<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended May 3, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-3385
H. J. HEINZ COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
PENNSYLVANIA 25-0542520
(State of Incorporation) (I.R.S. Employer Identification No.)
600 GRANT STREET, PITTSBURGH, PENNSYLVANIA 15219
(Address of principal executive offices) (Zip Code)
</TABLE>
412-456-5700
(Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
<S> <C>
Common Stock, par value $.25 per share New York Stock Exchange;
Pacific Stock Exchange
Third Cumulative Preferred Stock, $1.70 First
Series, par value $10 per share New York Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None.
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of June 30, 2000 the aggregate market value of the Registrant's voting
stock held by non-affiliates of the Registrant was approximately
$14,760,844,875.
The number of shares of the Registrant's Common Stock, par value $.25 per
share, outstanding as of June 30, 2000, was 347,853,010 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Annual Report to Shareholders for the fiscal year
ended May 3, 2000 are incorporated into Part I, Item 1; Part II, Items 5, 7, 7A
and 8; and Part IV, Item 14.
Portions of Registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on September 12, 2000, which will be filed with the
Securities and Exchange Commission within 120 days after the end of the
Registrant's fiscal year ended May 3, 2000, are incorporated into Part III,
Items 10, 11, 12 and 13.
<PAGE> 2
PART I
ITEM 1. BUSINESS.
H. J. Heinz Company was incorporated in Pennsylvania on July 27, 1900. In
1905, it succeeded to the business of a partnership operating under the same
name which had developed from a food business founded in 1869 at Sharpsburg,
Pennsylvania by Henry J. Heinz. H. J. Heinz Company and its subsidiaries
(collectively, the "Company") manufacture and market an extensive line of
processed food products throughout the world. The Company's principal products
include ketchup, condiments and sauces, frozen food, pet food, soups, beans and
pasta meals, tuna and other seafood products, infant food and other processed
food products.
The Company's products are manufactured and packaged to provide safe,
wholesome foods for consumers, foodservice and institutional customers. Many
products are prepared from recipes developed in the Company's research
laboratories and experimental kitchens. Ingredients are carefully selected,
washed, trimmed, inspected and passed on to modern factory kitchens where they
are processed, after which the finished product is filled automatically into
containers of glass, metal, plastic, paper or fiberboard which are then closed,
processed, labeled and cased for market. Finished products are processed by
sterilization, homogenization, chilling, freezing, pickling, drying, freeze
drying, baking or extruding. Certain finished products and seasonal raw
materials are aseptically packed into sterile containers after in-line
sterilization.
The Company manufactures its products from a wide variety of raw foods.
Pre-season contracts are made with farmers for a portion of raw materials such
as tomatoes, cucumbers, potatoes, onions and some other fruits and vegetables.
Dairy products, meat, sugar, spices, flour and certain other fruits and
vegetables are generally purchased on the open market.
Tuna is obtained through spot and term contracts directly with tuna vessel
owners or their cooperatives and by brokered transactions. In some instances, in
order to insure the continued availability of adequate supplies of tuna, the
Company assists, directly or indirectly, in financing the acquisition and
operation of fishing vessels. The provision of such assistance is not expected
to affect materially the operations of the Company. The Company also engages in
the tuna fishing business through wholly and partially owned subsidiaries.
The Marine Mammal Protection Act of 1972, as amended (the "Act"), and
regulations thereunder (the "Regulations") regulate the incidental taking of
dolphin in the course of fishing for yellowfin tuna in the eastern tropical
Pacific Ocean, where a portion of the Company's light-meat tuna is caught. In
1990, the Company voluntarily adopted a worldwide policy of refusal to purchase
tuna caught in the eastern tropical Pacific Ocean through the intentional
encirclement of dolphin by purse seine nets and reaffirmed its policy of not
purchasing tuna caught anywhere using gill nets or drift nets. Also in 1990, the
Dolphin Protection Consumer Information Act (the "Dolphin Information Act") was
enacted which regulates the labeling of tuna products as "dolphin safe" and bans
the importation of tuna caught using high seas drift nets. The Act was amended
in 1992 to further regulate tuna fishing methods which involve marine mammals.
Compliance with the Act, the Regulations, the Dolphin Information Act, and the
Company's voluntary policy and the 1992 amendments has not had, and is not
expected to have, a material adverse effect on the Company's operations.
Congress passed the International Dolphin Conservation Program Act ("IDCPA") on
August 15, 1997. It modified the regulation of the incidental taking of dolphins
in the course of fishing for yellowfin tuna in the eastern tropical Pacific
Ocean and revised the definition of "dolphin safe". Revision of the definition
of "dolphin safe" and modification of the regulation of the incidental taking of
dolphins in the course of fishing for yellowfin tuna in the eastern tropical
Pacific Ocean have not had and are not expected to have a material adverse
effect on the Company's operations.
In recent years, the supply of raw tuna has been variable causing a
fluctuation in raw fish prices; however, such variation in supply has not
affected materially, nor is it expected to affect materially, the Company's
operations.
