SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
------------------------ ------------
COMMISSION FILE NUMBER 1-3385
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT
AND SAVINGS PLAN
(Title of Plan)
H. J. HEINZ COMPANY
(Name of Issuer of securities held pursuant to the Plan)
1 PPG Place, Suite 3100 PITTSBURGH, PA 15222
(Address of Plan and of principal executive office of Issuer)
FINANCIAL STATEMENTS AND EXHIBITS
The following Plan financial statements, schedules and reports are attached
hereto:
1. Report of Independent Registered Public Accounting Firm
2. Statements of Net Assets Available for Benefits as of December 31, 2008 and
2007
3. Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 2008
4. Notes to Financial Statements
5. Supplemental Schedules:
Form 5500, Schedule H, Part IV, Line 4a Delinquent Participant
Contributions for the Year Ended December 31, 2008
Form 5500, Schedule H, Part IV, Line 4i Schedule of Assets (Held At
End of Year) as of December 31, 2008
Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted because
they are not applicable
Exhibits required to be filed by Item 601 of Regulation S-K are listed below and
are filed as a part hereof. Documents not designated as being incorporated
herein by reference are filed herewith. The paragraph number corresponds to the
exhibit number designated in Item 601 of Regulation S-K.
23. The consent of Independent Registered Public Accounting Firm dated
June 25, 2009 is filed herein.
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Benefits Administration Board has duly caused this Form 11-K Annual
Report to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Pittsburgh, Commonwealth of Pennsylvania.
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
(Name of Plan)
EMPLOYEE BENEFITS ADMINISTRATION BOARD
By: /s/ Randolph W. Keuch
..................................
Randolph W. Keuch
Vice President, Total Rewards
June 23, 2009
2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants of the H.J. Heinz Company Employees
Retirement and Savings Plan and the Employee
Benefits Administration Board:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the H. J. Heinz Company Employees Retirement and Savings Plan (the "Plan") at
December 31, 2008 and 2007, and the changes in net assets available for benefits
for the year ended December 31, 2008 in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H, Line 4i -
Schedule of Assets (Held of End of Year) and Schedule H, Line 4a - Schedule of
Delinquent Participant Contributions are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 25, 2009
3
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
---------------------------------
2008 2007
------------ ------------
Assets:
Investment in Master Trust, at fair value $369,205,084 $493,658.489
Cash equivalents 506,780 322,734
Participant loans receivable 3,628,654 2,827,979
Dividends receivable 761,943 718,512
Interest receivable on cash equivalents 44 855
Contributions receivable:
Employee 435,069 1,052,654
Employer 575,337 1,047,508
------------ ------------
Total contributions receivable 1,010,406 2,100,162
------------ ------------
------------ ------------
Total Assets 375,112,911 499,628,731
------------ ------------
Liabilities:
Accrued administrative expenses 61,850 147,928
------------ ------------
Total Liabilities 61,850 147,928
------------ ------------
Net Assets Available for Benefits at fair value 375,051,061 $499,480,803
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts 1,464,070 --
------------ ------------
Net Assets Available for Benefits $376,515,131 $499,480,803
------------ ------------
The accompanying notes are an integral part of the financial statements.
4
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 2008
Additions:
Participant contributions $16,940,299
Employer contributions, net 18,123,534
-------------
Total additions 35,063,833
-------------
Deductions:
Net change in Investment in Master Trust 119,532,991
Withdrawals and Distributions 37,856,770
Administrative expenses 509,002
-------------
Total deductions 157,898,763
-------------
Transfer to other plan (130,742)
Net decrease in net assets
available for benefits for the year (122,965,672)
Net assets available for benefits at
the beginning of the year 499,480,803
Net assets available for benefits at -------------
the end of the year $376,515,131
=============
The accompanying notes are an integral part of the financial statements.
5
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements
(1) PLAN DESCRIPTION:
The following description of the H. J. Heinz Company ("Company") Employees
Retirement and Savings Plan ("Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
General
The Plan is a defined contribution plan covering salaried employees
actively employed by the Company or any of its affiliated companies. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
The administration of the Plan and the responsibility for interpreting and
carrying out its provisions is vested in the Employee Benefits
Administration Board ("Committee"). The Committee consists of members
appointed by the Board of Directors of the Company ("The Board") upon the
recommendation of the Investment and Retirement Plan Oversight Committee of
the Company. The members of the Committee are not compensated for serving
on the Committee.
