þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended | ||
or | ||
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
PENNSYLVANIA | 25-0542520 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) | |
15222 | ||
Pittsburgh, Pennsylvania | (Zip Code) | |
(Address of principal executive offices) |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $.25 per share | The New York Stock Exchange | |
Third Cumulative Preferred Stock, | ||
$1.70 First Series, par value $10 per share | The New York Stock Exchange |
Large accelerated filer þ | Accelerated filer | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Item 1. | Business. |
Factories | Factories | |||||||||||||||||||
Owned | Leased | Major Owned and Licensed Trademarks | Owned | Leased | Major Owned and Licensed Trademarks | |||||||||||||||
North America | 23 | 4 | Heinz, Classico, Quality Chef Foods, Jack Daniel’s*, Catelli, Wyler’s, Heinz Bell ’Orto, Bella Rossa, Chef Francisco, Dianne’s, Ore-Ida, Tater Tots, Bagel Bites, Weight Watchers* Smart Ones, Boston Market*, Poppers, T.G.I. Friday’s*, Delimex, Truesoups, Alden Merrell, Escalon, PPI, Todd’s, Appetizers And, Inc., Nancy’s, Lea & Perrins, Renee’s Gourmet, HP, Diana, Bravo | 22 | 4 | Heinz, Classico, Quality Chef Foods, Jack Daniel’s*, Catelli, Wyler’s, Heinz Bell ’Orto, Bella Rossa, Chef Francisco, Dianne’s, Ore-Ida, Tater Tots, Bagel Bites, Weight Watchers* Smart Ones, Boston Market*, Poppers, T.G.I. Friday’s*, Delimex, Truesoups, Alden Merrell, Escalon, PPI, Todd’s, Appetizers And, Inc., Nancy’s, Lea & Perrins, Renee’s Gourmet, HP, Diana, Bravo | ||||||||||||||
Europe | 22 | — | Heinz, Orlando, Karvan Cevitam, Brinta, Roosvicee, Venz, Weight Watchers*, Farley’s, Farex, Sonnen Bassermann, Plasmon, Nipiol, Dieterba, Bi-Aglut, Aproten, Pudliszki, Ross, Honig, De Ruijter, Aunt Bessie*, Mum’s Own, Moya Semya, Picador, Derevenskoye, Mechta Hoziajki, Lea & Perrins, HP, Amoy*, Daddies, Squeezme! | 21 | — | Heinz, Orlando, Karvan Cevitam, Brinta, Roosvicee, Venz, Weight Watchers*, Farley’s, Farex, Sonnen Bassermann, Plasmon, Nipiol, Dieterba, Bi-Aglut, Aproten, Pudliszki, Ross, Honig, De Ruijter, Aunt Bessie*, Mum’s Own, Moya Semya, Picador, Derevenskoye, Mechta Hoziajki, Lea & Perrins, HP, Amoy*, Daddies, Squeezme!, Wyko | ||||||||||||||
Asia/Pacific | 14 | 2 | Heinz, Tom Piper, Wattie’s, ABC, Chef, Craig’s, Bruno, Winna, Hellaby, Hamper, Farley’s, Greenseas, Gourmet, Nurture, LongFong, Ore-Ida, SinSin, Lea & Perrins, HP, Star-Kist, Classico, Weight Watchers*, Pataks* | 17 | 2 | Heinz, Tom Piper, Wattie’s, ABC, Chef, Craig’s, Bruno, Winna, Hellaby, Hamper, Farley’s, Greenseas, Gourmet, Nurture, LongFong, Ore-Ida, SinSin, Lea & Perrins, HP, Star-Kist, Classico, Weight Watchers*, Pataks*, Cottee’s*, Rose’s*, Complan, Glucon D, Nycil | ||||||||||||||
Rest of World | 9 | 3 | Heinz, Wellington’s, Complan, Glucon D, Nycil, Today, Mama’s, John West, Farley’s, Dieterba, HP, Lea & Perrins, Classico, Banquete | 5 | 3 | Heinz, Wellington’s, Today, Mama’s, John West, Farley’s, Dieterba, HP, Lea & Perrins, Classico, Banquete | ||||||||||||||
68 | 9 | * Used under license | 65 | 9 | * Used under license | |||||||||||||||
2
3
Positions and Offices Held with the Company and | ||||||
Age (as of | Principal Occupations or | |||||
Name | August 13, 2008) | Employment During Past Five Years | ||||
William R. Johnson | 59 | Chairman, President, and Chief Executive Officer since September 2000. | ||||
Theodore N. Bobby | 57 | Executive Vice President and General Counsel since January 2007; Senior Vice President and General Counsel from April 2005 to January 2007; Acting General Counsel from January 2005 to April 2005; Vice President—Legal Affairs from September 1999 to January 2005. | ||||
Edward J. McMenamin | 51 | Senior Vice President—Finance and Corporate Controller since August 2004; Vice President Finance from June 2001 to August 2004. | ||||
Michael D. Milone | 51 | Senior Vice President-Heinz Pacific, Rest of World and Enterprise Risk Management since May 2006; Senior Vice President—President Rest of World and Asia from May 2005 to May 2006; Senior Vice President—President Rest of World from December 2003 to May 2005; Chief Executive Officer Star-Kist Foods, Inc. from June 2002 to December 2003. | ||||
David C. Moran | 50 | Executive Vice President & Chief Executive Officer and President of Heinz North America since May 2007; Executive Vice President & Chief Executive Officer and President of Heinz North America Consumer Products from November 2005 to May 2007; Senior Vice President—President Heinz North America Consumer Products from May 2005 to November 2005; President North America Consumer Products from January 2003 to May 2005. | ||||
C. Scott O’Hara | 47 | Executive Vice President—President and Chief Executive Officer Heinz Europe since May 2006; Executive Vice President—Asia Pacific/Rest of World from January 2006 to May 2006; Senior Vice President Europe—The Gillette Company from October 2004 to January 2006; General Manager U.K. and NL—The Gillette Company from June 2001 to October 2004. | ||||
D. Edward I. Smyth | 58 | �� | Senior Vice President—Chief Administrative Officer and Corporate and Government Affairs since December 2002 |
4
Positions and Offices Held with the Company and | ||||||
Age (as of | Principal Occupations or | |||||
Name | August 13, 2008) | Employment During Past Five Years | ||||
Christopher J. Warmoth | 49 | Senior Vice President—Heinz Asia since May 2006; Deputy President Heinz Europe from December 2003 to April 2006; Director Business Development and Marketing, Central and Eastern Europe, Eurasia and Middle East Group, The Coca-Cola Company from December 2001 to April 2003. | ||||
Arthur B. Winkleblack | 51 | Executive Vice President and Chief Financial Officer since January 2002. |
Item 1A. | Risk Factors |
5
4
6
5
7
6
• | sales, earnings, and volume growth, | |
• | general economic, political, and industry conditions, including those that could impact consumer spending, | |
• | competitive conditions, which affect, among other things, customer preferences and the pricing of products, production, | |
• | increases in the cost and restrictions on the availability of raw materials including agricultural commodities and packaging materials, the ability to increase product prices in response, and the impact on profitability, | |
• | the ability to identify and anticipate and respond through innovation to consumer trends, | |
• | the need for product recalls, | |
• | the ability to maintain favorable supplier relationships, | |
• | currency valuations and interest rate fluctuations, | |
• | changes in credit ratings, leverage, and economic conditions, and the impact of these factors on our cost of borrowing and access to capital markets, | |
• | the ability to | |
• | the ability to successfully complete cost reduction programs and increase productivity, | |
• | the ability to effectively integrate acquired businesses, new product and packaging innovations, | |
• | product mix, | |
• | the effectiveness of advertising, marketing, and promotional programs, | |
• | supply chain efficiency, | |
• | cash flow initiatives, | |
• | risks inherent in litigation, including tax litigation, |
8
• | the ability to further penetrate and grow in international | |
• | changes in estimates in critical accounting judgments and changes in laws and regulations, including tax laws, | |
• | the success of tax planning strategies, | |
• | the possibility of increased pension expense and contributions and other people-related costs, | |
• | the potential adverse impact of natural disasters, such as flooding and crop failures, |
7
• | the ability to implement new information systems and potential disruptions due to failures in technology systems, | |
• | with regard to dividends, dividends must be declared by the Board of Directors and will be subject to certain legal requirements being met at the time of declaration, as well as anticipated cash needs, and | |
• | other factors as described in “Risk Factors” above. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties. |
Item 3. | Legal Proceedings. |
Item 4. | Submission of Matters to a Vote of Security Holders. |
89
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Maximum | ||||||||||||||||
Total | Total Number of | Number of Shares | ||||||||||||||
Number of | Average | Shares Purchased as | that May Yet Be | |||||||||||||
Shares | Price Paid | Part of Publicly | Purchased Under | |||||||||||||
Period | Purchased | per Share | Announced Programs | the Programs | ||||||||||||
February 1, 2007 — | ||||||||||||||||
February 28, 2007 | 631,500 | $ | 46.73 | — | — | |||||||||||
March 1, 2007 — | ||||||||||||||||
March 28, 2007 | 2,302,400 | 46.04 | — | — | ||||||||||||
March 29, 2007 — | ||||||||||||||||
May 2, 2007 | 2,675,000 | 47.29 | — | — | ||||||||||||
Total | 5,608,900 | $ | 46.71 | — | — | |||||||||||
Maximum | ||||||||||||||||
Total | Total Number of | Number of Shares | ||||||||||||||
Number of | Average | Shares Purchased as | that May Yet Be | |||||||||||||
Shares | Price Paid | Part of Publicly | Purchased Under | |||||||||||||
Period | Purchased | per Share | Announced Programs | the Programs | ||||||||||||
January 31, 2008 — February 27, 2008 | — | $ | — | — | — | |||||||||||
February 28, 2008 — March 26, 2008 | 4,150,000 | 44.48 | — | — | ||||||||||||
March 27, 2008 — April 30, 2008 | 580,000 | 47.14 | — | — | ||||||||||||
Total | 4,730,000 | $ | 44.81 | — | — | |||||||||||
910
Item 6. | Selected Financial Data. |
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||||||||||||||||||||||||
May 2, | May 3, | April 27, | April 28, | April 30, | April 30, | May 2, | May 3, | April 27, | April 28, | |||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | (52 Weeks) | (52 Weeks) | (52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | |||||||||||||||||||||||||||||||
Sales(1) | $ | 9,001,630 | $ | 8,643,438 | $ | 8,103,456 | $ | 7,625,831 | $ | 7,566,800 | $ | 10,070,778 | $ | 9,001,630 | $ | 8,643,438 | $ | 8,103,456 | $ | 7,625,831 | ||||||||||||||||||||
Interest expense(1) | 333,270 | 316,296 | 232,088 | 211,382 | 222,729 | 364,856 | 333,270 | 316,296 | 232,088 | 211,382 | ||||||||||||||||||||||||||||||
Income from continuing operations(1) | 791,602 | 442,761 | 688,004 | 715,451 | 478,303 | 844,925 | 791,602 | 442,761 | 688,004 | 715,451 | ||||||||||||||||||||||||||||||
Income from continuing operations per share — diluted(1) | 2.38 | 1.29 | 1.95 | 2.02 | 1.35 | |||||||||||||||||||||||||||||||||||
Income from continuing operations per share — basic(1) | 2.41 | 1.31 | 1.97 | 2.03 | 1.36 | |||||||||||||||||||||||||||||||||||
Income from continuing operations per share—diluted(1) | 2.63 | 2.38 | 1.29 | 1.95 | 2.02 | |||||||||||||||||||||||||||||||||||
Income from continuing operations per share—basic(1) | 2.67 | 2.41 | 1.31 | 1.97 | 2.03 | |||||||||||||||||||||||||||||||||||
Short-term debt and current portion of long-term debt | 468,243 | 54,969 | 573,269 | 436,450 | 154,786 | 452,708 | 468,243 | 54,969 | 573,269 | 436,450 | ||||||||||||||||||||||||||||||
Long-term debt, exclusive of current portion(2) | 4,413,641 | 4,357,013 | 4,121,984 | 4,537,980 | 4,776,143 | 4,730,946 | 4,413,641 | 4,357,013 | 4,121,984 | 4,537,980 | ||||||||||||||||||||||||||||||
Total assets(3) | 10,033,026 | 9,737,767 | 10,577,718 | 9,877,189 | 9,224,751 | 10,565,043 | 10,033,026 | 9,737,767 | 10,577,718 | 9,877,189 | ||||||||||||||||||||||||||||||
Cash dividends per common share | 1.40 | 1.20 | 1.14 | 1.08 | 1.485 | 1.52 | 1.40 | 1.20 | 1.14 | 1.08 |
(1) | Amounts exclude the operating results related to the Company’s European seafood business andTegel® poultry businesses in New Zealand which were divested in Fiscal 2006 and have been presented as discontinued operations. | |
(2) | Long-term debt, exclusive of current portion, includes $198.3 million, $71.0 million, ($1.4) million, $186.1 million, | |
(3) |
1011
1112
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
• | Net sales grew at a CAGR of 8%, to over | |
• | Operating income grew | |
• | Operating free cash flow in Fiscal 2008 (cash flow from operations of | |
• | EPS grew to |
13
• | Our top 15 brands, which generate nearly 70% of total sales, grew | |
• | ||
• | R&D increased | |
• | Innovation in our emerging markets (Russia, Poland, the Czech Republic, Indonesia, China, India, South Africa, the Middle East and Latin America) drove strong growth, with |
12
• | D&A as a percentage of gross sales was reduced by | |
• | ||
• | The Company divested or closed | |
• | SG&A, excluding marketing, was 17.2% as a percentage of sales in Fiscal 2008, 30 basis points better than target. As a result of productivity gains in SG&A and despite |
• | Increase in the Company’s dividend |
14
• | Decrease in average shares outstanding by | |
• |
• | For Fiscal | |
• | ||
• | The Plan calls for 6% to 7% annual growth in operating income, while increasing the investment in marketing by $60 million to $100 million over the two-year period. Pricing and productivity gains are expected to help offset the 8 to 9% inflation expected in commodities to maintain the current gross profit and operating income margins realized in Fiscal 2008. | |
• | Annualized dividend raised to $1.66 per share, an increase of 9.2%, for Fiscal 2009 and the Company anticipates a dividend payout ratio of around 60% for Fiscal 2010. | |
• | The Company expects operating free cash flow of approximately $1.7 billion over the two-year period, driven by a 2 to 3 day reduction per year in CCC. |
13
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||||||||
May 2, | May 3, | April 27, | April 30, | May 2, | May 3, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | (52 Weeks) | (53 Weeks) | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||
Ketchup and sauces | $ | 3,682,102 | $ | 3,530,346 | $ | 3,234,229 | $ | 4,081,864 | $ | 3,682,102 | $ | 3,530,346 | ||||||||||||
Meals and snacks | 4,026,168 | 3,876,743 | 3,680,920 | 4,521,697 | 4,026,168 | 3,876,743 | ||||||||||||||||||
Infant foods | 929,075 | 863,943 | 855,558 | |||||||||||||||||||||
Infant/Nutrition | 1,089,544 | 929,075 | 863,943 | |||||||||||||||||||||
Other | 364,285 | 372,406 | 332,749 | 377,673 | 364,285 | 372,406 | ||||||||||||||||||
Total | $ | 9,001,630 | $ | 8,643,438 | $ | 8,103,456 | $ | 10,070,778 | $ | 9,001,630 | $ | 8,643,438 | ||||||||||||
15
16
17
18
14
19
15
20
16
17
18
19
21
20
Business or Product Line | Segment | Pre-Tax | After-Tax | Segment | Pre-Tax | After-Tax | ||||||||||||||
(In millions) | (In millions) | |||||||||||||||||||
Loss on sale of Seafood business in Israel | Rest of World | $ | (15.9 | ) | $ | (15.9 | ) | Rest of World | $ | (16 | ) | $ | (16 | ) | ||||||
Impairment charge on Portion Pac Bulk product line | U.S. Foodservice | (21.5 | ) | (13.3 | ) | U.S. Foodservice | (22 | ) | (13 | ) | ||||||||||
Impairment charge on U.K. Frozen and Chilled product lines | Europe | (15.2 | ) | (15.2 | ) | Europe | (15 | ) | (15 | ) | ||||||||||
