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Heinz Reports Third-Quarter EPS from Continuing Operations, Excluding Special Items, of $0.99 ($0.95 Reported)



  Heinz Reports Third-Quarter EPS from Continuing Operations, Excluding
  Special Items, of $0.99 ($0.95 Reported)

Fiscal 2013 Third-Quarter Results – Continuing Operations, Excluding Special
Items for both 2013 and 2012:

  * Reported sales grew 2.0% to $2.93 billion.
  * Emerging Markets delivered 17.6% organic sales growth (+18.8% reported).
  * Global Ketchup posted 4.2% organic sales growth (+4.7% reported).
  * Top 15 Brands delivered organic sales growth of 2.6% (+2.2% reported).
  * Operating income increased 4.3% (+9.7% reported).
  * Net income grew 3.0% to $320 million (+6.9% reported).
  * EPS grew 3.1% to $0.99 ($0.95 reported).
  * Operating free cash flow (cash from operations, less capital spending, net
    of proceeds from PP&E disposals) adjusted for the Foodstar earn-out was
    $320 million.

Reconciliations of non-GAAP amounts are set forth in the attached financial
tables. Results in Fiscal 2013 excluding special items represent the Company's
reported results adjusted to exclude a non-recurring charge for the Company's
early settlement of the earn-out payment that was due in Fiscal 2014 related
to the Fiscal 2011 acquisition of Foodstar. Results in Fiscal 2012 excluding
special items represent the Company’s reported results adjusted to exclude
productivity charges for targeted workforce reductions, asset write-offs
associated with factory closures and other implementation costs taken in
Fiscal 2012 to, among other things, increase manufacturing effectiveness and
accelerate growth. Organic sales are defined as volume plus price or total
sales growth excluding the impact of foreign exchange and acquisitions and
divestitures. Operating free cash flow is defined as cash from operations less
capital expenditures net of proceeds from disposal of Property, Plant &
Equipment.

Business Wire

PITTSBURGH -- February 21, 2013

H.J. Heinz Company (NYSE:HNZ) today reported solid third-quarter results, with
growth in sales, operating income, net income and earnings per share from
continuing operations, excluding special items.

Third-Quarter Results - Continuing Operations

In the third quarter ended January 27, 2013, reported sales increased 2.0% to
$2.93 billion. Organic sales grew 2.3% with net pricing up by 2% and volume up
0.3%. Divestitures reduced total sales by 0.3%. Foreign currency reduced sales
by 0.1%.

The primary growth driver was once again Emerging Markets, which delivered
organic sales growth of 17.6% (18.8% reported) led by Latin America, Indonesia
and China. Emerging Markets represented 23% of total Company sales in the
third quarter.

Global Ketchup delivered organic sales growth of 4.2% (4.7% reported), driven
by strong performance in Russia, Latin America and Canada.

The Top 15 Brands achieved organic sales growth of 2.6% (2.2% reported) and
generated more than 70% of the Company's total sales, driven by the Heinz^®,
ABC^®, Quero^®, Classico^® and Master^® brands. The growth was negatively
impacted by the Company's prior-year decision to exit T.G.I. Friday's^® frozen
meals.

Gross profit of $1.11 billion grew 7.1% and gross margin increased 170 basis
points to 37.7%. Excluding charges for productivity initiatives in Fiscal
2012, gross profit increased 4.8% and gross margin increased 100 basis points,
despite higher commodity costs, largely due to higher pricing and productivity
improvements.

Operating income of $468 million grew 9.7%. Excluding special items, operating
income increased 4.3% to $480 million.

The effective tax rate in this year's third quarter was 19.9% compared to
18.8% a year ago on a reported basis. Excluding special items, the effective
tax rate decreased to 19.3% from 20.0% a year ago.

Net income from continuing operations grew 6.9% to $308 million on a reported
basis. Excluding special items, net income from continuing operations
increased to $320 million, growth of 3.0%.

Diluted earnings per share from continuing operations increased 6.7% to $0.95
on a reported basis. Excluding special items, diluted EPS grew 3.1% to $0.99.

Foreign exchange had a negligible impact on this year's third-quarter results.

As Heinz first announced on January 23, 2013, the Company recorded a special
charge of $12 million, or $0.04 per share, in this year's third quarter
related to its earn-out payment of $60 million in cash to the previous owners
of Foodstar. This early earn-out payment is intended to give Heinz additional
flexibility in the future for growing its businesses in China, one of the
Company's largest and most important Emerging Markets.

