Kraft 2006 Annual Report Download - page 51

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The Company's revolving credit facility, which is for its sole use, requires the maintenance of a minimum net worth of $20.0 billion. At December 31, 2006,
the Company's net worth was $28.6 billion. The Company expects to continue to meet this covenant. The revolving credit facility does not include any other
financial tests, any credit rating triggers or any provisions that could require the posting of collateral. The Company expects to refinance long-term and
short-term debt from time to time. As approximately $1.4 billion of the Company's long-term debt matures during the next twelve months, the Company will
evaluate whether and how it will refinance these amounts. The nature and amount of the Company's long-term and short-term debt and the proportionate amount
of each can be expected to vary as a result of future business requirements, market conditions and other factors.
In addition to the above, certain international subsidiaries of Kraft maintain credit lines to meet the short-term working capital needs of the international
businesses. These credit lines, which amounted to approximately $1.1 billion as of December 31, 2006, are for the sole use of the Company's international
businesses. Borrowings on these lines amounted to approximately $200 million and $400 million at December 31, 2006 and 2005, respectively. At December 31,
2006 the Company also had approximately $0.3 billion of outstanding short-term debt related to its United Biscuits acquisition discussed in Note 6.Acquisitions.
Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
The Company has no off-balance sheet arrangements other than the guarantees and contractual obligations that are discussed below.
Guarantees. As discussed in Note 18 to the consolidated financial statements, the Company's third-party guarantees, which are primarily derived from
acquisition and divestiture activities, approximated $21 million, of which $8 million have no specified expiration dates. Substantially all of the remainder expire
through 2016, with no guarantees expiring during 2007. The Company is required to perform under these guarantees in the event that a third party fails to make
contractual payments or achieve performance measures. The Company has a liability of $16 million on its consolidated balance sheet at December 31, 2006,
relating to these guarantees.
In addition, at December 31, 2006, the Company was contingently liable for $189 million of guarantees related to its own performance. These include surety
bonds related to dairy commodity purchases and guarantees related to the payment of customs duties and taxes, and letters of credit.
Guarantees do not have, and are not expected to have, a significant impact on the Company's liquidity.
47
Source: KRAFT FOODS INC, 10-K, March 01, 2007