SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 28, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO _______________
FOR THE THREE MONTHS ENDED JULY 28, 2004 COMMISSION FILE NUMBER 1-3385
H. J. HEINZ COMPANY
(Exact name of registrant as specified in its charter)
<Table>
PENNSYLVANIA 25-0542520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 GRANT STREET, PITTSBURGH, PENNSYLVANIA 15219
(Address of Principal Executive Offices) (Zip Code)
</Table>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (412) 456-5700
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days. Yes X No __
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No __
The number of shares of the Registrant's Common Stock, par value $0.25 per
share, outstanding as of August 20, 2004 was 349,448,646 shares.
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<Table>
<Caption>
First Quarter Ended
------------------------------
July 28, 2004 July 30, 2003
FY 2005 FY 2004
------------- -------------
(Unaudited)
(In Thousands, Except
per Share Amounts)
Sales....................................................... $2,003,026 $1,895,524
Cost of products sold....................................... 1,264,273 1,188,448
---------- ----------
Gross profit................................................ 738,753 707,076
Selling, general and administrative expenses................ 399,099 358,000
---------- ----------
Operating income............................................ 339,654 349,076
Interest income............................................. 6,661 5,765
Interest expense............................................ 53,346 52,237
Other expense, net.......................................... 6,383 16,979
---------- ----------
Income from continuing operations before income taxes....... 286,586 285,625
Provision for income taxes.................................. 91,750 98,800
---------- ----------
Income from continuing operations........................... 194,836 186,825
Income from discontinued operations, net of tax............. -- 27,200
---------- ----------
Net income.................................................. $ 194,836 $ 214,025
========== ==========
Income per common share
Diluted
Continuing operations.................................. $ 0.55 $ 0.53
Discontinued operations................................ -- 0.08
---------- ----------
Net income........................................... $ 0.55 $ 0.60
========== ==========
Average common shares outstanding--diluted................ 354,977 354,522
========== ==========
Basic
Continuing operations.................................. $ 0.56 $ 0.53
Discontinued operations................................ -- 0.08
---------- ----------
Net income........................................... $ 0.56 $ 0.61
========== ==========
Average common shares outstanding--basic.................. 351,366 352,094
========== ==========
Cash dividends per share.................................... $ 0.285 $ 0.27
========== ==========
</Table>
See Notes to Condensed Consolidated Financial Statements.
------------------
2
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
July 28, 2004 April 28, 2004*
FY 2005 FY 2004
------------- ---------------
(Unaudited)
(Thousands of Dollars)
ASSETS
Current Assets:
Cash and cash equivalents................................... $1,173,637 $1,180,039
Receivables, net............................................ 953,639 1,093,155
Inventories................................................. 1,167,564 1,156,932
Prepaid expenses and other current assets................... 262,386 180,670
---------- ----------
Total current assets................................... 3,557,226 3,610,796
---------- ----------
Property, plant and equipment............................... 3,750,702 3,727,224
Less accumulated depreciation............................... 1,699,051 1,669,938
---------- ----------
Total property, plant and equipment, net............... 2,051,651 2,057,286
---------- ----------
Goodwill.................................................... 1,977,529 1,959,914
Trademarks, net............................................. 644,510 643,901
Other intangibles, net...................................... 147,684 149,920
Other non-current assets.................................... 1,381,886 1,455,372
---------- ----------
Total other non-current assets......................... 4,151,609 4,209,107
---------- ----------
Total assets........................................... $9,760,486 $9,877,189
========== ==========
</Table>
* Summarized from audited fiscal year 2004 balance sheet.
See Notes to Condensed Consolidated Financial Statements.
------------------
3
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<Table>
<Caption>
July 28, 2004 April 28, 2004*
FY 2005 FY 2004
------------- ---------------
(Unaudited)
(Thousands of Dollars)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt............................................. $ 13,026 $ 11,434
Portion of long-term debt due within one year............... 426,508 425,016
Accounts payable............................................ 910,085 1,063,113
Salaries and wages.......................................... 44,947 50,101
Accrued marketing........................................... 188,298 230,495
Other accrued liabilities................................... 347,819 361,596
Income taxes................................................ 319,087 327,313
---------- ----------
Total current liabilities.............................. 2,249,770 2,469,068
---------- ----------
Long-term debt.............................................. 4,523,797 4,537,980
Deferred income taxes....................................... 330,542 313,343
Non-pension postretirement benefits......................... 191,841 192,599
Other liabilities and minority interest..................... 497,307 470,010
---------- ----------
Total long-term liabilities............................ 5,543,487 5,513,932
Shareholders' Equity:
Capital stock............................................... 107,868 107,868
Additional capital.......................................... 423,919 403,043
Retained earnings........................................... 4,951,797 4,856,918
---------- ----------
5,483,584 5,367,829
Less:
Treasury stock at cost (80,564,216 shares at July 28, 2004
and 79,139,249 shares at April 28, 2004)............... 3,001,340 2,927,839
Unearned compensation..................................... 38,544 32,275
Accumulated other comprehensive loss...................... 476,471 513,526
---------- ----------
Total shareholders' equity............................. 1,967,229 1,894,189
---------- ----------
Total liabilities and shareholders' equity............. $9,760,486 $9,877,189
========== ==========
</Table>
* Summarized from audited fiscal year 2004 balance sheet.
See Notes to Condensed Consolidated Financial Statements.