2
<PAGE> 3
The following table lists the number of the Company's principal food
processing factories and major trademarks by business segment:
<TABLE>
<CAPTION>
Factories
--------------
Owned Leased Major Trademarks
----- ------ ----------------
<S> <C> <C> <C>
North American Grocery & Foodservice 19 5 Heinz, College Inn, StarKist,
Quality Chef, Yoshida, Diana Sauce,
Bell 'Orto, Bella Rosa, Pablum, Chef
Francisco, Domani, Omstead, 9-Lives,
Kibbles n' Bits, Ken-L-Ration,
Reward, Gravy Train, Skippy, Recipe,
Pounce, Snausages, Jerky Treats,
Pup-Peroni, Wagwells
North American Frozen 5 0 Ore-Ida, Bagel Bites, Moore's,
Rosetto, Weight Watchers, Boston
Market, Budget Gourmet, Smart Ones
Europe 24 6 Heinz, Petit Navire, John West, Mare
D'Oro, Mareblu, Marie Elisabeth,
Orlando, Guloso, San Marco, Linda
McCartney, Farley's, Farex, Sonnen
Basserman, Plasmon, Nipiol,
Dieterba, Ortobuono, Frank Coopers,
Pudliszki, Go Ahead!, American Dream
Asia/Pacific 20 4 Heinz, Tom Piper, Wattie's, ABC,
Tegel, Chef, Champ, Craig's, Bruno,
Winna, Hellaby, Hamper, Farley's,
Greenseas, Gourmet, Nurture, Complan
Other Operating Entities 8 3 Heinz, StarKist, Olivine,
Wellington's, Ganave, Champs, Royal
Pacific, 9-Lives, Pounce, Kibbles n'
Bits, Super Can
-- --
76 18
</TABLE>
The Company also owns or leases office space, warehouses, distribution
centers and research and other facilities throughout the world. The Company's
food processing plants and principal properties are in good condition and are
satisfactory for the purposes for which they are being utilized.
The Company has participated in the development of certain of its food
processing equipment, some of which is patented. The Company regards these
patents as important but does not consider any one or group of them to be
materially important to its business as a whole.
Although crops constituting some of the Company's raw food ingredients are
harvested on a seasonal basis, most of the Company's products are produced
throughout the year. Seasonal factors inherent in the business have always
influenced the quarterly sales and net income of the Company. Consequently,
comparisons between quarters have always been more meaningful when made between
the same quarters of different years.
The products of the Company are sold under highly competitive conditions,
with many large and small competitors. The Company regards its principal
competition to be other manufacturers
3
<PAGE> 4
of processed foods, including branded, retail products, foodservice products and
private label products, that compete with the Company for consumer preference,
distribution, shelf space and merchandising support. Product quality and
consumer value are important areas of competition.
The Company's products are sold through its own sales force and through
independent brokers, agents and distributors to chain, wholesale, cooperative
and independent grocery accounts, pharmacies, mass merchants, club stores, pet
stores, foodservice distributors and institutions, including hotels, restaurants
and certain government agencies. The Company is not dependent on any single
customer or a few customers for a material part of its sales.
Compliance with the provisions of national, state and local environmental
laws and regulations has not had a material effect upon the capital
expenditures, earnings or competitive position of the Company. The Company's
estimated capital expenditures for environmental control facilities for the
remainder of fiscal year 2001 and the succeeding fiscal year are not material
and will not materially affect either the earnings or competitive position of
the Company.
The Company's factories are subject to inspections by various governmental
agencies, and its products must comply with the applicable laws, including food
and drug laws, of the jurisdictions in which they are manufactured and marketed.
The Company employed, on a full-time basis as of May 3, 2000, approximately
46,900 persons around the world.
Segment information is set forth on pages 67 through 69 in Note 14 to the
Company's Annual Report to Shareholders for the fiscal year ended May 3, 2000.
Such information is incorporated herein by reference.
Income from international operations is subject to fluctuation in currency
values, export and import restrictions, foreign ownership restrictions, economic
controls and other factors. From time to time exchange restrictions imposed by
various countries have restricted the transfer of funds between countries and
between the Company and its subsidiaries. To date, such exchange restrictions
have not had a material adverse effect on the Company's operations.
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a
safe harbor for forward-looking statements made by or on behalf of the Company.
The Company and its representatives may from time to time make written or oral
forward-looking statements, including statements contained in the Company's
filings with the Securities and Exchange Commission and in its reports to
shareholders. The words or phrases "will likely result," "are expected to,"
"will continue," "is anticipated," "estimate," "project," "target," "goal" or
similar expressions identify "forward-looking statements" within the meaning of
the Act.
