EX-12.3 8 dex123.txt COMPUTATION OF RATIOS OF EARNINGS Exhibit 12.3 SARA LEE CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS (In millions except ratios)
Quarter Fiscal Year Ended (1) Ended ------------------------------------------------------- --------- June 28, June 27, July 3, July 1, June 30, Sept. 29, 1997 1998 (2) 1999 (3) 2000 2001 (4) 2001 -------- ------- ------- ------- ------- --------- Fixed charges and preferred stock dividend requirements: Interest expense $ 202 $ 224 $ 237 $ 252 $ 270 $ 74 Interest portion of rental expense 64 61 62 63 64 14 ------- ------- ------- ------- ------- -------- Total fixed charges before capitalized interest 266 285 299 315 334 88 and preferred stock dividend requirements Capitalized interest 12 10 3 9 14 2 Preferred stock dividend requirements (5) 41 24 20 20 18 4 ------- ------- ------- ------- ------- -------- Total fixed charges and preferred stock dividend requirements $ 319 $ 319 $ 322 $ 344 $ 366 $ 94 ======= ======= ======= ======= ======= ======== Earnings available for fixed charges and preferred stock stock dividend requirements: Income (loss) before income taxes continuing operations $ 1,401 ($ 531) $ 1,570 $ 1,567 $ 1,851 $ 262 Less undistributed income in minority owned companies (7) (6) (6) (8) (2) (4) Add minority interest in majority-owned subsidiaries 30 25 31 35 51 8 Add amortization of capitalized interest 23 25 23 24 24 6 Add fixed charges before capitalized interest and preferred stock dividend requirements 266 285 299 315 334 88 ------- ------- ------- ------- ------- -------- Total earnings (losses) available for fixed charges and preferred stock dividend requirements $ 1,713 ($ 202) $ 1,917 $ 1,933 $ 2,258 $ 360 ======= ======= ======= ======= ======= ======== Ratio of earnings (losses) to fixed charges and preferred stock dividend requirements 5.4 (0.6) 6.0 5.6 6.2 3.8 ======= ======= ======= ======= ======= ========
Notes (1) Our fiscal year ends on the Saturday nearest June 30. (2) In 1998, we recorded a restructuring provision that reduced income from continuing operations before income taxes by $2,038. (3) Fiscal 1999 was a 53-week year. In 1999, we recorded a gain on the sale of our tobacco business of $137 and a product recall charge of $76 that resulted in an increase in income from continuing operations before taxes of $61. (4) In 2001, we recorded a pre-tax charge of $554 in connection with certain reshaping actions, a pre-tax gain of $105 in connection with the IPO of our Coach Inc. subsidiary and a tax-free gain of $862 in connection with the exchange of our stock for the stock of Coach Inc., that resulted in an increase in income from continuing operations before taxes of $413. (5) Preferred stock dividends in the computation have been increased to an amount representing the pre-tax earnings that would have been required to cover such dividends.