Exhibit 99.1
Heinz Reports Another Strong Quarter and Raises Full Year EPS Outlook
to a Range of $2.35 to $2.39 due to Strong Business Momentum
Heinz Delivers Operating Income Growth of 10.2% in the Second
Quarter (excluding special items in the prior year)
-- Sales grew 3.5% and volume rose 2.5%, driven by global
innovation, marketing and new products. Net of acquisitions
and divestitures, sales grew 6.1%;
-- The operating income growth, excluding special items, was
driven by increased volume and a 50 basis point improvement in
gross profit margin. Reported operating income increased to
$383 million from $301 million in the second quarter last
year;
-- EPS of $0.59 from continuing operations compared to $0.60 for
the second quarter last year (excluding special items) due to
a higher tax rate of 34.8% in this quarter compared to 23.8% a
year ago. The full year estimated tax rate is 30%;
-- Through the first half of Fiscal 2007, sales were up 5.8% and
operating income (excluding prior year special items) up
10.4%.
Business Editors
PITTSBURGH--(BUSINESS WIRE)--Nov. 30, 2006--Building on an
excellent first quarter, H. J. Heinz Company (NYSE:HNZ) today reported
strong operating income growth of 10% for its second quarter
(excluding special items in the prior year) driven by outstanding
performance of Heinz's top brands and products. Sales increased 3.5%,
as the Company's focus and investment behind its top brands resulted
in impressive growth including Heinz(R) branded products (9% growth),
Weight Watchers(R) Smart Ones(R) meals (17% growth), Classico(R) pasta
sauces (9% growth), T.G.I. Friday's(R) frozen snacks (12% growth),
Plasmon(R) baby food (7% growth) and Weight Watchers(R) meals (11%
growth).
On a total company basis, including the impact of discontinued
operations, the Company reported net income of $191.6 million or $0.57
per diluted share in the current quarter, compared to $203.8 million
or $0.60 per share in the prior year. On a continuing operations
basis, the Company reported income of $197.4 million or $0.59 per
share compared to $168.3 million or $0.49 per share in the prior year.
Excluding discontinued operations and special items in the prior year
only, net income was $197.4 million in the current quarter or $0.59
per diluted share, compared to $205.4 million or $0.60 per share as
the prior year benefited from a very low tax rate. The tax rate for
the quarter was 34.8% compared to 23.8% a year ago, excluding special
items. There were no special items in the second quarter of Fiscal
2007.
Commenting on the Company's performance, Heinz's Chairman,
President and CEO William R. Johnson said: "We are pleased by the
excellent operating results in the quarter. Sales of our top ten
brands grew by 8% and total Heinz operating income for the quarter
increased 10%. North American Consumer Products continued its strong
momentum with sales up 7.5% and operating income up 12.5%. Our
businesses in Europe are building momentum and generated 9.7%
operating income growth in the quarter. Capitalizing on the health and
wellness trend, sales of the Heinz brand worldwide grew 9%, the Weight
Watchers Smart Ones brand was up 17%, the Classico brand was up 9% and
Weight Watchers from Heinz(R) meals in the UK grew 11%. Our Asia
Pacific businesses grew sales 6% and profit 16% as a result of new
product introductions and increased marketing. I am also pleased by
our continued improvements in working capital management - where we
reduced the Cash Conversion Cycle for the quarter by 10 days, to a
record low of 49 days."
Mr. Johnson continued, "Through the first half of the year, we
have driven sales growth of almost 6% and operating income growth of
better than 10%, and we are tracking well against the commitments we
made on June 1."
INNOVATION IN HEALTH, WELLNESS & CONVENIENCE
As one of the original companies dedicated to "Pure Food," Heinz's
brand portfolio is uniquely positioned to harness the growing consumer
demand for healthy eating options, while continuing to provide
solutions for convenience-seeking consumers.
A sampling of Heinz's exciting new product initiatives in health,
wellness and convenience in the quarter included:
-- In the U.S. -- the introduction of Classico organic pasta
sauces.
-- In Australia and New Zealand -- the launch of Heinz Fruit
Splat(TM) and Wattie's Fruit Squirtz(TM) ranges of strained
fruit snacks with no added sugars, colors or preservatives in
single-serve packs equal to one portion of fruit. Also, the
continued expansion of the steamfresh line of vegetables and
vegetable based meals.
