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Previous: HEINZ H J CO, 11-K, 1998-06-29 |
Next: HOUGHTON MIFFLIN CO, 11-K, 1998-06-29 |
<PAGE>
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, 1997
[ ] 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)
600 Grant Street Pittsburgh, PA 15219
(Address of Plan and of principal executive office of Issuer)
<PAGE>
Financial Statements and Exhibits
The following Plan financial statements, schedules and reports are attached
hereto:
1. Independent Accountants' Report dated June 16, 1998 of Coopers & Lybrand
L.L.P. for the Plan financial statements
2. Statements of Net Assets Available for Benefits as of December 31, 1997
and 1996
3. Statements of Changes in Net Assets Available for Benefits for the Years
Ended December 31, 1997 and 1996
4. Notes to Financial Statements
5. Supplemental Schedule of Assets Held for Investment Purposes as of December
31, 1997
6. Supplemental Schedule of Reportable Transactions for the Year Ended December
31, 1997
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 Coopers and Lybrand L.L.P. dated June 25, 1998 is filed
herein.
1
<PAGE>
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/ Gary D. Matson
....................................
Gary D. Matson, Chairman
June 25, 1998
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
H. J. HEINZ COMPANY EMPLOYEE
BENEFITS ADMINISTRATION BOARD:
We have audited the accompanying statements of net assets available for
benefits of the H. J. Heinz Company Employees Retirement and Savings Plan as of
December 31, 1997 and 1996 and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Employee Benefits Administration Board of the H. J.
Heinz Company. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the H. J.
Heinz Company Employees Retirement and Savings Plan as of December 31, 1997 and
1996 and the changes in net assets available for benefits for the years
then ended, in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
for investment purposes and the supplemental schedule of reportable transactions
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 Regulation for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The Fund Information
in the statements of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for the purpose of
additional analysis rather than to present the net assets available for benefits
and changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information 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/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Pittsburgh, Pennsylvania
June 16, 1998
3
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1997
<TABLE>
<CAPTION>
H. J. Heinz Co. Managed Income Magellan Retirement Gov't. Overseas
Stock Fund Portfolio Fund Money Market Fund
--------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $217,835,289 $10,915,736 $54,972,528 $46,830,629 $11,200,580
Investment -- -- -- -- --
Investment income receivable:
Dividends 1,332,392 -- -- -- --
Interest and other 9,496 54,815 2,272 216,294 5
--------------- ------------- -------------- --------------- --------------
Total investment income receivable 1,341,888 54,815 2,272 216,294 5
--------------- ------------- -------------- --------------- --------------
Contributions receivable:
Employee 338,418 13,883 164,898 248,824 42,738
Employer -- 21,128 241,693 423,190 32,178
--------------- ------------- -------------- --------------- --------------
Total contributions receivable 338,418 35,011 406,591 672,014 74,916
--------------- ------------- -------------- --------------- --------------
Participant Loan Receivable 558 -- 208 143 32
--------------- ------------- -------------- --------------- --------------
Total Assets $219,516,153 $11,005,562 $55,381,599 $47,719,080 $11,275,533
--------------- ------------- -------------- --------------- --------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- --
Accrued interest due on note payable -- -- -- -- --
Accrued administrative expenses 84,675 4,238 21,239 18,176 4,327
--------------- ------------- -------------- --------------- --------------
Total Liabilities $84,675 $4,238 $21,239 $18,176 $4,327
--------------- ------------- -------------- --------------- --------------
Net Assets Available for Benefits $219,431,478 $11,001,324 $55,360,360 $47,700,904 $11,271,206
=============== ============= ============== =============== ==============
<CAPTION>
Vanguard
Equity-Income Puritan Intermediate OTC Fixed Income
Fund Fund Bond Fund Portfolio Securities Fund
--------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $40,910,658 $35,369,637 $9,981,683 $4,266,584 $1,969,131
Investment -- -- -- -- --
Investment income receivable:
Dividends -- -- 54,005 -- 25,309
Interest and other 5,078 2,333 -- 6,617 46
--------------- ------------- -------------- --------------- --------------
Total investment income receivable 5,078 2,333 54,005 6,617 25,355
--------------- ------------- -------------- --------------- --------------
Contributions receivable:
Employee 117,986 87,041 16,599 10,971 2,566
Employer 145,095 146,147 41,079 9,672 2,479
--------------- ------------- -------------- --------------- --------------
Total contributions receivable 263,081 233,188 57,678 20,643 5,045
--------------- ------------- -------------- --------------- --------------
Participant Loan Receivable 216 156 -- 6 --
--------------- ------------- -------------- --------------- --------------
Total Assets $41,179,033 $35,605,314 $10,093,366 $4,293,850 $1,999,531
--------------- ------------- -------------- --------------- --------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- --
Accrued interest due on note payable -- -- -- -- --
Accrued administrative expenses 15,807 13,665 3,877 1,651 770
--------------- ------------- -------------- --------------- --------------
Total Liabilities $15,807 $13,665 $3,877 $1,651 $ 770
--------------- ------------- -------------- --------------- --------------
Net Assets Available for Benefits $41,163,226 $35,591,649 $10,089,489 $4,292,199 $1,998,761
=============== ============= ============== =============== ==============
<PAGE>
<CAPTION>
Vanguard Vanguard Vanguard
Wellington Windsor II Index Trust-500
Fund Fund Portfolio
------------- ------------- ---------------
<S> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $3,536,327 $7,215,917 $11,339,648
Investment -- -- --
Investment income receivable:
Dividends -- -- 129,177
Interest and other 97 4,426 5,634
--------------- ------------- --------------
Total investment income receivable 97 4,426 134,811
--------------- ------------- --------------
Contributions receivable:
Employee 9,327 25,434 41,790
Employer 11,144 23,113 36,014
--------------- ------------- --------------
Total contributions receivable 20,471 48,547 77,804
--------------- ------------- --------------
Participant Loan Receivable 20 33 118