In order to comply with the terms of the safe harbor, the Company notes
that a variety of factors could cause the Company's actual results and
experience to differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements. These
forward-looking statements are uncertain. The risks and uncertainties that may
affect operations and financial performance, some of which may be beyond the
control of the Company, include the following:
- Changes in laws and regulations, including changes in food and drug laws,
accounting standards, taxation requirements (including tax rate changes,
new tax laws and revised tax law interpretations) and environmental laws
in domestic or foreign jurisdictions;
- Competitive product and pricing pressures and the Company's ability to
gain or maintain share of sales in the global market as a result of
actions by competitors and others;
4
<PAGE> 5
- Fluctuations in the cost and availability of raw materials and the
ability to maintain favorable supplier arrangements and relationships;
- The impact of higher energy costs on the cost of producing, transporting
and distributing the Company's products;
- The Company's ability to generate sufficient cash flows to support
capital expenditures, share repurchase programs and general operating
activities;
- The inherent risks in the marketplace associated with new product or
packaging introductions, including uncertainties about trade and consumer
acceptance;
- The Company's ability to achieve sales and earnings forecasts, which are
based on assumptions about sales volume, product mix and other items;
- The Company's ability to integrate acquisitions and joint ventures into
its existing operations and the availability of new acquisition and joint
venture opportunities;
- The Company's ability to achieve its cost savings objectives, including
the continued implementation of the Company's Operation Excel
restructuring program;
- The impact of unforeseen economic and political changes in international
markets where the Company competes, such as currency exchange rates,
inflation rates, recession, foreign ownership restrictions and other
external factors over which the Company has no control;
- Interest rate fluctuations and other capital market conditions;
- The effectiveness of the Company's advertising, marketing and promotional
programs; and
- Weather conditions, which could impact demand for Company products and
the supply and cost of raw materials.
The foregoing list of important factors is not exclusive. The
forward-looking statements are and will be based on management's then current
views and assumptions regarding future events and operating performance and
speak only as of their dates. The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
ITEM 2. PROPERTIES.
See table in Item 1.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company has not submitted any matters to a vote of security holders
since the last annual meeting of shareholders on September 8, 1999.
5
<PAGE> 6
EXECUTIVE OFFICERS OF THE REGISTRANT
The following is a list of the names and ages of all of the executive
officers of H. J. Heinz Company indicating all positions and offices held by
each such person and each such person's principal occupations or employment
during the past five years. All the executive officers have been elected to
serve until the next annual election of officers or until their successors are
elected, or until their earlier resignation or removal. The annual election of
officers is scheduled to occur on September 12, 2000.
<TABLE>
<CAPTION>
Positions and Offices Held with the Company and
Age (as of Principal Occupations or
Name September 12, 2000) Employment During Past Five Years
---- ------------------- -----------------------------------------------
<S> <C> <C>
William R. Johnson 51 President and Chief Executive Officer since
April 1998; President and Chief Operating
Officer from June 1996 to April 1998; Senior
Vice President and President and Chief
Executive Officer of Star-Kist Foods, Inc. and
the Asia-Pacific region from September 1993 to
June 1996.
Paul F. Renne 57 Executive Vice President and Chief Financial
Officer since June 1997; Senior Vice
President--Finance and Chief Financial Officer
from September 1996 to June 1997; Vice
President--Treasurer from October 1986 to
September 1996.
A. G. Malcolm Ritchie 46 Executive Vice President and President--Europe
since May 1998; Vice President of European
Grocery and Foodservice--H. J. Heinz Company,
Ltd. from May 1997 to May 1998; Managing
Director of H. J. Heinz Company, Ltd. from
August 1994 to May 1997.
Richard H. Wamhoff 54 Executive Vice President--Global
Manufacturing/Supply Chain and Frozen Foods
since May 1998; President and Chief Executive
Officer--Ore-Ida Foods, Inc. from May 1993 to
May 1998.
David R. Williams 57 Executive Vice President since June 1996;
Executive Vice President--Finance and Chief
Financial Officer from June 1996 to September
1996; Senior Vice President--Finance and Chief
Financial Officer from August 1992 to June
1996.
Michael J. Bertasso 50 Senior Vice President--Strategy, Process and
Business Development since May 1998; Executive
Vice President--Star-Kist Foods, Inc. from July
1996 to May 1998; Chief Cost Officer--Star-Kist
Foods, Inc. from May 1995 to July 1996.
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
Positions and Offices Held with the Company and
Age (as of Principal Occupations or
Name September 12, 2000) Employment During Past Five Years
---- ------------------- -----------------------------------------------
<S> <C> <C>
William C. Goode 59 Senior Vice President and Chief Administrative
Officer since May 2000; Vice President and
Chief Administrative Officer from May 1998 to
April 2000; Vice President--Operations of Heinz
Pet Products from October 1996 to May 1998;
Vice President--Human Resources & Quality
Systems of Star-Kist Foods, Inc. from May 1993
to October 1996.
Michael D. Milone 44 Senior Vice President--Global Category
Development since May 2000; Vice President--
Global Category Development from August 1998 to
May 2000; President and Chief Operating Officer
of Heinz Pet Products from July 1996 to August
1998; Chief Revenue Officer--Star-Kist Foods,
Inc. from May 1995 to July 1996; Vice
President--Marketing Heinz Pet Products from
June 1991 to May 1995.