Impairment charge on European production assets | Europe | (18.7 | ) | (18.7 | ) | Europe | (19 | ) | (19 | ) | ||||||||||
Impairment charge on Noodle product line in Indonesia | Asia/Pacific | (15.8 | ) | (8.5 | ) | Asia/Pacific | (16 | ) | (9 | ) | ||||||||||
Impairment charge on investment in Zimbabwe business | Rest of World | (111.0 | ) | (105.6 | ) | Rest of World | (111 | ) | (106 | ) | ||||||||||
Other | Various | (1.5 | ) | 0.5 | Various | (2 | ) | 1 | ||||||||||||
Total | $ | (199.6 | ) | $ | (176.7 | ) | $ | (200 | ) | $ | (177 | ) | ||||||||
22
21
Fiscal Years Ended May 3, 2006 | Fiscal Year Ended May 3, 2006 | |||||||||||||||||||||||||||||||||||||||
Income from | Per | Income from | Earnings | |||||||||||||||||||||||||||||||||||||
Net | Gross | Operating | Continuing | Share | Net | Gross | Operating | Continuing | Per Share | |||||||||||||||||||||||||||||||
Sales | Profit | Income | Operations | —Diluted | Sales | Profit | Income | Operations | —Diluted | |||||||||||||||||||||||||||||||
(Amounts in millions, except per share amounts) | (Amounts in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||
Reported results from continuing operations | $ | 8,643.4 | $ | 3,093.1 | $ | 1,113.6 | $ | 442.8 | $ | 1.29 | $ | 8,643 | $ | 3,093 | $ | 1,114 | $ | 443 | $ | 1.29 | ||||||||||||||||||||
Separation, downsizing and integration | — | 17.4 | 146.7 | 96.6 | 0.28 | — | 17 | 147 | 97 | 0.28 | ||||||||||||||||||||||||||||||
Net loss on disposals & impairments | — | 74.1 | 89.7 | 48.3 | 0.14 | — | 74 | 90 | 48 | 0.14 | ||||||||||||||||||||||||||||||
Asset impairment charges for cost and equity investments | — | — | — | 105.6 | 0.31 | — | — | — | 106 | 0.31 | ||||||||||||||||||||||||||||||
American Jobs Creation Act | — | — | — | 24.4 | 0.07 | — | — | — | 24 | 0.07 | ||||||||||||||||||||||||||||||
Results from continuing operations excluding special items | $ | 8,643.4 | $ | 3,184.6 | $ | 1,350.0 | $ | 717.7 | $ | 2.10 | $ | 8,643 | $ | 3,185 | $ | 1,350 | $ | 718 | $ | 2.10 | ||||||||||||||||||||
23
24
22
23
25
Less than | More than | Less than | More than | |||||||||||||||||||||||||||||||||||||
1 year | 1-3 years | 3-5 years | 5 years | Total | 1 year | 1-3 years | 3-5 years | 5 years | Total | |||||||||||||||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||||||||||||||||||
Long Term Debt(1) | $ | 538,236 | $ | 1,521,200 | $ | 1,873,122 | $ | 3,259,179 | $ | 7,191,737 | $ | 530,731 | $ | 1,778,224 | $ | 1,641,220 | $ | 3,233,352 | $ | 7,183,527 | ||||||||||||||||||||
Capital Lease Obligations | 10,046 | 19,423 | 54,391 | 33,581 | 117,441 | 10,161 | 19,475 | 48,179 | 32,574 | 110,389 | ||||||||||||||||||||||||||||||
Operating Leases | 67,002 | 108,994 | 71,476 | 188,163 | 435,635 | 68,752 | 106,689 | 87,514 | 190,984 | 453,939 | ||||||||||||||||||||||||||||||
Purchase Obligations | 1,092,699 | 955,771 | 453,787 | 34,394 | 2,536,651 | 1,254,104 | 745,641 | 184,074 | 25,907 | 2,209,726 | ||||||||||||||||||||||||||||||
Other Long Term Liabilities Recorded on the Balance Sheet | 75,615 | 192,621 | 181,990 | 158,947 | 609,173 | 101,928 | 236,512 | 231,383 | 167,033 | 736,856 | ||||||||||||||||||||||||||||||
Total | $ | 1,783,598 | $ | 2,798,009 | $ | 2,634,766 | $ | 3,674,264 | $ | 10,890,637 | $ | 1,965,676 | $ | 2,886,541 | $ | 2,192,370 | $ | 3,649,850 | $ | 10,694,437 | ||||||||||||||||||||
(1) | Amounts include expected cash payments for interest on fixed rate long-term debt. Due to the uncertainty of forecasting expected variable rate interest payments, those amounts are not included in the table. |
24
26
Aggregate Notional Amount | Net Unrealized Gains/(Losses) | Aggregate Notional Amount | Net Unrealized Gains/(Losses) | |||||||||||||||||||||||||||||
May 2, 2007 | May 3, 2006 | May 2, 2007 | May 3, 2006 | April 30, 2008 | May 2, 2007 | April 30, 2008 | May 2, 2007 | |||||||||||||||||||||||||
(Dollars in millions) | (Dollars in millions) | |||||||||||||||||||||||||||||||
Purpose of Hedge: | ||||||||||||||||||||||||||||||||
Intercompany cash flows | $ | 1,010 | $ | 652 | $ | (3.8 | ) | $ | 5.4 | $ | 1,110 | $ | 1,010 | $ | 25 | $ | (4 | ) | ||||||||||||||
Forecasted purchases of raw materials and finished goods and foreign currency denominated obligations | 360 | 346 | (3.2 | ) | (1.3 | ) | 541 | 360 | 6 | (3 | ) | |||||||||||||||||||||
Forecasted sales and foreign currency denominated assets | 136 | 153 | 8.2 | (4.3 | ) | 57 | 136 | — | 8 | |||||||||||||||||||||||
Net investments in foreign operations | 1,964 | 1,855 | (72.9 | ) | (42.2 | ) | — | 1,964 | — | (73 | ) | |||||||||||||||||||||
$ | 3,470 | $ | 3,006 | $ | (71.7 | ) | $ | (42.4 | ) | $ | 1,708 | $ | 3,470 | $ | 31 | $ | (72 | ) | ||||||||||||||
27
25
May 2, 2007 | May 3, 2006 | April 30, 2008 | May 2, 2007 | |||||||||||||
(Dollars in millions) | (Dollars in millions) | |||||||||||||||
Pay floating swaps—notional amount | $ | 2,588.4 | $ | 2,615.4 | $ | 1,642 | $ | 2,588 | ||||||||
Net unrealized gains/(losses) | $ | 71.2 | $ | (1.4 | ) | |||||||||||
Net unrealized gains | $ | 95 | $ | 71 | ||||||||||||
Weighted average maturity (years) | 8.9 | 10.0 | 4 | 9 | ||||||||||||
Weighted average receive rate | 6.37 | % | 6.37 | % | 6.36 | % | 6.37 | % | ||||||||
Weighted average pay rate | 6.35 | % | 5.07 | % | 6.15 | % | 6.35 | % |
Fair Value Effect | Fair Value Effect | |||||||
(Dollars in | (Dollars in | |||||||
millions) | millions) | |||||||
Foreign currency contracts | $ | 329 | $ | 177 | ||||
Interest rate swap contracts | $ | 81 | $ | 21 |
28
26
29
27
30
28
31
100 Basis Point | 100 Basis Point | |||||||||||||||
Increase | Decrease | Increase | Decrease | |||||||||||||
Pension benefits | ||||||||||||||||
Discount rate used in determining projected benefit obligation | $ | (332.2 | ) | $ | 384.8 | $ | (341 | ) | $ | 392 | ||||||
Discount rate used in determining net pension expense | $ | (27.7 | ) | $ | 30.8 | $ | (26 | ) | $ | 29 | ||||||
Long-term rate of return on assets used in determining net pension expense | $ | (27.3 | ) | $ | 27.3 | $ | (29 | ) | $ | 29 | ||||||
Other benefits | ||||||||||||||||
Discount rate used in determining projected benefit obligation | $ | (21.6 | ) | $ | 21.9 | $ | (22 | ) | $ | 22 | ||||||
Discount rate used in determining net benefit expense | $ | (2.8 | ) | $ | 3.2 | $ | (3 | ) | $ | 3 |
29
32
30
Stock Price Range | Stock Price Range | |||||||||||||||
High | Low | High | Low | |||||||||||||
2008 | ||||||||||||||||
First | $ | 48.50 | $ | 42.84 | ||||||||||||
Second | 47.18 | 41.82 | ||||||||||||||
Third | 48.75 | 41.37 | ||||||||||||||
Fourth | 48.25 | 41.60 | ||||||||||||||
2007 | ||||||||||||||||
First | $ | 44.15 | $ | 39.62 | $ | 44.15 | $ | 39.62 | ||||||||
Second | 42.65 | 40.33 | 42.65 | 40.33 | ||||||||||||
Third | 47.16 | 41.78 | 47.16 | 41.78 | ||||||||||||
Fourth | 48.73 | 44.28 | 48.73 | 44.28 | ||||||||||||
2006 | ||||||||||||||||
First | $ | 37.87 | $ | 34.87 | ||||||||||||
Second | 37.42 | 34.01 | ||||||||||||||
Third | 35.97 | 33.42 | ||||||||||||||
Fourth | 42.79 | 33.48 |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
3133
Item 8. | Financial Statements and Supplementary Data. |
3234
3335
34
3536
Fiscal Year Ended | ||||||||||||
April 30, 2008 | May 2, 2007 | May 3, 2006 | ||||||||||
(52 Weeks) | (52 Weeks) | (53 Weeks) | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Sales | $ | 10,070,778 | $ | 9,001,630 | $ | 8,643,438 | ||||||
Cost of products sold | 6,390,086 | 5,608,730 | 5,550,364 | |||||||||
Gross profit | 3,680,692 | 3,392,900 | 3,093,074 | |||||||||
Selling, general and administrative expenses | 2,111,725 | 1,946,185 | 1,979,462 | |||||||||
Operating income | 1,568,967 | 1,446,715 | 1,113,612 | |||||||||
Interest income | 41,519 | 41,869 | 33,190 | |||||||||
Interest expense | 364,856 | 333,270 | 316,296 | |||||||||
Asset impairment charges for cost and equity investments | — | — | 110,994 | |||||||||
Other expense, net | 27,836 | 30,915 | 26,051 | |||||||||
Income from continuing operations before income taxes | 1,217,794 | 1,124,399 | 693,461 | |||||||||
Provision for income taxes | 372,869 | 332,797 | 250,700 | |||||||||
Income from continuing operations | 844,925 | 791,602 | 442,761 | |||||||||
(Loss)/income from discontinued operations, net of tax | — | (5,856 | ) | 202,842 | ||||||||
Net income | $ | 844,925 | $ | 785,746 | $ | 645,603 | ||||||
Income/(Loss) Per Common Share: | ||||||||||||
Diluted | ||||||||||||
Continuing operations | $ | 2.63 | $ | 2.38 | $ | 1.29 | ||||||
Discontinued operations | — | (0.02 | ) | 0.59 | ||||||||
Net Income | $ | 2.63 | $ | 2.36 | $ | 1.89 | ||||||
Average common shares outstanding—Diluted | 321,717 | 332,468 | 342,121 | |||||||||
Basic | ||||||||||||
Continuing operations | $ | 2.67 | $ | 2.41 | $ | 1.31 | ||||||
Discontinued operations | — | (0.02 | ) | 0.60 | ||||||||
Net Income | $ | 2.67 | $ | 2.39 | $ | 1.90 | ||||||
Average common shares outstanding—Basic | 317,019 | 328,625 | 339,102 | |||||||||
Cash dividends per share | $ | 1.52 | $ | 1.40 | $ | 1.20 | ||||||
37
April 30, | May 2, | |||||||
2008 | 2007 | |||||||
(Dollars in thousands) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 617,687 | $ | 652,896 | ||||
Receivables (net of allowances: 2008—$15,687 and 2007—$14,706) | 1,161,481 | 996,852 | ||||||
Inventories: | ||||||||
Finished goods andwork-in-process | 1,100,735 | 943,449 | ||||||
Packaging material and ingredients | 277,481 | 254,508 | ||||||
Total inventories | 1,378,216 | 1,197,957 | ||||||
Prepaid expenses | 139,492 | 132,561 | ||||||
Other current assets | 28,690 | 38,736 | ||||||
Total current assets | 3,325,566 | 3,019,002 | ||||||
Property, plant and equipment: | ||||||||
Land | 56,007 | 51,950 | ||||||
Buildings and leasehold improvements | 842,198 | 788,053 | ||||||
Equipment, furniture and other | 3,502,071 | 3,214,860 | ||||||
4,400,276 | 4,054,863 | |||||||
Less accumulated depreciation | 2,295,563 | 2,056,710 | ||||||
Total property, plant and equipment, net | 2,104,713 | 1,998,153 | ||||||
Other non-current assets: | ||||||||
Goodwill | 2,997,462 | 2,834,639 | ||||||
Trademarks, net | 957,111 | 892,749 | ||||||
Other intangibles, net | 456,948 | 412,484 | ||||||
Other non-current assets | 723,243 | 875,999 | ||||||
Total other non-current assets | 5,134,764 | 5,015,871 | ||||||
Total assets | $ | 10,565,043 | $ | 10,033,026 | ||||
38
Fiscal Year Ended | ||||||||||||
May 2, 2007 | May 3, 2006 | April 27, 2005 | ||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Sales | $ | 9,001,630 | $ | 8,643,438 | $ | 8,103,456 | ||||||
Cost of products sold | 5,608,730 | 5,550,364 | 5,069,926 | |||||||||
Gross profit | 3,392,900 | 3,093,074 | 3,033,530 | |||||||||
Selling, general and administrative expenses | 1,946,185 | 1,979,462 | 1,752,058 | |||||||||
Operating income | 1,446,715 | 1,113,612 | 1,281,472 | |||||||||
Interest income | 41,869 | 33,190 | 26,939 | |||||||||
Interest expense | 333,270 | 316,296 | 232,088 | |||||||||
Asset impairment charges for cost and equity investments | — | 110,994 | 73,842 | |||||||||
Other expense, net | 30,915 | 26,051 | 14,966 | |||||||||
Income from continuing operations before income taxes | 1,124,399 | 693,461 | 987,515 | |||||||||
Provision for income taxes | 332,797 | 250,700 | 299,511 | |||||||||
Income from continuing operations | 791,602 | 442,761 | 688,004 | |||||||||
(Loss)/income from discontinued operations, net of tax | (5,856 | ) | 202,842 | 64,695 | ||||||||
Net income | $ | 785,746 | $ | 645,603 | $ | 752,699 | ||||||
Income/(Loss) Per Common Share: | ||||||||||||
Diluted | ||||||||||||
Continuing operations | $ | 2.38 | $ | 1.29 | $ | 1.95 | ||||||
Discontinued operations | (0.02 | ) | 0.59 | 0.18 | ||||||||
Net Income | $ | 2.36 | $ | 1.89 | $ | 2.13 | ||||||
Average common shares outstanding—Diluted | 332,468 | 342,121 | 353,450 | |||||||||
Basic | ||||||||||||
Continuing operations | $ | 2.41 | $ | 1.31 | $ | 1.97 | ||||||
Discontinued operations | (0.02 | ) | 0.60 | 0.18 | ||||||||
Net Income | $ | 2.39 | $ | 1.90 | $ | 2.15 | ||||||
Average common shares outstanding—Basic | 328,625 | 339,102 | 350,042 | |||||||||
Cash dividends per share | $ | 1.40 | $ | 1.20 | $ | 1.14 | ||||||
36
May 2, | May 3, | |||||||
2007 | 2006 | |||||||
(Dollars in thousands) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 652,896 | $ | 445,427 | ||||
Receivables (net of allowances: 2007—$14,706 and 2006 — $16,988) | 996,852 | 1,002,125 | ||||||
Inventories: | ||||||||
Finished goods andwork-in-process | 943,449 | 817,037 | ||||||
Packing material and ingredients | 254,508 | 256,645 | ||||||
Total inventories | 1,197,957 | 1,073,682 | ||||||
Prepaid expenses | 132,561 | 139,714 | ||||||
Other current assets | 38,736 | 42,987 | ||||||
Total current assets | 3,019,002 | 2,703,935 | ||||||
Property, plant and equipment: | ||||||||
Land | 51,950 | 55,167 | ||||||
Buildings and leasehold improvements | 788,053 | 762,735 | ||||||
Equipment, furniture and other | 3,214,860 | 2,946,574 | ||||||
4,054,863 | 3,764,476 | |||||||
Less accumulated depreciation | 2,056,710 | 1,863,919 | ||||||
Total property, plant and equipment, net | 1,998,153 | 1,900,557 | ||||||
Other non-current assets: | ||||||||
Goodwill | 2,834,639 | 2,822,567 | ||||||
Trademarks, net | 892,749 | 776,857 | ||||||
Other intangibles, net | 412,484 | 269,564 | ||||||
Other non-current assets | 875,999 | 1,264,287 | ||||||
Total other non-current assets | 5,015,871 | 5,133,275 | ||||||
Total assets | $ | 10,033,026 | $ | 9,737,767 | ||||
37
May 2, | May 3, | April 30, | May 2, | |||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Short-term debt | $ | 165,054 | $ | 54,052 | $ | 124,290 | $ | 165,054 | ||||||||
Portion of long-term debt due within one year | 303,189 | 917 | 328,418 | 303,189 | ||||||||||||
Accounts payable | 1,181,078 | 1,035,084 | 1,247,479 | 1,181,078 | ||||||||||||
Salaries and wages | 85,818 | 84,815 | 92,553 | 85,818 | ||||||||||||
Accrued marketing | 262,217 | 216,267 | 298,342 | 262,217 | ||||||||||||
Other accrued liabilities | 414,130 | 476,683 | 487,656 | 414,130 | ||||||||||||
Income taxes | 93,620 | 150,413 | 91,322 | 93,620 | ||||||||||||
Total current liabilities | 2,505,106 | 2,018,231 | 2,670,060 | 2,505,106 | ||||||||||||
Long-term debt and other liabilities: | ||||||||||||||||
Long-term debt | 4,413,641 | 4,357,013 | 4,730,946 | 4,413,641 | ||||||||||||
Deferred income taxes | 463,666 | 518,724 | 409,186 | 463,666 | ||||||||||||
Non-pension postretirement benefits | 253,117 | 207,840 | ||||||||||||||
Non-pension post-retirement benefits | 257,051 | 253,117 | ||||||||||||||
Minority interest | 98,309 | 120,152 | 65,727 | 98,309 | ||||||||||||
Other liabilities | 457,504 | 466,984 | 544,253 | 457,504 | ||||||||||||
Total long-term debt and other liabilities | 5,686,237 | 5,670,713 | 6,007,163 | 5,686,237 | ||||||||||||
Shareholders’ equity: | ||||||||||||||||
Capital stock: | ||||||||||||||||
Third cumulative preferred, $1.70 first series, $10 par value* | 77 | 82 | 72 | 77 | ||||||||||||
Common stock, 431,096,486 shares issued, $0.25 par value | 107,774 | 107,774 | 107,774 | 107,774 | ||||||||||||