--------------- ------------- --------------
Total Assets $3,556,915 $7,268,923 $11,552,381
--------------- ------------- --------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- --
Accrued interest due on note payable -- -- --
Accrued administrative expenses 1,366 2,789 4,433
--------------- ------------- --------------
Total Liabilities $ 1,366 $ 2,789 $ 4,433
--------------- ------------- --------------
Net Assets Available for Benefits $3,555,549 $7,266,134 $11,547,948
=============== ============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1997 (continued)
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard
U.S. Growth Explorer Int'l Growth Participants' ESOP
Portfolio Fund Portfolio Loans Trust Total
----------- ---------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $5,295,569 $1,984,357 $2,648,483 -- -- $466,272,756
Investment -- -- -- $96,228 $92,103,297 92,199,525
Investment income receivable:
Dividends 212,294 219,024 117,223 -- 569,787 2,659,211
Interest and other 3,383 11 23 -- -- 310,530
----------- ---------- ------------ ------------- ----------- ------------
Total investment income receivable 215,677 219,035 117,246 -- 569,787 2,969,741
----------- ---------- ------------ ------------- ----------- ------------
Contributions receivable:
Employee 21,975 9,514 10,133 -- -- 1,162,097
Employer 19,777 7,896 6,868 -- 446,888 1,614,361
----------- ---------- ------------ ------------- ----------- ------------
Total contributions receivable 41,752 17,410 17,001 -- 446,888 2,776,458
----------- ---------- ------------ ------------- ----------- ------------
Participant Loan Receivable 22 9 -- (1,521) -- --
----------- ---------- ------------ ------------- ----------- ------------
Total Assets $5,553,020 $2,220,811 $2,782,730 $94,707 $93,119,972 $564,218,480
----------- ---------- ------------ ------------- ----------- ------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- 16,341,483 16,341,483
Accrued interest due on note payable -- -- -- -- 169,725 169,725
Accrued administrative expenses 2,129 851 1,069 -- 88,878 269,940
----------- ---------- ------------ ------------- ----------- ------------
Total Liabilities $ 2,129 $ 851 $ 1,069 $ -- $16,600,086 $16,781,148
----------- ---------- ------------ ------------- ----------- ------------
Net Assets Available for Benefits $5,550,891 $2,219,960 $2,781,661 $94,707 $76,519,886 $547,437,332
=========== ========== ============ ============= =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1996
<TABLE>
<CAPTION>
H. J. Heinz Co. Managed Income Magellan Retirement Gov't. Overseas
Stock Fund Portfolio Fund Money Market Fund
--------------- ------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $178,619,155 $9,946,832 $45,122,434 $25,070,487 $ 9,977,026
Investment -- -- -- -- --
Investment income receivable:
Dividends 1,429,821 -- -- -- --
Interest and other 8,469 48,572 158 108,983 17
--------------- ------------- -------------- --------------- --------------
Total investment income receivable 1,438,290 48,572 158 108,983 17
--------------- ------------- -------------- --------------- --------------
Contributions receivable:
Employee 356,224 16,699 188,288 184,537 52,817
Employer -- 29,567 250,725 332,952 33,230
--------------- ------------- -------------- --------------- --------------
Total contributions receivable 356,224 46,266 439,013 517,489 86,047
--------------- ------------- -------------- --------------- --------------
Participant Loan Receivable 631 110 363 436 113
--------------- ------------- -------------- --------------- --------------
Total Assets $180,414,300 $10,041,780 $45,561,968 $25,697,395 $10,063,203
--------------- ------------- -------------- --------------- --------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- --
Accrued interest due on note payable -- -- -- -- --
Accrued administrative expenses 46,557 2,584 11,667 6,510 2,580
--------------- ------------- -------------- --------------- --------------
Total Liabilities $46,557 $2,584 $11,667 $6,510 $2,580
--------------- ------------- -------------- --------------- --------------
Net Assets Available for Benefits $180,367,743 $10,039,196 $45,550,301 $25,690,885 $10,060,623
=============== ============= ============== =============== ==============
<CAPTION>
Equity-Income Puritan Intermediate Asset Manager Asset Mgr
Fund Fund Bond Fund Growth Fund Income Fund
--------------- ------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $30,130,183 $31,041,828 $9,349,119 $5,002,592 $489,017
Investment -- -- -- -- --
Investment income receivable:
Dividends -- -- 47,662 -- --
Interest and other 263 174 44 24 1
--------------- ------------- -------------- --------------- --------------
Total investment income receivable 263 174 47,706 24 1
--------------- ------------- -------------- --------------- --------------
Contributions receivable:
Employee 119,270 104,252 20,596 30,177 2,494
Employer 134,547 164,286 54,572 24,321 3,006
--------------- ------------- -------------- --------------- --------------
Total contributions receivable 253,817 268,538 75,168 54,498 5,500
--------------- ------------- -------------- --------------- --------------
Participant Loan Receivable 412 233 64 240 11
--------------- ------------- -------------- --------------- --------------
Total Assets $30,384,675 $31,310,773 $9,472,057 $5,057,354 $494,529
--------------- ------------- -------------- --------------- --------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- --
Accrued interest due on note payable -- -- -- -- --
Accrued administrative expenses 7,790 8,026 2,430 1,294 126
--------------- ------------- -------------- --------------- --------------
Total Liabilities $7,790 $8,026 $2,430 $1,294 $ 126
--------------- ------------- -------------- --------------- --------------
Net Assets Available for Benefits $30,376,885 $31,302,747 $9,469,627 $5,056,060 $494,403
=============== ============= ============== =============== ==============
<PAGE>
<CAPTION>
Asset Manager Retirement Participants' ESOP
Fund Growth Fund Loans Trust Total
------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4, 8) $2,736,284 $21,532,239 -- -- $369,017,196
Investment -- -- $204,385 $70,454,970 70,659,355
Investment income receivable:
Dividends -- -- -- 568,958 2,046,441
Interest and other 8 186 -- -- 166,899
--------------- ------------- -------------- ------------- --------------
Total investment income receivable 8 186 -- 568,958 2,213,340
--------------- ------------- -------------- ------------- --------------
Contributions receivable:
Employee 9,159 94,606 -- -- 1,179,119
Employer 12,395 127,341 -- 456,808 1,623,750
--------------- ------------- -------------- ------------- --------------
Total contributions receivable 21,554 221,947 -- 456,808 2,802,869
--------------- ------------- -------------- ------------- --------------
Participant Loan Receivable 72 315 (3,000) -- --
