Back to GetFilings.com





SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JULY 30, 2003

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______________ TO _______________

FOR THE THREE MONTHS ENDED JULY 30, 2003 COMMISSION FILE NUMBER 1-3385

H. J. HEINZ COMPANY
(Exact name of registrant as specified in its charter)



PENNSYLVANIA 25-0542520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

600 GRANT STREET, PITTSBURGH, PENNSYLVANIA 15219
(Address of Principal Executive Offices) (Zip Code)


REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (412) 456-5700

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days. Yes X No __

The number of shares of the Registrant's Common Stock, par value $.25 per
share, outstanding as of August 29, 2003 was 351,675,129 shares.


PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

H. J. HEINZ COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME



First Quarter Ended
------------------------------
July 30, 2003 July 31, 2002
FY 2004 FY 2003
------------- -------------
(Unaudited)
(In Thousands, Except
per Share Amounts)


Sales....................................................... $1,895,524 $1,839,314
Cost of products sold....................................... 1,188,448 1,166,635
---------- ----------
Gross profit................................................ 707,076 672,679
Selling, general and administrative expenses................ 358,000 376,782
---------- ----------
Operating income............................................ 349,076 295,897
Interest income............................................. 5,765 6,223
Interest expense............................................ 52,237 51,853
Other expense, net.......................................... 16,979 13,185
---------- ----------
Income from continuing operations before income taxes and
cumulative effect of change in accounting principle....... 285,625 237,082
Provision for income taxes.................................. 98,800 82,710
---------- ----------
Income from continuing operations before cumulative effect
of change in accounting principle......................... 186,825 154,372
Income from discontinued operations, net of tax............. 27,200 23,423
---------- ----------
Income before cumulative effect of change in accounting
principle................................................. 214,025 177,795
Cumulative effect of change in accounting principle......... -- (77,812)
---------- ----------
Net income.................................................. $ 214,025 $ 99,983
========== ==========
Income per common share
Diluted
Continuing operations.................................. $ 0.53 $ 0.44
Discontinued operations................................ 0.08 0.07
Cumulative effect of change in accounting principle.... -- (0.22)
---------- ----------
Net income........................................... $ 0.60 $ 0.28
========== ==========
Average common shares outstanding--diluted................ 354,522 353,529
========== ==========
Basic
Continuing operations.................................. $ 0.53 $ 0.44
Discontinued operations................................ 0.08 0.07
Cumulative effect of change in accounting principle.... -- (0.22)
---------- ----------
Net income........................................... $ 0.61 $ 0.28
========== ==========
Average common shares outstanding--basic.................. 352,094 351,026
========== ==========
Cash dividends per share.................................... $ 0.27 $ 0.4050
========== ==========


See Notes to Condensed Consolidated Financial Statements.

------------------

2


H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS



April 30,
July 30, 2003 2003*
FY 2004 FY 2003
------------- --------------
(Unaudited)
(Thousands of Dollars)

ASSETS
Current Assets:
Cash and cash equivalents................................... $ 804,734 $ 801,732
Receivables, net............................................ 990,043 1,165,460
Inventories................................................. 1,185,829 1,152,953
Prepaid expenses and other current assets................... 243,815 164,175
---------- ----------
Total current assets................................... 3,224,421 3,284,320
---------- ----------

Property, plant and equipment............................... 3,473,119 3,412,853
Less accumulated depreciation............................... 1,520,553 1,454,987
---------- ----------
Total property, plant and equipment, net............... 1,952,566 1,957,866
---------- ----------

Goodwill.................................................... 1,909,797 1,849,389
Trademarks, net............................................. 613,820 610,063
Other intangibles, net...................................... 133,725 134,897
Other non-current assets.................................... 1,226,485 1,388,216
---------- ----------
Total other non-current assets......................... 3,883,827 3,982,565
---------- ----------

Total assets........................................... $9,060,814 $9,224,751
========== ==========


*Summarized from audited fiscal year 2003 balance sheet.

See Notes to Condensed Consolidated Financial Statements.

------------------

3


H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS



July 30, 2003 April 30, 2003*
FY 2004 FY 2003
------------- ---------------
(Unaudited)
(Thousands of Dollars)

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt............................................. $ 26,151 $ 146,838
Portion of long-term debt due within one year............... 9,952 7,948
Accounts payable............................................ 902,709 938,168
Salaries and wages.......................................... 42,580 43,439
Accrued marketing........................................... 196,818 201,945
Other accrued liabilities................................... 344,112 387,130
Income taxes................................................ 238,666 200,666
---------- ----------
Total current liabilities.............................. 1,760,988 1,926,134
---------- ----------

Long-term debt.............................................. 4,608,272 4,776,143
Deferred income taxes....................................... 169,656 183,998
Non-pension postretirement benefits......................... 190,644 192,663
Other liabilities and minority interest..................... 972,957 946,656
---------- ----------
Total long-term liabilities............................ 5,941,529 6,099,460

Shareholders' Equity:
Capital stock............................................... 107,873 107,880
Additional capital.......................................... 361,861 376,542
Retained earnings........................................... 4,551,500 4,432,571
---------- ----------
5,021,234 4,916,993

Less:
Treasury stock at cost (79,095,494 shares at July 30, 2003
and 79,647,881 shares at April 30, 2003)............... 2,877,475 2,879,506
Unearned compensation..................................... 20,449 21,195
Accumulated other comprehensive loss...................... 765,013 817,135
---------- ----------
Total shareholders' equity............................. 1,358,297 1,199,157
---------- ----------
Total liabilities and shareholders' equity............. $9,060,814 $9,224,751
========== ==========


*Summarized from audited fiscal year 2003 balance sheet.

See Notes to Condensed Consolidated Financial Statements.

