Sara Lee Corporation today announced results for the third quarter of fiscal 2001 ended March 31, 2001. All results reflect continuing operations and exclude unusual items unless otherwise noted. Net sales rose 3% to $4.3 billion, and increased 6% in constant currency terms. Unit volumes increased 6% including acquisitions completed over the last 12 months, and fell 1% from base business operations.

Reported operating income fell 4% to $445 million in the quarter; on a constant currency basis, excluding the impact of the stronger dollar, operating income was flat with last year. Diluted earnings per share were $.27, equal to $.27 in the third quarter last year.

For the first nine months of fiscal 2001, net sales were $13.5 billion, up 4% over the same period a year ago; sales increased 8% on a constant currency basis. Unit volumes increased 8% including acquisitions, and declined 1% from base business operations. Reported operating income declined 1% to $1.5 billion, but increased 4% excluding the impact of the stronger dollar. Diluted earnings per share rose 2% to $.96, compared with $.94 in the same period of fiscal 2000.

"We remain intensely focused in our efforts to reshape Sara Lee's product portfolio and business organization to improve the efficiency and profitability of our operations," said C. Steven McMillan, president and chief executive officer of Sara Lee. "The slowdown in the U.S. economy, and increased competitive issues in several key markets, clearly had a negative impact on our third quarter results, but we continued our emphasis on product development and brand building, including a 9% increase in total corporate marketing spending in the quarter."

Unusual Items

The corporation's results for the quarter and nine months ended March 31, 2001 were affected by the following unusual items related to the ongoing reshaping program announced in May 2000. That plan includes the divestiture of noncore operations that do not fit with the company's strategy to establish leading branded positions in Food and Beverage, Intimates and Underwear and Household Products, and the restructuring of a number of defined business activities.

In the third quarter, business dispositions included the sale of Ozark Salad and Nutrine, part of the Sara Lee Foods segment, resulting in a pretax gain of $19 million. In addition, the company completed the sale of Argal, a Spanish processed meats company, which resulted in a $2 million favorable adjustment to the estimate made in the second quarter for the anticipated loss on this transaction. Together, these items resulted in a pretax gain of $21 million.

Additional restructuring actions in the quarter - involving workforce resizing, the disposition of assets and exit of leases - resulted in an $11 million pretax charge, which was partially offset by a $2 million favorable adjustment to the estimate made in the second quarter for severance and lease exit costs. These items resulted in a net charge of $9 million. The net gain from the disposition of businesses exceeded restructuring charges in the quarter, resulting in a $12 million increase in pretax income, which increased net income by $5 million, or $.01 per diluted share.

On a year-to-date basis, the $344 million pretax charge taken in the second quarter for business dispositions and restructurings was partially offset by the $12 million increase in pretax income in the third quarter related to these items, resulting in a $332 million net charge in the year-to-date period. Also affecting the first nine months was the sale of PYA/Monarch, completed in December 2000, which resulted in an after-tax gain of $638 million, or $.73 per share on a diluted basis in the period; and the initial public offering of Coach, completed in October 2000, which resulted in a gain of $105 million, or $.12 per share on a diluted basis in the period.

The net impact of these unusual items increased net income and diluted earnings per share by $431 million and $.49, respectively, for the nine months ended March 31, 2001.

A performance review for each line of business follows.

SARA LEE FOODS

                       Third Quarter  Change     Nine Months  Change
                       -------------  ------     -----------  ------
                       2001     2000            2001    2000

Sales           $     1,192   $1,180    0.9%  $3,834  $3,797    1.0%
Operating Income   $     73   $   67    8.5%  $  259  $  297  (12.9)%

Sara Lee Foods includes the company's worldwide Packaged Meats and Bakery businesses. This line of business reported improved results in the third quarter, reflecting higher margins and profits in both global meats and bakery, with particular strength in the company's domestic operations.

Marketing spending to support key brands and new products in this segment - including Jimmy Dean Fresh Taste. Fast!, Ball Park Kosher Franks and Sara Lee Calzone Creations and Cake Bites - increased more than 10% during the third quarter.