D. Edward I. Smyth 50 Senior Vice President--Corporate and Government
Affairs since May 1998; Vice
President--Corporate Affairs from March 1990 to
May 1998.
Laura Stein 38 Senior Vice President and General Counsel since
January 2000; attorney at The Clorox Company
from 1992-1999, last serving as Assistant
General Counsel--Regulatory Affairs.
</TABLE>
7
<PAGE> 8
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Information relating to the Company's common stock is set forth beginning
on page 44 under the caption "Stock Market Information" and on page 69 in Note
15, "Quarterly Results (Unaudited)," of the Company's Annual Report to
Shareholders for the fiscal year ended May 3, 2000. Such information is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The following table presents selected consolidated financial data for the
Company and its subsidiaries for each of the five fiscal years 1996 through
2000. All amounts are in thousands except per share data.
<TABLE>
<CAPTION>
Fiscal year ended
--------------------------------------------------------------
May 3, April 28, April 29, April 30, May 1,
2000 1999 1998 1997 1996
(53 Weeks) (52 Weeks) (52 Weeks) (52 Weeks) (52 Weeks)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Sales....................... $9,407,949 $9,299,610 $9,209,284 $9,357,007 $9,112,265
Interest expense............ 269,748 258,813 258,616 274,746 277,411
Net income.................. 890,553 474,341 801,566 301,871 659,319
Net income per share--
diluted................... 2.47 1.29 2.15 0.81 1.75
Net income per share--
basic..................... 2.51 1.31 2.19 0.82 1.79
Short-term debt and current
portion of long-term
debt...................... 176,575 904,207 339,626 1,163,442 1,082,169
Long-term debt, exclusive of
current portion........... 3,935,826 2,472,206 2,768,277 2,283,993 2,281,659
Total assets................ 8,850,657 8,053,634 8,023,421 8,437,787 8,623,691
Cash dividends per common
share..................... 1.44 1/2 1.34 1/4 1.23 1/2 1.13 1/2 1.03 1/2
</TABLE>
The 2000 results include net restructuring and implementation costs of
$392.7 million pretax ($0.74 per share) for Operation Excel, a pretax
contribution of $30.0 million ($0.05 per share) to the H. J. Heinz Company
Foundation, costs related to Ecuador of $20.0 million pretax ($0.05 per share),
a gain of $464.6 million pretax ($0.72 per share) on the sale of the Weight
Watchers classroom business and a gain of $18.2 million pretax ($0.03 per share)
on the sale of an office building in the U.K. See Notes 3 and 4 to the
Consolidated Financial Statements beginning on page 54 of the Company's Annual
Report to Shareholders for the fiscal year ended May 3, 2000.
The 1999 results include restructuring and implementation costs of $552.8
million pretax ($1.11 per share) for Operation Excel and costs of $22.3 million
pretax ($0.04 per share) related to the implementation of Project Millennia,
offset by the reversal of unutilized Project Millennia accruals for severance
and exit costs of $25.7 million pretax ($0.04 per share) and a gain of $5.7
million pretax on the sale of the bakery products unit. See Notes 3 and 4 to the
Consolidated Financial Statements beginning on page 54 of the Company's Annual
Report to Shareholders for the fiscal year ended May 3, 2000.
The 1998 results include costs of $84.1 million pretax ($0.14 per share)
related to the implementation of Project Millennia, offset by the gain on the
sale of the Ore-Ida frozen foodservice business, $96.6 million pretax ($0.14 per
share). See Notes 3 and 4 to the Consolidated Financial Statements beginning on
page 54 of the Company's Annual Report to Shareholders for the fiscal year ended
May 3, 2000.
8
<PAGE> 9
The 1997 results include a pretax charge for Project Millennia
restructuring and implementation costs of $647.2 million ($1.09 per share). See
Note 4 to the Consolidated Financial Statements beginning on page 55 of the
Company's Annual Report to Shareholders for the fiscal year ended May 3, 2000.
These charges were partially offset by gains recognized on the sale of the New
Zealand ice cream business, $72.1 million pretax ($0.12 per share) and real
estate in the United Kingdom, $13.2 million pretax ($0.02 per share).
The 1996 results include gains related to the sale of the Weight Watchers
Magazine ($0.02 per share) and the sale of two regional dry pet food product
lines ($0.02 per share) and a charge for restructuring costs at certain overseas
affiliates ($0.01 per share).
Note: All earnings per share amounts are presented on an after-tax diluted basis
unless otherwise noted.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This information is set forth in the Management's Discussion and Analysis
section on pages 30 through 44 of the Company's Annual Report to Shareholders
for the fiscal year ended May 3, 2000. Such information is incorporated herein
by reference.
On July 7, 2000, the Commissioners of the Federal Trade Commission
challenged the Company's acquisition of Milnot Holding Corporation, the maker of
Beech-Nut baby food. The Company intends to defend the acquisition in the
courts.