------------------
4
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<Table>
<Caption>
First Quarter Ended
------------------------------
July 28, 2004 July 30, 2003
FY 2005 FY 2004
------------- -------------
(Unaudited)
(Thousands of Dollars)
Cash Flows from Operating Activities:
Net income................................................ $ 194,836 $ 214,025
Income from discontinued operations, net of tax........... -- (27,200)
---------- ---------
Income from continuing operations......................... 194,836 186,825
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation............................................ 53,654 51,857
Amortization............................................ 5,429 4,375
Deferred tax provision.................................. 34,657 19,529
Gain on sale of the Northern Europe bakery business..... -- (26,338)
Other items, net........................................ 27,483 949
Changes in current assets and liabilities, excluding
effects of acquisitions and divestitures:
Receivables........................................... 129,979 166,734
Inventories........................................... (6,936) (8,314)
Prepaid expenses and other current assets............. (50,799) (75,345)
Accounts payable...................................... (169,936) (67,228)
Accrued liabilities................................... (63,119) (59,088)
Income taxes.......................................... 30,932 71,980
---------- ---------
Cash provided by operating activities.............. 186,180 265,936
---------- ---------
Cash Flows from Investing Activities:
Capital expenditures.................................... (38,440) (29,597)
Acquisitions, net of cash acquired...................... (8,393) (61,298)
Proceeds from divestitures.............................. 19,179 57,938
Other items, net........................................ (6,814) 4,873
---------- ---------
Cash used for investing activities................. (34,468) (28,084)
---------- ---------
Cash Flows from Financing Activities:
Payments on long-term debt.............................. (6,170) (40,356)
Proceeds from/(payments on) commercial paper and
short-term debt, net................................... 1,650 (123,921)
Dividends............................................... (99,970) (95,096)
Purchases of treasury stock............................. (101,913) (38,796)
Exercise of stock options............................... 34,688 34,643
Other items, net........................................ 11,323 12,466
---------- ---------
Cash used for financing activities................. (160,392) (251,060)
---------- ---------
Effect of exchange rate changes on cash and cash
equivalents............................................... 2,278 16,210
Net (decrease)/increase in cash and cash equivalents........ (6,402) 3,002
Cash and cash equivalents at beginning of year.............. 1,180,039 801,732
---------- ---------
Cash and cash equivalents at end of period.................. $1,173,637 $ 804,734
========== =========
</Table>
See Notes to Condensed Consolidated Financial Statements.
------------------
5
H. J. HEINZ COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The interim condensed consolidated financial statements of H. J. Heinz
Company, together with its subsidiaries (collectively referred to as the
"Company"), are unaudited. In the opinion of management, all adjustments,
which are of a normal and recurring nature, necessary for a fair statement
of the results of operations of these interim periods have been included.
The results for interim periods are not necessarily indicative of the
results to be expected for the full fiscal year due to the seasonal nature
of the Company's business.
These statements should be read in conjunction with the Company's
consolidated financial statements and related notes, and management's
discussion and analysis of financial condition and results of operations
which appear in the Company's Annual Report on Form 10-K for the year ended
April 28, 2004.
(2) DISCONTINUED OPERATIONS AND SPIN-OFF
On December 20, 2002, the Company transferred to a wholly-owned subsidiary
("SKF Foods") certain assets and liabilities, including its U.S. and
Canadian pet food and pet snacks, U.S. tuna, U.S. retail private label soup
and private label gravy, College Inn broths and its U.S. infant feeding
businesses and distributed all of the shares of SKF Foods common stock on a
pro rata basis to its shareholders. Immediately thereafter, SKF Foods
merged with a wholly-owned subsidiary of Del Monte Foods Company ("Del
Monte") resulting in SKF Foods becoming a wholly-owned subsidiary of Del
Monte. Net income from discontinued operations for the three months ended
July 30, 2003 reflects the favorable settlement of tax liabilities related
to the spun off businesses.
(3) SPECIAL ITEMS
DIVESTITURES
During the first quarter of Fiscal 2004, the Company sold its bakery
business in Northern Europe for $57.9 million. The transaction resulted in
a pretax gain of $26.3 million ($13.3 million after tax), which was used to
offset reorganization costs during Fiscal 2004 and was recorded as a
component of selling, general and administrative expenses ("SG&A").
REORGANIZATION COSTS
During the first quarter of Fiscal 2004, the Company recognized $5.5
million pretax ($3.4 million after tax) of reorganization costs. These
costs were recorded as a component of SG&A and were primarily due to
employee termination and severance costs related to ongoing efforts to
reduce overhead costs at its North American operations following the Fiscal
2003 spin-off transaction with Del Monte. Additionally, during the first
quarter of Fiscal 2004, the Company wrote down pizza crust assets in the
United Kingdom totaling $4.0 million pretax ($2.8 million after tax) which
has been included as a component of cost of products sold. Amounts included
in accrued expenses related to these initiatives totaled $4.2 million and
$13.2 million at July 28, 2004 and April 28, 2004, respectively.
6
(4) INVENTORIES
The composition of inventories at the balance sheet dates was as follows:
<Table>
<Caption>
July 28, 2004 April 28, 2004
------------- --------------
(Thousands of Dollars)
Finished goods and work-in-process.......................... $ 916,019 $ 890,813
Packaging material and ingredients.......................... 251,545 266,119
---------- ----------
$1,167,564 $1,156,932
========== ==========
</Table>
(5) GOODWILL AND OTHER INTANGIBLE ASSETS
Changes in the carrying amount of goodwill for the first quarter ended July
28, 2004, by reportable segment, are as follows:
<Table>
<Caption>
North
American Other
Consumer U.S. Asia/ Operating
Products Foodservice Europe Pacific Entities Total
-------- ----------- -------- -------- --------- ----------
(Thousands of Dollars)
Balance at April 28, 2004........... $923,939 $179,544 $670,935 $165,646 $19,850 $1,959,914
Acquisition......................... -- 6,558 4,541 -- -- 11,099
Purchase accounting
reclassifications................. -- (1,190) -- (298) -- (1,488)
Disposal............................ (2,548) -- -- -- -- (2,548)
Translation adjustments............. 2,109 -- 14,276 407 608 17,400
Impairment.......................... -- -- -- -- (6,848) (6,848)
-------- -------- -------- -------- ------- ----------
Balance at July 28, 2004............ $923,500 $184,912 $689,752 $165,755 $13,610 $1,977,529
======== ======== ======== ======== ======= ==========
</Table>
The above impairment, which was classified within cost of products sold,
was due to a deterioration of current and expected operating results of a
consolidated joint venture following a recall in Fiscal 2004. The Company
reached an agreement with third parties, the proceeds of which were offset
by the impairment and other damages incurred to date. The annual impairment
tests are performed in the fourth quarter of each fiscal year unless events
suggest an impairment may have occurred in the interim.