-- In Italy -- a range of special care infant foods in the
Plasmon brand offering Italian parents solutions for children
who have digestion problems, difficulty sleeping, food
allergies or are underweight.
-- In Canada -- the successful launch of Weight Watchers Smart
Ones meals.
"We have launched more than 100 great-tasting new products this
year, which we are supporting with strong consumer marketing, as well
as effective customer co-marketing and in-store promotional
activities," Mr. Johnson said. "We have robust new product pipelines
across all of our major business segments that are helping to drive
positive growth and margin expansion."
(Comments herein refer to the following non-GAAP financial
measures: adjusted gross profit and adjusted operating income for
Fiscal 2006, which exclude special items, and Operating Free Cash Flow
for 2007. There have been no special items in Fiscal 2007. See
attached tables for further details, including reconciliation of
non-GAAP financial measures. Management believes that the adjusted
GAAP measures provide additional clarity in understanding the trends
of the business as they enable investors to use financial measures
that management uses in addition to GAAP measures to evaluate the
day-to-day operations of the business.)
SECOND QUARTER SUMMARY
Second quarter sales increased 3.5%, to $2.23 billion from $2.16
billion. Sales increased 2.5% from volume, 1.7% from net pricing and
1.8% from foreign exchange, partially offset by a 2.6% decline from
the impact of divestitures, net of acquisitions. The volume increase
was driven by the continued success of our business in North America
with increased innovation and marketing behind Weight Watchers Smart
Ones meals and Boston Market(R) entrees. The volume results were also
driven by frozen entrees globally and a number of new product
introductions, particularly in Australia and New Zealand.
Gross profit margin in the second quarter increased to 37.9% from
the adjusted gross profit in 2006 of 37.4%. These increases reflect
higher volume and increased pricing and were partially offset by
commodity cost increases and the impact of divestitures. Operating
income in the second quarter of Fiscal 2007 of $383.0 million,
increased 10.2% from adjusted operating income in the second quarter
of 2006, largely due to increased volume in the U.S., Australia and
New Zealand, the higher gross profit margin and reductions in selling
and distribution expenses ("S&D") and general and administrative
expenses ("G&A"). S&D and G&A declined, despite volume increases, as a
result of strong productivity gains and targeted workforce reductions
last year. These declines were partially offset by increased marketing
expense, particularly in the North American Consumer Products segment,
and increased compensation costs related to the adoption of FAS 123R
in the current year.
The operating income increase of 10.2% was offset by an increase
in the effective tax rate of 11 percentage points to 34.8%, and
resulted in a 1.7% decline in EPS. The higher effective tax rate is
due to the benefit in the prior year from the reversal of a tax
provision of $23.4 million related to a foreign affiliate, partially
offset by the non-deductibility of certain asset write-offs taken that
quarter. The Company continues to anticipate that the reported tax
rate on continuing operations for the year will be approximately 30%.
Heinz's working capital management showed continued improvement
over the prior year, as the Cash Conversion Cycle for the quarter
improved 10 days, to 49 days, reflecting improvements in the current
year core operations and the impact of prior year divestitures. The
Company generated $176 million of Operating Free Cash Flow (cash flow
from operations plus proceeds from disposals of property, plant and
equipment less capital expenditures) in the second quarter of Fiscal
2007.
SECOND QUARTER SEGMENT HIGHLIGHTS
NORTH AMERICAN CONSUMER PRODUCTS
Sales of the North American Consumer Products segment increased
7.5%. Volume increased 4.7%, largely resulting from strong growth in
Classico pasta sauces and Weight Watchers Smart Ones and Boston
Market(R) frozen entrees, sides and desserts. Volume increases were
also generated from increased consumption of T.G.I. Friday's and Bagel
Bites(R) frozen snacks and Heinz(R) gravy. Pricing increased 1.0%
largely due to Heinz(R) ketchup and Ore-Ida frozen potatoes.
Acquisitions increased sales 0.8%, primarily from the recent
acquisition of Renee's Gourmet Foods, a Canadian manufacturer of
premium refrigerated salad dressings, sauces, dips, marinades and
mayonnaise. Favorable Canadian exchange translation rates increased
sales 1.0%.
Adjusted operating income increased 12.5%, due primarily to
increased volume, higher pricing, manufacturing efficiencies in the
Canadian business and lower selling and delivery costs. These
increases were partially offset by increased marketing expenses,
primarily for Weight Watchers Smart Ones meals, Ore-Ida frozen
potatoes and frozen snacks.
