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Sara Lee Corporation and Subsidiaries 13
Impact of Significant Items on Income from
Continuing Operations and Net Income
Year ended June 28, 2008 Year ended June 30, 2007 Year ended July 1, 2006
Pretax Diluted EPS Pretax Diluted EPS Pretax Diluted EPS
In millions except per share data Impact Net Income Impact 1Impact Net Income Impact 1Impact Net Income Impact 1
Significant items affecting comparability
of income from continuing operations
and net income
(Charges for) income from exit activities $÷(39) $÷(25) $(0.03) $(106) $÷(69) $(0.09) $(166) $(111) $(0.14)
Income from (charges for) asset and
business disposition activities 1 – – 12 10 0.01 80 52 0.07
Subtotal (38) (25) (0.03) (94) (59) (0.08) (86) (59) (0.08)
(Charges) income in cost of sales
Transformation charges – IT costs (8) (5) (0.01) (10) (6) (0.01) (5) (3) –
Accelerated depreciation (1) (1) – (31) (19) (0.03) (29) (19) (0.02)
Hurricane losses ––– ––– (2)(1)–
(Charges) income in SG&A expenses
Transformation charges – IT costs (40) (26) (0.04) (42) (27) (0.04) (32) (21) (0.03)
Other transformation costs (3) (2) – (67) (44) (0.06) (122) (80) (0.10)
Accelerated depreciation – – – (1) (1) – (10) (6) (0.01)
Change in vacation policy ––– ––– 1490.01
Hurricane losses ––– ––– (3)(2)–
Impairment charges (851) (827) (1.16) (172) (145) (0.19) (193) (120) (0.16)
Impact of significant items on income from
continuing operations before income taxes (941) (886) (1.24) (417) (301) (0.41) (468) (302) (0.39)
Significant tax matters affecting comparability
Deferred tax valuation allowance adjustment – 19 0.03 – (27) (0.04) – 36 0.05
Tax benefit on disposition of a business – – – – 169 0.23 – – –
Contingent tax obligation adjustment – 103 0.14 – 67 0.09 – 332 0.43
Tax on repatriation of prior years’ earnings – – – – – – – (291) (0.38)
Other tax adjustments, net – (1) – – 2 – – 5 0.01
Impact on income from continuing operations (941) (765) (1.07) (417) (90) (0.13) (468) (220) (0.29)
Significant items impacting
discontinued operations
U.K. Pension plan settlement charge (15) (15) (0.02) – – – – – –
Impairment charges – – – – – – (394) (338) (0.43)
Charge for transformation expenses (1) (1) – (1) (1) – (13) (8) (0.01)
European Meats curtailment gain ––– ––– 1180.01
Contingent tax adjustments ––– ––– –(24)(0.03)
Tax benefit from Direct Selling ––– ––– –500.07
Gain (loss) on the sale of discontinued
operations, net (23) (24) (0.03) 5 16 0.02 466 401 0.52
Impact of significant items on net income $(980) $(805) $(1.12) $(413) $÷(75) $(0.10) $(398) $(131) $(0.17)
1The earnings per share (EPS) impact of individual amounts in the table above are rounded to the nearest $0.01 and may not add to the total.