FAIR VALUE MEASUREMENTS (Tables)
|
12 Months Ended |
Dec. 31, 2016 |
|---|
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] |
|
| Assets and liabilities measured at fair value on a recurring basis |
The following tables summarize those assets and liabilities measured at fair value on a recurring basis (in millions):
|
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|
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|
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|
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December 31, 2016 |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Other |
|
4 |
Netting
Adjustment
|
|
5 |
Fair Value
Measurements
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Trading securities1
|
$ |
202 |
|
|
$ |
115 |
|
|
$ |
4 |
|
|
$ |
63 |
|
|
$ |
— |
|
|
$ |
384 |
|
|
Available-for-sale securities1
|
1,655 |
|
|
4,619 |
|
|
139 |
|
3 |
— |
|
|
— |
|
|
6,413 |
|
|
Derivatives2
|
4 |
|
|
878 |
|
|
— |
|
|
— |
|
|
(369 |
) |
6 |
513 |
|
8 |
Total assets |
$ |
1,861 |
|
|
$ |
5,612 |
|
|
$ |
143 |
|
|
$ |
63 |
|
|
$ |
(369 |
) |
|
$ |
7,310 |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives2
|
$ |
11 |
|
|
$ |
276 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(192 |
) |
7 |
$ |
95 |
|
8 |
Total liabilities |
$ |
11 |
|
|
$ |
276 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(192 |
) |
|
$ |
95 |
|
|
|
|
1 |
Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities. |
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|
2 |
Refer to Note 5 for additional information related to the composition of our derivative portfolio.
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|
3 |
Primarily related to long-term debt securities that mature in 2018. |
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|
4 |
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 3. |
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|
5 |
Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There are no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 5.
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|
6 |
The Company is obligated to return $201 million in cash collateral it has netted against its derivative position.
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|
7 |
The Company has the right to reclaim $17 million in cash collateral it has netted against its derivative position.
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|
|
8 |
The Company's derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $347 million in the line item prepaid expenses and other assets; $166 million in the line item other assets; $42 million in the line item accounts payable and accrued expenses; and $53 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.
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|
December 31, 2015 |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Other |
|
4 |
Netting
Adjustment
|
|
5 |
Fair Value
Measurements
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Trading securities1
|
$ |
183 |
|
|
$ |
101 |
|
|
$ |
2 |
|
|
$ |
36 |
|
|
$ |
— |
|
|
$ |
322 |
|
|
Available-for-sale securities1
|
3,913 |
|
|
4,574 |
|
|
119 |
|
3 |
— |
|
|
— |
|
|
8,606 |
|
|
Derivatives2
|
2 |
|
|
1,268 |
|
|
— |
|
|
— |
|
|
(638 |
) |
6 |
632 |
|
8 |
Total assets |
$ |
4,098 |
|
|
$ |
5,943 |
|
|
$ |
121 |
|
|
$ |
36 |
|
|
$ |
(638 |
) |
|
$ |
9,560 |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives2
|
$ |
24 |
|
|
$ |
635 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(488 |
) |
7 |
$ |
171 |
|
8 |
Total liabilities |
$ |
24 |
|
|
$ |
635 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(488 |
) |
|
$ |
171 |
|
|
|
|
1 |
Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities. |
|
|
2 |
Refer to Note 5 for additional information related to the composition of our derivative portfolio.
|
|
|
3 |
Primarily related to long-term debt securities that mature in 2018. |
|
|
4 |
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 3. |
|
|
5 |
Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle net positive and negative positions and also cash collateral held or placed with the same counterparties. There are no amounts subject to legally enforceable master netting agreements that management has chosen not to offset or that do not meet the offsetting requirements. Refer to Note 5.
|
|
|
6 |
The Company is obligated to return $184 million in cash collateral it has netted against its derivative position.
|
|
|
7 |
The Company has the right to reclaim $17 million in cash collateral it has netted against its derivative position.
|
|
|
8 |
The Company's derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $79 million in the line item prepaid expenses and other assets; $553 million in the line item other assets; and $171 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.