On July 9, 2000, the Company acquired IDF Holdings, Inc., the parent of
International DiverseFoods Inc. ("IDF"). IDF, with annual sales exceeding $100
million, offers an extensive line of portion control and bulk food products,
including sauces, condiments, salad dressings, pancake and biscuit mixes,
batters and breading. Its major customers include leading casual dining
restaurants and fast-food chains, along with foodservice distributors and food
processing companies.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
This information is set forth in the Management's Discussion and Analysis
section on pages 42 through 44 of the Company's Annual Report to Shareholders
for the fiscal year ended May 3, 2000. Such information is incorporated herein
by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Balance Sheets of the Company and its subsidiaries as of
May 3, 2000 and April 28, 1999 and the related Consolidated Statements of
Income, Shareholders' Equity and Cash Flows for the fiscal years ended May 3,
2000, April 28, 1999 and April 29, 1998 together with the related Notes to
Consolidated Financial Statements, on pages 45 through 70 of the Company's
Annual Report to Shareholders for the fiscal year ended May 3, 2000, are
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There is nothing to be reported under this item.
9
<PAGE> 10
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information relating to the Directors of the Company is set forth under the
captions "Election of Directors" and "Additional Information--Section 16
Beneficial Ownership Reporting Compliance" in the Company's definitive Proxy
Statement in connection with its Annual Meeting of Shareholders to be held
September 12, 2000. Such information is incorporated herein by reference.
Information relating to the executive officers of the Company is set forth under
the caption "Executive Officers of the Registrant" in Part I above.
ITEM 11. EXECUTIVE COMPENSATION.
Information relating to executive compensation is set forth under the
caption "Executive Compensation" in the Company's definitive Proxy Statement in
connection with its Annual Meeting of Shareholders to be held September 12,
2000. Such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information relating to the ownership of equity securities of the Company
by certain beneficial owners and management is set forth under the caption
"Security Ownership of Management" in the Company's definitive Proxy Statement
in connection with its Annual Meeting of Shareholders to be held September 12,
2000. Such information is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information relating to certain relationships with a beneficial shareholder
and certain related transactions is set forth under the caption "Certain
Business Relationships and Agreements" in the Company's definitive Proxy
Statement in connection with its Annual Meeting of Shareholders to be held
September 12, 2000. Such information is incorporated herein by reference.
10
<PAGE> 11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<C> <S>
(a)(1) The following financial statements and report included in
the Company's Annual Report to Shareholders for the fiscal
year ended May 3, 2000 are incorporated herein by reference:
Consolidated Balance Sheets as of May 3, 2000 and April 28,
1999 Consolidated Statements of Income for the fiscal years
ended May 3, 2000, April 28, 1999 and April 29, 1998
Consolidated Statements of Shareholders' Equity for the
fiscal years ended May 3, 2000, April 28, 1999 and
April 29, 1998 Consolidated Statements of Cash Flows
for the fiscal years ended May 3, 2000, April 28, 1999
and April 29, 1998
Notes to Consolidated Financial Statements
Report of Independent Accountants of
PricewaterhouseCoopers LLP dated June 14, 2000 on the
Company's consolidated financial statements for the
fiscal years ended May 3, 2000, April 28, 1999 and
April 29, 1998
(2) The following report and schedule is filed herewith as a
part hereof:
Report of Independent Accountants of PricewaterhouseCoopers
LLP dated June 14, 2000 on the Company's consolidated
financial statement schedule filed as a part hereof for
the fiscal years ended May 3, 2000, April 28, 1999 and
April 29, 1998
Consent of Independent Accountants of PricewaterhouseCoopers
LLP dated July 27, 2000 filed as a part hereof
Schedule II (Valuation and Qualifying Accounts and Reserves)
for the three fiscal years ended May 3, 2000, April 28, 1999
and April 29, 1998
All other schedules are omitted because they are not
applicable or the required information is included herein or
is shown in the consolidated financial statements or notes
thereto incorporated herein by reference.
(3) 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 numbers correspond to the
exhibit numbers designated in Item 601 of Regulation S-K.
3(i) The Company's Articles of Amendment dated July 13,
1994, amending and restating the Company's amended and
restated Articles of Incorporation in their entirety,
are incorporated herein by reference to Exhibit 3(i)
to the Company's Annual Report on Form 10-K for the
fiscal year ended April 27, 1994.
3(ii) The Company's By-Laws, as amended effective
September 8, 1999 are incorporated herein by reference
to Exhibit 3 to the Company's Quarterly Report on Form
10-Q for the three months ended July 28, 1999.
4. Except as set forth below, there are no instruments
with respect to long-term debt of the Company that
involve indebtedness or securities authorized thereunder
exceeding 10 percent of the total assets of the Company on a
consolidated basis. The Company agrees to file a copy of any
instrument or agreement defining the rights of holders of
long-term debt of the Company upon request of the Securities and
Exchange Commission.
</TABLE>
11
<PAGE> 12
<TABLE>
<C> <S>
(a) The Indenture between the Company and The First
National Bank of Chicago dated as of July 15, 1992 is
incorporated herein by reference to Exhibit 4(a) to the
Company's Registration Statement on Form S-3 (Reg. No.
