ANYTIMEkANYPLACEkANYWHERE - Heinz

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
H.J. Heinz Company and Subsidiaries
1. SIGNIFICANT
ACCOUNTING POLICIES
Fiscal Year: H.J. Heinz Company (the ‘‘company’’) operates on a 52- or 53-week fiscal year
ending the Wednesday nearest April 30. However, certain foreign subsidiaries have earlier
closing dates to facilitate timely reporting. Fiscal years for the financial statements included
herein ended May 3, 2000, April 28, 1999 and April 29, 1998.
Principles of Consolidation: The consolidated financial statements include the accounts
of the company and its subsidiaries. All intercompany accounts and transactions were
eliminated. Investments owned less than 50%, where significant influence exists, are accounted
for on an equity basis. Certain prior-year amounts have been reclassified in order to conform
with the Fiscal 2000 presentation.
UseofEstimates: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, the disclosure of contingent assets and liabilities
at the date of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.
Translation of Foreign Currencies: For all significant foreign operations, the functional currency
is the local currency. Assets and liabilities of these operations are translated at the exchange
rate in effect at each year-end. Income statement accounts are translated at the average rate of
exchange prevailing during the year. Translation adjustments arising from the use of differing
exchange rates from period to period are included as a component of shareholders’ equity.
Gains and losses from foreign currency transactions are included in net income for the period.
Cash Equivalents: Cash equivalents are defined as highly liquid investments with original
maturities of 90 days or less.
Inventories: Inventories are stated at the lower of cost or market. Cost is determined principally
under the average cost method.
Property, Plant and Equipment: Land, buildings and equipment are recorded at cost. For
financial reporting purposes, depreciation is provided on the straight-line method over
the estimated useful lives of the assets. Accelerated depreciation methods are generally used
for income tax purposes. Expenditures for new facilities and improvements that substantially
extend the capacity or useful life of an asset are capitalized. Ordinary repairs and maintenance
are expensed as incurred. When property is retired or otherwise disposed, the cost and
related depreciation are removed from the accounts and any related gains or losses are
included in income.
Intangibles: Goodwill, trademarks and other intangibles arising from acquisitions are being
amortized on a straight-line basis over periods ranging from three to 40 years. The company
regularly reviews the individual components of the balances by evaluating the future cash
flows of the businesses to determine the recoverability of the assets and recognizes, on a
current basis, any diminution in value.
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