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Cash used for financing activities totaled $483 million compared to $1.15 billion last year.
• Proceeds from long-term debt were $230 million in the current year and $447 million in the
prior year. The current year proceeds primarily relate to a variable rate, three-year 16 billion
Japanese yen denominated credit agreement the Company entered into in the third quarter of
the year. The proceeds were used in the funding of the Foodstar acquisition and for general
corporate purposes and were swapped to $193.2 million and the interest rate was fixed at
2.66%. See Note 12, “Derivative Financial Instruments and Hedging Activities” in Item 8-
“Financial Statements and Supplementary Data” for additional information. The prior year
proceeds relate to the issuance of $250 million of 7.125% notes due 2039 by H. J. Heinz Finance
Company (“HFC”), a subsidiary of Heinz, in July 2009. These notes were fully, unconditionally
and irrevocably guaranteed by the Company. The proceeds from the notes were used for
payment of the cash component of the exchange transaction discussed below as well as various
expenses relating to the exchange, and for general corporate purposes. Also in the prior year,
the Company received cash proceeds of $167 million related to a 15 billion Japanese yen
denominated credit agreement that was entered into during the second quarter of Fiscal 2010.
• Payments on long-term debt were $46 million in the current year compared to $630 million in
the prior year. Prior year payments reflect cash payments on the Fiscal 2010 DRS exchange
transaction discussed below and the payoff of our A$281 million Australian denominated
borrowings which matured on December 16, 2009.
• Net payments on commercial paper and short-term debt were $193 million this year compared
to $427 million in the prior year.
• Cash proceeds from option exercises, net of treasury stock purchases, provided $85 million of
cash in the current year. During the fourth quarter of Fiscal 2011, the Company purchased
1.4 million shares of stock at a total cost of $70 million. Cash proceeds from option exercises
provided $67 million of cash in the prior year, and the Company had no treasury stock
purchases in the prior year.
• Dividend payments totaled $580 million this year, compared to $534 million for the same
period last year, reflecting a 7.1% increase in the annualized dividend per common share to
$1.80.
• In the current year, $6 million of cash was paid for the purchase of the remaining 21% interest
in Heinz UFE Ltd., a Chinese subsidiary of the Company that manufactures infant feeding
products. In the prior year, $62 million of cash was paid for the purchase of the remaining 49%
interest in Cairo Food Industries, S.A.E., an Egyptian subsidiary of the Company that
manufactures ketchup, condiments and sauces.
On August 6, 2009, HFC issued $681 million of 7.125% notes due 2039 (of the same series as the
notes issued in July 2009), and paid $218 million of cash, in exchange for $681 million of its
outstanding 15.590% DRS due December 1, 2020. In addition, HFC terminated a portion of the
remarketing option by paying the remarketing agent a cash payment of $89 million. The exchange
transaction was accounted for as a modification of debt. Accordingly, cash payments used in the
exchange, including the payment to the remarketing agent, have been accounted for as a reduction in
the book value of the debt, and will be amortized to interest expense under the effective yield method.
Additionally, the Company terminated its $175 million notional total rate of return swap in August
2009 in connection with the DRS exchange transaction. See Note 12, “Derivative Financial
Instruments and Hedging Activities” in Item 8-“Financial Statements and Supplementary Data”
for additional information.
On May 26, 2011, the Company announced that its Board of Directors approved a 6.7% increase
in the quarterly dividend on common stock from 45 cents to 48 cents, an annual indicative rate of
$1.92 per share for Fiscal 2012, effective with the July 2011 dividend payment. Fiscal 2012 dividend
payments are expected to be approximately $620 million.
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