Trademarks and other intangible assets at July 28, 2004 and April 28, 2004,
subject to amortization expense, are as follows:
<Table>
<Caption>
July 28, 2004 April 28, 2004
------------------------------- -------------------------------
Accum Accum
Gross Amort Net Gross Amort Net
-------- --------- -------- -------- --------- --------
(Thousands of Dollars)
Trademarks........................... $185,071 $ (50,882) $134,189 $188,927 $ (50,505) $138,422
Licenses............................. 208,186 (119,976) 88,210 208,186 (118,504) 89,682
Other................................ 122,772 (63,298) 59,474 123,394 (63,156) 60,238
-------- --------- -------- -------- --------- --------
$516,029 $(234,156) $281,873 $520,507 $(232,165) $288,342
======== ========= ======== ======== ========= ========
</Table>
Amortization expense for trademarks and other intangible assets subject to
amortization was $3.3 million and $3.5 million for the quarter ended July
28, 2004 and July 30, 2003, respectively. Based upon the amortizable
intangible assets recorded on the balance sheet at July 28, 2004,
amortization expense for each of the next five years is estimated to be
approximately $13 million.
Intangible assets not subject to amortization at July 28, 2004 and April
28, 2004 were $510.3 million and $505.5 million, respectively, and
consisted solely of trademarks.
(6) STOCK-BASED COMPENSATION PLANS
Stock-based compensation is accounted for by using the intrinsic
value-based method in accordance with Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees."
7
The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." Accordingly, no compensation
cost has been recognized for the Company's stock option plans. If the
Company had elected to recognize compensation cost based on the fair value
of the options granted at grant date as prescribed by SFAS No. 123, income
and income per common share from continuing operations would have been as
follows:
<Table>
<Caption>
First Quarter Ended
-----------------------------
July 28, 2004 July 30, 2003
------------- -------------
(In Thousands, Except per
Share Amounts)
Income from continuing operations:
As reported............................................ $194,836 $186,825
Fair value-based expense, net of tax................... 6,140 4,907
-------- --------
Pro forma.............................................. $188,696 $181,918
======== ========
Income per common share from continuing operations:
Diluted
As reported.......................................... $ 0.55 $ 0.53
Pro forma............................................ $ 0.53 $ 0.51
Basic
As reported.......................................... $ 0.56 $ 0.53
Pro forma............................................ $ 0.54 $ 0.52
</Table>
The weighted-average fair value of options granted was $6.58 and $6.30 per
share in the first quarter ended July 28, 2004 and July 30, 2003,
respectively.
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions:
<Table>
<Caption>
First Quarter Ended
--------------------
July 28, July 30,
2004 2003
-------- --------
Dividend yield.............................................. 3.0% 3.3%
Volatility.................................................. 15.8% 21.9%
Risk-free interest rate..................................... 4.4% 3.7%
Expected term (years)....................................... 7.9 6.5
</Table>
During the first quarter of Fiscal 2005, the Company granted 302,298
restricted stock units to employees. The fair value of the awards granted
has been recorded as unearned compensation and is shown as a separate
component of shareholders' equity.
8
(7) PENSIONS AND OTHER POST RETIREMENT BENEFITS
The components of net periodic benefit cost are as follows:
<Table>
<Caption>
Pension Benefits Post Retirement Benefits
First Quarter Ended First Quarter Ended
----------------------------- -----------------------------
July 28, 2004 July 30, 2003 July 28, 2004 July 30, 2003
------------- ------------- ------------- -------------
(Thousands of Dollars)
Service cost........................ $ 11,198 $ 10,563 $1,372 $1,200
Interest cost....................... 30,004 28,706 4,054 3,819
Expected return on plan assets...... (41,150) (37,783) -- --
Amortization of net initial asset... (211) (200) -- --
Amortization of prior service
cost.............................. 2,287 2,174 (756) (573)
Amortization of unrecognized loss... 13,750 10,294 1,866 950
Loss/(gain) due to curtailment,
settlement and special termination
benefits.......................... -- (2,348) -- 380
-------- -------- ------ ------
Net periodic benefit cost........... $ 15,878 $ 11,406 $6,536 $5,776
======== ======== ====== ======
</Table>
As of July 28, 2004, the Company has contributed $11 million to fund its
obligations under these plans. As previously disclosed, the Company expects
to make combined cash contributions of approximately $40 million in Fiscal
2005.
(8) RECENTLY ISSUED ACCOUNTING STANDARDS
In December 2003, the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 ("the Act") was signed into law. The Act
introduced a prescription drug benefit under Medicare (Medicare Part D) and
a federal subsidy to sponsors of retirement health care plans that provide
a benefit that is at least actuarially equivalent to Medicare Part D. In
accordance with FASB Staff Position 106-1, the Company elected to defer
recognizing the effects of the Act on the accounting for its retirement
health care plans in Fiscal 2004. In May 2004, the FASB issued Staff
Position 106-2 providing final guidance on the accounting for benefits
provided by the Act. The Staff Position 106-2 will be implemented by the
Company in the second quarter of Fiscal 2005. The Company is currently
evaluating the impact of this guidance on the Company's financial position,
results of operations and cash flows.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity".
This statement affects the classification, measurement and disclosure
requirements of certain freestanding financial instruments including
mandatorily redeemable shares. SFAS No. 150 was effective for the Company
for the second quarter of Fiscal 2004. The adoption of SFAS No. 150
required the prospective classification of Heinz Finance Company's $325
million of mandatorily redeemable preferred shares from minority interest
to long-term debt and the $5.1 million quarterly preferred dividend from
other expenses to interest expense beginning in the second quarter ended
October 29, 2003, with no resulting effect on the Company's profitability.