107,851 | 107,856 | 107,846 | 107,851 | |||||||||||||
Additional capital | 580,606 | 502,235 | 617,811 | 580,606 | ||||||||||||
Retained earnings | 5,778,617 | 5,454,108 | 6,129,008 | 5,778,617 | ||||||||||||
6,467,074 | 6,064,199 | 6,854,665 | 6,467,074 | |||||||||||||
Less: | ||||||||||||||||
Treasury shares, at cost (109,317,154 shares at May 2, 2007 and 100,339,405 shares at May 3, 2006) | 4,406,126 | 3,852,220 | ||||||||||||||
Unearned compensation | — | 32,773 | ||||||||||||||
Treasury shares, at cost (119,628,499 shares at April 30, 2008 and 109,317,154 shares at May 2, 2007) | 4,905,755 | 4,406,126 | ||||||||||||||
Accumulated other comprehensive loss | 219,265 | 130,383 | 61,090 | 219,265 | ||||||||||||
Total shareholders’ equity | 1,841,683 | 2,048,823 | 1,887,820 | 1,841,683 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 10,033,026 | $ | 9,737,767 | $ | 10,565,043 | $ | 10,033,026 | ||||||||
* | The preferred stock outstanding is convertible at a rate of one share of preferred stock into 15 shares of common stock. The Company can redeem the stock at $28.50 per share. As of |
3839
May 2, 2007 | May 3, 2006 | April 27, 2005 | April 30, 2008 | May 2, 2007 | May 3, 2006 | |||||||||||||||||||||||||||||||||||||||||||
Shares | Dollars | Shares | Dollars | Shares | Dollars | Shares | Dollars | Shares | Dollars | Shares | Dollars | |||||||||||||||||||||||||||||||||||||
(Amounts in thousands, expect per share amounts) | (Amounts in thousands, expect per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
PREFERRED STOCK | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | 8 | $ | 82 | 9 | $ | 83 | 10 | $ | 94 | 8 | $ | 77 | 8 | $ | 82 | 9 | $ | 83 | ||||||||||||||||||||||||||||||
Conversion of preferred into common stock | — | (5 | ) | (1 | ) | (1 | ) | (1 | ) | (11 | ) | (1 | ) | (5 | ) | — | (5 | ) | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at end of year | 8 | 77 | 8 | 82 | 9 | 83 | 7 | 72 | 8 | 77 | 8 | 82 | ||||||||||||||||||||||||||||||||||||
Authorized shares- May 2, 2007 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||
Authorized shares- April 30, 2008 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||
COMMON STOCK | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | ||||||||||||||||||||||||||||||||||||
Balance at end of year | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | 431,096 | 107,774 | ||||||||||||||||||||||||||||||||||||
Authorized shares- May 2, 2007 | 600,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Authorized shares- April 30, 2008 | 600,000 | |||||||||||||||||||||||||||||||||||||||||||||||
ADDITIONAL CAPITAL | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | 502,235 | 430,073 | 403,043 | 580,606 | 502,235 | 430,073 | ||||||||||||||||||||||||||||||||||||||||||
Conversion of preferred into common stock | (191 | ) | (32 | ) | (350 | ) | (219 | ) | (191 | ) | (32 | ) | ||||||||||||||||||||||||||||||||||||
Stock options exercised, net of shares tendered for payment | 79,735 | † | 46,861 | † | 27,030 | † | 20,920 | † | 79,735† | 46,861† | ||||||||||||||||||||||||||||||||||||||
Stock option expense | 11,987 | — | — | 8,919 | 11,987 | — | ||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit activity | 16,000 | 21,958 | (7,051 | ) | 4,961 | 16,000 | 21,958 | |||||||||||||||||||||||||||||||||||||||||
Transfer of unearned compensation balance per SFAS No. 123R | (32,773 | ) | — | — | — | (32,773 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Initial adoption of FIN 48 | (1,719 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other, net* | 3,613 | 3,375 | 7,401 | 4,343 | 3,613 | 3,375 | ||||||||||||||||||||||||||||||||||||||||||
Balance at end of year | 580,606 | 502,235 | 430,073 | 617,811 | 580,606 | 502,235 | ||||||||||||||||||||||||||||||||||||||||||
RETAINED EARNINGS | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | 5,454,108 | 5,210,748 | 4,856,918 | 5,778,617 | 5,454,108 | 5,210,748 | ||||||||||||||||||||||||||||||||||||||||||
Net income | 785,746 | 645,603 | 752,699 | 844,925 | 785,746 | 645,603 | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends: | ||||||||||||||||||||||||||||||||||||||||||||||||
Preferred (per share $1.70 per share in 2007, 2006 and 2005) | (13 | ) | (14 | ) | (15 | ) | ||||||||||||||||||||||||||||||||||||||||||
Common (per share $1.40, $1.20, and $1.14 in 2007, 2006, and 2005 respectively) | (461,224 | ) | (408,137 | ) | (398,854 | ) | ||||||||||||||||||||||||||||||||||||||||||
Preferred (per share $1.70 per share in 2008, 2007, and 2006) | (12 | ) | (13 | ) | (14 | ) | ||||||||||||||||||||||||||||||||||||||||||
Common (per share $1.52, $1.40, and $1.20 in 2008, 2007, and 2006, respectively) | (485,234 | ) | (461,224 | ) | (408,137 | ) | ||||||||||||||||||||||||||||||||||||||||||
Initial adoption of FIN 48 | (9,288 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Other, net* | — | 5,908 | — | — | — | 5,908 | ||||||||||||||||||||||||||||||||||||||||||
Balance at end of year | 5,778,617 | 5,454,108 | 5,210,748 | 6,129,008 | 5,778,617 | 5,454,108 | ||||||||||||||||||||||||||||||||||||||||||
TREASURY STOCK | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | (100,339 | ) | (3,852,220 | ) | (83,419 | ) | (3,140,586 | ) | (79,139 | ) | (2,927,839 | ) | (109,317 | ) | (4,406,126 | ) | (100,339 | ) | (3,852,220 | ) | (83,419 | ) | (3,140,586 | ) | ||||||||||||||||||||||||
Shares reacquired | (16,651 | ) | (760,686 | ) | (21,925 | ) | (823,370 | ) | (7,825 | ) | (291,348 | ) | (13,054 | ) | (580,707 | ) | (16,651 | ) | (760,686 | ) | (21,925 | ) | (823,370 | ) | ||||||||||||||||||||||||
Conversion of preferred into common stock | 7 | 195 | 1 | 33 | 16 | 361 | 8 | 224 | 7 | 195 | 1 | 33 | ||||||||||||||||||||||||||||||||||||
Stock options exercised, net of shares tendered for payment | 7,265 | 195,117 | 4,575 | 101,945 | 2,845 | 62,669 | 2,116 | 62,486 | 7,265 | 195,117 | 4,575 | 101,945 | ||||||||||||||||||||||||||||||||||||
Restricted stock unit activity | 96 | 2,438 | 58 | 1,303 | 251 | 5,724 | 289 | 8,591 | 96 | 2,438 | 58 | 1,303 | ||||||||||||||||||||||||||||||||||||
Other, net* | 305 | 9,030 | 371 | 8,455 | 433 | 9,847 | 330 | 9,777 | 305 | 9,030 | 371 | 8,455 | ||||||||||||||||||||||||||||||||||||
Balance at end of year | (109,317 | ) | (4,406,126 | ) | (100,339 | ) | (3,852,220 | ) | (83,419 | ) | (3,140,586 | ) | (119,628 | ) | (4,905,755 | ) | (109,317 | ) | (4,406,126 | ) | (100,339 | ) | (3,852,220 | ) | ||||||||||||||||||||||||
UNEARNED COMPENSATION | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | (32,773 | ) | (31,141 | ) | (32,275 | ) | — | (32,773 | ) | (31,141 | ) | |||||||||||||||||||||||||||||||||||||
Restricted stock unit activity | — | (2,195 | ) | 2,123 | — | — | (2,195 | ) | ||||||||||||||||||||||||||||||||||||||||
Transfer of balance to additional capital per SFAS No. 123R | 32,773 | — | — | — | 32,773 | — | ||||||||||||||||||||||||||||||||||||||||||
Other, net* | — | 563 | (989 | ) | — | — | 563 | |||||||||||||||||||||||||||||||||||||||||
Balance at end of year | — | (32,773 | ) | (31,141 | ) | — | — | (32,773 | ) | |||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME/(LOSS) | ||||||||||||||||||||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE (LOSS)/INCOME | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | (130,383 | ) | 25,622 | (513,526 | ) | (219,265 | ) | (130,383 | ) | 25,622 | ||||||||||||||||||||||||||||||||||||||
Minimum pension liability (net of $4,167 tax expense, $3,306 tax benefit, and $116,117 tax expense in 2007, 2006 and 2005 respectively) | 8,041 | (8,583 | ) | 273,934 | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized translation adjustments (net of $29,635 tax benefit, $11,912 tax benefit, and $32,768 tax expense in 2007, 2006 and 2005 respectively) | 293,673 | (147,746 | ) | 263,585 | ||||||||||||||||||||||||||||||||||||||||||||
Net change in fair value of cash flow hedges (net of $4,423 tax expense in 2007) | (3,401 | ) | 8,236 | 23,754 | ||||||||||||||||||||||||||||||||||||||||||||
Net hedging losses/(gains) reclassified into earnings (net of $6,163 tax benefit, $5,915 tax expense, and $14,556 tax expense in 2007, 2006 and 2005 respectively) | 11,239 | (7,912 | ) | (22,125 | ) | |||||||||||||||||||||||||||||||||||||||||||
Net pension and post-retirement benefit losses (net of $75,407 tax benefit in 2008) | (155,989 | ) | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of net pension and post-retirement benefit losses to net income (net of $14,159 tax benefit in 2008) | 27,787 | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Minimum pension liability (net of $4,167 tax expense and $3,306 tax benefit in 2007 and 2006, respectively) | — | 8,041 | (8,583 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Unrealized translation adjustments (net of $25,823 tax expense, $29,635 tax benefit, and $11,912 tax benefit in 2008, 2007 and 2006, respectively) | 281,090 | 293,673 | (147,746 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Net change in fair value of cash flow hedges (net of $7,527 tax expense and $4,423 tax benefit in 2008 and 2007, respectively) | 16,273 | (3,401 | ) | 8,236 | ||||||||||||||||||||||||||||||||||||||||||||
Net hedging (gains)/losses reclassified into earnings (net of $7,287 tax expense, $6,163 tax benefit, and $5,915 tax expense in 2008, 2007, and 2006, respectively) | (10,986 | ) | 11,239 | (7,912 | ) | |||||||||||||||||||||||||||||||||||||||||||
Net other comprehensive income adjustments | 309,552 | (156,005 | ) | 539,148 | ||||||||||||||||||||||||||||||||||||||||||||
Net other comprehensive income/(loss) adjustments | 158,175 | 309,552 | (156,005 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Initial adoption of SFAS No. 158, net of $182,530 tax benefit | (398,434 | ) | — | — | — | (398,434 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Balance at end of year | (219,265 | )†† | (130,383 | ) | 25,622 | (61,090 | )†† | (219,265 | ) | (130,383 | ) | |||||||||||||||||||||||||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | $ | 1,841,683 | $ | 2,048,823 | $ | 2,602,573 | $ | 1,887,820 | $ | 1,841,683 | $ | 2,048,823 | ||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 785,746 | $ | 645,603 | $ | 752,699 | $ | 844,925 | $ | 785,746 | $ | 645,603 | ||||||||||||||||||||||||||||||||||||
Net other comprehensive income adjustments | 309,552 | (156,005 | ) | 539,148 | ||||||||||||||||||||||||||||||||||||||||||||
Net other comprehensive income/(loss) adjustments | 158,175 | 309,552 | (156,005 | ) | ||||||||||||||||||||||||||||||||||||||||||||
TOTAL COMPREHENSIVE INCOME | $ | 1,095,298 | $ | 489,598 | $ | 1,291,847 | $ | 1,003,100 | $ | 1,095,298 | $ | 489,598 | ||||||||||||||||||||||||||||||||||||
* | Includes activity of the Global Stock Purchase Plan. Retained Earnings in Fiscal 2006 reflects the final settlement associated with businesses spun-off to Del Monte in Fiscal 2003. | |
† | Includes income tax benefit resulting from exercised stock options. | |
†† | Comprised of unrealized translation adjustment of |
3940
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||||||||
May 2, | May 3, | April 27, | April 30, | May 2, | May 3, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | (52 Weeks) | (53 Weeks) | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||
Operating activities: | ||||||||||||||||||||||||
Net income | $ | 785,746 | $ | 645,603 | $ | 752,699 | $ | 844,925 | $ | 785,746 | $ | 645,603 | ||||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation | 233,374 | 227,454 | 227,187 | 250,826 | 233,374 | 227,454 | ||||||||||||||||||
Amortization | 32,823 | 36,384 | 25,265 | 38,071 | 32,823 | 36,384 | ||||||||||||||||||
Deferred tax provision/(benefit) | 52,244 | (57,693 | ) | 53,857 | 18,543 | 52,244 | (57,693 | ) | ||||||||||||||||
(Gains)/losses on disposals and impairment charges | (1,391 | ) | 48,023 | 100,818 | (15,706 | ) | (1,391 | ) | 48,023 | |||||||||||||||
Other items, net | 11,066 | 39,066 | 43,989 | 22,343 | 11,066 | 39,066 | ||||||||||||||||||
Changes in current assets and liabilities, excluding effects of acquisitions and divestitures: | ||||||||||||||||||||||||
Receivables | 10,987 | 115,583 | 45,851 | (55,832 | ) | 10,987 | 115,583 | |||||||||||||||||
Inventories | (82,534 | ) | (47,401 | ) | (25,315 | ) | (133,600 | ) | (82,534 | ) | (47,401 | ) | ||||||||||||
Prepaid expenses and other current assets | 14,208 | 13,555 | 2,633 | 5,748 | 14,208 | 13,555 | ||||||||||||||||||
Accounts payable | 56,524 | 56,545 | 8,140 | 89,160 | 56,524 | 56,545 | ||||||||||||||||||
Accrued liabilities | (4,489 | ) | 57,353 | 25,077 | 28,259 | (4,489 | ) | 57,353 | ||||||||||||||||
Income taxes | (46,270 | ) | (59,511 | ) | (99,408 | ) | 95,566 | (46,270 | ) | (59,511 | ) | |||||||||||||
Cash provided by operating activities | 1,062,288 | 1,074,961 | 1,160,793 | 1,188,303 | 1,062,288 | 1,074,961 | ||||||||||||||||||
Investing activities: | ||||||||||||||||||||||||
Capital expenditures | (244,562 | ) | (230,577 | ) | (240,671 | ) | (301,588 | ) | (244,562 | ) | (230,577 | ) | ||||||||||||
Proceeds from disposals of property, plant and equipment | 60,661 | 19,373 | 22,252 | 8,531 | 60,661 | 19,373 | ||||||||||||||||||
Acquisitions, net of cash acquired | (88,996 | ) | (1,100,436 | ) | (126,549 | ) | (151,604 | ) | (88,996 | ) | (1,100,436 | ) | ||||||||||||
Net (payments)/proceeds related to divestitures | (4,144 | ) | 856,729 | 51,150 | ||||||||||||||||||||
Purchases of short-term investments | — | — | (293,475 | ) | ||||||||||||||||||||
Sales of short-term investments | — | — | 333,475 | |||||||||||||||||||||
Net proceeds/(payments) related to divestitures | 63,481 | (4,144 | ) | 856,729 | ||||||||||||||||||||
Termination of net investment hedges | (93,153 | ) | — | — | ||||||||||||||||||||
Other items, net | (49,203 | ) | 3,094 | (10,236 | ) | (79,894 | ) | (49,203 | ) | 3,094 | ||||||||||||||
Cash used for investing activities | (326,244 | ) | (451,817 | ) | (264,054 | ) | (554,227 | ) | (326,244 | ) | (451,817 | ) | ||||||||||||
Financing activities: | ||||||||||||||||||||||||
Payments on long-term debt | (52,069 | ) | (727,772 | ) | (480,471 | ) | (368,214 | ) | (52,069 | ) | (727,772 | ) | ||||||||||||
Proceeds from long-term debt | — | 230,790 | — | — | — | 230,790 | ||||||||||||||||||
Net proceeds from commercial paper and short-term debt | 384,055 | 298,525 | 26,468 | 483,730 | 384,055 | 298,525 | ||||||||||||||||||
Dividends | (461,237 | ) | (408,151 | ) | (398,869 | ) | (485,246 | ) | (461,237 | ) | (408,151 | ) | ||||||||||||
Purchase of treasury stock | (760,686 | ) | (823,370 | ) | (291,348 | ) | ||||||||||||||||||
Purchases of treasury stock | (580,707 | ) | (760,686 | ) | (823,370 | ) | ||||||||||||||||||
Exercise of stock options | 259,816 | 142,046 | 79,383 | 78,596 | 259,816 | 142,046 | ||||||||||||||||||
Termination of interest rate swaps | 103,522 | — | — | |||||||||||||||||||||
Other items, net | 9,212 | 18,507 | 13,952 | 10,224 | 9,212 | 18,507 | ||||||||||||||||||
