|
|
|
|
|
|
|
|
|
|
|
|
|
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-3344
Sara Lee Corporation
(Exact name of registrant as specified in its charter)
Maryland 36-2089049
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Three First National Plaza, Suite 4600, Chicago, Illinois 60602-4260
(Address of principal executive offices)
(Zip Code)
(312) 726-2600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No __________
On April 1, 1995, the Registrant had 479,642,196 outstanding shares of
common stock $1.33 1/3 par value, which is registrant's only class of common
stock.
The document contains 19 pages.
Page 1
<PAGE> 2
SARA LEE CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
PART I -
FINANCIAL STATEMENTS -
Preface 3
Condensed Consolidated Balance Sheets -
At April 1, 1995 and July 2, 1994 4
Consolidated Statements of Income -
For the thirteen and thirty-nine weeks ended
April 1, 1995 and April 2, 1994 5
Consolidated Statements of Common Stockholders' Equity -
For the period July 3, 1993 to April 1, 1995 6
Consolidated Statements of Cash Flows -
For the thirty-nine weeks ended
April 1, 1995 and April 2, 1994 7
Notes to Consolidated Financial Statements 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION 9
PART II -
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURE 14
EXHIBIT 11 - Computation of Net Income Per Common Share 15
EXHIBIT 12.1 - Computation of Ratio of Earnings to Fixed Charges 17
EXHIBIT 12.2 - Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividend Requirements 18
EXHIBIT 27 - Financial Data Schedule 19
</TABLE>
Page 2
<PAGE> 3
PART I
SARA LEE CORPORATION AND SUBSIDIARIES
Preface
The consolidated financial statements for the thirteen and thirty-nine
weeks ended April 1, 1995 and April 2, 1994 and the balance sheet as
of April 1, 1995 included herein have not been examined by independent
public accountants, but, in the opinion of Sara Lee Corporation
("Corporation"), all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position at
April 1, 1995 and the results of operations and the cash flows for the
periods presented herein have been made. The results of operations
for the thirteen and thirty-nine weeks ended April 1, 1995 are not
necessarily indicative of the operating results for the full fiscal
year.
The consolidated financial statements included herein have been
prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Although the Corporation believes that the
disclosures made are adequate to make the information presented not
misleading, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant
to such regulations. These consolidated financial statements should
be read in conjunction with the financial statements and the notes
thereto included in the Corporation's Form 10-K for the year ended
July 2, 1994.
Page 3
<PAGE> 4
SARA LEE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets at April 1, 1995 and July 2, 1994
(in millions)
<TABLE>
<CAPTION>
April 1, July 2,
1995 1994
ASSETS --------- --------
<S> <C> <C>
Cash and Equivalents $ 189 $ 189
Trade Accounts Receivable, less Allowances 1,666 1,472
Inventories:
Finished Goods 1,775 1,603
Work in Process 364 361
Materials and Supplies 675 603
-------- --------
2,814 2,567
Other Current Assets 239 241
-------- --------
Total Current Assets 4,908 4,469
Investments in Associated Companies 106 142
Trademarks and Other Assets 500 492
Property, Net 2,901 2,900
Intangible Assets 3,938 3,662
-------- --------
$ 12,353 $ 11,665
======== ========
LIABILITIES AND EQUITY
Notes Payable $ 1,039 $ 1,281
Accounts Payable 1,066 1,253
Accrued Liabilities 2,649 2,303
Current Maturities of Long-Term Debt 102 82
-------- --------
Total Current Liabilities 4,856 4,919
Long-Term Debt 1,844 1,496
Deferred Income Taxes 333 290
Other Liabilities 712 783
Minority Interest in Subsidiaries 523 520
Auction Preferred Stock 300 300
ESOP Convertible Preferred Stock 336 339
Unearned Deferred Compensation (303) (308)
Common Stockholders' Equity 3,752 3,326
-------- --------
$ 12,353 $ 11,665
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
Page 4
<PAGE> 5
SARA LEE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
For the Thirteen and Thirty-Nine Weeks Ended April 1, 1995 and April 2, 1994
(in millions, except per share data)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
---------------------- -----------------------
April 1, April 2, April 1, April 2,
