-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sXQ1M9Y/EW0qGVfDjdZ757BpyTBKxy+I7XdaezNggfWJkBCcf0i0j4TkCnOY95Vu i7YJ6CWN6st4oPDmwMmTfA== 0000950124-94-001710.txt : 19941117 0000950124-94-001710.hdr.sgml : 19941117 ACCESSION NUMBER: 0000950124-94-001710 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941001 FILED AS OF DATE: 19941114 SROS: MSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEE SARA CORP CENTRAL INDEX KEY: 0000023666 STANDARD INDUSTRIAL CLASSIFICATION: 2013 IRS NUMBER: 362089049 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03344 FILM NUMBER: 94559424 BUSINESS ADDRESS: STREET 1: THREE FIRST NATL PLZ STE 4600 CITY: CHICAGO STATE: IL ZIP: 60602 BUSINESS PHONE: 3127262600 MAIL ADDRESS: STREET 1: THREE FIRST NATL PLZ STREET 2: SUITE 4600 CITY: CHICAGO STATE: IL ZIP: 60602 FORMER COMPANY: FORMER CONFORMED NAME: CONSOLIDATED FOODS CORP DATE OF NAME CHANGE: 19850402 FORMER COMPANY: FORMER CONFORMED NAME: CONSOLIDATED GROCERD CORP DATE OF NAME CHANGE: 19731220 10-Q 1 QUARTERLY REPORT 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 October 1, 1994 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 October 1, 1994, the Registrant had 481,169,421 outstanding shares of common stock $1.33 1/3 par value, which is registrant's only class of common stock. The document contains 17 pages. Page 1 2 SARA LEE CORPORATION AND SUBSIDIARIES INDEX PART I - FINANCIAL STATEMENTS - Preface 3 Condensed Consolidated Balance Sheets - At October 1, 1994 and July 2, 1994 4 Consolidated Statements of Income - For the thirteen weeks ended October 1, 1994 and October 2, 1993 5 Consolidated Statements of Common Stockholders' Equity - For the period July 3, 1993 to October 1, 1994 6 Consolidated Statements of Cash Flows - For the thirteen weeks ended October 1, 1994 and October 2, 1993 7 Notes to Consolidated Financial Statements 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION 9 PART II - ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12 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 16 EXHIBIT 12.2 - Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements 17 Page 2 3 PART I SARA LEE CORPORATION AND SUBSIDIARIES Preface The consolidated financial statements for the thirteen weeks ended October 1, 1994 and October 2, 1993 and the balance sheet as of October 1, 1994 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 October 1, 1994 and the results of operations and the cash flows for the periods presented herein have been made. The results of operations for the thirteen weeks ended October 1, 1994 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 4 SARA LEE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets at October 1, 1994 and July 2, 1994 (in millions)
Oct. 1, July 2, 1994 1994 ASSETS ------- ------- Cash and Equivalents $ 219 $ 189 Trade Accounts Receivable, less Allowances 1,774 1,472 Inventories: Finished Goods 1,609 1,603 Work in Process 382 361 Materials and Supplies 637 603 ----------- ----------- 2,628 2,567 Other Current Assets 228 241 ----------- ----------- Total Current Assets 4,849 4,469 Investments in Associated Companies 143 142 Trademarks and Other Assets 493 492 Property, Net 2,863 2,900 Intangible Assets 3,684 3,662 ----------- ----------- $ 12,032 $ 11,665 =========== =========== LIABILITIES AND EQUITY Notes Payable $ 1,465 $ 1,281 Accounts Payable 1,050 1,253 Accrued Liabilities 2,445 2,303 Current Maturities of Long-Term Debt 199 82 ----------- ----------- Total Current Liabilities 5,159 4,919 Long-Term Debt 1,497 1,496 Deferred Income Taxes 318 290 Other Liabilities 774 783 Minority Interest in Subsidiaries 528 520 Auction Preferred Stock 300 300 ESOP Convertible Preferred Stock 336 339 Unearned Deferred Compensation (308) (308) Common Stockholders' Equity 3,428 3,326 ----------- ----------- $ 12,032 $ 11,665 =========== ===========
See accompanying Notes to Consolidated Financial Statements. Page 4 5 SARA LEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Income For the Thirteen Weeks Ended October 1, 1994 and October 2, 1993 (in millions, except per share data)