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|
| Assets measured at fair value on a nonrecurring basis |
The gains or losses on assets measured at fair value on a nonrecurring basis are summarized in the table below (in millions):
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Gains (Losses) |
|
December 31, |
2016 |
|
|
2015 |
|
|
Assets held for sale1
|
$ |
(2,264 |
) |
|
$ |
(980 |
) |
|
Intangible assets |
(153 |
) |
2 |
(473 |
) |
3 |
Investment in formerly unconsolidated subsidiary |
— |
|
|
(19 |
) |
4 |
Valuation of shares in equity method investee |
— |
|
|
(6 |
) |
5 |
Total |
$ |
(2,417 |
) |
|
$ |
(1,478 |
) |
|
|
|
1 |
The Company is required to record assets and liabilities that are held for sale at the lower of carrying value or fair value less any costs to sell based on the agreed-upon sale price. These losses related to refranchising activities in North America. The charges were calculated based on Level 3 inputs. Refer to Note 2. |
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|
2 |
The Company recognized losses of $153 million during the year ended December 31, 2016 due to impairment charges on certain intangible assets. The charges incurred during 2016 included $143 million related to the impairment of certain U.S. bottlers' franchise rights. This charge was related to a number of factors, primarily as a result of lower operating performance compared to previously modeled results as well as a revision in management's view of the proceeds that may be ultimately received upon refranchising the territory. The 2016 losses also included a $10 million goodwill impairment charge, primarily the result of management's revised outlook on market conditions. The charges were determined by comparing the fair value of the assets to the current carrying value. The fair value of the assets was derived using discounted cash flow analyses based on Level 3 inputs. Refer to Note 17.
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3 |
The Company recognized losses of $473 million during the year ended December 31, 2015 due to impairment charges on certain intangible assets. The charges incurred during 2015 included $418 million of impairment charges primarily due to the discontinuation of the energy products in the glacéau portfolio as a result of the Monster Transaction and a $55 million impairment charge on a Venezuelan trademark. The charges were determined by comparing the fair value of the assets to the current carrying value. The fair value of the assets was derived using discounted cash flow analyses based on Level 3 inputs. Refer to Note 1, Note 2 and Note 17.
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4 |
The Company recognized a loss of $19 million on our previously held investment in a South African bottler, which had been accounted for under the equity method of accounting prior to our acquisition of the bottler in February 2015. U.S. GAAP requires the acquirer to remeasure its previously held noncontrolling equity interest in the acquired entity to fair value as of the acquisition date and recognize any gains or losses in earnings. The Company remeasured our equity interest in the South African bottler based on Level 3 inputs. Refer to Note 2.
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5 |
In 2014, the Company recognized an estimated loss of $32 million as a result of the owners of the majority interest in a Brazilian bottling entity exercising their option to acquire from us a 10 percent interest in the entity's outstanding shares. The exercise price was lower than our carrying value. The transaction closed in January 2015, and the Company recorded an additional loss of $6 million during the year ended December 31, 2015, calculated based on the final option price. These losses were determined using Level 3 inputs. Refer to Note 2 and Note 17.