1995 1994 1995 1994
------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $ 4,193 $ 3,664 $13,131 $11,470
------- ------- ------- -------
Cost of Sales 2,628 2,276 8,184 7,137
Selling, General and Administrative Expenses 1,271 1,119 3,920 3,398
Interest Expense 63 47 178 131
Interest Income (16) (12) (40) (31)
------- ------- ------- -------
3,946 3,430 12,242 10,635
------- ------- ------- -------
Income Before Income Taxes 247 234 889 835
Income Taxes 81 82 306 292
------- ------- ------- -------
Net Income Before Accounting Change 166 152 583 543
Cumulative Effect of Accounting Change -- -- -- (35)
------- ------- ------- -------
Net Income 166 152 583 508
Preferred Dividend Requirements, Net of Tax 8 6 21 18
------- ------- ------- -------
Net Income Available for Common Stockholders $ 158 $ 146 $ 562 $ 490
======= ======= ======= =======
Net Income Per Common Share - Primary
Before Cumulative Effect of Accounting Change $ 0.33 $ 0.30 $ 1.17 $ 1.09
Cumulative Effect of Accounting Change -- -- -- (0.07)
------- ------- ------- -------
$ 0.33 $ 0.30 $ 1.17 $ 1.02
======= ======= ======= =======
Average Shares Outstanding 479 479 479 480
======= ======= ======= =======
Net Income Per Common Share - Fully Diluted
Before Cumulative Effect of Accounting Change $ 0.32 $ 0.29 $ 1.14 $ 1.06
Cumulative Effect of Accounting Change -- -- -- (0.07)
------- ------- ------- -------
$ 0.32 $ 0.29 $ 1.14 $ 0.99
======= ======= ======= =======
Average Shares Outstanding 498 498 498 499
======= ======= ======= =======
Cash Dividends Per Common Share $ 0.17 $ 0.16 $ 0.50 $ 0.465
======= ======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
Page 5
<PAGE> 6
SARA LEE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Common Stockholders' Equity
For the Period July 3, 1993 to April 1, 1995
(in millions, except per share data)
<TABLE>
<CAPTION>
UNEARNED
COMMON CAPITAL RETAINED TRANSLATION RESTRICTED
TOTAL STOCK SURPLUS EARNINGS ADJUSTMENTS STOCK
------- -------- ------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Balances at July 3, 1993 $ 3,551 $ 647 $ 66 $ 3,056 $ (194) $ (24)
Net Income 508 -- -- 508 -- --
Cash Dividends -
Common ($.465 per share) (222) -- -- (222) -- --
Auction preferred
($1,962.00 per share) (6) -- -- (6) -- --
ESOP convertible preferred
($4.08 per share) (19) -- -- (19) -- --
Stock Issuances -
Stock option and benefit plans 48 4 44 -- -- --
Restricted stock, less
amortization of $2 2 -- 1 -- -- 1
Reacquired Shares (224) (12) (82) (130) -- --
Translation Adjustments (51) -- -- -- (51) --
ESOP Tax Benefit 7 -- -- 7 -- --
Other -- -- -- (2) -- 2
------- ----- ------ ------- ------ -----
Balances at April 2, 1994 3,594 639 29 3,192 (245) (21)
Net Income (309) -- -- (309) -- --
Cash Dividends -
Common ($.16 per share) (76) -- -- (76) -- --
Auction preferred
($770.33 per share) (2) -- -- (2) -- --
ESOP convertible preferred
($1.36 per share) (7) -- -- (7) -- --
Stock Issuances -
Stock option and benefit plans 21 2 19 -- -- --
Restricted stock, less
amortization of $2 2 -- 1 -- -- 1
Translation Adjustments 75 -- -- -- 75 --
ESOP Tax Benefit 3 -- -- 3 -- --
Other 25 -- 27 (2) -- --
------- ----- ------ ------- ------ -----
Balances at July 2, 1994 3,326 641 76 2,799 (170) (20)
Net Income 583 -- -- 583 -- --
Cash Dividends -
Common ($.50 per share) (240) -- -- (240) -- --
Auction preferred
($3,151.33 per share) (9) -- -- (9) -- --
ESOP convertible preferred
($4.08 per share) (19) -- -- (19) -- --
Stock Issuances -
Stock option and benefit plans 41 3 38 -- -- --
Restricted stock, less
amortization of $5 5 -- 12 -- -- (7)
Reacquired Shares (93) (5) (88) -- -- --
Translation Adjustments 145 -- -- -- 145 --
ESOP Tax Benefit 8 -- -- 8 -- --
Other 5 -- 3 (1) -- 3
------- ----- ------ ------- ------ -----
Balances at April 1, 1995 $ 3,752 $ 639 $ 41 $ 3,121 $ (25) $ (24)
======= ===== ====== ======= ====== =====
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
Page 6
<PAGE> 7
SARA LEE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Thirty-Nine Weeks Ended April 1, 1995 and April 2, 1994
(in millions)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
------------------------------
April 1, April 2
1995 1994
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES -
Net income $ 583 $ 508
Adjustments for non-cash charges included in net income:
Depreciation and amortization of intangibles 452 440