The Bank of New York Mellon is trustee ("Trustee") of the Plan.
Eligibility
Regular full time employees are eligible to participate in the Plan
beginning with their employment commencement date. Part-time or temporary
employees are eligible to participate on the first day of the month
following a probationary period in which 1,000 or more hours of service are
performed.
Investment Risks
The plan provides for various investment options as described in Note 6.
Any investment is exposed to various risks, such as interest rate, market
and credit. These risks could result in a material effect on participants'
account balances and the amounts reported in the statements of net assets
available for benefits and the statement of changes in net assets available
for benefits.
Contributions
Participant contributions to the Plan may be either tax-deferred or after-
tax. The total of a participant's tax-deferred and after-tax contributions
may not exceed 20% of their compensation. Each participant may make
contributions into one or more of the investment funds as described in Note
6, in whole percentages, of not less than 1% of their compensation. In
addition, a participant may transfer amounts received from other retirement
plans to the Plan. Amounts that are transferred from other retirement plans
are held in a separate rollover account. Rollovers were $870,674 for the
year ended December 31, 2008 and are included in participant contributions
on the statement of changes in net assets available for benefits.
Tax-deferred contributions made by certain highly compensated participants
may be limited under Internal Revenue Code of 1986, as amended (the "Code")
rules. Tax-deferred contributions by any participant under the Plan and any
other qualified cash or deferred arrangement were limited to $15,500
($20,500 if over age 50) in 2008 and 2007. The Committee gives participants
affected by these limitations timely notification.
The Company matching contribution is $0.55 for each dollar of tax-deferred
employee contribution up to 5% of the employee's eligible earnings
("Matching Contribution"). The Company's Matching Contribution may be made
in cash or shares of the Company's common stock, at the Company's
discretion. During 2008, the Company contributed cash which the Trustee
used to purchase Company stock. The Matching Contributions can be
immediately reallocated into one of the other investment options by
participants.
6
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
Contributions (continued)
Additionally, the Company makes monthly, age-related contributions to the
Company Contribution Account ("CCA") of eligible employees. Employees
direct the investment of such contributions into one or more of the
investment funds as described in Note 6. For employees hired on or after
May 1, 2004 and credited with at least one year of service, these
contributions range from 3% of eligible earnings for participants less than
30 years old to 9% for those 60 and over. For employees hired prior to May
1, 2004, the age-related contributions range from 1.5% for participants who
are less than 30 years old to 13% for participants 60 and over. For the
year ended December 31, 2008, the Company made age-related contributions
totaling approximately $13.2 million.
Investment Options
Participants may direct the investment of their accounts in multiples of
1%, in any one or more of the Investment options selected by the Committee.
The current offering includes eight Vanguard mutual funds, two Fidelity
mutual funds, one Fidelity stable value common collective trust (CCT) and
four other mutual funds in addition to the H. J. Heinz Company Stock
unitized investment (Company Stock Investment). The Company Stock
Investment holds a temporary investment fund (TIF), sponsored by the
Trustee, for liquidity. The TIF is also categorized as a CCT. An additional
TIF is held to pay Plan expenses.
Participant Accounts
Each participant's account is credited with the participant's
contributions, the Company's matching and age-related contributions, and
Plan earnings. Company contributions are based on participants' eligible
earnings while each participant's investment earnings are determined by the
results of the underlying investments selected by the participant. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
Vesting
The value of a participant's employee savings account, which includes
tax-deferred, after-tax, and rollover contributions, is fully vested at all
times.
In general, participants' matching accounts vest after three years of
service. Beginning in 2007, CCA contributions vest after three years of
service; prior to that it was five years. However, regardless of a
participant's years of service, the CCA and matching account vest upon
retirement, attainment of age 65, total and permanent disability, death,
discharge without cause or for any reason after the beginning of the year
in which a participant turns 55.
Withdrawals and Distributions
A participant or the beneficiary of a deceased participant may elect to
withdraw up to 100% of the participant's after-tax or rollover account.
A participant's matching account will be available for withdrawal if the
participant:
(a) has at least 5 years of continuous membership in the Plan, or
(b) has attained age 59 1/2.
A participant may not withdraw any amount from their tax-deferred account
during active employment before age 59 1/2 except for hardship as defined
in the Plan.
A participant may not withdraw any amount from their CCA during active
employment before age 70 1/2.