--------------- ------------- -------------- ------------- --------------
Total Assets $2,757,918 $21,754,687 $201,385 $71,480,736 $444,692,760
--------------- ------------- -------------- ------------- --------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- 20,283,951 20,283,951
Accrued interest due on note payable -- -- -- 120,720 120,720
Accrued administrative expenses 707 5,567 -- 31,900 127,738
--------------- ------------- -------------- ------------- --------------
Total Liabilities $ 707 $ 5,567 -- $20,436,571 $20,532,409
--------------- ------------- -------------- ------------- --------------
Net Assets Available for Benefits $2,757,211 $21,749,120 $201,385 $51,044,165 $424,160,351
=============== ============= ============== ============= ==============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1997
<TABLE>
<CAPTION>
H. J. Heinz Co. Managed Income Magellan Retirement Gov't. Overseas
Stock Fund Portfolio Fund Money Market Fund
--------------- -------------- -------------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $ 58,931,573 $ 5,031,181 $ 8,778,628 $21,565,563 $ 747,162
------------ ----------- ------------ ----------- -----------
Transfers from ESOP to other funds (Note 7) -- -- -- -- --
Additions:
Investment income:
Dividends -- -- -- -- --
Interest -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total investment income -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Participant contributions 4,842,965 274,502 2,575,396 3,439,485 914,882
Age-related employer contributions -- 385,557 3,316,479 4,614,210 596,064
ESOP debt service funding -- -- -- -- --
Transfer for Loan Repayments 7,459 1,165 14,718 6,454 852
------------ ----------- ------------ ----------- -----------
Total additions 4,850,424 661,224 5,906,593 8,060,149 1,511,798
------------ ----------- ------------ ----------- -----------
Deductions:
Withdrawals 24,420,305 4,715,534 4,806,840 7,565,059 1,031,452
Administrative expenses 297,957 14,743 68,322 50,634 16,925
Interest expense on note payable -- -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total deductions 24,718,262 4,730,277 4,875,162 7,615,693 1,048,377
------------ ----------- ------------ ----------- -----------
Net increase (decrease) in net assets available
for benefits for the year 39,063,735 962,128 9,810,059 22,010,019 1,210,583
Net assets available for benefits at
the beginning of the year 180,367,743 10,039,196 45,550,301 25,690,885 10,060,623
------------ ----------- ----------- ----------- -----------
Net assets available for benefits at
the end of the year $219,431,478 $11,001,324 $55,360,360 $47,700,904 $11,271,206
============ =========== =========== =========== ===========
<CAPTION> Vanguard
Equity-Income Puritan Intermediate OTC Fixed Income
Fund Fund Bond Fund Portfolio Securities Fund
------------- ------------ -------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $11,110,871 $ 4,561,546 $ 778,259 $ 4,256,554 $1,989,290
Transfers from ESOP to other funds (Note 7) -- -- -- -- --
Additions:
Investment income:
Dividends -- -- -- -- --
Interest -- -- -- -- --
----------- ----------- ----------- ---------- ---------
Total investment income -- -- -- -- --
----------- ----------- ----------- ---------- ---------
Participant contributions 1,941,826 1,598,496 312,072 32,353 5,612
Age-related employer contributions 2,017,560 2,149,595 686,945 27,406 5,797
ESOP debt service funding -- -- -- -- --
Transfer for Loan Repayments 24,453 14,076 4,252 19 --
----------- ----------- ----------- ---------- ---------
Total additions 3,983,839 3,762,167 1,003,269 59,778 11,409
----------- ----------- ----------- ---------- ---------
Deductions:
Withdrawals 4,257,972 3,988,996 1,149,114 21,700 898
Administrative expenses 50,397 45,815 12,552 2,433 1,040
Interest expense on note payable -- -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- -- --
----------- ----------- ----------- ---------- ---------
Total deductions 4,308,369 4,034,811 1,161,666 24,133 1,938
----------- ----------- ----------- ---------- ---------
Net increase (decrease) in net assets available
for benefits for the year 10,786,341 4,288,902 619,862 4,292,199 1,998,761
Net assets available for benefits at
the beginning of the year 30,376,885 31,302,747 9,469,627 -- --
----------- ----------- ----------- ---------- ----------
Net assets available for benefits at
the end of the year $41,163,226 $35,591,649 $10,089,489 $4,292,199 $1,998,761
=========== =========== =========== ========== ==========
<CAPTION>
Vanguard Vanguard Vanguard
Wellington Windsor II Index Trust-500
Fund Fund Portfolio
------------- ------------- ----------------
<S> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $3,527,986 $7,155,201 $11,411,619
Transfers from ESOP to other funds (Note 7)
Additions:
Investment income:
Dividends -- -- --
Interest -- -- --
----------- ----------- -----------
Total investment income -- -- --
----------- ----------- -----------
Participant contributions 24,748 74,365 131,031
Age-related employer contributions 28,021 58,025 91,081
ESOP debt service funding -- -- --
Transfer for Loan Repayments 59 97 352
----------- ----------- -----------
Total additions 52,828 132,487 222,464
----------- ----------- -----------
Deductions:
Withdrawals 23,370 17,659 79,960
Administrative expenses 1,895 3,895 6,175
Interest expense on note payable -- -- --
Net (appreciation) in fair value
of investments -- -- --
----------- ----------- -----------
Total deductions 25,265 21,554 86,135
----------- ----------- -----------
Net increase (decrease) in net assets available
for benefits for the year 3,555,549 7,266,134 11,547,948
Net assets available for benefits at
the beginning of the year -- -- --
----------- ----------- -----------
Net assets available for benefits at
the end of the year $3,555,549 $ 7,266,134 $11,547,948
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard
U.S. Growth Explorer Int'l Growth Asset Manager Asset Manager
Portfolio Fund Portfolio Growth Fund Income Fund
--------------- ------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $ 5,433,300 $ 2,176,233 $ 2,721,787 ($ 5,306,609) ($ 536,745)
------------ ----------- ------------ ----------- -----------
Transfers from ESOP to other funds (Note 7) -- -- -- -- --
Additions:
Investment income:
Dividends -- -- -- -- --
Interest -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total investment income -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Participant contributions 73,094 58,081 44,624 353,303 48,196
Age-related employer contributions 50,797 21,079 19,569 296,920 43,617
ESOP debt service funding -- -- -- -- --
Transfer for Loan Repayments 65 27 13 1,628 201
------------ ----------- ------------ ----------- -----------
Total additions 123,956 79,187 64,206 651,851 92,014
------------ ----------- ------------ ----------- -----------