Cash used for financing activities | (620,909 | ) | (1,269,425 | ) | (1,050,885 | ) | (758,095 | ) | (620,909 | ) | (1,269,425 | ) | ||||||||||||
Cash provided by operating activities of discontinued operations spun-off to Del Monte | 33,511 | 13,312 | 28,196 | — | 33,511 | 13,312 | ||||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 58,823 | (5,353 | ) | 69,660 | 88,810 | 58,823 | (5,353 | ) | ||||||||||||||||
Net increase/(decrease) in cash and cash equivalents | 207,469 | (638,322 | ) | (56,290 | ) | |||||||||||||||||||
Net (decrease)/increase in cash and cash equivalents | (35,209 | ) | 207,469 | (638,322 | ) | |||||||||||||||||||
Cash and cash equivalents at beginning of year | 445,427 | 1,083,749 | 1,140,039 | 652,896 | 445,427 | 1,083,749 | ||||||||||||||||||
Cash and cash equivalents at end of year | $ | 652,896 | $ | 445,427 | $ | 1,083,749 | $ | 617,687 | $ | 652,896 | $ | 445,427 | ||||||||||||
4041
1. | Significant Accounting Policies |
4142
42
43
4344
Fiscal Year Ended | Fiscal Year Ended | |||||||||||
May 3, | April 27, | May 3, | ||||||||||
2006 | 2005 | 2006 | ||||||||||
(53 Weeks) | (52 Weeks) | (53 Weeks) | ||||||||||
(In thousands, | (In thousands, | |||||||||||
except per share amounts) | except per share amounts) | |||||||||||
Income from continuing operations: | ||||||||||||
As reported | $ | 442,761 | $ | 688,004 | $ | 442,761 | ||||||
Fair value-based expense, net of tax | 12,333 | 17,846 | 12,333 | |||||||||
Pro forma | $ | 430,428 | $ | 670,158 | $ | 430,428 | ||||||
Income per common share from continuing operations: | ||||||||||||
Diluted | ||||||||||||
As reported | $ | 1.29 | $ | 1.95 | $ | 1.29 | ||||||
Pro forma | $ | 1.26 | $ | 1.90 | $ | 1.26 | ||||||
Basic | ||||||||||||
As reported | $ | 1.31 | $ | 1.97 | $ | 1.31 | ||||||
Pro forma | $ | 1.27 | $ | 1.91 | $ | 1.27 |
4445
Before Application | After Application | |||||||||||
of SFAS No. 158 | Adjustments | of SFAS No. 158 | ||||||||||
(Dollars in thousands) | ||||||||||||
Total other non-current assets | $ | 5,521,506 | $ | (505,635 | ) | $ | 5,015,871 | |||||
Total assets | $ | 10,538,661 | $ | (505,635 | ) | $ | 10,033,026 | |||||
Total current liabilities | $ | 2,494,871 | $ | 10,235 | $ | 2,505,106 | ||||||
Deferred income taxes | $ | 646,196 | $ | (182,530 | ) | $ | 463,666 | |||||
Other liabilities | $ | 392,410 | $ | 65,094 | $ | 457,504 | ||||||
Total long-term debt and other liabilities | $ | 5,803,673 | $ | (117,436 | ) | $ | 5,686,237 | |||||
Accumulated other comprehensive income/(loss) | $ | 179,169 | $ | (398,434 | ) | $ | (219,265 | ) | ||||
Total shareholders’ equity | $ | 2,240,117 | $ | (398,434 | ) | $ | 1,841,683 | |||||
Total liabilities and shareholders’ equity | $ | 10,538,661 | $ | (505,635 | ) | $ | 10,033,026 |
2. | Recently Issued Accounting Standards |
46
3. | Discontinued Operations |
45
4. | Fiscal 2006 Transformation Costs |
Business or Product Line | Segment | Pre-Tax | After-Tax | |||||||
(In millions) | ||||||||||
Loss on sale of Seafood business in Israel | Rest of World | $ | (15.9 | ) | $ | (15.9 | ) | |||
Impairment charge on Portion Pac Bulk product line | U.S. Foodservice | (21.5 | ) | (13.3 | ) | |||||
Impairment charge on U.K. Frozen and Chilled product lines | Europe | (15.2 | ) | (15.2 | ) | |||||
Impairment charge on European production assets | Europe | (18.7 | ) | (18.7 | ) | |||||
Impairment charge on Noodle product line in Indonesia | Asia/Pacific | (15.8 | ) | (8.5 | ) | |||||
Impairment charge on investment in Zimbabwe business | Rest of World | (111.0 | ) | (105.6 | ) | |||||
Other | Various | (1.5 | ) | 0.5 | ||||||
Total | $ | (199.6 | ) | $ | (176.7 | ) | ||||
4647
Business or Product Line | Segment | Pre-Tax | After-Tax | |||||||
(In millions) | ||||||||||
Loss on sale of Seafood business in Israel | Rest of World | $ | (15.9 | ) | �� | $ | (15.9 | ) | ||
Impairment charge on Portion Pac Bulk product line | U.S. Foodservice | (21.5 | ) | (13.3 | ) | |||||
Impairment charge on U.K. Frozen and Chilled product lines | Europe | (15.2 | ) | (15.2 | ) | |||||
Impairment charge on European production assets | Europe | (18.7 | ) | (18.7 | ) | |||||
Impairment charge on Noodle product line in Indonesia | Asia/Pacific | (15.8 | ) | (8.5 | ) | |||||
Impairment charge on investment in Zimbabwe business | Rest of World | (111.0 | ) | (105.6 | ) | |||||
Other | Various | (1.5 | ) | 0.5 | ||||||
Total | $ | (199.6 | ) | $ | (176.7 | ) | ||||
5. | Acquisitions |
48
• | In August 2005, the Company acquired HP Foods Limited, HP Foods Holdings Limited, and HP Foods International Limited (collectively referred to as “HPF”) for a purchase price of approximately $877 million. HPF is a manufacturer and marketer of sauces which are primarily sold in the United Kingdom, the United States, and Canada. The Company acquired HPF’s brands includingHP®andLea & |
47
acquisition, concluding that the acquisition may not be expected to result in a substantial lessening of competition within the markets for tomato ketchup, brown sauce, barbeque sauce, canned baked beans and canned pasta in the United Kingdom. |
• | On April 28, 2005, the Company acquired a controlling interest in Petrosoyuz, a leading Russian maker of ketchup, condiments and sauces. Petrosoyuz’s business includes brands such asPikador®,Derevenskoye®,Mechta Hoziajki®andMoya Sem’ya®. | |
• | In July 2005, the Company acquired Nancy’s Specialty Foods, Inc., which produces premium appetizers, quiche entrees and desserts in the United States and Canada. | |
• | In March 2006, the Company acquired Kabobs, Inc., which produces premium hors d’oeuvres in the United States. |
49
6. | Goodwill and Other Intangible Assets |
North | North | |||||||||||||||||||||||||||||||||||||||||||||||
American | Rest | American | Rest | |||||||||||||||||||||||||||||||||||||||||||||
Consumer | U.S. | Asia/ | of | Consumer | Asia/ | U.S. | of | |||||||||||||||||||||||||||||||||||||||||
Products | Foodservice | Europe | Pacific | World | Total | Products | Europe | Pacific | Foodservice | World | Total | |||||||||||||||||||||||||||||||||||||
(Thousands of dollars) | (Thousands of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at May 3, 2006 | $ | 1,067,727 | $ | 278,039 | $ | 1,265,469 | $ | 195,206 | $ | 16,126 | $ | 2,822,567 | ||||||||||||||||||||||||||||||||||||
Balance at May 2, 2007 | $ | 1,081,673 | $ | 1,259,514 | $ | 214,964 | $ | 262,823 | $ | 15,665 | $ | 2,834,639 | ||||||||||||||||||||||||||||||||||||
Acquisitions | 35,694 | — | 1,209 | 414 | — | 37,317 | — | 15,259 | 47,603 | — | — | 62,862 | ||||||||||||||||||||||||||||||||||||
Purchase accounting adjustments | (21,706 | ) | (15,216 | ) | (103,144 | ) | — | 633 | (139,433 | ) | 2,820 | (2,155 | ) | — | — | — | 665 | |||||||||||||||||||||||||||||||
Disposals | — | — | (229 | ) | (2,234 | ) | — | (2,463 | ) | — | (1,239 | ) | — | — | — | (1,239 | ) | |||||||||||||||||||||||||||||||
Translation adjustments | (42 | ) | — | 96,209 | 21,578 | (1,094 | ) | 116,651 | 11,795 | 69,549 | 19,852 | — | (661 | ) | 100,535 | |||||||||||||||||||||||||||||||||
Balance at May 2, 2007 | $ | 1,081,673 | $ | 262,823 | $ | 1,259,514 | $ | 214,964 | $ | 15,665 | $ | 2,834,639 | ||||||||||||||||||||||||||||||||||||
Balance at April 30, 2008 | $ | 1,096,288 | $ | 1,340,928 | $ | 282,419 | $ | 262,823 | $ | 15,004 | $ | 2,997,462 | ||||||||||||||||||||||||||||||||||||
48
May 2, 2007 | May 3, 2006 | April 30, 2008 | May 2, 2007 | |||||||||||||||||||||||||||||||||||||||||||||
Gross | Accum Amort | Net | Gross | Accum Amort | Net | Gross | Accum Amort | Net | Gross | Accum Amort | Net | |||||||||||||||||||||||||||||||||||||
(Thousands of dollars) | (Thousands of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||
Trademarks | $ | 196,703 | $ | (63,110 | ) | $ | 133,593 | $ | 197,957 | $ | (61,279 | ) | $ | 136,678 | $ | 200,966 | $ | (69,104 | ) | $ | 131,862 | $ | 196,703 | $ | (63,110 | ) | $ | 133,593 | ||||||||||||||||||||
Licenses | 208,186 | (135,349 | ) | 72,837 | 208,186 | (129,630 | ) | 78,556 | 208,186 | (141,070 | ) | 67,116 | 208,186 | (135,349 | ) | 72,837 | ||||||||||||||||||||||||||||||||
Recipes/processes | 64,315 | (15,779 | ) | 48,536 | 95,456 | (14,079 | ) | 81,377 | 71,495 | (19,306 | ) | 52,189 | 64,315 | (15,779 | ) | 48,536 | ||||||||||||||||||||||||||||||||
Customer related assets | 152,668 | (19,183 | ) | 133,485 | 105,510 | (11,507 | ) | 94,003 | 183,204 | (31,418 | ) | 151,786 | 152,668 | (19,183 | ) | 133,485 | ||||||||||||||||||||||||||||||||
Other | 70,386 | (56,344 | ) | 14,042 | 70,832 | (55,204 | ) | 15,628 | 73,848 | (59,639 | ) | 14,209 | 70,386 | (56,344 | ) | 14,042 | ||||||||||||||||||||||||||||||||
$ | 692,258 | $ | (289,765 | ) | $ | 402,493 | $ | 677,941 | $ | (271,699 | ) | $ | 406,242 | $ | 737,699 | $ | (320,537 | ) | $ | 417,162 | $ | 692,258 | $ | (289,765 | ) | $ | 402,493 | |||||||||||||||||||||
4950
7. | Income Taxes |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||
Current: | ||||||||||||||||||||||||
U.S. federal | $ | 89,020 | $ | 71,533 | $ | 68,905 | $ | 80,638 | $ | 89,020 | $ | 71,533 | ||||||||||||
State | 9,878 | 14,944 | 9,128 | 15,323 | 9,878 | 14,944 | ||||||||||||||||||
Foreign | 181,655 | 225,498 | 169,629 | 258,365 | 181,655 | 225,498 | ||||||||||||||||||
280,553 | 311,975 | 247,662 | 354,326 | 280,553 | 311,975 | |||||||||||||||||||
Deferred: | ||||||||||||||||||||||||
U.S. federal | 104,113 | (54,957 | ) | 45,020 | 14,975 | 104,113 | (54,957 | ) | ||||||||||||||||
State | 5,444 | 3,015 | 3,144 | 2,381 | 5,444 | 3,015 | ||||||||||||||||||
Foreign | (57,313 | ) | (9,333 | ) | 3,685 | 1,187 | (57,313 | ) | (9,333 | ) | ||||||||||||||
52,244 | (61,275 | ) | 51,849 | 18,543 | 52,244 | (61,275 | ) | |||||||||||||||||
Provision for income taxes | $ | 332,797 | $ | 250,700 | $ | 299,511 | $ | 372,869 | $ | 332,797 | $ | 250,700 | ||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||
Domestic | $ | 293,580 | $ | 87,409 | $ | 385,926 | $ | 268,450 | $ | 293,580 | $ | 87,409 | ||||||||||||
Foreign | 830,819 | 606,052 | 601,589 | 949,344 | 830,819 | 606,052 | ||||||||||||||||||
From continuing operations | $ | 1,124,399 | $ | 693,461 | $ | 987,515 | $ | 1,217,794 | $ | 1,124,399 | $ | 693,461 | ||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
U.S. federal statutory tax rate | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | ||||||||||||
Tax on income of foreign subsidiaries | (5.4 | ) | (3.6 | ) | (5.3 | ) | (4.5 | ) | (5.4 | ) | (3.6 | ) | ||||||||||||
State income taxes (net of federal benefit) | 1.0 | 1.8 | 0.9 | 0.7 | 1.0 | 1.8 | ||||||||||||||||||
Earnings repatriation | 9.6 | 4.3 | (0.5 | ) | 3.3 | 9.6 | 4.3 | |||||||||||||||||
Reduction of tax reserves for statute of limitations expiration | (5.9 | ) | — | — | (0.1 | ) | (5.9 | ) | — | |||||||||||||||
Effects of revaluation of tax basis of foreign assets | (4.6 | ) | (2.3 | ) | (2.6 | ) | (2.4 | ) | (4.6 | ) | (2.3 | ) | ||||||||||||
Other | (0.1 | ) | 1.0 | 2.8 | (1.4 | ) | (0.1 | ) | 1.0 | |||||||||||||||
Effective tax rate | 29.6 | % | 36.2 | % | 30.3 | % | 30.6 | % | 29.6 | % | 36.2 | % | ||||||||||||
51
50
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
Depreciation/amortization | $ | 634,192 | $ | 582,543 | $ | 689,112 | $ | 634,192 | ||||||||
Benefit plans | 43,632 | 155,052 | 33,719 | 43,632 | ||||||||||||
Deferred income | 30,145 | — | ||||||||||||||
Other | 39,377 | 47,314 | 56,160 | 39,377 | ||||||||||||
Deferred tax liabilities | 717,201 | 784,909 | 809,136 | 717,201 | ||||||||||||
Operating loss carryforwards | (41,210 | ) | (70,192 | ) | (40,852 | ) | (41,210 | ) | ||||||||
Benefit plans | (198,011 | ) | (140,810 | ) | (248,808 | ) | (198,011 | ) | ||||||||
Depreciation/amortization | (53,722 | ) | (821 | ) | (69,909 | ) | (53,722 | ) | ||||||||
Tax credit carryforwards | (851 | ) | (54,897 | ) | (12,998 | ) | (851 | ) | ||||||||
Deferred income | (39,942 | ) | — | |||||||||||||
Other | (72,593 | ) | (92,471 | ) | (96,618 | ) | (72,593 | ) | ||||||||
Deferred tax assets | (366,387 | ) | (359,191 | ) | (509,127 | ) | (366,387 | ) | ||||||||
Valuation allowance | 44,935 | 30,950 | 52,008 | 44,935 | ||||||||||||
Net deferred tax liabilities | $ | 395,749 | $ | 456,668 | $ | 352,017 | $ | 395,749 | ||||||||
52
(Dollars in | ||||
millions) | ||||
Balance at May 3, 2007 | $ | 183.7 | ||
Increases for tax positions of prior years | 10.6 | |||
Decreases for tax positions of prior years | (31.0 | ) | ||
Increases based on tax positions related to the current year | 9.9 | |||
Decreases due to settlements with taxing authorities | (41.0 | ) | ||
Decreases due to lapse of statute of limitations | (3.1 | ) | ||
Balance at April 30, 2008 | $ | 129.1 | ||
5153
8. | Debt |
5254
2007 | 2006 | 2008 | 2007 | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
Commercial Paper (variable rate) | $ | 673,604 | $ | 408,070 | $ | 1,223,367 | $ | 673,604 | ||||||||
6.00% U.S. Dollar Notes due March 2008 | 299,824 | 299,619 | — | 299,824 | ||||||||||||
6.226% Heinz Finance Preferred Stock due July 2008 | 325,000 | 325,000 | 325,000 | 325,000 | ||||||||||||
6.625% U.S. Dollar Notes due July 2011 | 749,563 | 749,457 | 749,668 | 749,563 | ||||||||||||
6.00% U.S. Dollar Notes due March 2012 | 632,201 | 631,732 | 598,301 | 632,201 | ||||||||||||
U.S. Dollar Remarketable Securities due November 2020 | 800,000 | 800,000 | ||||||||||||||
U.S. Dollar Remarketable Securities due December 2020 | 800,000 | 800,000 | ||||||||||||||
6.375% U.S. Dollar Debentures due July 2028 | 229,842 | 232,656 | 230,101 | 229,842 | ||||||||||||
6.25% British Pound Notes due February 2030 | 247,089 | 228,848 | 246,386 | 247,089 | ||||||||||||
6.75% U.S. Dollar Notes due March 2032 | 449,779 | 472,923 | 449,855 | 449,779 | ||||||||||||
Canadian Dollar Credit Agreement due October 2010 | 157,842 | 180,636 | 144,669 | 157,842 | ||||||||||||
Other U.S. Dollar due June 2011—November 2034 (3.00—7.98%) | 59,216 | 9,713 | ||||||||||||||
OtherNon-U.S. Dollar due March 2022 (weighted average rate of 11.00%) | 21,675 | 20,705 | ||||||||||||||
Other U.S. Dollar due May 2008—November 2034 (3.00—7.97)% | 56,136 | 59,216 | ||||||||||||||
OtherNon-U.S. Dollar due May 2008—March 2022 (7.00—11.00)% | 37,360 | 21,675 | ||||||||||||||
4,645,635 | 4,359,359 | 4,860,843 | 4,645,635 | |||||||||||||
SFAS No. 133 Hedge Accounting Adjustments (See Note 13) | 71,195 | (1,429 | ) | 198,521 | 71,195 | |||||||||||
Less portion due within one year | (303,189 | ) | (917 | ) | (328,418 | ) | (303,189 | ) | ||||||||
Total long-term debt | $ | 4,413,641 | $ | 4,357,013 | $ | 4,730,946 | $ | 4,413,641 | ||||||||
Weighted-average interest rate on long-term debt, including the impact of applicable interest rate swaps | 6.14 | % | 5.25 | % | 5.90 | % | 6.14 | % | ||||||||
53
55
9. | Supplemental Cash Flows Information |
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||
Cash Paid During the Year For: | ||||||||||||||||||||||||
Interest | $ | 268,781 | $ | 292,285 | $ | 226,928 | $ | 360,698 | $ | 268,781 | $ | 292,285 | ||||||||||||
