Coca Cola 2015 Annual Report Download - page 22

If we are unable to renew collective bargaining agreements on satisfactory terms, or we or our bottling partners experience strikes, work stoppages or
labor unrest, our business could suffer.
Many of our associates at our key manufacturing locations and bottling plants are covered by collective bargaining agreements. While we generally have
been able to renegotiate collective bargaining agreements on satisfactory terms when they expire and regard our relations with associates and their
representatives as generally satisfactory, negotiations in the current environment remain challenging, as the Company must have competitive cost structures
in each market while meeting the compensation and benefits needs of our associates. If we are unable to renew collective bargaining agreements on
satisfactory terms, our labor costs could increase, which could affect our profit margins. In addition, many of our bottling partners' employees are represented
by labor unions. Strikes, work stoppages or other forms of labor unrest at any of our major manufacturing facilities or at our bottling operations' or our major
bottlers' plants could impair our ability to supply concentrates and syrups to our bottling partners or our bottlers' ability to supply finished beverages to
customers, which could reduce our net operating revenues and could expose us to customer claims. Furthermore, from time to time we and our bottling
partners restructure manufacturing and other operations to improve productivity. Restructuring activities and the announcement of plans for future
restructuring activities may result in a general increase in insecurity among some Company associates and some employees in other parts of the Coca-Cola
system, which may have negative implications on employee morale, work performance, escalation of grievances and successful negotiation of collective
bargaining agreements. If these labor relations are not effectively managed at the local level, they could escalate in the form of corporate campaigns
supported by the labor organizations and could negatively affect our Company's overall reputation and brand image, which in turn could have a negative
impact on our products' acceptance by consumers.
We may be required to recognize impairment charges that could materially affect our financial results.
We assess our goodwill, trademarks and other intangible assets as well as our other long-lived assets as and when required by accounting principles generally
accepted in the United States to determine whether they are impaired and, if they are, we record appropriate impairment charges. Our equity method investees
also perform impairment tests, and we record our proportionate share of impairment charges recorded by them adjusted, as appropriate, for the impact of items
such as basis differences, deferred taxes and deferred gains. It is possible that we may be required to record significant impairment charges or our
proportionate share of significant impairment charges recorded by equity method investees in the future and, if we do so, our operating or equity income
could be materially adversely affected.
We may incur multi-employer plan withdrawal liabilities in the future, which could negatively impact our financial performance.
We participate in certain multi-employer pension plans in the United States. Our U.S. multi-employer pension plan expense totaled $40 million in 2015. The
U.S. multi-employer pension plans in which we currently participate have contractual arrangements that extend into 2020. If, in the future, we choose to
withdraw from any of the multi-employer pension plans in which we currently participate, we would need to record the appropriate withdrawal liabilities at
that time, which could negatively impact our financial performance in the applicable periods.
If we do not successfully integrate and manage our Company-owned or -controlled bottling operations or other acquired businesses or brands, our results
could suffer.
From time to time we acquire or take control of bottling operations, often in underperforming markets where we believe we can use our resources and
expertise to improve performance. In addition, we routinely evaluate opportunities to acquire other businesses or brands to expand our beverage portfolio
and capabilities. We may incur unforeseen liabilities and obligations in connection with acquiring, taking control of or managing acquired bottling
operations, other businesses or brands and may encounter unexpected difficulties and costs in restructuring and integrating them into our Company's
operating and internal control structures. We may also experience delays in extending our Company's internal control over financial reporting to newly
acquired or controlled bottling operations or other businesses, which may increase the risk of failure to prevent misstatements in their financial records and in
our consolidated financial statements. Our financial performance depends in large part on how well we can manage and improve the performance of
Company-owned or -controlled bottling operations and other acquired businesses or brands. We cannot assure you, however, that we will be able to achieve
our strategic and financial objectives for such bottling operations or other acquisitions. If we are unable to achieve such objectives, our consolidated results
could be negatively affected.
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