9
(9) SEGMENTS
The Company's reportable segments are primarily organized by geographical
area. The composition of segments and measure of segment profitability is
consistent with that used by the Company's management.
Descriptions of the Company's reportable segments are as follows:
North American Consumer Products--This segment 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.
U.S. Foodservice--This segment 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 and desserts.
Europe--This segment includes the Company's operations in Europe and
sells products in all of the Company's core categories.
Asia/Pacific--This segment includes the Company's operations in New
Zealand, Australia, Japan, China, South Korea, Indonesia, Singapore and
Thailand. This segment's operations include products in all of the
Company's core categories.
Other Operating Entities--This segment includes the Company's operations
in Africa, India, Latin America, the Middle East and other areas that
sell products in all of the Company's core categories.
The Company's management evaluates performance based on several factors
including net sales, operating income excluding special items, and the use
of capital resources. Intersegment revenues are accounted for at current
market values. Items below the operating income line of the consolidated
statements of income are not presented by segment, since they are excluded
from the measure of segment profitability reviewed by the Company's
management.
10
The following table presents information about the Company's reportable
segments:
<Table>
<Caption>
First Quarter Ended
-----------------------------
July 28, 2004 July 30, 2003
FY 2005 FY 2004
------------- -------------
(Thousands of Dollars)
Net external sales:
North American Consumer Products.......................... $ 488,832 $ 450,778
U.S. Foodservice.......................................... 343,868 331,217
Europe.................................................... 788,725 735,153
Asia/Pacific.............................................. 294,272 290,007
Other Operating Entities.................................. 87,329 88,369
---------- ----------
Consolidated Totals....................................... $2,003,026 $1,895,524
========== ==========
Intersegment revenues:
North American Consumer Products.......................... $ 12,726 $ 14,077
U.S. Foodservice.......................................... 4,242 3,532
Europe.................................................... 4,672 4,535
Asia/Pacific.............................................. 597 674
Other Operating Entities.................................. 390 499
Non-Operating (a)......................................... (22,627) (23,317)
---------- ----------
Consolidated Totals....................................... $ -- $ --
========== ==========
Operating income (loss):
North American Consumer Products.......................... $ 111,092 $ 106,262
U.S. Foodservice.......................................... 54,340 49,200
Europe.................................................... 154,091 171,316
Asia/Pacific.............................................. 32,263 34,266
Other Operating Entities.................................. 14,326 11,238
Non-Operating (a)......................................... (26,458) (23,206)
---------- ----------
Consolidated Totals....................................... $ 339,654 $ 349,076
========== ==========
Operating income (loss) excluding special items (b):
North American Consumer Products.......................... $ 111,092 $ 107,758
U.S. Foodservice.......................................... 54,340 51,700
Europe.................................................... 154,091 146,517
Asia/Pacific.............................................. 32,263 34,266
Other Operating Entities.................................. 14,326 11,238
Non-Operating (a)......................................... (26,458) (21,748)
---------- ----------
Consolidated Totals....................................... $ 339,654 $ 329,731
========== ==========
</Table>
--------------------
(a) Includes corporate overhead, intercompany eliminations and charges not
directly attributable to operating segments.
(b) First Quarter ended July 30, 2003--Excludes the gain on disposal of the
bakery business in Northern Europe and costs to reduce overhead of the
remaining businesses as follows: North American Consumer Products $1.5
million, U.S. Foodservice $2.5 million, Europe $(24.8) million, and
Non-Operating $1.5 million.
11
The Company's revenues are generated via the sale of products in the
following categories:
<Table>
<Caption>
First Quarter Ended
-----------------------------
July 28, 2004 July 30, 2003
FY 2005 FY 2004
------------- -------------
(Thousands of Dollars)
Ketchup, Condiments and Sauces.............................. $ 762,600 $ 742,295
Frozen Foods................................................ 461,540 392,709
Convenience Meals........................................... 450,869 427,180
Infant Foods................................................ 178,951 186,582
Other....................................................... 149,066 146,758
---------- ----------
Total.................................................. $2,003,026 $1,895,524
========== ==========
</Table>
(10) NET INCOME PER COMMON SHARE
The following are reconciliations of income to income applicable to common
stock and the number of common shares outstanding used to calculate basic
EPS to those shares used to calculate diluted EPS:
<Table>
<Caption>
First Quarter Ended
-----------------------------
July 28, 2004 July 30, 2003
FY 2005 FY 2004
------------- -------------
(In Thousands)
Income from continuing operations........................... $194,836 $186,825
Preferred dividends......................................... 4 4
-------- --------
Income from continuing operations applicable to common
stock..................................................... $194,832 $186,821
======== ========
Average common shares outstanding--basic.................. 351,366 352,094
Effect of dilutive securities:
Convertible preferred stock............................ 140 151
Stock options and restricted stock..................... 3,471 2,277
-------- --------
Average common shares outstanding--diluted................ 354,977 354,522
======== ========
</Table>
(11) COMPREHENSIVE INCOME
<Table>
<Caption>
First Quarter Ended
-----------------------------
July 28, 2004 July 30, 2003
FY 2005 FY 2004
------------- -------------
(Thousands of Dollars)
Net income.................................................. $194,836 $214,025
Other comprehensive income:
Foreign currency translation adjustment................ 43,318 54,800
Minimum pension liability adjustment................... (5,707) (4,810)
Net deferred gains/(losses) on derivatives from
periodic revaluations................................ (2,201) (2,626)
Net deferred (gains)/losses on derivatives reclassified
to earnings.......................................... 1,645 4,758
-------- --------
Comprehensive income........................................ $231,891 $266,147
======== ========
</Table>
(12) DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
The Company operates internationally, with manufacturing and sales
facilities in various locations around the world, and utilizes certain
derivative financial instruments to manage its foreign currency, commodity
price, and interest rate exposures. There have been no material changes in
the Company's market risk during the three months ended July 28, 2004.