Unit volumes for Packaged Meats rose 1% in the quarter, as higher sales for smoked sausage, breakfast sausage, luncheon meat and corn dogs were partially offset by lower hot dog volumes. By geographic region, unit sales in the United States rose 2%, European unit volumes were flat, and unit sales in Mexico declined 1%, compared with an unusually strong 20% increase in last year's third quarter. Through nine months, unit sales declined 1%.

Worldwide Bakery unit sales fell 12% in the third quarter and declined 10% on a year-to-date basis. Unit sales were particularly affected by volume declines of approximately 30% in the company's European bakery operations. These businesses are expected to be divested by the end of the fiscal year. In the United States, Sara Lee maintained its leading share of the Frozen Baked Goods category with a 12-month dollar share of 18.3%.

BEVERAGE
                       Third Quarter  Change     Nine Months  Change
                       -------------  ------     -----------  ------
                       2001     2000            2001    2000

Sales             $     724   $  735  (1.4)%  $2,215  $2,113     4.9%
Operating Income  $     123   $  116    5.6%  $  365  $  357     2.3%

Sara Lee's Beverage line of business includes retail and foodservice coffee and tea sales in major markets around the world. Eliminating the impact of currency from reported results, this line of business produced solid gains, including a 3% sales increase in the third quarter with operating income up 11%, and sales and operating income gains of 13% and 12%, respectively, through nine months.

Base business global unit volumes fell 1% during the third quarter, as increased European retail and concentrate volumes were more than offset by declines in lower margin unit sales in the United States. Through nine months, base business unit sales fell 2%. Over the most recent 12-month period, the company maintained its leading category shares in a number of key markets including the Netherlands, Belgium, Spain, Denmark and Brazil. Including acquisitions completed over the last 12 months, unit sales grew 22% in the quarter and increased 33% through nine months.

HOUSEHOLD PRODUCTS
                       Third Quarter  Change     Nine Months  Change
                       -------------  ------     -----------  ------
                       2001     2000            2001    2000

Sales               $   533  $   520   2.6%   $1,505  $1,563   (3.7)%
Operating Income    $    80  $    85  (5.8)%  $  232  $  243   (4.6)%

Sara Lee's most global line of business, Household Products, includes sales of basic personal care and household products in Europe, the United States and Asia, as well as door-to-door Direct Selling operations in 17 countries. In constant currency terms, sales rose 11% in the third quarter and operating income increased 2%; through nine months, excluding the impact of the stronger dollar, sales grew 6% and operating income rose 5%. Marketing spending for this line of business rose more than 10% in the quarter to support key brands and new product launches, such as Ambi-Pur LiquiFresh in the United States.

Unit volumes for the four core categories - Body Care, Air Fresheners, Insecticides and Shoe Care - increased 9% during the third quarter, on top of a 7% increase in the same period last year. Unit sales were particularly strong in two product categories: Body Care, led by Radox products in the United Kingdom, Monsavon products in France and the Sanex line of healthy skin care items; and Air Fresheners, which enjoyed double-digit unit gains in almost all of its major markets. Through nine months, unit volumes for these four core categories grew 5%.

The company's Direct Selling operations, conducted by 700,000 independent representatives selling branded toiletries, cosmetics and fragrances directly to consumers, produced increased sales and operating income during both the quarter and through nine months, with particular strength in Latin America.

INTIMATES AND UNDERWEAR
                       Third Quarter  Change     Nine Months  Change
                       -------------  ------     -----------  ------
                       2001     2000            2001    2000

Sales             $   1,860 $  1,778   4.6%   $6,042  $5,688     6.2%
Operating Income  $     169 $    193 (12.2)%  $  649  $  618     5.1%

Sara Lee's Intimates and Underwear line of business includes the company's global Legwear, Knit Products and Intimate Apparel operations. While sales rose in both periods, and operating income increased 5% through nine months, operating income fell, as expected, in the third quarter, due to significant market and competitive pressures in many basic apparel retail sectors. Marketing spending for this line of business increased 5% during the quarter, in line with sales. Quarter and year-to-date results include Coach, which contributed to sales and operating income in both periods.

Base business unit volumes for these global operations fell 4% during the third quarter and declined 2% through nine months. Including acquisitions completed over the last 12 months, unit sales increased 4% during the quarter and rose 6% on a year-to-date basis.

