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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
(Fee Required)
FOR THE FISCAL YEAR ENDED JUNE 30, 1994 COMMISSION FILE NUMBER 1-3344
SARA LEE CORPORATION PERSONAL PRODUCTS
RETIREMENT SAVINGS PLAN OF PUERTO RICO
(Full title of the plan)
--------------------
SARA LEE CORPORATION
THREE FIRST NATIONAL PLAZA
SUITE 4600
CHICAGO, ILLINOIS 60602
(Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office)
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[ARTHUR ANDERSEN LLP LETTERHEAD]
SARA LEE CORPORATION
PERSONAL PRODUCTS RETIREMENT
SAVINGS PLAN OF PUERTO RICO
FINANCIAL STATEMENTS
AS OF JUNE 30, 1994 AND 1993
TOGETHER WITH AUDITORS' REPORT
EMPLOYER IDENTIFICATION NUMBER: 36-2089049
PLAN NUMBER: 202
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[ARTHUR ANDERSEN LLP LETTERHEAD]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Sara Lee Corporation
Pension and Employee Benefits Committee:
We have audited the accompanying statements of net assets available for Plan
benefits of the SARA LEE CORPORATION PERSONAL PRODUCTS RETIREMENT SAVINGS PLAN
OF PUERTO RICO as of June 30, 1994 and 1993, and the related statement of
changes in net assets available for Plan benefits for the year ended June 30,
1994. These financial statements are the responsibility of Sara Lee
Corporation's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As described in Note 2, these financial statements were prepared on a modified
cash basis of accounting, which is a comprehensive basis of accounting other
than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits of the Sara
Lee Corporation Personal Products Retirement Savings Plan of Puerto Rico as of
June 30, 1994 and 1993, and the changes in its net assets available for Plan
benefits for the year ended June 30, 1994, on the basis of accounting described
in Note 2.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois,
December 15, 1994
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SARA LEE CORPORATION PERSONAL PRODUCTS
RETIREMENT SAVINGS PLAN OF PUERTO RICO
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF JUNE 30, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
-------- --------
<S> <C> <C>
ASSETS:
Value of interest in Master Trust-
Interest Income Fund $1,428,572 $1,255,860
Puerto Rico Sara Lee Stock Fund 23,723 7,272
Diversified Equity Fund 18,066 12,552
Aggressive Equity Fund -- 45,233
Small Stock Fund 64,571 --
International Equity Fund 3,849 --
Balanced Fund 15,766 --
--------- ---------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,554,547 $1,320,917
========== ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
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SARA LEE CORPORATION PERSONAL PRODUCTS
RETIREMENT SAVINGS PLAN OF PUERTO RICO
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
Puerto
Rico
Interest Sara Lee Small
Income Stock Diversified Aggressive Stock International Balanced
Fund Fund Equity Fund Equity Fund Fund Equity Fund Fund Total
-------- -------- ----------- ----------- ----- ------------ -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
beginning of year $1,255,860 $7,272 $12,552 $45,233 $ - $ - $ - $1,320,917
---------- ------ ------- ------- ------- ------ -------- ----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income-
Interest 96,250 11 1 - 8 - - 96,270
Dividends - 207 456 - 3,177 1 136 3,977
Realized gain - 610 153 - 112 3 (4) 874
Unrealized gain (loss) - (2,414) (676) - (1,919) 31 (399) (5,377)
Net change in accrued income (146) 135 - - (4) - - (15)
Other income 90 - - - - - - 90
Contributions-
Employer 38,385 - - - - - - 38,385
Participant 158,001 11,911 8,055 - 8,541 1,528 5,904 193,940
---------- ------ ------- ------- ------- ------ -------- ----------
Total additions 292,580 10,460 7,989 - 9,915 1,563 5,637 328,144
---------- ------ ------- ------- ------- ------ -------- ----------
DEDUCTIONS TO NET ASSETS ATTRIBUTED TO:
Benefits paid to participants (112,823) (372) (690) - - - - (113,885)
---------- ------ ------- ------- ------- ------ -------- ----------
Net increase 179,757 10,088 7,299 - 9,915 1,563 5,637 214,259
---------- ------ ------- ------- ------- ------ -------- ----------
INTERFUND TRANSFERS, net 1,756 (2,639) (4,566) (45,233) 49,359 882 441 -
---------- ------ ------- ------- ------- ------ -------- ----------
TRANSFERS TO/(FROM) THE PLAN, net (8,801) 9,002 2,781 - 5,297 1,404 9,688 19,371
---------- ------ ------- ------- ------- ------ -------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS,
end of year $1,428,572 $23,723 $18,066 $ - $64,571 $3,849 $15,766 $1,554,547
========== ======= ======= ======= ======= ====== ======= ==========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
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SARA LEE CORPORATION PERSONAL PRODUCTS
RETIREMENT SAVINGS PLAN OF PUERTO RICO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994 AND 1993
1. DESCRIPTION OF PLAN:
The following brief description of the Sara Lee Corporation Personal Products
Retirement Savings Plan of Puerto Rico (the "Plan") is provided for general
information purposes only. Sara Lee Consumer Personal Products ("Hanes") is
wholly owned by Sara Lee Corporation (the "Company"). The Plan was formerly
the Sara Lee Consumer Personal Products Retirement Savings Plan. The assets
associated with the participants on the U.S. payroll were merged with the Sara
Lee Corporation 401(k) Supplemental Savings Plan. The assets associated with
the participants on the Puerto Rico payroll remained in the Plan.