12
For additional information, refer to pages 23-24 of the Company's Annual
Report on Form 10-K for the fiscal year ended April 28, 2004.
As of July 28, 2004, the Company is hedging forecasted transactions for
periods not exceeding two years. During the next 12 months, the Company
expects $7.1 million of net deferred loss reported in accumulated other
comprehensive loss to be reclassified to earnings. Hedge ineffectiveness
related to cash flow hedges, which is reported in current period earnings
as other income and expense, was not significant for the first quarter
ended July 28, 2004 and July 30, 2003. Amounts reclassified to earnings
because the hedged transaction was no longer expected to occur were not
significant for the first quarter ended July 28, 2004 and July 30, 2003.
The Company uses certain foreign currency debt instruments as net
investment hedges of foreign operations. Losses of $4.1 million (net of
income taxes of $2.4 million), which represented effective hedges of net
investments, were reported as a component of accumulated other
comprehensive loss within unrealized translation adjustment for the first
quarter ended July 28, 2004.
(13) SUBSEQUENT EVENT
In August 2004, the Company and H.J. Heinz Finance Company, a subsidiary of
the Company, amended their $600 million 364-Day Credit Agreement and their
$1.5 billion Five-Year Credit Agreement by combining the agreements into a
$2.0 billion Five-Year Credit Agreement, expiring August 2009. The Credit
Agreement supports the Company's commercial paper borrowings and the
remarketable securities.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SPECIAL ITEMS
DISCONTINUED OPERATIONS
On December 20, 2002, Heinz transferred to a wholly-owned subsidiary ("SKF
Foods") certain assets and liabilities, including its U.S. and Canadian pet food
and pet snacks, U.S. tuna, U.S. retail private label soup and private label
gravy, College Inn broths and its U.S. infant feeding businesses and distributed
all of the shares of SKF Foods common stock on a pro rata basis to its
shareholders. Immediately thereafter, SKF Foods merged with a wholly-owned
subsidiary of Del Monte Foods Company ("Del Monte") resulting in SKF Foods
becoming a wholly-owned subsidiary of Del Monte. Net income from discontinued
operations for the three months ended July 30, 2003 reflects the favorable
settlement of tax liabilities related to the spun off businesses.
DIVESTITURES
During the first quarter of Fiscal 2004, the Company sold its bakery
business in Northern Europe for $57.9 million. The transaction resulted in a
pretax gain of $26.3 million ($13.3 million after-tax), which was used to offset
reorganization costs during Fiscal 2004 and was recorded as a component of
selling, general and administrative expenses ("SG&A"). This sale impacted
approximately 70 employees.
REORGANIZATION COSTS
During the first quarter of Fiscal 2004, the Company recognized $5.5
million pretax ($3.4 million after-tax) of reorganization costs. These costs
were recorded as a component of SG&A and were primarily due to employee
termination and severance costs related to ongoing efforts to reduce overhead
costs at its North American operations following the Fiscal 2003 spin-off
transaction with Del Monte. Additionally, during the first quarter of Fiscal
2004, the Company wrote down pizza crust assets in the United Kingdom totaling
$4.0 million pretax ($2.8 million after-tax) which has been included as a
component of cost of products sold.
THREE MONTHS ENDED JULY 28, 2004 AND JULY 30, 2003
RESULTS OF OPERATIONS
Sales for the three months ended July 28, 2004 increased $107.5 million, or
5.7%, to $2.0 billion. Sales were favorably impacted by volume of 1.9% and
exchange translation rates of 4.0%. The favorable volume impact is mainly due to
strong increases in the North American Consumer Products and Europe segments,
aided by new product introductions. Acquisitions, net of divestitures, increased
sales by 0.8%. Lower pricing decreased sales by 1.0%, principally due to
increased trade promotional spending to support the restage of the Italian
infant feeding business, and market price pressures impacting Northern Europe
and the Tegel poultry business in New Zealand.
Gross profit increased $31.7 million, or 4.5%, to $738.8 million, however
the gross profit margin decreased to 36.9% from 37.3%. The decrease in the gross
profit margin is mainly due to increased commodity costs, increased trade
promotional spending in Europe, and market price pressures impacting the Tegel
poultry business and Latin American businesses. The increase in gross profit is
primarily a result of higher volume and favorable exchange translation rates,
partially offset by lower pricing. Last year's gross profit was unfavorably
impacted by the write down of U.K. pizza crust assets totaling $4.0 million.
SG&A increased $41.1 million, or 11.5%, to $399.1 million, and increased as
a percentage of sales to 19.9% from 18.9%. The increase is primarily due to the
gain recorded on the sale of the
14
Northern European bakery business in the prior year, foreign exchange
translation rates, and increased employee costs related to the new long-term
incentive compensation program ("LTIP"). The new LTIP greatly reduces the use of
stock options in favor of performance units. Last year's SG&A was unfavorably
impacted by reorganization costs totaling $5.5 million. Operating income
decreased $9.4 million, or 2.7%, to $339.7 million, and decreased as a
percentage of sales to 17.0% from 18.4% as a result of the changes noted above.
Net interest expense increased $0.2 million, to $46.7 million. Net interest
expense was unfavorably impacted by the adoption of SFAS No. 150 (see below for
further discussion) beginning in the second quarter of Fiscal 2004. The
unfavorable impact on net interest expense related to the adoption of SFAS No.
150 was largely offset by lower debt balances in the first quarter of Fiscal
2005. Other expenses, net, decreased $10.6 million, resulting from the SFAS 150
reclassification and lower currency losses. The effective tax rate for the
current quarter was 32.0% compared to 34.6% last year. The current year
effective tax rate was favorably impacted by changes to the capital structure in
certain foreign subsidiaries. The prior year effective tax rate was unfavorably
impacted by the sale of the Northern European bakery business.