Deductions:
Withdrawals 3,391 34,217 2,790 396,159 49,327
Administrative expenses 2,974 1,243 1,542 5,143 345
Interest expense on note payable -- -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total deductions 6,365 35,460 4,332 401,302 49,672
------------ ----------- ------------ ----------- -----------
Net increase (decrease) in net assets available
for benefits for the year 5,550,891 2,219,960 2,781,661 (5,056,060) (494,403)
Net assets available for benefits at
the beginning of the year -- -- -- 5,056,060 494,403
------------ ----------- ----------- ----------- -----------
Net assets available for benefits at
the end of the year $ 5,550,891 $ 2,219,960 $ 2,781,661 -- --
============ =========== =========== =========== ===========
<CAPTION>
Asset Manager Retirement Participants' ESOP
Fund Growth Fund Loans Trust Total
------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) ($2,857,090) ($22,653,617) $ -- -- $118,822,692
Transfers from ESOP to other funds (Note 7) -- -- -- ($1,549,238) (1,549,238)
Additions:
Investment income:
Dividends -- -- -- 2,270,527 2,270,527
Interest -- -- -- 28,260 28,260
----------- ------------ ---------- ------------ -------------
Total investment income -- -- -- 2,298,787 2,298,787
----------- ------------ ---------- ------------ -------------
Participant contributions 87,694 1,014,910 -- -- 17,847,635
Age-related employer contributions 120,771 1,314,590 -- -- 15,844,083
ESOP debt service funding -- -- -- 2,896,890 2,896,890
Transfer for Loan Repayments 908 14,842 (91,640) -- --
----------- ------------ ---------- ------------ -------------
Total additions 209,373 2,344,342 (91,640) 3,646,439 37,338,157
----------- ------------ ---------- ------------ -------------
Deductions:
Withdrawals 107,767 1,425,581 15,038 5,423,312 59,536,441
Administrative expenses 1,727 14,264 -- 182,431 782,452
Interest expense on note payable -- -- -- 971,007 971,007
Net (appreciation) in fair value
of investments -- -- -- (28,406,032) (28,406,032)
----------- ------------ ---------- ------------ -------------
Total deductions 109,494 1,439,845 15,038 (21,829,282) 32,883,868
----------- ------------ ---------- ------------ -------------
Net increase (decrease) in net assets available
for benefits for the year (2,757,211) (21,749,120) (106,678) 25,475,721 123,276,981
Net assets available for benefits at
the beginning of the year 2,757,211 21,749,120 201,385 51,044,165 424,160,351
----------- ------------ ---------- ------------ -------------
Net assets available for benefits at -- -- $ 94,707 $76,519,886 $547,437,332
the end of the year =========== ============ ========== ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1996
<TABLE>
<CAPTION>
H. J. Heinz Co. Managed Income Magellan Retirement Gov't. Overseas
Stock Fund Portfolio Fund Money Market Fund
--------------- -------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $ 7,801,796 $ 1,654,650 ($ 2,626,223) $ 2,387,680 $ 4,410,070
------------ ----------- ------------ ----------- -----------
Transfers from ESOP to other funds (Note 7) -- -- -- -- --
Additions:
Investment income:
Dividends -- -- -- -- --
Interest -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total investment income -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Participant contributions 5,183,431 520,090 3,200,196 2,786,929 705,061
Age-related employer contributions -- 410,726 3,867,197 4,278,557 455,851
ESOP debt service funding -- -- -- -- --
Transfer for Loan Repayments 9,836 1,630 15,799 7,093 3,848
------------ ----------- ------------ ----------- -----------
Total additions 5,193,267 932,446 7,083,192 7,072,579 1,164,760
------------ ----------- ------------ ----------- -----------
Deductions:
Withdrawals 11,977,961 1,343,424 3,320,554 4,195,449 352,227
Administrative expenses 333,444 16,976 83,584 59,821 16,050
Interest expense on note payable -- -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total deductions 12,311,405 1,360,400 3,404,138 4,255,270 368,277
------------ ----------- ------------ ----------- -----------
Net increase (decrease) in net assets available
for benefits for the year 683,658 1,226,696 1,052,831 5,204,989 5,206,553
Net assets available for benefits at
the beginning of the year 179,684,085 8,812,500 44,497,470 20,485,896 4,854,070
------------ ----------- ----------- ----------- -----------
Net assets available for benefits at
the end of the year $180,367,743 $10,039,196 $45,550,301 $25,690,885 $10,060,623
============ =========== =========== =========== ===========
<CAPTION>
Equity-Income Puritan Intermediate Asset Manager: Asset Manager:
Fund Fund Bond Fund Growth Fund Income Fund
------------- ------------ -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $12,952,171 $ 5,518,492 $ 869,492 $ 2,471,812 $139,998
Transfers from ESOP to other funds (Note 7) -- -- -- -- --
Additions:
Investment income:
Dividends -- -- -- -- --
Interest -- -- -- -- --
----------- ----------- ---------- ---------- --------
Total investment income -- -- -- -- --
----------- ----------- ---------- ---------- --------
Participant contributions 1,476,357 1,586,724 657,545 382,038 31,411
Age-related employer contributions 1,681,641 2,308,460 818,942 277,330 35,301
ESOP debt service funding -- -- -- -- --
Transfer for Loan Repayments 14,564 6,020 4,679 2,332 179
----------- ----------- ---------- ---------- --------
Total additions 3,172,562 3,901,204 1,481,166 661,700 66,891
----------- ----------- ---------- ---------- --------
Deductions:
Withdrawals 1,283,174 1,474,653 766,312 54,044 3,673
Administrative expenses 45,182 52,768 16,495 6,898 753
Interest expense on note payable -- -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- -- --
----------- ----------- ---------- ---------- --------
Total deductions 1,328,356 1,527,421 782,807 60,942 4,426
----------- ----------- ---------- ---------- --------
Net increase (decrease) in net assets available
for benefits for the year 14,796,377 7,892,275 1,567,851 3,072,570 202,463
Net assets available for benefits at
the beginning of the year 15,580,508 23,410,472 7,901,776 1,983,490 291,940
----------- ----------- ---------- ---------- --------
Net assets available for benefits at
the end of the year $30,376,885 $31,302,747 $9,469,627 $5,056,060 $494,403
=========== =========== ========== ========== ========
<CAPTION> Asset Manager Retirement Participants' ESOP
Fund Growth Fund Loans Trust Total
------------- ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $825,958 $ 753,778 -- -- $ 37,159,674
Transfers from ESOP to other funds (Note 7) -- -- -- $(1,088,574) (1,088,574)
Additions:
Investment income:
Dividends -- -- -- 2,216,949 2,216,949
Interest -- -- -- 25,582 25,582
----------- ------------ ------------ ------------ -------------
Total investment income -- -- -- 2,242,531 2,242,531
----------- ------------ ------------ ------------ -------------
