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SEAGRAM ADOPTS FINANCIAL ACCOUNTING STANDARDS 106 AND 109

 MONTREAL, Jan. 4, 1993 /PRNewswire/ -- The Seagram Company Ltd. (NYSE: VO) announced today that it will adopt Financial Accounting Standards 106 and 109 in its current fiscal year which ends on Jan. 31, 1993, and will restate results for the first three quarters of the year. As a result, Seagram will record in the first quarter a one-time reduction in retained earnings of approximately $1.4 billion, $1.2 billion of which represents Seagram's share of the charges to be taken by E.I. du Pont de Nemours and Company, which has announced that it will adopt the same standards for 1992. For United States reporting purposes this retroactive effect of the accounting changes will be included in net income as a one-time, non-cash charge of approximately $3.70 per share. For Canadian reporting purposes, the effect of the accounting changes will be charged to retained earnings and not recognized on the income statement.
 FAS 106 requires companies to recognize the effect of post- retirement medical costs during employees' service with the company as opposed to at the time the costs are incurred after retirement. Seagram has chosen to expense immediately the full liability for benefits accrued to date rather than amortize the expense over 20 years. For Seagram, the FAS 106 charge will amount to approximately $1.075 billion, which includes $950 million for the Company's share of the charge to be taken by Du Pont. The balance sheet will reflect an increase in deferred credits of $125 million as well as a $950 million reduction in the book value of Du Pont holdings. In addition to the one-time charge, adoption of FAS 106 is expected to increase annual accounting charges for post-retirement medical expenses by approximately $10 million unless changes are made to current benefit plans.
 FAS 109 changes the accounting treatment of deferred taxes. Under the new method, changes in tax rates will have a retroactive effect on taxes which have been deferred. In addition, the accounting for deferred taxes upon acquisition will change. The total effect of FAS 109 will be a one-time charge of about $75 million for Seagram and approximately $250 million for the Company's share of the charge against Du Pont. No ongoing charges from FAS 109 for Seagram's operations are anticipated.
 The Seagram Company Ltd. is a leading global producer and marketer of distilled spirits, wines, fruit juices, coolers, and mixers, and sells its brands in more than 150 countries. Seagram manages its worldwide beverage operations through two major business units -- The Seagram Spirits And Wine Group and The Seagram Beverage Group -- and two U.S.-based specialized, premium wine operations, The Seagram Classics Wine Company and Seagram Chateau & Estate Wines Company. Subsidiaries and affiliates in 34 countries comprise the largest distribution system in the spirits and wine industry.
 -0- 1/4/93
 /CONTACT: Chris Tofalli of Seagram, 212-572-1118/
 (VO)


CO: Seagram Company Ltd. ST: Quebec IN: FOD SU:

LR -- NY014 -- 1188 01/04/93 09:13 EST
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Publication:PR Newswire
Date:Jan 4, 1993
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