Discontinued Operations

During the third quarter of Fiscal 2013, the Heinz Board of Directors approved
management's plan to divest Shanghai LongFong Foods, a frozen food business in
China. The Company is committed to divesting LongFong and anticipates securing
an agreement with a suitable buyer in the next 12 months.

As a result, LongFong has been reclassified as a discontinued operation;
previously it was reported in the Company's Asia/Pacific segment. LongFong's
net assets have been classified as held for sale and the Company has recorded
a $36.0 million pre-tax and after-tax non-cash goodwill impairment charge in
the third quarter of Fiscal 2013, which has been recorded in discontinued
operations. LongFong had reported sales of $27 million and $51 million in the
nine months ended January 27, 2013 and January 25, 2012, respectively.

In the first quarter of Fiscal 2013, Heinz completed the previously announced
sale of its U.S. Foodservice frozen desserts business. This transaction
resulted in a $32.7 million pre-tax ($21.1 million after-tax) loss, which has
been recorded in discontinued operations.

Including discontinued operations, Heinz reported total Company net income of
$270 million and EPS of $0.83 in the latest quarter.

Year-to-Date -- Continuing Operations

For the nine months ended January 27, 2013, sales of $8.54 billion increased
0.5% on a reported basis and 3.7% on an organic basis. Operating income was
$1.28 billion, an increase of 9.4%. Excluding special items, operating income
was $1.29 billion, up 0.9%. Net income from continuing operations was $889
million, up 15.8%. Excluding special items, net income from continuing
operations was $901 million, an increase of 6.8%.

The year-to-date tax rate was 15.9% versus 19.7% last year. Heinz reported
diluted earnings per share from continuing operations of $2.75, an increase of
16.0%. Excluding special items, diluted earnings per share from continuing
operations was $2.79, an increase of 7.3%.

EPS in the first nine months of this year was reduced by $0.06 from
unfavorable foreign currency translation.

Including discontinued operations, Heinz reported total Company net income of
$817 million and EPS of $2.53 in the first nine months of this year.

H.J. Heinz Company Enters Into Agreement to Be Acquired by Berkshire Hathaway
and 3G Capital

As previously announced on Thursday, February 14, 2013, the H.J. Heinz Company
entered into a definitive merger agreement to be acquired by an investment
consortium comprised of Berkshire Hathaway and 3G Capital.

Under the terms of the agreement, which was unanimously approved by Heinz's
Board of Directors, Heinz shareholders will receive $72.50 in cash for each
share of common stock they own, in a transaction valued at $28 billion,
including the assumption of Heinz's outstanding debt. The per share price
represents a 20% premium to Heinz's closing share price of $60.48 on February
13, 2013, a 19% premium to Heinz's all-time high share price, a 23% premium to
the 90-day average Heinz share price and a 30% premium to the one-year average
share price.

The transaction is subject to approval by Heinz shareholders, receipt of
regulatory approvals and other customary closing conditions, and is expected
to close in the third (calendar) quarter of 2013.

As announced on February 14, Heinz will not host a conference call with
securities analysts to discuss the Company's third-quarter Fiscal 2013
results.

SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS:

This press release and our other public pronouncements contain forward-looking
statements within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are
generally identified by the words “will,” “expects,” “anticipates,”
“believes,” “estimates” or similar expressions and include our expectations as
to future revenue growth, earnings, capital expenditures and other spending,
dividend policy, and planned credit rating, as well as anticipated reductions
in spending. These forward-looking statements reflect management’s view of
future events and financial performance. These statements are subject to
risks, uncertainties, assumptions and other important factors, many of which
may be beyond Heinz’s control, and could cause actual results to differ
materially from those expressed or implied in these forward-looking
statements. Factors that could cause actual results to differ from such
statements include, but are not limited to:

  * the occurrence of any event, change or other circumstances that could give
    rise to the termination of the merger agreement with Berkshire Hathaway
    and 3G Capital,
  * the failure to receive, on a timely basis or otherwise, the required
    approvals by the Company's shareholders and government or regulatory
    agencies with regard to the merger agreement,
  * the risk that a closing condition to the merger agreement may not be
    satisfied,
  * the failure of the buyer to obtain the necessary financing in connection
    with the merger agreement,
  * the ability of the Company to retain and hire key personnel and maintain
    relationships with customers, suppliers and other business partners
    pending the consummation of the proposed merger agreement,
  * sales, volume, earnings, or cash flow growth,
  * general economic, political, and industry conditions, including those that
    could impact consumer spending,
  * competitive conditions, which affect, among other things, customer
    preferences and the pricing of products, production, and energy costs,
  * competition from lower-priced private label brands,
  * increases in the cost and restrictions on the availability of raw
    materials, including agricultural commodities and packaging materials, the
    ability to increase product prices in response, and the impact on
    profitability,
  * the ability to identify and anticipate and respond through innovation to
    consumer trends,
  * the need for product recalls,
  * the ability to maintain favorable supplier and customer relationships, and
    the financial viability of those suppliers and customers,
  * currency valuations and devaluations and interest rate fluctuations,
  * changes in credit ratings, leverage, and economic conditions and the
    impact of these factors on our cost of borrowing and access to capital
    markets,
  * our ability to effectuate our strategy, including our continued evaluation
    of potential opportunities, such as strategic acquisitions, joint
    ventures, divestitures, and other initiatives, our ability to identify,
    finance, and complete these transactions and other initiatives, and our
    ability to realize anticipated benefits from them,
  * the ability to successfully complete cost reduction programs and increase
    productivity,
  * the ability to effectively integrate acquired businesses,
  * new products, packaging innovations, and product mix,
  * the effectiveness of advertising, marketing, and promotional programs,
  * supply chain efficiency,
  * cash flow initiatives,
  * risks inherent in litigation, including tax litigation,
  * the ability to further penetrate and grow and the risk of doing business
    in international markets, particularly our emerging markets; economic or
    political instability in those markets, strikes, nationalization, and the
    performance of business in hyperinflationary environments, in each case
    such as Venezuela; and the uncertain global macroeconomic environment and
    sovereign debt issues, particularly in Europe,
  * changes in estimates in critical accounting judgments and changes in laws
    and regulations, including tax laws,
  * the success of tax planning strategies,
  * the possibility of increased pension expense and contributions and other
    people-related costs,
  * the potential adverse impact of natural disasters, such as flooding and
    crop failures, and the potential impact of climate change,
  * the ability to implement new information systems, potential disruptions
    due to failures in information technology systems, and risks associated
    with social media,
  * with regard to dividends, dividends must be declared by the Board of
    Directors and will be subject to certain legal requirements being met at
    the time of declaration, as well as our Board’s view of our anticipated
    cash needs, and
  * other factors described in “Risk Factors” and “Cautionary Statement
    Relevant to Forward-Looking Information” in the Company’s Annual Report on
    Form 10-K for the fiscal year ended April 29, 2012 and reports on Forms
    10-Q thereafter.

The forward-looking statements are 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, except as required by the securities laws.

ABOUT HEINZ: H.J. Heinz Company, offering “Good Food Every Day”™ is one of the
world’s leading marketers and producers of healthy, convenient and affordable
foods specializing in ketchup, sauces, meals, soups, snacks and infant
nutrition. Heinz provides superior quality, taste and nutrition for all eating
occasions whether in the home, restaurants, the office or “on-the-go.” Heinz
is a global family of leading branded products, including Heinz® Ketchup,
sauces, soups, beans, pasta and infant foods (representing over one third of
Heinz’s total sales), Ore-Ida® potato products, Weight Watchers® Smart Ones®
entrées, T.G.I. Friday’s® snacks, and Plasmon infant nutrition. Heinz is
famous for its iconic brands on six continents, showcased by Heinz® Ketchup,
The World’s Favorite Ketchup®.

                                                        
                                                          