------------------

4


H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



First Quarter Ended
------------------------------
July 30, 2003 July 31, 2002
FY 2004 FY 2003
------------- -------------
(Unaudited)
(Thousands of Dollars)

Cash Flows from Operating Activities
Net income................................................ $ 214,025 $ 99,983
Income from discontinued operations....................... (27,200) (23,423)
--------- ---------
Income from continuing operations......................... 186,825 76,560
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation............................................ 51,857 49,346
Amortization............................................ 4,375 5,309
Deferred tax provision.................................. 19,529 6,721
Gain on divestiture..................................... (26,338) --
Cumulative effect of change in accounting principle..... -- 77,812
Other items, net........................................ 949 1,385
Changes in current assets and liabilities, excluding
effects of acquisitions and divestitures:
Receivables........................................... 166,734 236,895
Inventories........................................... (8,314) (67,200)
Prepaid expenses and other current assets............. (75,345) (109,778)
Accounts payable...................................... (67,228) (94,340)
Accrued liabilities................................... (59,088) (59,741)
Income taxes.......................................... 71,980 47,141
--------- ---------
Cash provided by operating activities.............. 265,936 170,110
--------- ---------
Cash Flows from Investing Activities:
Capital expenditures.................................... (29,597) (27,515)
Acquisitions, net of cash acquired...................... (61,298) (17,278)
Proceeds from divestiture............................... 57,938 --
Other items, net........................................ 4,873 (1,286)
--------- ---------
Cash used for investing activities................. (28,084) (46,079)
--------- ---------
Cash Flows from Financing Activities:
Payments on long-term debt.............................. (40,356) (4,246)
Payments on commercial paper and short-term debt, net... (123,921) (89,525)
Dividends............................................... (95,096) (142,134)
Purchases of treasury stock............................. (38,796) --
Exercise of stock options............................... 34,643 3,981
Other items, net........................................ 12,466 12,443
--------- ---------
Cash used for financing activities................. (251,060) (219,481)
--------- ---------
Effect of exchange rate changes on cash and cash
equivalents............................................... 16,210 26,178

Effect of discontinued operations........................... -- 58,787
--------- ---------
Net increase/(decrease) in cash and cash equivalents........ 3,002 (10,485)
Cash and cash equivalents at beginning of year.............. 801,732 202,403
--------- ---------
Cash and cash equivalents at end of period.................. $ 804,734 $ 191,918
========= =========


See Notes to Condensed Consolidated Financial Statements.

------------------

5


H. J. HEINZ COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(1) BASIS OF PRESENTATION

The interim condensed consolidated financial statements of H. J. Heinz
Company, together with its subsidiaries (collectively referred to as the
"Company"), are unaudited. In the opinion of management, all adjustments,
which are of a normal and recurring nature, necessary for a fair statement
of the results of operations of these interim periods have been included.
The results for interim periods are not necessarily indicative of the
results to be expected for the full fiscal year due to the seasonal nature
of the Company's business. Certain prior year amounts have been
reclassified in order to conform with the Fiscal 2004 presentation.

These statements should be read in conjunction with the Company's
consolidated financial statements and related notes, and management's
discussion and analysis of financial condition and results of operations
which appear in the Company's Annual Report on Form 10-K for the year ended
April 30, 2003.

(2) DISCONTINUED OPERATIONS AND SPIN-OFF

On December 20, 2002, Heinz transferred to a wholly-owned subsidiary ("SKF
Foods") certain assets and liabilities, including its U.S. and Canadian pet
food and pet snacks, U.S. tuna, U.S. retail private label soup and private
label gravy, College Inn broths and its U.S. infant feeding businesses and
distributed all of the shares of SKF Foods common stock on a pro rata basis
to its shareholders. Immediately thereafter, SKF Foods merged with a
wholly-owned subsidiary of Del Monte Foods Company ("Del Monte") resulting
in SKF Foods becoming a wholly-owned subsidiary of Del Monte ("the
Merger").

In accordance with accounting principles generally accepted in the United
States of America, the operating results related to these businesses spun
off to Del Monte have been treated as discontinued operations in the
Company's consolidated statements of income. Net income from discontinued
operations for the first quarter ended July 30, 2003 reflects the favorable
settlement of prior year tax liabilities related to the spun off
businesses. The discontinued operations generated sales of $364.3 million
and net income of $23.4 million (net of $10.2 million in tax) for the first
quarter ended July 31, 2002.

(3) SPECIAL ITEMS

DIVESTITURES
During the first quarter of Fiscal 2004, the Company announced it had sold
its bakery business in Northern Europe for $57.9 million. The transaction
resulted in a pretax gain of $26.3 million ($13.3 million after tax) which
will be used to offset reorganization costs during Fiscal 2004. Pro forma
results of the Company, assuming the divestiture had been made at the
beginning of each period presented, would not be materially different from
the results reported.

REORGANIZATION COSTS
During the first quarter of Fiscal 2004, the Company recognized $5.5
million pretax ($3.4 million after tax) as a component of selling, general
and administrative expenses ("SG&A"), primarily due to employee termination
and severance costs related to ongoing efforts to reduce overhead costs at
its North American operations following last year's spin-off transaction
with Del Monte. Additionally, during the first quarter of Fiscal 2004, the
Company wrote down pizza crust assets to be disposed of in the United
Kingdom totaling $4.0 million pretax ($2.8 million after tax) which has
been included as a component of cost of products sold.

6


During the first quarter of Fiscal 2003, the Company recognized
reorganization costs totaling $18.4 million pretax ($11.6 million after
tax) which is included as a component of SG&A.

During the first quarter of Fiscal 2004, the Company utilized $31.9 million
of severance and exit cost accruals related to reorganization costs.
Amounts included in accrued expenses related to these initiatives totaled
$19.8 million and $46.2 million at July 30, 2003 and April 30, 2003,
respectively.