Base business unit sales for the company's global Intimate Apparel operations were flat during the quarter and rose 1% through nine months, with similar results in both the United States and Europe. The company increased its leading dollar share of the total U.S. bra category by 2.5 percentage points to 30.2% over the last 12 months. Including acquisitions, unit sales grew 15% in the third quarter and increased 17% through the first nine months.

Global Legwear volumes from base business operations fell 9% during the quarter and declined 6% through nine months, reflecting continued weakness in consumer demand for sheer hosiery products. The company did maintain its leading U.S. sheer hosiery category position with a dollar share of 51.9%, and it increased its number-one position in the total U.S. sock market by 5 percentage points to 18.5% over the most recent 12-month period. Including acquisitions, Legwear unit sales fell 3% during the quarter and declined 1% through nine months.

Base business unit sales for the company's global Knit Products operations fell 3% during the quarter and declined 1% through nine months. For the third quarter, total global underwear units fell 4% while worldwide activewear volumes were flat; global underwear unit sales also fell 4% through the first nine months, while worldwide activewear units rose 5%. While experiencing slower consumer demand and aggressive competitive pricing pressures, the company continues to support its strong Hanes and Hanes Her Way megabrand franchises, and total marketing spending for Sara Lee Knit Products in the United States nearly doubled in the third quarter. Market shares remain strong, and the company continues to hold number-one positions in the United States in men's and boys' underwear (36.9%); women's and girls' underwear (37.4%); and fleecewear (22.2%). Including acquisitions completed over the last 12 months, unit sales rose 1% in the third quarter and increased 3% through nine months.

Net interest expense was $37 million for the quarter and $149 million for the first nine months, compared with $44 million and $120 million, respectively, in the comparable periods a year ago. Interest expense decreased in the quarter as a result of lower debt levels resulting from repayment of debt using the proceeds of recent divestitures. In the third quarter, Sara Lee repurchased 250,000 shares of its common stock for more than $5 million. Year to date, the company repurchased nearly 24 million shares for more than $500 million. The company has approximately 7 million shares remaining on its current repurchase authorization.

Outlook

Sara Lee's management currently expects diluted earnings per share for the fourth quarter of fiscal 2001 to fall within the range of $.35 to $.38, compared with $.33 from continuing operations and $.35 from total operations in the fourth quarter of fiscal 2000. Full fiscal year diluted earnings per share from total operations are projected to be $1.34 to $1.37, compared with $1.34 from total operations last year. Actual results will depend to a large extent on both future euro-dollar exchange rates and retail market conditions for the company's branded apparel products.

By line of business, management expects fourth-quarter operating income for Sara Lee Foods to increase at a double-digit rate versus the fourth quarter a year ago. Operating income for Beverage and Household products, the company's two most European-based businesses, will show modest increases or declines, depending on the euro-dollar exchange rate, but both businesses should produce solid gains on a local currency basis. Operating income for Intimates and Underwear is likely to decline in the fourth quarter due to continued significant weakness in the current U.S. retail environment.

Forward-looking Statements

This news release contains certain forward-looking statements concerning Sara Lee's operations, economic performance and financial condition, including without limitation the statements in the section entitled "Outlook" regarding the fourth quarter and full fiscal year 2001. These forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from those expressed or implied in the forward-looking statements.

Factors that could cause Sara Lee's actual results to differ materially from such forward-looking statements include the following: (i) impacts on reported earnings from fluctuations in foreign currency exchange rates - particularly the euro - given Sara Lee's significant concentration of business in Western Europe; (ii) significant competitive activity, including advertising, promotional and price competition, and changes in consumer demand for Sara Lee's products; (iii) inherent risks in the marketplace associated with new product introductions, including uncertainties about trade and consumer acceptance; (iv) Sara Lee's ability to successfully integrate acquisitions into its existing operations and the availability of new acquisitions, joint ventures and alliance opportunities that build stockholder value; (v) the financial impact of Sara Lee's decision to dispose of certain non-core business units; (vi) fluctuations in the cost and availability of various raw materials; (vii) the effect on future revenues and expenses in Sara Lee's Packaged Meats business resulting from the foot and mouth viral disease recently discovered in parts of Europe; (viii) Sara Lee's ability to complete the transactions anticipated in its business reshaping program; (ix) the corporation's ability to realize forecasted savings, as well as improvements in productivity and efficiency, from its business reshaping, restructuring and other programs. In addition, Sara Lee's results may also be affected by general factors, such as economic conditions, political developments, interest and inflation rates, accounting standards, taxes and laws and regulations affecting the corporation in markets where it competes.

