<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, 1998
[ ] 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. Report of Independent Accountants dated May 28, 1999 of
PricewaterhouseCoopers LLP for the Plan financial statements
2. Statements of Net Assets Available for Benefits as of December 31, 1998
and 1997
3. Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1998
4. Notes to Financial Statements
5. Supplemental Schedule of Assets Held for Investment Purposes as of December
31, 1998
6. Supplemental Schedule of Reportable Transactions for the Year Ended December
31, 1998
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 PricewaterhouseCoopers LLP dated June 28, 1999 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 28, 1999
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
H. J. HEINZ COMPANY EMPLOYEE
BENEFITS ADMINISTRATION BOARD:
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the H. J. Heinz Company Employees Retirement and Savings Plan (the "Plan") at
December 31, 1998 and 1997, and the change in net assets available for benefits
for the year ended December 31, 1998 in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Employee Benefits Administration Board; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted 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 statement 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 plan benefits and changes in net assets available for
benefits of each fund. These supplemental schedules and fund information are the
responsibility of the Employee Benefits Administration Board. 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/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
May 28, 1999
3
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1998
<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) $218,862,356 $10,172,347 $68,189,561 $47,098,735 $10,375,302
Investment -- -- -- -- --
Investment income receivable:
Dividends 1,313,878 -- -- -- --
Interest and other 54,126 47,476 93 227,318 248
--------------- ------------- -------------- --------------- --------------
Total investment income receivable 1,368,004 47,476 93 227,318 248
--------------- ------------- -------------- --------------- --------------
Contributions receivable:
Employee 269,053 8,827 131,685 201,588 25,427
Employer 15,443 19,478 195,709 350,295 20,711
--------------- ------------- -------------- --------------- --------------
Total contributions receivable 284,496 28,305 327,394 551,883 46,138
--------------- ------------- -------------- --------------- --------------
Participant Loan Receivable 433 -- 149 14 11
--------------- ------------- -------------- --------------- --------------
Total Assets $220,515,289 $10,248,128 $68,517,197 $47,877,950 $10,421,699
--------------- ------------- -------------- --------------- --------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- --
Accrued interest due on note payable -- -- -- -- --
Accrued administrative expenses 41,423 1,922 12,826 8,902 1,952
--------------- ------------- -------------- --------------- --------------
Total Liabilities 41,423 1,922 12,826 8,902 1,952
--------------- ------------- -------------- --------------- --------------
Net Assets Available for Benefits $220,473,866 $10,246,206 $68,504,371 $47,869,048 $10,419,747
=============== ============= ============== =============== ==============
</TABLE>
<TABLE>
<CAPTION>
Equity-Income Puritan Intermediate OTC
Fund Fund Bond Fund Portfolio
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $36,517,509 $34,502,760 $10,843,323 $8,513,673
Investment -- -- -- --
Investment income receivable:
Dividends -- -- 53,712 --
Interest and other 45 88 -- --
--------------- ------------- -------------- ---------------
Total investment income receivable 45 88 53,712 --
--------------- ------------- -------------- ---------------
Contributions receivable:
Employee 83,645 60,485 14,058 15,637
Employer 104,785 109,508 35,387 13,204
--------------- ------------- -------------- ---------------
Total contributions receivable 188,430 169,993 49,445 28,841
--------------- ------------- -------------- ---------------
Participant Loan Receivable 122 104 -- 10
--------------- ------------- -------------- ---------------