(4) INVENTORIES

The composition of inventories at the balance sheet dates was as follows:



July 30, 2003 April 30, 2003
------------- --------------
(Thousands of Dollars)

Finished goods and work-in-process.................... $ 923,002 $ 902,186
Packaging material and ingredients.................... 262,827 250,767
---------- ----------
$1,185,829 $1,152,953
========== ==========


(5) GOODWILL AND OTHER INTANGIBLE ASSETS

Effective May 2, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142 "Goodwill and Other Intangible
Assets." Under this standard, goodwill and intangibles with indefinite
useful lives are no longer amortized. As a result of adopting SFAS No. 142,
the Company recorded a transitional impairment charge which was calculated
as of May 2, 2002, and recorded as an effect of a change in accounting
principle in the three-month period ended July 31, 2002, of $77.8 million.
There was no tax effect associated with this charge. The charge, which
relates to certain of the Company's reporting units, has been reflected in
its segments as follows: Europe $54.6 million, Asia/Pacific $2.7 million,
and Other Operating Entities $20.5 million.

Changes in the carrying amount of goodwill for the first quarter ended July
30, 2003, by reportable segment, are as follows (see footnote 8 for
information on changes to reportable segments):



North
American Other
Consumer U.S. Asia/ Operating
(Thousands of Dollars) Products Foodservice Europe Pacific Entities Total
---------------------- -------- ----------- -------- -------- --------- ----------

Balance at April 30, 2003........... $891,608 $164,542 $637,371 $143,201 $ 12,667 $1,849,389
Acquisition......................... -- 49,381 2,882 -- 141 52,404
Purchase accounting
reclassifications................. -- -- 1,280 -- -- 1,280
Disposal............................ -- -- (11,530) -- -- (11,530)
Translation adjustments............. 1,147 -- 8,829 5,414 301 15,691
Other............................... 2,563 -- -- -- -- 2,563
-------- -------- -------- -------- -------- ----------
Balance at July 30, 2003............ $895,318 $213,923 $638,832 $148,615 $ 13,109 $1,909,797
======== ======== ======== ======== ======== ==========


Trademarks and other intangible assets at July 30, 2003 and April 30, 2003,
subject to amortization expense, are as follows:



July 30, 2003 April 30, 2003
------------------------------- -------------------------------
Accum Accum
(Thousands of Dollars) Gross Amort Net Gross Amort Net
- ---------------------- -------- --------- -------- -------- --------- --------

Trademarks...................... $183,074 $ (48,481) $134,593 $191,832 $ (55,691) $136,141
Licenses........................ 208,186 (114,089) 94,097 208,186 (112,617) 95,569
Other........................... 98,218 (58,590) 39,628 96,938 (57,610) 39,328
-------- --------- -------- -------- --------- --------
$489,478 $(221,160) $268,318 $496,956 $(225,918) $271,038
======== ========= ======== ======== ========= ========


Amortization expense for trademarks and other intangible assets subject to
amortization was $4.4 million and $5.3 million for the first quarter ended
July 30, 2003 and July 31, 2002,

7


respectively. Based upon the amortizable intangible assets recorded on the
balance sheet at July 30, 2003, amortization expense for each of the next
five years is estimated to be approximately $18.0 million.

Intangible assets not subject to amortization at July 30, 2003 and April
30, 2003 were $479.2 million and $473.9 million, respectively, and
consisted solely of trademarks.

(6) STOCK-BASED EMPLOYEE COMPENSATION PLANS

Stock-based compensation is accounted for by using the intrinsic
value-based method in accordance with Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees."

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation." Accordingly, no compensation
cost has been recognized for the Company's stock option plans. If the
Company had elected to recognize compensation cost based on the fair value
of the options granted at grant date as prescribed by SFAS No. 123, income
and earnings per share from continuing operations before cumulative effect
of change in accounting principle would have been reduced to the pro forma
amounts indicated below:



First Quarter Ended
-----------------------------
July 30, 2003 July 31, 2002
------------- -------------
(In Thousands, Except Per
Share Amounts)

Pro forma income from continuing operations before
cumulative effect of change in accounting principle....... $181,918 $147,785
Pro forma diluted income per common share from continuing
operations before cumulative effect of change in
accounting principle...................................... $ 0.51 $ 0.42
Pro forma basic income per common share from continuing
operations before cumulative effect of change in
accounting principle...................................... $ 0.52 $ 0.42


The weighted-average fair value of options granted was $6.30 per share in
the first quarter ended July 30, 2003. There were no options granted in the
first quarter ended July 31, 2002.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions:



2004
-----

Dividend yield.............................................. 3.3%
Volatility.................................................. 21.9%
Risk-free interest rate..................................... 3.7%
Expected term (years)....................................... 6.5


(7) RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure -- an amendment of
FASB Statement No. 123". SFAS No. 148 provides alternative methods of
transition for entities that voluntarily change to the fair value method
of accounting for stock-based employee compensation, and it also amends
the disclosure provisions of SFAS No. 123 to require prominent disclosure
about the effects of an entity's accounting policy decisions with respect
to stock-based employee compensation in both annual and interim financial
reporting. The disclosure provisions of SFAS No. 148 were effective for
the Company at April 30, 2003.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and
Equity." This statement affects the classification, measurement and
disclosure requirements of certain freestanding financial instruments
including mandatorily redeemable shares. SFAS No. 150 was effective for
all financial instruments entered into or modified after May 31, 2003, and
otherwise is effective for the Company

8


for the second quarter of Fiscal 2004. The adoption of SFAS No. 150 will
require the reclassification of the Company's $325 million of mandatorily
redeemable preferred shares from minority interest to long-term debt on
the condensed consolidated balance sheet and the $20.2 million annual
preferred dividend from other expenses to interest expense on the
consolidated statement of income with no resulting effect on the Company's
profitability.

(8) SEGMENTS

The Company's reportable segments are primarily organized by geographical
area. The composition of segments and measure of segment profitability is
consistent with that used by the Company's management.