Participant contributions 130,344 1,530,168 -- -- 18,190,294
Age-related employer contributions 152,690 1,973,412 -- -- 16,260,107
ESOP debt service funding -- -- -- 4,245,956 4,245,956
Transfer for Loan Repayments 1,889 9,243 ($ 77,112) -- --
---------- ----------- ----------- ----------- ------------
Total additions 284,923 3,512,823 (77,112) 5,399,913 39,850,314
----------- ------------ ------------ ------------ -------------
Deductions:
Withdrawals 53,899 1,126,594 20,143 1,898,829 27,870,936
Administrative expenses 4,759 39,899 -- 177,449 854,078
Interest expense on note payable -- -- -- 1,241,629 1,241,629
Net (appreciation) in fair value
of investments -- -- -- (5,574,851) (5,574,851)
----------- ------------ ------------ ------------ -------------
Total deductions 58,658 1,166,493 20,143 (2,256,944) 24,391,792
----------- ------------ ------------ ------------ -------------
Net increase (decrease) in net assets available
for benefits for the year 1,052,223 3,100,108 (97,255) 7,656,857 52,618,196
Net assets available for benefits at
the beginning of the year 1,704,988 18,649,012 298,640 43,387,308 371,542,155
----------- ------------ ------------ ------------ -------------
Net assets available for benefits at
the end of the year $2,757,211 $21,749,120 $201,385 $51,044,165 $424,160,351
=========== ============ ============ ============ =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
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 the affiliated companies. It 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 upon the recommendation of the Investment Committee of the
Board of Directors. The members of the Committee are not compensated for
serving on the Committee.
The Board of Directors has designated (i) Fidelity Management Trust Company
to act as trustee ("Trustee") under the Plan; and (ii) Mellon Bank, N. A. to
act as trustee of the separate ESOP trust established for matching
contributions ("ESOP Trustee").
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 the amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
The plan provides for various investment options as described in Note 4.
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 statements of changes in net assets available
for benefits.
Certain prior-year amounts have been reclassified in order to conform with
the current year presentation.
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 13% of their compensation. Each participant may make tax
deferred contributions, in whole percentages, of not less than 2% of his
compensation.
Tax deferred contributions made by certain highly compensated participants
may be limited under Internal Revenue Code rules. Tax deferred contributions
by any participant under the Plan and any other qualified cash or deferred
arrangement were limited to $9,500 in both 1997 and 1996. The committee will
give a participant affected by these limitations timely notification.
The Company will contribute on behalf of each participating employee an
amount equivalent to the tax deferred contribution up to 3% of the employee's
compensation. The Company's matching contributions may be made in cash or in
shares of the Company's common stock of equal value. Shares of stock used for
the Company match will come from the shares held in the separate, leveraged
employee stock ownership plan ("ESOP") trust. The ESOP is described in
greater detail in Note 7.
10
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
Contributions (continued)
The Company makes monthly, age-related contributions to the Company
Contribution Account ("CCA") of participating employees who direct the
investment of such contributions into one or more of the investment funds
stated in Note 4, with the exception of the H. J. Heinz Company Stock Fund.
The age-related contributions are based on percentages of participants'
eligible earnings and range from a rate of 1% for participants that are less
than 25 years old to a rate of 13% for participants that are 60 years old and
over.
A participant may transfer amounts received from other retirement plans to
the Plan. Amounts that are rolled over from other retirement plans are held
in a separate rollover account.
Participant Accounts
Each participant's account is credited with the participant's contribution(s)
and allocation of (a) the Company's matching and age-related contributions,
as defined and (b) Plan earnings. Allocations are based on participant
earnings or account balances, as defined. 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 tax deferred account, which is maintained for
tax deferred contributions, after tax account, which is maintained for after
tax contributions, and rollover account, which is maintained for rollover
contributions, is fully vested at all times. The value of the Company's
matching contribution and CCA contribution allocated to a participant's
account will be fully vested upon the occurrence of any of the following
events: completion of five years of service (or in the case of the matching
contribution of a participant who was an employee as of December 31, 1992, 36
months of continuous membership in the Plan, if earlier), job elimination,
workforce reduction, termination of employment after attainment of age 55,
attainment of age 65, total and permanent disability, or death.
Withdrawals
A participant may elect to withdraw up to 100% of their 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) is eligible for a "hardship" withdrawal in accordance with the
rules of the Plan, or
(c) 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.
11
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
Withdrawals (continued)
A participant who qualifies for a hardship withdrawal and withdraws from
their matching and tax deferred accounts is suspended from making
contributions to the Plan for one year. 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 or
housing.
A participant, upon termination of service, may elect to receive a lump-sum
amount equal to the value of their account or annual installments over a
period not to exceed 30 years. A terminated participant may also elect to
choose a direct transfer of their account balance to the trustee or custodian
of another eligible retirement plan.
Loans
The Plan was amended effective January 1, 1990, to prohibit the granting or
renegotiating of loans. Any outstanding loan as of December 31, 1989 shall
continue to be administered in accordance with the loan rules established by
the Committee as in effect on such date.
The interest rates for all outstanding loans for the years ended December 31,
1997 and 1996, ranged from 7.0% to 10.94% and 6.5% to 12.5%, respectively.
Payment of principal and interest is by payroll deduction, subject to rules
permitting prepayment. Repayments of the principal of a loan to a
participant will be 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.
