Net sales up 9.7% with growth across all six business segments
Operating income of $233 million and diluted earnings per share of $.25 in the second quarter
DOWNERS GROVE, Ill. (Feb. 6, 2008) – Sara Lee Corporation (NYSE: SLE) today announced that net sales for the second quarter of fiscal 2008, ending Dec. 29, 2007, were $3.5 billion, an increase of 9.7% compared to $3.2 billion in the prior year period. Net sales grew in all six business segments, with particularly strong growth in international beverage (+21.7%), international bakery (+17.6%), household and body care (+14.3%) and North American retail bakery (+9.2%). The corporation’s adjusted net sales1 – which exclude the impact of foreign currency exchange rates and acquisitions/divestitures – increased 4.2% in the second quarter of fiscal 2008, also with growth across all six business segments, most notably in North American retail bakery (+9.2%), international beverage (+7.7%) and international bakery (+4.3%). For the first six months of fiscal 2008, Sara Lee reported net sales of $6.6 billion, up 9.0% over the comparable period last year, while adjusted net sales
rose 4.3%.
“During the second quarter, we benefited from our ongoing investment in the company as sales growth continued across all business segments and we gained share for many of our largest brands,” said Brenda C. Barnes, chairman and chief executive officer of Sara Lee Corporation. “Our strategic approach
to pricing, combined with the impact of procurement and continuous improvement savings, helped offset significantly increased input costs. In addition, the higher advertising and promotion spending that supported more than 40 new products launched this quarter helped us strengthen our position as a
marketplace leader.”
Sara Lee reported operating income of $233 million for the second quarter of fiscal 2008, compared to an operating loss of $2 million in the second quarter of fiscal 2007. Adjusted operating income – which excludes the impact of significant items, foreign currency exchange rates and acquisitions/divestitures –
was $254 million in the second quarter of fiscal 2008, compared to $255 million in the prior year’s period. For the first six months of fiscal 2008, operating income was $527 million, compared to $252 million in the first six months of fiscal 2007. Adjusted operating income declined 0.7% in the first
six months of fiscal 2008, from $443 million to $440 million.
Diluted EPS as reported were $.25 per share in the second quarter of fiscal 2008 versus a loss of $.08 per share for the year-ago period. Diluted EPS were impacted by various significant items, as shown in the table on page 2, that on a year-over-year basis increased diluted EPS as reported by $.32 per share. The remaining increase in diluted EPS of $.01 per share was primarily the result of favorable foreign currency exchange rates. In the first six months of fiscal 2008, diluted EPS as reported were $.53, compared to $.36
for the first half of fiscal 2007.

1 The terms “adjusted net sales,” “adjusted operating income” and “adjusted operating segment income” are reconciled to each item’s most
comparable U.S. generally accepted accounting principles measure on pages 13 to 16, with an explanation of the terms on page 19 of this release.

Sara Lee Reports Strong Sales Growth in Second Quarter of FY08 – Page 2
Impact of Significant Items on Diluted Earnings per Share Second Quarter Six Months 2008 2007 2008 2007
Diluted EPS continuing operations as reported $ .25 $ (.08) $ .53 $ .26
Diluted EPS as reported $ .25 $ (.08) $ .53 $ .36
Increase/(decrease) in EPS from:
Exit activities $ (.01) $ (.03) $ (.01) $ (.05)
Income from business disposition activities - - - .01
Transformation charges – information technology costs (.01) (.01) (.03) (.02)
Transformation charges – other - (.02) - (.03)
Impairment charges - (.18) - (.18)
Accelerated depreciation - (.01) - (.03)
Significant items related to continuing operations before income taxes* (.02) (.25) (.04) (.28)
Tax valuation allowance adjustments/other .05 (.04) .07 (.04)
Tax benefit on disposition of a business - - - .21
Significant items related to continuing operations* .03 (.29) .03 (.11)
(Loss) gain on disposition of discontinued operations, net - (.01) - .02
Total impact of significant items* $ .03 $ (.29) $ .03 $ (.09)

Other Financial Highlights
• Net cash from operating activities was approximately $205 million in the first six months of fiscal 2008, compared to $38 million in the first six months of fiscal 2007, the latter included $88 million of cash
generated by discontinued operations. The year-over-year increase was primarily driven by a reduction in cash paid for taxes, pension plans, transformation activities and interest.
• Media advertising and promotion (MAP) spending for continuing operations increased 14.0% in the second quarter of fiscal 2008, driven by significantly higher MAP spending in North American retail meats, international beverage and household and body care. For the first six months of fiscal 2008, MAP
spending increased 17.1%, most notably behind marketing campaigns for Ball Park, Hillshire Farm, Ambi Pur and Sanex.
• Net interest expense was $29 million for the second quarter of fiscal 2008, an increase of $1 million compared to the year-ago period, primarily resulting from lower interest income. Net interest expense was $58 million in the first six months of fiscal 2008, compared to $77 million in the prior year’s period.
• General corporate expenses were $61 million in the second quarter of fiscal 2008 compared to $93 million in the year-ago period, primarily due to lower transformation and employee benefit costs.
In the first six months of fiscal 2008 corporate expenses were $128 million, compared to $177 million in the comparable period last year.
• The company repurchased 12 million shares of its common stock in the second quarter of fiscal 2008 at an average price of $16.04 per share, for a total cost of $194 million. At the end of the second quarter, approximately 31 million shares remained authorized by the board of directors for repurchase.
• The effective tax rate for continuing operations for the second quarter was 10.9%, compared to a negative 88.6% in the prior year’s period. For additional information on the tax rate, please see page 18 of this news release.

Business Performance Review
North American Retail Meats
• Net sales increased 0.9% to $695 million in the second quarter of fiscal 2008, as a 4.4% increase in retail meat sales was partially offset by a 40.9% decline in commodity meat sales to non-retail customers; adjusted net sales also increased 0.9%.
• Net sales for the first six months of fiscal 2008 increased 2.1% to $1.3 billion; adjusted net sales also increased 2.0%.

Sara Lee Reports Strong Sales Growth in Second Quarter of FY08 – Page 3
• Operating segment income was $50 million in the second quarter, compared to a loss of $6 million in the year-ago period. The increase was primarily due to an asset impairment charge for the closure of a facility in the second quarter of last year and improved results in Mexico in this year’s second quarter,
that were partially offset by higher MAP spending. Higher prices partially offset commodity cost increases, while procurement and other continuous improvement savings offset inflation in labor and benefit costs. Adjusted operating segment income increased 9.0% to $50 million from $47 million in
the prior year’s period.
• Operating segment income for the first six months was $78 million, compared to $21 million last year.
Adjusted operating segment income was $79 million, compared to $95 million in the first six months of fiscal 2007.

Webcast
Sara Lee Corporation’s review of second quarter results for fiscal 2008 will be broadcast live via the Internet today at 9 a.m. CST. The live webcast can be accessed at www.saralee.com and is anticipated to conclude by 10 a.m. CST. For people who are unable to listen to the webcast live, the earnings review
will be available two hours following the completion of the webcast in the Investors Relations section of the Sara Lee corporate Web site until Wednesday, Aug. 6, 2008.
See for more on www.saralee.com