Kraft 2008 Annual Report Download - page 16

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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Source: KRAFT FOODS INC, 10-K, February 25, 2008 Powered by Morningstar® Document Research℠