10-K 1 j1304701e10vk.txt H.J. HEINZ FINANCE COMPANY 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 27, 2005 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 333-85064 H. J. HEINZ FINANCE COMPANY (Exact name of registrant as specified in its charter) DELAWARE 82-0382406 (State of Incorporation) (I.R.S. Employer Identification No.) 600 GRANT STREET, PITTSBURGH, PENNSYLVANIA 15219 (Address of principal executive offices) (Zip Code)

412-456-5700 (Registrant's telephone number) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None. SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None. 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 filing requirements for the past 90 days. Yes X No _ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes _ No X All of the outstanding shares of the registrant's common stock are owned by H. J. Heinz Company. DOCUMENTS INCORPORATED BY REFERENCE None PART I ITEM 1. BUSINESS. GENERAL H. J. Heinz Finance Company has been a direct or indirect subsidiary of H.J. Heinz Company ("Heinz") since 1983. H. J. Heinz Finance Company and its subsidiaries, collectively referred to as "Heinz Finance" (or "HFC"), had no significant operating history until Heinz completed a corporate reorganization in the United States on May 3, 2001. The reorganization was designed to simplify Heinz's U.S. corporate structure, consolidate operations and establish centers of excellence for the management of the U.S. trademarks and for U.S. treasury functions. As a result of the reorganization, all of the U.S. business operations that had historically been conducted by Heinz through its Heinz USA division and eight subsidiary corporations are now conducted by Heinz Finance. Since May 3, 2001, we have been engaged in the business of acquiring, holding and financing equity and debt investments in subsidiaries of Heinz that own and operate Heinz's U.S. businesses, which manufacture, market, distribute and sell food in the United States. Our most significant asset is our ownership interests in H. J. Heinz Company, L.P. ("Heinz LP"), a Delaware limited partnership formed on October 9, 2000. Heinz LP has two classes of limited partnership interests. Heinz directly owns the Class A interests in Heinz LP. Heinz Finance, directly and through wholly-owned subsidiaries, owns the Class B interests in Heinz LP. Heinz Management Company ("HMC") is the managing general partner of Heinz LP and employs its salaried personnel. Heinz LP reimburses HMC for all its management costs. DESCRIPTION OF THE BUSINESS We conduct our food business through two segments, North American Consumer Products and U.S. Foodservice. Segment information is set forth in this report on pages 39 through 41 in Note 16, "Segment Data" in Item 8 -- "Financial Statements and Supplementary Data." PRODUCTS AND MARKETS Our products are manufactured and packaged to provide safe, wholesome foods for consumers, foodservice and institutional customers. Many products are prepared from recipes developed in our research laboratories and experimental kitchens. Ingredients are carefully selected, washed, trimmed, inspected and passed on to modern factory kitchens where they are processed, after which the intermediate product is filled automatically into containers of glass, metal, plastic, paper or fiberboard which are then closed. Products are processed by sterilization, homogenization, chilling, freezing, pickling, drying, freeze drying, baking or extruding, then labeled and cased for market. We manufacture and contract for the manufacture of our products from a wide variety of raw foods. Pre-season contracts are made with farmers for a portion of raw materials such as tomatoes, cucumbers, potatoes, onions and some other fruits and vegetables. Dairy products, meat, sugar, spices, flour and certain other fruits and vegetables are generally purchased on the open market. 2 The primary brands and products marketed and sold by us include, by segment, the following: North American Consumer Products....................... Heinz tomato ketchup, mustard and sauces Heinz Easy Squeeze! ketchup E-Z Squirt kids' condiment Classico pasta sauce Yoshida sauces Bell'Orto and Bella Rossa tomato products Jack Daniels* sauces Wyler's bouillon and soups Ore-Ida potato products Tater Tots potato products Bagel Bites snacks Boston Market* HomeStyle meals Smart Ones meals Weight Watchers* meals Hot Bites snacks Poppers appetizers T.G.I. Friday's* appetizers Delimex snacks U.S. Foodservice.......................... Chef Francisco and Quality Chef soups Dianne's desserts Truesoups soups Alden Merrell desserts Escalon tomato products PPI single serve sauces and condiments Todd's soups and sauces

--------------- * Used under license from unrelated parties. TRADEMARKS, PATENTS AND LICENSES We own or license the trademarks used in connection with our products from related and unrelated parties. Our most significant trademarks are "Heinz", "Smart Ones" and "Ore-Ida" which we license from a related party. The trademarks that we license from unrelated parties are under long-term contracts and are important to our business although they are individually immaterial. We have participated in the development of certain food processing equipment, some of which is patented. We regard these patents as important but do not consider any one or group of them to be materially important to our business as a whole. COMPETITION Our products are sold under highly competitive conditions, with many large and small competitors. We regard our principal competition to be other manufacturers of processed foods, including branded, retail products, foodservice products and private label products, that compete with us for consumer preference, distribution, shelf space and merchandising support. We compete primarily on the basis of product quality, brand recognition, brand loyalty and consumer value. CUSTOMERS Our products are sold through our own sales force and through independent brokers, agents and distributors to chain, wholesale, cooperative and independent grocery accounts, pharmacies, mass merchants, club stores, foodservice distributors and institutions, including hotels, restaurants, hospitals, health-care facilities and certain government agencies. 3 For Fiscal 2005, one customer, Wal-Mart Stores, Inc., represented more than 10% of our sales. We closely monitor the credit risk associated with our customers and to date have never experienced significant losses. PROPERTIES We operate 26 factories involved in manufacturing our products. We own 22 of these factories and lease the remaining four factories. We also own or lease office space, warehouses, distribution centers and research and other facilities. Our food processing plants and principal properties are in good condition and are satisfactory for the purposes for which they are being utilized. EMPLOYEES On a full-time basis, as of April 27, 2005, approximately 10,300 people were employed as part of our business. REGULATORY Compliance with the provisions of national, state and local environmental laws and regulations has not had a material effect upon our capital expenditures, earnings or competitive position. Our estimated capital expenditures for environmental control facilities for the remainder of Fiscal Year 2006 and the succeeding fiscal year are not material and are not expected to materially affect either our earnings or competitive position. Our factories are subject to inspections by various governmental agencies, including the United States Department of Agriculture and the Occupational Safety and Health Administration, and our products must comply with all the applicable laws, including food and drug laws, such as the Federal Food and Cosmetic Act of 1938, as amended, and the Federal Fair Packaging or Labeling Act of 1966, as amended, of the jurisdictions in which they are manufactured and marketed. LEGAL PROCEEDINGS Certain suits and claims have been filed against Heinz Finance and have not been finally adjudicated. These suits and claims when finally concluded and determined, in the opinion of management, based upon the information that it presently possesses, will not have a material adverse effect on Heinz Finance's consolidated financial position, results of operations or liquidity. CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe harbor for forward-looking statements made by or on behalf of Heinz Finance. Heinz Finance and its representatives may from time to time make written or oral forward-looking statements, including statements contained in Heinz Finance's filings with the Securities and Exchange Commission. These forward-looking statements are based on management's views and assumptions of future events and financial performance. The words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "should," "estimate," "project," "target," "goal," "outlook" or similar expressions identify "forward-looking statements" within the meaning of the Act. In order to comply with the terms of the safe harbor, Heinz Finance notes that a variety of factors could cause Heinz Finance's actual results and experience to differ materially from the anticipated results or other expectations expressed in Heinz Finance's forward-looking statements. These forward-looking statements are uncertain. The risks and uncertainties that may affect operations and 4 financial performance and other activities, some of which may be beyond the control of Heinz Finance, include the following: - Changes in laws and regulations, including changes in food and drug laws, accounting standards, taxation requirements (including tax rate changes, new tax laws and revised tax law interpretations) and environmental laws; - Competitive product and pricing pressures and Heinz Finance's ability to gain or maintain share of sales as a result of actions by competitors and others; - Fluctuations in the cost and availability of raw materials, and the ability to maintain favorable supplier arrangements and relationships; - The impact of higher energy costs and other factors affecting the cost of producing, transporting and distributing Heinz Finance's products; - Heinz Finance's ability to generate sufficient cash flows to support capital expenditures, interest and debt principal repayment and general operating activities; - The inherent risks in the marketplace associated with new product or packaging introductions, including uncertainties about trade and consumer acceptance, as well as changes in consumer preference and the ability to anticipate and respond to consumer trends; - Heinz Finance's ability to achieve sales and earnings forecasts, which are based on assumptions and the ability to anticipate and respond to consumer trends about sales volume, product mix and other items; - Heinz Finance's ability to integrate acquisitions and joint ventures into its existing operations, the availability of new acquisition and joint venture opportunities and the success of acquisitions, joint ventures, divestitures and other business combinations; - Heinz Finance's ability to achieve its cost savings objectives, including any restructuring programs, strategic initiatives, working capital initiatives or other programs; - The possibility of increased pension expense resulting from declines in stock market returns and cost increases for medical benefits; - The effect of any recalls of products; - Changes in estimates in critical accounting judgments; - Interest rate fluctuations and other capital market conditions; - The effectiveness of Heinz Finance's advertising, marketing and promotional programs; - Weather conditions, which could impact demand for Heinz Finance's products and the supply and cost of raw materials; - The impact of supply chain efficiency and cash flow initiatives; - Potential impairment of investments; - Risks inherent in litigation; - Heinz Finance's ability to maintain its profit margin in the face of a consolidating retail environment and large global customers; - The impact of U.S. industry conditions, including the effect of the economic downturn in the food industry; and - Heinz Finance's ability to offset the reduction in volume and revenue resulting from participation in categories experiencing declining consumption rates. 5 The foregoing list of important factors is not exclusive. The forward-looking statements are and will be based on management's then current views and assumptions regarding future events and operating performance and speak only as of their dates. Heinz Finance 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 law. ITEM 2. PROPERTIES. See Item 1. ITEM 3. LEGAL PROCEEDINGS. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Heinz Finance did not submit any matters to a vote of security holders during the fourth quarter of Fiscal 2005. 6 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Our Board of Directors is composed of four members, one of whom is an Independent Director. By "Independent Director" we mean a director who is not a current officer or employee of Heinz Finance, Heinz or any affiliate of Heinz or of any other person or persons that, in the aggregate, own or owns more than 50% of the outstanding common stock of Heinz Finance, Heinz, or any affiliate of Heinz, and who is elected by holders of Heinz Finance's outstanding Series A Preferred Shares and the holders of any Heinz Finance stock expressly being designated by us as being at parity with the Series A Preferred Shares, "Parity Securities," with like voting rights, collectively, the "Voting Parity Securities." Andrew L. Stidd, the initial and current Independent Director, was named in the Certificate of Designation for the Series A Preferred Shares. Our directors will serve until resignation or removal. There is no current intention to alter the number of directors comprising the Board of Directors, and our Bylaws provide that the Board of Directors may not comprise more than nine members. Our directors and executive officers are:

Each director, other than the Independent Director, is an officer or employee of Heinz. COMPENSATION OF DIRECTORS The Independent Director (and any subsequent additional Independent Director) receives annual compensation of $3,500 plus reimbursement of expenses for attendance at each meeting of the Board of Directors. We do not pay fees to directors who are not Independent Directors. 7 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES FOR EQUITY SECURITIES. All of the outstanding common shares of Heinz Finance are owned by Heinz. ITEM 6. SELECTED FINANCIAL DATA. The following table presents selected consolidated and combined financial data for Heinz Finance and its predecessor, which consisted of Heinz's U.S. business operations (the "U.S. Group"), for each of the five fiscal years 2001 through 2005. All amounts are in thousands.

