Sara Lee 2011 Annual Report Download - page 60

FINANCIAL REVIEW Consolidated Net Income and Diluted Earnings Per Share (EPS) Net income was $1.296 billion in 2011, an increase of $769 mil- lion over the prior year. The increase in net income was due to a $1.0 billion increase in income from discontinued operations, which was the result of a $361 million increase in income from discontin- ued operations primarily related to a year-over-year reduction in the tax provision related to the repatriation of foreign earnings and a tax benefit related to the North American fresh bakery operations and a $652 million increase in the gain on sale of businesses, which related to the completion of the disposition of several household and body care businesses in 2011. The increases in net income were partially offset by the $244 million reduction in income from continuing operations noted previously.
Net income was $527 million in 2010, an increase of $147 million
over the previous year. The increase in net income was due to a $398 million increase in income from continuing operations as a result of a reduction in after tax impairment charges on a year-over- year basis partially offset by a $251 million reduction in net income from discontinued operations due to the tax provision related to the repatriation of foreign earnings.
The net income attributable to Sara Lee was $1.287 billion in
2011, $506 million in 2010 and $364 million in 2009.
Diluted EPS were $2.06 in 2011, $0.73 in 2010 and $0.52
in 2009. The diluted EPS in each succeeding year was favorably impacted by lower average shares outstanding due to an ongoing share repurchase program.
Operating Results by Business Segment The corporation’s structure is currently organized around four business segments, which are described below.
North American Retail
sells a variety of packaged meat and frozen
bakery products to retail customers in North America.
North American Foodservice
sells a variety of meat, bakery and
beverage products to foodservice customers in North America. Sales are made in the foodservice channel to distributors, restau- rants, hospitals and other large institutions.
International Beverage
sells coffee and tea products in certain
markets around the world, including Europe, Brazil and Australia. Sales are made in both the retail and foodservice channels.
International Bakery
sells a variety of bakery and dough products
to retail and foodservice customers in Europe and Australia.
The following is a summary of results by business segment:
In millions 2011 2010 2009 Net sales North American Retail $2,868 $2,818 $2,767 North American Foodservice 1,566 1,547 1,776 International Beverage 3,548 3,221 3,062 International Bakery 726 785 795
Total business segments 8,708 8,371 8,400
Intersegment sales (27) (32) (34) Net sales $8,681 $8,339 $8,366
The following tables summarize the components of the percentage
change in net sales as compared to the prior year.
Volume Impact
(Excl. 53rd of 53rd Acq./ Foreign
Week) Mix Price Other Week Disp. Exchange Total
2011 vs 2010 North American Retail (3.8) % 1.8 % 5.5 % (0.2) % (1.9) % 0.4 % –% 1.8 % North American Foodservice (13.4) 6.8 9.5 (0.1) (1.7) – 0.1 1.2 International Beverage (2.2) 2.0 6.0 4.1 (1.7) 1.1 0.9 10.2 International Bakery (2.5) (0.6) (3.7) 0.4 (1.5) – 0.4 (7.5) Total business segments (4.7) % 2.5 % 5.6 % 1.5 % (1.7) % 0.5 % 0.4% 4.1 % 2010 vs 2009 North American Retail (5.5) % 6.8 % (1.5) % 0.1% 1.9 % – % –% 1.8 % North American Foodservice (13.1) 6.3 0.1 0.1 1.5 (8.0) 0.2 (12.9) International Beverage 1.4 (0.4) (0.7) (1.1) 1.6 0.4 4.0 5.2 International Bakery (2.3) (0.8) (3.6) 0.9 1.5 – 3.0 (1.3) Total business segments (3.9) % 3.0 % (1.0) % (0.3) % 1.7 % (1.6) % 1.8% (0.3) %