333-48017) and the supplements to such Indenture are
incorporated herein by reference to the Company's Form
8-Ks dated January 27, 1993, March 25, 1998 and July
16, 1998 relating to the Company's $200,000,000 6 7/8%
Notes due 2003, $300,000,000 6% Notes due 2008 and
$250,000,000 6.375% Debentures due 2028, respectively.
10(a) Management contracts and compensatory plans:
(i) 1986 Deferred Compensation Program for H. J. Heinz Company
and affiliated companies, as amended and restated in its
entirety effective December 6, 1995, is incorporated herein
by reference to Exhibit 10(c)(i) to the Company's Annual
Report on Form 10-K for the fiscal year ended May 1, 1995.
(ii) H. J. Heinz Company 1984 Stock Option Plan, as amended, is
incorporated herein by reference to Exhibit 10(n) to the
Company's Annual Report on Form 10-K for the fiscal year
ended May 2, 1990.
(iii) H. J. Heinz Company 1987 Stock Option Plan, as amended, is
incorporated herein by reference to Exhibit 10(o) to the
Company's Annual Report on Form 10-K for the fiscal year
ended May 2, 1990.
(iv) H. J. Heinz Company 1990 Stock Option Plan is incorporated
herein by reference to Appendix A to the Company's Proxy
Statement dated August 3, 1990.
(v) H. J. Heinz Company 1994 Stock Option Plan is incorporated
herein by reference to Appendix A to the Company's Proxy
Statement dated August 5, 1994.
(vi) H. J. Heinz Company Supplemental Executive Retirement Plan,
as amended, is incorporated herein by reference to Exhibit
10(c)(ix) to the Company's Annual Report on Form 10-K for
the fiscal year ended April 28, 1993.
(vii) H. J. Heinz Company Executive Deferred Compensation Plan is
incorporated herein by reference to Exhibit 10(a)(vii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended April 28, 1999.
(viii) H. J. Heinz Company Incentive Compensation Plan is
incorporated herein by reference to Appendix B to the
Company's Proxy Statement dated August 5, 1994.
(ix) H. J. Heinz Company Stock Compensation Plan for Non-Employee
Directors is incorporated herein by reference to Appendix A
to the Company's Proxy Statement dated August 3, 1995.
(x) H. J. Heinz Company 1996 Stock Option Plan is incorporated
herein by reference to Appendix A to the Company's Proxy
Statement dated August 2, 1996.
(xi) Service Agreement between H. J. Heinz Company and Anthony J.
F. O'Reilly is incorporated herein by reference to Exhibit
10 to the Company's Quarterly Report on Form 10-Q for the
nine months ended January 28, 1998.
(xii) H. J. Heinz Company Deferred Compensation Plan for Directors
is incorporated herein by reference to Exhibit 10
(xiii) to the Company's Annual Report on Form 10-K for the fiscal
year ended April 29, 1998.
</TABLE>
12
<PAGE> 13
<TABLE>
<S> <C>
(xiii) H. J. Heinz Company Global Stock Purchase Plan is
incorporated herein by reference to Appendix A to the
Company's Proxy Statement dated August 3, 1999.
(xiv) Form of Severance Protection Agreement.
12. Computation of Ratios of Earnings to Fixed Charges.
13. Pages 30 through 71 of the H. J. Heinz Company Annual Report to
Shareholders for the fiscal year ended May 3, 2000, portions of
which are incorporated herein by reference. Those portions of the
Annual Report to Shareholders that are not incorporated herein by
reference shall not be deemed to be filed as a part of this Report.
21. Subsidiaries of the Registrant.
23. The following Exhibit is filed by incorporation by reference to
Item 14(a)(2) of this Report:
(a) Consent of PricewaterhouseCoopers LLP.
24. Powers-of-attorney of the Company's directors.
27. Financial Data Schedule.
Copies of the exhibits listed above will be furnished upon
request to holders or beneficial holders of any class of the
Company's stock, subject to payment in advance of the cost
of reproducing the exhibits requested.
</TABLE>
(b) There have been no reports filed on Form 8-K during the last fiscal
quarter of the period covered by this Report.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized, on July 27, 2000.
H. J. HEINZ COMPANY
(Registrant)
By: /s/ PAUL F. RENNE
.................................................
PAUL F. RENNE
Executive Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, on July 27, 2000.
<TABLE>
<CAPTION>
Signature Capacity
--------- --------
<S> <C>
/s/ WILLIAM R. JOHNSON President and Chief Executive Officer
........................................... (Principal Executive Officer)
WILLIAM R. JOHNSON
/s/ PAUL F. RENNE Executive Vice President and
........................................... Chief Financial Officer
PAUL F. RENNE (Principal Financial Officer)
/s/ WILLIAM J. SHOWALTER Vice President and Corporate Controller
........................................... (Principal Accounting Officer)
WILLIAM J. SHOWALTER
</TABLE>
Anthony J. F. O'Reilly Director
William R. Johnson Director
Nicholas F. Brady Director
Mary C. Choksi Director
Edith E. Holiday Director
Samuel C. Johnson Director
Candace Kendle Director
Donald R. Keough Director By /s/ PAUL F. RENNE
Dean R. O'Hare Director ........................................