Consequently, the corporation wishes to caution readers not to place undue reliance on any forward-looking statements. We have provided additional information in our Form 10-K for fiscal year 2000, which readers are encouraged to review, concerning factors that could cause actual results to differ materially from those in the forward looking statements. Sara Lee undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Sara Lee Corporation (www.saralee.com) is a global branded consumer packaged goods company with approximately $17.5 billion in annual revenues. Its leading brands include Sara Lee, Douwe Egberts, Hillshire Farm, Kiwi, Hanes and Playtex.

                                      Sara Lee Corporation (NYSE)

Consolidated Statements of Income

(in millions except per share amounts)

                                           Third Quarter Ended
                                     ---------------------------------
                                      March 31,    April 1,    Percent
                                        2001         2000      Change
                                     ---------    ----------   -------

Net sales                            $ 4,308        $ 4,175       3.2%
                                     --------       --------

Cost of sales                          2,511          2,407
Cost of sales - product line exit         --             --
Selling, general and administrative
 expenses                              1,460          1,388
Interest expense                          60             61
Interest income                          (23)           (17)
Unusual Items - Business reshaping:
  Gain in connection with initial
   public offering                        --             --
  Business dispositions and other
   charges                               (12)            --
                                     --------       --------
                                       3,996          3,839
                                     --------       --------

Income from continuing operations
 before income taxes                     312            336      (7.3)
Income taxes                              71             87
                                     --------       --------

Income from continuing operations        241            249      (3.3)
Income from discontinued operations,
 net of income taxes                      --             13
Gain on disposal of discontinued
 operations, net of income taxes          --             --
                                     --------       --------

Net income                           $   241        $   262      (8.2)
                                     ========       ========

Income from continuing operations
 per common share
  Basic                              $  0.29        $  0.28       3.6
                                     ========       ========
  Diluted                            $  0.28        $  0.27       3.7
                                     ========       ========

Net income per common share
  Basic                              $  0.29        $  0.30      (3.3)
                                     ========       ========
  Diluted                            $  0.28        $  0.29      (3.4)
                                     ========       ========

Average shares outstanding

  Basic                                  828            878
                                     ========       ========
  Diluted                                865            911
                                     ========       ========


                                           Nine Months Ended
                                     ---------------------------------
                                      March 31,    April 1,    Percent
                                        2001         2000      Change
                                     ---------    ----------   -------

Net sales                            $ 13,520       $13,048       3.6%
                                    ----------      --------

Cost of sales                           7,829         7,478
Cost of sales - product line exit          24            --
Selling, general and administrative
 expenses                               4,474         4,279
Interest expense                          211           175
Interest income                           (62)          (55)
Unusual Items - Business reshaping:
  Gain in connection with initial
   public offering                       (105)           --
  Business dispositions and other
   charges                                308            --
                                    ----------      --------
                                       12,679        11,877
                                    ----------      --------

Income from continuing operations
 before income taxes                      841         1,171     (28.2)
Income taxes                              211           306
                                    ----------      --------

Income from continuing operations         630           865     (27.2)
Income from discontinued operations,
 net of income taxes                       25            44
Gain on disposal of discontinued
 operations, net of income taxes          638            --
                                    ----------      --------

Net income                           $  1,293       $   909      42.2
                                    ==========      ========

Income from continuing operations
 per common share
  Basic                              $   0.75       $  0.97     (22.7)
                                    ==========      ========
  Diluted                            $   0.72       $  0.94     (23.4)
                                    ==========      ========

Net income per common share
  Basic                              $   1.54       $  1.02      51.0
                                    ==========      ========
  Diluted                            $   1.48       $  0.99      49.5
                                    ==========      ========

Average shares outstanding
  Basic                                   833           881
                                    ==========      ========
  Diluted                                 870           916
                                    ==========      ========

                                           Sara Lee Corporation (NYSE)