Total Assets $36,706,106 $34,672,945 $10,946,480 $8,542,524
--------------- ------------- -------------- ---------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- --
Accrued interest due on note payable -- -- -- --
Accrued administrative expenses 6,869 6,490 2,050 1,601
--------------- ------------- -------------- ---------------
Total Liabilities 6,869 6,490 2,050 1,601
--------------- ------------- -------------- ---------------
Net Assets Available for Benefits $36,699,237 $34,666,455 $10,944,430 $8,540,923
=============== ============= ============== ===============
</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, 1998 (continued)
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard Vanguard
Long-Term Wellington Windsor II Institutional
Corporate Fund Fund Fund Index Fund
--------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $4,002,950 $5,696,818 $15,942,319 $25,246,473
Investment -- -- -- --
Investment income receivable:
Dividends 77,482 -- -- 271,795
Interest and other 112 -- 5,194 7,874
-------------- ------------- -------------- -------------
Total investment income receivable 77,594 -- 5,194 279,669
-------------- ------------- -------------- -------------
Contributions receivable:
Employee 6,637 14,451 47,795 69,576
Employer 7,525 16,431 47,148 66,923
-------------- ------------- -------------- -------------
Total contributions receivable 14,162 30,882 94,943 136,499
-------------- ------------- -------------- -------------
Participant Loan Receivable -- 12 64 60
-------------- ------------- -------------- -------------
Total Assets $4,094,706 $5,727,712 $16,042,520 $25,662,701
-------------- ------------- -------------- -------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- --
Accrued interest due on note payable -- -- -- --
Accrued administrative expenses 767 1,072 3,000 4,800
-------------- ------------- -------------- -------------
Total Liabilities 767 1,072 3,000 4,800
-------------- ------------- -------------- -------------
Net Assets Available for Benefits $4,093,939 $ 5,726,640 $16,039,520 $25,657,901
============== ============= ============== ============
<CAPTION>
Vanguard Vanguard Vanguard
U.S. Growth Explorer Int'l Growth Participants' ESOP
Fund Fund Fund Loans Trust Total
------------ ---------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $18,386,684 $2,241,227 $3,776,926 -- -- $520,368,963
Investment -- -- -- $78,381 $95,967,107 96,045,488
Investment income receivable:
Dividends -- 19,799 -- -- 579,503 2,316,169
Interest and other 104,440 11 -- -- -- 447,025
------------ ---------- ----------- ----------- ----------- ------------
Total investment income receivable 104,440 19,810 -- -- 579,503 2,763,194
------------ ---------- ----------- ----------- ----------- ------------
Contributions receivable:
Employee 51,364 8,041 8,901 -- -- 1,017,170
Employer 50,147 7,036 8,431 -- 386,752 1,454,913
------------ ---------- ----------- ----------- ----------- ------------
Total contributions receivable 101,511 15,077 17,332 -- 386,752 2,472,083
------------ ---------- ----------- ----------- ----------- ------------
Participant Loan Receivable 219 30 10 (1,238) -- --
------------ ---------- ----------- ----------- ----------- ------------
Total Assets $18,592,854 $2,276,144 $3,794,268 $77,143 $96,933,362 $621,649,728
----------- ---------- ----------- ----------- ----------- ------------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- 13,571,071 13,571,071
Accrued interest due on note payable -- -- -- -- 92,021 92,021
Accrued administrative expenses 3,478 425 710 -- 43,698 141,985
------------ ---------- ----------- ----------- ----------- ------------
Total Liabilities 3,478 425 710 -- 13,706,790 13,805,077
------------ ---------- ----------- ----------- ----------- ------------
Net Assets Available for Benefits $18,589,376 $2,275,719 $3,793,558 $77,143 $83,226,572 $607,844,651
============ ========== =========== =========== =========== ============
</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, 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>
Equity-Income Puritan Intermediate OTC
Fund Fund Bond Fund Portfolio
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $40,910,658 $35,369,637 $9,981,683 $4,266,584
Investment -- -- -- --
