EX-12.1 5 dex121.txt COMPUTATION OF RATIOS OF EARNINGS Exhibit 12.1 SARA LEE CORPORATION AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (In millions except ratios)
Fiscal Year Ended (1) ---------------------------------------------------- June 28, June 27, July 3, July 1, June 30, 1997 1998 (2) 1999 (3) 2000 2001 (4) --------- --------- -------- -------- -------- Fixed charges: Interest expense $ 202 $ 224 $ 237 $ 252 $ 270 Interest portion of rental expense 64 61 62 63 64 ------- ------- ------- ------- ------- Total fixed charges before capitalized interest 266 285 299 315 334 Capitalized interest 12 10 3 9 14 ------- ------- ------- ------- ------- Total fixed charges $ 278 $ 295 $ 302 $ 324 $ 348 ======= ======= ======= ======= ======= Earnings available for fixed charges: Income (loss) before income taxes continuing operations $ 1,401 ($ 531) $ 1,570 $ 1,567 $ 1,851 Less undistributed income in minority owned companies (7) (6) (6) (8) (2) Add minority interest in majority-owned subsidiaries 30 25 31 35 51 Add amortization of capitalized interest 23 25 23 24 24 Add fixed charges before capitalized interest 266 285 299 315 334 ------- ------- ------- ------- ------- Total earnings (losses) available for fixed charges $ 1,713 ($ 202) $ 1,917 $ 1,933 $ 2,258 ======= ======= ======= ======= ======= Ratio of earnings (losses) to fixed charges 6.2 (0.7) 6.3 6.0 6.5 ======= ======= ======= ======= =======
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. An increase in income from continuing operations of $497 million in 1998 would have resulted in a ratio of earnings to fixed charges of 1.0x and an increase in income from continuing operations of $521 million in 1998 would have resulted in a ratio of earnings to fixed charges and preferred stock dividend requirements of 1.0x. (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.