Coca Cola 2013 Annual Report Download - page 104

amortization of these fair value adjustments will be a reduction of interest expense in future periods, which will typically result in
our interest expense being less than the actual interest paid to service the debt. Total interest paid was $498 million, $574 million
and $573 million in 2013, 2012 and 2011, respectively.
Maturities of long-term debt for the five years succeeding December 31, 2013, are as follows (in millions):
Maturities of
Long-Term Debt
2014 $ 1,024
2015 2,573
2016 2,681
2017 1,394
2018 3,298
NOTE 11: COMMITMENTS AND CONTINGENCIES
Guarantees
As of December 31, 2013, we were contingently liable for guarantees of indebtedness owed by third parties of $662 million, of
which $288 million was related to VIEs. Refer to Note 1 for additional information related to the Company’s maximum exposure
to loss due to our involvement with VIEs. Our guarantees are primarily related to third-party customers, bottlers, vendors and
container manufacturing operations and have arisen through the normal course of business. These guarantees have various terms,
and none of these guarantees was individually significant. The amount represents the maximum potential future payments that we
could be required to make under the guarantees; however, we do not consider it probable that we will be required to satisfy these
guarantees.
We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations.
Legal Contingencies
The Company is involved in various legal proceedings. We establish reserves for specific legal proceedings when we determine that
the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management has also
identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no
estimate of possible losses can be made. Management believes that the total liabilities to the Company that may arise as a result
of currently pending legal proceedings will not have a material adverse effect on the Company taken as a whole.
During the period from 1970 to 1981, our Company owned Aqua-Chem, Inc., now known as Cleaver-Brooks, Inc. (‘‘Aqua-Chem’’).
During that time, the Company purchased over $400 million of insurance coverage, which also insures Aqua-Chem for some of its
prior and future costs for certain product liability and other claims. A division of Aqua-Chem manufactured certain boilers that
contained gaskets that Aqua-Chem purchased from outside suppliers. Several years after our Company sold this entity, Aqua-Chem
received its first lawsuit relating to asbestos, a component of some of the gaskets. Aqua-Chem was first named as a defendant in
asbestos lawsuits in or around 1985 and currently has approximately 40,000 active claims pending against it. In September 2002,
Aqua-Chem notified our Company that it believed we were obligated for certain costs and expenses associated with its asbestos
litigations. Aqua-Chem demanded that our Company reimburse it for approximately $10 million for out-of-pocket litigation-related
expenses. Aqua-Chem also demanded that the Company acknowledge a continuing obligation to Aqua-Chem for any future liabilities
and expenses that are excluded from coverage under the applicable insurance or for which there is no insurance. Our Company
disputes Aqua-Chem’s claims, and we believe we have no obligation to Aqua-Chem for any of its past, present or future liabilities,
costs or expenses. Furthermore, we believe we have substantial legal and factual defenses to Aqua-Chem’s claims. The parties
entered into litigation in Georgia to resolve this dispute, which was stayed by agreement of the parties pending the outcome of
litigation filed in Wisconsin by certain insurers of Aqua-Chem. In that case, five plaintiff insurance companies filed a declaratory
judgment action against Aqua-Chem, the Company and 16 defendant insurance companies seeking a determination of the parties’
rights and liabilities under policies issued by the insurers and reimbursement for amounts paid by plaintiffs in excess of their
obligations. During the course of the Wisconsin insurance coverage litigation, Aqua-Chem and the Company reached settlements
with several of the insurers, including plaintiffs, who have or will pay funds into an escrow account for payment of costs arising from
the asbestos claims against Aqua-Chem. On 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
102