Paul F. Renne Director PAUL F. RENNE
A. G. Malcolm Ritchie Director Director and Attorney-in-Fact
Herman J. Schmidt Director
Eleanor B. Sheldon Director
William P. Snyder III Director
S. Donald Wiley Director
David R. Williams Director
James M. Zimmerman Director
14
<PAGE> 15
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Shareholders of
H. J. Heinz Company:
Our audits of the consolidated financial statements referred to in our
report dated June 14, 2000 appearing in the 2000 Annual Report to Shareholders
of H. J. Heinz Company and Subsidiaries (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the financial statement schedule listed in Item
14(a)(2) of this Form 10-K. In our opinion, this financial statement schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
June 14, 2000
------------------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (No. 333-48017) and Form S-8 (Nos. 2-51719, 33-32563,
33-42015, 33-55777, 33-62623, 333-13849 and 333-87419) of H. J. Heinz Company
and Subsidiaries of our report dated June 14, 2000 relating to the financial
statements, which appears in the 2000 Annual Report to Shareholders, which is
incorporated in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report dated June 14, 2000 relating to the
financial statement schedule, which appears in this Form 10-K.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Pittsburgh, Pennsylvania
July 27, 2000
15
<PAGE> 16
SCHEDULE II
H. J. HEINZ COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FISCAL YEARS ENDED MAY 3, 2000, APRIL 28, 1999 AND APRIL 29, 1998
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Additions
----------------------
Balance at Charged to Charged Balance at
beginning costs and to other end of
Description of period expenses accounts Deductions period
----------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Fiscal year ended May 3, 2000:
Reserves deducted in the balance sheet from
the assets to which they apply:
Receivables............................... $ 21,633 $ 3,986 $-- $ 6,922(1) $ 18,697
======== ======= == ======= ========
Investments, advances and other assets.... $ 1,876 $ -- $-- $ 279 $ 1,597
======== ======= == ======= ========
Deferred tax assets (2)................... $ 40,811 $49,173 $-- $14,875 $ 75,109
======== ======= == ======= ========
Fiscal year ended April 28, 1999:
Reserves deducted in the balance sheet from
the assets to which they apply:
Receivables............................... $ 17,627 $ 8,427 $-- $ 4,421(1) $ 21,633
======== ======= == ======= ========
Investments, advances and other assets.... $ 2,392 $ -- $-- $ 516 $ 1,876
======== ======= == ======= ========
Deferred tax assets (3)................... $ 20,992 $25,949 $-- $ 6,130 $ 40,811
======== ======= == ======= ========
Fiscal year ended April 29, 1998:
Reserves deducted in the balance sheet from
the assets to which they apply:
Receivables............................... $ 18,934 $ 4,934 $-- $ 6,241(1) $ 17,627
======== ======= == ======= ========
Investments, advances and other assets.... $ 4,767 $ -- $-- $ 2,375 $ 2,392
======== ======= == ======= ========
Deferred tax assets (4)................... $ 5,459 $16,755 $-- $ 1,222 $ 20,992
======== ======= == ======= ========
</TABLE>
NOTES:
(1) Principally reserves on assets sold, written-off or reclassified.
(2) The net change in the valuation allowance for deferred tax assets was an
increase of $34.3 million. The increase was due to increases in the
valuation allowance related to additional deferred tax assets for foreign
tax credit carryforward ($34.3 million) and loss carryforwards ($14.8
million). The increase was partially offset by decreases in the valuation
allowance related to reduction in deferred tax assets for loss carryforwards
($14.8 million). See Note 5 to the Consolidated Financial Statements on
pages 58 and 59 of the Company's Annual Report to Shareholders for the
fiscal year ended May 3, 2000.
(3) The net change in the valuation allowance for deferred tax assets was an
increase of $19.8 million. The increase was due to a change in judgment
about the realizability of deferred tax assets related to foreign tax credit
carryforwards ($4.1 million) and the addition of deferred tax assets for
loss carryforwards ($21.8 million). The increase was partially offset by
decreases in the valuation allowance related to a reduction in deferred tax
assets for loss carryforwards ($3.0 million) and foreign tax credit
carryforwards ($3.1 million). See Note 5 to the Consolidated Financial
Statements on pages 58 and 59 of the Company's Annual Report to Shareholders
for the fiscal year ended May 3, 2000.
(4) The net change in the valuation allowance for deferred tax assets was an
increase of $15.5 million. The increase was due to increases in the
valuation allowance related to additional deferred tax assets for foreign
tax credit carryforwards ($9.5 million) and loss carryforwards ($7.2
million). The increase was partially offset by a decrease in the valuation
allowance related to the utilization of loss carryforwards ($1.2 million).
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
DESCRIPTION OF EXHIBIT
------------------------------------------------------------
<S> <C>
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 numbers correspond to the
exhibit numbers designated in Item 601 of Regulation S-K.
