Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.7.0.1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2017
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 table summarizes those assets and liabilities measured at fair value on a recurring basis as of March 31, 2017 (in millions):
 
Level 1

Level 2

Level 3

 
Other4

Netting
Adjustment

5 
Fair Value
Measurements

 
Assets:
 
 
 
 
 
 
 
 
 
Trading securities1
$
215

$
117

$
3

 
$
65

$
—

 
$
400

 
Available-for-sale securities1
1,934

4,687

143

3 
—

—

 
6,764

 
Derivatives2
7

471

—

 
—

(356
)
6 
122

8 
Total assets
$
2,156

$
5,275

$
146

 
$
65

$
(356
)
 
$
7,286

 
Liabilities:
 
 
 
 
 
 
 
 
 
Derivatives2
$
(5
)
$
(300
)
$
—

 
$
—

$
273

7 
$
(32
)
8 
Total liabilities
$
(5
)
$
(300
)
$
—

 
$
—

$
273

 
$
(32
)
 
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 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 $146 million in cash collateral it has netted against its net asset derivative position.
7 
The Company has the right to reclaim $60 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 condensed consolidated balance sheets as follows: $122 million in the line item other assets and $32 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.
The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 (in millions):
 
Level 1

Level 2

Level 3

 
Other4

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.
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 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 $201 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 condensed consolidated balance sheets 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.
Assets and liabilities 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):
 
Gains (Losses)  
 
Three Months Ended
 
March 31, 2017

 
April 1,
2016

Assets held for sale1
$
(367
)
 
$
(315
)
Intangible assets
(104
)
2 
—

Total
$
(471
)
 
$
(315
)
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, which were calculated based on Level 3 inputs. Refer to Note 2.
2 The Company recognized losses of $104 million during the three months ended March 31, 2017 due to impairment charges on certain intangible assets. The charges included $84 million related to the impairment of CCR goodwill recorded in our Bottling Investments operating segment, primarily as a result of current quarter refranchising activities in North America and management's estimate of the proceeds that are expected to be received for the remaining bottling territories upon their refranchising. This charge was determined by comparing the fair value of the reporting unit, based on Level 3 inputs, to its carrying value. Additionally, the charges included $20 million of impairments related to Venezuelan intangible assets that were recorded due to weaker sales resulting from continued political instability. The fair value of these assets was derived using discounted cash flow analyses based on Level 3 inputs. Refer to Note 10.