U.S. FOODSERVICE
Sales of the U.S. Foodservice segment increased 5.4% primarily as
a result of higher volume. Volume rose 5.1%, due to higher volume in
Heinz ketchup and frozen soup, appetizers and desserts. Divestitures,
net of acquisitions, reduced sales 2.1%.
Adjusted operating income increased 13.3% primarily due to
increased volume and cost reduction programs. This increase was
partially offset by higher commodity costs. In addition, operating
income benefited from lower S&D costs as a percentage of sales,
reflecting strong productivity initiatives to reduce transportation
costs.
EUROPE
Adjusted operating income increased 9.7% due to higher pricing and
reduced G&A. The decrease in G&A is chiefly a result of prior year
targeted workforce reductions, including the virtual elimination of
European headquarters. Marketing expense is expected to increase in
the second half of the year with the planned launch of HP Top Down,
and the Dreamz Meanz(TM) Heinz initiative, an integrated consumer and
trade promotion that runs across the entire Heinz brand portfolio in
the UK.
Sales excluding acquisitions and divestitures, were up 4.4% driven
by growth in Heinz ketchup across Europe, Heinz(R) beans in the UK,
and Pudlizski sauces in Poland. Heinz ketchup growth was driven
primarily by increased marketing and wider distribution. Overall,
sales decreased 0.8% as higher pricing on Heinz(R) soup and pasta
meals in the UK was offset by reduced volume in Italy and Russia due
to reduced promotions and competitive pressures. The acquisition of HP
Foods in Fiscal 2006 increased sales by 1.5% and favorable exchange
rates increased sales by 4.7%.
ASIA PACIFIC
Sales in Asia/Pacific increased a robust 6.0%. Volume increased
sales 3.7% reflecting continued strong volume in Australia and New
Zealand, largely due to new product introductions, such as Weight
Watchers steamfresh vegetables and meals.
Adjusted operating income increased 16.4% as higher volume and net
pricing along with lower G&A was only partially offset by higher
commodity costs and increased marketing. The reduction in G&A is a
result of targeted workforce reductions, including the virtual
elimination of Asian headquarters.
REST OF WORLD (ROW)
Sales for ROW, excluding acquisitions and divestitures, were up
double digits in the quarter. Overall sales decreased 4.0%, as
divestitures reduced sales 13.6% and foreign exchange translation
rates reduced sales 3.1%. Volume increased 6.8% due primarily to
market and share growth in nutritional drinks in India and growth in
baby food in Latin America. Higher pricing increased sales by 5.9%,
largely due to reduced promotions and price increases taken in Latin
America.
Adjusted operating income increased 13.5% as increased pricing was
partially offset by the impact of divestitures.
YEAR TO DATE HIGHLIGHTS
Sales for the six months ended November 1, 2006 increased 5.8%.
Sales were favorably impacted by a volume increase of 3.7%. Positive
increases were generated in all of the Company's segments, led by the
North American Consumer Products and U.S. Foodservice segments. Strong
volume increases were also noted in our businesses in Australia, New
Zealand and Italy, as well as in the emerging markets of India, China
and Poland, in line with the Company's strategy to focus on such key
emerging markets. Net pricing increased sales by 1.4%. Divestitures,
net of acquisitions, decreased sales by 0.7%. Foreign exchange
translation rates increased sales by 1.5%.
Adjusted operating income for the six months increased 10.4%,
which was favorably impacted by increased volume and the higher gross
profit margin of 37.7% versus 37.2% last year. Income from continuing
operations was $1.17 per diluted share in the six months ended
November 1, 2006, compared to income from continuing operations,
excluding special items, in the prior six months of $1.07 per share.
On a total company basis, net income was $1.15 per diluted share this
year compared to $1.04 per diluted share last year.
MEETING WITH SECURITIES ANALYSTS - INTERNET BROADCASTS
Heinz will host a conference call with security analysts today at
8:30 a.m. (Eastern Time). The call will be webcast live on
www.heinz.com and will be archived for playback beginning at 2 p.m.
The call is available live for Media (listen only) at (800)
955-1760 (U.S.). It will be hosted by William R. Johnson, Chairman,
President & CEO; Art Winkleblack, Executive Vice President and Chief
Financial Officer; Ed McMenamin, Senior Vice President - Finance and
Corporate Controller; and Jack Runkel, Vice President - Investor
Relations.
