Coca Cola 2013 Annual Report Download - page 23

In North America, as of December 31, 2013, we owned 67 beverage production facilities, 10 principal beverage concentrate and/or
syrup manufacturing plants, one facility that manufactures juice concentrates for foodservice use, and two bottled water facilities;
we leased one beverage production facility, one bottled water facility and four container manufacturing facilities; and we operated
267 principal beverage distribution warehouses, of which 94 were leased and the rest were owned. Also included in the North
America operating segment is a portion of the Atlanta office complex consisting of the North America group’s main offices.
Additionally, outside of North America, as of December 31, 2013, our Company owned and operated 17 principal beverage
concentrate manufacturing plants, of which three are included in the Eurasia and Africa operating segment, three are included in
the Europe operating segment, five are included in the Latin America operating segment, and six are included in the Pacific
operating segment, and we owned a majority interest in and operated one beverage concentrate manufacturing plant included in
the Pacific operating segment.
We own or hold a majority interest in or otherwise consolidate under applicable accounting rules bottling operations that, as of
December 31, 2013, owned 75 principal beverage bottling and canning plants located throughout the world. These plants are
included in the Bottling Investments operating segment.
Management believes that our Company’s facilities for the production of our products are suitable and adequate, that they are
being appropriately utilized in line with past experience, and that they have sufficient production capacity for their present
intended purposes. The extent of utilization of such facilities varies based upon seasonal demand for our products. However,
management believes that additional production can be obtained at the existing facilities by adding personnel and capital
equipment and, at some facilities, by adding shifts of personnel or expanding the facilities. We continuously review our anticipated
requirements for facilities and, on the basis of that review, may from time to time acquire additional facilities and/or dispose of
existing facilities.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various legal proceedings, including the proceedings specifically discussed below. 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.
Aqua-Chem Litigation
On December 20, 2002, the Company filed a lawsuit (The Coca-Cola Company v. Aqua-Chem, Inc., Civil Action No. 2002CV631-50) in
the Superior Court of Fulton County, Georgia (the ‘‘Georgia Case’’), seeking a declaratory judgment that the Company has no
obligation to its former subsidiary, Aqua-Chem, Inc., now known as Cleaver-Brooks, Inc. (‘‘Aqua-Chem’’), for any past, present or
future liabilities or expenses in connection with any claims or lawsuits against Aqua-Chem. Subsequent to the Company’s filing but
on the same day, Aqua-Chem filed a lawsuit (Aqua-Chem, Inc. v. The Coca-Cola Company, Civil Action No. 02CV012179) in the
Circuit Court, Civil Division of Milwaukee County, Wisconsin (the ‘‘Wisconsin Case’’). In the Wisconsin Case, Aqua-Chem sought
a declaratory judgment that the Company is responsible for all liabilities and expenses not covered by insurance in connection
with certain of Aqua-Chem’s general and product liability claims arising from occurrences prior to the Company’s sale of
Aqua-Chem in 1981, and a judgment for breach of contract in an amount exceeding $9 million for costs incurred by Aqua-Chem
to date in connection with such claims. The Wisconsin Case initially was stayed, pending final resolution of the Georgia Case, and
later was voluntarily dismissed without prejudice by Aqua-Chem.
The Company owned Aqua-Chem from 1970 to 1981. 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. The
Company sold Aqua-Chem to Lyonnaise American Holding, Inc., in 1981 under the terms of a stock sale agreement. The 1981
agreement, and a subsequent 1983 settlement agreement, outlined the parties’ rights and obligations concerning past and future
claims and lawsuits involving Aqua-Chem. Cleaver-Brooks, a division of Aqua-Chem, manufactured boilers, some of which
contained asbestos 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.
The parties agreed in 2004 to stay the Georgia Case pending the outcome of insurance coverage litigation filed by certain
Aqua-Chem insurers on March 26, 2004. In the coverage action, five plaintiff insurance companies filed suit (Century Indemnity
Company, et al. v. Aqua-Chem, Inc., The Coca-Cola Company, et al., Case No. 04CV002852) in the Circuit Court, Civil
Division of Milwaukee County, Wisconsin, against the Company, Aqua-Chem and 16 insurance companies. Several of the
policies that were the subject of the coverage action had been issued to the Company during the period (1970 to 1981) when
the Company owned Aqua-Chem. The complaint sought a determination of the respective rights and obligations under the
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