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| Summary of the fair value of pension plan assets for U.S. and non-U.S. pension plans |
The following table summarizes the levels within the fair value hierarchy for our pension plan assets as of December 31, 2016 and 2015 (in millions):
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|
December 31, 2016 |
|
December 31, 2015 |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
Other 1
|
|
|
Total |
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|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
Other 1
|
|
|
Total |
|
Cash and cash equivalents |
$ |
373 |
|
$ |
29 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
402 |
|
|
$ |
128 |
|
$ |
148 |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
276 |
|
Equity securities: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.-based companies |
1,812 |
|
1 |
|
14 |
|
|
— |
|
|
1,827 |
|
|
1,562 |
|
— |
|
1 |
|
|
— |
|
|
1,563 |
|
International-based companies |
935 |
|
4 |
|
— |
|
|
— |
|
|
939 |
|
|
802 |
|
5 |
|
10 |
|
|
— |
|
|
817 |
|
Fixed-income securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government bonds |
— |
|
525 |
|
1 |
|
|
— |
|
|
526 |
|
|
— |
|
736 |
|
1 |
|
|
— |
|
|
737 |
|
Corporate bonds and debt securities |
— |
|
978 |
|
18 |
|
|
— |
|
|
996 |
|
|
— |
|
1,171 |
|
2 |
|
|
— |
|
|
1,173 |
|
Mutual, pooled and commingled funds |
91 |
|
20 |
|
— |
|
|
1,022 |
|
3 |
1,133 |
|
|
77 |
|
15 |
|
— |
|
|
1,031 |
|
3 |
1,123 |
|
Hedge funds/limited partnerships |
— |
|
— |
|
— |
|
|
1,213 |
|
4 |
1,213 |
|
|
— |
|
— |
|
— |
|
|
764 |
|
4 |
764 |
|
Real estate |
— |
|
— |
|
2 |
|
|
521 |
|
5 |
523 |
|
|
— |
|
— |
|
2 |
|
|
462 |
|
5 |
464 |
|
Other |
— |
|
3 |
|
211 |
|
2 |
598 |
|
6 |
812 |
|
|
— |
|
9 |
|
219 |
|
2 |
544 |
|
6 |
772 |
|
Total |
$ |
3,211 |
|
$ |
1,560 |
|
$ |
246 |
|
|
$ |
3,354 |
|
|
$ |
8,371 |
|
|
$ |
2,569 |
|
$ |
2,084 |
|
$ |
235 |
|
|
$ |
2,801 |
|
|
$ |
7,689 |
|
|
|
1 |
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 13. |
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|
2 |
Includes purchased annuity insurance contracts. |
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|
3 |
This class of assets includes actively managed emerging markets equity funds and a collective trust fund for qualified plans, invested primarily in equity securities of companies in the developed and emerging markets. There are no liquidity restrictions on these investments. |
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|
4 |
This class of assets includes hedge funds that can be subject to redemption restrictions, ranging from monthly to semi-annually with a redemption notice period of up to 181 days and/or initial lock-up periods of up to one year, and private equity funds that are primarily closed-end funds in which the Company's investments are generally not eligible for redemption. Distributions from these private equity funds will be received as the underlying assets are liquidated or distributed. |
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|
5 |
This class of assets includes funds invested in real estate, including a privately held real estate investment trust, a real estate commingled pension trust fund, infrastructure limited partnerships and commingled investment funds. These funds seek current income and capital appreciation through the investments and can be subject to redemption restrictions, ranging from quarterly to semi-annually with a redemption notice period of up to 90 days. |
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|
6 |
This class of assets includes segregated portfolios of private investment funds that are invested in a portfolio of insurance-linked securities. These assets can be subject to a semi-annual redemption, with a redemption notice period of 90 days, subject to certain gate restrictions. |