Investment income receivable:
Dividends -- -- 54,005 --
Interest and other 5,078 2,333 -- 6,617
--------------- ------------- -------------- ---------------
Total investment income receivable 5,078 2,333 54,005 6,617
--------------- ------------- -------------- ---------------
Contributions receivable:
Employee 117,986 87,041 16,599 10,971
Employer 145,095 146,147 41,079 9,672
--------------- ------------- -------------- ---------------
Total contributions receivable 263,081 233,188 57,678 20,643
--------------- ------------- -------------- ---------------
Participant Loan Receivable 216 156 -- 6
--------------- ------------- -------------- ---------------
Total Assets $41,179,033 $35,605,314 $10,093,366 $4,293,850
--------------- ------------- -------------- ---------------
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
--------------- ------------- -------------- ---------------
Total Liabilities $ 15,807 $ 13,665 $ 3,877 $ 1,651
--------------- ------------- -------------- ---------------
Net Assets Available for Benefits $41,163,226 $35,591,649 $10,089,489 $4,292,199
=============== ============= ============== ===============
</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 NET ASSETS AVAILABLE FOR BENEFITS
as of December 31, 1997 (continued)
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard Vanguard Vanguard
Long-Term Wellington Windsor II Index Trust-500 U.S. Growth
Corporate Fund Fund Fund Fund Fund
------------- ------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $1,969,131 $3,536,327 $7,215,917 $11,339,648 $5,295,569
Investment -- -- -- -- --
Investment income receivable:
Dividends 25,309 -- -- 129,177 212,294
Interest and other 46 97 4,426 5,634 3,383
---------- ---------- ---------- ----------- ----------
Total investment income receivable 25,355 97 4,426 134,811 215,677
---------- ---------- ---------- ----------- ----------
Contributions receivable:
Employee 2,566 9,327 25,434 41,790 21,975
Employer 2,479 11,144 23,113 36,014 19,777
---------- ---------- ---------- ----------- ----------
Total contributions receivable 5,045 20,471 48,547 77,804 41,752
---------- ---------- ---------- ----------- ----------
Participant Loan Receivable -- 20 33 118 22
---------- ---------- ---------- ----------- ----------
Total Assets $1,999,531 $3,556,915 $7,268,923 $11,552,381 $5,553,020
---------- ---------- ---------- ----------- ----------
Liabilities:
Notes payable to H. J. Heinz Company -- -- -- -- --
Accrued interest due on note payable -- -- -- -- --
Accrued administrative expenses 770 1,366 2,789 4,433 2,129
---------- ---------- ---------- ----------- ----------
Total Liabilities $ 770 $ 1,366 $ 2,789 $ 4,433 $ 2,129
---------- ---------- ---------- ----------- ----------
Net Assets Available for Benefits $1,998,761 $3,555,549 $7,266,134 $11,547,948 $5,550,891
========== ========== ========== =========== ==========
<CAPTION>
Vanguard Vanguard
Explorer Int'l Growth Participants' ESOP
Fund Fund Loans Trust Total
---------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Master Trust (Notes 4,8) $1,984,357 $2,648,483 -- -- $466,272,756
Investment -- -- $96,228 $92,103,297 92,199,525
Investment income receivable:
Dividends 219,024 117,223 -- 569,787 2,659,211
Interest and other 11 23 -- -- 310,530
---------- ------------ ------------- ----------- ------------
Total investment income receivable 219,035 117,246 -- 569,787 2,969,741
---------- ------------ ------------- ----------- ------------
Contributions receivable:
Employee 9,514 10,133 -- -- 1,162,097
Employer 7,896 6,868 -- 446,888 1,614,361
---------- ------------ ------------- ----------- ------------
Total contributions receivable 17,410 17,001 -- 446,888 2,776,458
---------- ------------ ------------- ----------- ------------
Participant Loan Receivable 9 -- (1,521) -- --
---------- ------------ ------------- ----------- ------------
Total Assets $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 851 1,069 -- 88,878 269,940
---------- ------------ ------------- ----------- ------------
Total Liabilities $ 851 $ 1,069 $ -- $16,600,086 $16,781,148
---------- ------------ ------------- ----------- ------------
Net Assets Available for Benefits $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.
