Sara Lee 2010 Annual Report Download - page 73

Note 11 – Earnings per Share
Net income (loss) per share – basic is computed by dividing income
(loss) attributable to Sara Lee by the weighted average number of
common shares outstanding for the period. Net income (loss) per
share – diluted reflects the potential dilution that could occur if
options and fixed awards to be issued under stock-based compen-
sation arrangements were converted into common stock.
Options to purchase 16.1 million shares of common stock at
July 3, 2010, 27.7 million shares of common stock at June 27,
2009, and 28.2 million shares of common stock at June 28, 2008
were not included in the computation of diluted earnings per share
because the exercise price of these options was greater than the
average market price of the corporation’s outstanding common
stock, and therefore anti-dilutive. Additionally, in 2008, no potential
common shares have been included in the computation of diluted
loss per share as these shares are anti-dilutive.
The following is a reconciliation of net income (loss) to net
income (loss) per share – basic and diluted – for the years ended
July 3, 2010, June 27, 2009, and June 28, 2008:
In millions except earnings per share 2010 2009 2008
Income (loss) from continuing operations
attributable to Sara Lee $÷635 $«220 $«(280)
Income (loss) from discontinued
operations attributable to Sara Lee (213) 144 225
Gain (loss) on sale of
discontinued operations 84 – (24)
Net income (loss) attributable
to Sara Lee $÷506 $«364 $÷«(79)
Average shares outstanding – basic 688 701 715
Dilutive effect of stock compensation 32–
Diluted shares outstanding 691 703 715
Income (loss) from continuing
operations per share
Basic $«0.92 $0.31 $(0.39)
Diluted $«0.92 $0.31 $(0.39)
Net income (loss) from discontinued
operations per share
Basic $(0.19) $0.21 $«0.28
Diluted $(0.19) $0.21 $«0.28
Net income (loss) per share
Basic $«0.74 $0.52 $(0.11)
Diluted $«0.73 $0.52 $(0.11)
Note 12 – Debt Instruments
The composition of the corporation’s long-term debt, which includes
capital lease obligations, is summarized in the following table:
In millions Maturity Date 2010 2009
Senior debt
7.26% – 7.71% notes 2010 $÷÷÷«– $÷÷«25
Euro denominated – 2.25% note 2012 375 –
6.25% notes 2012 1,110 1,110
3.875% notes 2013 500 500
10% zero coupon notes
($19 million face value) 2014 14 12
10% – 14.25% zero coupon notes
($105 million face value) 2015 64 57
6.125% notes 2033 500 500
Euro denominated – euro interbank
offered rate (EURIBOR) plus 1.75% 2011 – 399
Total senior debt 2,563 2,603
Obligations under capital lease 35 44
Other debt 116 119
Total debt 2,714 2,766
Unamortized discounts (6) (7)
Hedged debt adjustment to fair value 26 25
Total long-term debt 2,734 2,784
Less current portion (16) (46)
$2,718 $2,738
On March 30, 2010, a subsidiary of the corporation issued
€300 million of debt, which is scheduled to mature in March 2012.
The notes were issued at a fixed rate of 2.25% but have effectively
been converted into variable rate debt using interest rate swap
instruments. The proceeds were used to retire €285 million of debt
that was scheduled to mature in 2011.
Payments required on long-term debt during the years ending
2011 through 2015 are $16 million, $1,545 million, $532 million,
$26 million and $74 million, respectively. The corporation made cash
interest payments of $140 million, $174 million and $247 million
in 2010, 2009 and 2008, respectively.
Sara Lee Corporation and Subsidiaries 71