A participant who qualifies for a hardship withdrawal and withdraws from
their tax-deferred account is suspended from making contributions to the
Plan for six months. Under present Internal Revenue Service ("IRS") rules,
a "hardship" means an immediate and heavy need to draw on financial
resources to meet obligations related to health, education, housing or
death of a family member.
A participant, upon termination of service, may either receive a lump-sum
payment of their account balance or transfer their account balance to the
trustee or custodian of another eligible retirement plan including the
Employees' Retirement System to purchase an annuity.
7
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
Participant Loans
Participants may request a loan from their account. The minimum loan is
$1,000 and the maximum is the lesser of $50,000 or 50% of the vested value
of their account. Participants are charged a $50 loan processing fee. The
interest rate is set based on the prime rate in effect on the last day of
the month before the loan is issued plus 1%. The Plan also administers
participant loans of plans that were merged into the Plan. The interest
rates for all outstanding loans for the year ended December 31, 2008 ranged
from 5.0% to 9.25% and 5.25% to 9.25% in 2007.
Outstanding loans, which are secured by the participants' interest in the
Plan, are repaid through payroll deductions, subject to rules permitting
prepayment. Repayments of the principal of a participant's loan are
allocated first to the participant's after tax account, and then to the
participant's tax deferred account. Payments of interest on a loan to a
participant are allocated to the participant's after tax account and tax
deferred account, respectively, in the same proportion that the outstanding
principal of the loan was attributable to such accounts at the end of the
month preceding the payment. Payments of principal and interest are
reinvested in the investment fund(s) in accordance with the participant's
investment directions in effect at the time such interest or principal
repayment is received by the Trustee.
In the event of default, as described by the Plan, participants are
considered to have received a distribution and are subject to income taxes
on the distributed amount. Also, participants may be subject to an
additional 10% penalty tax on their taxable withdrawal if it occurs prior
to age 59 1/2.
Cash Equivalents
Cash equivalents are defined as highly liquid investments with original
maturities of 90 days or less.
Plan Termination
The term of the Plan is indefinite, subject to termination at any time by
the Board. In the event the Plan is terminated or the Company contributions
are permanently discontinued, participants will be fully vested in the
Company contributions. The Company has no intention to terminate the Plan
at this time.
Administrative Expenses
The Trustee pays expenses of the Plan including record-keeping fees,
administrative charges, professional fees, and trustee fees, from the
assets of the Trust unless paid by the Company. Expenses are paid from Plan
assets up to 15 basis points of the net asset value during the plan year.
The Company pays any Plan expenses in excess of the the basis points
accrual and the TIF interest. For the year ended December 31, 2008, Plan
expenses were $509,002. Expenses are allocated to each investment fund
based on the fund's proportion of the total asset value of the Plan.
The Company, as permitted by ERISA, may obtain reimbursement from Company
sponsored employee benefit plans for certain administrative charges
incurred in providing administrative services to such plans. These expenses
include salaries, payroll expenses and other miscellaneous charges, and are
allocated based on time incurred related to each plan. The Plan paid the
Company $49,864 for the year ended December 31, 2008 for these
administrative services which is included in the total expense amount
above.
8
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
Other
Benefits are recorded when paid.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments. Such change as
it relates to those investments held in the Master Trust is included as a
component of the net change in investment in master trust on the statement
of changes in net assets. Also included in the net change in investment in
master trust are dividends and interest earned for the year and the net of
new participant loans issued and loan repayments, including interest.
Basis of Accounting
The accompanying financial statements are presented on the accrual basis of
accounting.
Investment Valuation and Income Recognition
The Plan holds an interest in the assets of the H. J. Heinz Defined
Contribution Master Trust. The Plan's investments are stated at fair value
and consist of various registered investment companies, a stable value
common collective trust fund (Fidelity Managed Income Portfolio (MIP)) and
H. J. Heinz Company stock. Valuation methodologies for each type of
investment are discussed within footnote 7 - Fair Value Measurements. As
discussed in the following paragraph, the Plan's investment in the MIP is
presented at fair value with an adjustment to contact value.