Increase in deferred income taxes 30 4
Cumulative effect of accounting change -- 35
Other (89) (102)
Changes in current assets and liabilities, excluding
businesses acquired and sold (257) (575)
------- -------
Net cash from operating activities 719 310
------- -------
INVESTING ACTIVITIES -
Purchases of property and equipment (287) (458)
Acquisitions of businesses (120) (404)
Dispositions of businesses 11 --
Returns from associated companies 43 48
Sales of property 34 36
Other 3 5
------- -------
Net cash used in investing activities (316) (773)
------- -------
FINANCING ACTIVITIES -
Issuances of common stock 41 48
Purchases of common stock (93) (224)
Issuance of equity securities by subsidiary -- 200
Redemption of preferred stock (3) (30)
Borrowings of long-term debt 446 366
Repayments of long-term debt (270) (276)
Short-term (repayments) borrowings, net (263) 476
Payments of dividends (268) (247)
------- -------
Net cash (used in) from financing activities (410) 313
------- -------
Effect of changes in foreign exchange rates on cash 7 --
------- -------
Decrease in cash and equivalents -- (150)
Cash and equivalents at beginning of year 189 325
------- -------
Cash and equivalents at end of quarter $ 189 $ 175
======= =======
COMPONENTS OF THE CHANGES IN CURRENT ASSETS
AND LIABILITIES:
(Increase) in trade accounts receivable $ (44) $ (150)
(Increase) in inventories (90) (224)
Decrease (Increase) in other current assets 12 (10)
(Decrease) in accounts payable (273) (196)
Increase in accrued liabilities 138 5
------- -------
Changes in current assets and liabilities $ (257) $ (575)
======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
Page 7
<PAGE> 8
SARA LEE CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. During the first quarter of fiscal 1995 the Corporation adopted Statement
of Position 93-7 "Reporting on Advertising Costs" (SOP 93-7) as issued by
the American Institute of Certified Public Accountants. The statement
primarily requires that the cost of advertising be expensed no later than
the first time the advertising takes place. The Corporation's previous
method of accounting for advertising was consistent with SOP 93-7 and its
adoption had no material impact on the results of operations.
Page 8
<PAGE> 9
SARA LEE CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Results of Operations
and Financial Condition
The following is a discussion of the results of operations for the third
quarter and first nine months of fiscal 1995 compared to the comparable periods
of fiscal 1994 and a discussion of the changes in financial condition during
the first nine months of fiscal 1995.
RESULTS OF OPERATIONS
Comparison of Third Quarter Fiscal 1995 to Third Quarter Fiscal 1994
Current quarter sales of $4.19 billion were $529 million or 14.4% above the
$3.66 billion reported in the third quarter of last year. Packaged Foods sales
increased 19.1% to $2.16 billion while Packaged Consumer Products sales
increased 9.8% to $2.03 billion.
Businesses acquired net of businesses sold subsequent to the start of the third
quarter of last year increased sales by approximately 5.4 percentage points.
The weakening of the U.S. dollar relative to foreign currencies had the effect
of increasing sales in fiscal 1995 by approximately 5.3 percentage points.
Thus, on a comparable basis, sales increased approximately 3.7%. After
adjusting for business acquisitions and dispositions as well as foreign currency
fluctuations, comparable Packaged Foods sales increased 0.6% while comparable
Packaged Consumer Products sales increased 6.8% as compared to the third
quarter of last year.
Cost of sales increased by $352 million or 15.4% while the gross profit margin
was 37.3% in the current quarter compared to 37.9% in the third quarter of last
year. Packaged Foods gross profit margins declined and the mix of sales was
more heavily weighted toward Packaged Foods which have lower gross profit
margins than Packaged Consumer Products.
Selling, general and administrative expenses of $1.27 billion were $152 million
or 13.6% higher than the third quarter of last year. The increase was
primarily due to acquisitions, the weakening of the U.S. dollar relative to
foreign currencies and increases in advertising and promotion expense. Net
interest expense increased from $35.5 million last year to $46.7 million in the
current year primarily as a result of higher interest rates.