7
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1998
<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) $ 27,615,979 $ 58,567 $ 13,469,195 $ 419,595 $ (976,953)
------------ ----------- ------------ ----------- -----------
Transfers from ESOP to other funds (Note 7) -- -- -- -- --
Additions:
Investment income:
Dividends -- -- -- -- --
Interest -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total investment income -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Participant contributions 4,626,140 240,764 2,454,989 3,690,500 614,869
Age-related employer contributions 31,694 278,319 2,959,235 5,080,388 455,059
ESOP debt service funding -- -- -- -- --
Transfer for Loan Repayments 5,214 -- 2,168 232 257
------------ ----------- ------------ ----------- -----------
Total additions 4,663,048 519,083 5,416,392 8,771,120 1,070,185
------------ ----------- ------------ ----------- -----------
Deductions:
Withdrawals 30,995,645 1,323,098 5,683,304 8,980,110 934,180
Administrative expenses 240,994 9,670 58,272 42,461 10,511
Interest expense on note payable -- -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- -- --
------------ ----------- ------------ ----------- -----------
Total deductions 31,236,639 1,332,768 5,741,576 9,022,571 944,691
------------ ----------- ------------ ----------- -----------
Net increase (decrease) in net assets available
for benefits for the year 1,042,388 (755,118) 13,144,011 168,144 (851,459)
Net assets available for benefits at
the beginning of the year 219,431,478 11,001,324 55,360,360 47,700,904 11,271,206
------------ ----------- ----------- ----------- -----------
Net assets available for benefits at
the end of the year $220,473,866 $10,246,206 $68,504,371 $47,869,048 $10,419,747
============ =========== =========== =========== ===========
<CAPTION>
Equity-Income Puritan Intermediate OTC
Fund Fund Bond Fund Portfolio
------------- ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $(4,891,003) $ (878,328) $1,057,415 $ 3,740,929
Transfers from ESOP to other funds (Note 7) -- -- -- --
Additions:
Investment income:
Dividends -- -- -- --
Interest -- -- -- --
----------- ----------- ----------- ----------
Total investment income -- -- -- --
----------- ----------- ----------- ----------
Participant contributions 1,754,975 1,265,141 322,345 348,792
Age-related employer contributions 1,824,766 1,744,775 534,783 227,664
ESOP debt service funding -- -- -- --
Transfer for Loan Repayments 1,796 1,421 -- 159
----------- ----------- ----------- ----------
Total additions 3,581,537 3,011,337 857,128 576,615
----------- ----------- ----------- ----------
Deductions:
Withdrawals 3,117,708 3,025,327 1,049,529 61,457
Administrative expenses 36,815 32,876 10,073 7,363
Interest expense on note payable -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- --
----------- ----------- ----------- ----------
Total deductions 3,154,523 3,058,203 1,059,602 68,820
----------- ----------- ----------- ----------
Net increase (decrease) in net assets available
for benefits for the year (4,463,989) (925,194) 854,941 4,248,724
Net assets available for benefits at
the beginning of the year 41,163,226 35,591,649 10,089,489 4,292,199
----------- ----------- ----------- ----------
Net assets available for benefits at
the end of the year $36,699,237 $34,666,455 $10,944,430 $8,540,923
=========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
H. J. HEINZ COMPANY
EMPLOYEES RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
for the Year Ended December 31, 1998 (continued)
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard Vanguard
Long-Term Wellington Windsor II Institutional Index
Corporate Fund Fund Fund Fund
--------------- ------------- ------------- ----------------
<S> <C> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $2,385,138 $2,148,820 $7,760,266 $13,240,879
Transfers from ESOP to other funds (Note 7) --
Additions:
Investment income:
Dividends -- -- -- --
Interest -- -- -- --
--------- ----------- ----------- -----------
Total investment income -- -- -- --
--------- ----------- ----------- -----------
Participant contributions 156,936 329,887 932,459 1,285,644
Age-related employer contributions 74,434 241,816 643,629 911,932
ESOP debt service funding -- -- -- --
Transfer for Loan Repayments -- 143 812 1,023
--------- ----------- ----------- -----------
Total additions 231,370 571,846 1,576,900 2,198,599
--------- ----------- ----------- -----------
Deductions:
Withdrawals 518,513 544,451 549,335 1,308,509
Administrative expenses 2,817 5,124 14,445 21,016
Interest expense on note payable -- -- -- --
Net (appreciation) in fair value
of investments -- -- -- --
--------- ----------- ----------- -----------
Total deductions 521,330 549,575 563,780 1,329,525
--------- ----------- ----------- -----------
Net increase (decrease) in net assets available
for benefits for the year 2,095,178 2,171,091 8,773,386 14,109,953
Net assets available for benefits at
the beginning of the year 1,998,761 3,555,549 7,266,134 11,547,948
---------- ----------- ----------- -----------
Net assets available for benefits at
the end of the year $4,093,939 $5,726,640 $16,039,520 $25,657,901
========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Vanguard Vanguard Vanguard
U.S. Growth Explorer Int'l Growth
Fund Fund Fund
------------- ------------- --------------
