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H. J. <strong>Heinz</strong> Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) In Fiscal 2010, the Company adopted a new accounting standard requiring additional disclosures for Plan assets of defined benefit pension and other post-retirement plans. As required by the standard, the Company categorized Plan assets within a three level fair value hierarchy. The following section describes the valuation methodologies used to measure the fair value of pension plan assets, including an indication of the level in the fair value hierarchy in which each type of asset is generally classified. Equity Securities. These securities consist of direct investments in the stock of publicly traded companies. Such investments are valued based on the closing price reported in an active market on which the individual securities are traded. As such, the direct investments are classified as Level 1. Equity Securities (mutual and pooled funds). Mutual funds are valued at the net asset value of shares held by the Plan at year end. As such, these mutual fund investments are classified as Level 1. Pooled funds are similar in nature to retail mutual funds, but are more efficient for institutional investors than retail mutual funds. As pooled funds are only accessible by institutional investors, the net asset value is not readily observable by non-institutional investors; therefore, pooled funds are classified as Level 2. Fixed Income Securities. These securities consist of publicly traded U.S. and non-U.S. fixed interest obligations (principally corporate bonds and debentures). Such investments are valued through consultation and evaluation with brokers in the institutional market using quoted prices and other observable market data. As such, a portion of these securities are included in Levels 1, 2 and 3. Other Investments. Primarily consist of real estate, private equity holdings and interest rate swaps. Direct investments of real estate and private equity are valued by investment managers based on the most recent financial information available, which typically represents significant observable data. As such, these investments are generally classified as Level 3. The fair value of interest rate swaps is determined through use of observable market swap rates and are classified as Level 2. Cash and Cash Equivalents. This consists of direct cash holdings and institutional short-term investment vehicles. Direct cash holdings are valued based on cost, which approximates fair value and are classified as Level 1. Institutional short-term investment vehicles are valued daily and are classified as Level 2. April 27, 2011 Asset Category Level 1 Level 2 Level 3 Total (Dollars in thousands) Equity Securities . . . . . . . . . . . . . . . $ 863,404 $ — $ — $ 863,404 Equity Securities (mutual and pooled funds) . . . . . . . . . . . . . . . . . 157,296 1,005,678 — 1,162,974 Fixed Income Securities . . . . . . . . . . 53,381 966,157 9,649 1,029,187 Other Investments . . . . . . . . . . . . . . — — 131,095 131,095 Cash and Cash Equivalents . . . . . . . 16,270 58,951 — 75,221 Total . . . . . . . . . . . . . . . . . . . . . . . . . $1,090,351 $2,030,786 $140,744 $3,261,881 73
H. J. <strong>Heinz</strong> Company and Subsidiaries Notes to Consolidated Financial Statements — (Continued) April 28, 2010 Asset Category Level 1 Level 2 Level 3 Total (Dollars in thousands) Equity Securities . . . . . . . . . . . . . . . . $ 894,684 $ — $ — $ 894,684 Equity Securities (mutual and pooled funds) . . . . . . . . . . . . . . . . . . . . . . . 122,753 641,727 — 764,480 Fixed Income Securities . . . . . . . . . . . 49,951 785,924 8,646 844,521 Other Investments . . . . . . . . . . . . . . . — 7,491 35,569 43,060 Cash and Cash Equivalents . . . . . . . . 14,260 308,966 — 323,226 Total . . . . . . . . . . . . . . . . . . . . . . . . . . $1,081,648 $1,744,108 $44,215 $2,869,971 Level 3 Gains and Losses: Changes in the fair value of the Plan’s Level 3 assets are summarized as follows: Fair Value April 28, 2010 Acquisitions Dispositions Realized Gain/(Loss) (Dollars in thousands) Unrealized Gain/(Loss) Fair Value April 27, 2011 Fixed Income Securities . . . . $ 8,646 $ — $ — $ — $ 1,003 $ 9,649 Other Investments . . . . . . . . 35,569 95,518 (619) 2,727 (2,100) 131,095 Total . . . . . . . . . . . . . . . . . . . $44,215 $95,518 $(619) $2,727 $(1,097) $140,744 Fair Value April 29, 2009 Acquisitions Dispositions Realized Gain/(Loss) (Dollars in thousands) Unrealized Gain/(Loss) Fair Value April 28, 2010 Fixed Income Securities . . . . . $ 8,873 $ — $(1,500) $ 246 $1,027 $ 8,646 Other Investments . . . . . . . . . 38,306 3,362 (2,658) (2,627) (814) 35,569 Total . . . . . . . . . . . . . . . . . . . . $47,179 $3,362 $(4,158) $(2,381) $ 213 $44,215 Cash Flows: The Company contributed $22.4 million to the defined benefit plans in Fiscal 2011, none of which was discretionary. The Company funds its U.S. defined benefit plans in accordance with IRS regulations, while foreign defined benefit plans are funded in accordance with local laws and regulations in each respective country. Discretionary contributions to the pension funds may also be made by the Company from time to time. Defined benefit plan contributions for the next fiscal year are expected to be less than $40 million; however, actual contributions may be affected by pension asset and liability valuation changes during the year. The Company paid $16.2 million for benefits in the postretirement medical plans in Fiscal 2011. The Company makes payments on claims as they occur during the fiscal year. Payments for the next fiscal year are expected to be approximately $18 million. The medical subsidy received in Fiscal 2011 was $1.4 million. Estimated future medical subsidy receipts are approximately $0.3 million for 2012, $0.3 million for 2013, $0.4 million annually from 2014 through 2016 and $2.5 million for the period from 2017 through 2021. The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010, and on March 30, 2010, the Health Care and Education Reconciliation Act of 74
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Financial Highlights* EPS (1) CAGR
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Emerging Markets % of Company Sales
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technology. The PlantBottle packagi
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The Company also owns or leases off
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Name Age (as of August 30, 2011) Po
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Disruption of our supply chain coul
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The Company could incur more debt,
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obligation to publicly update or re
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Item 6. Selected Financial Data. Th
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In order to continue to drive susta
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Selling, general and administrative
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The volume reflects ongoing weaknes
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educed S&D, partially offset by inc
Page 30 and 31: $85 million for the fiscal year end
Page 32 and 33: At April 27, 2011, the Company had
Page 34 and 35: As of April 27, 2011, the Company w
Page 36 and 37: interest rate contracts and cross-c
Page 38 and 39: In December 2010, the FASB issued a
Page 40 and 41: Most of these assumptions vary sign
Page 42 and 43: Sensitivity of Assumptions If we as
Page 44 and 45: Item 8. Financial Statements and Su
Page 46 and 47: Report of Independent Registered Pu
Page 48 and 49: H. J. Heinz Company and Subsidiarie
Page 54 and 55: Inventories: Inventories are stated
Page 92 and 93: (e) H. J. Heinz Company and Subsidi
Page 96 and 97: Item 9. Changes in and Disagreement
Page 98 and 99: (1) The Executive Deferred Compensa
Page 100 and 101: (c) Indenture among H. J. Heinz Com
Page 102 and 103: (xxvii) Form of Fiscal Year 2009 Re
Page 104 and 105: SIGNATURES Pursuant to the requirem
Page 106 and 107: Exhibit 31(b) I, Arthur B. Winklebl
Page 108 and 109: Exhibit 32(b) Certification by the
Page 110 and 111: PERFORMANCE GRAPH The following gra
Page 114 and 115: CORPORATE DATA Heinz: H. J. Heinz C
Page 116: H.J. Heinz Company P.O. Box 57 Pitt
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