Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

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Fair Value Measurements
 6 Months Ended
Jul. 02, 2021
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):
July 2, 2021 Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:          
Equity securities with readily determinable values1
$ 2,427  $ 224  $ 18  $ 103  $ —  $ 2,772 
Debt securities1
—  1,640  35 

—  —  1,675 
Derivatives2
133  708  —  —  (567)
6
 274 
8
Total assets $ 2,560  $ 2,572  $ 53  $ 103  $ (567) $ 4,721 
Liabilities:          
Contingent consideration liability $ —  $ —  $ 472 
5
 $ —  $ —  $ 472 
Derivatives2
—  118  —  —  (97)
7
 21 
8
Total liabilities $ —  $ 118  $ 472  $ —  $ (97) $ 493 
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 derivatives 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 $405 million in cash collateral it has netted against its derivative positions.
7 The Company has the right to reclaim $16 million in cash collateral it has netted against its derivative positions.
8     The Company’s derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows:
$274 million in the line item other assets and $21 million in the line item other liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.
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 
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 derivatives 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 $546 million in cash collateral it has netted against its derivative positions.
7 The Company does not have the right to reclaim any cash collateral it has netted against its derivative positions.
8    The Company’s derivative financial instruments are recorded at fair value in our condensed 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 6 for additional information related to the composition of our derivatives portfolio.
Gross realized and unrealized gains and losses on Level 3 assets and liabilities were not significant for the three and six months ended July 2, 2021 and June 26, 2020.
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 July 2, 2021 and June 26, 2020.
Nonrecurring Fair Value Measurements
The gains and losses on assets measured at fair value on a nonrecurring basis are summarized in the following table (in millions):
Gains (Losses)  
 
Three Months Ended Six Months Ended
 
July 2,
2021		   June 26,
2020		 July 2,
2021		   June 26,
2020
 
Impairment of intangible assets $ — 

$ (63)
1
 $ —  $ (215)
1
Other-than-temporary impairment charges —  (38)
2
 —  (38)
2
Impairment of equity investment without a readily
determinable fair value
 —  —  —  (26)
3
Total $ —    $ (101)   $ —  $ (279)
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, 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 an other-than-temporary impairment charge of $38 million during the three and six months ended June 26, 2020 related to one of our equity method investees in Latin America, primarily driven by revised projections of future operating results. The fair value of this investment was derived using discounted cash flow analyses based on Level 3 inputs.
3 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 values 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 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, the 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 July 2, 2021, the carrying value and fair value of our long-term debt, including the current portion, were $40,141 million and $41,348 million, respectively. As of December 31, 2020, the carrying value and fair value of our long-term debt, including the current portion, were $40,610 million and $43,218 million, respectively.