3(i) The Company's Articles of Amendment dated July 13, 1994,
amending and restating the Company's amended and restated
Articles of Incorporation in their entirety, are incorporated
herein by reference to Exhibit 3(i) to the Company's Annual
Report on Form 10-K for the fiscal year ended April 27, 1994.
3(ii) The Company's By-Laws, as amended effective September 8, 1999
are incorporated herein by reference to Exhibit 3 to the
Company's Quarterly Report on Form 10-Q for the three months
ended July 28, 1999.
4. Except as set forth below, there are no instruments
with respect to long-term debt of the Company that involve
indebtedness or securities authorized thereunder
exceeding 10 percent of the total assets of the
Company on a consolidated basis. The Company agrees
to file a copy of any instrument or agreement
defining the rights of holders of long-term debt of
the Company upon request of the Securities and
Exchange Commission.
(a) The Indenture between the Company and The First
National Bank of Chicago dated as of July 15, 1992 is
incorporated herein by reference to Exhibit 4(a) to the
Company's Registration Statement on Form S-3 (Reg. No.
333-48017) and the supplements to such Indenture are
incorporated herein by reference to the Company's Form
8-Ks dated January 27, 1993, March 25, 1998 and July
16, 1998 relating to the Company's $200,000,000 6 7/8%
Notes due 2003, $300,000,000 6% Notes due 2008 and
$250,000,000 6.375% Debentures due 2028, respectively.
10(a) Management contracts and compensatory plans:
(i) 1986 Deferred Compensation Program for H. J. Heinz
Company and affiliated companies, as amended and
restated in its entirety effective December 6, 1995, is
incorporated herein by reference to Exhibit 10(c)(i) to
the Company's Annual Report on Form 10-K for the fiscal
year ended May 1, 1995.
(ii) H. J. Heinz Company 1984 Stock Option Plan, as amended,
is incorporated herein by reference to Exhibit 10(n) to
the Company's Annual Report on Form 10-K for the fiscal
year ended May 2, 1990.
(iii) H. J. Heinz Company 1987 Stock Option Plan, as amended,
is incorporated herein by reference to Exhibit 10(o) to
the Company's Annual Report on Form 10-K for the fiscal
year ended May 2, 1990.
(iv) H. J. Heinz Company 1990 Stock Option Plan is
incorporated herein by reference to Appendix A to the
Company's Proxy Statement dated August 3, 1990.
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
DESCRIPTION OF EXHIBIT
------------------------------------------------------------
<S> <C>
(v) H. J. Heinz Company 1994 Stock Option Plan is incorporated
herein by reference to Appendix A to the Company's Proxy
Statement dated August 5, 1994.
(vi) H. J. Heinz Company Supplemental Executive Retirement Plan,
as amended, is incorporated herein by reference to Exhibit
10(c)(ix) to the Company's Annual Report on Form 10-K for the
fiscal year ended April 28, 1993.
(vii) H. J. Heinz Company Executive Deferred Compensation Plan is
incorporated herein by reference to Exhibit 10(a)(vii) to the
Company's Annual Report on Form 10-K for the fiscal year
ended April 28, 1999.
(viii) H. J. Heinz Company Incentive Compensation Plan is
incorporated herein by reference to Appendix B to the
Company's Proxy Statement dated August 5, 1994.
(ix) H. J. Heinz Company Stock Compensation Plan for Non-Employee
Directors is incorporated herein by reference to Appendix A
to the Company's Proxy Statement dated August 3, 1995.
(x) H. J. Heinz Company 1996 Stock Option Plan is incorporated
herein by reference to Appendix A to the Company's Proxy
Statement dated August 2, 1996.
(xi) Service Agreement between H. J. Heinz Company and Anthony J.
F. O'Reilly is incorporated herein by reference to Exhibit 10
to the Company's Quarterly Report on Form 10-Q for the nine
months ended January 28, 1998.
(xii) H. J. Heinz Company Deferred Compensation Plan for Directors
is incorporated herein by reference to Exhibit 10(xiii) to
the Company's Annual Report on Form 10-K for the fiscal year
ended April 29, 1998.
(xiii) H. J. Heinz Company Global Stock Purchase Plan is
incorporated herein by reference to Appendix A to the
Company's Proxy Statement dated August 3, 1999.
(xiv) Form of Severance Protection Agreement.
12. Computation of Ratios of Earnings to Fixed Charges.
13. Pages 30 through 71 of the H. J. Heinz Company Annual Report to
Shareholders for the fiscal year ended May 3, 2000, portions of which
are incorporated herein by reference. Those portions of the Annual
Report to Shareholders that are not incorporated herein by reference
shall not be deemed to be filed as a part of this Report.
21. Subsidiaries of the Registrant.
23. The following Exhibit is filed by incorporation by reference to
Item 14(a)(2) of this Report:
(a) Consent of PricewaterhouseCoopers LLP.
24. Powers-of-attorney of the Company's directors.
27. Financial Data Schedule.
</TABLE>