The effective tax rate decreased from 35% to 33% of income before income taxes.
This was primarily due to lower foreign taxes.
Net income increased 9.3% to $166 million. Net income per share increased 10%
to $0.33 per share from the $0.30 per share reported last year.
Page 9
<PAGE> 10
Comparison of First Nine Months of Fiscal 1995 to First Nine Months of Fiscal
1994
Net sales for the first nine months of fiscal 1995 were $13.13 billion or 14.5%
higher than the $11.47 billion reported last year. Packaged Foods sales
increased 17.0% to $6.54 billion and Packaged Consumer Products sales increased
12.1% to $6.6 billion. Adjusting sales for businesses sold and acquired
subsequent to the start of fiscal 1994 and foreign currency fluctuations, sales
increased by approximately 6.3%. After adjusting for business acquisitions and
dispositions as well as foreign currency fluctuations, comparable Packaged
Foods sales increased 3.7% while comparable Packaged Consumer Products sales
increased 8.8% as compared to the first nine months of last year. Cost of
sales increased by $1.05 billion or 14.7% while the gross profit margin
percentage was 37.7% in the first nine months of fiscal 1995 and 37.8% in the
comparable period last year. Packaged Foods gross profit margin declined and the
mix of sales was more heavily weighted toward Packaged Foods which have lower
gross profit margins than Packaged Consumer Products.
Selling, general and administrative expenses of $3.92 billion were $522 million
or 15.4% higher than the first nine months of last year. The increase was
primarily due to acquisitions, the weakening of the U.S. dollar relative to
foreign currencies and increases in advertising and promotion expense in all of
the Corporation's lines of business. Net interest expense was $137.8 million
compared to $100.2 million in the prior year. The $37.6 million increase
resulted from higher interest rates and increased long term debt levels.
The Corporation adopted Statement of Financial Accounting Standards No. 109
(SFAS 109) "Accounting for Income Taxes" at the start of fiscal 1994. The
cumulative effect of initially applying this statement resulted in a charge of
$35 million or $0.07 per share in the first quarter of fiscal 1994. The effect
of this new standard on income tax expense, exclusive of the cumulative effect
adjustment, for the nine months ended April 2, 1994 was not material.
The effective tax rate, excluding the cumulative impact of adopting SFAS 109,
was 34.4% in the first nine months of fiscal 1995 and 35.0% in the first nine
months of fiscal 1994. This was primarily due to lower foreign taxes.
Excluding the cumulative impact of the accounting change, net income increased
7.4% to $583 million while net income per share increased 7.3% to $1.17 from
$1.09 last year. Including the cumulative impact of the accounting change, net
income increased 14.8% and net income per share increased 14.7%.
FINANCIAL CONDITION
The weakening of the U.S. dollar relative to foreign currencies had the effect
of increasing the Corporation's consolidated assets and liabilities from July
2, 1994. The growth in the elements of working capital excluding the impact of
foreign currency changes and acquisitions are quantified in the Consolidated
Statements of Cash Flows on page 7 of this document.
Excluding the impact of foreign currency changes there were no significant
changes in the Corporation's financial position.
Page 10
<PAGE> 11
RESTRUCTURING
On June 6, 1994, the Corporation announced a restructuring of its worldwide
operations which will result in the closure of 94 manufacturing and
distribution facilities and the severance of 9,900 employees. Through April 1,
1995, 35 facilities have been closed and 5,909 employees severed. Severance
benefits are being paid over time as opposed to a lump sum distribution. A
reconciliation of the restructuring reserves through April 1, 1995 is presented
on page 12 of this document.
Restructuring actions are expected to be substantially completed by 1996, and
the Corporation expects to fund the costs of the plan from internal sources and
available borrowing capacity.
The Corporation expects the restructuring plan to begin lowering operating
costs in fiscal 1995 and to generate increasing savings in subsequent years,
growing to an annual savings of approximately $250 million in fiscal 1998.
Through the first nine months of fiscal 1995, savings from the restructuring
have totaled $48 million; however, a significant portion of this benefit has
been used for business building initiatives and profit improvements.
