Coca Cola 2015 Annual Report Download - page 113

The Company firmly believes that the IRS' claims are without merit and plans to pursue all available administrative and judicial remedies necessary to
resolve this matter. To that end, the Company filed a petition in the U.S. Tax Court on December 14, 2015. The Company intends to vigorously defend its
position and is confident in its ability to prevail on the merits. The Company regularly assesses the likelihood of adverse outcomes resulting from
examinations such as this to determine the adequacy of its tax reserves. The Company believes that the final adjudication of this matter will not have a
material impact on its consolidated financial position, results of operations or cash flows and that it has adequate tax reserves for all tax matters. However, the
ultimate outcome of disputes of this nature is uncertain, and if the IRS were to prevail on its assertions, the additional tax, interest, and any potential penalties
could have a material adverse impact on the Company's financial position, results of operations or cash flows.
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 $560 million and
$530 million as of December 31, 2015 and 2014, respectively.
Workforce (Unaudited)
We refer to our employees as "associates." As of December 31, 2015, our Company had approximately 123,200 associates, of which approximately 60,900
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, 2015, approximately 17,500 associates, excluding seasonal hires, in North America were covered by collective bargaining agreements.
These agreements typically have terms of three years 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.
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, 2015 (in millions):
Year Ended December 31,
Operating Lease
Payments
2016 $ 171
2017 109
2018 89
2019 68
2020 59
Thereafter 220
Total minimum operating lease payments1
$ 716
1 Income associated with sublease arrangements is not significant.
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Our Company grants awards under its stock-based compensation plans to certain employees of the Company. Total stock-based compensation expense was
$236 million, $209 million and $227 million in 2015, 2014 and 2013, 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 awards under
these plans was $65 million, $57 million and $62 million in 2015, 2014 and 2013, respectively. Beginning in 2015, certain employees who had previously
been eligible for long-term equity awards received long-term performance cash awards. Employees who receive these performance cash awards do not receive
equity awards as part of the long-term incentive program.
As of December 31, 2015, we had $319 million of total unrecognized compensation cost related to nonvested stock-based compensation awards 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.
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