As described in FASB Staff Position ("FSP") AAG INV-1 and SOP 94-4-1,
Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain
Investment Companies Subject to the AICPA Investment Company Guide and
Defined-Contribution Health and Welfare and Pension Plans, an investment
contract is generally permitted to be valued at contract value, rather
than fair value, to the extent it is fully benefit-responsive because
contract value is the amount participants would receive if they were to
initiate permitted transactions under the terms of the Plan. As also
provided for by the RSP, fully benefit-responsive investment contracts are
included at fair value in the investment of the Plan and are adjusted to
contract value in the statements of net assets available for benefits. The
statement of changes in net assets available for benefits is prepared on a
contract value basis. The Fidelity Managed Income Portfolio is a fully
benefit-responsive investment contract.
Purchases and sales of investments are reflected on a trade-date basis.
Gains or losses on sales of securities are based on average cost. Dividend
income is recorded on the ex-dividend date. Interest is recorded as earned.
9
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(3) RELATED PARTY TRANSACTIONS:
The Plan holds a total of $2,699,614 of TIF which is managed by the
Trustee of the Plan as of December 31, 2008. The Company Stock Investment
holds $2,192,834 of TIF for liquidity. The remainder is maintained to pay
Plan expenses. Therefore, these transactions qualify as party-in-interest
transactions.
Certain Plan investments are publicly traded common stock of H.J. Heinz
Company, the Plan Sponsor. The Plan purchased 300,938 shares of Company
stock at a cost of $13,966,411 and sold 338,413 shares of Company stock for
$15,883,653 during Plan year 2008. The Plan received $2,946,402 in
dividends during 2008.
(4) FEDERAL INCOME TAXES:
The IRS has made a determination that the Plan is a qualified plan under
Section 401(a) of the Code. Therefore, the Trust established under the Plan
is exempt from Federal income taxes under Section 501(a) of the Code.
The IRS has determined and informed the Company by letter dated August 1,
2002 that the Plan is designed in accordance with applicable sections of
the Code. The Plan was amended and restated effective January 1, 2007 to
incorporate amendments relating to the Pension Protection Act of 2006 and
certain other changes. Tax and ERISA counsel to the Company is of the
opinion that the Plan continues to be a "qualified" plan under Section
401(a) of the Code, that the Plan contains an employee stock ownership plan
that meets the requirements of Section 4975(e)(7) of the Code and that the
Plan contains a qualified cash or deferred arrangement within the meaning
of Section 401(k) of the Code. Therefore, no provision for income tax has
been included in the Plan's financial statements. The Company submitted the
Plan to the IRS for review and is awaiting their response.
Under present Federal income tax laws and regulations, and as long as the
Plan is approved as a qualified plan, participants are not subject to
Federal income taxes as a result of their participation in the Plan until
their accounts are withdrawn or distributed to them.
(5) FORFEITURES:
Company contributions which have been credited to participants' accounts
and which have not vested are forfeited upon voluntary termination of
employment or discharge for cause. These forfeitures are used to reduce
company contributions. As of December 31, 2008 and 2007, forfeited
non-vested accounts totaling $61,816 and $110,191 were included in the
Plan. For the year ended December 31, 2008, the use of forfeited non-vested
accounts reduced company contributions by $451,029.
10
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(6) MASTER TRUST:
The Plan has a Master Trust arrangement with the Trustee. The Trustee
maintains separate accounts to record the pro rata share of each
participating Plan, reflecting contributions received on behalf of the
Plan, benefit payments or other expense allocable to the Plan and its pro
rata share of collected or accrued income, gain or loss, general expenses
and other transactions allocable to the Investment Funds or to the Trust
as a whole.
The following tables present the Master Trust information for the Plan.