Page 11
<PAGE> 12
SARA LEE CORPORATION AND SUBSIDIARIES
RECONCILIATION OF RESTRUCTURING RESERVES
AS OF APRIL 1, 1995
(in millions)
<TABLE>
<CAPTION>
WRITEDOWN
OF PROPERTY RECOGNITION OF
AND INVESTMENTS CURTAILMENT RESTRUCTURING
FISCAL 1994 TO NET LOSS AND SPECIAL FOREIGN RESERVES
RESTRUCTURING REALIZABLE TERMINATION CASH EXCHANGE AS OF
RESERVES VALUE BENEFITS PAYMENTS IMPACTS APRIL 1,1995
------------- --------------- ---------------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
ANTICIPATED LOSSES
ASSOCIATED WITH
DISPOSAL OF LAND,
BUILDINGS AND
IMPROVEMENTS, AND
MACHINERY AND EQUIPMENT $ 289 $ (289) $ -- $ -- $ -- $ --
ANTICIPATED EXPENDITURES TO
CLOSE AND DISPOSE OF IDLE
FACILITIES - INCLUDES
$33 OF NON-CANCELABLE
LEASE OBLIGATIONS 112 -- -- (16) -- 96
ANTICIPATED SEVERANCE BENEFITS 239 -- -- (79) -- 160
PENSION BENEFITS ASSOCIATED WITH
SEVERED EMPLOYEE GROUP 33 -- (33) -- -- --
ANTICIPATED LOSSES ASSOCIATED WITH
THE DISPOSAL OF CERTAIN
BUSINESSES 59 (15) -- (33) -- 11
---- ---- ---- ---- ---- ----
732 (304) (33) (128) -- 267
FOREIGN EXCHANGE IMPACTS -- -- -- -- 19 19
---- ---- ---- ---- ---- ----
TOTAL RESTRUCTURING RESERVES $ 732 $ (304) $ (33) $ (128) $ 19 $ 286
==== ==== ==== ==== ==== ====
</TABLE>
Page 12
<PAGE> 13
PART II
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
<TABLE>
<CAPTION>
PAGE NUMBER OR
EXHIBIT INCORPORATED HEREIN
NUMBER DESCRIPTION BY REFERENCE TO
------ ---------------------------------- ----------------------------------
<S> <C> <C>
11 Computation of Net Income 15
Per Common Share
12.1 Computation of Ratio of
Earnings to Fixed Charges 17
12.2 Computation of Ratio of
Earnings to Fixed Charges
and Preferred Stock Dividend
Requirements 18
27 Financial Data Schedule 19
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Registrant during the
quarter for which this report is filed.
Page 13
<PAGE> 14
S I G N A T U R E
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SARA LEE CORPORATION
(Registrant)
By: /s/ Wayne R. Szypulski
-------------------------------
Wayne R. Szypulski
Vice President and Controller
DATE: May 15, 1995
Page 14
<PAGE> 1
SARA LEE CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE EXHIBIT 11
(in millions except per share data)
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED APRIL 1, 1995
----------------------------------------------------
PRIMARY FULLY DILUTED
------------------------ ------------------------
Thirteen Thirty-Nine Thirteen Thirty-Nine
Weeks Weeks Weeks Weeks
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
EARNINGS:
Net income $ 166 $ 583 $ 166 $ 583
Less: Dividends on Preferred Stocks, (8) (21) (4) (9)
net of tax benefits
Adjustment attributable to conversion of
ESOP Convertible Preferred Stock -- -- (2) (6)
------ ------ ------ ------
Net Income Available for Common Stockholders $ 158 $ 562 $ 160 $ 568
====== ====== ====== ======
SHARES:
Average Shares Outstanding 477 477 477 477
Add: Common Stock Equivalents -
Stock options 1 1 1 1
ESOP Convertible Preferred Stock -- -- 19 19
Restricted stock and other 1 1 1 1
------ ------ ------ ------
Adjusted Weighted Average Shares Outstanding 479 479 498 498
====== ====== ====== ======
NET INCOME PER COMMON SHARE: $ 0.33 $ 1.17 $ 0.32 $ 1.14
====== ====== ====== ======
</TABLE>
Page 15
<PAGE> 2
SARA LEE CORPORATION AND SUBSIDIARIES
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE (continued)
(in millions except per share data)
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED APRIL 2, 1994
---------------------------------------------------------
PRIMARY FULLY DILUTED
--------------------------- ---------------------------
Thirteen Thirty-Nine Thirteen Thirty-Nine
Weeks Weeks Weeks Weeks
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
EARNINGS:
Net income before accounting change $ 152 $ 543 $ 152 $ 543
Cumulative effect of accounting change -- (35) -- (35)
------ ------ ------ -------
Net income 152 508 152 508
Less: Dividends on Preferred Stocks,
net of tax benefits (6) (18) (2) (7)
Adjustment attributable to conversion of