(1) Long-term debt, exclusive of current portion, includes $186.1 million, $125.3 million, $294.8 million and $23.6 million of hedge accounting adjustments associated with interest rate swaps at April 27, 2005, April 28, 2004, April 30, 2003 and May 1, 2002, respectively. There were no interest rate swaps at May 2, 2001. (2) Long-term debt, exclusive of current portion, and preferred stock reflects the prospective classification of Heinz Finance Company's $325 million of mandatorily redeemable preferred shares to long-term debt beginning in the second quarter of Fiscal 2004 as a result of the adoption of Statement of Financial Accounting Standards ("SFAS") No. 150. * See a discussion of the restatement on pages 26 and 27 in Note No. 2, "Restatement of Previously Issued Financial Statements" in Item 8 -- "Financial Statements and Supplementary Data." Fiscal 2005 results from continuing operations include a $64.5 million non-cash impairment charge for the Company's equity investment in The Hain Celestial Group, Inc. ("Hain"). Fiscal 2004 results from continuing operations include costs of $8.7 million pretax, primarily due to employee termination and severance costs related to ongoing efforts to reduce overhead costs, of which $8.6 million pretax was charged to Heinz Finance by Heinz Management Company. Fiscal 2003 results from continuing operations include costs related to the Del Monte transaction and costs to reduce overhead of the remaining businesses totaling $89.5 million pretax, of which $34.2 million pretax was charged to Heinz Finance by Heinz Management Company. These include employee termination and severance costs, legal and other professional service costs and costs related to the early extinguishment of debt. 8 Fiscal 2002 results from continuing operations include a net restructuring benefit of $1.1 million pretax related to the Streamline initiative. Fiscal 2001 results from continuing operations include restructuring and implementation costs of $15.3 million pretax relating to the Streamline initiative and net restructuring and implementation costs of $37.1 million pretax for Operation Excel. Results also include a loss of $94.6 million pretax on the sale of The All American Gourmet business and acquisition costs of $18.5 million pretax. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. SPECIAL ITEMS ASSET IMPAIRMENTS Heinz Finance holds an equity investment in The Hain Celestial Group, Inc. ("Hain"), a natural, specialty and snack food company. Hain shares traded at less than 80% of Heinz Finance's carrying value since late January 2004. Due to the length of time and the amount that Hain stock traded below Heinz Finance's basis, Heinz Finance determined that the decline was other-than-temporary as defined by the Accounting Principles Board Opinion No. 18 and as a result, recognized a $64.5 million non-cash impairment charge during the third quarter of Fiscal 2005. The charge reduced Heinz Finance's carrying value in Hain to fair market value as of January 26, 2005, with no resulting impact on cash flows. Heinz Finance currently owns approximately six million shares of Hain stock, with a book value of approximately $20.00 per share as of April 27, 2005. In the future, should the market value of Hain common stock decline and remain below current market value for a substantial time, Heinz Finance could be required to record additional write-downs of its investment in Hain. DISCONTINUED OPERATIONS On December 20, 2002, Heinz transferred to a wholly-owned subsidiary ("SKF Foods") certain assets and liabilities, including its U.S. 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. 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 Heinz Finance's consolidated statements of income. Net income from discontinued operations for the year ended April 27, 2005 was $4.7 million and reflects the favorable settlement of tax liabilities related to the businesses spun-off to Del Monte on December 20, 2002. The discontinued operations generated sales of $1,052.6 million and a net loss of $23.3 million (net of $13.8 million of a tax benefit) for Fiscal 2003. REORGANIZATION COSTS Heinz Finance recognized reorganization costs of $8.7 million pretax in Fiscal 2004. These costs were recorded as a component of Selling, General and Administrative expense ("SG&A") and were primarily due to employee termination and severance costs. Also, of this amount, $8.6 million was charged to Heinz Finance by Heinz Management Company through a management fee for all salaried employee costs. Management estimates that these actions impacted approximately 80 employees. In Fiscal 2003, Del Monte transaction costs and costs to reduce overhead of the remaining business totaled $55.3 million pretax. In addition, during Fiscal 2003, Heinz Management Company recognized Del Monte transaction costs and costs to reduce overhead of the remaining business totaling $34.2 million pretax. These costs were then charged to Heinz Finance through the management fee charged to Heinz Finance by Heinz Management Company for all salaried employee costs. 9 These total charges of $89.5 million pretax were comprised of $39.6 million related to the early retirement of debt, $24.4 million in employee termination and severance costs, $14.7 million for legal, professional and other related costs, and $10.8 million of non-cash write-offs. Of this amount, $6.0 million was included in cost of products sold, $44.0 million in SG&A, and $39.6 million in other expenses, net. Management estimates that these actions impacted approximately 200 employees, excluding those who were transferred to Del Monte. During Fiscal 2005, Heinz Finance utilized $5.0 million in severance and exit cost accruals related to reorganization costs. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS On July 20, 2005, the Board of Directors of HFC, after discussions with its registered public accountant, PricewaterhouseCoopers LLP, decided to restate its consolidated balance sheets as of April 28, 2004 and April 30, 2003, and the consolidated statements of income, shareholder's equity and cash flows for the years ended April 28, 2004 and April 30, 2003. These restatement adjustments have no impact on the consolidated financial statements of Heinz. Furthermore, these adjustments have no impact on the operating income or cash flows from operations of HFC, and only affect the minority interest of Heinz in HFC. In addition, the restatement impacts HFC's first, second and third quarters of Fiscal 2005 and all interim periods in Fiscal 2004. These restated amounts for the fiscal years ended April 28, 2004 and April 30, 2003 as well as the impact thereof on the first three quarters of Fiscal 2005 and all interim periods in Fiscal 2004 are presented in Item 8 -- "Financial Statements and Supplementary Data". The restatement is a result of the incorrect application of an intercompany royalty agreement between Heinz LP and Trademark Management Company ("TMC"), subsidiaries of H. J. Heinz Finance Company. This incorrect application of the intercompany agreement resulted in an understatement of net income for Heinz LP and an overstatement of the net income for TMC. Because both Heinz LP and TMC are within the HFC consolidation, such royalty is eliminated and has no impact on HFC's consolidated "income before income taxes and minority interest". However, minority interest, which represents Heinz's interest in Heinz LP, was understated. In addition, as a result of the overstatement of net income for TMC, the provision for income taxes was overstated. Also, see our disclosure under Item 9A.(b), relating to a change in our internal control over financial reporting that resulted in the identification of the need to restate the financial statements identified above, is incorporated herein by reference. Readers should only rely on the restated financial statements for the fiscal years ended April 28, 2004 and April 30, 2003 and the restated financial data for the interim periods during the 2004 and 2005 fiscal years as presented in this Annual Report on Form 10-K for the fiscal year ended April 27, 2005 and not those financial statements included in the previously filed Annual Reports on Form 10-K and interim reports on Form 10-Q for those periods. Throughout Management's Discussion and Analysis of Financial Condition and Results of Operations, all referenced amounts for prior periods and prior period comparisons reflect the balances and amounts on a restated basis. RESULTS OF CONTINUING OPERATIONS FISCAL YEARS ENDED APRIL 27, 2005 AND APRIL 28, 2004 Sales for Fiscal 2005 increased $217.3 million, or 6.8%, to $3.43 billion. Sales volume increased 5.1% due primarily to strong increases in the North American Consumer Products segment, driven by increases in frozen potatoes, entrees and snacks and increases in the U.S. Foodservice segment driven by increased sales of frozen soup, tomato products and Heinz ketchup. Pricing increased 2.3% as a result of reduced trade spending and decreased product placement fees in the North American Consumer Products segment and price increases initiated in the U.S. Foodservice segment to offset fuel and commodity cost pressures. Divestitures, net of acquisitions, reduced sales 0.6%. 10 Gross profit increased $121.1 million, or 10.4%, to $1.28 billion, and the gross profit margin increased to 37.4% from 36.2%. The gross profit margin increase was primarily a result of favorable pricing, partially offset by increases in commodity costs. The 10.4% increase in gross profit was primarily a result of higher volume. SG&A increased $60.5 million, or 11.2%, to $603.0 million, and increased as a percentage of sales to 17.6% from 16.9%. This increase is primarily a result of increased selling and distribution costs, reflecting the sales volume increase and higher fuel and trucking costs. Last year's SG&A was unfavorably impacted by reorganization costs totaling $8.7 million. Operating income increased $29.3 million, or 6.3%, to $494.0 million, while operating income decreased as a percentage of sales to 14.4% from 14.5%. The 6.3% increase was a result of the changes noted above, partially offset by increased royalty expense to related parties. Total marketing support (recorded as a reduction of revenue or as a component of SG&A) decreased $56.5 million, or 7.7%, to $679.1 million on a sales increase of 6.8%. Marketing support recorded as a reduction of revenue, typically deals and allowances, decreased $53.6 million, or 8.1%, to $609.8 million primarily due to reduced trade spending and decreased product placement fees on SmartOnes frozen entrees and Ore-Ida potatoes as well as declines related to Classico pasta sauces and Heinz ketchup. Marketing support recorded as a component of SG&A decreased $2.9 million, or 4.1%, to $69.4 million. Net interest expense increased $8.9 million, to $136.1 million. Net interest expense was unfavorably impacted by the adoption of SFAS No. 150 (see below for further discussion) beginning in the second quarter of Fiscal 2004. The unfavorable impact on net interest expense related to the adoption of SFAS No. 150, higher interest rates during Fiscal 2005 and higher average short-term related party debt balances was largely offset by lower average external debt balances and higher interest income resulting from increased average cash balances and short-term notes receivable from related parties. The year was also unfavorably impacted by the $64.5 million non-cash impairment discussed previously. There was a non-cash currency loss of $51.2 million in the current year compared to $21.2 million in the prior year related to the marked-to-market adjustment on Euro-denominated long-term debt, which matured on January 5, 2005. This debt represents a net investment hedge at the Heinz level. Because Heinz Finance does not have foreign operations, this marked-to-market adjustment does not qualify for net investment hedge accounting treatment at Heinz Finance. Other expenses, net, increased $7.2 million primarily due to reduced gains on commodity contract hedges in the current year. The effective tax rate for the current period was 12.1% compared to 12.7% last year. The decrease in the effective tax rate is primarily attributable to an increase in minority interest as a percentage of net profit before tax. Income from continuing operations for Fiscal 2005 was $60.5 million compared to $79.4 million in Fiscal 2004. FISCAL 2005 OPERATING RESULTS BY BUSINESS SEGMENT NORTH AMERICAN CONSUMER PRODUCTS Sales of the North American Consumer Products segment increased $134.9 million, or 7.6%, to $1.91 billion. Sales volume increased 6.5% due to significant growth in Ore-Ida frozen potatoes and SmartOnes frozen entrees, aided by the introduction of Ore-Ida Extra Crispy Potatoes, new microwavable Easy Fries, and several new SmartOnes frozen entrees. Strong performance in Boston Market HomeStyle meals and in the frozen snack brands of Delimex, Bagel Bites and TGI Friday's, as well as new distribution related to a co-packing agreement also contributed to the volume increase. Pricing increased sales 3.0% largely due to reduced trade spending and decreased product placement fees on SmartOnes frozen entrees and Ore-Ida potatoes as well as increased price related to Classico 11 pasta sauces and Heinz ketchup. Divestitures reduced sales 1.9% due to the sale of Ethnic Gourmet Food and Rosetto pasta to Hain in the first quarter. Gross profit increased $69.8 million, or 9.3%, to $818.2 million driven by the increase in sales. The gross profit margin increased to 43.0% from 42.3% due primarily to higher net pricing partially offset by higher commodity and fuel costs. Operating income increased $32.0 million, or 10.4%, to $338.8 million, due to the increase in gross profit which was, partially offset by higher selling and distribution costs, related to higher volume and higher fuel costs, and by increased royalty expense to related parties resulting from increased sales and a change in the application of the royalty rate. Operating income for the year ended April 28, 2004 was unfavorably impacted by reorganization costs totaling $4.8 million. U.S. FOODSERVICE Sales of the U.S. Foodservice segment increased $82.4 million, or 5.7%, to $1.53 billion. Sales volume increased sales 3.3% due to growth in Heinz ketchup, strong performance on Truesoups frozen soup, and growth in custom recipe tomato products. Higher pricing increased sales by 1.4%, as price increases were initiated to offset fuel and commodity cost pressures. Acquisitions increased sales 0.9%, due to the prior year acquisition of Truesoups LLC, a manufacturer and marketer of premium frozen soups. Gross profit increased $51.4 million, or 12.4%, to $467.4 million, and the gross profit margin increased to 30.6% from 28.8%. The gross profit margin increase was primarily due to favorable pricing, partly offset by increases in commodity costs. Operating income decreased $2.4 million, or 1.5%, to $157.7 million, due to increased selling and distribution costs, related to a substantial increase in fuel and trucking costs, and by increased royalty expense to related parties resulting from increased sales and a change in the application of the royalty rate. This was partially offset by the growth in gross profit. Operating income for the year ended April 28, 2004 was unfavorably impacted by reorganization costs totaling $3.9 million. FISCAL YEARS ENDED APRIL 28, 2004 AND APRIL 30, 2003 Sales for Fiscal 2004 increased $51.8 million, or 1.6%, to $3.21 billion. Sales were favorably impacted by volume of 0.7% due to strong increases in the U.S. Foodservice segment. Pricing remained constant as Heinz Finance's goal to achieve more competitive net pricing under the Every Day Low Pricing Strategy in the retail businesses was offset by pricing improvements in the U.S. Foodservice segment. Acquisitions, net of divestitures, increased sales 0.9% due primarily to the acquisition of Truesoups LLC. Gross profit increased $21.6 million, or 1.9%, to $1.16 billion, and, the gross profit margin increased slightly to 36.2% from 36.1%. The gross profit increase was primarily driven by Heinz Finance's continuing focus on process and system improvements, productivity initiatives and elimination of less profitable Stock Keeping Units. For Fiscal 2003, gross profit was impacted by Del Monte transaction related costs and costs to reduce overhead of the remaining businesses of $6.0 million. SG&A decreased $60.5 million, or 10.0%, to $542.5 million, and, as a percentage of sales, was reduced to 16.9% from 19.1%. The decrease is primarily due to decreased marketing expense primarily in the North American Consumer Products segment reflecting Heinz Finance's goal to achieve more competitive net pricing as discussed above. Additionally, SG&A was impacted in Fiscal 2004 by reorganization costs of $8.7 million, and in Fiscal 2003 by Del Monte transaction related costs and cost to reduce overhead of the remaining businesses of $44.0 million. The favorable impact of these items was offset by increases in pension and personnel costs. Total marketing support (recorded as a reduction of revenue or as a component of SG&A) decreased $54.2 million, or 6.9%, to $735.6 million on a sales increase of 1.6%. Marketing support recorded as a reduction of revenue, typically deals and allowances, decreased $17.1 million, or 2.5%, to 12 $663.3 million, which is primarily a result of more efficient trade spending programs primarily related to Ore-Ida potato products and Boston Market HomeStyle meals. Marketing support recorded as a component of SG&A decreased $37.1 million, or 33.9%, to $72.3 million, as most marketing resources were focused on sharpening retail price points primarily for Boston Market HomeStyle meals and Classico pasta sauce. Operating income increased $85.4 million, or 22.5%, to $464.7 million, and increased as a percentage of sales to 14.5% from 12.0% as a result of the changes noted above. Net interest expense increased $4.4 million, to $127.1 million, due to the prospective classification of Heinz Finance's dividends on its mandatorily redeemable preferred shares to interest expense from retained earnings. This treatment is in accordance with the adoption of SFAS No. 150 (see below for further discussion) beginning in the second quarter of Fiscal 2004. This increase was offset by decreases due to lower debt balances and lower interest rates. Other expense, net, decreased $51.5 million, to $5.6 million, attributable to a $39.6 million pretax charge related to early retirement of debt in Fiscal 2003, gains recorded in Fiscal 2004 on closed commodity futures contracts and increased equity income. There was a non-cash currency loss of $21.2 million in Fiscal 2004 compared to $65.0 million in Fiscal 2003 related to the marked-to-market adjustment on Euro-denominated long-term debt. This debt represents a net investment hedge at the Heinz level. Because Heinz Finance does not have foreign operations, this marked-to-market adjustment does not qualify for net investment hedge accounting treatment at Heinz Finance. The effective tax rate for Fiscal 2004 was 12.7% compared to 7.2% in Fiscal 2003. Heinz Finance's effective tax rate fluctuates depending on the proportion of its nontaxable minority interest in Heinz LP to total Heinz Finance income before tax and was also unfavorably impacted by the non-deductible interest expense associated with Heinz Finance's mandatorily redeemable preferred shares. Income from continuing operations for Fiscal 2004 was $79.4 million compared to $36.6 million in Fiscal 2003. FISCAL YEAR 2004 OPERATING RESULTS BY BUSINESS SEGMENT NORTH AMERICAN CONSUMER PRODUCTS Sales of the North American Consumer Products segment decreased $60.9 million, or 3.3%. Sales volume decreased 0.4% as strong increases in Heinz ketchup and frozen potatoes were more than offset by declines in SmartOnes frozen entrees, related to the increased popularity of low-carb dieting, which drove declines in the nutritional frozen entree category in the U.S., as well as the effects of the rationalization of Boston Market side dishes and Hot Bites snacks. Lower pricing decreased sales 1.9% consistent with our strategy to obtain more competitive consumer price points on Boston Market HomeStyle meals, Heinz gravy, Classico pasta sauces, SmartOnes frozen entrees and Delimex frozen snacks. Divestitures in Fiscal 2003 reduced sales 1.0%. Gross profit decreased $11.5 million, or 1.5%, to $748.4 million; however, the gross profit margin increased to 42.3% from 41.5%, as manufacturing cost savings, reflecting significant productivity initiatives and more effective and efficient new product launches, offset unfavorable pricing and higher commodity costs. In addition, reorganization costs unfavorably impacted gross profit by $4.9 million in Fiscal 2003. Operating income increased $65.5 million, or 27.1%, to $306.8 million, primarily due to decreased consumer marketing expenses related to the Fiscal 2003 launch of Easy Squeeze!, Boston Market frozen entrees, Hot Bites snacks and Ore-Ida Funky Fries. In addition, Fiscal 2004 operating income was unfavorably impacted by reorganization costs of $4.8 million and Fiscal 2003 operating income was unfavorably impacted by Del Monte transaction related costs and costs to reduce overhead of the remaining businesses of $44.0 million. 13 U.S. FOODSERVICE U.S. Foodservice's sales increased $112.6 million, or 8.5%. Sales volume increased sales 2.3% primarily due to increases in Heinz ketchup, Escalon processed tomato products, Dianne's frozen desserts and single serve condiments as a result of new customers, successful product innovation and a strengthening trend in the U.S. restaurant industry. Higher pricing increased sales by 2.6% chiefly due to Heinz ketchup and single serve condiments. Acquisitions, net of divestitures, increased sales 3.5%, primarily due to the acquisition of Truesoups LLC, a manufacturer and marketer of premium frozen soups. Gross profit increased $33.0 million, or 8.6%, to $415.9 million, and the gross profit margin remained constant at 28.8% as favorable pricing and sales mix were offset by higher commodity costs. In addition, reorganization costs unfavorably impacted gross profit by $1.1 million for Fiscal 2003. Operating income increased $19.9 million, or 14.2%, to $160.1 million, primarily due to the growth in gross profit, partially offset by the impact of higher sales volume on Selling & Distribution expenses ("S&D") and increased General & Administrative expenses ("G&A") attributable to increased personnel and systems costs. In addition, reorganization costs unfavorably impacted operating income by $3.9 million in Fiscal 2004 and Del Monte transaction related costs and costs to reduce overhead of the remaining businesses unfavorably impacted operating income by $5.9 million for Fiscal 2003. LIQUIDITY AND FINANCIAL POSITION Cash provided by continuing operating activities in Fiscal 2005 was $516.5 million, a decrease of $34.3 million from the prior year. The decrease in Fiscal 2005 versus Fiscal 2004 is primarily due to unfavorable movements in accrued liabilities, accounts receivable and inventories, partially offset by favorable movement in accounts payable. Cash used for investing activities totaled $69.0 million compared to $152.6 million last year. Acquisitions used $84.3 million in cash in Fiscal 2005 related primarily to Heinz Finance's purchase in the fourth quarter of Appetizer's And, Inc., a manufacturer and marketer of high-quality, frozen hors d'oeuvres sold primarily to the U.S. foodservice industry. In Fiscal 2004, acquisitions used $61.3 million in cash. Capital expenditures totaled $56.5 million compared to $56.1 million last year. Proceeds from divestitures provided $18.6 million in the Fiscal 2005. Cash used for financing activities totaled $714.0 million, compared to $170.4 million last year. Payments on short-term debt with related parties were $253.2 million this year, compared to proceeds of $0.1 million last year. Payments on long-term debt totaled $405.0 million, compared to $8.3 million in the prior year, reflecting the payoff of E300 million of bonds ($404.7 million) which matured on January 5, 2005. Dividend payments to preferred shareholders recorded in retained earnings on the balance sheet totaled $5.1 million in the prior year. These payments are included as a component of cash flows from operating activities beginning in the second quarter ended October 29, 2003, as a result of the adoption of SFAS No. 150 (see below for further discussion). Distributions to minority partners, all of which are 100% owned by Heinz, totaled $53.5 million in the current year and $157.2 million in the prior year. Return on average shareholders' equity ("ROE") is calculated by taking net income divided by average shareholders' equity. Average shareholders' equity is a five-point quarterly average. ROE was 24.0% in Fiscal 2005, 37.5% in Fiscal 2004 and 7.1% in Fiscal 2003. ROE in Fiscal 2005 was unfavorably impacted by the asset impairment charge previously discussed. Pretax return on average invested capital ("ROIC") is calculated by taking net operating profit before income taxes and minority interest divided by average invested capital. Net operating profit before income taxes excludes net interest expense. Average invested capital is a five-point quarterly average of debt plus total equity less cash and cash equivalents and short-term investments. ROIC was 11.3% in Fiscal 2005, 13.3% in Fiscal 2004 and 8.8% in Fiscal 2003. ROIC in Fiscal 2005 was unfavorably impacted by the asset impairment charge previously discussed. 14 In August 2004, Heinz and Heinz Finance amended their $600 million 364-Day Credit Agreement and their $1.5 billion Five-Year Credit Agreement by combining the agreements into a $2.0 billion Five-Year Credit Agreement, expiring August 2009. The Credit Agreement supports Heinz and Heinz Finance's commercial paper borrowings and the remarketable securities. As a result, these borrowings are classified as long-term debt based upon Heinz Finance's intent and ability to refinance these borrowings on a long-term basis. These resources, Heinz Finance's year-end cash balance of $155.6 million, strong operating cash flow and access to the capital market, if required, should enable Heinz Finance to meet its cash requirements for operations, including capital expansion programs and debt maturities. All of Heinz Finance's debt is guaranteed by Heinz. Heinz's long-term debt ratings were A- at Standard & Poor's and Fitch and A-3 at Moody's and Heinz Finance's short-term debt ratings were A-2 at Standard & Poor's, F-2 at Fitch and P-2 at Moody's. Moody's has put Heinz's long term rating under review for possible downgrade. CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS CONTRACTUAL OBLIGATIONS Heinz Finance is obligated to make future payments under various contracts such as debt agreements, lease agreements and unconditional purchase obligations. In addition, Heinz Finance has purchase obligations for materials, supplies, services and property, plant and equipment as part of the ordinary conduct of business. A few of these obligations are long-term and are based on minimum purchase requirements. In the aggregate, such commitments are not at prices in excess of current markets. Due to the proprietary nature of some of Heinz Finance's materials and processes, certain supply contracts contain penalty provisions for early terminations. Heinz Finance does not believe that a material amount of penalties are reasonably likely to be incurred under these contracts based upon historical experience and current expectations. The following table represents the contractual obligations of Heinz Finance as of April 27, 2005.

