Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

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Fair Value Measurements
 6 Months Ended
Jun. 26, 2020
Fair Value Measurements [Abstract]  
Fair Value Disclosures [Text Block] FAIR VALUE MEASUREMENTS
Recurring Fair Value Measurements
The following tables summarize assets and liabilities measured at fair value on a recurring basis (in millions):
June 26, 2020 Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:          
Equity securities with readily determinable values1
$ 1,685    $ 183    $ 11    $ 94    $ —    $ 1,973   
Debt securities1
—    2,242    45   

—    —    2,287   
Derivatives2
3    856    —    —    (582)  
6
 277   
8
Total assets $ 1,688    $ 3,281    $ 56    $ 94    $ (582)   $ 4,537   
Liabilities:          
Contingent consideration liability $ —    $ —    $ (299)  
5
 $ —    $ —    $ (299)  
Derivatives2
(8)   (377)   —    —    317   
7
 (68)  
8
Total liabilities $ (8)   $ (377)   $ (299)   $ —    $ 317    $ (367)  
1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.
2 Refer to Note 6 for additional information related to the composition of our derivative portfolio.
3 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 4.
4 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 6.
5 Refer to Note 2 for additional information related to the contingent consideration liability resulting from the fairlife acquisition.
6 The Company is obligated to return $289 million in cash collateral it has netted against its derivative position.
7  The Company has the right to reclaim $18 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 sheet as follows:
$277 million in the line item other assets and $68 million in the line item other liabilities. Refer to Note 6 for additional information related
to the composition of our derivative portfolio.
December 31, 2019 Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:  
 
      
Equity securities with readily determinable values1
$ 1,877    $ 219    $ 14    $ 109    $ —    $ 2,219   
Debt securities1
—    3,291    37    —    —    3,328   
Derivatives2
9    579    —    —    (392)  
5
 196   
6
Total assets $ 1,886    $ 4,089    $ 51    $ 109    $ (392)   $ 5,743   
Liabilities:          
Derivatives2
$ —    $ (162)   $ —    $ —    $ 130    $ (32)  
6
Total liabilities $ —    $ (162)   $ —    $ —    $ 130    $ (32)  
1 Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.
2 Refer to Note 6 for additional information related to the composition of our derivative portfolio.
3 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 4.
4 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 6.
5 The Company is obligated to return $261 million in cash collateral it has netted against its derivative position.
6 The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows: $196 million in the line item other assets and $32 million in the line item other liabilities. Refer to Note 6 for additional information related to the composition of our derivative portfolio.
Gross realized and unrealized gains and losses on Level 3 assets and liabilities were not significant for the three and six months ended June 26, 2020 and June 28, 2019.
The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period. Gross transfers between levels within the hierarchy were not significant for the three and six months ended June 26, 2020 and June 28, 2019.
Nonrecurring Fair Value Measurements
The gains and losses on assets measured at fair value on a nonrecurring basis are summarized in the table below (in millions):
Gains (Losses)  
 
Three Months Ended Six Months Ended
 
June 26,
2020		   June 28,
2019		 June 26,
2020		   June 28,
2019
 
Impairment of intangible assets $ (63)  
1
 $ —    $ (215)  
1
 $ —   
Other-than-temporary impairment charges (38)  
2
 (49)  
2
 (38)  
2
 (392)  
2
Impairment of equity investment without a readily
determinable fair value		 —    —    (26)  
4
 —   
CCBA asset adjustments —    (160)  
3
 —    (160)  
3
Total $ (101)     $ (209)     $ (279)   $ (552)  
1 The Company recorded impairment charges of $8 million and $160 million during the three and six months ended June 26, 2020, respectively, related to its Odwalla trademark in North America, as the Company decided in June 2020 to discontinue its Odwalla juice business. The Company recorded an impairment charge of $55 million during the three and six months ended June 26, 2020 related to a trademark in North America, which was primarily driven by the impact of the COVID-19 pandemic, revised projections of future operating results and a change in brand focus in the Company's portfolio. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs.
2 The Company recognized other-than-temporary impairment charges of $38 million during the three and six months ended June 26, 2020 and $49 million during the three and six months ended June 28, 2019 related to certain of our equity method investees in Latin America, primarily driven by revised projections of future operating results. The fair values of these investments were derived using discounted cash flow analyses based on Level 3 inputs. During the six months ended June 28, 2019, the Company recognized an other-than-temporary impairment charge of $286 million related to our investment in CCBJHI, an equity method investee. Based on the length of time and the extent to which the market value of our investment in CCBJHI had been less than our carrying value as well as the financial condition and near-term prospects of the issuer, management determined that the decline in fair value was other than temporary in nature. This impairment charge was determined using the quoted market price (a Level 1 measurement) of CCBJHI. During the six months ended June 28, 2019, the Company also recognized an other-than-temporary impairment charge of $57 million related to one of our equity method investees in North America. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results.
3 The Company was required to measure CCBA's property, plant and equipment and definite-lived intangible assets at the lower of their current fair values or their carrying amounts before they were classified as held for sale, adjusted for depreciation and amortization expense that would have been recognized had the business been classified as held and used during the period that CCBA was classified as held for sale. As a result, we reduced the carrying value of CCBA's property, plant and equipment and definite-lived intangible assets by $34 million and $126 million, respectively, based on Level 3 inputs. Refer to Note 2.
4 The Company recorded an impairment charge of $26 million related to an investment in an equity security without a readily determinable fair value. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results.
Other Fair Value Disclosures
The carrying amounts of cash and cash equivalents; short-term investments; trade accounts receivable; accounts payable and accrued expenses; and loans and notes payable approximate their fair values because of the relatively short-term maturities of these financial instruments. The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments. Where quoted prices are not available, fair value is estimated using discounted cash flows and market-based expectations for interest rates, credit risk and the contractual terms of the debt instruments. As of June 26, 2020, the carrying amount and fair value of our long-term debt, including the current portion, were $42,910 million and $45,465 million, respectively. As of December 31, 2019, the carrying amount and fair value of our long-term debt, including the current portion, were $31,769 million and $32,725 million, respectively.