Income from continuing operations for the first quarter of Fiscal 2005 was
$194.8 million compared to $186.8 million in the year earlier quarter, an
increase of 4.3%. Diluted earnings per share was $0.55 in the current year
compared to $0.53 in the prior year, up 4.2%.
OPERATING RESULTS BY BUSINESS SEGMENT
NORTH AMERICAN CONSUMER PRODUCTS
Sales of the North American Consumer Products segment increased $38.1
million, or 8.4%, to $488.8 million. Sales volume increased 6.7% due to
significant growth in Ore-Ida frozen potatoes and SmartOnes frozen entrees,
aided by the introduction of Ore-Ida Extra Crispy Potatoes, new microwavable
Easy Fries, and several new "Truth About Carbs" frozen entrees. Strong
performance in Boston Market HomeStyle meals, Delimex snacks, and TGI Friday's
appetizers also contributed to the volume increase. Sales increased 2.6% due to
the prior year acquisition of the Canadian business of Unifine Richardson B.V.,
which manufactures and sells salad dressings, sauces, and dessert toppings.
Divestitures reduced sales 1.1% primarily due to the sale of Ethnic Gourmet
Foods.
Gross profit increased $5.9 million, or 3.0%, to $202.7 million driven by
the increase in sales volume. The gross profit margin decreased to 41.5% from
43.7% due primarily to sales mix and higher commodity and other manufacturing
costs. Operating income increased $4.8 million, or 4.5%, to $111.1 million, due
to strong volume growth and reduced marketing expenses, partially offset by
higher commodity and distribution costs. Operating income for the first quarter
ended July 30, 2003 was impacted by reorganization costs totaling $1.5 million.
U.S. FOODSERVICE
Sales of the U.S. Foodservice segment increased $12.7 million, or 3.8%, to
$343.9 million. Acquisitions increased sales 2.4%, due to the prior year
acquisition of Truesoups LLC, a manufacturer and marketer of premium frozen
soups. Higher pricing increased sales by 2.2% mainly due to Heinz Ketchup,
single serve condiments, Chef Francisco frozen soups, and Dianne's and Alden
Merrell frozen desserts. Sales volume decreased sales 0.7% due to customer
service issues at Portion Pac Inc. resulting from the startup of a new warehouse
management system that temporarily impacted shipments of some portion control
products early in the quarter. The system is now fully operational.
Gross profit increased $7.0 million, or 7.4%, to $101.7 million, and the
gross profit margin increased to 29.6% from 28.6%. These increases are primarily
due to favorable pricing, sales mix,
15
and the prior year acquisition of Truesoups LLC, partly offset by increases in
commodity costs. Operating income increased $5.1 million, or 10.4%, to $54.3
million, primarily due to growth in gross profit, partially offset by increased
distribution costs. Operating income for the first quarter ended July 30, 2003
was impacted by reorganization costs totaling $2.5 million.
EUROPE
Heinz Europe's sales increased $53.6 million, or 7.3%, to $788.7 million.
Favorable exchange translation rates increased sales by 8.4%. Volume increased
2.1% principally due to newly introduced Weight Watchers products in the frozen
foods category, increases in Heinz ketchup from the successful introduction of
the top-down bottle, increases in Heinz ready-to-serve soups, and expanded
retail distribution of frozen desserts in the U.K. Volume was also favorably
impacted by increased promotional activity supporting John West seafood, Heinz
frozen desserts in the U.K., and the restage of the Italian infant feeding
business. Lower pricing decreased sales 2.2%, primarily due to increased trade
promotion spending related to the restage of the Italian infant feeding business
and lower trade prices in the Netherlands. Divestitures reduced sales 1.0%.
Gross profit increased $15.0 million, or 5.2%, to $303.0 million, while the
gross profit margin decreased from 39.2% to 38.4%. The increase in gross profit
is primarily due to favorable exchange translation rates and strong sales
volume, partially offset by trade promotional spending to reduce prices in Italy
and the Netherlands. The decrease in gross profit margin is primarily related to
lower net pricing and unfavorable raw material and production costs for the
European seafood business. Gross profit for the first quarter ended July 30,
2003 was impacted by the write-down of the U.K. pizza crust assets totaling $4.0
million. Operating income decreased $17.2 million, or 10.1%, to $154.1 million,
largely due to the gain recognized in the prior year on the sale of the Northern
European bakery business, partially offset by growth in gross profit and reduced
marketing expenses.
ASIA/PACIFIC
Sales in Asia/Pacific increased $4.3 million, or 1.5%, to $294.3 million.
Favorable exchange translation rates increased sales by 4.2%. Volume decreased
sales 1.0%, as strong volume in convenience meals and poultry in New Zealand
were primarily offset by declines in Japan. Lower pricing reduced sales 1.7%
primarily due to market price pressures on Tegel poultry in New Zealand.
Gross profit increased $1.0 million, or 1.0%, to $95.5 million. The gross
profit margin decreased slightly to 32.5% from 32.6%. The increase in gross
profit is primarily due to favorable exchange translation rates in Australia and
New Zealand and lower commodity costs in Indonesia, partially offset by lower
volume and Tegel poultry's lower pricing. Operating income decreased $2.0
million, or 5.8%, to $32.3 million, due to reduced net pricing and increased
distribution costs.
OTHER OPERATING ENTITIES
Sales for Other Operating Entities decreased $1.0 million, or 1.2%, to
$87.3 million. Volume decreased 4.8% due primarily to lower sales in Israel,
following a product recall in the third quarter of Fiscal 2004. Lower pricing
reduced sales by 5.1%, mainly due to decreases in Latin America as a result of
market price pressures. The prior year acquisition of a frozen food business in
South Africa increased sales by 8.2%. Gross profit decreased $2.1 million, or
6.8%, to $28.8 million, due mainly to lower sales in Israel and Latin America,
partially offset by the impact of a prior year acquisition in South Africa.