THIRTEEN WEEKS ENDED --------------------------------- Oct. 1, Oct. 2, 1994 1993 ----------- ------------ Net Sales $ 4,290 $ 3,796 ----------- ------------ Cost of Sales 2,672 2,384 Selling, General and Administrative Expenses 1,319 1,138 Interest Expense 55 42 Interest Income (10) (10) ----------- ------------ 4,036 3,554 ----------- ------------ Income Before Income Taxes 254 242 Income Taxes 89 87 ----------- ------------ Net Income Before Accounting Change 165 155 Cumulative Effect of Accounting Change -- (35) ----------- ------------ Net Income 165 120 Preferred Dividend Requirements, Net of Tax 6 6 ----------- ------------ Net Income Available for Common Stockholders $ 159 $ 114 =========== ============ Net Income Per Common Share - Primary Before Cumulative Effect of Accounting Change $ 0.33 $ 0.31 Cumulative Effect of Accounting Change -- (0.07) ----------- ------------ $ 0.33 $ 0.24 =========== ============ Average Shares Outstanding 481 481 =========== ============ Net Income Per Common Share - Fully Diluted Before Cumulative Effect of Accounting Change $ 0.32 $ 0.30 Cumulative Effect of Accounting Change -- (0.07) ----------- ------------ $ 0.32 $ 0.23 =========== ============ Average Shares Outstanding 499 500 =========== ============ Cash Dividends Per Common Share $ 0.16 $ 0.145 =========== ============
See accompanying Notes to Consolidated Financial Statements. Page 5 6 SARA LEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Common Stockholders' Equity For the Period July 3, 1993 to October 1, 1994 (in millions, except per share data)
UNEARNED COMMON CAPITAL RETAINED TRANSLATION RESTRICTED TOTAL STOCK SURPLUS EARNINGS ADJUSTMENTS STOCK ------ --------- --------- ----------- ------------ ------------ Balances at July 3, 1993 $3,551 $ 647 $ 66 $ 3,056 $ (194) $ (24) Net Income 120 -- -- 120 -- -- Cash Dividends - Common ($.145 per share) (69) -- -- (69) -- -- Auction preferred ($637 per share) (2) -- -- (2) -- -- ESOP convertible preferred ($1.359 per share) (6) -- -- (6) -- -- Stock Issuances - Stock option and benefit plans 17 1 16 -- -- -- Restricted Stock Amortization 1 -- -- -- -- 1 Reacquired Shares (224) (12) (82) (130) -- -- Translation Adjustments 6 -- -- -- 6 -- ESOP Tax Benefit 2 -- -- 2 -- -- Other -- -- -- (1) -- 1 ------ --------- --------- ----------- --------- --------- Balances at October 2, 1993 3,396 636 -- 2,970 (188) (22) Net Income 79 -- -- 79 -- -- Cash Dividends - -- Common ($.48 per share) (229) -- -- (229) -- -- Auction preferred ($2,095.33 per share) (6) -- -- (6) -- -- ESOP convertible preferred ($4.0785 per share) (20) -- -- (20) -- -- Stock Issuances - Stock option and benefit plans 52 5 47 -- -- -- Restricted stock, less amortization of $3 3 -- 2 -- -- 1 Translation Adjustments 18 -- -- -- 18 -- ESOP Tax Benefit 8 -- -- 8 -- -- Other 25 -- 27 (3) -- 1 ------ --------- --------- ----------- --------- --------- Balances at July 2, 1994 3,326 641 76 2,799 (170) (20) Net Income 165 -- -- 165 -- -- Cash Dividends - Common ($.16 per share) (77) -- -- (77) -- -- Auction preferred ($877.33 per share) (3) -- -- (3) -- -- ESOP convertible preferred ($1.359 per share) (6) -- -- (6) -- -- Stock Issuances - Stock option and benefit plans 13 1 12 -- -- -- Restricted stock, less amortization of $1 1 -- 9 -- -- (8) Reacquired Shares (17) (1) (16) -- -- -- Translation Adjustments 22 -- -- -- 22 -- ESOP Tax Benefit 3 -- -- 3 -- -- Other 1 -- 1 (1) -- 1 ------ --------- --------- ----------- --------- --------- Balances at October 1, 1994 $3,428 $ 641 $ 82 $ 2,880 $ (148) $ (27) ====== ========= ========= =========== ========= =========
See accompanying Notes to Consolidated Financial Statements. Page 6 7 SARA LEE CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows For the Thirteen Weeks Ended October 1, 1994 and October 2, 1993 (in millions)
THIRTEEN WEEKS ENDED -------------------- Oct. 1, Oct. 2, 1994 1993 ------ ------ OPERATING ACTIVITIES - Net income $ 165 $ 120 Adjustments for non-cash charges included in net income: Depreciation and amortization of intangibles 149 144 Increase (decrease) in deferred income taxes 25 (9) Cumulative effect of accounting change -- 35 Other (7) (29) Changes in current assets and liabilities, excluding businesses acquired and sold (380) (496) ------ ------ Net cash used in operating activities (48) (235) ------ ------ INVESTING ACTIVITIES - Purchases of property and equipment (96) (154) Acquisitions of businesses (27) (349) Sale of businesses 11 -- Returns from (investments in) associated companies 3 (8) Sales of property 11 11 Other 1 2 ------ ------ Net cash used in investing activities (97) (498) ------ ------ FINANCING ACTIVITIES - Issuances of common stock 13 17 Purchases of common stock (17) (224) Issuance of equity securities by subsidiary -- 200 Redemption of preferred stock (3) (30) Borrowings of long-term debt 127 153 Repayments of long-term