In the first quarter of Fiscal 2004, the Company has changed its segment
reporting to reflect changes in organizational structure and management of
its businesses. The Company is now managing and reporting its North
American businesses under two segments, designated North American Consumer
Products and U.S. Foodservice. Changes in the remaining segments involve
the reclassification of certain operating and non-operating businesses
between existing segments. Prior periods have been restated to conform
with the current presentation. Descriptions of the Company's reportable
segment are as follows:

North American Consumer Products--This segment manufactures, markets and
sells ketchup, condiments, sauces, pasta meals, and frozen potatoes,
entrees, snacks and appetizers to the grocery channels in the United
States of America and our Canadian business.

U.S. Foodservice--This segment manufactures, markets and sells branded
and customized products to commercial and non-commercial food outlets
and distributors in the United States of America including ketchup,
condiments, sauces and frozen soups and desserts.

Europe--This segment includes the Company's operations in Europe and
sells products in all of the Company's core categories.

Asia/Pacific--This segment includes the Company's operations in New
Zealand, Australia, Japan, China, South Korea, Indonesia and Thailand.
This segment's operations include products in all of the Company's core
categories.

Other Operating Entities--This segment includes the Company's operations
in Africa, India, Latin America, the Middle East and other areas that
sell products in all of the Company's core categories. During Fiscal
2003, the Company deconsolidated its Zimbabwe operations which had
historically been reported in this segment.

The Company's management evaluates performance based on several factors
including net sales and the use of capital resources; however, the primary
measurement focus is operating income excluding unusual costs and gains.
Intersegment revenues are accounted for at current market values. Items
below the operating income line of the consolidated statements of income
are not presented by segment, since they are excluded from the measure of
segment profitability reviewed by the Company's management.

9


The following table presents information about the Company's reportable
segments:



First Quarter Ended
-----------------------------------
July 30, 2003 July 31, 2002
FY 2004 FY 2003
---------------- ----------------
(Thousands of Dollars)

Net external sales:
North American Consumer Products.......................... $ 450,778 $ 454,145
U.S. Foodservice.......................................... 331,217 307,728
Europe.................................................... 735,153 673,398
Asia/Pacific.............................................. 290,007 237,240
Other Operating Entities.................................. 88,369 166,803
---------- ----------
Consolidated Totals....................................... $1,895,524 $1,839,314
========== ==========
Intersegment revenues:
North American Consumer Products.......................... $ 14,077 $ 13,379
U.S. Foodservice.......................................... 3,532 3,554
Europe.................................................... 4,535 3,531
Asia/Pacific.............................................. 674 915
Other Operating Entities.................................. 499 462
Non-Operating (a)......................................... (23,317) (21,841)
---------- ----------
Consolidated Totals....................................... $ -- $ --
========== ==========
Operating income (loss):
North American Consumer Products.......................... $ 106,262 $ 101,628
U.S. Foodservice.......................................... 49,200 40,948
Europe.................................................... 171,316 139,779
Asia/Pacific.............................................. 34,266 18,932
Other Operating Entities.................................. 11,238 21,460
Non-Operating (a)......................................... (23,206) (26,850)
---------- ----------
Consolidated Totals....................................... $ 349,076 $ 295,897
========== ==========
Operating income (loss) excluding special items (b):
North American Consumer Products.......................... $ 107,758 $ 106,394
U.S. Foodservice.......................................... 51,700 43,076
Europe.................................................... 146,517 139,779
Asia/Pacific.............................................. 34,266 18,932
Other Operating Entities.................................. 11,238 21,460
Non-Operating (a)......................................... (21,748) (15,339)
---------- ----------
Consolidated Totals....................................... $ 329,731 $ 314,302
========== ==========


- ---------------

(a) Includes corporate overhead, intercompany eliminations and charges not
directly attributable to operating segments.

(b) First Quarter ended July 30, 2003 - Excludes the gain on disposal of the
bakery business in Northern Europe and costs to reduce overhead of the
remaining businesses as follows: North American Consumer Products $1.5
million, U.S. Foodservice $2.5 million, Europe $(24.8) million, and
Non-Operating $1.5 million.

First Quarter ended July 31, 2002 - Excludes Del Monte transaction related
costs and cost to reduce overhead of the remaining businesses as follows:
North American Consumer Products $4.8 million, U.S. Foodservice $2.1
million, and Non-Operating $11.5 million.

10


The Company's revenues are generated via the sale of products in the
following categories:



First Quarter Ended
-----------------------------------
July 30, 2003 July 31, 2002
FY 2004 FY 2003
---------------- ----------------
(Thousands of Dollars)

Ketchup, Condiments and Sauces.............................. $ 742,295 $ 639,975
Frozen Foods................................................ 392,709 437,715
Convenience Meals........................................... 427,180 380,233
Infant Foods................................................ 186,582 176,927
Other....................................................... 146,758 204,464
---------- ----------
Total................................................... $1,895,524 $1,839,314
========== ==========


The above amounts include the impact of acquisitions, divestitures
(primarily affecting the Other and Frozen Foods categories) and foreign
exchange.