Termination
The term of the Plan is indefinite, subject to termination at any time by the
Board of Directors of the Company. 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
Expenses of the Plan including record-keeping fees, administrative charges,
professional fees, and trustee fees, may be paid by the Trustees from the
assets of the Trust Funds unless paid by the Company. For the years ended
December 31, 1997 and 1996 administrative expenses of $782,452 and
$854,078, respectively were paid by the Trustees from the assets of the
Plan. Expenses absorbed by the Plan were allocated to the various funds of
the Plan based on the net asset value of the individual fund as a percentage
of the total net asset value of the Plan's funds.
12
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
Administrative Expenses (continued)
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 allocation of these charges
to the Plan for the years ended December 31, 1997 and 1996 were $37,062 and
$42,164 respectively.
(2) Summary of Significant Accounting Policies:
Investment Valuation
The value of the shares in a mutual fund is based on the active market value
of the underlying securities in the fund.
Investments in the Company's common stock are valued at the last reported
sales price on the last business day of the year.
Temporary investments in short-term investment funds are valued at cost which
approximates market value.
Other
The Plan presents in the statements of changes in net assets available for
benefits the 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.
Purchases and sales of securities 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.
(3) Federal Income Taxes:
The IRS has made a determination that the Plan is a qualified plan under
Section 401(a) of the Internal Revenue Code of 1986, as amended ("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 February 3,
1998, that the Plan is designed in accordance with applicable sections of the
Code. The Plan has been amended since a favorable determination was received,
however, 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.
13
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(3) Federal Income Taxes: (continued)
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.
In order for the Company's Retirement and Savings Plan to comply with the
nondiscrimination coverage requirements under Code sections 410(b) and
401(a)(4) for the plan year ended December 31, 1996, an additional
contribution of $190,583 was made to the SAVER Plan on behalf of certain non-
highly compensated employees to satisfy the applicable Code requirements.
(4) Investment Programs:
Effective October 1 1997, the funds offered by the Plan were changed to
increase investment choices and reduce the Plan's dependence on a single
mutual fund company. Eight new funds were added--seven Vanguard funds and one
Fidelity fund while four Fidelity funds (Asset Manager Growth, Asset Manager
Income, Asset Manager and Retirement Growth) were eliminated. Participant
fund balances in the discontinued funds were automatically transferred to the
Retirement Government Money Market Fund if participants had not transferred
them to other available funds as of September 29, 1997. Fidelity Management
Trust Company remains Trustee for all the investment funds. Participants may
direct the investment of their accounts in multiples of 1%, in any one or
more of the Investment funds selected by the Committee. The ESOP match
account investment cannot be reallocated unless a participant is eligible to
retire or is no longer employed. Reallocations from the ESOP to other funds
are included in the Net Change in Investment in Master Trust on the Statement
of Changes in Net Assets Available for Benefits. A description of the
Investment funds by investment category follows:
Company Stock
The H.J. Heinz Company Stock Fund consists of common stock of the Company.
Stable Value
Fidelity's Managed Income Portfolio (Previously labeled GIC Group Trust
Fund) invests in guaranteed investment contracts offered by major insurance
companies and other approved financial institutions and in certain types of
fixed income securities. A portion of the fund is invested in a money
market fund to provide daily liquidity. Guaranteed investment contracts are
recorded at contract value, which includes principal and accumulated
interest, which approximates market value.
Growth
The Fidelity Magellan Fund is an aggressive growth fund, the asset of which
are invested primarily in common stocks of both well known and lesser-known
companies with above-average growth potential and a correspondingly higher
level of risk.
The Vanguard U.S. Growth Fund seeks to provide long-term capital
appreciation by investing in common stocks of large companies with above-
average growth potential.
14
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(4) Investment Programs (continued):
Money Market
The assets of Fidelity's Retirement Government Money market Portfolio
are invested in high-quality short-term money market securities for
which the U.S. Government or its agencies or instrumentalities guarantee
timely payment of principal and interest.
International
The Fidelity Overseas Fund is an aggressive growth fund, which seeks
long-term capital appreciation, primarily through investments in foreign
securities. The fund invests primarily in securities of issuers whose
principal business activities are outside the U.S.
Vanguard International Growth Portfolio seeks long-term capital growth
by investing in common stocks of companies based outside of the United
States that have above-average growth potential.
Index
Vanguard Index Trust--500 Portfolio seeks long-term growth of capital
and income from dividends. It holds all of the 500 stocks that make up
the Standard & Poor's 500 Composite Stock Price Index (S&P 500).
Growth and Income
The assets of the Fidelity Equity-Income Fund are invested primarily in
income-producing equity securities. Capital appreciation is a secondary
objective of the fund. It tries to achieve a yield of the securities of
the S&P 500.
Vanguard Windsor II is a value-oriented growth and income fund seeking
long-term growth of capital and income from dividends. The fund invests
in a diversified group of out-of-favor stocks of large-capitalization
companies.
Balanced
The assets of the Fidelity Puritan Fund are invested in a broadly
diversified portfolio of high-yielding U.S. and foreign securities
including those in emerging markets, which may involve additional risk.
The investments can include all types of bonds of any quality or
maturity as well as common stocks and preferred stocks.
The Vanguard Wellington Fund is a balanced fund designed to pursue three
investment objectives: conservation of capital, reasonable current
income, and profits without undue risk. The funds assets are divided
between common stocks and bonds.
15
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(4) Investment Programs (continued):
Fixed Income
The assets of the Fidelity Intermediate Bond Fund are invested in high-
quality, fixed-income obligations whose average maturity ranges between
3 and 10 years.
The Vanguard Fixed Income Securities Fund--Long-Term Corporate Portfolio
seeks to provide a high and sustainable level of current income
consistent with the maintenance of principal and liquidity by investing
in a diversified portfolio of long-term investment-grade bonds.
Small Capitalization
The Fidelity OTC Portfolio seeks long-term capital appreciation by
investing in the securities of smaller, less well-known companies.
Vanguard Explorer Fund seeks long-term growth of capital by investing
primarily in common stocks of small and emerging growth companies.
Discontinued Funds:
The Fidelity Retirement Growth Fund is an aggressive growth fund which
seeks capital appreciation by investing primarily in common stocks, but
also in other types of securities.
The assets of the Fidelity Asset Manager Fund are allocated among and
across domestic and foreign equities, bonds and short-term instruments.
The fund seeks high total return.
The assets of the Fidelity Asset Manager Growth Fund are allocated among
three principal asset classes: stocks, bonds and short-term instruments.
However, the fund may invest in many types of domestic and foreign
securities. The fund seeks to maximize total return over the long-term.
