Kraft 2007 Annual Report Download - page 29

Item 2. Properties.
We have 187 manufacturing and processing facilities worldwide. In North America, we have 64 facilities, and outside of North
America, we have 123 facilities located in 44 countries. These manufacturing and processing facilities are located throughout
the following territories:
Territory
Number of
Facilities
U.S. 51
Canada 13
European Union 67
Eastern Europe, Middle East and Africa 17
Latin America 20
Asia Pacific 19
Total 187
We own 181 and lease six of these manufacturing and processing facilities. We maintain all of our plants and properties in good
condition, and we believe they are suitable and adequate for our present needs.
We have publicly announced, but not yet completed the sale or closure of five facilities in the U.S., three facilities in Canada,
six facilities in Europe, one facility in Asia Pacific and two facilities in Latin America. The numbers above include these
facilities.
As of December 31, 2007, our distribution facilities consisted of 313 distribution centers and depots worldwide. In North
America, we had 302 distribution centers and depots, more than 75% of which support our direct-store-delivery systems.
Outside North America, we had eleven distribution centers in seven countries. We own 39 of these distribution centers and three
of these depots, and we lease 128 of these distribution centers and 143 of these depots. We believe that all of these facilities are
in good condition and have sufficient capacity to meet our distribution needs in the near future.
In January 2004, we announced a three-year Restructuring Program and in January 2006, extended it through 2008. As part of
the Restructuring Program, we anticipate closing up to 35 facilities. We announced the closure of three plants during 2007; we
have now announced the closure of 30 facilities since the program began in 2004.
Item 3. Legal Proceedings.
On August 27, 2007, The Proctor & Gamble Company (“P&G”) filed suit in the U.S. District Court for the Northern District of
California against our wholly-owned subsidiary, Kraft Foods Global, Inc. (“KFGI”), for patent infringement. P&G alleges
that the plastic packaging for our Maxwell House®brand coffee infringes their U.S. Patent Number 7,169,418, entitled
“Packaging System to Provide Fresh Packed Coffee” (“P&G Patent”). P&G seeks, among other things, preliminary and
permanent injunctions enjoining our use of the alleged infringing plastic packaging, and unspecified damages. The P&G
Patent is, at the same time, the subject of a pending inter partes reexamination proceeding before the U.S. Patent and Trademark
Office, which could either invalidate, or validate, the patent, in its entirety or in part. For this reason, KFGI filed a Motion to
Stay the patent infringement suit on grounds that the outcome of the inter partes reexamination could dispose of all or some of
the asserted claims. On October 11, 2007, the Court granted KFGI’s Motion to Stay. P&G filed an appeal of the stay in
the Court of Appeals for the Federal Circuit on November 9, 2007, and KFGI then filed a motion to dismiss P&G’s appeal on
December 17, 2007. A decision on the motion is pending at this time. No further rulings are expected in this patent infringement
suit pending the outcome of the inter partes reexamination.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the fourth quarter of 2007.
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