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| Reconciliation of the beginning and ending balance of Level 3 assets for U.S. and non-U.S. pension plans |
The following table provides a reconciliation of the beginning and ending balance of Level 3 assets for our U.S. and non-U.S. pension plans for the years ended December 31, 2016 and 2015 (in millions):
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Equity
Securities
|
|
|
Fixed-Income Securities |
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|
Real Estate |
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|
Other |
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Total |
|
2015 |
|
|
|
|
|
|
|
|
|
Balance at beginning of year |
$ |
17 |
|
|
$ |
36 |
|
|
$ |
— |
|
|
$ |
339 |
|
|
$ |
392 |
|
Actual return on plan assets: |
|
|
|
|
|
|
|
|
|
Related to assets held at the reporting date |
(6 |
) |
|
1 |
|
|
— |
|
|
5 |
|
|
— |
|
Related to assets sold during the year |
— |
|
|
(4 |
) |
|
— |
|
|
— |
|
|
(4 |
) |
Purchases, sales and settlements — net |
— |
|
|
(6 |
) |
|
— |
|
|
(77 |
) |
1 |
(83 |
) |
Transfers into/(out of) Level 3 — net |
— |
|
|
(24 |
) |
|
2 |
|
|
(3 |
) |
|
(25 |
) |
Foreign currency translation adjustments |
— |
|
|
— |
|
|
— |
|
|
(45 |
) |
|
(45 |
) |
Balance at end of year |
$ |
11 |
|
|
$ |
3 |
|
|
$ |
2 |
|
|
$ |
219 |
|
2 |
$ |
235 |
|
2016 |
|
|
|
|
|
|
|
|
|
Balance at beginning of year |
$ |
11 |
|
|
$ |
3 |
|
|
$ |
2 |
|
|
$ |
219 |
|
|
$ |
235 |
|
Actual return on plan assets: |
|
|
|
|
|
|
|
|
|
Related to assets held at the reporting date |
4 |
|
|
2 |
|
|
— |
|
|
7 |
|
|
13 |
|
Related to assets sold during the year |
— |
|
|
(2 |
) |
|
— |
|
|
3 |
|
|
1 |
|
Purchases, sales and settlements — net |
— |
|
|
12 |
|
|
— |
|
|
(23 |
) |
|
(11 |
) |
Transfers into/(out of) Level 3 — net |
(1 |
) |
|
4 |
|
|
— |
|
|
7 |
|
|
10 |
|
Foreign currency translation adjustments |
— |
|
|
— |
|
|
— |
|
|
(2 |
) |
|
(2 |
) |
Balance at end of year |
$ |
14 |
|
|
$ |
19 |
|
|
$ |
2 |
|
|
$ |
211 |
|
2 |
$ |
246 |
|
|
|
1 |
Includes the reclassification of assets associated with the Company's consolidated German bottling operations to assets held for sale and liabilities held for sale as of December 31, 2015. During the year ended December 31, 2016, the Company deconsolidated our German bottling operations. Refer to Note 2. |
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|
2 |
Includes purchased annuity insurance contracts. |
|
| Summary of the fair value of postretirement benefit plan assets |
The following table summarizes the levels within the fair value hierarchy for our other postretirement benefit plan assets as of December 31, 2016 and 2015 (in millions):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
Level 1 |
|
Level 2 |
|
Other 1
|
|
Total |
|
|
Level 1 |
|
Level 2 |
|
Other 1
|
|
Total |
|
Cash and cash equivalents |
$ |
2 |
|
$ |
— |
|
$ |
— |
|
$ |
2 |
|
|
$ |
1 |
|
$ |
7 |
|
$ |
— |
|
$ |
8 |
|
Equity securities: |
|
|
|
|
|
|
|
|
|
U.S.-based companies |
116 |
|
— |
|
— |
|
116 |
|
|
116 |
|
— |
|
— |
|
116 |
|
International-based companies |
8 |
|
— |
|
— |
|
8 |
|
|
6 |
|
— |
|
— |
|
6 |
|
Fixed-income securities: |
|
|
|
|
|
|
|
|
|
Government bonds |
— |
|
3 |
|
— |
|
3 |
|
|
77 |
|
3 |
|
— |
|
80 |
|
Corporate bonds and debt securities |
— |
|
6 |
|
— |
|
6 |
|
|
— |
|
8 |
|
— |
|
8 |
|
Mutual, pooled and commingled funds |
98 |
|
— |
|
5 |
|
103 |
|
|
10 |
|
— |
|
5 |
|
15 |
|
Hedge funds/limited partnerships |
— |
|
— |
|
9 |
|
9 |
|
|
— |
|
— |
|
5 |
|
5 |
|
Real estate |
— |
|
— |
|
4 |
|
4 |
|
|
— |
|
— |
|
3 |
|
3 |
|
Other |
— |
|
— |
|
4 |
|
4 |
|
|
— |
|
— |
|
4 |
|
4 |
|
Total |
$ |
224 |
|
$ |
9 |
|
$ |
22 |
|
$ |
255 |
|
|
$ |
210 |
|
$ |
18 |
|
$ |
17 |
|
$ |
245 |
|
|
|
1 |
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented in Note 13. |
|