Income taxes | $ | 283,431 | $ | 326,370 | $ | 381,443 | $ | 261,283 | $ | 283,431 | $ | 326,370 | ||||||||||||
Details of Acquisitions: | ||||||||||||||||||||||||
Fair value of assets | $ | 108,438 | $ | 1,296,379 | $ | 187,108 | $ | 165,093 | $ | 108,438 | $ | 1,296,379 | ||||||||||||
Liabilities* | 19,442 | 192,486 | 48,179 | 13,489 | 19,442 | 192,486 | ||||||||||||||||||
Cash paid | 88,996 | 1,103,893 | 138,929 | 151,604 | 88,996 | 1,103,893 | ||||||||||||||||||
Less cash acquired | — | 3,457 | 12,380 | — | — | 3,457 | ||||||||||||||||||
Net cash paid for acquisitions | $ | 88,996 | $ | 1,100,436 | $ | 126,549 | $ | 151,604 | $ | 88,996 | $ | 1,100,436 | ||||||||||||
* | Includes obligations to sellers of $11.5 million, $2.0 million and $5.7 million in 2008, 2007 and |
10. | Employees’ Stock Incentive Plans and Management Incentive Plans |
54
56
2003 Plan | ||||
(Amounts in | ||||
thousands) | ||||
Number of shares authorized | 18,869 | |||
Number of stock option shares | ( | ) | ||
Number of stock option shares forfeited and returned to the plan | ||||
Number of restricted stock units and restricted stock issued | ( | ) | ||
Shares available for grant as stock options | ||||
5557
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||||||||
May 2, | May 3, | April 27, | April 30, | May 2, | May 3, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Dividend yield | 3.3 | % | 3.2 | % | 3.0 | % | 3.3 | % | 3.3 | % | 3.2 | % | ||||||||||||
Expected Volatility | 17.9 | % | 22.0 | % | 25.4 | % | ||||||||||||||||||
Expected volatility | 15.8 | % | 17.9 | % | 22.0 | % | ||||||||||||||||||
Expected term (years) | 5.0 | 5.0 | 7.9 | 5.0 | 5.0 | 5.0 | ||||||||||||||||||
Risk-free interest rate | 4.7 | % | 4.0 | % | 4.4 | % | 4.3 | % | 4.7 | % | 4.0 | % |
Weighted | Weighted | |||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||
Number of | Exercise Price | Aggregate | Number of | Exercise Price | Aggregate | |||||||||||||||||||
Options | (per share) | Intrinsic Value | Options | (per share) | Intrinsic Value | |||||||||||||||||||
(Amounts in thousands, except per share data) | (Amounts in thousands, except per share data) | |||||||||||||||||||||||
Options outstanding at April 28, 2004 | 37,485 | $ | 37.49 | $ | 1,405,163 | |||||||||||||||||||
Options granted | 1,587 | 37.04 | 58,779 | |||||||||||||||||||||
Options exercised | (2,845 | ) | 27.77 | (79,008 | ) | |||||||||||||||||||
Options forfeited and returned to the plan | (763 | ) | 36.54 | (27,863 | ) | |||||||||||||||||||
Options outstanding at April 27, 2005 | 35,464 | 38.27 | 1,357,071 | 35,464 | $ | 38.27 | $ | 1,357,071 | ||||||||||||||||
Options granted | 1,165 | 37.01 | 43,126 | 1,165 | 37.01 | 43,126 | ||||||||||||||||||
Options exercised | (4,575 | ) | 30.66 | (140,266 | ) | (4,575 | ) | 30.66 | (140,266 | ) | ||||||||||||||
Options forfeited and returned to the plan | (539 | ) | 38.06 | (20,505 | ) | (539 | ) | 38.06 | (20,505 | ) | ||||||||||||||
Options outstanding at May 3, 2006 | 31,515 | 39.33 | 1,239,426 | 31,515 | 39.33 | 1,239,426 | ||||||||||||||||||
Options granted | 895 | 41.92 | 37,515 | 895 | 41.92 | 37,515 | ||||||||||||||||||
Options exercised | (7,266 | ) | 35.77 | (259,860 | ) | (7,266 | ) | 35.77 | (259,860 | ) | ||||||||||||||
Options forfeited and returned to the plan | (347 | ) | 44.60 | (15,481 | ) | (347 | ) | 44.60 | (15,481 | ) | ||||||||||||||
Options outstanding at May 2, 2007 | 24,797 | $ | 40.39 | $ | 1,001,600 | 24,797 | 40.39 | 1,001,600 | ||||||||||||||||
Options granted | 1,352 | 45.54 | 61,579 | |||||||||||||||||||||
Options exercised | (2,116 | ) | 37.31 | (78,960 | ) | |||||||||||||||||||
Options forfeited and returned to the plan | (1,899 | ) | 51.32 | (97,461 | ) | |||||||||||||||||||
Options vested and exercisable at April 27, 2005 | 24,161 | $ | 38.56 | $ | 931,625 | |||||||||||||||||||
Options outstanding at April 30, 2008 | 22,134 | $ | 40.06 | $ | 886,758 | |||||||||||||||||||
Options vested and exercisable at May 3, 2006 | 25,545 | $ | 39.29 | $ | 1,003,646 | 25,545 | $ | 39.29 | $ | 1,003,646 | ||||||||||||||
Options vested and exercisable at May 2, 2007 | 21,309 | $ | 40.88 | $ | 871,095 | 21,309 | $ | 40.88 | $ | 871,095 | ||||||||||||||
Options vested and exercisable at April 30, 2008 | 19,249 | $ | 39.77 | $ | 765,552 |
5658
Options Outstanding | Options Exercisable | Options Outstanding | Options Exercisable | |||||||||||||||||||||||||||||||||||||||||||||
Weighted- | Weighted- | Weighted- | Weighted- | Weighted- | Weighted- | |||||||||||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||||||||||||||
Remaining | Remaining | Remaining | Weighted- | Remaining | Remaining | Remaining | Weighted- | |||||||||||||||||||||||||||||||||||||||||
Range of Exercise | Number | Life | Exercise Price | Number | Life | Average | Number | Life | Exercise Price | Number | Life | Average | ||||||||||||||||||||||||||||||||||||
Price Per Share | Outstanding | (Years) | Per Share | Exercisable | (Years) | Exercise Price | Outstanding | (Years) | Per Share | Exercisable | (Years) | Exercise Price | ||||||||||||||||||||||||||||||||||||
(Options in thousands) | (Options in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
$29.18-$35.61 | 8,470 | 5.0 | $ | 33.30 | 7,418 | 4.9 | $ | 33.20 | ||||||||||||||||||||||||||||||||||||||||
$35.62-$44.77 | 10,511 | 4.1 | 40.53 | 8,075 | 3.6 | 41.03 | ||||||||||||||||||||||||||||||||||||||||||
$29.18-$35.38 | 7,357 | 3.8 | $ | 33.32 | 7,326 | 3.8 | $ | 33.31 | ||||||||||||||||||||||||||||||||||||||||
$35.39-$44.77 | 9,506 | 3.1 | 40.46 | 7,965 | 2.8 | 40.71 | ||||||||||||||||||||||||||||||||||||||||||
$44.78-$54.00 | 5,816 | 1.1 | 50.47 | 5,816 | 1.1 | 50.47 | 5,271 | 1.7 | 48.76 | 3,958 | 0.2 | 49.83 | ||||||||||||||||||||||||||||||||||||
24,797 | 3.7 | $ | 40.39 | 21,309 | 3.3 | $ | 40.88 | 22,134 | 3.0 | $ | 40.06 | 19,249 | 2.6 | $ | 39.77 | |||||||||||||||||||||||||||||||||
Weighted | Weighted | |||||||||||||||
Average | Average | |||||||||||||||
Grant Date | Grant Date | |||||||||||||||
Number of | Fair Value | Number of | Fair Value | |||||||||||||
Options | (per share) | Options | (per share) | |||||||||||||
(Amounts in thousands, except per share data) | (Amounts in thousands, except per share data) | |||||||||||||||
Unvested options at May 3, 2006 | 5,970 | $ | 7.72 | |||||||||||||
Unvested options at May 2, 2007 | 3,488 | $ | 6.98 | |||||||||||||
Options granted | 895 | 6.69 | 1,352 | 6.25 | ||||||||||||
Options vested | (3,362 | ) | 8.21 | (1,886 | ) | 6.88 | ||||||||||
Options forfeited and returned to the plan | (15 | ) | 7.14 | (69 | ) | 6.98 | ||||||||||
Unvested options at May 2, 2007 | 3,488 | 6.98 | ||||||||||||||
Unvested options at April 30, 2008 | 2,885 | $ | 7.07 | |||||||||||||
5759
2003 Plan | ||||
(Amounts in thousands) | ||||
Number of shares authorized | 9,440 | |||
Number of shares reserved for issuance | ( | ) | ||
Number of shares forfeited and returned to the plan | ||||
Shares available for grant | ||||
Weighted Average | Weighted | |||||||||||||||
Grant Date | Average | |||||||||||||||
Fair Value | Grant Date | |||||||||||||||
Number of Units | (Per Share) | Fair Value | ||||||||||||||
(Amounts in thousands, | Number of Units | (Per Share) | ||||||||||||||
except per share data) | (Amounts in thousands, | |||||||||||||||
except per share data) | ||||||||||||||||
Unvested units and stock at May 3, 2006 | 1,813 | $ | 35.48 | |||||||||||||
Unvested units and stock at May 2, 2007 | 2,025 | $ | 36.57 | |||||||||||||
Units and stock granted | 364 | 41.88 | 715 | 46.00 | ||||||||||||
Units and stock vested | (131 | ) | 36.12 | (579 | ) | 35.94 | ||||||||||
Units and stock forfeited and returned to the plan | (21 | ) | 37.13 | (74 | ) | 38.92 | ||||||||||
Unvested units and stock at May 2, 2007 | 2,025 | 36.57 | ||||||||||||||
Unvested units and stock at April 30, 2008 | 2,087 | $ | 39.88 | |||||||||||||
5860
11. | Retirement Plans |
59
2007 | 2006 | |||||||
(Dollars in thousands) | ||||||||
Change in Benefit Obligation: | ||||||||
Benefit obligation at the beginning of the year | $ | 2,601,229 | $ | 2,342,701 | ||||
Service cost | 42,886 | 42,081 | ||||||
Interest cost | 135,984 | 124,064 | ||||||
Participants’ contributions | 10,347 | 11,078 | ||||||
Amendments | 4,046 | (10,434 | ) | |||||
Actuarial loss | 21,301 | 139,007 | ||||||
Acquisitions | — | 110,949 | ||||||
Divestitures | (459 | ) | (33,932 | ) | ||||
Curtailment | — | (22,863 | ) | |||||
Settlement | (10,664 | ) | (16,628 | ) | ||||
Special termination benefits | 3,188 | 22,025 | ||||||
Benefits paid | (143,298 | ) | (115,464 | ) | ||||
Exchange/other | 130,162 | 8,645 | ||||||
Benefit obligation at the end of the year | 2,794,722 | 2,601,229 | ||||||
Change in Plan Assets: | ||||||||
Fair value of plan assets at the beginning of the year | $ | 2,621,220 | $ | 2,213,143 | ||||
Actual return on plan assets | 207,470 | 427,859 | ||||||
Acquisitions | — | 65,187 | ||||||
Divestitures | (172 | ) | (33,732 | ) | ||||
Settlement | (10,664 | ) | (16,628 | ) | ||||
Employer contribution | 62,505 | 64,649 | ||||||
Participants’ contributions | 10,347 | 11,078 | ||||||
Benefits paid | (143,298 | ) | (115,464 | ) | ||||
Exchange | 141,372 | 5,128 | ||||||
Fair value of plan assets at the end of the year | 2,888,780 | 2,621,220 | ||||||
Funded status | 94,058 | 19,991 | ||||||
Unamortized prior service cost | — | 3,981 | ||||||
Unamortized net actuarial loss | — | 645,766 | ||||||
Unamortized net initial asset | — | — | ||||||
Net amount recognized | $ | 94,058 | $ | 669,738 | ||||
Amount recognized in the consolidated balance sheet consists of: | ||||||||
Prepaid benefit cost | $ | — | $ | 733,453 | ||||
Accrued benefit liability | — | (185,821 | ) | |||||
Accumulated other comprehensive loss | — | 122,106 | ||||||
Noncurrent assets | 284,619 | — | ||||||
Current liabilities | (8,545 | ) | — | |||||
Noncurrent liabilities | (182,016 | ) | — | |||||
Net amount recognized | $ | 94,058 | $ | 669,738 | ||||
Amounts recognized in accumulated other comprehensive loss consist of: | ||||||||
Net actuarial loss | $ | 633,461 | $ | — | ||||
Prior service cost | 11,746 | — | ||||||
Net amount recognized | $ | 645,207 | $ | — | ||||
60
2007 2006 (Dollars in thousands) Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic pension costs in Fiscal 2008 are as follows: Net actuarial loss $ 42,921 $ — Negative prior service cost (1,093 ) — Net amount recognized $ 41,828 $ —
2007 | 2006 | |||||||
Discount rate | 5.5 | % | 5.3 | % | ||||
Compensation increase rate | 5.0 | % | 4.0 | % |
2007 | 2006 | 2005 | ||||||||||
(Dollars in thousands) | ||||||||||||
Components of defined benefit net periodic benefit cost: | ||||||||||||
Service cost | $ | 42,886 | $ | 42,081 | $ | 46,102 | ||||||
Interest cost | 135,984 | 124,064 | 122,981 | |||||||||
Expected return on assets | (198,470 | ) | (168,990 | ) | (168,371 | ) | ||||||
Amortization of: | ||||||||||||
Net initial asset | — | (21 | ) | (862 | ) | |||||||
Prior service cost | (3,465 | ) | 2,207 | 9,251 | ||||||||
Net actuarial loss | 52,302 | 58,869 | 56,506 | |||||||||
Loss due to curtailment, settlement and special termination benefits | 2,335 | 18,846 | — | |||||||||
Net periodic benefit cost | 31,572 | 77,056 | 65,607 | |||||||||
Defined contribution plans | 34,940 | 28,139 | 25,118 | |||||||||
Total pension cost | 66,512 | 105,195 | 90,725 | |||||||||
Less pension cost associated with discontinued operations | — | 375 | 366 | |||||||||
Pension cost associated with continuing operations | $ | 66,512 | $ | 104,820 | $ | 90,359 | ||||||
61
2008 | 2007 | |||||||
(Dollars in thousands) | ||||||||
Change in Benefit Obligation: | ||||||||
Benefit obligation at the beginning of the year | $ | 2,794,722 | $ | 2,601,229 | ||||
Service cost | 39,832 | 42,886 | ||||||
Interest cost | 152,073 | 135,984 | ||||||
Participants’ contributions | 13,090 | 10,347 | ||||||
Amendments | 14,907 | 4,046 | ||||||
Actuarial (gain)/loss | (89,838 | ) | 21,301 | |||||
Divestitures | — | (459 | ) | |||||
Settlement | — | (10,664 | ) | |||||
Special termination benefits | — | 3,188 | ||||||
Benefits paid | (149,048 | ) | (143,298 | ) | ||||
Exchange/other | 67,437 | 130,162 | ||||||
Benefit obligation at the end of the year | $ | 2,843,175 | $ | 2,794,722 | ||||
Change in Plan Assets: | ||||||||
Fair value of plan assets at the beginning of the year | $ | 2,888,780 | $ | 2,621,220 | ||||
Actual (loss)/return on plan assets | (79,759 | ) | 207,470 | |||||
Divestitures | — | (172 | ) | |||||
Settlement | — | (10,664 | ) | |||||
Employer contribution | 59,799 | 62,505 | ||||||
Participants’ contributions | 13,090 | 10,347 | ||||||
Benefits paid | (149,048 | ) | (143,298 | ) | ||||
Exchange | 60,261 | 141,372 | ||||||
Fair value of plan assets at the end of the year | 2,793,123 | 2,888,780 | ||||||
Funded status | $ | (50,052 | ) | $ | 94,058 | |||
Amount recognized in the consolidated balance sheet consists of: | ||||||||
Noncurrent assets | $ | 191,079 | $ | 284,619 | ||||
Current liabilities | (19,826 | ) | (8,545 | ) | ||||
Noncurrent liabilities | (221,305 | ) | (182,016 | ) | ||||
Net amount recognized | $ | (50,052 | ) | $ | 94,058 | |||
Amounts recognized in accumulated other comprehensive loss consist of: | ||||||||
Net actuarial loss | $ | 802,738 | $ | 633,461 | ||||
Prior service cost | 25,572 | 11,746 | ||||||
Net amount recognized | $ | 828,310 | $ | 645,207 | ||||
Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic pension costs in the following fiscal year are as follows: | ||||||||
Net actuarial loss | $ | 36,512 | $ | 42,921 | ||||
Prior service cost | 3,567 | (1,093 | ) | |||||
Net amount recognized | $ | 40,079 | $ | 41,828 | ||||
62
2008 | 2007 | |||||||
Discount rate | 6.1 | % | 5.5 | % | ||||
Compensation increase rate | 5.2 | % | 5.0 | % |
2008 | 2007 | 2006 | ||||||||||
(Dollars in thousands) | ||||||||||||
Components of defined benefit net periodic benefit cost: | ||||||||||||
Service cost | $ | 39,832 | $ | 42,886 | $ | 42,081 | ||||||
Interest cost | 152,073 | 135,984 | 124,064 | |||||||||
Expected return on assets | (227,373 | ) | (198,470 | ) | (168,990 | ) | ||||||
Amortization of: | ||||||||||||
Net initial asset | — | — | (21 | ) | ||||||||
Prior service cost | (1,403 | ) | (3,465 | ) | 2,207 | |||||||
Net actuarial loss | 44,121 | 52,302 | 58,869 | |||||||||
Loss due to curtailment, settlement and special termination benefits | — | 2,335 | 18,846 | |||||||||
Net periodic benefit cost | 7,250 | 31,572 | 77,056 | |||||||||
Defined contribution plans | 34,027 | 34,940 | 28,139 | |||||||||
Total pension cost | 41,277 | 66,512 | 105,195 | |||||||||
Less pension cost associated with discontinued operations | — | — | 375 | |||||||||
Pension cost associated with continuing operations | $ | 41,277 | $ | 66,512 | $ | 104,820 | ||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
Expected rate of return | 8.2 | % | 8.2 | % | 8.2 | % | 8.2 | % | 8.2 | % | 8.2 | % | ||||||||||||
Discount rate | 5.3 | % | 5.5 | % | 5.8 | % | 5.5 | % | 5.3 | % | 5.5 | % | ||||||||||||
Compensation increase rate | 4.0 | % | 4.0 | % | 3.9 | % | 5.0 | % | 4.0 | % | 4.0 | % |