The following long-term liabilities included in the consolidated balance sheet are excluded from the table above: interest payments, income taxes, minority interest and other liabilities. Heinz Finance is unable to estimate the timing of the payments for these items. OFF-BALANCE SHEET ARRANGEMENTS AND OTHER COMMITMENTS Heinz Finance does not have material financial guarantees or other contractual commitments that are reasonably likely to adversely affect liquidity. In addition, see Note 8 of the consolidated financial statements for disclosure of all significant related party items. MARKET RISK FACTORS Heinz Finance is exposed to market risks from adverse changes in interest rates, commodity prices, foreign exchange rates and production costs. As a policy, Heinz Finance does not engage in speculative or leveraged transactions, nor does Heinz Finance hold or issue financial instruments for trading purposes. 15 INTEREST RATE SENSITIVITY Heinz Finance is exposed to changes in interest rates primarily as a result of its borrowing and investing activities used to maintain liquidity and fund business operations. The nature and amount of Heinz Finance's long-term and short-term debt can be expected to vary as a result of future business requirements, market conditions and other factors. Heinz Finance's debt obligations are summarized in Note 8 and Note 10 to the consolidated financial statements. In order to manage interest rate exposure, Heinz Finance utilizes interest rate swaps in order to convert fixed-rate debt to floating. These derivatives are primarily accounted for as fair value hedges. Accordingly, changes in the fair value of these derivatives, along with changes in the fair value of the hedged debt obligations that are attributable to the hedged risk, are recognized in current period earnings. Based on the amount of fixed-rate debt converted to floating as of April 27, 2005, a variance of 1/8% in the related interest rate would cause annual interest expense related to this debt to change by approximately $3.6 million. The following table presents additional information related to interest rate contracts designated as fair value hedges by Heinz Finance:

Heinz Finance had interest rate contracts with total notional amounts of $107.6 million and $907.6 million at April 27, 2005 and April 28, 2004, respectively, that did not meet the criteria for hedge accounting but effectively mitigated interest rate exposures. These derivatives are accounted for on a full mark-to-market basis through current earnings and they mature approximately three years from the current fiscal year end. Net unrealized gains/(losses), which are presented as a component of other noncurrent assets/liabilities, related to these interest rate contracts totaled $(2.5) million and $4.5 million at April 27, 2005 and April 28, 2004, respectively. FOREIGN EXCHANGE RATE SENSITIVITY Heinz Finance's cash flow and earnings are subject to fluctuations due to exchange rate variation. Foreign currency risk exists due to Heinz Finance's foreign-currency-denominated borrowings. Heinz Finance may attempt to limit its exposure to changing foreign exchange rates through financial market actions. These actions may include entering into forward or option contracts to hedge exposures. The instruments are used to reduce risk by essentially creating offsetting currency exposures. Heinz Finance had foreign denominated borrowings totaling $511.2 million and $539.4 million at April 27, 2005 and April 28, 2004, respectively. Of the amount outstanding at April 28, 2004, $355.3 million represented net investment hedges of foreign operations at the Heinz level. Because Heinz Finance does not have foreign operations, the changes in value due to exchange rate variation did not qualify for net investment hedge accounting treatment at Heinz Finance. Consequently, losses of $51.2 million and $21.2 million due to exchange rate variation were included in currency loss for the years ended April 27, 2005 and April 28, 2004, respectively. Heinz Finance had outstanding foreign currency contracts with notional amounts of $515 million and $182 million, at April 27, 2005 and April 28, 2004, respectively. These contracts, which mature during Fiscal 2006, were used to hedge cash flows associated with foreign-currency-denominated borrowings. Contracts that meet qualifying criteria are accounted for as foreign currency cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of other comprehensive income and is recognized in earnings at the time the hedged item affects earnings. Any 16 gains and losses due to hedge ineffectiveness or related to contracts which do not qualify for hedge accounting are recorded in current period earnings in other expenses, net. Net unrealized gains/(losses) related to foreign currency contracts totaled $(3.8) million and $0.5 million at April 27, 2005 and April 28, 2004, respectively. EFFECT OF HYPOTHETICAL 10% FLUCTUATION IN MARKET PRICES As of April 27, 2005, the potential gain or loss in the fair value of Heinz Finance's outstanding interest rate contracts and foreign currency contracts, assuming a hypothetical 10% fluctuation in swap rates and currency rates, respectively, would be approximately:

However, it should be noted that any change in the fair value of the contracts, real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged items. In relation to currency contracts, this hypothetical calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar. RECENTLY ISSUED ACCOUNTING STANDARDS In November 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4". This Statement is meant to eliminate any narrow differences existing between the FASB standards and the standards issued by the International Accounting Standards Board by clarifying that any abnormal idle facility expense, freight, handling costs and spoilage be recognized as current-period charges. This Statement is required to be adopted by Heinz Finance in the first quarter of Fiscal 2007; however, early application is permitted. Heinz Finance does not expect the adoption of this Statement to have a material impact on results of operations, financial position or cash flows. 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 Heinz Finance for the second quarter of Fiscal 2004. The adoption of SFAS No. 150 required the prospective classification of Heinz Finance Company's $325 million of mandatorily redeemable preferred shares to long-term debt and the $5.1 million quarterly preferred dividend from retained earnings to interest expense beginning in the second quarter ending October 29, 2003. DISCUSSION OF SIGNIFICANT ACCOUNTING ESTIMATES In the ordinary course of business, Heinz Finance has made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. Heinz Finance believes that the following discussion addresses Heinz Finance's most critical accounting policies, which are those that are most important to the portrayal of Heinz Finance's financial condition and results and require management's most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. MARKETING COSTS Trade promotions are an important component of the sales and marketing of Heinz Finance's products and are critical to the support of the business. Trade promotion costs include amounts paid 17 to encourage retailers to offer temporary price reductions for the sale of Heinz Finance's products to consumers, amounts paid to obtain favorable display positions in retailers' stores, and amounts paid to customers for shelf space in retail stores. Accruals for trade promotions are recorded primarily at the time of sale of product to the customer based on an estimate of the expected levels of performance of the trade promotion, which is dependent upon factors such as historical trends with similar promotions, expectations regarding customer participation, and sales and payment trends with similar previously offered programs. Our original estimated costs of trade promotions may change in the future as a result of changes in customer participation, particularly for new programs and for programs related to the introduction of new products. We perform monthly and quarterly evaluations of our outstanding trade promotions; making adjustments, where appropriate, to reflect changes in our estimates. Settlement of these liabilities typically occurs in subsequent periods primarily through an authorized process for deductions taken by a customer from amounts otherwise due to Heinz Finance. As a result, the ultimate cost of a trade promotion program is dependent on the relative success of the events and the actions and level of deductions taken by Heinz Finance's customers for amounts they consider due to them. Final determination of the permissible deductions may take extended periods of time and could have a significant impact on Heinz Finance's results of operations depending on how actual results of the programs compare to original estimates. We offer coupons to consumers in the normal course of our business. Costs associated with this activity, which we refer to as coupon redemption costs, are accrued in the period in which the coupons are offered. The initial estimates made for each coupon offering are based upon historical redemption experience rates for similar products or coupon amounts. We perform subsequent estimates that compare our actual redemption rates to the original estimates. We review the assumptions used in the valuation of the estimates and determine an appropriate accrual amount. Adjustments to our initial accrual may be required if our actual redemption rates vary from our estimated redemption rates. INVENTORIES Inventories are stated at the lower of cost or market value. Cost is principally determined by the average cost method. Heinz Finance records adjustments to the carrying value of inventory based upon its forecasted plans to sell its inventories. The physical condition (e.g., age and quality) of the inventories is also considered in establishing its valuation. These adjustments are estimates, which could vary, either favorably or unfavorably, from actual requirements if future economic conditions, customer inventory levels or competitive conditions differ from our expectations. INVESTMENTS AND LONG-LIVED ASSETS AND PROPERTY, PLANT AND EQUIPMENT Investments and long-lived assets are recorded at their respective cost basis on the date of acquisition. Buildings, equipment and leasehold improvements are depreciated on a straight-line basis over the estimated useful life of such assets. Heinz Finance reviews investments and long-lived assets, including intangibles with finite useful lives, and property, plant and equipment, whenever circumstances change such that the indicated recorded value of an asset may not be recoverable or has suffered an other than temporary impairment. Factors that may affect recoverability include changes in planned use of equipment or software, the closing of facilities and changes in the underlying financial strength of investments. The estimate of current value requires significant management judgment and requires assumptions that can include: future volume trends and revenue and expense growth rates developed in connection with Heinz Finance's internal projections and annual operating plans, and in addition, external factors such as market value devaluation and inflation which are developed in connection with Heinz Finance's longer-term strategic planning. As each is management's best estimate on then available information, resulting estimates may differ from actual cash flows. 18 GOODWILL AND INDEFINITE LIVED INTANGIBLES Carrying values of goodwill and intangible assets with indefinite lives are reviewed for impairment at least annually, or when circumstances indicate that a possible impairment may exist, in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets." Indicators such as unexpected adverse economic factors, unanticipated technological change or competitive activities, loss of key personnel, and acts by governments and courts, may signal that an asset has become impaired. Heinz Finance's measure of impairment is based on a discounted cash flow model that requires significant judgment and requires assumptions about future volume trends and revenue and expense growth rates developed in connection with Heinz Finance's internal projections and annual operating plans, and in addition, external factors such as changes in macroeconomic trends and cost of capital developed in connection with Heinz Finance's longer-term strategic planning. Inherent in estimating future performance, in particular assumptions regarding external factors such as capital markets, are uncertainties beyond Heinz Finance's control. Management believes that because fair values of goodwill and intangible assets with indefinite lives significantly exceed carrying value, it is unlikely that a material impairment charge would be recognized. INCOME TAXES Heinz Finance accounts for income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes". Judgment is required in determining Heinz Finance's provision for income taxes. In the ordinary course of Heinz Finance's business, there are some transactions for which the ultimate tax outcome is uncertain. Heinz Finance adjusts its income tax provision in the period it is probable that actual results will differ from its estimates. Tax law and rate changes are reflected in the income tax provision in the period in which such changes are enacted. The American Jobs Creation Act provides a deduction calculated as a percentage of qualified income from manufacturing in the United States. The percentage increases from 3% to 9% over a 6 year period beginning with Heinz Finance's 2006 Fiscal Year. In December 2004, the FASB issued a new staff position providing for this deduction to be treated as a special deduction, as opposed to a tax rate reduction, in accordance with SFAS No. 109. The benefit of this deduction is not expected to have a material impact on Heinz Finance's effective tax rate in Fiscal 2006. INFLATION In general, costs are affected by inflation and the effects of inflation may be experienced by Heinz Finance in future periods. Management believes, however, that such effects have not been material to Heinz Finance during the past three years. The impact of inflation on both Heinz Finance's financial position and results of operations is not expected to adversely affect Fiscal 2006 results. Heinz Finance's financial position continues to remain strong, enabling it to meet cash requirements for operations. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. This information is set forth in this report in Item 7 -- "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 15 through 17. 19 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm..... 21 Consolidated Statements of Income........................... 22 Consolidated Balance Sheets................................. 23 Consolidated Statements of Shareholder's Equity............. 24 Consolidated Statements of Cash Flows....................... 25 Notes to Consolidated Financial Statements.................. 26

20 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of H. J. Heinz Finance Company: In our opinion, the accompanying financial statements listed in the index appearing under item 15 (a) (1) present fairly, in all material respects, the financial position of H. J. Heinz Finance Company and its subsidiaries (the "Company") at April 27, 2005 and April 28, 2004, and the results of their operations and their cash flows for each of the three years in the period ended April 27, 2005, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and the financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and the financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note 2, the financial statements for the years ended April 28, 2004 and April 30, 2003 have been restated. /s/ PRICEWATERHOUSECOOPERS LLP Pittsburgh, Pennsylvania July 25, 2005 21 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME

The accompanying notes are an integral part of these financial statements. 22 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these financial statements. 23 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

The accompanying notes are an integral part of these financial statements. 24 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these financial statements. 25 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The domestic treasury and business operations of H.J. Heinz Company ("Heinz") are conducted by H.J. Heinz Finance Company and its wholly owned subsidiaries, and H.J. Heinz Company, L.P. ("Heinz LP"), which are collectively referred to as "Heinz Finance" (or "HFC"), in the accompanying notes. H.J. Heinz Finance Company has limited partnership interests in Heinz LP equal to approximately 40% of the capital of Heinz LP. Heinz LP owns or leases the operating assets involved in manufacturing throughout the United States and manages the business. Heinz LP has two classes of limited partnership interests, Class A and Class B, that are allocated varying income and cash distributions in accordance with the Heinz LP agreement. H.J. Heinz Finance Company, directly and through wholly-owned subsidiaries, owns the Class B interests. Heinz directly owns the Class A interests. Heinz Management Company, a wholly-owned subsidiary of Heinz, is the managing General Partner of Heinz LP and employs the salaried personnel of Heinz's domestic operations. Under the partnership agreement, H.J. Heinz Finance Company has the power to control the General Partner through majority membership on Heinz LP's management board. The minority interest amounts on the April 27, 2005 and April 28, 2004 balance sheets represent the Class A and General Partner's limited partnership interest in Heinz LP, and have been adjusted for the minority partners' share of income and cash distributions. For all Heinz financial reporting and disclosure purposes, H. J. Heinz Finance Company and its subsidiaries (including Heinz LP) are treated as fully consolidated subsidiaries. All of the assets, liabilities, results of operations and cash flows of these entities are included in the Heinz consolidated financial statements. All of the intercompany transactions and accounts are eliminated within the Heinz consolidated financial statements. The preferred shares issued by H.J. Heinz Finance Company are reported in the Heinz consolidated financial statements as long-term debt at April 27, 2005 and April 28, 2004. 2. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS HFC has restated its consolidated balance sheets as of April 28, 2004 and April 30, 2003, and the consolidated statements of income, shareholder's equity and cash flows for the years ended April 28, 2004 and April 30, 2003. These restatement adjustments have no impact on the consolidated financial statements of Heinz. Furthermore, these adjustments have no impact on the operating income or cash flows from operations of HFC, and only affect the minority interest of Heinz in HFC. In addition, the restatement impacts HFC's first, second and third quarters of Fiscal 2005 and all interim periods in Fiscal 2004. The restated amounts for these quarters are presented in Note No. 17 -- "Quarterly Results (Unaudited)" below. The restatement is a result of the incorrect application of an intercompany royalty agreement between Heinz LP and Trademark Management Company ("TMC"), subsidiaries of H.J. Heinz Finance Company. This incorrect application of the intercompany agreement resulted in an understatement of net income for Heinz LP and an overstatement of the net income for TMC. Because both Heinz LP and TMC are within the HFC consolidation, such royalty is eliminated and has no impact on HFC's consolidated "income before income taxes and minority interest". However, minority interest, which represents Heinz's interest in Heinz LP, was understated. In addition, as a result of the overstatement of net income for TMC, the provision for income taxes was overstated. 26 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the impact of the restatement adjustments described above on the financial statements for all of the applicable periods:

3. SIGNIFICANT ACCOUNTING POLICIES FISCAL YEAR Heinz Finance operates on a 52- or 53-week fiscal year ending the Wednesday nearest April 30. Fiscal years for the financial statements included herein ended April 27, 2005, April 28, 2004, and April 30, 2003. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Heinz Finance, and entities in which Heinz Finance maintains a controlling financial interest. Control is generally determined based on the majority ownership of an entity's voting interests. In certain situations, control is based on participation in the majority of an entity's economic risks and rewards. Heinz Finance has no material investments in variable interest entities. Investments in certain companies over which Heinz Finance 27 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) exerts significant influence, but does not control the financial and operating decisions, are accounted for as equity method investments. All intercompany accounts and transactions are eliminated. Certain prior-year amounts have been reclassified in order to conform with the Fiscal 2005 presentation. USE OF ESTIMATES The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, 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. 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, which generally have the following ranges: buildings -- 40 years or less, machinery and equipment -- 15 years or less, computer software -- 3-5 years, and leasehold improvements -- over the life of the lease, not to exceed 15 years. 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. Property, plant and equipment are reviewed for possible impairment when appropriate. Heinz Finance's impairment review is based on an undiscounted cash flow analysis at the lowest level for which identifiable cash flows exist. Impairment occurs when the carrying value of the asset exceeds its future undiscounted cash flows. When an impairment is indicated, the asset is written down to its fair value. INTANGIBLES Intangible assets with finite useful lives are amortized on a straight-line basis over the estimated periods benefited, and are reviewed when appropriate for possible impairment, similar to property, plant and equipment. Goodwill and intangible assets with indefinite useful lives are not amortized. The carrying values of goodwill and other intangible assets with indefinite useful lives are tested at least annually for impairment. REVENUE RECOGNITION Heinz Finance recognizes revenue when title, ownership and risk of loss pass to the customer. This occurs upon delivery of the product to the customer. Customers do not have the right to return products unless damaged or defective. Revenue is recorded, net of sales incentives, and includes shipping and handling charges billed to customers. Shipping and handling costs are classified as part of cost of sales. 28 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) MARKETING COSTS Heinz Finance promotes its products with advertising, consumer incentives and trade promotions. Such programs include, but are not limited to, discounts, coupons, rebates, in-store display incentives and volume-based incentives. Advertising costs are expensed as incurred. Consumer incentive and trade promotion activities are recorded as a reduction of revenue based on amounts estimated as being due to customers and consumers at the end of a period, based principally on historical utilization and redemption rates. For interim reporting purposes, advertising, consumer incentive and product placement expenses are charged to operations as a percentage of volume, based on estimated volume and related expense for the full year. INCOME TAXES Until July 6, 2001, Heinz Finance joined with Heinz in the filing of a consolidated U.S. income tax return and state income tax returns. After July 6, 2001, H.J. Heinz Finance Company began filing its own consolidated U.S. income tax return. U.S. tax expense for all periods prior to July 7, 2001, and state tax expense for all years includes the effect of certain tax sharing agreements Heinz Finance has with Heinz regarding these consolidated filings. Specifically, Heinz charged (refunded) Heinz Finance at the U.S. statutory rate for its actual taxable income (loss). In addition, Heinz charges Heinz Finance for its share of consolidated state tax expense based on Heinz Finance's share of the state allocation factors. Deferred income taxes result primarily from temporary differences between financial and tax reporting. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. FINANCIAL INSTRUMENTS Heinz Finance's financial instruments consist primarily of cash and cash equivalents, short-term investments, short-term notes receivable from related parties, long-term notes receivable from related parties, short-term debt with related parties, long-term debt, swaps and forward contracts. The carrying values for Heinz Finance's financial instruments approximate fair value. As a policy, Heinz Finance does not engage in speculative or leveraged transactions, nor does Heinz Finance hold or issue financial instruments for trading purposes. Heinz Finance uses derivative financial instruments for the purpose of hedging currency and interest rate exposures, which exist as part of ongoing business operations. Heinz Finance carries derivative instruments on the balance sheet at fair value, determined by reference to quoted market data. Derivatives with scheduled maturities of less than one year are included in receivables or accounts payable, based on the instrument's fair value. Derivatives with scheduled maturities beyond one year are presented as a component of other non-current assets or other liabilities, based on the instrument's fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it. The cash flows related to derivative instruments are classified in the consolidated financial statements of cash flows within operating activities as a component of other items, net. The $40 million of auction rate securities that the Company held as of April 28, 2004 have been reclassified from cash and cash equivalents to short-term investments in the consolidated balance sheets. Corresponding adjustments have also been made to the consolidated statements of cash flows to reflect the gross purchases and sales of these securities as investing activities rather than as a component of cash and cash equivalents. The Company no longer owns auction rate securities as of April 27, 2005. 29 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 4. RECENTLY ISSUED ACCOUNTING STANDARDS In November 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4". This Statement is meant to eliminate any narrow differences existing between the FASB standards and the standards issued by the International Accounting Standards Board by clarifying that any abnormal idle facility expense, freight, handling costs and spoilage be recognized as current-period charges. This Statement is required to be adopted by Heinz Finance in the first quarter of Fiscal 2007; however, early application is permitted. Heinz Finance does not expect the adoption of this Statement to have a material impact on results of operations, financial position or cash flows. 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 Heinz Finance for the second quarter of Fiscal 2004. The adoption of SFAS No. 150 required the prospective classification of Heinz Finance Company's $325 million of mandatorily redeemable preferred shares as long-term debt and the $5.1 million quarterly preferred dividend from retained earnings to interest expense beginning in the second quarter ending October 29, 2003. 5. SPECIAL ITEMS ASSET IMPAIRMENTS Heinz Finance holds an equity investment in The Hain Celestial Group, Inc. ("Hain"), a natural, specialty and snack food company. Hain shares traded at less than 80% of Heinz Finance's carrying value since late January 2004. Due to the length of time and the amount that Hain stock traded below Heinz Finance's basis, Heinz Finance determined that the decline was other-than-temporary as defined by Accounting Principles Board Opinion No. 18 and as a result, recognized a $64.5 million non-cash impairment charge during the third quarter of Fiscal 2005. The charge reduced Heinz Finance's carrying value in Hain to fair market value as of January 26, 2005, with no resulting impact on cash flows. Heinz Finance currently owns approximately six million shares of Hain stock, with a book value of approximately $20.00 per share as of April 27, 2005. In the future, should the market value of Hain common stock decline and remain below current market value for a substantial time, Heinz Finance could be required to record additional writedowns of its investment in Hain. DISCONTINUED OPERATIONS On December 20, 2002, Heinz transferred to a wholly-owned subsidiary ("SKF Foods") certain assets and liabilities, including its U.S. 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. 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 Heinz Finance's consolidated statements of income. Net income from discontinued operations for the year ended April 27, 2005 was $4.7 million and reflects the favorable settlement of tax liabilities related to the businesses spun-off to Del Monte on December 20, 2002. The discontinued operations generated sales of $1,052.6 million and a net loss of $23.3 million (net of $13.8 million of a tax benefit) for Fiscal 2003. 30 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) REORGANIZATION COSTS In Fiscal 2004, Heinz Finance recognized reorganization costs of $8.7 million pretax which were primarily due to employee termination and severance costs. Of this amount, $8.6 million was charged to Heinz Finance by Heinz Management Company through a management fee for all salaried employee costs. These costs were recognized as a component of selling, general and administrative expenses ("SG&A"). In Fiscal 2003, Del Monte transaction costs and costs to reduce overhead of the remaining business totaled $55.3 million pretax. In addition, during Fiscal 2003, Heinz Management Company recognized Del Monte transaction costs and costs to reduce overhead of the remaining business totaling $34.2 million pretax. These costs were then charged to Heinz Finance through the management fee charged to Heinz Finance by Heinz Management Company for all salaried employee costs. These total charges of $89.5 million pretax were comprised of $39.6 million related to the early retirement of debt, $24.4 million in employee termination and severance costs, $14.7 million for legal, professional and other related costs, and $10.8 million of non-cash write-offs. Of this amount, $6.0 million was included in cost of products sold, $44.0 million in SG&A, and $39.6 million in other expenses, net. During Fiscal 2005, Heinz Finance utilized $5.0 million of severance and exit cost accruals related to reorganization costs. Amounts included in accounts payable to related parties and other accrued liabilities related to these initiatives totaled $5.0 million at April 28, 2004. 6. ACQUISITIONS/DIVESTITURES Heinz Finance made one acquisition in Fiscal 2005 and one in Fiscal 2004 for total purchase prices of $84.3 million and $61.3 million, respectively, neither of which were significant. The Fiscal 2005 acquisition was Appetizers And, Inc., a manufacturer and marketer of high quality, frozen hors d'oeuvres sold primarily to the U.S. foodservice industry. The Fiscal 2004 acquisition was Truesoups LLC, a manufacturer and marketer of premium frozen soups designed primarily for the foodservice trade. There were no acquisitions in Fiscal 2003. All of the above acquisitions have been accounted for as purchases and, accordingly, the respective purchase prices have been allocated to the respective assets and liabilities based upon their estimated fair values as of the acquisition date. Operating results of businesses acquired have been included in the consolidated statements of income from the respective acquisition dates forward. There are no significant contingent payments, options or commitments associated with any of the acquisitions. Pro forma results of Heinz Finance, assuming all of the following acquisitions and divestitures had occurred at the beginning of each period presented, would not be materially different from the results reported. 7. GOODWILL AND OTHER INTANGIBLE ASSETS Effective May 2, 2002, Heinz Finance adopted SFAS No. 142 "Goodwill and Other Intangible Assets." Under this standard, goodwill and intangibles with indefinite useful lives are no longer amortized. This standard also requires, at a minimum, an annual impairment assessment of the carrying value of goodwill and intangibles with indefinite useful lives. The reassessment of intangible assets, including the ongoing impact of amortization, and the assignment of goodwill to reporting units was completed during the first quarter of Fiscal 2003. Heinz Finance completed its transitional goodwill impairment tests during the second quarter of Fiscal 2003. No impairment issues were identified as a result of completing these transitional impairment tests. 31 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The annual impairment tests are performed in the fourth quarter of each fiscal year unless events suggest an impairment may have occurred in the interim. No impairment charges were recognized in Fiscal 2005. Changes in the carrying amount of goodwill for the fiscal year ended April 27, 2005 by reportable segment are as follows:

During Fiscal 2005, Heinz Finance acquired a controlling interest in Appetizers And, Inc. Preliminary purchase price allocations have been recorded for this acquisition. Heinz Finance expects to finalize the purchase price allocations related to this acquisition during Fiscal 2006 upon completion of third-party valuation procedures. Trademarks and other intangible assets at April 27, 2005 and April 28, 2004, subject to amortization expense, are as follows:

Amortization expense for trademarks and other intangible assets subject to amortization was $9.8 million, $9.6 million and $9.6 million for the fiscal years ended April 27, 2005, April 28, 2004, and April 30, 2003, respectively. Based upon the amortizable intangible assets recorded on the balance sheet as of April 27, 2005, amortization expense for each of the next five years is estimated to be approximately $10 million. Intangible assets not subject to amortization totaled $108.1 million and $103.1 million at April 27, 2005 and April 28, 2004, respectively, and consisted solely of trademarks. 8. RELATED PARTY TRANSACTIONS EMPLOYEE COSTS Certain of Heinz's general and administrative expenses are allocated to Heinz Finance. These costs primarily include a management charge of all salaried employee costs from the Heinz Management Company. Total costs charged to Heinz Finance for these services, including discontinued operations, were $309.7 million, $265.7 million and $333.1 million in Fiscal 2005, 2004 and 2003, respectively. These costs are recorded as cost of products sold or SG&A expense in the accompanying consolidated statements of income depending on the nature of the cost. For the years ended April 27, 2005, April 28, 2004 and April 30, 2003, $55.8 million, $44.4 million and $52.9 million, respectively, 32 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) was recorded as costs of products sold and $253.9 million, $221.3 million and $280.2 million, respectively, as SG&A. Heinz charges Heinz Finance for its share of group health insurance costs for eligible company employees based upon location-specific costs, overall insurance costs and loss experience incurred during a calendar year. In addition, various other insurance coverages are also provided to Heinz Finance through Heinz's corporate programs. Workers compensation, auto, property, product liability and other insurance coverages are charged directly based on Heinz Finance's loss experience. Amounts charged to Heinz Finance for insurance costs, were $63.9 million, $65.4 million and $75.8 million for Fiscal 2005, 2004, 2003, respectively, and are recorded in SG&A expense in the accompanying consolidated statements of income. Pension costs and postretirement costs are also charged to Heinz Finance based upon eligible employees participating in the Plans and are included either in the management charge from Heinz Management Company discussed above or are recorded directly on Heinz LP (see Note 14). CASH MANAGEMENT Heinz Finance represents the treasury center for cash management and debt financing for all of Heinz's domestic operations. In addition, Heinz Finance enters into a number of short-term notes payable with foreign wholly-owned subsidiaries of Heinz. As a result of these cash management activities, Heinz Finance had $401.8 million and $104.6 million of net short-term notes receivable with related parties recorded on the consolidated balance sheets as of April 27, 2005 and April 28, 2004, respectively. In addition, at April 27, 2005 and April 28, 2004, long-term notes receivable from related parties includes $35.0 million related to a receivable from Heinz, which is classified as long-term given its maturity of May 2, 2007. An average interest rate of 2.2%, 1.2% and 2.1% was earned on total notes receivable from related parties resulting in $16.8 million, $5.7 million and $21.6 million of interest income for the fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003, respectively. In addition, an average interest rate of 1.8%, 1.9% and 2.8% was charged on total notes payable to related parties resulting in $10.1 million, $5.2 million and $9.9 million of interest expense for the fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003, respectively. PRODUCT SALES AND PURCHASES Heinz Finance sells and purchases products and services to and from other Heinz affiliates. The results of related party transactions are the $18.6 million and $19.7 million balances due from related parties as of April 27, 2005 and April 28, 2004, respectively, and the $85.8 million and $72.9 million balances for accounts payable to related parties as of April 27, 2005 and April 28, 2004, respectively. Product sales to related parties were $51.4 million, $46.7 million and $48.3 million in Fiscal 2005, 2004 and 2003, respectively, and purchases from related parties were $42.5 million, $33.6 million and $28.0 million in Fiscal 2005, 2004 and 2003, respectively. OTHER RELATED PARTY ITEMS Heinz Finance held $1.9 billion of non-voting, 6.5% cumulative non-participating preferred stock of PM Holding, Inc. ("PM Holding"), a subsidiary of Heinz. Heinz Finance's preferred stock investment in PM Holding was converted to a preferred stock investment in Heinz as a result of the merger of PM Holding with and into Heinz during the third quarter of Fiscal 2003. The dividends on the preferred stock amounted to $123.2 million, $123.2 million and $123.9 million for Fiscal 2005, 2004 and 2003, respectively. This preferred stock investment is recorded in the Investments in related parties balance on the consolidated balance sheets as of April 27, 2005 and April 28, 2004. 33 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Heinz Finance incurred royalty expense of $187.6 million, $156.3 million and $159.5 million in Fiscal 2005, 2004 and 2003, respectively, to Promark Brands, Inc., a direct subsidiary of Heinz, for the use of certain trademarks. These royalties are recorded in the Royalty expense to related parties line on the consolidated statements of income. In addition, Heinz LP incurred royalty expense of $20.9 million, $20.2 million and $18.6 million in Fiscal 2005, 2004 and 2003, respectively, to TMC, a subsidiary of H.J. Heinz Finance Company. Because both Heinz LP and TMC are within the Heinz Finance consolidation, such royalty is eliminated and has no impact on Heinz Finance's consolidated income before income taxes and minority interest. However, this payment does impact the minority interest line on the statements of income, which represents the Class A and General Partners' share of Heinz LP's income. 9. INCOME TAXES The following table summarizes the provision for U.S. federal and state taxes on income from continuing operations:

The differences between the U.S. federal statutory tax rate and Heinz Finance's consolidated effective tax rate from continuing operations are as follows:

Heinz Finance's effective tax rate is significantly impacted by Heinz Finance's nontaxable minority interest in Heinz LP. The effective tax rate will fluctuate for Heinz Finance depending on the proportion of this nontaxable minority interest to total Heinz Finance income before tax. In Fiscal 2005 and 2004, the effective tax rate was unfavorably impacted by the nondeductible interest expense associated with Heinz Finance's mandatorily redeemable preferred shares. 34 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The deferred tax (assets) and deferred tax liabilities applicable to continuing operations recorded on the balance sheet as of April 27, 2005 and April 28, 2004 are as follows:

The Fiscal 2005 change in the valuation allowance is an increase of $1.2 million, due entirely to an increase in deferred tax assets related to state tax loss carryforwards. These state tax loss carryforwards, which arose primarily as a result of current year operations, expire between 2010 and 2025. In the second quarter of Fiscal 2005, a $14 million prior period adjustment was made to additional paid-in-capital and deferred tax accounts related to an adjustment to the original net assets contributed to Heinz LP on May 3, 2001. The American Jobs Creation Act provides a deduction calculated as a percentage of qualified income from manufacturing in the United States. The percentage increases from 3% to 9% over a 6 year period beginning with Heinz Finance's 2006 fiscal year. In December 2004, the FASB issued a new staff position providing for this deduction to be treated as a special deduction, as opposed to a tax rate reduction, in accordance with SFAS No. 109. The benefit of this deduction is not expected to have a material impact on Heinz Finance's effective tax rate in Fiscal 2006. 10. DEBT AND PREFERRED STOCK In August 2004, Heinz and Heinz Finance amended their $600 million 364-Day Credit Agreement and their $1.5 billion Five-Year Credit Agreement by combining the agreements into a $2.0 billion Five-Year Credit Agreement, expiring August 2009. The Credit Agreement supports Heinz and Heinz Finance's commercial paper borrowings and the remarketable securities. As a result, these borrowings are classified as long-term debt based upon Heinz Finance's intent and ability to refinance these borrowings on a long-term basis. 35 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Long-term debt was comprised of the following as of April 27, 2005 and April 28, 2004:

