill (154) (152) (460) (457)
 Operating income 763 762 2,195 2,182
 Cash interest expense (242) (385) (747) (1,000)
 Non-cash interest expense (103) (115) (341) (642)
 Amortization of debt
 issuance costs (5) (16) (15) (98)
 Other (expense) income,
 net 12 (21) 11 (44)
 Income before income taxes 425 225 1,103 398
 Provision for income taxes 173 102 498 191
 Income before extraordinary
 item 252 123 605 207
 Extraordinary item - loss
 on early extinguishments
 of debt, net of income
 taxes (70) --- (351) ---
 Net income $ 182 $ 123 $ 254 $ 207
 Preferred stock divs. 7 57 23 165
 Net income applicable
 to common stock $ 175 $ 66 $ 231 $ 42
 Net income (loss) per common and common equivalent share:
 Income before
 extraordinary item(a)$ 0.18 $ 0.07 $ 0.43 $ 0.05
 Extraordinary item (0.05) --- (0.26) ---
 Net income $ 0.13 $ 0.07 $ 0.17 $ 0.05
 Avg. no. of common and common
 equiv. shares outstanding
 (in thousands) 1,364,326 902,494 1,365,588 819,924
 (a) If calculated on a fully diluted basis, including securities that produce an anti-dilutive result, income (loss) before extraordinary item per common and common equivalent share amounted to $.18 and $.12 for the three months ended Sept. 30, 1992 and 1991, respectively, and $.45 and $.23 for the nine months ended Sept. 30, 1992 and 1991, respectively.
 -0- 10/27/92
 /CONTACT: Jason Wright of RJR Nabisco, 212-258-5770/
 (RN) CO: RJR Nabisco Holdings Corp. ST: New York IN: HOU SU: ERN


BN -- AT011 -- 5280 10/27/92 10:14 EST
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Date:Oct 27, 1992
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