Operating Results by Industry Segment
Unusual Items not Allocated to Industry Segments
(in millions)                                      Third Quarter Ended
----------------------------------------------------------------------

                                               Sales
                                    ----------------------------
                                March 31,      April 1,      Percent
                                  2001          2000         Change
                               -----------    ----------    ---------

Food and Beverage:
     Sara Lee Foods            $    1,192     $   1,180          0.9 %

     Beverage                         724           735         (1.4)

Household  Products                   533           520          2.6

Intimates and Underwear             1,860         1,778          4.6

                               -----------    ----------    ---------

     Total sales and operating
      companies income              4,309         4,213          2.3

Intersegment sales                     (1)          (38)        96.8

Amortization of goodwill
 and trademarks                        --            --           --

General corporate expenses             --            --           --

Business dispositions and
 other charges (1)                     --            --           --
                               -----------    ----------    ---------


Total net sales and
 operating income                   4,308         4,175          3.2

Net interest expense                   --            --           --
                               -----------    ----------    ---------


Net sales and income from
 continuing operations
 before income taxes           $    4,308     $   4,175          3.2 %
                               ===========    ==========    =========


                                           Operating Income
                                     ---------------------------
                                March 31,      April 1,      Percent
                                  2001           2000        Change
                               -----------    ----------    ---------

Food and Beverage:
     Sara Lee Foods            $       73     $      67          8.5 %

     Beverage                         123           116          5.6

Household  Products                    80            85         (5.8)

Intimates and Underwear               169           193        (12.2)

                               -----------    ----------    ---------

     Total sales and operating
      companies income                445           461         (3.5)

Intersegment sales                     --            --           --

Amortization of goodwill
 and trademarks                       (48)          (45)        (6.5)

General corporate expenses            (60)          (36)       (63.4)

Business dispositions and
 other charges (1)                     12            --           NM
                               -----------    ----------    ---------


Total net sales and
 operating income                     349           380         (8.1)

Net interest expense                  (37)          (44)        14.4
                               -----------    ----------    ---------


Net sales and income from
 continuing operations
 before income taxes           $      312     $     336         (7.3)%
                               ===========    ==========    =========


                                           Nine Months Ended
                                                Sales
                                     ----------------------------
                                March 31,      April 1,      Percent
                                  2001           2000        Change
                               -----------    ----------    ---------

Food and Beverage:
     Sara Lee Foods            $    3,834     $   3,797          1.0 %

     Beverage                       2,215         2,113          4.9

Household  Products                 1,505         1,563         (3.7)

Intimates and Underwear             6,042         5,688          6.2

                               -----------    ----------    ---------

     Total sales and operating
      companies income             13,596        13,161          3.3

Intersegment sales                    (76)         (113)        32.5

Amortization of goodwill
 and trademarks                        --            --           --

General corporate expenses             --            --           --

Gain in connection with
 initial public offering (2)           --            --           --

Business dispositions and
 other charges (1)                     --            --           --
                               -----------    ----------    ---------


Total net sales and
 operating income                  13,520        13,048          3.6

Net interest expense                   --            --           --
                               -----------    ----------    ---------

Net sales and income from
 continuing operations
 before income taxes           $   13,520     $  13,048          3.6 %
                               ===========    ==========    =========

                                           Operating Income
                                     ---------------------------
                                March 31,      April 1,      Percent
                                  2001           2000       Change
                               -----------    ----------    ---------

Food and Beverage:
     Sara Lee Foods            $      259     $     297        (12.9)%

     Beverage                         365           357          2.3

Household  Products                   232           243         (4.6)

Intimates and Underwear               649           618          5.1

                               -----------    ----------    ---------

     Total sales and operating
      companies income              1,505         1,515         (0.7)

Intersegment sales                     --            --           --

Amortization of goodwill
 and trademarks                      (142)         (127)       (11.9)

General corporate expenses           (146)          (97)       (49.4)

Gain in connection with
 initial public offering (2)          105            --           NM

Business dispositions and
 other charges (1)                   (332)           --           NM
                               -----------    ----------    ---------


Total net sales and
 operating income                     990         1,291        (23.3)

Net interest expense                 (149)         (120)       (25.0)
                               -----------    ----------    ---------


Net sales and income from
 continuing operations
 before income taxes           $      841     $   1,171        (28.2)%
                               ===========    ==========    =========

    See accompanying notes to financial statements for information
regarding the unusual items.