(9) NET INCOME PER COMMON SHARE

The following are reconciliations of income to income applicable to common
stock and the number of common shares outstanding used to calculate basic
EPS to those shares used to calculate diluted EPS:



First Quarter Ended
-----------------------------------
July 30, 2003 July 31, 2002
FY 2004 FY 2003
---------------- ----------------
(In Thousands, Except per Share
Amounts)

Income from continuing operations before cumulative effect
of change in accounting principle......................... $186,825 $154,372
Preferred dividends......................................... 4 5
-------- --------
Income from continuing operations applicable to common stock
before cumulative effect of change in accounting
principle................................................. 186,821 154,367
Cumulative effect of change in accounting principle......... -- (77,812)
-------- --------
Income from continuing operations applicable to common
stock..................................................... $186,821 $ 76,555
======== ========
Average common shares outstanding--basic.................. 352,094 351,026
Effect of dilutive securities:
Convertible preferred stock............................. 151 148
Stock options and restricted stock...................... 2,277 2,355
-------- --------
Average common shares outstanding--diluted................ 354,522 353,529
======== ========


(10) COMPREHENSIVE INCOME



First Quarter Ended
-----------------------------------
July 30, 2003 July 31, 2002
FY 2004 FY 2003
---------------- ----------------
(Thousands of Dollars)

Net income.................................................. $214,025 $ 99,983
Other comprehensive income:
Foreign currency translation adjustment................. 54,800 117,388
Minimum pension liability adjustment.................... (4,810) 906
Net deferred gains/(losses) on derivatives from periodic
revaluations.......................................... (2,626) 8,165
Net deferred (gains)/losses on derivatives reclassified
to earnings........................................... 4,758 (13,795)
-------- --------
Comprehensive income........................................ $266,147 $212,647
======== ========


(11) DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

The Company operates internationally, with manufacturing and sales
facilities in various locations around the world, and utilizes certain
derivative and non-derivative financial instruments to manage its foreign
currency, commodity price, and interest rate exposures.

FOREIGN CURRENCY HEDGING: The Company uses forward contracts and option
contracts to mitigate its foreign currency exchange rate exposure due to
forecasted purchases of raw materials and sales of finished goods, and
future settlement of foreign currency denominated

11


assets and liabilities. Derivatives used to hedge forecasted transactions
and specific cash flows associated with foreign currency denominated
financial assets and liabilities which meet the criteria for hedge
accounting are designated as cash flow hedges.

The Company uses certain foreign currency debt instruments as net
investment hedges of foreign operations. Losses of $3.1 million (net of
income taxes of $1.8 million), which represented effective hedges of net
investments, were reported as a component of accumulated other
comprehensive loss within unrealized translation adjustment for the first
quarter ended July 30, 2003.

COMMODITY PRICE HEDGING: The Company uses commodity futures, swaps and
option contracts in order to reduce price risk associated with forecasted
purchases of raw materials such as corn, soybean oil and soybean meal.
Commodity price risk arises due to factors such as weather conditions,
government regulations, economic climate and other unforeseen
circumstances. Derivatives used to hedge forecasted commodity purchases
that meet the criteria for hedge accounting are designated as cash flow
hedges.

INTEREST RATE HEDGING: The Company uses interest rate swaps to manage
interest rate exposure. These derivatives may be designated as cash flow
hedges or fair value hedges depending on the nature of the risk being
hedged.

HEDGE INEFFECTIVENESS: Hedge ineffectiveness related to cash flow hedges,
which is reported in current period earnings as other income and expense,
was a net loss of $0.1 million for the first quarter ended July 30, 2003
and July 31, 2002.

DEFERRED HEDGING GAINS AND LOSSES: As of July 30, 2003, the Company is
hedging forecasted transactions for periods not exceeding two years. During
the next 12 months, the Company expects $7.0 million of net deferred gain
reported in accumulated other comprehensive loss to be reclassified to
earnings. Amounts reclassified to earnings because the hedged transaction
was no longer expected to occur were a net loss of $0.1 million and a net
gain of $0.2 million for the first quarter ended July 30, 2003 and July 31,
2002, respectively.

OTHER ACTIVITIES: The Company enters into certain derivative contracts in
accordance with its risk management strategy that do not meet the criteria
for hedge accounting. Although these derivatives do not qualify as hedges,
they have the economic impact of largely mitigating foreign currency,
commodity price or interest rate exposures. These derivative financial
instruments are accounted for on a full mark to market basis through
current earnings even though they were not acquired for trading purposes.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

SPECIAL ITEMS

DISCONTINUED OPERATIONS

On December 20, 2002, Heinz transferred to a wholly-owned subsidiary ("SKF
Foods") certain assets and liabilities, including its U.S. and Canadian pet food
and pet snacks, U.S. tuna, U.S. retail private label soup and private label
gravy, College Inn broths and its U.S. infant feeding businesses and distributed
all of the shares of SKF Foods common stock on a pro rata basis to its
shareholders. Immediately thereafter, SKF Foods merged with a wholly-owned
subsidiary of Del Monte Foods Company ("Del Monte") resulting in SKF Foods
becoming a wholly-owned subsidiary of Del Monte ("the Merger").

In accordance with accounting principles generally accepted in the United
States of America, the operating results related to these businesses spun off to
Del Monte have been treated as discontinued operations in the Company's
consolidated statements of income. Net income from discontinued operations for
the first quarter ended July 30, 2003 reflects the favorable settlement of prior
year tax liabilities related to the spun off businesses. The discontinued
operations gener-

12


ated sales of $364.3 million and net income of $23.4 million (net of $10.2
million in tax) for the first quarter ended July 31, 2002.

DIVESTITURES

During the first quarter of Fiscal 2004, the Company sold its bakery
business in Northern Europe for $57.9 million. The transaction resulted in a
pretax gain of $26.3 million ($13.3 million after-tax) which will be used to
offset reorganization costs during Fiscal 2004.

REORGANIZATION COSTS

During the first quarter of Fiscal 2004, the Company recognized $5.5
million pretax ($3.4 million after-tax) as a component of Selling, General and
Administrative expenses ("SG&A") primarily due to employee termination and
severance costs related to ongoing efforts to reduce overhead costs at its North
American operations following last year's spin-off transaction with Del Monte.
Additionally, during the first quarter of Fiscal 2004, the Company wrote down
pizza crust assets to be disposed of in the United Kingdom totaling $4.0 million
pretax ($2.8 million after-tax) which has been included as a component of cost
of products sold. During the first quarter of Fiscal 2003, the Company
recognized reorganization costs totaling $18.4 million pretax ($11.6 million
after-tax) which is included as a component of SG&A.

