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Previous: CONSOLIDATED EDISON CO OF NEW YORK INC, 10-Q, 1996-05-13 |
Next: CONSOLIDATED NATURAL GAS CO, 10-Q, 1996-05-13 |
<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 March 30, 1996
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 March 30, 1996, the Registrant had 485,395,092 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
PART I -
FINANCIAL STATEMENTS -
Preface 3
Condensed Consolidated Balance Sheets -
At March 30, 1996 and July 1, 1995 4
Consolidated Statements of Income -
For the thirteen and thirty-nine weeks ended
March 30, 1996 and April 1, 1995 5
Consolidated Statements of Common Stockholders' Equity -
For the period July 2, 1994 to March 30, 1996 6
Consolidated Statements of Cash Flows -
For the thirty-nine weeks ended
March 30, 1996 and April 1, 1995 7
Note 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
Page 2
<PAGE> 3
PART I
SARA LEE CORPORATION AND SUBSIDIARIES
Preface
The consolidated financial statements for the thirteen and thirty-nine weeks
ended March 30, 1996 and April 1, 1995 and the balance sheet as of March 30,
1996 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 March 30, 1996 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 March 30, 1996 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 1, 1995.
Page 3
<PAGE> 4
SARA LEE CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets at March 30, 1996 and July 1, 1995
(in millions)
<TABLE>
<CAPTION>
March 30, July 1,
1996 1995
ASSETS --------- -------
------
<S> <C> <C>
Cash and Equivalents $ 167 $ 202
Trade Accounts Receivable, less Allowances 1,828 1,653
Inventories:
Finished Goods 1,945 1,782
Work in Process 366 423
Materials and Supplies 606 625
---------- ----------
2,917 2,830
Other Current Assets 241 243
---------- ----------
Total Current Assets 5,153 4,928
Investments in Associated Companies 85 109
Trademarks and Other Assets 454 506
Property, Net 2,909 2,964
Intangible Assets 3,947 3,924
---------- ----------
$ 12,548 $ 12,431
========== ==========
LIABILITIES AND EQUITY
----------------------
Notes Payable $ 638 $ 559
Accounts Payable 1,134 1,436
Accrued Liabilities 2,661 2,628
Current Maturities of Long-Term Debt 160 221
---------- ----------
Total Current Liabilities 4,593 4,844
Long-Term Debt 1,904 1,817
Deferred Income Taxes 294 273
Other Liabilities 650 705
Minority Interest in Subsidiaries 527 519
Auction Preferred Stock 300 300
ESOP Convertible Preferred Stock 327 331
Unearned Deferred Compensation (291) (297)
Common Stockholders' Equity 4,244 3,939
---------- ----------
$ 12,548 $ 12,431
========== ==========
</TABLE>
See accompanying Note 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 March 30, 1996 and April 1, 1995
(in millions, except per share data)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
------------------------ -------------------------
March 30, April 1, March 30, April 1,
1996 1995 1996 1995
-------- ------- --------- --------
<S> <C> <C> <C> <C>
Net Sales $ 4,443 $ 4,193 $ 13,997 $ 13,131
------- ------- -------- --------
Cost of Sales 2,724 2,628 8,675 8,184
Selling, General and Administrative Expenses 1,396 1,271 4,195 3,920
Interest Expense 56 63 175 178
Interest Income (17) (16) (43) (40)
------- ------- -------- --------
4,159 3,946 13,002 12,242
------- ------- -------- --------
Income Before Income Taxes 284 247 995 889
Income Taxes 96 81 338 306
------- ------- -------- --------
Net Income 188 166 657 583
Preferred Dividend Requirements, Net of Tax 7 8 21 21
------- ------- -------- --------
Net Income Available for Common Stockholders $ 181 $ 158 $ 636 $ 562
======= ======= ======== ========
Net Income Per Common Share - Primary $ 0.37 $ 0.33 $ 1.31 $ 1.17
======= ======= ======== ========
Average Shares Outstanding 487 479 485 479
======= ======= ======== ========
Net Income Per Common Share - Fully Diluted $ 0.36 $ 0.32 $ 1.27 $ 1.14
======= ======= ======== ========
Average Shares Outstanding 505 498 504 498
======= ======= ======== ========
Cash Dividends Per Common Share $ 0.19 $ 0.17 $ 0.55 $ 0.50
======= ======= ======== ========
</TABLE>
See accompanying Note to Consolidated Financial Statements.