debt (21) (235) Short-term borrowings, net 159 716 Payments of dividends (86) (77) ------ ------ Net cash from financing activities 172 520 ------ ------ Effect of changes in foreign exchange rates on cash 3 3 ------ ------ Increase (decrease) in cash and equivalents 30 (210) Cash and equivalents at beginning of year 189 325 ------ ------ Cash and equivalents at end of quarter $ 219 $ 115 ====== ====== COMPONENTS OF THE CHANGES IN CURRENT ASSETS AND LIABILITIES: (Increase) in trade accounts receivable $ (277) $ (274) (Increase) in inventories (14) (66) Decrease (increase) in other current assets 16 (1) (Decrease) in accounts payable (216) (247) Increase in accrued liabilities 111 92 ------ ------ Changes in current assets and liabilities $ (380) $ (496) ====== ======
See accompanying Notes to Consolidated Financial Statements. Page 7 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. 2. A domestic subsidiary of the Corporation issued $200 million of preferred equity securities in July 1993. No gain or loss was recognized as a result of the transaction and the Corporation owned substantially all of the voting equity of the subsidiary, both before and after the transaction. The securities issued by the subsidiary provide the holder a rate of return based upon a specified inter-bank borrowing rate, are redeemable in fiscal 1996, and may be called at any time by the subsidiary. The subsidiary has the option of redeeming the securities with either cash, debt or equity of the Corporation. The subsidiary used the cash proceeds received to purchase the common stock of the Corporation on the open market. Page 8 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 first quarter of fiscal 1995 compared to the first quarter of fiscal 1994 and the changes in financial condition during the first three months of fiscal 1995. RESULTS OF OPERATIONS Current quarter sales of $4.29 billion were $494 million or 13% above the $3.80 billion reported in the first quarter of last year. The Packaged Foods segment and the Packaged Consumer Products segment had sales increases of 12.1% and 14.0%, respectively. Businesses acquired net of businesses sold subsequent to the first quarter of last year increased sales by approximately 2 percentage points. The weakening of the U.S. dollar relative to foreign currencies had the effect of increasing sales by 3 percentage points. Thus, on a comparable basis, sales increased by approximately 8%. Cost of sales increased by $288 million or 12.1% while the gross profit margin was 37.7% in the current quarter compared to 37.2% in the first quarter of last year. The improvement was primarily attributable to increased gross profit margins in the Packaged Foods Segment. Selling, general and administrative expenses of $1.32 billion were $181 million or 15.9% higher than the first 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 in all of the Corporation's lines of business. Net interest expense increased from $32 million last year to $45 million in the current year primarily as a result of 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 adopting this change as of the beginning of the period of change was $35 million or $.07 per share. The effect of this new standard on income tax expense, exclusive of the cumulative effect adjustment, for the thirteen weeks ended October 2, 1993, was not material. The effective tax rate, excluding the cumulative impact of adopting SFAS 109, decreased from 36.0% to 35.0% of income before income taxes. This decrease was largely due to the impact of lower foreign taxes. Excluding the cumulative impact of the accounting change from the first quarter of last year, net income increased 6.5% to $165 million while net income per share increased 6.5% to $.33 from $.31 last year. Including the cumulative impact of the accounting change, net income and net income per share both increased 37.5% from the first quarter of last year. Page 9 10 FINANCIAL CONDITION During the first quarter of fiscal 1995, cash and equivalents increased by $30 million while borrowings increased by $302 million. The increase in borrowings is primarily attributable to seasonal changes in 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 October 1, 1994, 16 facilities have been closed and 2,905 employees severed. A reconciliation of the restructuring reserves through October 1, 1994 is presented on p. 11 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. Savings from the planned actions will be used for both business building initiatives and profit improvements. Due to the timing of the actions taken to date, no material benefit has been recognized in operating results. Page 10 11 SARA LEE CORPORATION AND SUBSIDIARIES RECONCILIATION OF RESTRUCTURING RESERVES AS OF OCTOBER 1, 1994 (in millions)
