Net Income (Loss) Per Share

6 Months Ended

Dec. 31, 2011

Net Income (Loss) Per Share [Abstract]

Net Income (Loss) Per Share

2. Net Income (Loss) Per Share

The computation of net income per share only includes results attributable to Sara Lee and does not include earnings related to noncontrolling interests. Net income per share – basic is computed by dividing net income attributable to Sara Lee by the weighted average number of shares of common stock outstanding for the period. Net income per share – diluted reflects the potential dilution that could occur if options or fixed awards to be issued under stock-based compensation awards were converted into common stock. For the quarter and six months ended December 31, 2011, options to purchase 2.4 million shares of the corporation's common stock had exercise prices that were greater than the average market price of those shares during the respective reporting periods. For the quarter and six months ended January 1, 2011, options to purchase 12.1 million shares of the corporation's common stock had exercise prices that were greater than the average market price of those shares during the respective reporting periods. For the six months ended December 31, 2011, the dilutive effect of stock option and award plans was excluded from the earnings per share calculation on a year-to-date basis as they would be anti-dilutive given the loss in the period.

The average shares outstanding declined in the second quarter and first six months of 2012 as compared to the second quarter and first six months of 2011 as a result of shares repurchased in 2011. During 2011, the corporation repurchased 80.2 million shares of common stock for $1.3 billion, a significant portion of which were repurchased after the end of the second quarter of 2011. As of December 31, 2011, the corporation was authorized to repurchase approximately $1.2 billion of common stock under its existing share repurchase program, plus 13.5 million shares of common stock that remain authorized for repurchase under the corporation's prior share repurchase program. The corporation repurchases common stock at times management deems appropriate. However, the corporation does not expect to continue with any further share repurchases.

The following is a reconciliation of net income (loss) to net income (loss) per share – basic and diluted – for the second quarter and first six months of 2012 and 2011 (per share amounts are rounded and may not add to total):

Computation of Net Income per Common Share

(In millions, except per share data)

	Quarter ended				Six Months ended
	Dec. 31, 2011		Jan. 1, 2011		Dec. 31, 2011			Jan. 1, 2011
Amounts attributable to Sara Lee
Income (loss) from continuing operations	$	33	$	88	$	(1	)	$	149
Income from discontinued operations, net of tax		435		743		252			874
Net income	$	468	$	831	$	251		$	1,023
Average shares outstanding – Basic		592		638		592			646
Dilutive effect of stock option and award plans		3		4		—			3
Diluted shares outstanding		595		642		592			649
Earnings per common share – Basic
Income (loss) from continuing operations	$	0.06	$	0.14	$	0.00		$	0.23
Income from discontinued operations		0.74		1.16		0.43			1.35
Net income	$	0.79	$	1.30	$	0.42		$	1.58
Earnings per common share – Diluted
Income (loss) from continuing operations	$	0.05	$	0.14	$	0.00		$	0.23
Income from discontinued operations		0.73		1.16		0.43			1.35
Net income	$	0.79	$	1.30	$	0.42		$	1.58