The Coca-Cola Company Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Hedging Transactions and Derivative Financial Instruments (Tables)

Hedging Transactions and Derivative Financial Instruments (Tables)

9 Months Ended

Oct. 02, 2015

Hedging Transactions and Derivative Financial Instruments

Derivative instruments, fair value, designated as hedging instruments

The following table presents the fair values of the Company's derivative instruments that were designated and qualified as part of a hedging relationship (in millions):



		Fair Value^1,2
Derivatives Designated as Hedging Instruments	Balance Sheet Location¹	October 2, 2015		December 31, 2014
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	644	$	923
Foreign currency contracts	Other assets	443		346
Interest rate contracts	Prepaid expenses and other assets	24		14
Interest rate contracts	Other assets	88		146
Total assets		$	1,199	$	1,429
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	29	$	24
Foreign currency contracts	Other liabilities	44		249
Commodity contracts	Accounts payable and accrued expenses	1		1
Interest rate contracts	Accounts payable and accrued expenses	14		11
Interest rate contracts	Other liabilities	263		35
Total liabilities		$	351	$	320

¹All of the Company's derivative instruments are carried at fair value in our condensed consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 14 for the net presentation of the Company's derivative instruments.

²Refer to Note 14 for additional information related to the estimated fair value.

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following table presents the fair values of the Company's derivative instruments that were not designated as hedging instruments (in millions):



		Fair Value^1,2
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location¹	October 2, 2015		December 31, 2014
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	59	$	44
Foreign currency contracts	Other assets	239		231
Commodity contracts	Prepaid expenses and other assets	7		9
Commodity contracts	Other assets	1		1
Other derivative instruments	Prepaid expenses and other assets	2		14
Other derivative instruments	Other assets	—		2
Total assets		$	308	$	301
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	20	$	33
Foreign currency contracts	Other liabilities	2		21
Commodity contracts	Accounts payable and accrued expenses	153		156
Commodity contracts	Other liabilities	31		17
Interest rate contracts	Other liabilities	2		2
Other derivative instruments	Accounts payable and accrued expenses	27		11
Other derivative instruments	Other liabilities	20		—
Total liabilities		$	255	$	240

²Refer to Note 14 for additional information related to the estimated fair value.

Derivative instruments, designated as hedging instruments, gain (loss) in statement of financial performance

The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the three months ended October 2, 2015 (in millions):



	Gain (Loss) Recognized in Other Comprehensive Income ("OCI")			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	1		Net operating revenues	$	170		$	—		²
Foreign currency contracts	22			Cost of goods sold	16			—			²
Foreign currency contracts	—			Interest expense	(3		)	—
Interest rate contracts	(223		)	Interest expense	1			(3		)
Commodity contracts	(1		)	Cost of goods sold	(1		)	—
Total	$	(201	)		$	183		$	(3	)

¹The Company records gains and losses reclassified from AOCI into income for the effective portion and the ineffective portion, if any, to the same line items in our condensed consolidated statements of income.

²Includes a de minimis amount of ineffectiveness in the hedging relationship.

The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the nine months ended October 2, 2015 (in millions):



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	727		Net operating revenues	$	468		$	—		²
Foreign currency contracts	52			Cost of goods sold	44			—			²
Foreign currency contracts	18			Interest expense	(7		)	—
Interest rate contracts	(187		)	Interest expense	(2		)	(3		)
Commodity contracts	(2		)	Cost of goods sold	(2		)	—
Total	$	608			$	501		$	(3	)

²Includes a de minimis amount of ineffectiveness in the hedging relationship.



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	490		Net operating revenues	$	19		$	—
Foreign currency contracts	36			Cost of goods sold	5			—		²
Foreign currency contracts	(93		)	Other income (loss) — net	(52		)	—
Interest rate contracts	(9		)	Interest expense	—			—
Commodity contracts	—			Cost of goods sold	1			—
Total	$	424			$	(27	)	$	—

²Includes a de minimis amount of ineffectiveness in the hedging relationship.

