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

Sep. 30, 2016

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	September 30, 2016		December 31, 2015
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	283	$	572
Foreign currency contracts	Other assets	155		246
Commodity contracts	Prepaid expenses and other assets	—		1
Interest rate contracts	Prepaid expenses and other assets	20		20
Interest rate contracts	Other assets	290		62
Total assets		$	748	$	901
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	153	$	51
Foreign currency contracts	Other liabilities	60		75
Interest rate contracts	Accounts payable and accrued expenses	98		53
Interest rate contracts	Other liabilities	69		231
Total liabilities		$	380	$	410

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	September 30, 2016		December 31, 2015
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	198	$	105
Foreign currency contracts	Other assets	4		241
Commodity contracts	Prepaid expenses and other assets	22		2
Commodity contracts	Other assets	1		1
Other derivative instruments	Prepaid expenses and other assets	—		17
Other derivative instruments	Other assets	1		3
Total assets		$	226	$	369
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	47	$	59
Foreign currency contracts	Other liabilities	9		9
Commodity contracts	Accounts payable and accrued expenses	41		154
Commodity contracts	Other liabilities	1		19
Interest rate contracts	Other liabilities	2		1
Other derivative instruments	Accounts payable and accrued expenses	6		5
Other derivative instruments	Other liabilities	1		2
Total liabilities		$	107	$	249

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 September 30, 2016 (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	$	(48	)	Net operating revenues	$	141		$	(2	)
Foreign currency contracts	9			Cost of goods sold	8			—
Foreign currency contracts	—			Interest expense	(2		)	—
Foreign currency contracts	36			Other income (loss) — net	40			—
Interest rate contracts	26			Interest expense	(2		)	3
Commodity contracts	(1		)	Cost of goods sold	—			—
Total	$	22			$	185		$	1

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.

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 30, 2016 (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	$	(348	)	Net operating revenues	$	419		$	(3	)
Foreign currency contracts	(34		)	Cost of goods sold	41			(1		)
Foreign currency contracts	—			Interest expense	(6		)	—
Foreign currency contracts	25			Other income (loss) — net	38			—
Interest rate contracts	(226		)	Interest expense	(6		)	3
Commodity contracts	—			Cost of goods sold	—			—
Total	$	(583	)		$	486		$	(1	)



	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	$	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	)

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.

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 September 30, 2016 and October 2, 2015 (in millions):



Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income¹
		Three Months Ended
		September 30, 2016			October 2, 2015
Interest rate contracts	Interest expense	$	—		$	151
Fixed-rate debt	Interest expense	(1		)	(152		)
Net impact to interest expense		$	(1	)	$	(1	)
Foreign currency contracts	Other income (loss) — net	$	(67	)	$	82
Available-for-sale securities	Other income (loss) — net	66			(87		)
Net impact to other income (loss) — net		$	(1	)	$	(5	)
Net impact of fair value hedging instruments		$	(2	)	$	(6	)

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 September 30, 2016 and October 2, 2015 (in millions):



Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income¹
		Nine Months Ended
		September 30, 2016			October 2, 2015
Interest rate contracts	Interest expense	$	398		$	(71	)
Fixed-rate debt	Interest expense	(364		)	79
Net impact to interest expense		$	34		$	8
Foreign currency contracts	Other income (loss) — net	$	(37	)	$	217
Available-for-sale securities	Other income (loss) — net	34			(231		)
Net impact to other income (loss) — net		$	(3	)	$	(14	)
Net impact of fair value hedging instruments		$	31		$	(6	)

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
	September 30, 2016		December 31, 2015		September 30, 2016			October 2, 2015			September 30, 2016			October 2, 2015
Foreign currency denominated debt	$	11,740	$	10,912	$	(67	)	$	(104	)	$	(323	)	$	(386	)
Foreign currency contracts	565		1,347		(9		)	274			(235		)	680
Total	$	12,305	$	12,259	$	(76	)	$	170		$	(558	)	$	294

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	September 30, 2016			October 2, 2015
Foreign currency contracts	Net operating revenues	$	(6	)	$	34
Foreign currency contracts	Cost of goods sold	—			2
Foreign currency contracts	Other income (loss) — net	—			(26		)
Interest rate contracts	Interest expense	2			—
Commodity contracts	Net operating revenues	—			(9		)
Commodity contracts	Cost of goods sold	(9		)	(133		)
Commodity contracts	Selling, general and administrative expenses	(1		)	(14		)
Other derivative instruments	Selling, general and administrative expenses	3			(12		)
Other derivative instruments	Other income (loss) — net	—			(24		)
Total		$	(11	)	$	(182	)



		Nine Months Ended
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	September 30, 2016			October 2, 2015
Foreign currency contracts	Net operating revenues	$	(34	)	$	43
Foreign currency contracts	Cost of goods sold	4			3
Foreign currency contracts	Other income (loss) — net	(116		)	(75		)
Interest rate contracts	Interest expense	2			—
Commodity contracts	Net operating revenues	3			(8		)
Commodity contracts	Cost of goods sold	68			(152		)
Commodity contracts	Selling, general and administrative expenses	3			(13		)
Other derivative instruments	Selling, general and administrative expenses	11			(11		)
Other derivative instruments	Other income (loss) — net	(14		)	(86		)
Total		$	(73	)	$	(299	)