In the third quarter of Fiscal 2005, Heinz Finance paid off E300 million of bonds ($404.7 million) which matured on January 5, 2005. The fair value of the debt obligations approximated the recorded value as of April 27, 2005 and April 28, 2004. Annual maturities of long-term debt during the next five fiscal years are $0.3 million in 2006, $0.2 million in 2007, $299.6 million in 2008, $325.2 million in 2009 and $0.2 million in 2010. As of April 27, 2005, Heinz and Heinz Finance had $800 million of remarketable securities due December 2020. These securities are subject to an annual remarketing on each December 1, and the interest rate is reset on such dates. If the securities are not remarketed, then Heinz and Heinz Finance are required to repurchase all of the securities at 100% of the principal amount plus accrued interest. On December 1, 2004, the securities were remarketed at a coupon of 6.189%. 36 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 11. MINORITY INTEREST The components of Heinz Finance's minority interest balance as of April 27, 2005, April 28, 2004 and April 30, 2003 are as follows:

12. SUPPLEMENTAL CASH FLOW INFORMATION Net cash paid during the year for:

13. MANAGEMENT INCENTIVE PLAN Heinz's management incentive plan covers officers and other key employees. Participants may elect to be paid on a current or deferred basis. The aggregate amount of all awards may not exceed certain limits in any year. All of Heinz Finance's compensation under the management incentive plan was recorded by Heinz Management Company and subsequently charged back to Heinz Finance (see Note 8). 37 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 14. EMPLOYEE RETIREMENT BENEFITS Employees participate in certain defined benefit pension plans, certain defined contribution plans, and certain stock option plans, all of which are sponsored by Heinz. Heinz Finance also provides post-retirement health care and life insurance benefits for employees who meet the eligibility requirements of the Heinz plans. Retirees share in the cost of these benefits based on age and years of service. Heinz allocates costs for the defined benefit plans to Heinz Finance as determined by actuarial valuations. Heinz contributions to the defined contribution plans amount to a qualified age-related contribution, a matching of employee's contributions up to a specified amount, and for certain employees, supplemental contributions. The following (income) expense was included in Heinz Finance's statements of income:

Employees also participate in the Employee Stock Ownership Plan ("ESOP") and the Global Stock Purchase Plan ("GSPP"). Heinz established the ESOP in 1990 to replace in full or in part Heinz Finance's cash-matching contributions to the H. J. Heinz Company Employees Retirement and Saving Plan, a 401(k) plan for salaried employees. The GSPP gives employees an option to acquire stock at the lower of 85% of the fair market value of Heinz's stock on the first or last day of a purchase period. 15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Heinz Finance utilizes certain derivative financial instruments to manage its foreign currency and interest rate exposures. FOREIGN CURRENCY HEDGING Heinz Finance may hedge foreign currency cash flows associated with foreign-currency-denominated financial liabilities. Derivatives used to hedge foreign-currency-denominated borrowings that meet the criteria for hedge accounting are designated as cash flow hedges. Accordingly, the effective portion of gains and losses is deferred as a component of accumulated other comprehensive income and is recognized in earnings at the time the hedged item affects earnings, in the same line item as the underlying hedged item. INTEREST RATE HEDGING Heinz Finance 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. Derivatives used to hedge risk associated with changes in the fair value of certain fixed rate debt obligations are primarily designated as fair value hedges. Consequently, changes in the fair value of these derivatives, along with changes in the fair value of the hedged debt obligations that are attributable to the hedged risk, are recognized in current period earnings. 38 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) HEDGE INEFFECTIVENESS Hedge ineffectiveness related to cash flow hedges, which is reported in current period earnings as other expenses, was not significant for the fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003. DEFERRED HEDGING GAINS AND LOSSES As of April 27, 2005, Heinz Finance is hedging forecasted transactions for periods not exceeding one year. There were no deferred gains or losses related to cash flow hedges at April 27, 2005. Net deferred gains reclassified to earnings because the hedged transaction was no longer expected to occur were not significant. OTHER ACTIVITIES Heinz Finance 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 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. At April 27, 2005, Heinz Finance had outstanding currency exchange and interest rate derivative contracts with notional amounts of $515 million and $2.88 billion, respectively. At April 28, 2004, Heinz Finance had outstanding currency exchange and interest rate derivative contracts with notional amounts of $182 million and $3.68 billion, respectively. The fair value of derivative financial instruments was a net asset of $180 million, and $130 million at April 27, 2005 and April 28, 2004, respectively. CONCENTRATIONS OF CREDIT RISK Counterparties to currency exchange and interest rate derivatives consist of large major international financial institutions. Heinz Finance continually monitors its positions and the credit ratings of the counterparties involved and, by policy, limits the amount of credit exposure to any one party. While Heinz Finance may be exposed to potential losses due to the credit risk of non-performance by these counterparties, losses are not anticipated. For Fiscal 2005, Wal-Mart Stores, Inc. represented more than 10% of Heinz Finance's sales. Heinz Finance closely monitors the credit risk associated with its customers and has never experienced significant losses. 16. SEGMENT DATA The composition of segments and measure of segment profitability is consistent with that used by Heinz Finance's management. Descriptions of the Heinz Finance's reportable segments are as follows: - NORTH AMERICAN CONSUMER PRODUCTS -- This segment primarily 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. - U.S. FOODSERVICE -- This segment primarily 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, desserts and appetizers. 39 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Heinz Finance's management evaluates performance based on several factors including net sales, operating income, and the use of capital resources. 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 Heinz Finance's management. The following table presents information about Heinz Finance's reportable segments:

--------------- (a) Excludes property, plant and equipment obtained through acquisitions. (b) Includes charges/assets not directly attributable to operating segments and intercompany eliminations. (c) FISCAL YEAR ENDED APRIL 28, 2004: Includes costs to reduce overhead of the remaining businesses as follows: North American Consumer Products $4.8 million and U.S. Foodservice $3.9 million. FISCAL YEAR ENDED APRIL 30, 2003: Includes Del Monte transaction related costs and costs to reduce overhead of the remaining business as follows: North American Consumer Products $44.0 million and U.S. Foodservice $5.9 million. 40 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Heinz Finance's revenues are generated via the sale of products in the following categories:

17. QUARTERLY RESULTS (UNAUDITED) As discussed in Note 2, the quarterly financial statements for the first, second and third quarters of the fiscal year ended April 27, 2005 and all interim periods for the fiscal year ended April 28, 2004 have been restated. The following tables present the impact of the restatement on the previously reported quarterly financial statements.

41 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The third quarter of Fiscal 2005 includes a $64.5 million non-cash impairment charge for Heinz Finance's equity investment in The Hain Celestial Group, Inc. ("Hain"). The first quarter of Fiscal 2004 includes costs to reduce overhead of $2.5 million after tax. The fourth quarter of Fiscal 2004 includes costs to reduce overhead of $3.0 million after tax. 18. COMMITMENTS AND CONTINGENCIES LEGAL MATTERS Certain suits and claims have been filed against Heinz Finance and have not been finally adjudicated. These suits and claims when finally concluded and determined, in the opinion of management, based upon the information that it presently possesses, will not have a material adverse effect on Heinz Finance's consolidated financial position, results of operations or liquidity. LEASE COMMITMENTS Operating lease rentals for warehouses, production and office facilities and equipment amounted to $17.9 million in 2005, $23.3 million in 2004 and $20.5 million in 2003. Future lease payments for noncancellable operating leases as of April 27, 2005 totaled $140.2 million (2006 -- $14.9 million, 42 H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 2007 -- $69.4 million, 2008 -- $7.3 million, 2009 -- $6.8 million, 2010 -- $5.6 million and thereafter -- $36.2 million). No significant credit guarantees existed between Heinz Finance and third parties as of April 27, 2005. 19. ADVERTISING COSTS Advertising expenses (including production and communication costs) for Fiscal Years 2005, 2004 and 2003 were $119.2 million, $138.0 million and $183.9 million, respectively. For Fiscal Years 2005, 2004 and 2003, $88.7 million, $99.6 million and $108.0 million, respectively, were recorded as a reduction of revenue and $30.5 million, $38.4 million and $75.9 million, respectively, were recorded as a component of SG&A. 43 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. There is nothing to be reported under this item. ITEM 9A. CONTROLS AND PROCEDURES. (a) Evaluation of Disclosure Controls and Procedures HFC's management, with the participation of HFC's President and Chief Financial Officer, evaluated the effectiveness of HFC's disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the President and Chief Financial Officer concluded that HFC'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 HFC in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our management including the President and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. (b) Changes in Internal Controls over Financial Reporting A change in HFC's internal control over financial reporting, which occurred during HFC's most recent fiscal quarter, has materially affected HFC's internal control over financial reporting. HFC changed its internal control by enhancing the process for determining and applying its intercompany royalty agreements. The change led to a restatement that resulted from the incorrect application of certain aspects of an intercompany royalty agreement between Heinz LP and Trademark Management Company ("TMC"), subsidiaries of H. J. Heinz Finance Company. This incorrect application of the intercompany agreement resulted in an understatement of net income for Heinz LP and an overstatement of the net income for TMC. Because both Heinz LP and TMC are within the HFC consolidation, such royalty is eliminated and has no impact on HFC's consolidated "income before income taxes and minority interest" or cash flows from operations. However, minority interest expense was understated. The minority interest represents Heinz's interest in Heinz LP. These adjustments have no impact on the consolidated financial statements of Heinz. ITEM 9B. OTHER INFORMATION. There is nothing to report under this item. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. See table in Part 1. Our code of ethics, which is applicable to all employees including the principal executive, principal financial and principal accounting officers, is available on Heinz's website (www.heinz.com). ITEM 11. EXECUTIVE COMPENSATION. Compensation of Directors We paid fees to our Independent Director for his service as a director. The Independent Director is entitled to receive annual compensation of $3,500 plus reimbursement of expenses for attendance at each meeting of the Board of Directors. We do not pay fees to the other directors who are not the Independent Director. 44 Executive Compensation The following table sets forth information concerning the total compensation paid to our named executive officers for the periods set forth below for services to Heinz and Heinz Finance. SUMMARY COMPENSATION TABLE

--------------- (1) In accordance with SEC rules, disclosure of perquisites and other personal benefits is omitted if the aggregate amount of such compensation for an executive is the lesser of $50,000 or 10% of the total annual salary and bonus for the given year. Perquisites and other personal benefits include personal use of Heinz-owned aircraft, financial counseling, allowance for a Heinz automobile, parking, and club dues. For fiscal year 2005, Mr. Johnson reimbursed Heinz for its aggregate incremental cost related to his personal airplane use. Aggregate incremental cost includes fuel, landing fees, airport taxes and fees, customs fees and in-flight food. Pursuant to SEC rules, each perquisite exceeding 25% of the aggregate amount of Other Annual Compensation reported must be disclosed. For Mr. Johnson, this includes $27,816 for financial counseling. (2) Amounts reflect grants of restricted stock units in fiscal years 2003, 2004, and 2005 including a grant in lieu of a portion of such officer's cash bonus for fiscal year 2003 and, in the case of Mr. Cullo and Mr. Berger, for fiscal year 2005. The total number of all units awarded in such grants and their aggregate value as of April 27, 2005 were as follows: Mr. Cullo, 1,325, $48,853; Mr. Johnson, 219,309, $8,085,923; Mr. Berger, 50,130, $1,848,293; Mr. Moran, 23,815, $878,059; Mr. Jimenez, 51,980, $1,916,503; and Mr. Winkleblack, 44,036, $1,623,607. The restricted stock units vest in five years, subject to earlier vesting upon the attainment of certain predetermined specific financial objectives, except in the cases of Mr. Berger, whose grant of restricted stock units in lieu of a portion of his cash bonus for fiscal year 2005 vested on June 3, 2005 upon achieving specified performance objectives, and Mr. Moran, whose grant of a one-time retention award vests in five years. Executive officers of Heinz are required to automatically defer receipt of any restricted stock units until termination of employment, or in some cases as required by the 45 Internal Revenue Code, six months after separation of service. Dividend equivalents are paid on the restricted stock units at the same rate as paid on the Heinz's common stock. (3) All option awards and those restricted stock unit awards made prior to the spin-off of certain businesses to Del-Monte Corporation on December 20, 2002 have been adjusted to reflect the stock distribution made in connection with such spin-off. (4) Includes for fiscal year 2005 for Messrs. Cullo, Johnson, Berger, Moran, Jimenez, and Winkleblack, respectively, the following: (i) amounts contributed by Heinz under Heinz's retirement plans, $35,542, $359,250, $55,253, $69,000, $73,833, and $92,758; (ii) amounts paid by Heinz to executives for payment of premiums allocable to executive life insurance provided by Heinz, $7,664, $101,822, $38,103, $2,149, $7,936, and $9,485(see description of bonus life insurance program under the Executive Estate Life Insurance Program heading); and (iii) the portion of interest accrued (but not currently paid or payable) on deferred compensation above 120% of the applicable federal long-term rate, $0, $21,265,$10,633, $0, $0, and $0. 46 OPTION GRANTS BY HEINZ IN FISCAL YEAR 2005

