Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS (Tables)

v3.23.3
FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 29, 2023
Fair Value Disclosures [Abstract]  
Assets and liabilities measured at fair value on a recurring basis
The following tables summarize assets and liabilities measured at fair value on a recurring basis (in millions):
September 29, 2023 Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:          
Equity securities with readily determinable values1
$ 1,545  $ 169  $ 2  $ 83  $ —  $ 1,799 
Debt securities1
—  1,101  12 

—  —  1,113 
Derivatives2
2  359  —  —  (256)
6
 105 
8
Total assets $ 1,547  $ 1,629  $ 14  $ 83  $ (256) $ 3,017 
Liabilities:          
Contingent consideration liability $ —  $ —  $ 2,935 
5
 $ —  $ —  $ 2,935 
Derivatives2
8  1,892  —  —  (1,770)
7
 130 
8
Total liabilities $ 8  $ 1,892  $ 2,935  $ —  $ (1,770) $ 3,065 
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 6 for additional information related to the composition of our derivatives 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 were 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.
5Represents the fair value of the remaining milestone payment related to our acquisition of fairlife in 2020, which is contingent on fairlife achieving certain financial targets through 2024 and, if achieved, is payable in 2025. This milestone payment is based on agreed-upon formulas related to fairlife’s operating results, the resulting value of which is not subject to a ceiling. The fair value was determined using a Monte Carlo valuation model. The Company made a milestone payment of $275 million during the nine months ended September 29, 2023.
6The Company is not obligated to return any cash collateral it has netted against its derivative position.
7The Company has the right to reclaim $1,514 million in cash collateral it has netted against its derivative position.
8The Company’s derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows: $54 million in the line item prepaid expenses and other current assets, $51 million in the line item other noncurrent assets, and $130 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.
December 31, 2022 Level 1 Level 2 Level 3
Other3
Netting
Adjustment
4
 Fair Value
Measurements
Assets:  
 
      
Equity securities with readily determinable values1
$ 1,801  $ 169  $ 15  $ 85  $ —  $ 2,070 
Debt securities1
—  975  8  —  —  983 
Derivatives2
2  239  —  —  (227)
6
 14 
8
Total assets $ 1,803  $ 1,383  $ 23  $ 85  $ (227) $ 3,067 
Liabilities:          
Contingent consideration liability $ —  $ —  $ 1,590 
5
 $ —  $ —  $ 1,590 
Derivatives2
4  1,962  —  —  (1,678)
7
 288 
8
Total liabilities $ 4  $ 1,962  $ 1,590  $ —  $ (1,678) $ 1,878 
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 6 for additional information related to the composition of our derivatives 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 were 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.
5Represents the fair value of future milestone payments related to our acquisition of fairlife in 2020, which are contingent on fairlife achieving certain financial targets through 2024 and, if achieved, are payable in 2023 and 2025. These milestone payments are based on agreed-upon formulas related to fairlife’s operating results, the resulting values of which are not subject to a ceiling. The fair value was determined using a Monte Carlo valuation model.
6The Company was not obligated to return any cash collateral it had netted against its derivative position.
7The Company had the right to reclaim $1,447 million in cash collateral it had netted against its derivative position.
8The Company’s derivative financial instruments were recorded at fair value in our consolidated balance sheet as follows: $14 million in the line item other noncurrent assets and $288 million in the line item other noncurrent liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.