The Fidelity Asset Manager Income Fund seeks a high level of current
income by maintaining a diversified portfolio of stocks, bonds short-
term instruments and other investments. The asset mix is designed to
provide a conservative asset allocation across various market
conditions.
16
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(5) Net Asset Value per Unit:
The interests of Plan participants are accounted for under a unit method. The
number of units in each fund and the net asset value per unit are as follows:
<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
----------------- -----------------
Value per Value per
Units Unit Units Unit
------------- --------- ------------- ---------
<S> <C> <C> <C> <C>
H. J. Heinz Co. Stock Fund...... 109,694,553 $1.993 130,968,411 $1.375
Managed Income Portfolio........ 8,252,541 $1.329 7,962,528 $1.256
Magellan Fund................... 23,572,630 $2.332 24,460,122 $1.845
Retirement Gov't. Money Market.. 38,019,712 $1.238 21,415,696 $1.176
Overseas Fund................... 7,117,680 $1.574 7,020,572 $1.421
Equity-Income Fund.............. 16,509,164 $2.478 15,779,480 $1.909
Puritan Fund.................... 16,995,683 $2.081 18,224,395 $1.703
Intermediate Bond Fund.......... 7,392,332 $1.358 7,435,710 $1.264
OTC Portfolio................... 4,812,656 $ .891 -- --
Fixed Income Securities Fund.... 1,920,752 $1.031 -- --
Wellington Fund................. 3,518,035 $1.021 -- --
Windsor II Fund................. 7,107,071 $1.031 -- --
Index Trust--500 Portfolio...... 11,262,543 $1.019 -- --
U.S. Growth Portfolio........... 5,333,937 $1.034 -- --
Explorer Fund................... 2,344,458 $ .944 -- --
Int'l Growth Portfolio.......... 3,065,906 $ .903 -- --
Asset Manager: Growth Fund..... -- -- 3,346,689 $1.495
Asset Manager: Income Fund..... -- -- 375,683 $1.302
Asset Manager Fund.............. -- -- 1,977,025 $1.384
Retirement Growth Fund.......... -- -- 13,267,322 $1.623
</TABLE>
(6) Forfeitures:
Company contributions which have been credited to participants' accounts and
which have not vested are forfeited upon termination of employment. These
forfeitures are credited against subsequent Company contributions, or may be
used to pay plan administrative expenses. Forfeitures were $436,600 for the
year ended December 31, 1997 and $529,319 for the year ended December 31,
1996.
(7) ESOP Trust:
In September, 1989, the ESOP trust borrowed $50 million and purchased
2,366,862 shares of Heinz Common Stock at $21.125 per share. The Company
financed the transaction and sold the stock to the ESOP.
The Heinz stock is pledged as collateral for the loan and is credited to a
suspense account from which it is gradually released for allocation to
participants' accounts over the term of the loan. During 1997 and 1996, the
number of shares released from the suspense account for allocation to
participant accounts as a result of principal repayments was 172,529 and
226,643, respectively. As noted previously, the shares of stock used for the
Company match will come from the shares held in the ESOP trust. At December
31, 1997 and 1996, $34,606,161 and $30,570,446 respectively, of unallocated
assets were held by the ESOP.
17
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(7) ESOP Trust (continued):
The ESOP debt is in the form of an interest-bearing promissory note. For the
years ended December 31, 1997 and 1996, the weighted average interest rate
was 5.32% and 5.31%, respectively. Repayment of the loan will be made through
periodic payments. Dividends paid by the Company on allocated and unallocated
shares of the Heinz Common Stock are applied for repayment of the loan. When
dividends paid are not sufficient to make the periodic repayments, the
Company makes additional contributions to fund the deficiency.
The amount of ESOP debt required to be retired in the years succeeding 1997
is: $1,804,311 in 1998, $2,102,665 in 1999, $2,221,415 in 2000, $2,346,871
in 2001, $2,479,412 in 2002 and $5,386,810 thereafter. The loan has a stated
maturity of July 31, 2004.
(8) Master Trust:
The Company entered into a Master Trust arrangement with Fidelity
Management Trust Company. The Trustee maintains 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.
18
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(8) Master Trust (continued):
The following tables present the Master Trust information for the Plan.
<TABLE>
<CAPTION>
December 31, 1997
----------------------------------------------------------------------------------------------------
Retirement &
Savings Plan
Fair Value of Net Percentage of
Investment of Investment Income Change in Interest in the
Master Trust Dividends Interest the Fair Value* Master Trust
---------------- --------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
H. J. Heinz Co.
Stock Fund $ 240,109,663 $ 6,127,688 $ 134,223 $ 66,566,428 90.72%
Managed Income
Portfolio 10,920,342 -- 675,017 5,035,813 99.96%
Magellan Fund 59,990,834 3,907,759 -- 9,862,291 91.63%
Retirement Gov't
Money Market 64,662,982 -- 2,660,526 23,114,145 72.42%
Overseas Fund 11,768,150 593,239 -- 806,687 95.18%
Equity-Income
Fund 43,734,130 2,431,026 -- 12,131,682 93.54%
Puritan Fund 37,854,039 3,208,692 -- 5,043,476 93.44%
Intermediate
Bond Fund 10,733,697 681,961 -- 791,500 92.99%
OTC Portfolio 4,299,844 179,867 -- 4,288,956 99.23%
Fixed Income
Securities Fund 1,969,693 35,948 -- 1,989,859 99.97%
Wellington Fund 3,626,690 175,753 -- 3,616,206 97.51%
Windsor II Fund 7,351,383 491,210 -- 7,285,688 98.16%
Index Trust--500 Fund 11,538,760 131,514 -- 11,605,465 98.27%
U.S. Growth Portfolio 5,442,397 218,228 -- 5,584,369 97.30%
Explorer Fund 2,006,808 221,500 -- 2,199,727 98.88%
International
Growth Fund 2,675,356 118,420 -- 2,747,717 99.00%
Asset Manager
Growth Fund -- -- -- (5,306,609) --
Asset Manager
Income Fund -- 16,732 -- (536,745) --
Asset Manager
Fund -- 65,954 -- (2,857,090) --
Retirement
Growth Fund -- -- -- (24,252,657) --
---------------- --------------- ------------ --------------- ------------
Total Master Trust $ 518,684,768 $ 18,605,491 $ 3,469,766 $ 129,716,908 89.90%
================ =============== =========== =============== ============
* Includes transfers between funds.
