Coca Cola 2011 Annual Report Download - page 114

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Operating Leases
The following table summarizes our minimum lease payments under noncancelable operating leases with initial or remaining lease
terms in excess of one year as of December 31, 2011 (in millions):
Operating
Years Ending December 31, Lease Payments
2012 $ 241
2013 174
2014 133
2015 101
2016 78
Thereafter 270
Total minimum operating lease payments1$ 997
1Income associated with sublease arrangements is not significant.
NOTE 12: STOCK COMPENSATION PLANS
Our Company grants stock options and restricted stock awards to certain employees of the Company. Total stock-based
compensation expense was $354 million, $380 million and $241 million in 2011, 2010 and 2009, respectively, and was included as a
component of selling, general and administrative expenses in our consolidated statements of income. The total income tax benefit
recognized in our consolidated statements of income related to stock-based compensation arrangements was $99 million,
$110 million and $68 million in 2011, 2010 and 2009, respectively.
As of December 31, 2011, we had $516 million of total unrecognized compensation cost related to nonvested stock-based
compensation arrangements granted under our plans. This cost is expected to be recognized over a weighted-average period of
1.8 years as stock-based compensation expense. This expected cost does not include the impact of any future stock-based
compensation awards.
As a result of our acquisition of CCE’s North American business, the Company assumed certain stock-based compensation plans
previously sponsored by CCE. Shares from these plans remain available for future grant to current employees who were
employees of CCE or its subsidiaries prior to the acquisition or who are hired by the Company or its subsidiaries following the
acquisition. The assumed Coca-Cola Enterprises Inc. 2001 Stock Option Plan, Coca-Cola Enterprises Inc. 2004 Stock Award Plan
and Coca-Cola Enterprises Inc. 2007 Incentive Award Plan previously sponsored by CCE have approximately 14 million shares
available for grant after conversion of CCE common stock into our common stock. The Company has not granted any equity
awards from the assumed plans.
Stock Option Plans
The fair value of our stock option grants is amortized over the vesting period, generally four years. The fair value of each option
award is estimated on the grant date using a Black-Scholes-Merton option-pricing model. The weighted-average fair value of
options granted during the past three years and the weighted-average assumptions used in the Black-Scholes-Merton option-
pricing model for such grants were as follows:
2011 2010 2009
Fair value of options at grant date $ 9.28 $ 9.39 $ 6.38
Dividend yield12.7% 2.9% 3.4%
Expected volatility219.0% 20.0% 20.0%
Risk-free interest rate32.3% 3.0% 2.8%
Expected term of the option45 years 6 years 6 years
1The dividend yield is the calculated yield on the Company’s stock at the time of the grant.
2Expected volatility is based on implied volatilities from traded options on the Company’s stock, historical volatility of the Company’s stock and other
factors.
3The risk-free interest rate for the period matching the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of
the grant.
4The expected term of the option represents the period of time that options granted are expected to be outstanding and is derived by analyzing
historic exercise behavior.
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