Coca Cola 2013 Annual Report Download - page 106

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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, 2013 (in millions):
Operating
Year Ended December 31, Lease Payments
2014 $ 252
2015 180
2016 142
2017 107
2018 88
Thereafter 276
Total minimum operating lease payments1$ 1,045
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 $227 million, $259 million and $354 million in 2013, 2012 and 2011, 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 $62 million,
$72 million and $99 million in 2013, 2012 and 2011, respectively.
As of December 31, 2013, we had $416 million of total unrecognized compensation cost related to nonvested share-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.
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:
2013 2012 2011
Fair value of options at grant date $ 3.73 $ 3.80 $ 4.64
Dividend yield12.8% 2.7% 2.7%
Expected volatility217.0% 18.0% 19.0%
Risk-free interest rate30.9% 1.0% 2.3%
Expected term of the option45 years 5 years 5 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
historical exercise behavior.
Generally, stock options granted from 1999 through July 2003 expire 15 years from the date of grant and stock options granted in
December 2003 and thereafter expire 10 years from the date of grant. The shares of common stock to be issued, transferred
and/or sold under the stock option plans are made available from authorized and unissued Company common stock or from the
Company’s treasury shares. In 2007, the Company began issuing common stock under these plans from the Company’s treasury
shares.
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