Sara Lee 2011 Annual Report Download - page 95

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Non-Indian Insecticides Business
In December 2010, the corporation
entered into an agreement to sell all of its non-Indian insecticides
businesses for €154 million and received a deposit of €152 million
($203 million – using foreign currency exchange rates on the date
of receipt) on the sale of this business. The deposit is recognized
as unrestricted cash, with an offsetting liability to the buyer, which
is reported in Accrued liabilities – Other in the Consolidated Balance
Sheet. However, as a result of competition concerns raised by the
European Commission, the parties abandoned the original sale
transaction in May 2011. Under the terms of the new sale agree-
ment, the original purchase price remains €154 million and the
corporation will complete the sale of various insecticides businesses
outside of the European Union (such as Malaysia, Singapore, Kenya
and Russia) to the original buyer. It will transfer the net proceeds
from the subsequent divestiture of the European portion of insecti-
cide businesses to the original buyer.
Business Sold in 2010
Godrej Sara Lee Joint Venture
In May 2010, the corporation
completed the disposition of its Godrej Sara Lee joint venture business,
which was part of the International Household and Body Care seg-
ment, 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.
Discontinued Operations Cash Flows The corporation’s discontinued
operations impacted the cash flows of the corporation as summarized
in the table below.
In millions 2011 2010 2009
Discontinued operations impact on
Cash from operating activities $÷÷221 $«498 $«579
Cash from (used in) investing activities 2,446 119 (105)
Cash used in financing activities (2,667) (625) (468)
Net cash impact of
discontinued operations $÷÷÷««– $÷÷(8) $÷÷«6
Cash balance of discontinued operations
At start of period – $÷÷«8 $÷÷«2
At end of period ––8
Increase (decrease) in cash
of discontinued operations $÷÷÷««– $÷÷(8) $÷÷«6
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.
Businesses Sold in 2011
Global Body Care and European Detergents
In December 2010,
the corporation completed the disposition of its global body care
and European detergents business. Using foreign currency exchange
rates on the date of the transaction, the corporation received cash
proceeds of $1.6 billion and reported an after tax gain on disposi-
tion of $491 million. The corporation entered into a customary
transitional services agreement with the purchaser of this business
to provide for the orderly separation of the business and the orderly
transition of various functions and processes which was completed
by the end of 2011.
Air Care Products Business
A majority of the air care products
business was sold in July 2010. Using foreign currency exchange
rates on the date of the transaction, the corporation has received
cash proceeds of $411 million to date, which represents the major-
ity of the proceeds to be received, and reported an after tax gain
on disposition of $94 million. When this business was sold, certain
operations were retained, primarily in Spain, until production related
to non-air care businesses ceases at the facility. Sara Lee will con-
tinue to manufacture air care products for the buyer for a period of
approximately five months after 2011, at which point the production
facility will be sold to the buyer and the final gain on the sale will
be recognized. The corporation entered into a customary transition
services agreement with the purchaser of this business to provide
for the orderly separation of the business and the orderly transition
of various functions and processes which completed by the end of
the second quarter of 2011.
Australia/New Zealand Bleach
In February 2011, the corporation
completed the sale of its Australia/New Zealand bleach business.
Using foreign currency exchange rates on the date of the transac-
tion, the corporation received cash proceeds of $53 million and
reported an after tax gain on disposition of $31 million.
Shoe Care Business
In May 2011, the corporation completed the
sale of the majority of its shoe care businesses. Using foreign cur-
rency exchange rates on the date of the transaction, the corporation
received cash proceeds of $276 million and reported an after tax
gain on disposition of $119 million. The corporation anticipates
receiving approximately $70 to $80 million more in future proceeds
on delayed sales and working capital adjustments from the buyer
in 2012.
92/93 Sara Lee Corporation and Subsidiaries