WRITEDOWN RECOGNITION OF OF PROPERTY CURTAILMENT RESTRUCTURING FISCAL 1994 TO NET LOSS AND SPECIAL FOREIGN RESERVES RESTRUCTURING REALIZABLE TERMINATION CASH EXCHANGE AS OF RESERVES VALUE BENEFITS PAYMENTS IMPACTS OCTOBER 1, 1994 ------------- ----------- ---------------- -------- -------- --------------- 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 -- -- (5) -- 107 ANTICIPATED SEVERANCE BENEFITS 239 -- -- (25) -- 214 PENSION BENEFITS ASSOCIATED WITH SEVERED EMPLOYEE GROUP 33 -- (33) -- -- -- ANTICIPATED LOSSES ASSOCIATED WITH THE DISPOSAL OF CERTAIN BUSINESSES 59 -- -- (19) -- 40 ------ ------ ------- ------- ----- ------- 732 (289) (33) (49) -- 361 FOREIGN EXCHANGE IMPACTS -- -- -- -- 14 14 ------ ------ ------- ------- ----- ------- TOTAL RESTRUCTURING RESERVES $ 732 $ (289) $ (33) $ (49) $ 14 $ 375 ====== ====== ======= ======= ===== =======
Page 11 12 PART II ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Registrant's 1994 Annual Meeting of Stockholders was held on October 27, 1994, in Chicago, Illinois ("Annual Meeting"). (b) Not applicable. (c) (i) A total of 427,541,012 votes (84.6% of all votes entitled to vote at the Annual Meeting) were represented by proxy or ballot at the Annual Meeting. The stockholders of the Registrant were requested to elect 18 directors as nominated by management. All nominees were elected as indicated by the following voting tabulation:
NAME FOR WITHHELD - - ------------------ ----------- -------- Paul A. Allaire 424,291,947 3,249,065 Frans H.J.J. Andriessen 419,815,123 7,725,889 John H. Bryan 424,033,785 3,507,227 Duane L. Burnham 424,191,559 3,349,453 Charles W. Coker 424,226,202 3,314,810 Willie D. Davis 424,186,924 3,354,088 Donald J. Franceschini 424,048,653 3,492,359 Allen F. Jacobson 424,114,583 3,426,429 Vernon E. Jordan, Jr. 423,178,469 4,362,543 James L. Ketelsen 424,252,197 3,288,815 Hans B. van Liemt 424,303,633 3,237,379 Joan D. Manley 424,249,704 3,291,308 C. Steven McMillan 424,189,541 3,351,471 Newton N. Minow 424,183,251 3,357,761 Michael E. Murphy 424,346,270 3,194,742 Sir Arvi H. Parbo A.C. 419,895,419 7,645,593 Rozanne L. Ridgway 424,031,390 3,509,622 Richard L. Thomas 424,349,888 3,191,124
(ii) The stockholders were requested to consider and vote upon proposed amendments to the Employee Stock Purchase Plan, as amended (the "Plan"). The proposed amendments included increasing the number of shares of common stock of the Registrant available for purchase under the Plan and clarifying those divisions and subsidiaries of the Registrant which participate in the Plan. The amendments were ratified by the stockholders, as 404,381,923 votes were cast for the proposal, 16,886,473 votes were cast against the proposal, 6,159,655 votes abstained, and 112,961 votes were broker non-votes. Page 12 13 (iii) The stockholders were requested to ratify the appointment of Arthur Andersen LLP as the independent public accountants of the Registrant for its fiscal year 1995. The appointment of Arthur Andersen LLP was ratified by the stockholders, as 420,437,265 votes were cast for the proposal, 2,785,126 votes were cast against the proposal, 4,205,659 votes abstained, and 112,962 votes were broker non-votes. (iv) The stockholders were requested to consider and vote upon a stockholder proposal concerning annual executive compensation. The proposal recommended that the Corporation not pay any compensation to its five highest-compensated officers which is not deductible under current law and that the Corporation not allow compensation to be deferred to avoid the $1,000,000 tax deduction cap. This stockholder proposal was not ratified by the stockholders, as 60,100,462 votes were cast for the proposal, 298,410,951 votes were cast against the proposal, 12,902,895 votes abstained, and 56,126,704 votes were broker non-votes. (v) The stockholders were requested to consider and vote upon a stockholder proposal concerning the Registrant's executive severance policy. The proposal recommended that absent stockholder approval of such a policy at a single regular annual stockholders' meeting, severance pay should not be paid to executive officers terminated for poor performance, change in control or violating company policies. This stockholder proposal was not ratified by the stockholders, as 78,471,483 votes were cast for the proposal, 275,543,096 votes were cast against the proposal, 17,399,729 votes abstained, and 56,126,704 votes were broker non-votes. (d) Not applicable. ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
