Sara Lee 2010 Annual Report Download - page 67

Gain (Loss) on the Sale of Discontinued Operations The gains
(losses) on the sales of discontinued operations recognized in
2010 and 2008 are summarized in the following tables.
Pretax Tax
Gain (Loss) (Charge)/ After Tax
In millions on Sale Benefit Gain (Loss)
2010
Godrej Sara Lee joint venture $150 $(72) $«78
Other 8 (2) 6
Total $158 $(74) $«84
2008
Mexican Meats $«(23) $÷(1) $(24)
Business Sold in 2010
Godrej Sara Lee Joint Venture In May 2010, the corporation
completed the disposition of its Godrej Sara Lee joint venture busi-
ness, which was part of the International Household and Body Care
segment, and recognized an after tax gain on the disposition. A total
of $230 million of cash proceeds was received from the disposition
of this business.
Business Sold in 2008
Mexican Meats In March 2008, the corporation completed the
disposition of its investment in its Mexican meats operation, which
had been reported in the North American Retail segment, and recog-
nized an after tax loss on disposition. A total of $55 million of cash
proceeds was received from the disposition of this business.
Discontinued Operations Cash Flows The corporation’s discontinued
operations impacted the cash flows of the corporation as summa-
rized in the table below.
In millions 2010 2009 2008
Discontinued operations impact on
Cash from operating activities $«321 $«260 $«221
Cash used in investing activities (18) (19) (26)
Cash used in financing activities (311) (235) (209)
Net cash impact of discontinued operations $÷÷(8) $÷÷«6 $««(14)
Cash balance of discontinued operations
At start of period $÷÷«8 $÷÷«2 $«««16
At end of period –82
Increase/(decrease) in cash
of discontinued operations $÷÷(8) $÷÷«6 $««(14)
The cash used in financing activities primarily represents the
net transfers of cash with the corporate office. The net assets of
the discontinued operations includes only the cash noted above
as most of the cash of those businesses has been retained as
a corporate asset.
Sara Lee Corporation and Subsidiaries 65
The following is a summary of the net assets held for sale as of
July 3, 2010 and June 27, 2009, which primarily consists of the net
assets of the international household and body care businesses.
July 3, June 27,
In millions 2010 2009
Cash and cash equivalents $÷÷÷«– $÷÷÷«8
Trade accounts receivable 48 60
Inventories 188 262
Other current assets 24 48
Total current assets held for sale 260 378
Property 144 156
Trademarks and other intangibles 188 221
Goodwill 496 568
Other assets 419
Assets held for sale $1,092 $1,342
Accounts payable $27 $50
Accrued expenses and other current liabilities 220 228
Current maturities of long-term debt 69
Total current liabilities held for sale 253 287
Long-term debt 27
Other liabilities 86
Liabilities held for sale $÷«263 $÷«300
Noncontrolling interest $÷÷÷«5 $÷÷«22
Note 6 – Exit, Disposal and Restructuring Activities
As part of its ongoing efforts to improve its operational performance
and reduce cost, the corporation initiated Project Accelerate in 2009,
which is a series of global initiatives designed to drive significant
savings in the next three years. It is anticipated that the overall cost
of the initiatives will include severance costs as well as transition
costs associated with transferring services to an outside third party.
An important component of Project Accelerate involves outsourcing
pieces of the North American and European Finance (transaction
processing) and Global Information Services (applications develop-
ment and maintenance) groups as well as the company’s indirect
procurement activities. In addition to cost savings, this business
process outsourcing will help the corporation drive standardization,
increase efficiency and provide flexibility. The corporation began
implementation of the initiative in North America and Europe in the
second quarter of 2009 and plans to complete global implementa-
tion within three years.