Operating Results by Industry Segment Unusual Items Allocated to
Industry Segments (in millions)

                                         Third Quarter Ended

                                                Sales
                                                -----
                                     March 31,   April 1,    Percent
                                         2001       2000      Change
                                     --------    -------     -------

Food and Beverage:
Sara Lee Foods                      $   1,192   $  1,180         0.9%
Beverage                                  724        735        (1.4)
Household  Products                       533        520         2.6
Intimates and Underwear                 1,860      1,778         4.6
                                        -----      -----        ----
Total sales and operating
companies income                        4,309      4,213         2.3
Intersegment sales                         (1)       (38)       96.8
Amortization of goodwill and trademarks    --         --          --

General corporate expenses                 --         --          --
                                   ----------  ---------    --------
Total net sales and operating income    4,308      4,175         3.2
Net interest expense                       --         --          --
                                   ----------  ---------    --------
Net sales and income from continuing
operations before income taxes     $    4,308   $  4,175         3.2%
                                   ==========  =========    ========

                                              Operating Income
                                     March 31,   April 1,    Percent
                                         2001       2000      Change
                                     --------    -------     -------
Food and Beverage:
Sara Lee Foods                    $        93  $      67        39.6%
Beverage                                  123        116         5.6
Household Products                         79         85        (6.9)
Intimates and Underwear                   162        193       (16.4)
                                         ----       ----       -----
Total sales and operating
companies income                          457        461        (1.0)
Intersegment sales                         --         --          --
Amortization of goodwill and trademarks   (48)       (45)       (6.5)
General corporate expenses                (60)       (36)      (63.4)
                                         ----      -----        ----
Total net sales and operating income      349        380        (8.1)
Net interest expense                      (37)       (44)       14.4
                                         ----      -----        ----
Net sales and income from continuing
operations before income taxes    $       312  $     336        (7.3)%
                                         ====       ====        ====

                                          Nine Months Ended
                                                 Sales
                                          -----------------
                                     March 31,   April 1,    Percent
                                         2001       2000      Change
                                     --------    -------     -------
Food and Beverage:
Sara Lee Foods                    $     3,834  $   3,797         1.0%
Beverage                                2,215      2,113         4.9
Household Products                      1,505      1,563        (3.7)
Intimates and Underwear                 6,042      5,688         6.2
                                        -----      -----         ---
Total sales and operating
companies income                       13,596     13,161         3.3
Intersegment sales                        (76)      (113)       32.5
Amortization of goodwill and trademarks    --         --          --
General corporate expenses                 --         --          --
                                       ------     ------       -----
Total net sales and operating income   13,520     13,048         3.6
Net interest expense                       --         --          --
                                       ------     ------       -----
Net sales and income from
continuing operations
before income taxes               $    13,520  $  13,048         3.6%
                                       ======     ======       =====

                                             Operating Income
                                             ----------------
                                     March 31,   April 1,    Percent
                                         2001       2000      Change
                                     --------    -------     -------
Food and Beverage:
Sara Lee Foods                      $     150    $   297       (49.7)%
Beverage                                  363        357         1.7
Household Products                        229        243        (5.8)
Intimates and Underwear                   536        618       (13.2)
                                       ------     ------      ------
Total sales and operating
companies income                        1,278      1,515       (15.7)
Intersegment sales                         --         --          --
Amortization of goodwill and trademarks  (142)      (127)      (11.9)
General corporate expenses               (146)       (97)      (49.4)
                                        -----      -----       -----
Total net sales and operating income      990      1,291       (23.3)
Net interest expense                     (149)      (120)      (25.0)
                                        -----      -----       -----
Net sales and income from continuing
operations before income taxes     $      841    $ 1,171       (28.2)%
                                        =====      =====       =====

    See accompanying notes to financial statements for information
regarding the unusual items.

