Coca Cola 2011 Annual Report Download - page 113

July 24, 2007, the Wisconsin trial court entered a final declaratory judgment regarding the rights and obligations of the parties
under the insurance policies issued by the remaining defendant insurers, which judgment was not appealed. The judgment directs,
among other things, that each insurer whose policy is triggered is jointly and severally liable for 100 percent of Aqua-Chem’s
losses up to policy limits. The court’s judgment concluded the Wisconsin insurance coverage litigation. The Georgia litigation
remains subject to the stay agreement. The Company and Aqua-Chem continued to negotiate with various insurers that were
defendants in the Wisconsin insurance coverage litigation over those insurers’ obligations to defend and indemnify Aqua-Chem for
the asbestos-related claims. The Company anticipated that a final settlement with three of those insurers would be finalized in
May 2011, but such insurers repudiated their settlement commitments and, as a result, Aqua-Chem and the Company filed suit
against them in Wisconsin state court to enforce the coverage-in-place settlement or, in the alternative, to obtain a declaratory
judgment validating Aqua-Chem and the Company’s interpretation of the court’s judgment in the Wisconsin insurance coverage
litigation. Whether or not Aqua-Chem and the Company prevail in the coverage-in-place settlement litigation, these three
insurance companies will remain subject to the court’s judgment in the Wisconsin insurance coverage litigation.
The Company is unable to estimate at this time the amount or range of reasonably possible loss it may ultimately incur as a result
of asbestos-related claims against Aqua-Chem. The Company believes that assuming (a) the defense and indemnity costs for the
asbestos-related claims against Aqua-Chem in the future are in the same range as during the past five years, and (b) the various
insurers that cover the asbestos-related claims against Aqua-Chem remain solvent, regardless of the outcome of the
coverage-in-place settlement litigation, there will likely be little defense or indemnity costs that are not covered by insurance over
the next five to seven years and, therefore, it is unlikely that Aqua-Chem would seek indemnification from the Company within
that period of time. In the event Aqua-Chem and the Company prevail in the coverage-in-place settlement litigation, and based on
the same assumptions, the Company believes insurance coverage for substantially all defense and indemnity costs would be
available for the next 10 to 12 years.
Indemnifications
At the time we acquire or divest our interest in an entity, we sometimes agree to indemnify the seller or buyer for specific
contingent liabilities. Management believes that any liability to the Company that may arise as a result of any such indemnification
agreements will not have a material adverse effect on the Company taken as a whole.
Tax Audits
The Company is involved in various tax matters, with respect to some of which the outcome is uncertain. These audits may result
in the assessment of additional taxes that are subsequently resolved with authorities or potentially through the courts. Refer to
Note 14.
Risk Management Programs
The Company has numerous global insurance programs in place to help protect the Company from the risk of loss. In general,
we are self-insured for large portions of many different types of claims; however, we do use commercial insurance above our
self-insured retentions to reduce the Company’s risk of catastrophic loss. Our reserves for the Company’s self-insured losses are
estimated through actuarial procedures of the insurance industry and by using industry assumptions, adjusted for our specific
expectations based on our claim history. The Company’s self-insurance reserves totaled $527 million and $502 million as of
December 31, 2011 and 2010, respectively.
Workforce (Unaudited)
We refer to our employees as ‘‘associates.’’ As of December 31, 2011, our Company had approximately 146,200 associates, of
which approximately 67,400 associates were located in the United States. Our Company, through its divisions and subsidiaries, is a
party to numerous collective bargaining agreements. As of December 31, 2011, approximately 19,000 associates in North America
were covered by collective bargaining agreements. These agreements typically have terms of three to five years. We currently
expect that we will be able to renegotiate such agreements on satisfactory terms when they expire. The Company believes that its
relations with its associates are generally satisfactory.
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