Page 5
<PAGE> 6
SARA LEE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Common Stockholders' Equity
For the Period July 2, 1994 to March 30, 1996
(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 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 $5 5 -- 12 -- -- (7)
Reacquired Shares (93) (5) (88) -- -- --
Translation Adjustments 145 -- -- -- 145 --
ESOP Tax Benefit 8 -- -- 8 -- --
Other 5 -- 3 (1) -- 3
-------- -------- --------- ----------- --------------- -------------
Balances at April 1, 1995 3,752 639 41 3,121 (25) (24)
Net Income 221 -- -- 221 -- --
Cash Dividends -
Common ($.17 per share) (80) -- -- (80) -- --
Auction preferred
($1,036.67 per share) (4) -- -- (4) -- --
ESOP convertible preferred
($1.36 per share) (6) -- -- (6) -- --
Stock Issuances -
Stock option and benefit plans 16 1 15 -- -- --
Restricted stock, less
amortization of $2 2 -- 1 -- -- 1
Translation Adjustments 28 -- -- -- 28 --
ESOP Tax Benefit 2 -- -- 2 -- --
Other 8 -- 10 (2) -- --
-------- -------- --------- ----------- --------------- -------------
Balances at July 1, 1995 3,939 640 67 3,252 3 (23)
Net Income 657 -- -- 657 -- --
Cash Dividends -
Common ($.55 per share) (265) -- -- (265) -- --
Auction preferred
($3,222.00 per share) (10) -- -- (10) -- --
ESOP convertible preferred
($4.08 per share) (18) -- -- (18) -- --
Stock Issuances -
Business acquisition 55 3 52 -- -- --
Stock option and benefit plans 75 5 70 -- -- --
Restricted stock, less
amortization of $11 11 1 17 -- -- (7)
Reacquired Shares (58) (3) (55) -- -- --
Translation Adjustments (168) -- -- -- (168) --
ESOP Tax Benefit 7 -- -- 7 -- --
ESOP Share Redemption 4 -- 4 -- -- --
Other 15 1 12 (1) -- 3
-------- -------- --------- ----------- --------------- -------------
Balances at March 30, 1996 $ 4,244 $ 647 $ 167 $ 3,622 $ (165) $ (27)
======== ======== ========= =========== =============== =============
</TABLE>
See accompanying Note to Consolidated Financial Statements.
Page 6
<PAGE> 7
SARA LEE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Thirty-Nine Weeks Ended March 30, 1996 and April 1, 1995
(in millions)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
----------------------------
March 30, April 1,
1996 1995
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES -
Net income $ 657 $ 583
Adjustments for non-cash charges included in net income:
Depreciation and amortization of intangibles 472 452
Increase in deferred income taxes 33 30
Other (32) (92)
Changes in current assets and liabilities, excluding
businesses acquired and sold (686) (257)
--------- ---------
Net cash from operating activities 444 716
--------- ---------
INVESTING ACTIVITIES -
Purchases of property and equipment (328) (287)
Acquisitions of businesses (72) (120)
Dispositions of businesses -- 11
Returns from associated companies 29 43
Sales of property 27 34
Other 6 3
--------- ---------
Net cash used in investing activities (338) (316)
--------- ---------
FINANCING ACTIVITIES -
Issuances of common stock 75 41
Purchases of common stock (58) (93)
Borrowings of long-term debt 351 446
Repayments of long-term debt (283) (270)
Short-term borrowings (repayments), net 77 (263)
Payments of dividends (293) (268)
--------- ---------
Net cash used in financing activities (131) (407)
--------- ---------
Effect of changes in foreign exchange rates on cash (10) 7
--------- ---------
Decrease in cash and equivalents (35) --
Cash and equivalents at beginning of year 202 189
--------- ---------
Cash and equivalents at end of quarter $ 167 $ 189
========= =========
COMPONENTS OF THE CHANGES IN CURRENT ASSETS
AND LIABILITIES:
(Increase) in trade accounts receivable $ (229) $ (44)
(Increase) in inventories (144) (90)
(Increase) decrease in other current assets (13) 12
(Decrease) in accounts payable (275) (273)
(Decrease) increase in accrued liabilities (25) 138
--------- ---------
Changes in current assets and liabilities $ (686) $ (257)
========= =========
</TABLE>
See accompanying Note to Consolidated Financial Statements.