During the first quarter of Fiscal 2004, the Company utilized $31.9 million
in severance and exit cost accruals related to reorganization costs.

THREE MONTHS ENDED JULY 30, 2003 AND JULY 31, 2002

In the first quarter of Fiscal 2004, the Company changed its segment
reporting to reflect changes in organizational structure and management of its
business. The Company is now managing and reporting its North American
businesses under two segments, designated North American Consumer Products and
U.S. Foodservice. Certain changes were also made to the composition of the
remaining segments. These changes involve the reclassification of certain
operating and non-operating businesses between existing segments. Prior periods
have been restated to conform with the current presentation. (See Note 8 to the
condensed consolidated financial statements for further discussion of the
Company's reportable segments).

RESULTS OF CONTINUING OPERATIONS

Sales for the three months ended July 30, 2003 increased $56.2 million, or
3.1%, to $1.90 billion. Sales were favorably impacted by exchange translation
rates of 7.5% and volume of 2.2%. The favorable volume impact is primarily due
to strong increases in the North American Consumer Products, U.S. Foodservice,
Asia/Pacific and Other Operating segments. Lower pricing decreased sales by
0.4%. Divestitures, net of acquisitions, reduced sales 6.3% due primarily to the
deconsolidation of the Zimbabwe operations in Fiscal 2003 (see below for further
discussion of this deconsolidation).

Gross profit increased $34.4 million, or 5.1%, to $707.1 million, and the
gross profit margin increased to 37.3% from 36.6%. The gross profit margin
increase was primarily driven by the U.S. Foodservice and Asia/Pacific segments.
The aggregate increase in gross profit also benefited from favorable exchange
translation rates, partially offset by the impact of divestitures and the write
down of the UK pizza crust assets to be disposed of.

SG&A decreased $18.8 million, or 5.0%, to $358.0 million. As a percentage
of sales, SG&A was reduced to 18.9% from 20.5%. The decrease is primarily due to
the gain recorded on the sale of the Northern Europe bakery business, partially
offset by increases from exchange translation rates. SG&A was also impacted by
reorganization costs of $5.5 million and $18.4 million for the first quarters
ended July 30, 2003 and July 31, 2002, respectively.
13


Operating income increased $53.2 million, or 18.0%, to $349.1 million, and
increased as a percentage of sales to 18.4% from 16.1%. This increase was
primarily driven by the increase in gross profit and the gain recorded on the
sale of the Northern Europe bakery business, partially offset by an increase in
pension expense.

Net interest expense increased $0.8 million, to $46.5 million, and other
expense, net, increased $3.8 million, to $17.0 million. The increase in other
expense is primarily attributable to currency losses in the current year,
partially offset by decreased minority interest expense as a result of the
Zimbabwe deconsolidation. The effective tax rate for the current quarter was
34.6% compared to 34.9% last year. The current quarter effective tax rate was
unfavorably impacted by 1.5 percentage points due to the sale of the Northern
Europe bakery business.

Income from continuing operations (before the cumulative effect of change
in accounting principle related to the adoption of Statement of Financial
Accounting Standard ("SFAS") No. 142) for the first quarter of Fiscal 2004 was
$186.8 million compared to $154.4 million in the year-earlier quarter. Diluted
earnings per share (before the cumulative effect of change in accounting
principle related to the adoption of SFAS No. 142) was $0.53 in the current year
compared to $0.44 in the prior year.

OPERATING RESULTS BY BUSINESS SEGMENT

NORTH AMERICAN CONSUMER PRODUCTS

Sales of the North American Consumer Products segment decreased $3.4
million, or 0.7%. Sales volume increased 4.1% primarily due to Heinz ketchup and
Classico pasta sauces, partially offset by declines in frozen food products.
Lower pricing decreased sales 2.0% consistent with our strategy to obtain a more
competitive consumer price point on Boston Market HomeStyle meals, Classico
pasta sauces and Bagel Bites snacks. This decrease was partially offset by price
increases in Heinz ketchup. Divestitures reduced sales 4.7% primarily due to the
Fiscal 2003 divestiture of a North American fish and frozen vegetable business.
Favorable exchange translation rates between the Canadian dollar and U.S. dollar
increased sales 1.9%.

Gross profit decreased $1.8 million, or 0.9%, to $196.8 million, and the
gross profit margin remained stable at 43.7%, as manufacturing cost savings were
offset by unfavorable pricing. Operating income increased $4.6 million, or 4.6%,
to $106.3 million, primarily due to decreased costs related to the prior year
launch of Easy Squeeze! and Kick'rs ketchup. Reorganization costs unfavorably
impacted operating income by $1.5 million and $4.8 million for the quarters
ending July 30, 2003 and July 31, 2002, respectively.

U.S. FOODSERVICE

U.S. Foodservice's sales increased $23.5 million, or 7.6%. Sales volume
increased sales 5.0% primarily due to increases in Heinz ketchup, Escalon
specialty sauces and Dianne's frozen desserts. Higher pricing increased sales by
2.1%. Acquisitions, net of divestitures, increased sales 0.4%, primarily due to
the current year acquisition of Truesoups LLC, a manufacturer and marketer of
premium frozen soups.

Gross profit increased $9.2 million, or 10.8%, to $94.6 million, and the
gross profit margin increased to 28.6% from 27.8%. This increase in gross profit
margin is primarily due to favorable pricing and sales mix. Operating income
increased $8.3 million, or 20.2%, to $49.2 million, primarily due to growth in
gross profit.

EUROPE

Heinz Europe's sales increased $61.8 million, or 9.2%. Favorable exchange
translation rates increased sales by 13.3%. Lower volume decreased sales 1.6%
primarily due to promotional timing
14


on convenience meals and infant feeding as well as the impact of the previously
announced Stock Keeping Unit rationalization of low-margin products. The record
heat wave in Europe contributed to the lower volumes in ready-to-serve soups and
Heinz beans. These volume decreases were partially offset by significant
increases in seafood. Lower pricing decreased sales 1.0%, primarily due to
increased trade promotion spending related to seafood. Divestitures reduced
sales 1.5%, primarily related to the sale of the UK frozen pizza business and
the Northern Europe bakery business.