</TABLE>
19
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(8) Master Trust (continued):
<TABLE>
<CAPTION>
December 31, 1996
-------------------------------------------------------------------------------------------
Retirement &
Savings Plan
Fair Value of Net Percentage of
Investment of Investment Income Change in Interest in the
Master Trust Dividends Interest the Fair Value* Master Trust
--------------- --------------- ----------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
H. J. Heinz Co.
Stock Fund $ 193,649,074 $ 6,085,903 $ 89,599 $ 9,295,951 92.24%
Managed Income
Portfolio 9,946,832 -- 515,136 1,654,650 100.00%
Magellan Fund 49,482,858 7,744,772 -- (2,245,807) 91.19%
Retirement Gov't
Money Market 40,146,651 -- 1,801,220 2,473,341 62.45%
Overseas Fund 10,590,303 638,560 -- 4,524,475 94.21%
Equity-Income
Fund 32,599,351 1,832,555 -- 13,575,945 92.43%
Puritan Fund 33,264,907 3,616,507 -- 5,858,634 93.32%
Intermediate
Bond Fund 10,357,653 635,912 -- 856,242 90.26%
Asset Manager
Growth Fund 5,002,592 425,339 -- 2,471,812 100.00%
Asset Manager
Income Fund 489,017 30,560 -- 139,998 100.00%
Asset Manager
Fund 2,736,284 208,284 -- 825,958 100.00%
Retirement
Growth Fund 23,622,577 2,897,571 -- 923,809 91.15%
--------------- ------------ ----------- -------------- ------------
Total Master Trust $ 411,888,099 $ 24,115,963 $ 2,405,955 $ 40,355,008 89.59%
=============== ============ =========== ============== ============
* Includes transfers between funds.
</TABLE>
20
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(9) Plan Amendments:
On December 1, 1997, the Board of Directors approved a proposal to amend
the Plan to increase the amount for a mandatory distribution of the
account balance after termination of employment from $3,500 to $5,000 as
permitted by the Taxpayer Relief Act of 1997, effective January 1, 1998.
On December 1, 1997, the Board of Directors approved a proposal to allow
former Heinz Pet Products employees at the Perham, Minnesota plant to
receive distributions from the Plan after the factory was sold, exclusive
of the pre-tax contributions which are restricted under Section 401(k) of
the Internal Revenue Code.
On December 4, 1996, the Board of Directors approved a proposal to amend
the Plan to establish and implement a procedure for the Plan to follow
when a participant cannot be located within three years after his or her
benefit becomes payable.
On April 9, 1996, the Board of Directors approved Tip Top Ice Cream
Company Limited, an affiliate of Watties, to adopt the Plan, and to extend
participation to its employees who are citizens of the United States and
who formerly participated in the Plan.
(10) Form 5500 Reconciliation:
In accordance with the American Institute of Certified Public Accountants
revised Audit and Accounting Guide "Audits of Employee Benefit Plans", the
Plan includes payments due to participants in net assets available for plan
benefits. Payments due to participants as of December 31, 1997 and 1996
were $7,160,773 and $4,052,303 respectively. This methodology differs from
that required under ERISA. Therefore, for the Form 5500, the Plan includes
such distributions payable as a liability of the Plan.
21
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
EIN: 25 - 0542520 PLAN 009
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
(c) Description of investment including
(b) Identity of issue, borrower, maturity date, rate of interest (e) Market
(a) lessor, or similar party collateral, par or maturity value (d) Cost Value
- ------- -------------------------------- --------------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
* H. J. Heinz Company H. J. Heinz Company ESOP
$.25 par value/share; 1,798,493 $ 34,431,710 $ 91,386,825
Mellon Bank EB Temporary Investment Fund $ 716,472 $ 716,472
* H. J. Heinz Company Participants' Loans $ _ $ 96,228
Interest Rates, 7.0%-10.94%
</TABLE>
22
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
EIN: 25 - 0542520 PLAN 009
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
(a) Identity of Party (b) Description (c) Purchase (d) Selling
Involved of Asset Price Price
- ---------------------------- --------------------------------- -------------- -------------
<S> <C> <C> <C>
Execution Services Inc. H. J. Heinz Company Common Stock 892,863 --
(2 purchases)
Execution Services Inc. H. J. Heinz Company Common Stock -- 1,009,164
(14 sales)
Cantor Fitzgerald & Co. Inc. H. J. Heinz Company Common Stock -- 3,657,996
(8 sales)
Autranet Inc. H. J. Heinz Company Common Stock -- 2,221,079
(12 sales)
Bridge Trading Co. H. J. Heinz Company Common Stock -- 79,315
(1 sale)
Mellon Bank EB Temporary Investment Fund -- 6,728,627
(114 sales)
Mellon Bank EB Temporary Investment Fund 7,056,725 --
(99 purchases)
Mellon Bank H. J. Heinz Company Common Stock 3,942,468 --
(ESOP LOAN) (4 purchases)
</TABLE>
<TABLE>
<CAPTION>
(f) Expense (h) Current Value (i) Net
incurred with (g) Cost of of Asset on Gain
Transaction Asset Transaction Date (Loss)
- --------------- ----------- ------------------ --------
<S> <C> <C> <C>
1,052 892,863 892,863 --
1,109 391,968 1,009,164 617,196
4,300 1,499,603 3,657,996 2,158,393
2,652 910,774 2,221,079 1,310,305
96 34,058 79,315 45,257
-- 6,728,627 6,728,627 --
-- 7,056,725 7,056,725 --
-- 3,942,468 3,942,468 --
</TABLE>
23
<PAGE>
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 Coopers and Lybrand L.L.P. dated June 25, 1998 is filed
herein.
<PAGE>
Exhibit 23
ACCOUNTANTS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
H. J. Heinz Company Employees Retirement and Savings Plan on Form S-8 (File No.
2-51719) of our report dated June 16, 1998 on our audits of the financial
statements of the H. J. Heinz Company Employees Retirement and Savings Plan as
of December 31, 1997 and 1996 and for the years then ended, which report is
included in this Annual Report on Form 11-K.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Pittsburgh, Pennsylvania
June 25, 1998
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