PAGE NUMBER OR EXHIBIT INCORPORATED HEREIN NUMBER DESCRIPTION BY REFERENCE TO - - ------ --------------------------- --------------------------- 11 Computation of Net Income 15 Per Common Share 12.1 Computation of Ratio of Earnings to Fixed Charges 16 12.2 Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements 17
(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 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: November 14, 1994 Page 14 15 EXHIBIT 11 SARA LEE CORPORATION AND SUBSIDIARIES COMPUTATION OF NET INCOME PER COMMON SHARE (in millions except per share data)
THIRTEEN WEEKS ENDED THIRTEEN WEEKS ENDED OCTOBER 1, 1994 OCTOBER 2, 1993 -------------------- ------------------------ FULLY FULLY PRIMARY DILUTED PRIMARY DILUTED ------- ------- ------- ------- EARNINGS: Net income before accounting change $ 165 $ 165 $ 155 $ 155 Cumulative effect of accounting change -- -- (35) (35) ------ ------ ------ ------- Net income 165 165 120 120 Less: Dividends on Preferred Stocks, net of tax benefits (6) (3) (6) (2) Adjustment attributable to conversion of ESOP Convertible Preferred Stock -- (2) -- (1) ------ ------ ------ ------- Net Income Available for Common Stockholders $ 159 $ 160 $ 114 $ 117 ====== ====== ====== ======= SHARES: Average Shares Outstanding 479 479 479 479 Add: Common Stock Equivalents -- Stock options 1 1 1 1 ESOP Convertible Preferred Stock -- 18 -- 19 Restricted stock and other 1 1 1 1 ------ ------ ------ ------- Adjusted Weighted Average Shares Outstanding 481 499 481 500 ====== ====== ====== ======= Net Income Per Common Share: Before cumulative effect of accounting change $ 0.33 $ 0.32 $ 0.31 $ 0.30 Cumulative effect of accounting change -- -- (0.07) (0.07) ------ ------ ------ ------- $ 0.33 $ 0.32 $ 0.24 $ 0.23 ====== ====== ====== =======
Page 15 16 EXHIBIT 12.1 SARA LEE CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (in millions except ratios)
Thirteen Weeks Ended -------------------- Oct. 1, Oct. 2, 1994 1993 ---------- -------- Fixed charges: Interest expense $ 55 $ 42 Interest portion of rental expense 21 16 ------- -------- Total fixed charges before capitalized interest 76 58 Capitalized interest 3 6 ------- -------- Total fixed charges $ 79 $ 64 ======= ======== Earnings available for fixed charges: Income before income taxes $ 254 $ 242 Less undistributed income in minority owned companies (3) (3) Add minority interest in majority-owned subsidiaries 10 6 Add amortization of capitalized interest 5 5 Add fixed charges before capitalized interest 76 58 ------- -------- Total earnings available for fixed charges $ 342 $ 308 ======= ======== Ratio of earnings to fixed charges 4.3 4.8 ======= ========
17 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)
Thirteen Weeks Ended -------------------- Oct. 1, Oct. 2, 1994 1993 ------- -------- Fixed charges and preferred stock dividend requirements: Interest expense $ 55 $ 42 Interest portion of rental expense 21 16 ----- ----- Total fixed charges before capitalized interest and preferred stock dividend requirements 76 58 Capitalized interest 3 6 Preferred stock dividend requirements (1) 10 9 ----- ----- Total fixed charges and preferred stock dividend requirements $ 89 $ 73 ===== ===== Earnings available for fixed charges and preferred stock dividend requirements: Income before income taxes $ 254 $ 242 Less undistributed income in minority owned companies (3) (3) Add minority interest in majority-owned subsidiaries 10 6 Add amortization of capitalized interest 5 5 Add fixed charges before capitalized interest and preferred stock dividend requirements 76 58 ----- ----- Total earnings available for fixed charges and preferred stock dividend requirements $ 342 $ 308 ===== ===== Ratio of earnings to fixed charges and preferred stock dividend requirements 3.8 4.2 ===== =====
(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. EX-27 2 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS JUL-01-1995 OCT-01-1994 192 27 1,963 189 2,628 4,849 5,280 2,417 12,032 5,159 1,497 641 0 328 2,787 12,032 4,290 4,290 2,672 2,672 0 34 45 254 89 165 0 0 0 165 .33 .32
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