Gross profit increased $16.7 million, or 6.1%, to $288.0 million; while,
the gross profit margin decreased to 39.2% from 40.3%. The increase in gross
profit is primarily due to improvements in the seafood business and favorable
exchange translation rates, partially offset by unfavorable manufacturing costs
in Northern Europe, unfavorable sales mix, lower volumes and the write off of
the UK pizza assets. Operating income increased $31.5 million, or 22.6%, to
$171.3 million, primarily attributable to the favorable change in gross profit
and the gain on the sale of the Northern Europe bakery business. General and
Administrative expenses ("G&A") also increased primarily due to exchange rates
and increased pension expense.

ASIA/PACIFIC

Sales in Asia/Pacific increased $52.8 million, or 22.2%. Favorable exchange
translation rates increased sales by 15.5%. Volume increased sales 5.2%
primarily due to Tegel poultry in New Zealand and ABC sauces and juice
concentrates in Indonesia. Higher pricing increased sales 0.8% related to ABC
sauces, offset by declines in Tegel poultry. Acquisitions, net of divestitures,
increased sales by 0.7% primarily due to a prior year acquisition of an Asian
sauce business in China.

Gross profit increased $23.9 million, or 33.8%, to $94.5 million, and the
gross profit margin increased to 32.6% from 29.8%. These increases are primarily
due to strong net pricing and manufacturing cost improvements in Australia and
New Zealand as well as favorable exchange translation rates. Operating income
increased $15.3 million, to $34.3 million, primarily due to the growth in gross
profit, offset partially by increased SG&A.

OTHER OPERATING ENTITIES

Sales for Other Operating Entities decreased $78.4 million, or 47.0%,
primarily due to the deconsolidation of the Company's Zimbabwe operations in
Fiscal 2003. The deconsolidation also impacted gross profit and operating
income. Gross profit decreased $14.3 million, or 31.6%, to $30.9 million, and
operating income decreased $10.2 million, or 47.6%, to $11.2 million. Excluding
the Zimbabwe operations in the prior year, sales increased 13.7%, primarily due
to strong volume increases of 7.0%, and operating income increased 41.1%.

Zimbabwe remains in a period of economic uncertainty. Should the current
situation continue, the Company could experience disruptions and delays
associated with its Zimbabwe operations. Therefore, as of the end of November
2002, the Company deconsolidated its Zimbabwean operations and classified its
remaining net investment of approximately $110 million as a cost investment
included in other non-current assets on the condensed consolidated balance sheet
as of July 30, 2003. If this situation continues to deteriorate, the Company's
ability to recover its investment could be impaired.

LIQUIDITY AND FINANCIAL POSITION

Cash provided by continuing operating activities increased by more than 55%
to $265.9 million compared to $170.1 million last year. The increase in Fiscal
2004 versus Fiscal 2003 is primarily due to improved working capital performance
as a result of the 14 day improvement in the Company's cash conversion cycle
versus the year ago period.

15


Cash used for investing activities totaled $28.1 million compared to $46.1
million last year. Acquisitions, net of divestitures, used $3.4 million in net
cash in the first quarter of Fiscal 2004 in line with the Company's strategy of
improving its business mix through acquisitions and divestitures. Capital
expenditures totaled $29.6 million compared to $27.5 million last year.

Cash used for financing activities totaled $251.1 million compared to
$219.5 million last year. The Company paid down $40.7 million in long-term debt
during the current quarter, compared to $4.2 million last year. Payments on
commercial paper and short-term borrowings were $123.9 million this year,
compared to $89.5 million last year. Cash used for purchases of treasury stock,
net of proceeds from option excercises, was $4.2 million this year. There were
no treasury stock purchases in the prior year, and proceeds from option
excercises provided $4.0 million in the prior year. Dividend payments totaled
$95.1 million, compared to $142.1 million for the same period last year
reflecting a reduction in the dividend rate in the fourth quarter of Fiscal 2003
as a result of the spin off of SKF Foods.

The Company continued its debt reduction efforts in the first quarter of
Fiscal 2004 by retiring approximately $140 million of debt. At July 30, 2003,
the Company's net debt (total debt net of the value of interest rate swaps
($150.4 million), less cash and cash equivalents) was $3.69 billion, down
approximately $1.43 billion as compared to the year earlier quarter. Additional
net debt reductions are anticipated in Fiscal 2004.

In first quarter of Fiscal 2004, the cash used for reorganization costs was
approximately $30 million.

The impact of inflation on both the Company's financial position and
results of operations is not expected to adversely affect Fiscal 2004 results.
The Company's financial position continues to remain very strong, enabling it to
meet cash requirements for operations, including anticipated additional pension
plan contributions, capital expansion programs and dividends to shareholders.

RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2002, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 148, "Accounting for Stock-Based Compensation -- Transition and
Disclosure -- an amendment of FASB Statement No. 123". SFAS No. 148 provides
alternative methods of transition for entities that voluntarily change to the
fair value method of accounting for stock-based employee compensation, and it
also amends the disclosure provisions of SFAS No. 123 to require prominent
disclosure about the effects of an entity's accounting policy decisions with
respect to stock-based employee compensation in both annual and interim
financial reporting. The disclosure provisions of SFAS No. 148 were effective
for the Company at April 30, 2003. The Company is currently evaluating its
policy for recognizing expense related to stock options.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity". This
statement affects the classification, measurement and disclosure requirements of
certain freestanding financial instruments, including mandatorily redeemable
shares. SFAS No. 150 was effective for all financial instruments entered into or
modified after May 31, 2003, and otherwise is effective for the Company for the
second quarter of Fiscal 2004. The adoption of SFAS No. 150 will require the
reclassification of the Company's $325 million of mandatorily redeemable
preferred shares from minority interest to long-term debt on the condensed
consolidated balance sheet and the $20.2 million annual preferred dividend from
other expenses to interest expense on the consolidated statement of income with
no resulting effect on the Company's profitability.