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS:
This press release contains forward-looking statements within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
generally identified by the words "will," "expects," "anticipates,"
"believes," "estimates" or similar expressions and include our
expectations as to future revenue growth, earnings, capital
expenditures and other spending, as well as anticipated reductions in
spending. These forward-looking statements reflect management's view
of future events and financial performance. These statements are
subject to risks, uncertainties, assumptions and other important
factors, many of which may be beyond Heinz's control, and could cause
actual results to differ materially from those expressed or implied in
these forward-looking statements. Factors that could cause actual
results to differ from such statements include, but are not limited
to:
-- sales, earnings, and volume growth,
-- general economic, political, and industry conditions,
-- competitive conditions, which affect, among other things,
customer preferences and the pricing of products, production,
energy and raw material costs,
-- the ability to identify and anticipate and respond through
innovation to consumer trends,
-- the need for product recalls,
-- the ability to maintain favorable supplier relationships,
-- currency valuations and interest rate fluctuations,
-- changes in credit ratings,
-- the ability to identify and complete and the timing, pricing
and success of acquisitions, joint ventures, divestitures and
other strategic initiatives,
-- approval of acquisitions and divestitures by competition
authorities, and satisfaction of other legal requirements,
-- the ability to successfully complete cost reduction programs,
-- the voting results on shareholder proposals, including the
proposed amendments to require majority voting,
-- the ability to limit disruptions to the business resulting
from the emphasis on three core categories and potential
divestitures,
-- the ability to effectively integrate acquired businesses, new
product and packaging innovations,
-- product mix,
-- the effectiveness of advertising, marketing, and promotional
programs,
-- the ability to maintain sales growth while reducing any
spending on advertising, marketing and promotional programs,
-- supply chain efficiency,
-- cash flow initiatives,
-- risks inherent in litigation, including tax litigation, and
international operations, particularly the performance of
business in hyperinflationary environments,
-- changes in estimates in critical accounting judgments and
changes in laws and regulations, including tax laws,
-- the success of tax planning strategies,
-- the possibility of increased pension expense and contributions
and other people-related costs,
-- the possibility of an impairment in Heinz's investments, and
-- other factors described in "Risk Factors" and "Cautionary
Statement Relevant to Forward-Looking Information" in the
Company's Form 10-K for the fiscal year ended May 3, 2006.
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.
ABOUT HEINZ: H. J. Heinz Company, offering "Good Food Every Day"(
TM) is one of the world's leading marketers and producers of
nutritious foods in ketchup, condiments, sauces, meals, soups, snacks
and infant foods. Heinz provides superior quality, taste and nutrition
to people eating at home, at restaurants, at the office and
"on-the-go." Heinz is a global family of leading brands, including
Heinz(R) ketchup, sauces, soups, beans, pasta and infant foods
(representing nearly one-third of total sales or close to $3 billion),
Ore-Ida(R) potato products, Weight Watchers(R) Smart Ones(R) entrees,
Boston Market(R) meals, T.G.I. Friday's(R) snacks, and Plasmon infant
nutrition. Heinz has number-one or number-two brands on five
continents, showcased by Heinz(R) ketchup, The World's Favorite
Ketchup(R). Information on Heinz is available at www.heinz.com.