<S> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) $ 12,084,295 ($206,838) $ 634,359
------------ ----------- ------------
Transfers from ESOP to other funds (Note 7) -- -- --
Additions:
Investment income:
Dividends -- -- --
Interest -- -- --
------------ ----------- ------------
Total investment income -- -- --
------------ ----------- ------------
Participant contributions 695,437 228,949 252,569
Age-related employer contributions 552,326 123,759 178,388
ESOP debt service funding -- -- --
Transfer for Loan Repayments 1,645 352 106
------------ ----------- ------------
Total additions 1,249,408 353,060 431,063
------------ ----------- ------------
Deductions:
Withdrawals 282,647 88,460 50,276
Administrative expenses 12,571 2,003 3,249
Interest expense on note payable -- -- --
Net (appreciation) in fair value
of investments -- -- --
------------ ----------- ------------
Total deductions 295,218 90,463 53,525
------------ ----------- ------------
Net increase (decrease) in net assets available
for benefits for the year 13,038,485 55,759 1,011,897
Net assets available for benefits at
the beginning of the year 5,550,891 2,219,960 2,781,661
------------ ----------- -----------
Net assets available for benefits at $ 18,589,376 $ 2,275,719 $ 3,793,558
the end of the year ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Participants' ESOP
Loans Trust Total
-------------- ------------ --------------
<S> <C> <C> <C>
Net Change in Investment in
Master Trust (Note 8) -- -- $ 77,662,315
Transfers from ESOP to other funds (Note 7) -- ($1,239,464) ($1,239,464)
Additions:
Investment income:
Dividends -- 2,261,032 2,261,032
Interest -- 23,542 23,542
---------- ------------ -------------
Total investment income -- 2,284,574 2,284,574
---------- ------------ -------------
Participant contributions -- -- 19,200,396
Age-related employer contributions -- -- 15,862,967
ESOP debt service funding -- 1,333,514 1,333,514
Transfer for Loan Repayments ($15,328) -- --
---------- ------------ -------------
Total additions (15,328) 2,378,624 37,441,987
---------- ------------ -------------
Deductions:
Withdrawals 2,236 4,759,096 63,273,881
Administrative expenses -- 152,958 663,218
Interest expense on note payable -- 816,884 816,884
Net (appreciation) in fair value
of investments -- (10,057,000) (10,057,000)
---------- ------------ -------------
Total deductions 2,236 (4,328,062) 54,696,983
---------- ------------ -------------
Net increase (decrease) in net assets available
for benefits for the year (17,564) 6,706,686 60,407,319
Net assets available for benefits at
the beginning of the year 94,707 76,519,886 547,437,332
---------- ------------ ------------
Net assets available for benefits at
the end of the year $ 77,143 $83,226,572 607,844,651
========== =========== ===========
</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 of the Company ("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 statement of changes in net assets available
for benefits.
Contributions
Participant contributions to the Plan may be either tax deferred or after
tax. The total of a participant's tax deferred and after tax contributions
may not exceed 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 $10,000 in 1998 and $9,500 in 1997. 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 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)
In addition, 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, including the H. J. Heinz Company Stock Fund effective
October 21, 1998. 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, 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.
A participant who qualifies for a hardship withdrawal and withdraws from
their 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.
11
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
Withdrawals (continued)
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,
1998 and 1997, ranged from 7.0% to 10.94% for both years.
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
The Trustees may pay expenses of the Plan including record-keeping fees,
administrative charges, professional fees, and trustee fees, from the assets
of the Trust Funds unless paid by the Company. For the years ended December
31, 1998 and 1997 the Plan incurred expenses of $663,218 and $782,452,
respectively. These expenses were paid from Plan assets. 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.
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, 1998 and 1997 were $27,243 and
$37,062, respectively.
12
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(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 statement 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.
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.
13
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(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.
Effective October 16, 1998, the Vanguard Institutional Index Fund replaced
the Vanguard Index Trust 500 Portfolio. Participant fund balances in the
Vanguard Index Trust 500 Portfolio were automatically transferred to the
Vanguard Institutional Index Fund on October 16, 1998 unless participants had
previously transferred them.
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 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.
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.
