Annual report pursuant to Section 13 and 15(d)

FAIR VALUE MEASUREMENTS (Tables)

v3.20.4
FAIR VALUE MEASUREMENTS (Tables)
 12 Months Ended
Dec. 31, 2020
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):
December 31, 2020
Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:          
Equity securities with readily determinable values1
$ 2,049  $ 210  $ 12  $ 103  $ —  $ 2,374 
Debt securities1
4  2,267  32  —  —  2,303 
     Derivatives2
63  835  —  —  (669)
6
 229 
8
Total assets $ 2,116  $ 3,312  $ 44  $ 103  $ (669) $ 4,906 
Liabilities:          
    Contingent consideration liability $ —  $ —  $ 321 
5
 $ —  $ —  $ 321 
    Derivatives2
—  91  —  —  (81)
7
 10 
8
Total liabilities $ —  $ 91  $ 321  $ —  $ (81) $ 331 
1Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.
2Refer to Note 5 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 5.
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 $546 million in cash collateral it has netted against its derivative position.
7 The Company does not have the right to reclaim any 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: $229 million in the line item other assets, $9 million in the line item accounts payable and accrued expenses and $1 million in the line item other liabilities. Refer to Note 5 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 
7
Total assets $ 1,886  $ 4,089  $ 51  $ 109  $ (392) $ 5,743 
Liabilities:          
    Derivatives2
$ —  $ 162  $ —  $ —  $ (130)
6
 $ 32 
7
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 5 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 5.
5 The Company is obligated to return $261 million in cash collateral it has netted against its derivative position.
6 The Company does not have the right to reclaim any cash collateral it has netted against its derivative position.
7 The Company's derivative financial instruments are recorded at fair value in our 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 5 for additional information related to the composition of our derivative portfolio.
Assets measured at fair value on a nonrecurring basis
The gains and losses on assets measured at fair value on a nonrecurring basis are summarized in the following table (in millions):
Gains (Losses)    
Year Ended December 31, 2020   2019  
Other-than-temporary impairment charges $ (290)
1
 $ (767)
1
Impairment of intangible assets (215)
2
 (42)
4
Impairment of equity investment without a readily determinable fair value (26)
3
 — 
CCBA asset adjustments —  (160)
5
Total $ (531)   $ (969)
1During the years ended December 31, 2020 and 2019, the Company recorded other-than-temporary impairment charges of $252 million and $406 million, respectively, related to CCBJHI, an equity method investee. Based on the length of time and the extent to which the market value of our investment in CCBJHI was less than our carrying value and the financial condition and near-term prospects of the issuer, management determined that the decline in fair value was other than temporary in nature. These impairment charges were determined using the quoted market prices (a Level 1 measurement) of CCBJHI. The Company also recorded other-than-temporary impairment charges of $38 million and $49 million, respectively, related to certain equity method investees in Latin America. These impairment charges were derived using Level 3 inputs and were primarily driven by revised projections of future operating results. During the year ended December 31, 2019, the Company recognized other-than-temporary impairment charges of $255 million related to certain equity method investees in the Middle East. These impairment charges were derived using Level 3 inputs and were primarily driven by revised projections of future operating results largely related to instability in the region and changes in local excise taxes. 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.
2The Company recorded impairment charges of $160 million related to its Odwalla trademark in North America, as the Company decided in June 2020 to discontinue its Odwalla juice business. The Company also recorded an impairment charge of $55 million 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.
3The 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.
4The Company recorded an impairment charge of $42 million related to a trademark in Asia Pacific, which was primarily driven by revised projections of future operating results for the trademark. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs.
5 As a result of CCBA no longer being classified as held for sale, 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.
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 (in millions):
December 31, 2020 December 31, 2019
Level 1 Level 2 Level 3 Other
1
 Total Level 1 Level 2 Level 3 Other
1
 Total
Cash and cash equivalents $ 558  $ 120  $ —  $ —  $ 678  $ 597  $ 144  $ —  $ —  $ 741 
Equity securities:    
U.S.-based companies 2,123  12  4  —  2,139  1,876  7  21  —  1,904 
International-based companies 1,694  32  —  —  1,726  1,354  33  —  —  1,387 
Fixed-income securities:
Government bonds —  637  —  —  637  —  536  —  —  536 
Corporate bonds and debt
securities		 —  1,011  31  —  1,042  —  924  40  —  964 
Mutual, pooled and commingled
funds		 44  268  —  502 
4
 814  40  258  —  600 
4
 898 
Hedge funds/limited partnerships —  —  —  622 
5
 622  —  —  —  689 
5
 689 
Real estate —  —  —  332 
6
 332  —  —  —  342 
6
 342 
Derivative financial instruments —  (15)
2
 —  —  (15) —  —  —  —  — 
Other —  —  302 
3
 362 
7
 664  —  —  273 
3
 346 
7
 619 
Total $ 4,419  $ 2,065  $ 337  $ 1,818  $ 8,639  $ 3,867  $ 1,902  $ 334  $ 1,977  $ 8,080 
1Certain 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.
2This class of assets includes investments in credit contracts.
3Includes purchased annuity insurance contracts.
4This 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 developing and emerging markets. There are no liquidity restrictions on these investments.
5This class of assets includes hedge funds that can be subject to redemption restrictions, ranging from monthly to semiannually, with a redemption notice period of up to one year and/or initial lock-up periods of up to three years, 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.
6This 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 semiannually, with a redemption notice period of up to 90 days.
7This 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 semiannual redemption, with a redemption notice period of 90 days, subject to certain gate restrictions.
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 (in millions):
Equity
Securities		 Fixed-Income Securities Other Total
2019        
Balance at beginning of year $ 17  $ 16  $ 270  $ 303 
Actual return on plan assets 1  —  10  11 
Purchases, sales, and settlements — net 1  21  1  23 
Transfers into Level 3 — net 2  3  —  5 
Net foreign currency translation adjustments —  —  (8) (8)
Balance at end of year $ 21  $ 40  $ 273 
1
 $ 334 
2020      
Balance at beginning of year $ 21  $ 40  $ 273 
1
 $ 334 
Actual return on plan assets —  1  6  7 
Purchases, sales, and settlements — net (18) (17) 4  (31)
Transfers into Level 3 — net 1  7  —  8 
Net foreign currency translation adjustments —  —  19  19 
Balance at end of year $ 4  $ 31  $ 302 
1
 $ 337 
1Includes 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 (in millions):
December 31, 2020 December 31, 2019
Level 1 Level 2
Other 1
Total Level 1 Level 2
Other 1
Total
Cash and cash equivalents $ 29  $ 1  $ —  $ 30  $ 56  $ 1  $ —  $ 57 
Equity securities:    
U.S.-based companies 169  1  —  170  124  —  —  124 
International-based companies 12  —  —  12  9  —  —  9 
Fixed-income securities:  
Government bonds —  3  —  3  —  3  —  3 
Corporate bonds and debt securities —  80  —  80  —  47  —  47 
Mutual, pooled and commingled funds —  84  2  86  —  2  82  84 
Hedge funds/limited partnerships —  —  7  7  —  —  7  7 
Real estate —  —  4  4  —  —  4  4 
Other —  —  4  4  —  —  4  4 
Total $ 210  $ 169  $ 17  $ 396  $ 189  $ 53  $ 97  $ 339 
1Certain 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