Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

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Fair Value Measurements
 9 Months Ended
Oct. 01, 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):
October 1, 2021 Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:          
Equity securities with readily determinable values1
$ 2,357  $ 221  $ 18  $ 105  $ —  $ 2,701 
Debt securities1
—  1,595  34 

—  —  1,629 
Derivatives2
71  634  —  —  (447)
6
 258 
7
Total assets $ 2,428  $ 2,450  $ 52  $ 105  $ (447) $ 4,588 
Liabilities:          
Contingent consideration liability $ —  $ —  $ 484 
5
 $ —  $ —  $ 484 
Derivatives2
4  81  —  —  (80) 5 
7
Total liabilities $ 4  $ 81  $ 484  $ —  $ (80) $ 489 
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 $354 million in cash collateral it has netted against its derivative positions.
7     The Company’s derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows: $258 million in the line item other assets and $5 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 nine months ended October 1, 2021 and September 25, 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 nine months ended October 1, 2021 and September 25, 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 Nine Months Ended
 
October 1,
2021		   September 25,
2020		 October 1,
2021		   September 25,
2020
 
Assets held for sale $ (266)
1
 $ —  $ (266)
1
 $ — 
Impairment of intangible assets — 

—  —  (215)
2
Other-than-temporary impairment charges —  —  —  (38)
3
Impairment of equity investment without a readily
  determinable fair value		 —  —  —  (26)
4
Total $ (266)   $ —    $ (266) $ (279)
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. The Company recorded charges of $266 million in the line item other income (loss) — net related to the restructuring of our manufacturing operations in the United States. These charges, which were calculated based on Level 3 inputs, primarily impacted the line item property, plant and equipment in our condensed consolidated balance sheet.
2 The Company recorded impairment charges of $160 million 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 related to a trademark in North America, which was 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.
3 The Company recognized an other-than-temporary impairment charge of $38 million 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.
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 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 October 1, 2021, the carrying value and fair value of our long-term debt, including the current portion, were $39,842 million and $40,795 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.