                                       Sara Lee Corporation (NYSE)

Consolidated Balance Sheets
(in millions)

                                      March 31,    July 1,    April 1,
                                        2001        2000        2000
                                     ---------- ----------  ----------
ASSETS
Cash and equivalents                  $    606   $    314    $    298
Trade accounts receivable                1,691      1,764       1,731
Inventories                              2,716      2,951       2,781
Other current assets                       305        382         303
Net assets of businesses held for sale     352        563         331
                                      ---------  ---------   ---------
  Total current assets                   5,670      5,974       5,444

Trademarks and other assets                660        697         656
Property, net                            2,100      2,319       2,330
Intangible assets, net                   2,544      2,621       2,757
                                      ---------  ---------   ---------
                                      $ 10,974   $ 11,611    $ 11,187
                                      =========  =========   =========

LIABILITIES AND EQUITY
Notes payable                         $    486   $  2,054    $  1,621
Accounts payable                         1,330      1,762       1,425
Accrued liabilities                      2,667      2,562       2,617
Current maturities of long-term debt       459        381         381
                                      ---------  ---------   ---------
  Total current liabilities              4,942      6,759       6,044

Long-term debt                           2,753      2,248       2,163
Deferred income taxes                      475        148         160
Other liabilities                          541        581         723
Minority interest in subsidiaries          658        616         622
Preferred stock                             22         25          29
Common stockholders' equity              1,583      1,234       1,446
                                      ---------  ---------   ---------
                                      $ 10,974   $ 11,611    $ 11,187
                                      =========  =========   =========

Notes To Financial Statements

1.  In the second quarter of fiscal 2001, the Corporation's management
    approved a plan to dispose of certain non-core businesses and exit
    a number of defined business activities. As a result of these
    decisions, the Corporation recognized a $344 million pretax charge
    - $233 million of this amount related to anticipated losses on the
    disposition of businesses and $111 million of the charge was the
    estimated cost of defined exit activities.

    In the third quarter of fiscal 2001, the Corporation completed the
    disposition of three businesses which were part of the Sara Lee
    Foods business segment. These transactions resulted in a pretax
    gain of $19 million and a $2 million reduction in the $233 million
    estimate provided in the second quarter of this fiscal year for
    anticipated losses on the planned disposition of businesses. The
    Corporation also provided $11 million for the cost of additional
    exit activities which were approved by management in the third
    quarter, and recorded a $2 million reduction in the estimated cost
    of certain severance and lease termination obligations which were
    provided as part of the $111 million second quarter restructuring
    charge. These business dispositions and restructuring actions
    resulted in an increase of $21 million in operating income in the
    Sara Lee Foods business segment in the quarter, and a reduction in
    operating income in the Intimates and Underwear and Household
    Products segments of $8 million and $1 million, respectively. Net
    income was increased by $5 million, or $.01 per diluted share in
    the quarter.

    On a year to date basis, the following charges are included in
    operating income of the Corporation's business segments: Intimates
    and Underwear - $218 million; Sara Lee Foods - $109 million;
    Household Products - $3 million; and Beverage - $2 million. The
    charges reduced net income for the nine months ended March 31,
    2001 by $312 million, or $.36 per diluted share.

2.  In the second quarter of fiscal 2001, the Corporation's Coach
    subsidiary, which is part of the Intimates and Underwear business
    segment, completed an initial public offering of 19.5% of its
    common stock resulting in a gain of $105 million. The gain
    increased income from continuing operations before income taxes by
    $105 million and increased diluted earnings per share by $.12 in
    the nine months ended March 31, 2001.

    In January 2001, the Corporation announced its intention to enter
    into a transaction in which it would offer to exchange its
    remaining 80.5% ownership interest in Coach for shares of Sara Lee
    common stock. This transaction was completed on April 4, 2001, and
    resulted in the Corporation exchanging the 35,026,333 Coach shares
    for 41,402,285 shares of Sara Lee common stock. The Corporation
    will recognize a material gain in the fourth quarter of fiscal
    2001 and reduce the number of outstanding common shares by 41
    million as a result of this transaction.

3.  In December 2000, the Corporation completed the sale of its
    PYA/Monarch foodservice distribution business. The operating
    results of this business segment have been treated as a
    discontinued operation in the accompanying financial statements.
    The Corporation received cash proceeds from the sale of $1,559
    million and recognized an after-tax gain of $638 million. The
    impact on diluted earnings per share was $.73 in the nine months
    ended March 31, 2001.