Page 7
<PAGE> 8
SARA LEE CORPORATION AND SUBSIDIARIES
Note to Consolidated Financial Statements
1. During the first quarter of fiscal 1996, the Corporation issued common stock
having a value of $55,181,000 in settlement of a deferred purchase price
obligation associated with the fiscal 1995 acquisition of the Consolidated
Foodservice Companies.
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 1996 compared to the comparable
periods of fiscal 1995 and a discussion of the changes in financial
condition during the first nine months of fiscal 1996.
RESULTS OF OPERATIONS
Comparison of Third Quarter Fiscal 1996 to Third Quarter Fiscal 1995
Current quarter sales of $4.44 billion were $250 million or 6.0% above
the $4.19 billion reported in the third quarter of last year. Packaged
Foods sales increased 2.9% to $2.23 billion while Packaged Consumer Products
sales increased 9.3% to $2.21 billion.
Businesses acquired net of businesses sold subsequent to the start of the third
quarter of last year increased sales by approximately 1.8 percentage points.
The weakening of the U.S. dollar relative to foreign currencies had the effect
of increasing sales in fiscal 1996 by approximately 0.3 percentage points.
Thus, on a comparable basis, sales increased approximately 3.9%. After
adjusting for business acquisitions and dispositions as well as foreign
currency fluctuations, comparable Packaged Foods sales increased 1.6% while
comparable Packaged Consumer Products sales increased 6.3% as compared to the
third quarter of last year.
Cost of sales increased by $96 million or 3.7% while the gross profit margin
was 38.7% in the current quarter compared to 37.3% in the third quarter of last
year. Packaged Foods and Packaged Consumer Products gross profit
margins increased and the mix of sales was more heavily weighted towards
Packaged Consumer Products which have higher gross profit margins than Packaged
Foods.
Selling, general and administrative expenses of $1.40 billion were $125 million
or 9.8 % higher than the third quarter of last year. The increase was
primarily due to increases in advertising and promotion expenses, acquisitions
and the weakening of the U.S. dollar relative to foreign currencies. In
addition, the mix of sales was more heavily weighted toward Packaged Consumer
Products which have higher selling, general and administrative expenses as a
percentage of sales than Packaged Foods. Net interest expense decreased from
$47 million last year to $39 million in the current year primarily as a result
of lower borrowing costs.
The effective tax rate increased from 33.0% to 34.0% of income before income
taxes. This was primarily due to lower foreign taxes in the prior year.
Net income increased 13.2% to $188 million. Net income per share
increased 12.1% to $0.37 per share from the $0.33 per share reported
last year. The lower percentage increase in earnings per share compared
to net income is attributable to higher shares outstanding.
Page 9
<PAGE> 10
Comparison of First Nine Months of Fiscal 1996 to First Nine Months of
Fiscal 1995
Net sales for the first nine months of fiscal 1996 were $14.00 billion or 6.6%
higher than the $13.13 billion reported last year. Packaged Foods sales
increased 8.4% to $7.08 billion and Packaged Consumer Products sales increased
4.8% to $6.92 billion. Adjusting sales for businesses sold and acquired
subsequent to the start of fiscal 1995 and foreign currency fluctuations, sales
increased by approximately 3.3%. After adjusting for business acquisitions and
dispositions as well as foreign currency fluctuations, comparable Packaged
Foods sales increased 2.2% while comparable Packaged Consumer Products sales
increased 4.5% as compared to the first nine months of last year. Cost of
sales increased by $491 million or 6% while the gross profit margin percentage
was 38.0% in the first nine months of fiscal 1996 and 37.7% in the comparable
period last year. The increase in Packaged Consumer Products gross profit
margins more than offset slightly lower Packaged Foods gross margins and a
sales mix which was more heavily weighted toward Packaged Foods which has lower
gross profit margins than Packaged Consumer Products.
Selling, general and administrative expenses of $4.19 billion were $275 million
or 7% 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 $132 million
compared to $138 million in the prior year. The decrease resulted from lower
borrowing costs.