--------------- (1) All options were granted in May 2004, pursuant to the terms of Heinz's stock option plans and have identical terms. All options vest in 25% annual increments commencing on May 19, 2005, the first anniversary of the grant date. (2) The estimated grant date present value reflected in the above table is determined using the Black-Scholes model. The material assumptions and adjustments incorporated in the Black-Scholes model in estimating the value of the option grants reflected in the above table include the following: (i) exercise price for the options ($37.06) equal to the fair market value of the underlying Heinz common stock on the date of grant; (ii) expected option term of 7.9 years; (iii) dividend yield of 2.95%; (iv) risk-free interest rate of 4.39%; and (v) volatility of 25.42%. The ultimate values of the options will depend on the future market price of Heinz's common stock, which cannot be forecasted with reasonable accuracy. The actual value, if any, an optionee will realize upon exercise of an option will depend on the excess of the market value of Heinz's common stock over the exercise price on the date the option is exercised. AGGREGATED OPTION/SAR EXERCISES IN FISCAL YEAR 2005 AND FISCAL YEAR-END OPTION/SAR VALUE(1)

--------------- (1) All options are denominated in shares of Heinz. (2) All options granted prior to December 20, 2002 were adjusted to reflect the stock distribution resulting from the spin-off of certain businesses to Del Monte Corporation on that date. (3) The "Value of Unexercised In-the-Money Options at Fiscal Year-End" is calculated based on the difference in options with exercise prices less than the closing price of Heinz stock on April 27, 2005 ($36.87), compared to the grant date exercise price, times the number of options. 47 LONG-TERM INCENTIVE PLANS AWARDS IN LAST FISCAL YEAR

PERFORMANCE UNIT AWARDS UNDER LONG-TERM INCENTIVE PROGRAM In order to further link the compensation of executives with the interests of shareholders, in Fiscal 2005 Heinz granted performance awards as permitted in the Fiscal Year 2003 Stock Incentive Plan, subject to achievement of performance goals, restrictions and conditions specified in advance by the Management Development and Compensation Committee of Heinz (the "Committee"). These new performance awards are tied to Heinz financial measures and are expected to replace a large portion of stock options and restricted stock units beginning in Fiscal Year 2005. For the performance period from April 29, 2004 through May 3, 2006, the measures are established by the Committee based on the compound annual growth rate of net income ("NI") and sales growth amounts. Awards are payable at the end of the 2-year performance period based upon Heinz's achieving the NI and sales growth targets. Once the minimum NI goal is met, the amount of any award is dependent upon the level of sales growth of Heinz for the performance period. If Heinz meets or exceeds the peer group median with regard to NI over the performance period and generates at least flat sales, the Committee may, in its discretion, authorize payment of up to 50% of any target award to participants excluding the Chief Executive Officer of Heinz. In addition, if Heinz does not remain in or above the third quartile when comparing its performance to that of its peer group companies on a relative total shareholder return basis, the Committee will exercise its discretion to reduce payouts for named executive officers. If earned, 50% of the payout on the performance award will be made in cash and 50% will be made in stock valued at the fair market value of Heinz common stock as of the date of the payout. However, if the executive has met applicable stock ownership guidelines, the performance award may be paid in cash. Mr. Johnson has met the applicable stock ownership guideline as published by the Committee. Nevertheless, the Committee determined on the grant date of the award that Mr. Johnson's performance award, if earned, will be paid half in cash and half in stock. For, Mr. Berger, Mr. Moran, Mr. Jimenez, Mr. Winkleblack, and Mr. Johnson, any stock received as partial payout on the performance award will be deferred until the retirement or termination of employment or until the executive is no longer a named executive officer of Heinz. RETIREMENT BENEFITS Most full-time salaried employees in the United States who were hired before January 1, 1993 are entitled to retirement benefits from Plan A of the H. J. Heinz Company Employees' Retirement System ("Plan A"). Benefits are based on credited service and five-year average eligible compensation through December 31, 1992, the date on which Plan A was frozen. Since January 1, 1993, retirement benefits have been provided by Heinz through an age-related contribution account within the Employees Retirement and Savings Plan and the Employees Retirement and Savings Excess Plan. Heinz has a Supplemental Executive Retirement Plan (the "SERP"), which provides additional retirement benefits for eligible executives, including the named executive officers in the Summary 48 Compensation Table. The SERP was adopted in order to attract and retain executives, and to compensate them for reductions in benefits due to limitations imposed by the Internal Revenue Code. Benefits under the SERP are paid as a single lump sum cash payment upon retirement at age 55 or later, after at least 5 years of service. Effective May 1, 2004, the Board of Directors of Heinz amended the SERP to provide future service benefits under a cash balance plan. Under the cash balance plan formula, a participant receives monthly pay credits based on the participant's annual bonus category; each of the named executive officers of Heinz receives a pay credit of 8% of eligible compensation. The accumulated credits earn 5% interest, compounded monthly. For service prior to May 1, 2004, participants receive a payment equal to the product of a service-related multiple, frozen as of May 1, 2004, and the participant's final average eligible compensation during the highest five of the ten years immediately prior to retirement. This product is reduced by (i) the lump sum value of the Plan A benefit (if any), and (ii) the value of the participant's Age-Related Company Contribution Account under the Employees Retirement and Savings Plan and the Employees Retirement and Savings Excess Plan. In addition to benefits under the SERP, Mr. Johnson receives benefits under an enhancement to the SERP that the Board of Directors approved on May 6, 2002. This enhancement provides for an additional benefit equal to 3.85% of final average earnings for each additional year of service after the date of the SERP enhancement. This benefit is subject to a maximum enhancement of 26.95% at 7 additional years of service. The enhancement is further limited to a total benefit equivalent to an annual annuity (from all of the Company's retirement arrangements) of 60% of final average earnings at retirement on or after the age of 60 (excluding any value received from equity awards and long-term incentives). This enhanced benefit fully vests on May 6, 2007, subject to Mr. Johnson's continued employment. If Mr. Johnson is involuntarily terminated from his position for a reason other than for cause, the benefit will fully vest as of the date of his termination. The following table entitled "U.S. Retirement Plans" shows the estimated retirement benefit for each of the named executive officers from all sources described above, stated as an annual pension equivalent beginning at age 65. The estimates assume that each executive works until age 65, and that eligible compensation under the SERP, the executive's base salary, annual bonus, and restricted stock units received in lieu of cash bonus, remain constant at Fiscal Year 2005 amounts. U.S. RETIREMENT PLANS

EXECUTIVE ESTATE LIFE INSURANCE PROGRAM In December 2001, Heinz adopted an executive estate life insurance program ("EELIP") for certain eligible executives. Under the EELIP, in 2001 and 2002, eligible executives, including two of the named executive officers, relinquished compensation in exchange for Heinz's funding of a split-dollar life insurance policy purchased by the executive's family trust ("EELIP Loans"). Each of the EELIP Loans was subject to vesting, and Heinz will automatically be repaid the amount of the EELIP 49 Loans plus interest thereon from the proceeds of the policy after the participant's and/or participant's spouse's death, as applicable. In March 2003, the EELIP was amended to eliminate the EELIP loan feature and convert the split-dollar life insurance program into a bonus life insurance program. Heinz has outstanding EELIP Loans to Messrs. Johnson and Berger, executive officers of Heinz. These EELIP Loans to Messrs. Johnson and Berger fully vested on or before September 2003, accrue interest at the annual rate of 4.99% and 4.6%, respectively, and, consistent with the EELIP, will be automatically repaid to Heinz upon payment under the related life insurance policy. As of April 27, 2005, the total due to Heinz plus accrued interest under these EELIP Loans were $5,738,293 and $507,370 from Messrs. Johnson and Berger. The above-referenced EELIP Loans which will be automatically repaid, with interest, to Heinz upon payment under the policy, are permitted to remain outstanding under the Sarbanes-Oxley Act of 2002, so long as their terms are not materially modified. SEVERANCE ARRANGEMENTS AND SPECIAL RESTRICTED STOCK UNIT AWARDS Heinz maintains severance agreements with its executive officers and certain other key executives. If an executive's employment is terminated involuntarily other than for cause, or voluntarily for good reason, within two years after a change in control of Heinz, the agreements provide for the lifting of restrictions on outstanding incentive awards, continuation of medical, life insurance and disability coverage for a three-year period, and a lump sum payment equal to three times the sum of the annual salary and bonus, including restricted stock units granted in lieu of a portion of the cash bonus opportunity (as determined under the severance agreements), of the executive plus a benefit determined by taking into account an additional three years of age and service for purposes of calculating retirement benefits. The agreements also provide that Heinz will reimburse the executive for the impact of excise taxes, if any, which may be imposed under the Internal Revenue Code with respect to certain payments contingent on a change in control. Recently, the Management Development and Compensation Committee of the Board of Directors of Heinz approved the grant of severance agreements to an expanded group of key executives of Heinz, including Mr. Cullo. Heinz has, on occasion, made restricted stock unit awards intended to facilitate retention of key employees or constitute performance awards for exceptional service to the business. Such awards have contained provisions including either accelerated vesting in the case of special performance awards, or vesting on the fifth year anniversary of the grant without the possibility of earlier vesting in the case of special retention awards. As noted in the Summary Compensation Table, Mr. Berger received an award of 26,364 restricted stock units in lieu of a portion of his cash bonus for fiscal year 2005, which vested upon the attainment of certain predetermined financial objectives relative to his business unit on June 3, 2005. Additionally, as reflected in the Summary Compensation Table, Heinz approved a grant of 10,000 restricted stock units in fiscal year 2005 to Mr. Moran as a special retention award, which will vest in five years from the date of grant. These restricted stock units will be forfeited in the event Mr. Moran leaves the employ of Heinz before the vesting date by reason of voluntary termination, involuntary termination with or without cause, or retirement. Executive officers are required to automatically defer receipt of any restricted stock units until termination of employment, or in some cases as required by the Internal Revenue Code, six months after separation of service. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table sets forth all equity securities of Heinz beneficially owned as of May 31, 2005 by each director and executive officer named in the Summary Compensation Table, and all directors, 50 director nominees and executive officers as a group, being eight in number. No named executive officer or director holds equity securities of Heinz Finance.

--------------- (1) Shares listed in this column include all shares in which the named individuals and all directors and executive officers as a group have a present beneficial economic interest, and also include all shares allocated to the accounts of the named individuals and all directors and executive officers as a group under Heinz's Employees Retirement and Savings Plan (L.A. Cullo, 4,088; W.R. Johnson, 80,218; J.P. Berger, 26,275; D.C. Moran, 161; J. Jimenez, 12,244; A.B. Winkleblack, 2,403; E.J. McMenamin, 13,917; and A. Stidd, 0). Each person has both sole voting and sole investment power with respect to the shares listed unless otherwise indicated. (2) Shares listed include shares subject to stock options granted under Heinz's stock option plans and exercisable within 60 days following May 31, 2005 (L.A. Cullo, 62,613; W.R. Johnson, 2,670,980; J.P. Berger, 425,633; D.C. Moran, 310,916; J. Jimenez, 574,369; A.B. Winkleblack, 162,554; E.J. McMenamin, 168,860; and A. Stidd, 0). (3) Shares listed include restricted stock units for Mr. Berger, whose grant of restricted stock units in lieu of a portion of his cash bonus for fiscal year 2005 vested on June 3, 2005 upon achieving specified performance objectives. (4) Percentages of less than 1 percent are omitted. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Heinz Finance and Heinz have entered into agreements that provide for financial support, administrative and other services, reimbursement for employee services and intellectual property. This section describes those material agreements between Heinz Finance and Heinz. Operational Agreements Heinz Finance entered into a services agreement with Heinz pursuant to which Heinz provides certain accounting, legal, tax and other support services and facilities to us. Under the services agreement, we reimburse Heinz for services provided by Heinz thereunder. In addition, some of the officers and employees of Heinz Finance are officers or employees of Heinz or its affiliates. In particular, Heinz Management Company employs the salaried people who conduct the business of Heinz LP, the largest subsidiary of Heinz Finance, and the costs and expenses of those employees are reimbursed by Heinz LP. If any individual provides more than de minimis services to both Heinz and Heinz Finance, the compensation of that individual will be apportioned between the two groups on terms no less favorable to us than we could obtain from unaffiliated entities. We pay a royalty to Promark Brands, Inc., for use of trademarks historically used in Heinz's U.S. business. 51 Guarantee Facility Agreement; Liquidity Agreement Heinz Finance has a guarantee facility agreement with Heinz, pursuant to which Heinz agrees to guarantee our payment of third-party obligations we have issued or owe. We pay Heinz fees equal to 10 basis points per year of the sum of the highest balance of the debt obligations with respect to which Heinz is a guarantor and the highest balance of the debt obligations with respect to which Heinz is a co-obligor. Under the terms of a liquidity agreement between Heinz and Heinz Finance, Heinz agreed to provide or make available to us from time to time loans in an aggregate principal amount of up to $400 million outstanding at any one time, with normal and customary conditions to disbursement for each loan made. Each loan under the liquidity agreement will bear interest at a floating rate per annum equal to the then applicable LIBOR plus 100 basis points. We pay Heinz a fee of 25 basis points per annum of the amount of loans available but not drawn. Other Agreements For further information regarding related party transactions, see Note 8 of Heinz Finance's consolidated financial statements for the fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003 included in this Form 10-K. ITEM 14. PRINCIPAL AUDITOR FEES AND SERVICES. PricewaterhouseCoopers LLP has been the independent accounting firm and has audited the financial statements of Heinz Finance since Fiscal 2002. The aggregate fees billed for each of the past two fiscal years are set forth below:

The audit fees relate to professional services rendered for the audit and review of the consolidated financial statements of Heinz Finance, the issuance of comfort letters and consents, and assistance with the review of documents filed with the SEC. The tax services fees relate to tax compliance in connection with the preparation of the partnership tax returns. Heinz Finance's Board of Directors adopted a revised policy effective since Fiscal 2004 which prohibits Heinz Finance from entering into non-audit related consulting agreements for services considered to have an impact on independence, and for all services prohibited by the Sarbanes-Oxley Act of 2002 and Securities and Exchange Commission regulations. The policy also contains procedures requiring Heinz Finance's Board of Directors' pre-approval of all audit and permitted non-audit services provided by the external auditors. 52 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a)(1) The following financial statements and report are filed as part of this report under Item 8 -- "Financial Statements and Supplementary Data": Report of Independent Registered Public Accounting Firm of PricewaterhouseCoopers LLP dated July 25, 2005, on Heinz Finance's consolidated financial statements and financial statement schedule filed as a part hereof for the fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003 Consolidated Statements of Income for the fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003 Consolidated Balance Sheets as of April 27, 2005 and April 28, 2004 Consolidated Statements of Shareholder's Equity for the fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003 Consolidated Statements of Cash Flows for the fiscal years ended April 27, 2005, April 28, 2004, and April 30, 2003 Notes to Consolidated Financial Statements (2) The following report and schedule is filed herewith as a part hereof: Schedule II (Valuation and Qualifying Accounts and Reserves) for the three fiscal years ended April 27, 2005, April 28, 2004 and April 30, 2003 All other schedules are omitted because they are not applicable or the required information is included herein or is shown in the consolidated financial statements or notes thereto filed as part of this report.