December 31, 2008
----------------------------------------------------------------------
Retirement &
Savings Plan
Fair Value of Percentage of
Investment of Dividends and Net Change in the Interest in the
Master Trust Interest Income Fair Value Master Trust
-------------- --------------- ----------------- ---------------
COMPANY STOCK INVESTMENT FUND
Retirement and Savings Plan Company Stock Investment $ 71,194,639 $ 2,999,594 ($17,145,360) 100.0%
SAVER Plan Company Stock Investment 13,073,489 540,550 (3,180,063) --
MUTUAL FUNDS
Retirement Govt. Money Market 76,282,886 1,683,816 1,676,869 82.04%
Intermediate Bond Fund 15,481,430 806,322 (1,020,626) 90.00%
Fixed Income Long-Term Securities Fund 14,722,862 894,448 261,648 92.54%
Wellington Fund 51,720,631 2,211,746 (13,775,998) 76.27%
Windsor II Fund 30,582,002 1,256,628 (18,662,693) 94.24%
Institutional Index Fund 31,940,891 976,571 (19,177,497) 91.97%
Explorer Fund 9,667,944 89,707 (6,948,484) 93.78%
International Growth Fund 15,148,016 665,953 (13,354,477) 94.59%
Lord Abbett Small Cap Value Fund 10,365,027 66,572 (4,869,491) 92.34%
Small Cap Index Fund 2,720,597 56,230 (1,524,648) 89.78%
Harbor International Fund 10,014,708 189,802 (8,247,869) 92.57%
Developed Markets Index Fund 3,475,118 182,609 (2,525,210) 91.84%
Oppenheimer Developing Markets 13,371,133 296,852 (14,009,797) 88.47%
Growth Fund of America 24,434,360 385,147 (15,755,669) 93.61%
COMMON COLLECTIVE TRUST
Managed Income Portfolio 29,775,255 1,006,976 1,006,976 92.87%
Adjustment from fair value to contract value 1,576,478 -- -- 92.87%
------------ ----------- -------------
Total Master Trust $425,547,466 $14,309,523 ($137,252,389) 87.10%
============ =========== =============
11
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(6) MASTER TRUST: (CONTINUED)
December 31, 2007
---------------------------------------------------------------
Retirement &
Savings Plan
Fair Value of Dividends Percentage of
Investment of and Interest Net Change in Interest in the
Master Trust Income The Fair Value Master Trust
------------- ----------- -------------- ---------------
COMPANY STOCK INVESTMENT FUND
Retirement and Savings Plan Company Stock Investment $ 90,165,511 $ 2,992,749 $ 4,729,216 100.0%
SAVER Plan Company Stock Investment 15,587,642 470,799 993,505 --
MUTUAL FUNDS
Retirement Govt. Money Market 89,198,021 4,034,555 4,034,555 74.22%
Intermediate Bond Fund 17,539,052 844,676 659,086 90.56%
Fixed Income Securities Fund 15,332,532 871,023 565,801 92.54%
Wellington Fund 40,491,058 1,321,463 3,229,972 92.15%
Windsor II Fund 53,606,014 1,299,992 1,335,744 94.24%
Institutional Index Fund 54,076,261 1,042,093 2,900,547 91.35%
Explorer Fund 17,954,400 105,332 987,725 91.49%
International Growth Fund 30,543,003 636,991 4,103,642 94.56%
Lord Abbett Small Cap Value 16,045,471 66,097 1,540,222 91.65%
Small Cap Index Fund 4,047,049 55,763 (11,969) 90.93%
Harbor International Fund 18,471,623 260,193 3,051,784 92.11%
Developed Markets Index Fund 6,422,535 183,782 539,030 90.79%
Oppenheimer Developing 28,919,305 232,930 6,871,107 87.32%
Growth Fund of America 39,033,042 485,110 3,705,527 93.36%
COMMON COLLECTIVE TRUST
Managed Income Portfolio 22,663,097 1,015,812 1,015,812 95.99%
------------ ----------- -----------
Total Master Trust $560,095,616 $15,919,360 $40,251,306 88.14%
============ =========== ===========
12
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(7) FAIR VALUE MEASUREMENTS:
The Plan adopted Financial Accounting Standards Board Statement No. 157
(FAS 157), Fair Value Measurements, effective January 1, 2008. FAS 157
defines fair value as the price that would be received from selling an
asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. When determining the fair
value measurements for assets and liabilities required to be recorded at
fair value, the Plan considers the principal or most advantageous market in
which it would transact and considers assumptions that market participants
would use when pricing the asset or liability, such as inherent risk,
transfer restrictions, and risk of nonperformance.
FAS 157 also establishes a fair value hierarchy that requires the Plan to
maximize the use of observable inputs and minimize the use of unobservable
inputs when measuring fair value. A financial instrument's categorization
within the fair value hierarchy is based upon the lowest level of input
that is significant to the fair value measurement. FAS 157 establishes
three levels of inputs that may be used to measure fair value:
Level 1 quoted prices in active markets for identical assets or
liabilities;
Level 2 inputs other than Level 1 that are observable, either directly
or indirectly, such as quoted prices for similar assets,
quoted prices for identical or similar assets or liabilities
in inactive markets, or other inputs that are observable or
can be corroborated by observable market data for
substantially the full term of the assets or liabilities; or
Level 3 unobservable inputs that are supported by little or no market
activity and that are significant to the fair value of the
assets or liabilities.