The effective tax rate was 34.0% in the first nine months of fiscal 1996 and
34.4% in the first nine months of fiscal 1995.
Net income increased 12.7% to $657 million while net income per share
increased 12.0% to $1.31 from $1.17 last year. The lower percentage
increase in earnings per share compared to net income is attributable to
higher shares outstanding.
FINANCIAL CONDITION
During the first nine months of fiscal 1996, cash and equivalents
decreased by $35 million while borrowings increased by $105 million.
The increase in borrowings is primarily attributable to business
acquisitions and higher working capital requirements.
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 March 30,
1996, 59 facilities have been closed and 7,038 employees severed. A
reconciliation of the restructuring reserves through March 30, 1996 is
presented on page 12 of this document.
Page 10
<PAGE> 11
Restructuring actions are expected to be substantially completed by December
1996, and the Corporation expects to fund the remaining costs of the plan from
internal sources and available borrowing capacity.
Actions taken as part of the restructuring plan lowered operating costs by $110
million through the first nine months of fiscal 1996; however, a significant
portion of this benefit has been used for business building and profit
improvement initiatives. The Corporation expects the restructuring plan to
generate increasing savings in subsequent years, growing to an annual savings
of approximately $250 million in fiscal 1998. Savings from the planned actions
will be used for both business building initiatives and profit improvements.
Page 11
<PAGE> 12
SARA LEE CORPORATION AND SUBSIDIARIES
RECONCILIATION OF RESTRUCTURING RESERVES
AS OF MARCH 30, 1996
(in millions)
<TABLE>
<CAPTION>
WRITEDOWN
OF PROPERTY RECOGNITION OF
AND INVESTMENTS CURTAILMENT
ORIGINAL TO NET LOSS AND SPECIAL
RESTRUCTURING REALIZABLE TERMINATION
RESERVES VALUE BENEFITS
---------------- ------------------- ----------------------
<S> <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 Non-Cancelable Lease Obligations 112 -- --
Anticipated Severance Benefits 239 -- --
Pension Benefits Associated with Severed
Employee Group 33 -- (33)
Anticipated Losses Associated with the
Disposal of Certain Businesses 59 (15) --
---------------- ------------------- ----------------------
732 (304) (33)
Foreign Exchange Impacts -- -- --
---------------- ------------------- ----------------------
Total Restructuring Reserves $ 732 $ (304) $ (33)
================ =================== ======================
<CAPTION>
RESTRUCTURING
FOREIGN RESERVES
CASH EXCHANGE AS OF
PAYMENTS IMPACTS MARCH 30, 1996
---------------- ---------------- ------------------
<S> <C> <C> <C>
Anticipated Losses Associated with Disposal
of Land, Buildings and Improvements,
and Machinery and Equipment $ -- $ -- $ --
Anticipated Expenditures to Close and
Dispose of Idle Facilities - Includes
$33 Non-Cancelable Lease Obligations (46) -- 66
Anticipated Severance Benefits (147) -- 92
Pension Benefits Associated with Severed
Employee Group -- -- --
Anticipated Losses Associated with the
Disposal of Certain Businesses (44) -- --
---------------- ---------------- ------------------
(237) -- 158
Foreign Exchange Impacts -- 15 15
---------------- ---------------- ------------------
Total Restructuring Reserves $ (237) $ 15 $ 173
================ ================ ==================
</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>
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 13, 1996
Page 14
<PAGE> 1
SARA LEE CORPORATION AND SUBSIDIARIES EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
(in millions except per share data)
<TABLE>
<CAPTION>
FOR THE PERIOD ENDED MARCH 30, 1996
-------------------------------------------------------------
PRIMARY FULLY DILUTED
-------------------------- ----------------------------
Thirteen Thirty-Nine Thirteen Thirty-Nine
Weeks Weeks Weeks Weeks
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
EARNINGS:
Net income $ 188 $ 657 $ 188 $ 657
Less: Dividends on Preferred Stocks,