14
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(4) Investment Programs (continued):
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 Fund 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 Institutional Index Fund seeks long-term growth of capital and
income from dividends. It holds all 500 stocks that comprise the
Standard & Poor's 500 Composite Stock Price Index (S&P 500) in
proportion to their weighting in the index.
Growth and Income
The assets of the Fidelity Equity-Income Fund are invested primarily in
income-producing equity securities. The fund has a value philosophy and
currently compares its performance with the Russell 3000 Value Index
instead 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.
Small Capitalization
The Fidelity OTC Portfolio seeks long-term capital growth by investing
mainly in equity securities traded in the over-the-counter market.
Vanguard Explorer Fund seeks long-term growth of capital by investing
primarily in common stocks of small and emerging growth 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 invests in dividend-paying large- and mid-
capitalization stocks of well-established companies whose prospects are
improving, but whose values have yet to be recognized in the
marketplace. The fund's 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 Fidelity Intermediate Bond Fund's goal is to produce high current
income by investing mainly in investment-grade debt securities while
normally maintaining an average maturity of three to ten years.
The Vanguard Long-Term Corporate Fund (previously called Fixed Income
Securities Fund -- Long-Term 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.
Discontinued Fund:
Vanguard Index Trust -- 500 Portfolio seeks long-term growth of capital
and income from dividends. It holds all of the 500 stocks that comprise
the S&P 500.
(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, 1998 December 31, 1997
------------------------ -------------------------
Value per Value per
Units Unit Units Unit
------------- --------- ------------- ---------
<S> <C> <C> <C> <C>
H. J. Heinz Co. Stock Fund...... 96,941,813 $2.272 109,694,553 $1.993
Managed Income Portfolio........ 7,266,072 $1.407 8,252,541 $1.329
Magellan Fund................... 21,903,067 $3.113 23,572,630 $2.332
Retirement Gov't. Money Market.. 36,363,548 $1.302 38,019,712 $1.238
Overseas Fund................... 5,848,535 $1.774 7,117,680 $1.574
Equity-Income Fund.............. 13,107,635 $2.786 16,509,164 $2.478
Puritan Fund.................... 14,233,167 $2.424 16,995,683 $2.081
Intermediate Bond Fund.......... 7,484,802 $1.457 7,392,332 $1.358
OTC Portfolio................... 6,814,484 $1.249 4,812,656 $0.891
Long-Term Corporate Fund........ 3,598,912 $1.118 1,920,752 $1.031
Wellington Fund................. 4,980,542 $1.144 3,518,035 $1.021
Windsor II Fund................. 13,303,162 $1.199 7,107,071 $1.031
Institutional Index Fund........ 19,486,687 $1.310 11,262,543 $1.019
U.S. Growth Fund................ 12,780,220 $1.447 5,333,937 $1.034
Explorer Fund................... 2,315,604 $0.976 2,344,458 $0.944
Int'l Growth Fund............... 3,579,773 $1.055 3,065,906 $0.903
</TABLE>
16
<PAGE>
H. J. HEINZ COMPANY EMPLOYEES
RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements (Continued)
(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 $442,810 for the
year ended December 31, 1998 and $436,600 for the year ended December 31,
1997.
(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 1998 and 1997, the
number of shares released from the suspense account for allocation to
participant accounts as a result of principal repayments was 126,680 and
172,529, 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, 1998 and 1997, $31,168,616 and $34,606,161 respectively, of unallocated
assets were held by the ESOP.
The ESOP debt is in the form of an interest-bearing promissory note. For the
years ended December 31, 1998 and 1997, the weighted average interest rate
was 5.98% and 5.32%, 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 1998
is: $2,768,538 in 1999, $1,929,864 in 2000, $2,038,855 in 2001, $2,154,000 in
2002, $2,275,646 in 2003 and $2,404,167 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.