63
Plan Assets at | Target | Plan Assets at | Target | |||||||||||||||||||||
Asset Category | 2007 | 2006 | Allocation | 2008 | 2007 | Allocation | ||||||||||||||||||
Equity securities | 68 | % | 68 | % | 64 | % | 65 | % | 68 | % | 65 | % | ||||||||||||
Debt securities | 29 | % | 29 | % | 34 | % | 32 | % | 29 | % | 33 | % | ||||||||||||
Real estate | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||||
Other | 2 | % | 2 | % | 1 | % | 2 | % | 2 | % | 1 | % | ||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||
62
2008 | $ | 146,737 | ||||||
2009 | $ | 153,964 | $ | 168,750 | ||||
2010 | $ | 155,476 | $ | 166,008 | ||||
2011 | $ | 158,938 | $ | 168,318 | ||||
2012 | $ | 162,722 | $ | 172,486 | ||||
Years2013-2017 | $ | 951,264 | ||||||
2013 | $ | 171,284 | ||||||
Years2014-2018 | $ | 879,329 |
12. | Postretirement Benefits Other Than Pensions and Other Post Employment Benefits |
63
2007 | 2006 | |||||||
(Dollars in thousands) | ||||||||
Change in benefit obligation: | ||||||||
Benefit obligation at the beginning of the year | $ | 273,434 | $ | 290,787 | ||||
Service cost | 6,253 | 6,242 | ||||||
Interest cost | 15,893 | 15,631 | ||||||
Participants’ contributions | 913 | 1,188 | ||||||
Amendments | — | (15,188 | ) | |||||
Actuarial gain | (2,262 | ) | (11,703 | ) | ||||
Loss due to curtailment and special termination benefits | — | 2,037 | ||||||
Benefits paid | (21,180 | ) | (20,778 | ) | ||||
Exchange/other | 110 | 5,218 | ||||||
Benefit obligation at the end of the year | 273,161 | 273,434 | ||||||
Funded status | (273,161 | ) | (273,434 | ) | ||||
Unamortized prior service cost | — | (20,118 | ) | |||||
Unamortized net actuarial loss | — | 67,314 | ||||||
Net accrued benefit liability | $ | (273,161 | ) | $ | (226,238 | ) | ||
Amount recognized in the consolidated balance sheet consists of: | ||||||||
Current liabilities | $ | (20,090 | ) | $ | — | |||
Noncurrent liabilities | (253,071 | ) | — | |||||
Net amount recognized | $ | (273,161 | ) | $ | — | |||
Amounts recognized in accumulated other comprehensive loss consist of: | ||||||||
Net actuarial loss | $ | 59,702 | $ | — | ||||
Prior service cost | (14,019 | ) | — | |||||
Net amount recognized | $ | 45,683 | $ | — | ||||
Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic pension costs in Fiscal 2008 are as follows: | ||||||||
Net actuarial loss | $ | 4,549 | $ | — | ||||
Negative prior service cost | (4,766 | ) | — | |||||
Net amount recognized | $ | (217 | ) | $ | — | |||
64
2008 | 2007 | |||||||
(Dollars in thousands) | ||||||||
Change in benefit obligation: | ||||||||
Benefit obligation at the beginning of the year | $ | 273,161 | $ | 273,434 | ||||
Service cost | 6,451 | 6,253 | ||||||
Interest cost | 15,626 | 15,893 | ||||||
Participants’ contributions | 973 | 913 | ||||||
Amendments | 1,001 | — | ||||||
Actuarial gain | (5,523 | ) | (2,262 | ) | ||||
Benefits paid | (20,386 | ) | (21,180 | ) | ||||
Exchange/other | 5,295 | 110 | ||||||
Benefit obligation at the end of the year | 276,598 | 273,161 | ||||||
Funded status | $ | (276,598 | ) | $ | (273,161 | ) | ||
Amount recognized in the consolidated balance sheet consists of: | ||||||||
Current liabilities | $ | (19,547 | ) | $ | (20,090 | ) | ||
Noncurrent liabilities | (257,051 | ) | (253,071 | ) | ||||
Net amount recognized | $ | (276,598 | ) | $ | (273,161 | ) | ||
Amounts recognized in accumulated other comprehensive loss consist of: | ||||||||
Net actuarial loss | $ | 50,329 | $ | 59,702 | ||||
Prior service cost | (8,242 | ) | (14,019 | ) | ||||
Net amount recognized | $ | 42,087 | $ | 45,683 | ||||
Amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic pension costs in the following fiscal year are as follows: | ||||||||
Net actuarial loss | $ | 3,693 | $ | 4,549 | ||||
Negative prior service cost | (3,783 | ) | (4,766 | ) | ||||
Net amount recognized | $ | (90 | ) | $ | (217 | ) | ||
65
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||
Components of defined benefit net periodic benefit cost: | ||||||||||||||||||||||||
Service cost | $ | 6,253 | $ | 6,242 | $ | 5,769 | $ | 6,451 | $ | 6,253 | $ | 6,242 | ||||||||||||
Interest cost | 15,893 | 15,631 | 16,057 | 15,626 | 15,893 | 15,631 | ||||||||||||||||||
Amortization of: | ||||||||||||||||||||||||
Prior service cost | (6,098 | ) | (2,830 | ) | (3,026 | ) | (4,770 | ) | (6,098 | ) | (2,830 | ) | ||||||||||||
Net actuarial loss | 5,465 | 6,925 | 5,634 | 4,579 | 5,465 | 6,925 | ||||||||||||||||||
Loss due to curtailment and special termination benefits | — | 1,846 | — | — | — | 1,846 | ||||||||||||||||||
Net periodic benefit cost | 21,513 | 27,814 | 24,434 | $ | 21,886 | $ | 21,513 | $ | 27,814 | |||||||||||||||
Periodic benefit cost associated with continuing operations | $ | 21,513 | $ | 27,814 | $ | 24,434 | ||||||||||||||||||
1% Increase | 1% Decrease | 1% Increase | 1% Decrease | |||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||
Effect on total service and interest cost components | $ | 1,588 | $ | (1,404 | ) | $ | 1,581 | $ | 1,406 | |||||||
Effect on postretirement benefit obligation | $ | 17,703 | $ | (15,931 | ) | $ | 18,016 | $ | 16,284 |
2008 | $ | 22,166 | ||||||
2009 | $ | 23,209 | $ | 21,296 | ||||
2010 | $ | 24,219 | $ | 22,624 | ||||
2011 | $ | 25,044 | $ | 23,766 | ||||
2012 | $ | 25,499 | $ | 24,733 | ||||
Years2013-2017 | $ | 128,703 | ||||||
2013 | $ | 25,038 | ||||||
Years2014-2018 | $ | 132,239 |
6566
13. | Derivative Financial Instruments and Hedging Activities |
67
66
6768
14. | Income Per Common Share |
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||||||||
May 2, | May 3, | April 27, | April 30, | May 2, | May 3, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | (52 Weeks) | (53 Weeks) | |||||||||||||||||||
(Amounts in thousands) | (Amounts in thousands) | |||||||||||||||||||||||
Income from continuing operations | $ | 791,602 | $ | 442,761 | $ | 688,004 | $ | 844,925 | $ | 791,602 | $ | 442,761 | ||||||||||||
Preferred dividends | 13 | 14 | 15 | 12 | 13 | 14 | ||||||||||||||||||
Income from continuing operations applicable to common stock | $ | 791,589 | $ | 442,747 | $ | 687,989 | $ | 844,913 | $ | 791,589 | $ | 442,747 | ||||||||||||
Average common shares outstanding—basic | 328,625 | 339,102 | 350,042 | 317,019 | 328,625 | 339,102 | ||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||
Convertible preferred stock | 123 | 125 | 137 | 109 | 123 | 125 | ||||||||||||||||||
Stock options, restricted stock and the global stock purchase plan | 3,720 | 2,894 | 3,271 | 4,589 | 3,720 | 2,894 | ||||||||||||||||||
Average common shares outstanding—diluted | 332,468 | 342,121 | 353,450 | 321,717 | 332,468 | 342,121 | ||||||||||||||||||
15. | Segment Information |
69
• | North American Consumer Products—This segment primarily manufactures, markets and sells ketchup, condiments, sauces, pasta meals, and frozen potatoes, entrees, snacks, and appetizers to the grocery channels in the United States of America and includes our Canadian business. | |
• | Europe—This segment includes the Company’s operations in Europe, including Eastern Europe and Russia, and sells products in all of the Company’s categories. | |
• | Asia/Pacific—This segment includes the Company’s operations in New Zealand, Australia, India, Japan, China, South Korea, Indonesia, and Singapore. This segment’s operations include products in all of the Company’s categories. | |
• | U.S. Foodservice—This segment primarily manufactures, markets and sells branded and customized products to commercial and non-commercial food outlets and distributors in the United States of America including ketchup, condiments, sauces, and frozen soups, desserts and appetizers. |
68
• | Rest of World—This segment includes the Company’s operations in Africa, |
Fiscal Year Ended | ||||||||||||||||||||||||
May 2, | May 3, | April 27, | May 2, | May 3, | April 27, | |||||||||||||||||||
2007 | 2006 | 2005 | 2007 | 2006 | 2005 | |||||||||||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | (53 Weeks) | (52 Weeks) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Net External Sales | Intersegment Sales | |||||||||||||||||||||||
North American Consumer Products | $ | 2,739,527 | $ | 2,554,118 | $ | 2,256,862 | $ | 51,204 | $ | 51,489 | $ | 51,742 | ||||||||||||
U.S. Foodservice | 1,556,339 | 1,569,833 | 1,503,818 | 23,513 | 23,285 | 22,550 | ||||||||||||||||||
Europe | 3,076,770 | 2,987,737 | 2,908,618 | 21,308 | 12,455 | 17,328 | ||||||||||||||||||
Asia/Pacific | 1,201,928 | 1,116,864 | 1,037,514 | 4,225 | 2,304 | 3,420 | ||||||||||||||||||
Rest of World | 427,066 | 414,886 | 396,644 | 1,569 | 1,843 | 1,571 | ||||||||||||||||||
Non-Operating(a) | — | — | — | (101,819 | ) | (91,376 | ) | (96,611 | ) | |||||||||||||||
Consolidated Totals | $ | 9,001,630 | $ | 8,643,438 | $ | 8,103,456 | $ | — | $ | — | $ | — | ||||||||||||
Operating Income (Loss) Excluding(b) | ||||||||||||||||||||||||
Operating Income (Loss) | Special Items | |||||||||||||||||||||||
North American Consumer Products | $ | 625,675 | $ | 583,367 | $ | 530,444 | $ | 625,675 | $ | 589,958 | $ | 530,444 | ||||||||||||
U.S. Foodservice | 216,115 | 177,292 | 224,784 | 216,115 | 212,053 | 224,784 | ||||||||||||||||||
Europe | 566,362 | 414,178 | 499,951 | 566,362 | 526,372 | 526,927 | ||||||||||||||||||
Asia/Pacific | 135,782 | 85,211 | 113,119 | 135,782 | 112,440 | 113,119 | ||||||||||||||||||
Rest of World | 53,879 | 17,854 | 34,739 | 53,879 | 45,732 | 34,739 | ||||||||||||||||||
Non-Operating(a) | (151,098 | ) | (164,290 | ) | (121,565 | ) | (151,098 | ) | (136,564 | ) | (121,565 | ) | ||||||||||||
Consolidated Totals | $ | 1,446,715 | $ | 1,113,612 | $ | 1,281,472 | $ | 1,446,715 | $ | 1,349,991 | $ | 1,308,448 | ||||||||||||
6970
Fiscal Year Ended | ||||||||||||||||||||||||
April 30, | May 2, | May 3, | April 30, | May 2, | May 3, | |||||||||||||||||||
2008 | 2007 | 2006 | 2008 | 2007 | 2006 | |||||||||||||||||||
(52 Weeks) | (52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | (53 Weeks) | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Net External Sales | Operating Income (Loss) | |||||||||||||||||||||||
North American Consumer Products | $ | 3,011,513 | $ | 2,739,527 | $ | 2,554,118 | $ | 678,388 | $ | 625,675 | $ | 583,367 | ||||||||||||
Europe | 3,532,326 | 3,076,770 | 2,987,737 | 636,866 | 566,362 | 414,178 | ||||||||||||||||||
Asia/Pacific | 1,599,860 | 1,319,231 | 1,221,054 | 194,900 | 150,177 | 101,447 | ||||||||||||||||||
U.S. Foodservice | 1,559,370 | 1,556,339 | 1,569,833 | 169,581 | 216,115 | 177,292 | ||||||||||||||||||
Rest of World | 367,709 | 309,763 | 310,696 | 45,437 | 39,484 | 1,618 | ||||||||||||||||||
Non-Operating(a) | — | — | — | (156,205 | ) | (151,098 | ) | (164,290 | ) | |||||||||||||||
Consolidated Totals | $ | 10,070,778 | $ | 9,001,630 | $ | 8,643,438 | $ | 1,568,967 | $ | 1,446,715 | $ | 1,113,612 | ||||||||||||
Operating Income (Loss) Excluding(b) | ||||||||||||||||||||||||
Special Items | ||||||||||||||||||||||||
North American Consumer Products | $ | 678,388 | $ | 625,675 | $ | 589,958 | ||||||||||||||||||
Europe | 636,866 | 566,362 | 526,372 | |||||||||||||||||||||
Asia/Pacific | 194,900 | 150,177 | 126,563 | |||||||||||||||||||||
U.S. Foodservice | 169,581 | 216,115 | 212,053 | |||||||||||||||||||||
Rest of World | 45,437 | 39,484 | 31,609 | |||||||||||||||||||||
Non-Operating(a) | (156,205 | ) | (151,098 | ) | (136,564 | ) | ||||||||||||||||||
Consolidated Totals | $ | 1,568,967 | $ | 1,446,715 | $ | 1,349,991 | ||||||||||||||||||
Depreciation and Amortization Expenses | Capital Expenditures(c) | |||||||||||||||||||||||
Total North America | $ | 122,200 | $ | 112,031 | $ | 103,492 | $ | 121,937 | $ | 97,954 | $ | 82,726 | ||||||||||||
Europe | 115,578 | 108,479 | 98,106 | 119,425 | 99,939 | 102,275 | ||||||||||||||||||
Asia/Pacific | 35,410 | 29,390 | 28,708 | 36,404 | 36,903 | 36,479 | ||||||||||||||||||
Rest of World | 5,690 | 5,010 | 5,349 | 10,064 | 7,586 | 6,139 | ||||||||||||||||||
Non-Operating(a) | 10,019 | 11,287 | 11,778 | 13,758 | 2,180 | 2,958 | ||||||||||||||||||
Consolidated Totals | $ | 288,897 | $ | 266,197 | $ | 247,433 | $ | 301,588 | $ | 244,562 | $ | 230,577 | ||||||||||||
Identifiable Assets | ||||||||||||||||||||||||
Total North America | $ | 3,795,272 | $ | 3,752,033 | $ | 3,530,639 | ||||||||||||||||||
Europe | 4,731,760 | 4,166,174 | 4,285,233 | |||||||||||||||||||||
Asia/Pacific | 1,433,467 | 1,213,867 | 1,208,504 | |||||||||||||||||||||
Rest of World | 235,625 | 189,543 | 208,175 | |||||||||||||||||||||
Non-Operating(d) | 368,919 | 711,409 | 505,216 | |||||||||||||||||||||
Consolidated Totals | $ | 10,565,043 | $ | 10,033,026 | $ | 9,737,767 | ||||||||||||||||||
Depreciation and Amortization Expenses Capital Expenditures(c) Total North America $ 112,031 $ 103,492 $ 96,649 $ 97,954 $ 82,726 $ 95,194 Europe 108,479 98,106 95,970 99,939 102,275 98,729 Asia/Pacific 27,676 27,021 26,186 35,450 34,206 28,961 Rest of World 6,724 7,036 7,664 9,039 8,412 8,997 Non-Operating(a) 11,287 11,778 9,102 2,180 2,958 8,790 Consolidated Totals $ 266,197 $ 247,433 $ 235,571 $ 244,562 $ 230,577 $ 240,671 Identifiable Assets Total North America $ 3,752,033 $ 3,530,639 $ 3,606,034 Europe 4,166,174 4,285,233 4,437,891 Asia/Pacific 1,129,767 1,138,566 1,364,882 Rest of World 273,643 278,113 280,952 Non-Operating(d) 711,409 505,216 887,959 Consolidated Totals $ 10,033,026 $ 9,737,767 $ 10,577,718
71
(a) | Includes corporate overhead, intercompany eliminations and charges not directly attributable to operating segments. | |
(b) | Fiscal year ended May 3, 2006:Excludes costs associated with targeted workforce reductions, costs incurred in connection with strategic reviews of several non-core businesses and net losses/impairment charge on divestures as follows: North American Consumer Products, $6.6 million; | |
(c) | Excludes property, plant and equipment obtained through acquisitions. | |
(d) | Includes identifiable assets not directly attributable to operating segments. |
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||||||||
May 2, | May 3, | April 27, | April 30, | May 2, | May 3, | |||||||||||||||||||
2007 | 2006 | 2005 | 2008 | 2007 | 2006 | |||||||||||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | (52 Weeks) | (52 Weeks) | (53 Weeks) | |||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||
Ketchup and sauces | $ | 3,682,102 | $ | 3,530,346 | $ | 3,234,229 | $ | 4,081,864 | $ | 3,682,102 | $ | 3,530,346 | ||||||||||||
Meals and snacks | 4,026,168 | 3,876,743 | 3,680,920 | 4,521,697 | 4,026,168 | 3,876,743 | ||||||||||||||||||
Infant foods | 929,075 | 863,943 | 855,558 | |||||||||||||||||||||
Infant/Nutrition | 1,089,544 | 929,075 | 863,943 | |||||||||||||||||||||
Other | 364,285 | 372,406 | 332,749 | 377,673 | 364,285 | 372,406 | ||||||||||||||||||
Total | $ | 9,001,630 | $ | 8,643,438 | $ | 8,103,456 | $ | 10,070,778 | $ | 9,001,630 | $ | 8,643,438 | ||||||||||||
70
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||||||||||||||||||||||||||||||||||