The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the nine months ended September 26, 2014 (in millions):



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	378		Net operating revenues	$	62		$	—	²
Foreign currency contracts	15			Cost of goods sold	25			—		²
Foreign currency contracts	(93		)	Other income (loss) — net	(52		)	—
Interest rate contracts	(100		)	Interest expense	—			—
Commodity contracts	1			Cost of goods sold	2			—
Total	$	201			$	37		$	—

²Includes a de minimis amount of ineffectiveness in the hedging relationship.

Derivative instruments, fair value hedges, gain (loss) recognized in income

The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings during the three months ended October 2, 2015 and September 26, 2014 (in millions):



Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income ¹
		Three Months Ended
		October 2, 2015			September 26, 2014
Interest rate contracts	Interest expense	$	151		$	(36	)
Fixed-rate debt	Interest expense	(152		)	44
Net impact to interest expense		$	(1	)	$	8
Foreign currency contracts	Other income (loss) — net	$	82		$	12
Available-for-sale securities	Other income (loss) — net	(87		)	(18		)
Net impact to other income (loss) — net		$	(5	)	$	(6	)
Net impact of fair value hedging instruments		$	(6	)	$	2

¹The net impacts represent the ineffective portions of the hedge relationships and the amounts excluded from the assessment of hedge effectiveness.

The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings during the nine months ended October 2, 2015 and September 26, 2014 (in millions):



Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income ¹
		Nine Months Ended
		October 2, 2015			September 26, 2014
Interest rate contracts	Interest expense	$	(71	)	$	(10	)
Fixed-rate debt	Interest expense	79			29
Net impact to interest expense		$	8		$	19
Foreign currency contracts	Other income (loss) — net	$	217		$	(7	)
Available-for-sale securities	Other income (loss) — net	(231		)	(10		)
Net impact to other income (loss) — net		$	(14	)	$	(17	)
Net impact of fair value hedging instruments		$	(6	)	$	2

¹The net impacts represent the ineffective portions of the hedge relationships and the amounts excluded from the assessment of hedge effectiveness.

Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions):



	Notional Amount				Gain (Loss) Recognized in OCI
	as of				Three Months Ended					Nine Months Ended
	October 2, 2015		December 31, 2014		October 2, 2015			September 26, 2014		October 2, 2015			September 26, 2014
Foreign currency contracts	$	1,657	$	2,047	$	274		$	134	$	680		$	(8	)
Foreign currency denominated debt	11,420		—		(104		)	—		(386		)	—
Total	$	13,077	$	2,047	$	170		$	134	$	294		$	(8	)

Schedule of Derivative Instruments Not Designated as Hedging Instruments Gain (Loss) in Statement of Financial Performance [Table Text Block]

The following tables present the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions):



		Three Months Ended
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	October 2, 2015			September 26, 2014
Foreign currency contracts	Net operating revenues	$	34		$	6
Foreign currency contracts	Other income (loss) — net	(26		)	(70		)
Foreign currency contracts	Cost of goods sold	2			—
Commodity contracts	Net operating revenues	(9		)	(9		)
Commodity contracts	Cost of goods sold	(133		)	25
Commodity contracts	Selling, general and administrative expenses	(14		)	(15		)
Other derivative instruments	Selling, general and administrative expenses	(12		)	3
Other derivative instruments	Other income (loss) — net	(24		)	18
Total		$	(182	)	$	(42	)



		Nine Months Ended
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	October 2, 2015			September 26, 2014
Foreign currency contracts	Net operating revenues	$	43		$	(12	)
Foreign currency contracts	Other income (loss) — net	(75		)	(47		)
Foreign currency contracts	Cost of goods sold	3			—
Commodity contracts	Net operating revenues	(8		)	(9		)
Commodity contracts	Cost of goods sold	(152		)	60
Commodity contracts	Selling, general and administrative expenses	(13		)	(14		)
Other derivative instruments	Selling, general and administrative expenses	(11		)	17
Other derivative instruments	Other income (loss) — net	(86		)	26
Total		$	(299	)	$	21