Operating income increased $3.1 million due to reduced general and
administrative expenses, partially offset by increased distribution costs.
During the first quarter of Fiscal 2005, the Company reached an agreement
with third parties related to a recall in Fiscal 2004. The proceeds of the
agreement offset recall related damages incurred to date.
16
Zimbabwe remains in a period of economic uncertainty. Should the current
situation continue, the Company could experience disruptions and delays
associated with its Zimbabwe operations. As of the end of November 2002, the
Company deconsolidated its Zimbabwean operations and classified its remaining
net investment of approximately $110 million as a cost investment included in
other non-current assets on the consolidated balance sheets. Although the
Company's business continues to operate profitably and it is able to source raw
materials, the country's economic situation remains uncertain and the Company's
ability to recover its investment could become impaired.
LIQUIDITY AND FINANCIAL POSITION
The following discussion of liquidity and financial position references
certain business measures utilized by Senior Management and the Board of
Directors to gauge our business operating performance. Management believes the
adjusted GAAP measures provide additional clarity in understanding the trends of
the business.
Cash provided by operating activities was $186.2 million, a decrease of
$79.8 million from the prior year. The decrease in Fiscal 2005 versus Fiscal
2004 is primarily due to working capital movements compared to the exceptional
performance in the last fiscal year, particularly accounts receivable and
accounts payable.
Cash used for investing activities totaled $34.5 million compared to $28.1
million last year. Proceeds from divestitures, net of acquisitions, provided
$10.8 million in the first three months of Fiscal 2005. In Fiscal 2004,
acquisitions, net of divestitures, used $3.4 million in cash. Capital
expenditures totaled $38.4 million (1.9% of sales) compared to $29.6 million
(1.6% of sales) last year.
Cash used for financing activities totaled $160.4 million compared to
$251.1 million last year. The Company paid down $6.2 million in long-term debt
during the current period, compared to $40.4 million last year. Proceeds on
short-term borrowings were $1.7 million this year, compared to payments of
$123.9 million in the prior year. Cash used for the purchases of treasury stock,
net of proceeds from option exercises, was $67.2 million this year compared to
$4.2 million in the prior year, in line with the Company's strategy of
maintaining fully diluted shares at a constant level. Dividend payments totaled
$100.0 million, compared to $95.1 million for the same period last year,
reflecting a 5.5% increase in the annual dividend on common stock.
The Company's primary measure of cash flow performance is operating free
cash flow (cash provided by operating activities less capital expenditures). For
the first three months of Fiscal 2005, the Company had operating free cash flow
totaling $147.7 million as compared to $236.3 million for the same period a year
ago. This decrease in operating free cash flow is the result of less favorable
working capital movement in the quarter, despite an absolute lower level of
working capital this year, and increased capital expenditures in the current
year.
The Company continued its debt reduction efforts in the first three months
of Fiscal 2005 by retiring approximately $6 million of debt. At July 28, 2004,
the Company's net debt (total debt net of the value of interest rate swaps
($95.4 million), less cash and cash equivalents) was $3.69 billion. Excluding
the reclassification of Heinz Finance Company's preferred stock (see below for
further discussion), net debt would have been $3.37 billion, down approximately
$320 million as compared to the prior year. The Company expects that over $400
million of long-term debt maturing in Fiscal 2005 will be retired.
In August 2004, the Company and H.J. Heinz Finance Company, a subsidiary of
the Company, amended their $600 million 364-Day Credit Agreement and their $1.5
billion Five-Year Credit Agreement by combining the agreements into a $2.0
billion Five-Year Credit Agreement, expiring August 2009. The Credit Agreement
supports the Company's commercial paper borrowings and the remarketable
securities. As a result, these borrowings are classified as long-term debt based
upon
17
the Company's ability to refinance these borrowings on a long-term basis. The
Company also maintains in excess of $500 million of other credit facilities used
primarily by the Company's foreign subsidiaries. These resources together with
the Company's existing cash balance of almost $1.2 billion, its anticipated
strong operating cash flow and access to the capital market, if required, should
enable the Company to meet its cash requirements for operations, including
capital expansion programs, debt maturities, and dividends to shareholders.
The impact of inflation on both the Company's financial position and the
results of operations is not expected to adversely affect Fiscal 2005 results.
CONTRACTUAL OBLIGATIONS
The Company is obligated to make future payments under various contracts
such as debt agreements, lease arrangements and unconditional purchase
obligations. In addition, the Company has purchase obligations for materials,
supplies, services and property, plant and equipment as part of the ordinary
conduct of business. A few of these obligations are long-term and are based on
minimum purchase requirements. In the aggregate, such commitments are not at
prices in excess of current markets. Due to the proprietary nature of some of
the Company's materials and processes, certain supply contracts contain penalty
provisions for early terminations. The Company does not believe that a material
amount of penalties are reasonably likely to be incurred under these contracts
based upon historical experience and current expectations. There have been no
material changes to contractual obligations during the three months ended July
28, 2004. For additional information, refer to page 22 of the Company's Annual
Report on Form 10-K for the fiscal year ended April 28, 2004.
RECENTLY ISSUED ACCOUNTING STANDARDS
In December 2003, the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 ("the Act") was signed into law. The Act introduced a
prescription drug benefit under Medicare (Medicare Part D) and a federal subsidy
to sponsors of retirement health care plans that provide a benefit that is at
least actuarially equivalent to Medicare Part D. In accordance with FASB Staff
Position 106-1, the Company elected to defer recognizing the effects of the Act
on the accounting for its retirement health care plans in Fiscal 2004. In May
2004, the FASB issued staff position 106-2 providing final guidance on
accounting for the Act. The Staff Position 106-2 will be implemented by the
Company in the second quarter of Fiscal 2005. The Company is currently
evaluating the impact of this guidance on the Company's financial position,
results of operations and cash flows.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". This
statement affects the classification, measurement and disclosure requirements of
certain freestanding financial instruments including mandatorily redeemable
shares. SFAS No. 150 was effective for the Company for the second quarter of
Fiscal 2004. The adoption of SFAS No. 150 required the prospective
classification of Heinz Finance Company's $325 million of mandatorily redeemable
preferred shares from minority interest to long-term debt and the $5.1 million
quarterly preferred dividend from other expenses to interest expense beginning
in the second quarter ended October 29, 2003, with no resulting effect on the
Company's profitability.
