EX-12.1 5 dex121.htm COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Computation of Ratio of Earnings to Fixed Charges

EXHIBIT 12.1

 

SARA LEE CORPORATION AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(In millions except ratios)

 

     Years Ended

     June 30,
2007(1)


    July 1,
2006(2)


Fixed charges:

              

Interest expense

   $ 265     $ 305

Interest portion of rental expense

     45       47
    


 

Total fixed charges before capitalized interest and preference security dividends of consolidated subsidiaries

     310       352

Preference security dividends of consolidated subsidiaries

     —         —  

Capitalized interest

     20       20
    


 

Total fixed charges

   $ 330     $ 372
    


 

Earnings available for fixed charges:

              

Income before income taxes from continuing operations

   $ 419     $ 193

Less undistributed (loss) income in minority-owned companies

     (1 )     —  

Add minority interest in majority-owned subsidiaries

     (5 )     10

Add amortization of capitalized interest

     11       11

Add fixed charges before capitalized interest and preference security dividends of consolidated subsidiaries

     310       352
    


 

Total earnings available for fixed charges

   $ 734     $ 566
    


 

Ratio of earnings to fixed charges

     2.2       1.5
    


 

 

(1) During fiscal 2007, the corporation recorded a pretax charge of $95 million in connection with certain restructuring activities. Also during fiscal 2007, the corporation recognized an impairment charge of $172 million and $120 million of contingent sales proceeds from the disposal of its European tobacco business in 1999.

 

(2) During fiscal 2006, the corporation recorded a pretax charge of $86 million in connection with certain restructuring activities. Also during fiscal 2006, the corporation recognized an impairment charge of $193 million and $114 million of contingent sales proceeds from the disposal of its European tobacco business in 1999.