H. J. Heinz Company and Subsidiaries
Consolidated Statements of Income
(In Thousands, Except per Share Amounts)
Second Quarter Ended Six Months Ended
----------------------- -----------------------
November 1, October 26, November 1, October 26,
2006 2005 2006 2005
FY2007 FY2006 FY2007 FY2006
----------- ----------- ----------- -----------
Sales $2,232,225 $2,156,984 $4,292,145 $4,057,262
Cost of products sold 1,385,627 1,353,212 2,673,130 2,550,928
----------- ----------- ----------- -----------
Gross profit 846,598 803,772 1,619,015 1,506,334
Selling, general and
administrative
expenses 463,613 502,811 916,388 948,508
----------- ----------- ----------- -----------
Operating income 382,985 300,961 702,627 557,826
Interest income 7,103 5,745 14,395 13,798
Interest expense 80,172 76,500 155,798 142,804
Other expense, net (7,106) (7,082) (14,817) (9,918)
----------- ----------- ----------- -----------
Income from continuing
operations before
income taxes 302,810 223,124 546,407 418,902
Provision for income
taxes 105,379 54,793 154,875 110,398
----------- ----------- ----------- -----------
Income from continuing
operations 197,431 168,331 391,532 308,504
(Loss)/income from
discontinued
operations, net of
tax (5,856) 35,490 (5,856) 52,591
----------- ----------- ----------- -----------
Net income $ 191,575 $ 203,821 $ 385,676 $ 361,095
=========== =========== =========== ===========
Income/(loss) per
common share -
Diluted
Continuing
operations $ 0.59 $ 0.49 $ 1.17 $ 0.89
Discontinued
operations (0.02) 0.10 (0.02) 0.15
----------- ----------- ----------- -----------
Net Income $ 0.57 $ 0.60 $ 1.15 $ 1.04
=========== =========== =========== ===========
Average common shares
outstanding - diluted 334,617 342,533 334,767 345,963
=========== =========== =========== ===========
Income/(loss) per
common share - Basic
Continuing
operations $ 0.60 $ 0.50 $ 1.18 $ 0.90
Discontinued
operations (0.02) 0.10 (0.02) 0.15
----------- ----------- ----------- -----------
Net Income $ 0.58 $ 0.60 $ 1.16 $ 1.05
=========== =========== =========== ===========
Average common shares
outstanding - basic 330,670 339,475 331,077 342,856
=========== =========== =========== ===========
Cash dividends per
share $ 0.35 $ 0.30 $ 0.70 $ 0.60
=========== =========== =========== ===========
Note: Fiscal 2006 includes special items.
(Totals may not add due to rounding)
H. J. Heinz Company and Subsidiaries
Segment Data
Second Quarter Ended Six Months Ended
----------------------- -----------------------
November 1, October 26, November 1, October 26,
2006 2005 2006 2005
FY2007 FY2006 FY2007 FY2006
----------- ----------- ----------- -----------
Net external sales:
North American
Consumer Products $ 671,644 $ 625,039 $1,287,221 $1,169,999
U.S. Foodservice 406,222 385,345 772,835 738,556
Europe 739,428 745,543 1,425,290 1,387,442
Asia/Pacific 318,323 300,395 609,856 560,315
Rest of World 96,608 100,662 196,943 200,950
----------- ----------- ----------- -----------
Consolidated Totals $2,232,225 $2,156,984 $4,292,145 $4,057,262
=========== =========== =========== ===========
Intersegment revenues:
North American
Consumer Products $ 12,982 $ 13,128 $ 25,811 $ 25,431
U.S. Foodservice 5,324 5,307 11,378 10,205
Europe 3,812 3,239 8,726 6,474
Asia/Pacific 1,501 449 2,436 1,223
Rest of World 567 301 786 564
Non-Operating (24,186) (22,424) (49,137) (43,897)
----------- ----------- ----------- -----------
Consolidated Totals $ - $ - $ - $ -
=========== =========== =========== ===========
Operating income
(loss):
North American
Consumer Products $ 165,965 $ 147,018 $ 309,179 $ 270,949
U.S. Foodservice 59,537 47,202 114,593 97,664
Europe 139,386 106,887 258,735 200,610
Asia/Pacific 44,317 36,012 75,364 54,701
Rest of World 11,828 (5,002) 23,667 1,365
Non-Operating (38,048) (31,156) (78,911) (67,463)
----------- ----------- ----------- -----------
Consolidated Totals $ 382,985 $ 300,961 $ 702,627 $ 557,826
=========== =========== =========== ===========
Operating income
(loss) excluding
special items:
North American
Consumer Products $ 165,965 $ 147,571 $ 309,179 $ 273,338
U.S. Foodservice 59,537 52,535 114,593 104,345
Europe 139,386 127,059 258,735 233,950
Asia/Pacific 44,317 38,075 75,364 62,490
Rest of World 11,828 10,419 23,667 18,751
Non-Operating (38,048) (28,227) (78,911) (56,207)
----------- ----------- ----------- -----------
Consolidated Totals $ 382,985 $ 347,432 $ 702,627 $ 636,667
=========== =========== =========== ===========
The company's revenues are generated via the sale of products in the
following categories:
Ketchup and Sauces $ 915,149 $ 870,080 $1,816,124 $1,673,009