net of tax benefits (7) (21) (3) (10)
Adjustment attributable to conversion of
ESOP Convertible Preferred Stock -- -- (2) (5)
----------- ----------- ------------ ------------
Net Income Available for Common Stockholders $ 181 $ 636 $ 183 $ 642
=========== =========== ============ ============
SHARES:
Average Shares Outstanding 482 481 482 481
Add: Common Stock Equivalents -
Stock options 3 2 3 3
ESOP Convertible Preferred Stock -- -- 18 18
Restricted stock and other 2 2 2 2
----------- ----------- ------------ ------------
Adjusted Weighted Average Shares Outstanding 487 485 505 504
=========== =========== ============ ============
NET INCOME PER COMMON SHARE: $ 0.37 $ 1.31 $ 0.36 $ 1.27
=========== =========== ============ ============
</TABLE>
Page 15
<PAGE> 2
EXHIBIT 11
SARA LEE CORPORATION AND SUBSIDIARIES (Continued)
COMPUTATION OF NET INCOME PER COMMON SHARE
(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,
net of tax benefits (8) (21) (4) (9)
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 16
<PAGE> 1
EXHIBIT 12.1
SARA LEE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in millions except ratios)
<TABLE>
<CAPTION>
Thirty-Nine Weeks Ended
----------------------------
March 30, April 1,
1996 1995
-------- --------
<S> <C> <C>
Fixed charges:
Interest expense $ 175 $ 178
Interest portion of rental expense 52 52
-------- ---------
Total fixed charges before capitalized interest 227 230
Capitalized interest 9 10
-------- ---------
Total fixed charges $ 236 $ 240
======== =========
Earnings available for fixed charges:
Income before income taxes $ 995 $ 889
Less undistributed income in minority owned companies (3) (7)
Add minority interest in majority-owned subsidiaries 29 27
Add amortization of capitalized interest 17 16
Add fixed charges before capitalized interest 227 230
-------- ---------
Total earnings available for fixed charges $ 1,265 $ 1,155
======== =========
Ratio of earnings to fixed charges 5.4 4.8
======== =========
</TABLE>
Page 17
<PAGE> 1
EXHIBIT 12.2
SARA LEE CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(in millions except ratios)
<TABLE>
<CAPTION>
Thirty-Nine Weeks Ended
-----------------------
March 30, April 1,
1996 1995
--------- ----------
<S> <C> <C>
Fixed charges and preferred stock dividend requirements:
Interest expense $ 175 $ 178
Interest portion of rental expense 52 52
------- --------
Total fixed charges before capitalized interest
and preferred stock dividend requirements 227 230
Capitalized interest 9 10
Preferred stock dividend requirements (1) 33 33
------- --------
Total fixed charges and preferred stock
dividend requirements $ 269 $ 273
======= ========
Earnings available for fixed charges and preferred
stock dividend requirements:
Income before income taxes $ 995 $ 889
Less undistributed income in minority owned companies (3) (7)
Add minority interest in majority-owned subsidiaries 29 27
Add amortization of capitalized interest 17 16
Add fixed charges before capitalized interest and
preferred stock dividend requirements 227 230
------- --------
Total earnings available for fixed charges and
preferred stock dividend requirements $ 1,265 $ 1,155
======= ========
Ratio of earnings to fixed charges and preferred stock
dividend requirements 4.7 4.2
======= ========
</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
<CIK> 0000023666
<NAME> SARA LEE CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-START> JUL-02-1995
<PERIOD-END> MAR-30-1996
<CASH> 144
<SECURITIES> 23
<RECEIVABLES> 2,023
<ALLOWANCES> 195
<INVENTORY> 2,917
<CURRENT-ASSETS> 5,153
<PP&E> 5,757
<DEPRECIATION> 2,848
<TOTAL-ASSETS> 12,548
<CURRENT-LIABILITIES> 4,593
<BONDS> 1,904
0
336
<COMMON> 647
<OTHER-SE> 3,597
<TOTAL-LIABILITY-AND-EQUITY> 12,548
<SALES> 13,997
<TOTAL-REVENUES> 13,997
<CGS> 8,675
<TOTAL-COSTS> 8,675
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 97
<INTEREST-EXPENSE> 132
<INCOME-PRETAX> 995
<INCOME-TAX> 338
<INCOME-CONTINUING> 657
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 657
<EPS-PRIMARY> 1.31
<EPS-DILUTED> 1.27
</TABLE>
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