Net External Sales | Long-Lived Assets | Net External Sales | Long-Lived Assets | |||||||||||||||||||||||||||||||||||||||||||||
May 2, | May 3, | April 27, | April 30, | May 2, | May 3, | |||||||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | May 2, | May 3, | April 27, | 2008 | 2007 | 2006 | April 30, | May 2, | May 3, | |||||||||||||||||||||||||||||||||||||
(52 Weeks) | (53 Weeks) | (52 Weeks) | 2007 | 2006 | 2005 | (52 Weeks) | (52 Weeks) | (53 Weeks) | 2008 | 2007 | 2006 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
United States | $ | 3,809,786 | $ | 3,693,262 | $ | 3,379,961 | $ | 2,377,900 | $ | 2,359,630 | $ | 2,110,987 | $ | 3,971,296 | $ | 3,809,786 | $ | 3,693,262 | $ | 2,393,732 | $ | 2,377,900 | $ | 2,359,630 | ||||||||||||||||||||||||
United Kingdom | 1,643,268 | 1,636,089 | 1,600,978 | 1,588,218 | 1,442,562 | 751,496 | 1,844,014 | 1,643,268 | 1,636,089 | 1,582,088 | 1,588,218 | 1,442,562 | ||||||||||||||||||||||||||||||||||||
Other | 3,548,576 | 3,314,087 | 3,122,517 | 2,171,907 | 1,967,353 | 2,263,181 | 4,255,468 | 3,548,576 | 3,314,087 | 2,540,414 | 2,171,907 | 1,967,353 | ||||||||||||||||||||||||||||||||||||
Total | $ | 9,001,630 | $ | 8,643,438 | $ | 8,103,456 | $ | 6,138,025 | $ | 5,769,545 | $ | 5,125,664 | $ | 10,070,778 | $ | 9,001,630 | $ | 8,643,438 | $ | 6,516,234 | $ | 6,138,025 | $ | 5,769,545 | ||||||||||||||||||||||||
16. | Quarterly Results |
2007 | 2008 | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | First | Second | Third | Fourth | Total | |||||||||||||||||||||||||||||||
(13 Weeks) | (13 Weeks) | (13 Weeks) | (13 Weeks) | (52 Weeks) | (13 Weeks) | (13 Weeks) | (13 Weeks) | (13 Weeks) | (52 Weeks) | |||||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||
Sales | $ | 2,059,920 | $ | 2,232,225 | $ | 2,295,192 | $ | 2,414,293 | $ | 9,001,630 | $ | 2,248,285 | $ | 2,523,379 | $ | 2,610,863 | $ | 2,688,251 | $ | 10,070,778 | ||||||||||||||||||||
Gross profit | 772,417 | 846,598 | 852,116 | 921,769 | 3,392,900 | 838,400 | 931,802 | 935,416 | 975,074 | 3,680,692 | ||||||||||||||||||||||||||||||
Income from continuing operations | 194,101 | 197,431 | 219,038 | 181,032 | 791,602 | |||||||||||||||||||||||||||||||||||
Net income | 194,101 | 191,575 | 219,038 | 181,032 | 785,746 | 205,294 | 227,037 | 218,532 | 194,062 | 844,925 | ||||||||||||||||||||||||||||||
Per Share Amounts: | ||||||||||||||||||||||||||||||||||||||||
Income from continuing operations—diluted | $ | 0.58 | $ | 0.59 | $ | 0.66 | $ | 0.55 | $ | 2.38 | ||||||||||||||||||||||||||||||
Income from continuing operations—basic | 0.59 | 0.60 | 0.67 | 0.56 | 2.41 | |||||||||||||||||||||||||||||||||||
Net income—diluted | $ | 0.63 | $ | 0.71 | $ | 0.68 | $ | 0.61 | $ | 2.63 | ||||||||||||||||||||||||||||||
Net income—basic | 0.64 | 0.72 | 0.69 | 0.62 | 2.67 | |||||||||||||||||||||||||||||||||||
Cash dividends | 0.35 | 0.35 | 0.35 | 0.35 | 1.40 | 0.38 | 0.38 | 0.38 | 0.38 | 1.52 |
2006 | ||||||||||||||||||||
First | Second | Third | Fourth | Total | ||||||||||||||||
(13 Weeks) | (13 Weeks) | (13 Weeks) | (14 Weeks) | (53 Weeks) | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||
Sales(1) | $ | 1,900,278 | $ | 2,156,984 | $ | 2,186,524 | $ | 2,399,652 | $ | 8,643,438 | ||||||||||
Gross profit(1) | 702,562 | 803,772 | 780,717 | 806,023 | 3,093,074 | |||||||||||||||
Income from continuing operations(1) | 140,173 | 168,331 | 133,178 | 1,079 | 442,761 | |||||||||||||||
Net income | 157,274 | 203,821 | 116,600 | 167,908 | 645,603 | |||||||||||||||
Per Share Amounts: | ||||||||||||||||||||
Income from continuing operations— diluted( 1) | $ | 0.40 | $ | 0.49 | $ | 0.39 | $ | 0.00 | $ | 1.29 | ||||||||||
Income from continuing operations— basic(1) | 0.41 | 0.50 | 0.40 | 0.00 | 1.31 | |||||||||||||||
Cash dividends | 0.30 | 0.30 | 0.30 | 0.30 | 1.20 |
7172
2007 | ||||||||||||||||||||
First | Second | Third | Fourth | Total | ||||||||||||||||
(13 Weeks) | (13 Weeks) | (13 Weeks) | (13 Weeks) | (52 Weeks) | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||
Sales | $ | 2,059,920 | $ | 2,232,225 | $ | 2,295,192 | $ | 2,414,293 | $ | 9,001,630 | ||||||||||
Gross profit | 772,417 | 846,598 | 852,116 | 921,769 | 3,392,900 | |||||||||||||||
Income from continuing operations | 194,101 | 197,431 | 219,038 | 181,032 | 791,602 | |||||||||||||||
Net income | 194,101 | 191,575 | 219,038 | 181,032 | 785,746 | |||||||||||||||
Per Share Amounts: | ||||||||||||||||||||
Income from continuing operations—diluted | $ | 0.58 | $ | 0.59 | $ | 0.66 | $ | 0.55 | $ | 2.38 | ||||||||||
Income from continuing operations—basic | 0.59 | 0.60 | 0.67 | 0.56 | 2.41 | |||||||||||||||
Cash dividends | 0.35 | 0.35 | 0.35 | 0.35 | 1.40 |
17. | Commitments and Contingencies |
18. | Advertising Costs |
7273
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. | Controls and Procedures. |
Item 9B. | Other Information. |
7374
Item 10. | Directors, Executive Officers and Corporate Governance. |
74
Item 11. | Executive Compensation. |
75
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
(a) | (b) | (c) | (a) | (b) | (c) | |||||||||||||||||||
Number of securities | Number of securities | |||||||||||||||||||||||
remaining available | remaining available | |||||||||||||||||||||||
for future issuance | for future issuance | |||||||||||||||||||||||
Number of securities to | Weighted-average | under equity | Number of securities to | Weighted-average | under equity | |||||||||||||||||||
be issued upon exercise | exercise price of | compensation Plans | be issued upon exercise | exercise price of | compensation Plans | |||||||||||||||||||
of outstanding options, | outstanding options, | (excluding securities | of outstanding options, | outstanding options, | (excluding securities | |||||||||||||||||||
warrants and rights | warrants and rights | reflected in column (a)) | warrants and rights | warrants and rights | reflected in column (a)) | |||||||||||||||||||
Equity Compensation plans approved by stockholders | 27,100,450 | $ | 40.04 | 14,081,528 | 24,610,332 | $ | 39.96 | 12,307,925 | ||||||||||||||||
Equity Compensation plans not approved by stockholders(1)(2) | 68,238 | N/A | (3) | N/A | (1)(4) | 60,093 | N/A | (3) | N/A | (1)(4) | ||||||||||||||
Total | 27,168,688 | $ | 40.04 | 14,081,528 | 24,670,425 | $ | 39.96 | 12,307,925 | ||||||||||||||||
75
(1) | The H. J. Heinz Company Restricted Stock Recognition Plan for Salaried Employees (the “Restricted Stock Plan”) was designed to provide recognition and reward in the form of awards of restricted stock to employees who have a history of outstanding accomplishment and who, because of their experience and skills, are expected to continue to contribute significantly to the success of the Company. Eligible employees were those full-time salaried employees not participating in the shareholder-approved H. J. Heinz Company Incentive Compensation Plan in effect as of May 1, 2002, and who have not been awarded an option to purchase Company Common Stock. The Company has ceased issuing shares from this Restricted Stock Plan, and it is the Company’s intention to terminate the Restricted Stock Plan once all restrictions on previously issued shares are lifted. All awards of this type are now made under the Fiscal Year 2003 Stock Incentive Plan. | |
(2) | The Executive Deferred Compensation Plan, as amended and restated on December 27, 2001 and the Deferred Compensation Plan for Non-Employee Directors as amended and restated on January 1, 2004, permit full-time salaried personnel based in the U.S. who have been identified as key employees and non-employee directors, to defer all or part of his or her cash compensation into either a cash account that accrues interest, or into a Heinz stock account. The election to defer is irrevocable. The Management Development & Compensation Committee of the Board of Directors administers the Plan. All amounts are payable at the times and in the amounts elected by the executives at the time of the deferral. The deferral period shall be at least one year and shall be no greater than the date of retirement or other termination, whichever is earlier. Amounts deferred into cash accounts are payable in cash, and all amounts deferred into the Heinz stock account are payable in Heinz Common Stock. Compensation deferred into the Heinz stock account appreciates or depreciates according to the fair market value of Heinz Common Stock. |
76
(3) | The grants made under the Restricted Stock Plan, the Executive Deferred Compensation Plan and the Deferred Compensation Plan for Non-Employee Directors are restricted or reserved shares of Common Stock, and therefore there is no exercise price. | |
(4) | The maximum number of shares of Common Stock that the Chief Executive Officer was authorized to grant under the Restricted Stock Plan was established annually by the Executive Committee of the Board of Directors; provided, however, that such number of shares did not exceed in any plan year 1% of all then outstanding shares of Common Stock. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Item 14. | Principal Accountant Fees and Services. |
7776
Item 15. | Exhibits and Financial Statement Schedules. |
(a)(1) | The following financial statements and reports are filed as part of this report under Item 8— | |||||||
Consolidated Balance Sheets as of April 30, 2008 and May 2, 2007 | ||||||||
Consolidated Statements of Income for the fiscal years ended April 30, 2008, May 2, 2007 and May 3, 2006 | ||||||||
Consolidated Statements of Shareholders’ Equity for the fiscal years ended April 30, 2008, May 2, 2007 and May 3, 2006 | ||||||||
Consolidated Statements of Cash Flows for the fiscal years ended April 30, 2008, May 2, 2007 and May 3, 2006 | ||||||||
Notes to Consolidated Financial Statements | ||||||||
Report of Independent Registered Public Accounting Firm of PricewaterhouseCoopers LLP dated June | ||||||||
(2) | The following report and schedule is filed herewith as a part hereof: | |||||||
Schedule II (Valuation and Qualifying Accounts and Reserves) for the three fiscal years ended April 30, 2008, May 2, 2007 and May 3, 2006 | ||||||||
All other schedules are omitted because they are not applicable or the required information is included herein or is shown in the consolidated financial statements or notes thereto filed as part of this report incorporated herein by reference. | ||||||||
(3) | Exhibits required to be filed by Item 601 ofRegulation S-K are listed below. Documents not designated as being incorporated herein by reference are filed herewith. The paragraph numbers correspond to the exhibit numbers designated in Item 601 ofRegulation S-K. | |||||||
3(i) | ||||||||
3(ii) | The Company’s By-Laws, as amended effective | |||||||
4. | Except as set forth below, there are no instruments with respect to long-term debt of the Company that involve indebtedness or securities authorized thereunder in amounts that exceed 10 percent of the total assets of the Company on a consolidated basis. The Company agrees to file a copy of any instrument or agreement defining the rights of holders of long-term debt of the Company upon request of the Securities and Exchange Commission. | |||||||
(a) | The Indenture among the Company, H. J. Heinz Finance Company, and Bank One, National Association dated as of July 6, 2001 relating to the H. J. Heinz Finance Company’s $750,000,000 6.625% Guaranteed Notes due 2011, $700,000,000 6.00% Guaranteed Notes due 2012 and $550,000,000 6.75% Guaranteed Notes due 2032 is incorporated herein by reference to Exhibit 4 of the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 2002. | |||||||
(b) | The Certificate of Designations, Preferences and Rights of Voting Cumulative Preferred Stock, Series A of H. J. Heinz Finance Company is incorporated herein by reference to Exhibit 4 of the Company’s Quarterly Report onForm 10-Q for the three months ended August 1, 2001. |
7877
(c) | Amended and Restated Five-Year Credit Agreement dated as of September 6, 2001 and amended and restated as of August 4, 2004 among H.J. Heinz Company, H.J. Heinz Finance Company, the Banks listed on the signature pages thereto and JP Morgan Chase Bank, as Administrative Agent, is incorporated herein by reference to Exhibit 4 to the Company’s quarterly report onForm 10-Q for the period ended January 25, 2006. | |||||||
10(a) | Management contracts and compensatory plans: | |||||||
(i) | 1986 Deferred Compensation Program for H. J. Heinz Company and affiliated companies, as amended and restated in its entirety effective December 6, 1995, is incorporated herein by reference to Exhibit 10(c)(i) to the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 1995. | |||||||
(ii) | H. J. Heinz Company 1990 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 3, 1990. | |||||||
(iii) | H. J. Heinz Company 1994 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 5, 1994. | |||||||
(iv) | H. J. Heinz Company Supplemental Executive Retirement Plan, as amended, is incorporated herein by reference to Exhibit 10(c)(ix) to the Company’s Annual Report onForm 10-K for the fiscal year ended April 28, 1993. | |||||||
(v) | H. J. Heinz Company Executive Deferred Compensation Plan (as amended and restated on December 27, 2001) is incorporated by reference to Exhibit 10(a)(vii) of the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 2002. | |||||||
(vi) | H. J. Heinz Company Incentive Compensation Plan is incorporated herein by reference to Appendix B to the Company’s Proxy Statement dated August 5, 1994. | |||||||
(vii) | H. J. Heinz Company Stock Compensation Plan for Non-Employee Directors is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 3, 1995. | |||||||
(viii) | H. J. Heinz Company 1996 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 2, 1996. | |||||||
(ix) | H. J. Heinz Company Deferred Compensation Plan for Directors is incorporated herein by reference to Exhibit 10(a)(xiii) to the Company’s Annual Report onForm 10-K for the fiscal year ended April 29, 1998. | |||||||
(x) | H. J. Heinz Company 2000 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 4, 2000. | |||||||
(xi) | H. J. Heinz Company Executive Estate Life Insurance Program is incorporated herein by reference to Exhibit 10(a)(xv) to the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 2002. | |||||||
(xii) | H. J. Heinz Company Restricted Stock Recognition Plan for Salaried Employees is incorporated herein by reference to Exhibit 10(a)(xvi) to the Company’s Annual Report on Form10-K for the fiscal year ended May 1, 2002. | |||||||
(xiii) | H. J. Heinz Company Senior Executive Incentive Compensation Plan is incorporated by reference to the Company’s Proxy Statement dated August 2, 2002. |
7978
(xiv) | Deferred Compensation Plan for Non-Employee Directors of H. J. Heinz Company (as amended and restated effective January 1, 2004), is incorporated herein by reference to Exhibit 10 to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 28, 2004. | |||||||