Meals and Snacks 1,009,344 968,327 1,863,287 1,781,428
Infant Feeding 213,202 207,318 426,899 401,696
Other 94,530 111,259 185,835 201,129
----------- ----------- ----------- -----------
Total $2,232,225 $2,156,984 $4,292,145 $4,057,262
=========== =========== =========== ===========
H. J. Heinz Company and Subsidiaries
Special Items - Second Quarter Ended October 26, 2005
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States of
America ("GAAP"). However, management believes that certain non-GAAP
performance measures and ratios, used in managing the business, may
provide users of this financial information with additional
meaningful comparisons between current results and results in prior
periods. Non-GAAP financial measures should be viewed in addition to,
and not as an alternative for, the Company's reported results
prepared in accordance with GAAP. The following table provides a
reconciliation of the Company's reported results from continuing
operations to the results excluding special items for the second
quarter ended October 26, 2005:
Second Quarter Ended October 26, 2005
------------------------------------------
(amounts in millions) Net Gross Operating Per
Sales Profit Income Income Share
--------- ------- --------- ------- ------
Reported results from
continuing operations $2,157.0 $803.8 $ 301.0 $168.3 $0.49
Reorganization costs - 4.0 31.5 22.2 0.06
Strategic review costs - 1.5 2.3 1.3 -
Net loss on disposals - (3.3) 12.7 13.6 0.04
--------- ------- --------- ------- ------
Results from continuing
operations excluding
special items $2,157.0 $805.9 $ 347.4 $205.4 $0.60
========= ======= ========= ======= ======
(Note: Totals may not add due to rounding.)
H. J. Heinz Company and Subsidiaries
Special Items - Six Months Ended October 26, 2005
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States of
America ("GAAP"). However, management believes that certain non-GAAP
performance measures and ratios, used in managing the business, may
provide users of this financial information with additional
meaningful comparisons between current results and results in prior
periods. Non-GAAP financial measures should be viewed in addition to,
and not as an alternative for, the Company's reported results
prepared in accordance with GAAP. The following table provides a
reconciliation of the Company's reported results from continuing
operations to the results excluding special items for the six months
ended October 26, 2005:
Six Months Ended October 26, 2005
--------------------------------------------
(amounts in millions) Net Gross Operating Per
Sales Profit Income Income Share
--------- --------- --------- ------- ------
Reported results from
continuing operations $4,057.3 $1,506.3 $ 557.8 $308.5 $0.89
Reorganization costs - 6.0 56.5 39.1 0.11
Strategic review costs - 1.5 9.7 7.9 0.02
Net loss on disposals - (3.3) 12.7 13.6 0.04
--------- --------- --------- ------- ------
Results from continuing
operations excluding
special items $4,057.3 $1,510.5 $ 636.7 $369.1 $1.07
========= ========= ========= ======= ======
(Note: Totals may not add due to rounding.)
H. J. Heinz Company and Subsidiaries
Non-GAAP Performance Ratios
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States of
America ("GAAP"). However, management believes that certain non-GAAP
performance measures and ratios, used in managing the business, may
provide users of this financial information with additional
meaningful comparisons between current results and results in prior
periods. Non-GAAP financial measures should be viewed in addition to,
and not as an alternative for, the Company's reported results
prepared in accordance with GAAP. The following table provides the
calculation of the non-GAAP performance ratio discussed in the
Company's press release dated November 30, 2006:
Operating Free Cash
Flow Calculation
(amounts in
thousands) Second Quarter Ended Six Months Ended
----------------------- ------------------------
November 1, October 26, November 1, October 26,
2006 2005 2006 2005
FY 2007 FY 2006 FY 2007 FY 2006
----------- ----------- ----------- ------------
Cash provided by
operating
activities $ 217,012 $ 227,567 $ 264,528 $ 393,483
Capital expenditures (50,615) (52,447) (89,542) (99,609)
Proceeds from
disposals of
property, plant and
equipment 9,765 1,620 34,167 3,427
----------- ----------- ----------- ------------
Operating Free
Cash Flow $ 176,162 $ 176,740 $ 209,153 $ 297,301
=========== =========== =========== ============
CONTACT: H. J. Heinz Company
Media:
Ted Smyth, 412-456-5780
Michael Mullen, 412-456-5751
Michael.mullen@us.hjheinz.com
or
Investors:
Jack Runkel, 412-456-6034