Kraft 2006 Annual Report Download - page 21

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Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
The Company has 159 manufacturing and processing facilities worldwide. In North America, the Company has 67 facilities, and outside of North America
there are 92 facilities located in 41 countries. These manufacturing and processing facilities are located throughout the following territories:
Territory
Number of
Facilities
United States 54
Canada 13
European Union 45
Eastern Europe, Middle East and Africa 13
Latin America 22
Asia Pacific 12
Total 159
The Company owns 154 and leases 5 of these manufacturing and processing facilities. All of the Company's plants and properties are maintained in good
condition, and the Company believes that they are suitable and adequate for its present needs.
The numbers above include 3 facilities in the United States, 5 facilities in the European Union, and 3 facilities in Latin America, for all of which closure or
sale has been publicly announced but has not yet been completed.
As of December 31, 2006, the Company's distribution facilities consisted of 327 distribution centers and depots worldwide. In North America, the Company
had 313 distribution centers and depots, more than 75% of which support the Company's direct-store-delivery systems. Outside North America, the Company had
14 distribution centers in 8 countries. The Company owns 44 of these distribution centers and 3 of these depots and leases 131 of these distribution centers and
149 of these depots. The Company believes that all of these facilities are in good condition and have sufficient capacity to meet the Company's distribution needs
for the foreseeable future.
In January 2004, the Company announced a three-year restructuring program and in January 2006, announced plans to expand its restructuring efforts
through 2008. The entire restructuring program is expected to result in the closure of up to 40 facilities. In 2006, the Company announced the closing of 8 plants,
for a total of 27 since the commencement of the restructuring program in January 2004.
Item 3. Legal Proceedings.
Legal Proceedings
The Company is party to a variety of legal proceedings arising out of the normal course of business, including the matters discussed below. While the results
of litigation cannot be predicted with certainty, management believes that the final outcome of these proceedings will not have a material adverse effect on the
Company's consolidated financial position, results of operations or cash flows.
Gaouars matter. In October 2002, Mr. Mustapha Gaouar and five other family members (collectively "the Gaouars") filed suit in the Commercial Court of
Casablanca against Kraft Foods Maroc and Mr. Omar Berrada claiming damages of approximately $31 million arising from a non-compete undertaking signed
by Mr. Gaouar allegedly under duress. The non-compete clause was contained in an
17
Source: KRAFT FOODS INC, 10-K, March 01, 2007