H.J. Heinz Company and Subsidiaries
Consolidated Statements of Income
                                                          
                       Third Quarter Ended               Nine Months Ended
(In Thousands,         January 27,     January 25,       January 27,     January 25,
Except per             2013            2012              2013            2012
Share Amounts)         FY 2013         FY 2012           FY 2013         FY 2012
Sales                  $ 2,933,331     $ 2,874,927       $ 8,538,315     $ 8,495,904
Cost of                1,826,816       1,841,329         5,416,840       5,511,796    
products sold
Gross profit           1,106,515       1,033,598         3,121,475       2,984,108
Selling,
general and            638,654         607,070           1,841,487       1,814,210    
administrative
expenses
Operating              467,861         426,528           1,279,988       1,169,898
income
Interest               6,149           6,690             22,295          25,626
income
Interest               71,091          72,542            213,069         218,104
expense
Other expense,         (14,104     )   (2,580      )     (18,098     )   (3,289      )
net
Income from
continuing
operations             388,815         358,096           1,071,116       974,131
before income
taxes
Provision for          77,333          67,268            169,957         191,904      
income taxes
Income from
continuing             311,482         290,828           901,159         782,227
operations
Loss from
discontinued           (38,668     )   (3,589      )     (72,079     )   (19,893     )
operations,
net of tax
Net income             272,814         287,239           829,080         762,334
Less: Net
income
attributable           3,268           2,545             12,063          14,517       
to the
noncontrolling
interest
Net income
attributable           $ 269,546       $ 284,694         $ 817,017       $ 747,817    
to H.J. Heinz
Company
Income/(loss)
per common
share:
Diluted
Continuing
operations
attributable           $ 0.95          $ 0.89            $ 2.75          $ 2.37
to H.J. Heinz
Company common
shareholders
Discontinued
operations
attributable           (0.12       )   (0.01       )     (0.22       )   (0.06       )
to H.J. Heinz
Company common
shareholders
Net income
attributable
to H.J. Heinz          $ 0.83          $ 0.88            $ 2.53          $ 2.31       
Company common
shareholders
Average common
shares                 323,218         322,713           323,048         323,538      
outstanding -
diluted
Basic
Continuing
operations
attributable           $ 0.96          $ 0.90            $ 2.77          $ 2.39
to H.J. Heinz
Company common
shareholders
Discontinued
operations
attributable           (0.12       )   (0.01       )     (0.22       )   (0.06       )
to H.J. Heinz
Company common
shareholders
Net income
attributable
to H.J. Heinz          $ 0.84          $ 0.89            $ 2.55          $ 2.32       
Company common
shareholders
Average common
shares                 320,745         320,159           320,523         320,850      
outstanding -
basic
Cash dividends         $ 0.515         $ 0.48            $ 1.545         $ 1.44       
per share
Amounts
attributable
to H.J. Heinz
Company common
shareholders:
Income from
continuing             $ 308,214       $ 288,283         $ 889,096       $ 767,710
operations,
net of tax
Loss from
discontinued           (38,668     )   (3,589      )     (72,079     )   (19,893     )
operations,
net of tax
Net income             $ 269,546       $ 284,694         $ 817,017       $ 747,817    
(Totals may
not add due to
rounding)
                                                                          
                                                                          

                     H.J. Heinz Company and Subsidiaries
                         Non-GAAP Performance Ratios

The Company reports its financial results in accordance with accounting
principles generally accepted in the United States of America ("GAAP").
However, management believes that certain non-GAAP performance measures and
ratios, used in managing the business, may provide users of this financial
information with additional meaningful comparisons between current results and
results in prior periods. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the Company's reported results
prepared in accordance with GAAP. The following table provides the calculation
of the non-GAAP performance ratios discussed in the Company's press release
dated February 21, 2013:

Fiscal 2013 Results Excluding Charge for Settlement of Foodstar Earn-Out

The following table reconciles the Company's Fiscal 2013 reported results to
results excluding the charge for the settlement of the Foodstar earn-out.

(amounts in         Third Quarter Ended January 27, 2013
thousands)
                                                                  Results
                                            Charge for            excluding
Continuing          Reported          _     earn-out        =     charge
Operations          Results                 settlement            for earn-out
                                                                  settlement
                                                                  (b)
Operating           $ 467,861               $ (12,081 )           $ 479,942
Income
Effective             19.9      %             —                     19.3      %
tax rate
Income from
continuing          $ 308,214               $ (12,081 )           $ 320,295
operations,
net of tax
Diluted
earnings
per share           $ 0.95                  $ (0.04   )           $ 0.99
from
continuing
operations
                                                                   
(amounts in         Nine Months Ended January 27, 2013
thousands)
                                                                  Results
                                            Charge for            excluding
Continuing          Reported          _     earn-out        =     charge
Operations          Results                 settlement            for earn-out
                                                                  settlement
                                                                  (b)
Operating           $ 1,279,988             $ (12,081 )           $ 1,292,069
Income
Income from
continuing          $ 889,096               $ (12,081 )           $ 901,177
operations,
net of tax
Diluted
earnings
per share           $ 2.75                  $ (0.04   )           $ 2.79
from
continuing
operations
                                                                               

Fiscal 2012 Results Excluding Charges for Productivity Initiatives

The following table reconciles the Company's Fiscal 2012 reported results to
results excluding charges for productivity initiatives.