ESOP Convertible Preferred Stock -- -- (2) (6)
------ ------ ------ -------
Net Income Available for Common Stockholders $ 146 $ 490 $ 148 $ 495
====== ====== ====== =======
SHARES:
Average Shares Outstanding 477 478 477 478
Add: Common Stock Equivalents -
Stock options 1 1 1 1
ESOP Convertible Preferred Stock -- -- 19 19
Restricted stock and other 1 1 1 1
------ ------ ------ -------
Adjusted Weighted Average Shares Outstanding 479 480 498 499
====== ====== ====== =======
NET INCOME PER COMMON SHARE:
Before cumulative effect of accounting change $ 0.30 $ 1.09 $ 0.29 $ 1.06
Cumulative effect of accounting change -- (0.07) -- (0.07)
------ ------- ------ -------
$ 0.30 $ 1.02 $ 0.29 $ 0.99
====== ======= ====== =======
</TABLE>
Page 16
<PAGE> 1
SARA LEE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.1
(in millions except ratios)
<TABLE>
<CAPTION>
Thirty-Nine Weeks Ended
-----------------------------
April 1, April 2,
1995 1994
--------- --------
<S> <C> <C>
Fixed charges:
Interest expense $ 178 $ 131
Interest portion of rental expense 52 46
------- -------
Total fixed charges before capitalized interest 230 177
Capitalized interest 10 17
------- -------
Total fixed charges $ 240 $ 194
======= =======
Earnings available for fixed charges:
Income before income taxes $ 889 $ 835
Less undistributed income in minority owned companies (7) (5)
Add minority interest in majority-owned subsidiaries 27 19
Add amortization of capitalized interest 16 14
Add fixed charges before capitalized interest 230 177
------- -------
Total earnings available for fixed charges $ 1,155 $ 1,040
======= =======
Ratio of earnings to fixed charges 4.8 5.4
======= =======
</TABLE>
Page 17
<PAGE> 1
SARA LEE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12.2
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(in millions except ratios)
<TABLE>
<CAPTION>
Thirty-Nine Weeks Ended
---------------------------
April 1, April 2,
1995 1994
<S> <C> <C>
Fixed charges and preferred stock dividend requirements:
Interest expense $ 178 $ 131
Interest portion of rental expense 52 46
------- -------
Total fixed charges before capitalized interest
and preferred stock dividend requirements 230 177
Capitalized interest 10 17
Preferred stock dividend requirements (1) 33 29
------- -------
Total fixed charges and preferred stock
dividend requirements $ 273 $ 223
======= =======
Earnings available for fixed charges and preferred
stock dividend requirements:
Income before income taxes $ 889 $ 835
Less undistributed income in minority owned companies (7) (5)
Add minority interest in majority-owned subsidiaries 27 19
Add amortization of capitalized interest 16 14
Add fixed charges before capitalized interest and
preferred stock dividend requirements 230 177
------- -------
Total earnings available for fixed charges and
preferred stock dividend requirements $ 1,155 $ 1,040
======= =======
Ratio of earnings to fixed charges and preferred stock
dividend requirements 4.2 4.7
======= =======
</TABLE>
(1) Preferred stock dividends in the computation have been increased to an
amount representing the pretax earnings that would have been required to
cover such dividends.
Page 18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financal information extracted from the
consolidated statement of income and consolidated balance sheet and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-01-1995
<PERIOD-END> APR-01-1995
<CASH> 168
<SECURITIES> 21
<RECEIVABLES> 1,878
<ALLOWANCES> 212
<INVENTORY> 2,814
<CURRENT-ASSETS> 4,908
<PP&E> 5,632
<DEPRECIATION> 2,731
<TOTAL-ASSETS> 12,353
<CURRENT-LIABILITIES> 4,856
<BONDS> 1,844
<COMMON> 639
0
333
<OTHER-SE> 3,113
<TOTAL-LIABILITY-AND-EQUITY> 12,353
<SALES> 13,131
<TOTAL-REVENUES> 13,131
<CGS> 8,184
<TOTAL-COSTS> 8,184
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 118
<INTEREST-EXPENSE> 138
<INCOME-PRETAX> 889
<INCOME-TAX> 306
<INCOME-CONTINUING> 583
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 583
<EPS-PRIMARY> 1.17
<EPS-DILUTED> 1.14
</TABLE>
|
|