Effective May 2, 2002, the Company adopted SFAS No. 142, "Goodwill and
Other Intangible Assets." Under this standard, goodwill and intangibles with
indefinite useful lives are no longer amortized. As a result of adopting SFAS
No. 142, the Company recorded a transitional impairment charge which was
calculated as of May 2, 2002, and recorded as an effect of a change in
accounting

16


principle in the three month period ended July 31, 2002, of $77.8 million. There
was no tax effect associated with this charge. The charge, which relates to
certain of the Company's reporting units, has been reflected in its segments as
follows: Europe $54.6 million, Asia/Pacific $2.7 million and Other Operating
Entities $20.5 million.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION

Except for historical information, matters discussed in this report,
including the management's discussion and analysis, the financial statements and
footnotes, and the statements about future growth, profitability, costs,
expectations, plans, or objectives, are forward-looking statements based on
management's estimates, assumptions, and projections. These forward-looking
statements are subject to risks, uncertainties, and other important factors that
could cause actual results to differ materially from those expressed or implied
in this report and the financial statements and footnotes. These include, but
are not limited to, sales, earnings, and volume growth, general economic,
political, and industry conditions, competitive conditions, production, energy
and raw material costs, the ability to maintain favorable supplier
relationships, achieving cost savings programs and gross margins, currency
valuations and interest rate fluctuations, success of acquisitions, joint
ventures, and divestitures, new product and packaging innovations, the
effectiveness of advertising, marketing, and promotional programs, supply chain
efficiency and cash flow initiatives, the impact of e-commerce and
e-procurement, risks inherent in international operations, particularly the
performance of business in hyperinflationary environments and litigation,
changes in estimates in critical accounting judgments, the possibility of
increased pension expense and contributions, and other factors described in
"Cautionary Statement Relevant to Forward-Looking Information" in the Company's
Form 10-K for the fiscal year ended April 30, 2003, and the Company's subsequent
filings with the Securities and Exchange Commission. The forward-looking
statements are and will be based on management's then current views and
assumptions regarding future events and speak only as of their dates. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in the Company's market risk during the
first quarter ended July 30, 2003. For additional information, refer to pages
21-23 of the Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 2003.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, evaluated the effectiveness of
the Company's disclosure controls and procedures as of the end of the period
covered by this report. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer concluded that the Company's disclosure controls and
procedures, as of the end of the period covered by this report, were designed
and are functioning effectively to provide reasonable assurance that the
information required to be disclosed by the Company in reports filed under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms. The Company
believes that a controls system, no matter how well designed and operated,
cannot provide absolute assurance that the objectives of the controls system are
met, and no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within a company have been
detected.

17


(b) Changes in Internal Controls

No change in the Company's internal control over financial reporting
occurred during the Company's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
controls over financial reporting.

18


PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Nothing to report under this item.

ITEM 2. CHANGES IN SECURITIES

Nothing to report under this item.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Nothing to report under this item.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Nothing to report under this item.

ITEM 5. OTHER INFORMATION

See Note 8 to the Condensed Consolidated Financial Statements in Part
I--Item 1 of this Quarterly Report on Form 10-Q.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits required to be furnished by Item 601 of Regulation S-K are
listed below. The Company has omitted certain exhibits in accordance with
Item 601(b)(4)(iii)(A) of Regulation S-K. The Company agrees to furnish
such documents to the Commission upon request. Documents not designated as
being incorporated herein by reference are set forth herewith. The
paragraph numbers correspond to the exhibit numbers designated in Item 601
of Regulation S-K.

12. Computation of Ratios of Earnings to Fixed Charges.

31. Rule 13a-14(a)/15d-14(a) Certifications.

32(a). Certification by the Chief Executive Officer Relating to a
Periodic Report Containing Financial Statements.*

32(b). Certification by the Chief Financial Officer Relating to a
Periodic Report Containing Financial Statements.*

(b) Reports on Form 8-K

During the last fiscal quarter covered by this Report, the Company
furnished a Current Report on Form 8-K dated June 13, 2003, relating to its
press release dated June 12, 2003. The Item 12 and the Exhibit attached to
that Form 8-K shall not be deemed "filed" for purposes of Section 18 of the
Exchange Act or otherwise subject to liability under that Section, nor
shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as
expressly set forth by specific reference in such filing.

* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") or otherwise subject to liability under that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as expressly set forth by
specific reference in such filing.

19


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 thereunto duly authorized.

H. J. HEINZ COMPANY
(Registrant)

Date: September 3, 2003
By: /s/ ARTHUR B. WINKLEBLACK
..........................................

Arthur B. Winkleblack
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)

Date: September 3, 2003
By: /s/ EDWARD J. MCMENAMIN
..........................................

Edward J. McMenamin
Vice President -- Finance
(Principal Accounting Officer)

20


EXHIBIT INDEX

DESCRIPTION OF EXHIBIT

Exhibits required to be filed by Item 601 of Regulation S-K are listed
below. Documents not designated as being incorporated herein by reference are
filed herewith. The paragraph numbers correspond to the exhibit numbers
designated in Item 601 of Regulation S-K.

12. Computation of Ratios of Earnings to Fixed Charges.

31. Rule 13a-14(a)/15d-14(a) Certifications.

32(a). Certification by the Chief Executive Officer Relating to a
Periodic Report Containing Financial Statements.*

32(b). Certification by the Chief Financial Officer Relating to a
Periodic Report Containing Financial Statements.*

* The Exhibit attached to this Form 10-Q shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange
Act") or otherwise subject to liability under that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as expressly set forth by
specific reference in such filing.