18
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION
Statements about future growth, profitability, costs, expectations, plans,
or objectives included in this report, including the management's discussion and
analysis, the financial statements and footnotes, are forward-looking statements
based on management's estimates, assumptions, and projections. These
forward-looking statements are subject to risks, uncertainties, and other
important factors that could cause actual results to differ materially from
those expressed or implied in this report and the financial statements and
footnotes. These include, but are not limited to, sales, earnings, and volume
growth, general economic, political, and industry conditions, competitors'
actions, which affect, among other things, customer preferences and the pricing
of products, production, energy and raw material costs, product recalls, the
ability to maintain favorable supplier relationships, achieving cost savings
programs and gross margins, currency valuations and interest rate fluctuations,
success of acquisitions, joint ventures, and divestitures, new product and
packaging innovations, the effectiveness of advertising, marketing, and
promotional programs, supply chain efficiency and cash flow initiatives, the
impact of e-commerce and e-procurement, risks inherent in litigation, including
the Remedia related claims in Israel and rights against third parties,
international operations, particularly the performance of business in
hyperinflationary environments, changes in estimates in critical accounting
judgments, the possibility of increased pension expense and contributions, and
other factors described in "Cautionary Statement Relevant to Forward-Looking
Information" in the Company's Form 10-K for the fiscal year ended April 28,
2004, and the Company's subsequent filings with the Securities and Exchange
Commission. The forward-looking statements are and will be based on management's
then current views and assumptions regarding future events and speak only as of
their dates. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by the securities laws.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in the Company's market risk during the
three months ended July 28, 2004. For additional information, refer to pages
23-24 of the Company's Annual Report on Form 10-K for the fiscal year ended
April 28, 2004.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, evaluated the effectiveness of
the Company's disclosure controls and procedures as of the end of the period
covered by this report. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures, as of the end of the period covered by this report, were designed
and are functioning effectively to provide reasonable assurance that the
information required to be disclosed by the Company in reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms. The Company
believes that a controls system, no matter how well designed and operated,
cannot provide absolute assurance that the objectives of the controls system are
met, and no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company have been
detected.
(b) Changes in Internal Control over Financial Reporting
No change in the Company's internal control over financial reporting
occurred during the Company's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
19
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Nothing to report under this item.
ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES
In the first quarter of Fiscal 2005, the Company repurchased the following
number of shares of its common stock:
<Table>
<Caption>
(d) Maximum
(a) Total (c) Total Number of Number of Shares
Number of (b) Average Shares Purchased as that May Yet Be
Shares Price Paid Part of Publicly Purchased Under
Period Purchased per Share Announced Programs the Programs
- ------ --------- ----------- ------------------- ----------------
April 29, 2004 -
May 26, 2004....... -- -- -- --
May 27, 2004 -
June 23, 2004...... 1,765,200 $37.77 -- --
June 24, 2004 -
July 28, 2004...... 909,800 $38.73 -- --
--------- ------ ---- ----
Total................ 2,675,000 $38.10 -- --
========= ====== ==== ====
</Table>
The shares repurchased were acquired under the share repurchase program
authorized by the Board of Directors on January 14, 2004 for a maximum of 15
million shares. All repurchases were made in open market transactions. As of
July 28, 2004, the maximum number of shares that may yet be purchased under the
2004 program is 12,006,150.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Nothing to report under this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Nothing to report under this item.
ITEM 5. OTHER INFORMATION
Nothing to report under this item.
20
ITEM 6. EXHIBITS
Exhibits required to be furnished by Item 601 of Regulation S-K are listed
below. The Company may have omitted certain exhibits in accordance with
Item 601(b)(4)(iii)(A) of Regulation S-K. The Company agrees to furnish
such documents to the Commission upon request. Documents not designated as
being incorporated herein by reference are set forth herewith. The
paragraph numbers correspond to the exhibit numbers designated in Item 601
of Regulation S-K.
12. Computation of Ratios of Earnings to Fixed Charges.
31(a). Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive
Officer.
31(b). Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial
Officer.
32(a). Certification by the Chief Executive Officer Relating to a
Periodic Report Containing Financial Statements.*
32(b). Certification by the Chief Financial Officer Relating to a
Periodic Report Containing Financial Statements.*
- ---------------
* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to liability under that section, nor
shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as expressly
set forth by specific reference in such filing.
21
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
H. J. HEINZ COMPANY
(Registrant)
Date: August 24, 2004
By: /s/ ARTHUR B. WINKLEBLACK
..........................................
Arthur B. Winkleblack
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: August 24, 2004
By: /s/ EDWARD J. MCMENAMIN
..........................................
Edward J. McMenamin
Senior Vice President--Finance
and Corporate Controller
(Principal Accounting Officer)
22
EXHIBIT INDEX
DESCRIPTION OF EXHIBIT
Exhibits required to be furnished by Item 601 of Regulation S-K are listed
below. Documents not designated as being incorporated herein by reference are
furnished herewith. The paragraph numbers correspond to the exhibit numbers
designated in Item 601 of Regulation S-K.
12. Computation of Ratios of Earnings to Fixed Charges.
31(a). Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive
Officer.
31(b). Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial
Officer.
32(a). Certification by the Chief Executive Officer Relating to a
Periodic Report Containing Financial Statements.*
32(b). Certification by the Chief Financial Officer Relating to a
Periodic Report Containing Financial Statements.*
- ---------------
* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") or otherwise subject to liability under that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as expressly set forth by
specific reference in such filing.