Sara Lee 2011 Annual Report Download - page 59

56/57 Sara Lee Corporation and Subsidiaries
of $361 million over the prior year due to the impact of income taxes. In 2011, the North American fresh bakery business reported a $101 million income tax benefit, which included a $122 million tax benefit that was associated with the excess tax basis related to these assets. In 2010, the international household and body care businesses reported $453 million of income tax expense, which included a $428 million tax charge related to the deemed repatriation of overseas earnings, attributable to the existing overseas cash and book value of the International Household and Body Care businesses.
Net sales for discontinued operations were $4.580 billion in
2010, an increase of $64 million, or 1.4% over the prior year. The sales growth was primarily driven by strength in the insecticides, shoe care and body care core categories, as well as the additional 53rd week and favorable foreign currency exchange rates, partially offset by a decline in North American fresh bakery sales. Pretax income in 2010 was $342 million, an increase of $37 million or 12% compared to 2009. The increase pretax income was driven by improved results for the household and body care operations, which were benefited by $33 million due to the cessation of depre- ciation and amortization in accordance with the accounting rules for assets held for sale and improved results for the North American fresh bakery and refrigerated dough businesses. Discontinued operations reported a loss of $139 million in fiscal 2010, due to $481 million of income tax expense. The increase in tax expense was related to the deemed repatriation of overseas earnings, attributable to the existing overseas cash and book value of the International Household and Body Care businesses. Gain (Loss) on Sale of Discontinued Operations
In 2011, the
corporation completed the disposition of the majority of the busi- nesses that comprised the household and body care business – global body care, European detergents, and Australia/New Zealand bleach businesses as well as a majority of the air care and shoe care businesses and recognized a pretax gain of $1.3 billion and an after tax gain of $736 million. In 2010, the corporation completed the disposition of its insecticide business in India, which had been part of the household and body care business, and recognized a pretax gain of $150 million and an after tax gain of $78 million. Further details regarding these transactions are included in Note 5 to the Consolidated Financial Statements, “Discontinued Operations.”
Diluted EPS from continuing operations was $0.54 in 2011,
$0.84 in 2010 and $0.26 in 2009. The diluted EPS from continuing operations in each succeeding year was favorably impacted by lower average shares outstanding as the corporation has been repurchasing shares of its common stock as part of an ongoing share repurchase program. The corporation repurchased 80.2 million shares in 2011, 36.4 million shares in 2010 and 11.4 million shares in 2009. Discontinued Operations The results of the corporation’s North American fresh bakery and refrigerated dough businesses and the household and body care businesses, which have been classified as discontinued operations, are summarized below:
In millions 2011 2010 2009 Net sales $3,422 $4,580 $4,516 Income from discontinued
operations before income taxes $÷«172 $÷«342 $÷«305
Income tax (expense) on income
from discontinued operations 50 (481) (109)
Gain (loss) on disposition of
discontinued operations before income taxes 1,304 158 –
Income tax (expense) benefit on
disposition of discontinued operations (568) (74) –
Net income (loss) from
discontinued operations $÷«958 $÷÷(55) $÷«196
Income (Loss) from Discontinued Operations before Income Taxes Net sales for discontinued operations were $3.422 billion in 2011, compared to $4.580 billion in the prior year, a 25.3% decrease. The sales decline was primarily driven by the impact of business dispositions after the start of 2010, which reduced net sales by $1.1 billion as well as the impact of the additional 53rd week in the prior year. Income before income taxes in 2011 was $172 mil- lion, a decrease of $170 million compared to 2010. The decrease was again driven by the impact of business dispositions, the addi- tional 53rd week and various other restructuring and other charges which reduced operating income by $191 million. Income from dis- continued operations was $222 million in fiscal 2011, an increase