17
<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, 1998
----------------------------------------------------------------------------------------------------
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 $ 243,550,114 $ 5,748,050 $ 142,184 $ 30,515,181 89.86%
Managed Income
Portfolio 10,188,417 -- 585,028 69,659 99.84%
Magellan Fund 74,787,480 3,480,127 -- 15,088,972 91.18%
Retirement Gov't
Money Market 66,201,315 -- 3,237,455 108,018 71.14%
Overseas Fund 10,900,983 213,572 -- (1,001,787) 95.18%
Equity-Income
Fund 39,458,176 2,356,677 -- (4,675,129) 92.55%
Puritan Fund 37,233,159 3,948,275 -- (608,195) 92.67%
Intermediate
Bond Fund 11,571,033 666,547 -- 1,029,627 93.71%
OTC Portfolio 8,641,610 439,143 -- 3,819,180 98.52%
Fixed Income
Securities Fund 4,095,936 219,240 -- 2,474,730 97.73%
Wellington Fund 5,856,424 650,778 -- 2,196,555 97.27%
Windsor II Fund 16,451,405 1,628,023 -- 8,063,854 96.91%
Institutional Index Fund 26,126,207 446,475 -- 13,867,270 96.63%
U.S. Growth Fund 19,360,320 1,185,642 -- 12,857,047 94.97%
Explorer Fund 2,322,657 20,460 -- (163,406) 96.49%
International
Growth Fund 3,834,633 75,240 -- 650,976 98.50%
---------------- --------------- ------------ --------------- ------------
Total Master Trust $ 580,579,869 $ 21,078,249 $ 3,964,667 $ 84,292,552 89.63%
================ =============== =========== =============== ============
* Includes transfers between funds.
</TABLE>
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%
Long-term
Corporate 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 Fund 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)
(9) Plan Amendments:
On September 3, 1998, the Board of Directors approved an amendment making
the Heinz Stock Fund available as an investment option for age-related
company contributions effective October 1, 1998.
On July 7, 1998, the Board of Directors approved a resolution to adopt
various technical changes required by the Small Business Job Protection
Act and the Uniform Services Employment and Reemployment Act; to permit
retired and terminated employees with account balances to make withdrawals
free of the retrictions which apply to active employees, and to eliminate
the three month participation penalty for employees who suspend
contributions to the plan.
On March 10, 1998, the Board of Directors approved an amendment which
authorizes the Director, Human Resource Services--North America to
designate certain employees as "Special Assignment International
Employees" which permits them to participate in the Plan.
On December 1, 1997, the Board of Directors approved an amendment to
the Plan to increase the amount for a mandatory distribution of the
account balance after termination of employment as permitted by the
Taxpayer Relief Act of 1997 from $3,500 to $5,000. Effective January 1,
1998, former employees with account balances less than or equal to $5,000
will receive an automatic distribution of their entire balance.
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.
(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, 1998 and 1997
were $3,530,269 and $7,160,773 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.
20
<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, 1998
<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; 1,682,342 $ 33,569,983 $ 95,262,616
Mellon Bank EB Temporary Investment Fund $ 704,491 $ 704,491
* H. J. Heinz Company Participants' Loans $ _ $ 73,381
Interest Rates, 7.0%-10.94%
</TABLE>
21
<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, 1998
<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 247,209 --
(1 purchase)
Execution Services Inc. H. J. Heinz Company Common Stock -- 1,799,731
(20 sales)
Cantor Fitzgerald & Co. Inc. H. J. Heinz Company Common Stock -- 1,617,884
(7 sales)
Autranet Inc. H. J. Heinz Company Common Stock -- 2,303,514
(7 sales)
Mellon Bank EB Temporary Investment Fund -- 6,612,554
(105 sales)
Mellon Bank EB Temporary Investment Fund 6,600,495 --
(62 purchases)
Mellon Bank H. J. Heinz Company Common Stock 2,770,412 --
(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>
216 247,209 247,209 --
1,664 633,024 1,799,731 1,166,707
1,481 581,286 1,617,884 1,036,598
2,114 828,644 2,303,514 1,474,870
-- 6,612,554 6,612,554 --
-- 6,600,495 6,600,495 --
-- 2,770,412 2,770,412 --
</TABLE>
22
<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 PricewaterhouseCoopers LLP dated June 28, 1999 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 May 28, 1999 on our audits of the financial
statements of the H. J. Heinz Company Employees Retirement and Savings Plan as
of December 31, 1998 and 1997 and for the year ended December 31, 1998, which
report is included in this Annual Report on Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 28, 1999