(xv) | Form of Stock Option Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xvi) | Form of Stock Option Award and Agreement for U.S. Employees Based in the U.K. on International Assignment is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xvii) | Form of Restricted Stock Unit Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xviii) | Form of Restricted Stock Unit Award and Agreement forNon-U.S. Based Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xix) | Form of Five-Year Restricted Stock Unit Retention Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xx) | Form of Five-Year Restricted Stock Unit Retention Award and Agreement forNon-U.S. Based Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xxi) | Form of Three-Year Restricted Stock Unit Retention Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xxii) | Form of Three-Year Restricted Stock Unit Retention Award and Agreement forNon-U.S. Based Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xxiii) | Named Executive Officer and Director Compensation | |||||||
(xxiv) | ||||||||
(xxv) | Form of Fiscal Year 2006 Restricted Stock Unit Award and Agreement for | |||||||
(xxvi) |
80
79
(xxvii) | Amendment Number One to the H.J. Heinz Company | |||||||
(xxviii) | ||||||||
(xxix) | Form of | |||||||
Form of Fiscal Year 2007 Restricted Stock Unit Award and Agreement is incorporated herein by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended November 1, 2006. | ||||||||
Form of Fiscal Year 2008 Stock Option Award and Agreement (U.S. Employees) is hereby incorporated by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended August 1, 2007. | ||||||||
(xxxii) | Form of Stock Option Award and Agreement is hereby incorporated by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended August 1, 2007. | |||||||
(xxxiii) | Form of Restricted Stock Unit Award and | |||||||
(xxxiv) | Form of Revised Fiscal Year 2008 Restricted Stock Unit Award and Agreement is hereby incorporated by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended August 1, 2007. | |||||||
(xxxv) | Form of Restricted Stock Unit Award and Agreement (U.S. Employees Retention) is hereby incorporated by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended August 1, 2007. | |||||||
(xxxvi) | Second Amended and Restated Fiscal Year 2003 Stock Incentive | |||||||
(xxxvii) | Second Amended and Restated Global Stock Purchase Plan is hereby incorporated herein by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended August 1, 2007. | |||||||
(xxxviii) | Time Sharing Agreement dated as of September 14, 2007, between H.J. Heinz Company and William R. Johnson incorporated herein by reference to Exhibit 10.1 of the Company’sForm 8-K dated September 14, 2007. | |||||||
(xxxix) | Retirement and Consulting Agreement and a Non-Competition and Non-Solicitation Agreement dated January 30, 2008 between H. J. Heinz Company and Jeffrey P. Berger are hereby incorporated by reference to Exhibit 10.1 of the Company’s Form8-K dated February 1, 2008. | |||||||
12. | Computation of Ratios of Earnings to Fixed Charges. | |||||||
21. | Subsidiaries of the Registrant. | |||||||
23. | Consent of PricewaterhouseCoopers LLP. | |||||||
24. | Powers-of-attorney of the Company’s directors. |
80
31(a) | Rule 13a-14(a)/15d-14(a) Certification by William R. Johnson. | |||||||
31(b) | Rule 13a-14(a)/15d-14(a) Certification by Arthur B. Winkleblack. | |||||||
32(a) | Certification by the Chief Executive Officer Relating to the Annual Report Containing Financial Statements. | |||||||
32(b) | Certification by the Chief Financial Officer Relating to the Annual Report Containing Financial Statements. |
81
By: | /s/ Arthur B. Winkleblack |
Signature | Capacity | |
/s/ William R. Johnson William R. Johnson | Chairman, President and Chief Executive Officer (Principal Executive Officer) | |
/s/ Arthur B. Winkleblack Arthur B. Winkleblack | Executive Vice President and (Principal Financial Officer) | |
/s/ Edward J. McMenamin Edward J. McMenamin | Senior Vice President-Finance and Corporate Controller (Principal Accounting Officer) |
William R. Johnson Charles E. Bunch Leonard S. Coleman, Jr. John G. Drosdick Edith E. Holiday Candace Kendle Dean R. O’Hare Nelson Peltz Dennis H. Reilley Lynn C. Swann Thomas J. Usher Michael F. Weinstein | Director } Director } Director } Director } Director } Director } Director } Director } Director } Director } Director } Director } | By: /s/ Arthur B. Winkleblack Attorney-in-Fact |
82
Additions | Additions | |||||||||||||||||||||||||||||||||||||||
Balance at | Charged to | Charged | Balance at | Balance at | Charged to | Charged | Balance at | |||||||||||||||||||||||||||||||||
beginning | costs and | to other | end of | beginning | costs and | to other | end of | |||||||||||||||||||||||||||||||||
Description | of period | expenses | accounts | Deductions | period | of period | expenses | accounts | Deductions | period | ||||||||||||||||||||||||||||||
Fiscal year ended April 30, 2008: | ||||||||||||||||||||||||||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||||||||||||||||||||||||||
Receivables | $ | 14,706 | $ | 2,379 | $ | 2,286 | $ | 3,684 | $ | 15,687 | ||||||||||||||||||||||||||||||
Fiscal year ended May 2, 2007: | ||||||||||||||||||||||||||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||||||||||||||||||||||||||
Receivables | $ | 16,988 | $ | 3,839 | $ | 1,266 | $ | 7,387 | $ | 14,706 | $ | 16,988 | $ | 3,839 | $ | 1,266 | $ | 7,387 | $ | 14,706 | ||||||||||||||||||||
Fiscal year ended May 3, 2006: | ||||||||||||||||||||||||||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||||||||||||||||||||||||||
Receivables | $ | 21,844 | $ | 3,213 | $ | — | $ | 8,069 | $ | 16,988 | $ | 21,844 | $ | 3,213 | $ | — | $ | 8,069 | $ | 16,988 | ||||||||||||||||||||
Fiscal year ended April 27, 2005: | ||||||||||||||||||||||||||||||||||||||||
Reserves deducted in the balance sheet from the assets to which they apply: | ||||||||||||||||||||||||||||||||||||||||
Receivables | $ | 21,313 | $ | 9,267 | $ | 2,390 | $ | 11,126 | $ | 21,844 | ||||||||||||||||||||||||||||||
Description of Exhibit | ||||||||
Exhibits required to be filed by Item 601 ofRegulation S-K are listed below. Documents not designated as being incorporated herein by reference are filed herewith. The paragraph numbers correspond to the exhibit numbers designated in Item 601 ofRegulation S-K. | ||||||||
3(i) | ||||||||
3(ii) | The Company’s By-Laws, as amended effective | |||||||
4. | Except as set forth below, there are no instruments with respect to long-term debt of the Company that involve indebtedness or securities authorized thereunder in amounts that exceed 10 percent of the total assets of the Company on a consolidated basis. The Company agrees to file a copy of any instrument or agreement defining the rights of holders of long-term debt of the Company upon request of the Securities and Exchange Commission. | |||||||
(a) | The Indenture among the Company, H. J. Heinz Finance Company, and Bank One, National Association dated as of July 6, 2001 relating to the H. J. Heinz Finance Company’s $750,000,000 6.625% Guaranteed Notes due 2011, $700,000,000 6.00% Guaranteed Notes due 2012 and $550,000,000 6.75% Guaranteed Notes due 2032 is incorporated herein by reference to Exhibit 4 of the Company’s Annual Report on Form10-K for the fiscal year ended May 1, 2002. | |||||||
(b) | The Certificate of Designations, Preferences and Rights of Voting Cumulative Preferred Stock, Series A of H. J. Heinz Finance Company is incorporated herein by reference to Exhibit 4 of the Company’s Quarterly Report onForm 10-Q for the three months ended August 1, 2001. | |||||||
(c) | Amended and Restated Five-Year Credit Agreement dated as of September 6, 2001 and amended and restated as of August 4, 2004 among H.J. Heinz Company, H.J. Heinz Finance Company, the Banks listed on the signature pages thereto and JP Morgan Chase Bank, as Administrative Agent, is incorporated herein by reference to Exhibit 4 to the Company’s quarterly report onForm 10-Q for the period ended January 25, 2006. | |||||||
10(a) | Management contracts and compensatory plans: | |||||||
(i) | 1986 Deferred Compensation Program for H. J. Heinz Company and affiliated companies, as amended and restated in its entirety effective December 6, 1995, is incorporated herein by reference to Exhibit 10(c)(i) to the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 1995. | |||||||
(ii) | H. J. Heinz Company 1990 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 3, 1990. | |||||||
(iii) | H. J. Heinz Company 1994 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 5, 1994. | |||||||
(iv) | H. J. Heinz Company Supplemental Executive Retirement Plan, as amended, is incorporated herein by reference to Exhibit 10(c)(ix) to the Company’s Annual Report onForm 10-K for the fiscal year ended April 28, 1993. | |||||||
(v) | H. J. Heinz Company Executive Deferred Compensation Plan (as amended and restated on December 27, 2001) is incorporated by reference to Exhibit 10(a)(vii) of the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 2002. |
Description of Exhibit | ||||||||
(vi) | H. J. Heinz Company Incentive Compensation Plan is incorporated herein by reference to Appendix B to the Company’s Proxy Statement dated August 5, 1994. | |||||||
(vii) | H. J. Heinz Company Stock Compensation Plan for Non-Employee Directors is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 3, 1995. | |||||||
(viii) | H. J. Heinz Company 1996 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 2, 1996. | |||||||
(ix) | H. J. Heinz Company Deferred Compensation Plan for Directors is incorporated herein by reference to Exhibit 10(a)(xiii) to the Company’s Annual Report onForm 10-K for the fiscal year ended April 29, 1998. | |||||||
(x) | H. J. Heinz Company 2000 Stock Option Plan is incorporated herein by reference to Appendix A to the Company’s Proxy Statement dated August 4, 2000. | |||||||
(xi) | H. J. Heinz Company Executive Estate Life Insurance Program is incorporated herein by reference to Exhibit 10(a)(xv) to the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 2002. | |||||||
(xii) | H. J. Heinz Company Restricted Stock Recognition Plan for Salaried Employees is incorporated herein by reference to Exhibit 10(a)(xvi) to the Company’s Annual Report onForm 10-K for the fiscal year ended May 1, 2002. | |||||||
(xiii) | H. J. Heinz Company Senior Executive Incentive Compensation Plan is incorporated by reference to the Company’s Proxy Statement dated August 2, 2002. | |||||||
(xiv) | Deferred Compensation Plan for Non-Employee Directors of H. J. Heinz Company (as amended and restated effective January 1, 2004), is incorporated herein by reference to Exhibit 10 to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 28, 2004. | |||||||
(xv) | Form of Stock Option Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xvi) | Form of Stock Option Award and Agreement for U.S. Employees Based in the U.K. on International Assignment is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xvii) | Form of Restricted Stock Unit Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xviii) | Form of Restricted Stock Unit Award and Agreement forNon-U.S. Based Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xix) | Form of Five-Year Restricted Stock Unit Retention Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xx) | Form of Five-Year Restricted Stock Unit Retention Award and Agreement forNon-U.S. Based Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. |
Description of Exhibit | ||||||||
(xxi) | Form of Three-Year Restricted Stock Unit Retention Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xxii) | Form of Three-Year Restricted Stock Unit Retention Award and Agreement forNon-U.S. Based Employees is incorporated herein by reference to Exhibit 10(a) to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended January 26, 2005. | |||||||
(xxiii) | Named Executive Officer and Director Compensation | |||||||
(xxiv) | ||||||||
(xxv) | Form of Fiscal Year 2006 Restricted Stock Unit Award and Agreement for | |||||||
(xxvi) | ||||||||
(xxvii) | Amendment Number One to the H.J. Heinz Company | |||||||
(xxviii) | ||||||||
Form of Fiscal Year 2006 Severance Protection Agreement is incorporated herein by reference to the Company’s Annual Report onForm 10-K for the fiscal year ended April 27, 2005. | ||||||||
Form of Long-Term Performance Program Award Agreement is hereby incorporated by reference to Exhibit 99 of the Company’sForm 8-K filed on June 12, 2006. | ||||||||
Form of Fiscal Year 2007 Restricted Stock Unit Award and Agreement is incorporated herein by reference to the Company’s Quarterly Report on Form10-Q for the quarterly period ended November 1, 2006. | ||||||||
Form of Fiscal Year 2008 Stock Option Award and Agreement (U.S. Employees) is hereby incorporated by reference to the Company’s Quarterly Report on Form10-Q for the quarterly period ended August 1, 2007. | ||||||||
(xxxii) | Form of Stock Option Award and Agreement is hereby incorporated by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended August 1, 2007. | |||||||
(xxxiii) | Form of Restricted Stock Unit Award and | |||||||
(xxxiv) | Form of Revised Fiscal Year 2008 Restricted Stock Unit Award and Agreement is hereby incorporated by reference to the Company’s Quarterly Report on Form10-Q for the quarterly period ended August 1, 2007. | |||||||
(xxxv) | Form of Restricted Stock Unit Award and Agreement (U.S. Employees Retention) is hereby incorporated by reference to the Company’s Quarterly Report on Form10-Q for the quarterly period ended August 1, 2007. | |||||||
(xxxvi) | Second Amended and Restated Fiscal Year 2003 Stock Incentive | |||||||
(xxxvii) | Second Amended and Restated Global Stock Purchase Plan is hereby incorporated herein by reference to the Company’s Quarterly Report onForm 10-Q for the quarterly period ended August 1, 2007. |
Description of Exhibit | ||||||||
(xxxviii) | Time Sharing Agreement dated as of September 14, 2007, between H. J. Heinz Company and William R. Johnson incorporated herein by reference to Exhibit 10.1 of the Company’sForm 8-K dated September 14, 2007. | |||||||
(xxxix) | Retirement and Consulting Agreement and a Non-Competition and Non-Solicitation Agreement dated January 30, 2008 between H.J. Heinz Company and Jeffrey P. Berger are hereby incorporated by reference to Exhibit 10.1 of the Company’sForm 8-K dated February 1, 2008. | |||||||
12. | Computation of Ratios of Earnings to Fixed Charges. | |||||||
21. | Subsidiaries of the Registrant. | |||||||
23. | Consent of PricewaterhouseCoopers LLP. | |||||||
24. | Powers-of-attorney of the Company’s directors. | |||||||
31(a) | Rule 13a-14(a)/15d-14(a) Certification by William R. Johnson. | |||||||
31(b) | Rule 13a-14(a)/15d-14(a) Certification by Arthur B. Winkleblack. | |||||||
32(a) | Certification by the Chief Executive Officer Relating to the Annual Report Containing Financial Statements. | |||||||
32(b) | Certification by the Chief Financial Officer Relating to the Annual Report Containing Financial Statements. |