(amounts in         Third Quarter Ended January 25, 2012
thousands)
                                                                    Results
                                                                    excluding
Continuing          Reported                Charges for             charges
Operations          Results           _     productivity      =     for
                                            initiatives             productivity
                                                                    initiatives
                                                                    (c)
Gross               $ 1,033,598             $ (22,218  )            $ 1,055,816
Profit
Gross
Profit              36.0        %           (0.7       )%           36.7        %
Margin
Operating           $ 426,528               $ (33,657  )            $ 460,185
Income
Effective           18.8        %           32.7       %            20.0        %
tax rate
Income from
continuing          $ 288,283               $ (22,647  )            $ 310,930
operations,
net of tax
Diluted
earnings
per share           $ 0.89                  $ (0.07    )            $ 0.96
from
continuing
operations
                                                                     
(amounts in         Nine Months Ended January 25, 2012
thousands)
                                                                    Results
                                                                    excluding
Continuing          Reported                Charges for             charges
Operations          Results           _     productivity      =     for
                                            initiatives             productivity
                                                                    initiatives
                                                                    (c)
Operating           $ 1,169,898             $ (111,152 )            $ 1,281,050
Income
Income from
continuing          $ 767,710               $ (76,295  )            $ 844,005
operations,
net of tax
Diluted
earnings
per share           $ 2.37                  $ (0.24    )            $ 2.60
from
continuing
operations
                                                                                 

Organic Sales Growth

                 Third Quarter Ended January 27, 2013
                 Organic                                                      Total
Organic          Sales       +     Foreign      +     Acquisitions/     =     Net
Sales            Growth            Exchange           Divestitures            Sales
                 (a)                                                          Change
Emerging         17.6  %           (3.4  )%           4.6     %       (d)     18.8 %
Markets
Global           4.2   %           0.6   %            —                       4.7  %
Ketchup
Top 15           2.6   %           (0.4  )%           —                       2.2  %
Brands
Total            2.3   %           (0.1  )%           (0.3    )%              2.0  %
Company
                                                                               
                 Nine Months Ended January 27, 2013
Total            3.7   %           (2.7  )%           (0.4    )%              0.5  %
Company
                                                                                    

Operating Free Cash Flow

Total Company (amounts in thousands)                       Third Quarter Ended
                                                           January 27, 2013
Cash provided by operating activities                      385,644
Capital expenditures                                       (83,514      )
Proceeds from disposals of property, plant and             2,202         
equipment
Operating Free Cash Flow                                   304,332
Foodstar earn-out                                          (15,453      )
Operating Free Cash Flow adjusted for the Foodstar         319,785       
earn-out
                                                                         

(a) Organic sales growth is a non-GAAP measure that is defined as volume plus
price or total sales growth excluding the impact of foreign currency
translation rates and acquisitions/divestitures.
(b) Excludes a charge in Fiscal 2013 for the early settlement of the earn-out
payment that was due in Fiscal 2014 related to the Fiscal 2011 acquisition of
Foodstar. This early settlement was completed in order to give the Company
additional flexibility in the future for growing its business in one of its
largest and most important emerging markets, China.
(c) Excludes costs in Fiscal 2012 associated with targeted workforce
reductions, asset write-offs associated with factory closures and other
implementation costs in order to increase manufacturing effectiveness and
accelerate productivity on a global scale. Other implementation costs
primarily include professional fees and relocation costs for the establishment
of a European supply chain hub in the Netherlands.
(d) Emerging Markets sales in Fiscal 2013 now include the markets of Papua New
Guinea, South Korea and Singapore. Sales in these markets were included in
Developed Markets sales in the prior year and therefore, were treated as an
acquisition variance when comparing current year sales to the prior year for
Emerging Markets.

(Totals may not add due to rounding)

Contact:

H.J. Heinz Company
Media:
Michael Mullen, 412-456-5751
Michael.mullen@us.hjheinz.com
or
Investors:
Margaret Nollen, 412-456-1048
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