(3) 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. 3(i) Heinz Finance's Certificate of Incorporation is incorporated herein by reference to Exhibit 3.1 to Heinz Finance's Registration Statement on Form S-4 (Reg. 333-85064). 3(ii) Heinz Finance's By-Laws are incorporated herein by reference to Exhibit 3.2 to Heinz Finance's Registration Statement on Form S-4 (Reg. 333-85064). 4. Except as set forth below, there are no instruments with respect to long-term debt of Heinz Finance that involve indebtedness or securities authorized thereunder exceeding 10 percent of the total assets of Heinz Finance on a consolidated basis. Heinz Finance agrees to file a copy of any instrument or agreement defining the rights of holders of long-term debt of Heinz Finance upon request of the Securities and Exchange Commission. (a) The Indenture between Heinz and The First National Bank of Chicago dated as of July 15, 1992 is incorporated herein by reference to Exhibit 4(a) to Heinz's Registration Statement on Form S-3 (Reg. No. 333-48017) and the supplements to such Indenture are incorporated herein by reference to Heinz's Form 8-Ks dated March 25, 1998 and July 16, 1998 relating to Heinz's $300,000,000 6% Notes due 2008 and $250,000,000 6.375% Debentures due 2028, respectively. (i) The Supplement dated May 3, 2001 among Heinz, Heinz Finance and Bank One, National Association to the Indenture is incorporated herein by reference to Exhibit 4(a)(i) of Heinz's Form 10-K for the fiscal year ended May 2, 2001.

53 (b) The Indenture between Heinz and Bank One, National Association dated November 6, 2000, is incorporated herein by reference to Exhibit 4 to Heinz's Quarterly Report on Form 10-Q for the nine months ended January 31, 2001. (i) The Supplement dated May 3, 2001 among Heinz, Heinz Finance and Bank One, National Association to the Indenture is incorporated herein by reference to Exhibit 4(b)(i) of Heinz's Annual Report on Form 10-K for the fiscal year ended May 2, 2001. (ii) The second Supplement dated November 15, 2002 among Heinz, Heinz Finance and Bank One, National Association to the Indenture is incorporated by reference to Exhibit 4 of Heinz Finance's Quarterly Report on Form 10-Q for the nine months ended January 29, 2003. (iii) The third Supplement dated November 10, 2004 among Heinz, Heinz Finance and Bank One, National Association is incorporated by reference to Exhibit 4 of Heinz Finance's Quarterly Report on Form 10-Q for the nine months ended January 26, 2005. (iv) The fourth Supplement dated November 24, 2004 among Heinz, Heinz Finance and Bank One, National Association is incorporated herein by reference to Exhibit 4 of Heinz Finance's Quarterly Report on Form 10-Q for the nine months ended January 26, 2005. (c) The Indenture among Heinz, Heinz Finance and Bank One, National Association dated as of July 6, 2001 relating to Heinz Finance's $750,000,000 6.625% Guaranteed Notes due 2011, $700,000,000 6.00% Guaranteed Notes due 2012 and $550,000,000 6.75% Guaranteed Notes due 2032 is incorporated herein by reference to Heinz's Annual Report on Form 10-K for the fiscal year ended May 1, 2002. (d) The Certificate of Designations, Preferences and Rights of Voting Cumulative Preferred Stock, Series A of Heinz Finance is incorporated herein by reference to Exhibit 4 of Heinz's Quarterly Report on Form 10-Q for the three months ended August 1, 2001. 10 (a) Liquidity Agreement dated as of June 26, 2001 between Heinz and Heinz Finance is incorporated herein by reference to Exhibit 10.1 of Heinz Finance's Registration Statement on Form S-4 (Reg. 333-85064). (b) Administrative Services Agreement dated as of May 1, 2001 between Heinz and Heinz Finance is incorporated herein by reference to Exhibit 10.2 of Heinz Finance's Registration Statement on Form S-4 (Reg. 333-85064). (c) Guarantee Facility Letter Agreement dated May 3, 2001 to Heinz Finance from Heinz is incorporated herein by reference to Exhibit 10.3 of Heinz Finance's Registration Statement on Form S-4 (Reg. 333-85064). (d) Third Amended and Restated Partnership Agreement of H. J. Heinz Company, L.P. is incorporated herein by reference to Exhibit 10.6 of Heinz Finance's Registration Statement on Amendment No. 2 to Form S-4 (Reg. 333-85064). (i) First Amendment to Third Amended and Restated Partnership Agreement incorporated herein by reference to Exhibit 10(a) to H.J. Heinz Company's Quarterly Report on Form 10-Q for the period ended January 28, 2004. (ii) Second Amendment to Third Amended and Restated Partnership Agreement incorporated herein by reference to Exhibit 10(b) to H.J. Heinz Company's Quarterly Report On Form 10-Q for the period ended January 28, 2004.

54 (iii) Third Amendment to Third Amended and Restated Partnership Agreement. (e) Management contracts and compensatory plans: (i) 1986 Deferred Compensation Program for H. J. Heinz Company and affiliated companies, as amended and restated in its entirety effective December 6, 1995, is incorporated herein by reference to Exhibit 10(c)(i) to H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended May 1, 1995. (ii) H. J. Heinz Company 1990 Stock Option Plan is incorporated herein by reference to Appendix A to H. J. Heinz Company's Proxy Statement dated August 3, 1990. (iii) H. J. Heinz Company 1994 Stock Option Plan is incorporated herein by reference to Appendix A to H. J. Heinz Company's Proxy Statement dated August 5, 1994. (iv) H. J. Heinz Company Supplemental Executive Retirement Plan, as amended, is incorporated herein by reference to Exhibit 10(c)(ix) to H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended April 28, 1993. (v) H. J. Heinz Company Executive Deferred Compensation Plan (as amended and restated on December 27, 2001) is incorporated herein by reference to Exhibit 10(a)(vii) of H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended May 1, 2002. (vi) H. J. Heinz Company Incentive Compensation Plan is incorporated herein by reference to Appendix B to H. J. Heinz Company's Proxy Statement dated August 5, 1994. (vii) H. J. Heinz Company Stock Compensation Plan for Non- Employee Directors is incorporated herein by reference to Appendix A to H. J. Heinz Company's Proxy Statement dated August 3, 1995. (viii) H. J. Heinz Company 1996 Stock Option Plan is incorporated herein by reference to Appendix A to H. J. Heinz Company's Proxy Statement dated August 2, 1996. (ix) H. J. Heinz Company Deferred Compensation Plan for Directors is incorporated herein by reference to Exhibit 10(a)(xiii) to H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended April 29, 1998. (x) H. J. Heinz Company Global Stock Purchase Plan is incorporated herein by reference to Appendix A to H. J. Heinz Company's Proxy Statement dated August 3, 1999. (xi) Form of Severance Protection Agreement is incorporated herein by reference to Exhibit 10(a)(xiv) to H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended May 3, 2000. (xii) H. J. Heinz Company 2000 Stock Option Plan is incorporated herein by reference to Appendix A to H. J. Heinz Company's Proxy Statement dated August 4, 2000. (xiii) H. J. Heinz Company Executive Estate Life Insurance Program is incorporated herein by reference to Exhibit 10(a)(xv) to H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended May 1, 2002. (xiv) H. J. Heinz Company Restricted Stock Recognition Plan for Salaried Employees is incorporated herein by reference to Exhibit 10(a)(xiv) to H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended May 1, 2002.

55 (xv) H. J. Heinz Company Fiscal Year 2003 Stock Incentive Plan is incorporated herein by reference to H. J. Heinz Company's Proxy Statement dated August 2, 2002. (xvi) H. J. Heinz Company Senior Executive Incentive Compensation Plan is incorporated herein by reference to H. J. Heinz Company's Proxy Statement dated August 2, 2002. (xvii) Form of First Amendment to Severance Protection Agreement is incorporated herein by reference to Exhibit 10(a)(xxi) to H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2003. (xviii) Deferred Compensation Plan for Non-Employee Directors of H. J. Heinz Company (as amended and restated effective January 1, 2004) is incorporated herein by reference to H. J. Heinz Company's Quarterly Report on Form 10-Q for the three months ended January 28, 2004. (xix) Form of Stock Option Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10 (a) to the H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xx) Form of Stock Option Award and Agreement for U.S. Employees Based in the U.K. on International Assignment is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xxi) Form of Restricted Stock Unit Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xxii) Form of Restricted Stock Unit Award and Agreement for Non-U.S. Based Employees is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xxiii) Form of Five-Year Restricted Stock Unit Retention Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xxiv) Form of Five-Year Restricted Stock Unit Retention Award and Agreement for Non-U.S. Based Employees is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xxv) Form of Three-Year Restricted Stock Unit Retention Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xxvi) Form of Three-Year Restricted Stock Unit Retention Award and Agreement for Non-U.S. Based Employees is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005.

56 (xxvii) Form of Performance Unit Award Agreement is incorporated herein by reference to Exhibit 10 (a) to H. J. Heinz Company's Quarterly Report on Form 10-Q for the quarterly period ended January 26, 2005. (xxviii) Director and Named Officer Compensation. (xxix) Jeffrey P. Berger Restricted Stock Unit Award and Agreement dated November 9, 2004 is incorporated herein by reference to Exhibit 10 (a) of H. J. Heinz Company's Annual Report on Form 10- K for the fiscal year ended April 27, 2005. (xxx) Form of Fiscal Year 2006 Restricted Stock Unit Award and Agreement for U.S. Employees is incorporated herein by reference to Exhibit 10 (a) of H. J. Heinz Company's Annual Report on Form 10- K for the fiscal year ended April 27, 2005. (xxxi) Form of Fiscal Year 2006 Restricted Stock Unit Award and Agreement for non-U.S. based Employees is incorporated herein by reference to Exhibit 10 (a) of H. J. Heinz Company's Annual Report on Form 10- K for the fiscal year ended April 27, 2005. (xxxii) Amendment Number One to the H. J. Heinz Company Fiscal Year 2003 Incentive Plan is incorporated herein by reference to Exhibit 10 (a) of H. J. Heinz Company's Annual Report on Form 10- K for the fiscal year ended April 27, 2005. (xxxiii) Amendment Number One to the H. J. Heinz Company 2000 Stock Option Plan is incorporated herein by reference to Exhibit 10 (a) of H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended April 27, 2005. (xxxiv) Amendment Number One to the H. J. Heinz Company 1996 Stock Option Plan is incorporated herein by reference to Exhibit 10 (a) of H. J. Heinz Company's Annual Report on Form 10-K for the fiscal year ended April 27, 2005. (xxxv) Form of Fiscal Year 2006 Severance Protection Agreement is incorporated herein by reference to Exhibit 10 (a) of H. J. Heinz Company's Annual Report on Form 10- K for the fiscal year ended April 27, 2005. 12. Computation of Ratios of Earnings to Fixed Charges. 21. Subsidiaries of the Registrant. 24. Powers-of-attorney of Heinz Finance's directors and officers. 31(a) Rule 13a-14(a)/15(d)-14(a) Certification by the President. 31(b) Rule 13a-14(a)/15(d)-14(a) Certification by Chief Financial Officer. 32(a) Certification by the President Relating to the Annual Report Containing Financial Statements. 32(b) Certification by the Chief Financial Officer Relating to the Annual Report Containing Financial Statements. Copies of the exhibits listed above will be furnished upon request, subject to payment in advance of the cost of reproducing the exhibits requested.

57 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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, on July 25, 2005. H. J. HEINZ FINANCE COMPANY (Registrant) By: /s/ ARTHUR B. WINKLEBLACK ................................................. ARTHUR B. WINKLEBLACK Director, Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, on July 25, 2005.

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT. No annual report, other than the Annual Report for the fiscal year ended April 28, 2004 on Form 10-K, was sent to security holders. 58 SCHEDULE II H. J. HEINZ FINANCE COMPANY AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FISCAL YEARS ENDED APRIL 27, 2005, APRIL 28, 2004 AND APRIL 30, 2003 (THOUSANDS OF DOLLARS)

NOTE: (1) Principally reserves on assets sold, written-off or reclassified or spun off. EXHIBIT INDEX

HEINZ HJ FINANCE CO 10-K