Download Annual Report PDF - Heinz
Download Annual Report PDF - Heinz
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H. J. <strong>Heinz</strong> Company and Subsidiaries<br />
Notes to Consolidated Financial Statements — (Continued)<br />
2010 (HCERA) was signed into law, which amends certain aspects of the PPACA. Among other<br />
things, the PPACA reduces the tax benefits available to an employer that receives the Medicare<br />
Part D subsidy. As a result of the PPACA, the Company was required to recognize in Fiscal 2010 tax<br />
expense of $3.9 million (approximately $0.01 per share) related to the reduced deductibility in future<br />
periods of the postretirement prescription drug coverage. The PPACA and HCERA (collectively<br />
referred to as the Act) will have both immediate and long-term ramifications for many employers that<br />
provide retiree health benefits.<br />
Benefit payments expected in future years are as follows:<br />
Pension<br />
Benefits<br />
Other<br />
Retiree<br />
Benefits<br />
(Dollars in thousands)<br />
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 201,912 $ 18,259<br />
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 189,005 $ 18,679<br />
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 192,729 $ 19,237<br />
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 188,400 $ 19,599<br />
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 192,655 $ 20,115<br />
Years 2017-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,008,931 $103,641<br />
12. Derivative Financial Instruments and Hedging Activities<br />
The Company operates internationally, with manufacturing and sales facilities in various<br />
locations around the world, and utilizes certain derivative financial instruments to manage its<br />
foreign currency, debt and interest rate exposures. At April 27, 2011, the Company had outstanding<br />
currency exchange, interest rate, and cross-currency interest rate derivative contracts with notional<br />
amounts of $1.86 billion, $1.51 billion and $377 million, respectively. At April 28, 2010, the Company<br />
had outstanding currency exchange, interest rate, and cross-currency interest rate derivative<br />
contracts with notional amounts of $1.64 billion, $1.52 billion and $160 million, respectively. The<br />
fair value of derivative financial instruments was a net asset of $72.7 million and $97.7 million at<br />
April 27, 2011 and April 28, 2010, respectively.<br />
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