HEINZ H J CO 8-K 2009
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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Attached is H. J. Heinz Company’s press release dated May 28, 2009 furnished herewith as Exhibit 99.1.
This press release presents the business measure of organic sales growth, which is defined as either volume plus price or total sales growth excluding the impact of foreign exchange and acquisitions and divestitures. This measure is utilized by senior management to provide investors with a more complete understanding of underlying sales trends by providing sales growth on a consistent basis.
This press release also presents the business measure of operating free cash flow, which is defined as cash flow from operations less capital expenditures net of proceeds from disposals of property, plant and equipment. This measure is utilized by senior management and the board of directors to gauge our business operating performance, including the progress of management to profitably monetize low return assets.
The limitation of operating free cash flow is that it adjusts for cash used for capital expenditures and cash received from disposals of property, plant and equipment, the net of which is no longer available to the Company for other purposes. Management compensates for this limitation by using the GAAP operating cash flow number as well. Operating free cash flow does not represent residual cash flow available for discretionary expenditures and does not provide insight to the entire scope of the historical cash inflows or outflows of our operations that are captured in the other cash flow measures reported in the statement of cash flows.
This press release also presents certain reported amounts and certain outlook on a constant currency basis. Constant currency is defined as the reported amount adjusted for translation (the effect of changes in average foreign exchange rates between the current period and the corresponding prior year), the impact of the fluctuation in the British Pound versus the Euro and U.S. Dollar cross rates on transaction costs (impact of currency on particular transactions such as raw material sourcing), and the $107MM impact of Fiscal 2009 currency translation hedges. Management refers to growth rates at constant currency so that results can be viewed without the impact of changing foreign currency exchange rates, thereby facilitating period-to-period comparisons of financial results. Management provides outlook on a constant currency basis because of the volatility of foreign exchange rates and because it believes that such presentation facilitates a period to period comparison. However, a limitation of the use of the constant currency results as a performance measure is that it does not reflect the unfavorable impact of exchange rates on financial results when comparing to the prior period. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP.
Disclosed on Exhibit 99.1 is supplemental information regarding reconciliation and calculation of the non-GAAP measures discussed above in connection with the financial results for the fourth quarters and fiscal years ended April 29, 2009 and April 30, 2008, respectively.
ITEM 7.01 REGULATION FD DISCLOSURE
Attached is H. J. Heinz Company’s press release dated May 28, 2009 furnished herewith as Exhibit 99.2 announcing an increase to the Company’s dividend.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.