General
The Plan is a defined contribution pension plan covering salaried, nonunion,
eligible employees on the Puerto Rico payroll who have completed 12 months of
credited service. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"). Participants should refer to the plan
agreement for a more complete description of the Plan's provisions.
Contributions
The participants may defer payment of a percentage of their compensation by
electing to have such percentage withheld from their compensation on a pretax
basis and contributed to the Plan on their behalf by Hanes. The participant
contributions can range from not less than 1% to no greater than 10% of
compensation, subject to limitations as noted in the Plan. Participants have
the option to invest in one or more of the six investment funds of the Plan in
even multiples of 10%. Participants may change their contribution percentage
as often as once per quarter. The investment funds consist of:
Interest Income Fund--The Interest Income Fund seeks to provide
stability of principal and a positive rate of return. The Interest
Income Fund invests primarily in investment contracts issued by
insurance companies and banks of high credit quality. The investment
contracts held by the fund are obligations of the issuing insurance
companies or banks and are not guaranteed as to principal or interest
by an agency of the federal government. A small portion of the fund
will be invested in money market instruments to facilitate daily cash
flow into and out of the fund.
Puerto Rico Sara Lee Stock Fund--The Puerto Rico Sara Lee Stock Fund
is designed to provide employees with the opportunity to share in the
potential growth of the Company's stock. The Sara Lee Stock Fund
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invests in the common stock of Sara Lee Corporation. A small portion
of the fund will be invested in money market instruments to facilitate
daily cash flow into and out of the fund.
Diversified Equity Fund--The Diversified Equity Fund attempts to
achieve growth of principal and modest current income. The
Diversified Equity Fund invests proportionately in all of the stocks
included in the Standard & Poor's 500 Composite Stock Price Index, a
widely recognized benchmark of stock market performance.
Aggressive Equity Fund--The Aggressive Equity Fund seeks long-term
growth of capital and invests primarily in common stock and securities
convertible into common stock.
Small Stock Fund--The Small Stock Fund seeks long-term growth of
capital. The Small Stock Fund attempts to provide investment results
paralleling those of the Russell 2000 Index, a broadly diversified
index of small company stocks.
International Equity Fund--The International Equity Fund seeks
long-term growth of capital by investing in stocks of companies
located outside the United States.
Balanced Fund--The Balanced Fund attempts to provide current income
and the potential for long-term growth of income and capital. The
Balanced Fund invests 60% of its assets in a portfolio of stocks that
is expected to parallel the returns of the Wilshire 5000 Stock Index
and 40% of its assets in a fixed income portfolio that is structured
to track the Lehman Brothers Aggregate Bond Index.
Prior to July 1, 1985, participants were allowed to make after-tax
contributions of 1% to 5% of their compensation. These after-tax contributions
are no longer allowed in accordance with the July 1, 1985, restatement.
The Company will contribute an amount equal to 35% of the pretax compensation
deferred contributions made by the participants employed by the Puerto Rican
Division of Hanes, not in excess of 5% of the participants' compensation.
Participant Accounts
Each participant's account is credited with the participant's contribution, the
participant's portion of the Company's contribution as determined above and an
allocation of the Plan's earnings. Allocations are based on the ratio that
each participant's account balance for the period bears to the total of all
participants' account balances for the period.
Administrative Fees and Expenses
Administrative fees and expenses associated with the Plan are paid by the
Company.
Vesting
All participants' accounts are fully vested and nonforfeitable at all times.
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Withdrawals
A participant may withdraw all or a portion of his after-tax account balance.
Withdrawal of a pretax account balance may be made only when a financial
hardship exists.
Benefit Payments
Upon termination of service, distribution of the balance in the participant's
account will be made to the participant or, in the case of the participant's
death, to his/her beneficiary by payment in cash or stock if invested in the
Puerto Rico Sara Lee Stock Fund.
A participant's settlement date will be the date on which his employment with
the Company is terminated due to one of the following (the first to occur):
a. Normal or late retirement--The date of the participant's
retirement on or after attaining age 65.
b. Early retirement--The date of the participant's retirement on or
after attaining age 55 and completing 10 years of credited service
but before attaining age 65.
c. Death--The date of the participant's death.
d. Resignation or dismissal--The date the participant resigns or is
dismissed from the Company before attaining age 55 and completing
10 years of credited service.
e. Total disability retirement--The date the participant becomes
totally disabled.
