The Coca-Cola Company Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Hedging Transactions and Derivative Financial Instruments (Tables)

Hedging Transactions and Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 28, 2013

Hedging Transactions and Derivative Financial Instruments

Derivative instruments, fair value, designated as hedging instruments

The following table presents the fair values of the Company's derivative instruments that were designated and qualified as part of a hedging relationship (in millions):



		Fair Value^1,2
Derivatives Designated as Hedging Instruments	Balance Sheet Location¹	June 28, 2013		December 31, 2012
Assets
Foreign currency contracts	Prepaid expenses and other assets	$	298	$	149
Foreign currency contracts	Other assets	70		—
Interest rate contracts	Prepaid expenses and other assets	52		7
Interest rate contracts	Other assets	284		335
Total assets		$	704	$	491
Liabilities
Foreign currency contracts	Accounts payable and accrued expenses	$	49	$	55
Foreign currency contracts	Other liabilities	22		—
Commodity contracts	Accounts payable and accrued expenses	1		1
Interest rate contracts	Other liabilities	—		6
Total liabilities		$	72	$	62

¹All of the Company's derivative instruments are carried at fair value in our condensed consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 14 for the net presentation of the Company's derivative instruments.

²Refer to Note 14 for additional information related to the estimated fair value.

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following table presents the fair values of the Company's derivative instruments that were not designated as hedging instruments (in millions):



		Fair Value^1,2
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location¹	June 28, 2013		December 31, 2012
Assets
Foreign currency contracts	Prepaid expenses and other assets	$	30	$	19
Foreign currency contracts	Other assets	156		42
Commodity contracts	Prepaid expenses and other assets	64		72
Other derivative instruments	Prepaid expenses and other assets	1		6
Total assets		$	251	$	139
Liabilities
Foreign currency contracts	Accounts payable and accrued expenses	$	52	$	24
Foreign currency contracts	Other liabilities	11		1
Commodity contracts	Accounts payable and accrued expenses	55		43
Commodity contracts	Other liabilities	3		1
Interest rate contracts	Other liabilities	3		—
Other derivative instruments	Accounts payable and accrued expenses	5		2
Total liabilities		$	129	$	71

²Refer to Note 14 for additional information related to the estimated fair value.

Derivative instruments, designated as hedging instruments, gain (loss) in statement of financial performance

The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the three months ended June 28, 2013 (in millions):



	Gain (Loss) Recognized in Other Comprehensive Income ("OCI")			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	89		Net operating revenues	$	51		$	1
Foreign currency contracts	14			Cost of goods sold	8			—
Interest rate contracts	138			Interest expense	(3		)	—
Commodity contracts	(1		)	Cost of goods sold	(1		)	—
Total	$	240			$	55		$	1

¹The Company records gains and losses reclassified from AOCI into income for the effective portion and the ineffective portion, if any, to the same line items in our condensed consolidated statements of income.

The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the six months ended June 28, 2013 (in millions):



	Gain (Loss) Recognized in OCI		Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	220	Net operating revenues	$	70		$	1
Foreign currency contracts	35		Cost of goods sold	10			—
Interest rate contracts	151		Interest expense	(6		)	—		²
Commodity contracts	1		Cost of goods sold	(1		)	—
Total	$	407		$	73		$	1

²Includes a de minimis amount of ineffectiveness in the hedging relationship.



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	72		Net operating revenues	$	(5	)	$	1
Foreign currency contracts	(14		)	Cost of goods sold	(6		)	—
Interest rate contracts	—			Interest expense	(3		)	—
Commodity contracts	(3		)	Cost of goods sold	(1		)	—
Total	$	55			$	(15	)	$	1



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	71		Net operating revenues	$	(26	)	$	2
Foreign currency contracts	12			Cost of goods sold	(12		)	—
Interest rate contracts	—			Interest expense	(6		)	—
Commodity contracts	(4		)	Cost of goods sold	—			—
Total	$	79			$	(44	)	$	2

Derivative instruments, fair value hedges, gain (loss) recognized in income

The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings during the three months ended June 28, 2013, and June 29, 2012 (in millions):



Fair Value Hedging Instruments	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
Fair Value Hedging Instruments	Location of Gain (Loss) Recognized in Income	June 28, 2013			June 29, 2012
Interest rate swaps	Interest expense	$	(116	)	$	90
Fixed-rate debt	Interest expense	131			(90		)
Net impact to interest expense		$	15		$	—
Foreign currency contracts	Other income (loss) — net	$	(17	)	$	(25	)
Available-for-sale securities	Other income (loss) — net	14			23
Net impact to other income (loss) — net		$	(3	)	$	(2	)
Net impact of fair value hedging instruments		$	12		$	(2	)

The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings during the six months ended June 28, 2013, and June 29, 2012 (in millions):



Fair Value Hedging Instruments	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
Fair Value Hedging Instruments	Location of Gain (Loss) Recognized in Income	June 28, 2013			June 29, 2012
Interest rate swaps	Interest expense	$	(151	)	$	69
Fixed-rate debt	Interest expense	176			(51		)
Net impact to interest expense		$	25		$	18
Foreign currency contracts	Other income (loss) — net	$	(7	)	$	15
Available-for-sale securities	Other income (loss) — net	(2		)	(16		)
Net impact to other income (loss) — net		$	(9	)	$	(1	)
Net impact of fair value hedging instruments		$	16		$	17

Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table presents the pretax impact that changes in the fair values of derivatives designated as net investment hedges had on AOCI during the three and six months ended June 28, 2013, and June 29, 2012 (in millions):



	Gain (Loss) Recognized in OCI
	Three Months Ended				Six Months Ended
	June 28, 2013		June 29, 2012		June 28, 2013		June 29, 2012
Foreign currency contracts	$	87	$	136	$	30	$	42

Schedule of Derivative Instruments Not Designated as Hedging Instruments Gain (Loss) in Statement of Financial Performance [Table Text Block]

The following tables present the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings during the three and six months ended June 28, 2013, and June 29, 2012, respectively (in millions):



		Three Months Ended
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	June 28, 2013			June 29, 2012
Foreign currency contracts	Net operating revenues	$	6		$	6
Foreign currency contracts	Other income (loss) — net	6			(184		)
Foreign currency contracts	Cost of goods sold	2			3
Interest rate contracts	Interest expense	(3		)	—
Commodity contracts	Net operating revenues	(1		)	—
Commodity contracts	Cost of goods sold	(75		)	(50		)
Commodity contracts	Selling, general and administrative expenses	(2		)	(26		)
Other derivative instruments	Selling, general and administrative expenses	4			2
Total		$	(63	)	$	(249	)



		Six Months Ended
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	June 28, 2013			June 29, 2012
Foreign currency contracts	Net operating revenues	$	4		$	(3	)
Foreign currency contracts	Other income (loss) — net	73			(72		)
Foreign currency contracts	Cost of goods sold	—			3
Interest rate contracts	Interest expense	(3		)	—
Commodity contracts	Net operating revenues	(1		)	—
Commodity contracts	Cost of goods sold	(144		)	(44		)
Commodity contracts	Selling, general and administrative expenses	(2		)	(7		)
Other derivative instruments	Selling, general and administrative expenses	24			18
Total		$	(49	)	$	(105	)