Annual report pursuant to Section 13 and 15(d)

FAIR VALUE MEASUREMENTS (Tables)

v3.22.0.1
FAIR VALUE MEASUREMENTS (Tables)
 12 Months Ended
Dec. 31, 2021
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, 2021
Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:          
Equity securities with readily determinable values1
$ 2,372  $ 230  $ 17  $ 104  $ —  $ 2,723 
Debt securities1
—  1,556  33  —  —  1,589 
Derivatives2
69  588  —  —  (459)
6
 198 
8
Total assets $ 2,441  $ 2,374  $ 50  $ 104  $ (459) $ 4,510 
Liabilities:          
Contingent consideration liability $ —  $ —  $ 590 
5
 $ —  $ —  $ 590 
Derivatives2
—  96  —  —  (82)
7
 14 
8
Total liabilities $ —  $ 96  $ 590  $ —  $ (82) $ 604 
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.
3Certain 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.
4Amounts 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.
5Refer to Note 2 for additional information related to the contingent consideration liability resulting from the fairlife acquisition.
6The Company is obligated to return $331 million in cash collateral it has netted against its derivative position.
7The Company does not have the right to reclaim any cash collateral it has netted against its derivative position.
8The Company’s derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $198 million in the line item other noncurrent assets and $14 million in the line item other noncurrent liabilities. Refer to Note 5 for additional information related to the composition of our derivative 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 
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.
3Certain 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.
4Amounts 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.
5Refer to Note 2 for additional information related to the contingent consideration liability resulting from the fairlife acquisition.
6The Company is obligated to return $546 million in cash collateral it has netted against its derivative position.
7The Company does not have the right to reclaim any cash collateral it has netted against its derivative position.
8The Company’s derivative financial instruments are recorded at fair value in our consolidated balance sheet as follows: $229 million in the line item other noncurrent assets, $9 million in the line item accounts payable and accrued expenses and $1 million in the line item other noncurrent liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.
Gains and losses on 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, 2021   2020  
Assets held for sale $ (266)
1
 $ — 
Other-than-temporary impairment charges —  (290)
3
Impairment of intangible assets (78)
2
 (215)
4
Impairment of equity investment without a readily determinable fair value —  (26)
5
Total $ (344)   $ (531)
1The 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 in our consolidated statement of income 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 consolidated balance sheet.
2The Company recorded an impairment charge of $78 million related to a trademark in Europe, which was driven by a change in the long-term outlook on the licensing arrangement for a certain brand. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs.
3During the year ended December 31, 2020, the Company recorded an other-than-temporary impairment charge of $252 million 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. This impairment charge was determined using the quoted market price (a Level 1 measurement) of CCBJHI. The Company also recorded an other-than-temporary impairment charge of $38 million related to one of our equity method investees in Latin America. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results.
4The 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 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.
5The 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.
Summary of the levels within the fair value hierarchy of pension plan assets
The following table summarizes the levels within the fair value hierarchy for our pension plan assets (in millions):
December 31, 2021 December 31, 2020
Level 1 Level 2 Level 3 Other
1
 Total Level 1 Level 2 Level 3 Other
1
 Total
Cash and cash equivalents $ 479  $ 26  $ —  $ —  $ 505  $ 558  $ 120  $ —  $ —  $ 678 
Equity securities:    
U.S.-based companies 2,382  22  27  —  2,431  2,123  12  4  —  2,139 
International-based companies 1,684  22  —  —  1,706  1,694  32  —  —  1,726 
Fixed-income securities:
Government bonds —  677  —  —  677  —  637  —  —  637 
Corporate bonds and debt
   securities		 —  994  29  —  1,023  —  1,011  31  —  1,042 
Mutual, pooled and commingled
   funds		 36  283  —  531 
4
 850  44  268  —  502 
4
 814 
Hedge funds/limited
   partnerships		 —  —  —  720 
5
 720  —  —  —  622 
5
 622 
Real estate —  —  —  389 
6
 389  —  —  —  332 
6
 332 
Derivative financial instruments —  (9)
2
 —  —  (9) —  (15)
2
 —  —  (15)
Other —  —  283 
3
 330 
7
 613  —  —  302 
3
 362 
7
 664 
Total $ 4,581  $ 2,015  $ 339  $ 1,970  $ 8,905  $ 4,419  $ 2,065  $ 337  $ 1,818  $ 8,639 
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 and can be subject to redemption restrictions, ranging from quarterly to semiannually, with a redemption notice period of up to 90 days.
7Primarily 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
1
 Total
2020        
Balance at beginning of year $ 21  $ 40  $ 273  $ 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  $ 337 
2021      
Balance at beginning of year $ 4  $ 31  $ 302  $ 337 
Actual return on plan assets 21  (3) (6) 12 
Purchases, sales and settlements — net 2  7  (2) 7 
Transfers into Level 3 — net —  (6) —  (6)
Net foreign currency translation adjustments —  —  (11) (11)
Balance at end of year $ 27  $ 29  $ 283  $ 339 
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, 2021 December 31, 2020
Level 1 Level 2
Other 1
Total Level 1 Level 2
Other 1
Total
Cash and cash equivalents $ 32  $ 1  $ —  $ 33  $ 29  $ 1  $ —  $ 30 
Equity securities:    
U.S.-based companies 183  1  —  184  169  1  —  170 
International-based companies 12  —  —  12  12  —  —  12 
Fixed-income securities:  
Government bonds —  3  —  3  —  3  —  3 
Corporate bonds and debt securities —  82  —  82  —  80  —  80 
Mutual, pooled and commingled funds —  85  2  87  —  84  2  86 
Hedge funds/limited partnerships —  —  9  9  —  —  7  7 
Real estate —  —  5  5  —  —  4  4 
Other —  —  4  4  —  —  4  4 
Total $ 227  $ 172  $ 20  $ 419  $ 210  $ 169  $ 17  $ 396 
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