2. SUMMARY OF ACCOUNTING POLICIES:
Basis of Accounting
The accompanying financial statements are presented on the modified cash basis
of accounting, which is a comprehensive basis of accounting other than
generally accepted accounting principles. Under the modified cash basis of
accounting, cash investments are recorded at accrued fair market value per
Wachovia Bank and Trust Company, N.A. (the "Trustee") and payments and
contributions are recorded as the cash is paid or received by the Trustee.
Valuation of Investments
Investments are stated at aggregate market value. The assets of the Plan are
commingled in the Sara Lee Corporation Investment Trust (the "Investment
Trust") at the Wachovia Bank & Trust Company, N.A. The Investment Trust had
investments totaling $321,865,969 at June 30, 1994. The composition of these
investments is as follows:
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<TABLE>
<S> <C>
Non-interest-bearing cash $ 58,541
Employer contribution receivable 86,757
Participant contribution receivable 75,023
Income receivable 1,518,691
Other receivables 183,136
Corporate stock common 29,702,040
Nonparticipant loans secured by mortgage 630,483
Participant loans 14,331,821
Investment in common/collective trust 9,425,127
Investment in registered investment company 67,941,912
Unallocated insurance contract investments 197,912,438
------------
Total $321,865,969
============
</TABLE>
Master Trust income allocated to the participating plans for the year ended
June 30, 1994, is as follows:
<TABLE>
<S> <C>
Employer contributions $ 5,765,875
Participant contributions 30,724,966
Noncash contributions 1,779,832
Interest income 14,605,649
Common stock dividends 867,797
Realized gain on sale of assets (103,634)
Net investment gain from common/collective trusts 523,233
Net investment gain from registered investment companies 1,760,769
-----------
Net investment income $55,924,487
===========
</TABLE>
The Plan assets represent .48% and .45% of Investment Trust assets as of June
30, 1994 and 1993, respectively. The schedule of assets held for investment
purposes and the schedule of 5% reportable transactions are disclosed in the
Wachovia Master Trust filing.
3. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company may discontinue
its contributions to the Plan at any time and terminate the Plan subject to the
provisions of ERISA. In the event of the termination of the Plan, participants
will receive their full account balance.
4. FEDERAL INCOME TAX STATUS:
The Plan obtained its latest determination letter on September 11, 1986, in
which the Internal Revenue Service stated that the Plan, as then designed, was
in compliance with the requirements of the Internal Revenue Code. The Plan has
been amended since receiving the determination letter. Although the plan
administrator believes that the Plan is currently designed and operated in
compliance with the requirements of the Internal Revenue Code, a new
determination letter has been filed to ensure that the amendments and revisions
that have occurred after September 11,
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1986, are included. Therefore, the plan administrator believes that the Plan
was qualified and the trust was tax-exempt as of the financial statement date.
5. CURRENT-YEAR EVENT:
Effective July 1, 1993, two additional investment fund choices, the Balanced
Fund and the International Equity Fund, were made available to participants.
The Aggressive Equity Fund was changed to the Small Stock Fund.
6. RECONCILIATION TO FORM 5500:
As of June 30, 1994, the Plan had approximately $97,084 of pending
distributions to participants who elected to withdraw from the operation and
earnings of the Plan. This amount is recorded as a liability in the Plan's
Form 5500; however, this amount is not recorded as a liability in accordance
with generally accepted accounting principles.
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company for the year
ended June 30, 1994:
<TABLE>
<CAPTION>
Benefits Net Assets
Payable to Benefits Available for
Participants Paid Plan Benefits
------------ --------- -------------
<S> <C> <C> <C>
Per financial statements $ - $113,885 $1,554,547
Accrued benefit payments 97,084 97,084 (97,084)
------- -------- ----------
Per Form 5500 $97,084 $210,969 $1,457,463
======= ======== ==========
</TABLE>
7. SUBSEQUENT EVENT:
By resolution dated September 19, 1994, the Plan was amended and restated in
full, effective July 1, 1994, to incorporate all prior amendments and to
conform with the applicable requirements of the Tax Reform Act of 1986.
<PAGE> 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K, into the Sara Lee Corporation Personal
Products Retirement Savings Plan of Puerto Rico previously filed Registration
Statement File No. 33-35760.
/s/ ARTHUR ANDERSEN LLP
Chicago, Illinois,
December 15, 1994
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 21, 1994
SARA LEE CORPORATION
PERSONAL PRODUCTS RETIREMENT
PLAN OF PUERTO RICO
By: SARA LEE CORPORATION
PERSONAL PRODUCTS RETIREMENT PLAN
OF PUERTO RICO COMMITTEE
By: /s/ Michael E. Murphy
---------------------------------
Michael E. Murphy, As a Committee
Member on Behalf of the Committee