Mutual Funds -- valued at the net asset value of shares held by the Plan at
year-end. The net asset value is a quoted price in an active market and is
classified within level 1 of the valuation hierarchy.
Common Stock -- valued at the closing price reported on the active market
on which the individual securities are traded, and classified within level
1 of the valuation hierarchy.
Common Collective Trust -- valued using the net asset value provided by the
administrator of the Fund. The net asset value is based on the value of the
underlying assets owned by the Fund, minus its liabilities, and these
divided by the number of units outstanding. The investment is classified
within level 2 of the valuation hierarchy because the unit price is quoted
on a private market that is not active; however, the unit price is based on
underlying investments which are primarily based on observable inputs.
Participant loans -- valued at the amortized cost, which approximates fair
value. Based on a lack of observable inputs, participant loans have been
classified as level 3 of the valuation hierarchy.
13
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
Investments measured at fair value on a recurring basis consisted of the
following types of instruments as of December 31, 2008 categorized using
the classification system defined above.
Assets at Fair Value as of December 31, 2008
------------------------------------------------------
Description Level 1 Level 2 Level 3 Total
- ----------- ------------ ----------- ---------- ------------
Mutual Funds $309,927,605 $ -- $ -- $309,927,605
Common Stocks 81,905,277 -- -- 81,905,277
Common Collective Trusts -- 32,138,106 -- 32,138,106
Total Master Trust Assets
at fair value $391,832,882 $32,138,106 $ -- $423,970,988
Participant Loans $ -- $ -- $3,628,654 $ 3,628,654
The table below sets forth a summary of changes in the fair value of the
Plan's level 3 assets for the year ended December 31, 2008.
Level 3 Assets Participant Loans
- -------------- -----------------
Balance as of January 1, 2008 $2,827,979
Issuances, repayments and settlements, net 800,675
----------
Balance as of December 31, 2008 $3,628,654
==========
(8) NONEXEMPT PARTY-IN-INTEREST TRANSACTION:
The Company remitted the February 2007 Appetizers And, Inc. participant
contributions of $51,488 to the trustee on April 4, 2007, which exceeded
the time period required under Department of Labor regulation 2510.3-102.
The Company filed form 5330 with the IRS and paid the required excise tax
on the transaction for 2007. In addition, the Company deposited into
affected participants' accounts the amount of income that would have been
earned had the contributions been remitted on a timely basis. The
delinquent contributions were corrected in 2008.
14
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
EIN: 25-0542520 PLAN 009
SCHEDULE H, LINE 4a -- SCHEDULE OF DELINQUENT PARTICIPANT CONTRIBUTIONS
FOR THE YEAR ENDED DECEMBER 31, 2008
Participant Contribution Contributions Contributions Contributions Pending Total Fully Corrected
Transferred Late to Plan Not Corrected * Corrected Outside VFCP Correction in VFCP Under VFCP and PTE 2002-51
- ------------------------ --------------- ---------------------- --------------------- --------------------------
$55,557 -- -- -- $55,557
* Contributions were transmitted to the trustee one month after the DOL
required deposit date, but the interest on the delinquent contributions was
not credited to the affected participants' accounts until April 17, 2008.
15
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
EIN: 25 - 0542520 PLAN 009
SCHEDULE H, Line 4i -- SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2008
(c) Description of investment including
(b) Identity of issue, borrower, maturity date, rate of interest, (e) Current
(a) lessor, or similar party collateral, par or maturity value (d) Cost Value
- ------- -------------------------------- ----------------------------------------- ------------------- ----------------
* Bank of New York Mellon EB Temporary Investment Fund $506,780 $506,780
* Participant Loans Participant Loans -- 3,628,654
Interest Rates, 5.0% - 9.25%
Maturity through 2023
* Denotes a party-in-interest, for which a statutory exemption exists.
16
EXHIBIT INDEX
Exhibits required to be filed by Item 601 of Regulation S-K are listed
below and are filed as part hereof. Documents not designated as being
incorporated herein by reference are filed herewith. The paragraph number
corresponds to the exhibit number designated in Item 601 of Regulation S-K.
23. The consent of Independent Registered Public Accounting Firm dated
June 25, 2009 is filed herein.
17