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FAIR VALUE MEASUREMENTS (Tables)
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12 Months Ended |
|
Dec. 31, 2012
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| Fair Value Measurements Disclosure [Abstract] |
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| 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):
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December 31, 2012 |
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Level 1 |
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Level 2 |
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Level 3 |
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Netting
Adjustment1
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Fair Value
Measurements
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Assets: |
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|
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Trading securities |
$ |
146 |
|
|
$ |
116 |
|
|
$ |
4 |
|
|
$ |
— |
|
|
$ |
266 |
|
Available-for-sale securities |
1,390 |
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|
3,068 |
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|
135 |
|
2 |
— |
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|
4,593 |
|
Derivatives3
|
47 |
|
|
583 |
|
|
— |
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|
(116 |
) |
|
514 |
|
Total assets |
$ |
1,583 |
|
|
$ |
3,767 |
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|
$ |
139 |
|
|
$ |
(116 |
) |
|
$ |
5,373 |
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Liabilities: |
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Derivatives3
|
$ |
35 |
|
|
$ |
98 |
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|
$ |
— |
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|
$ |
(121 |
) |
|
$ |
12 |
|
Total liabilities |
$ |
35 |
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|
$ |
98 |
|
|
$ |
— |
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|
$ |
(121 |
) |
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$ |
12 |
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1 |
Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and also cash collateral held or placed with the same counterparties. Refer to Note 5.
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2 |
Primarily related to long-term debt securities that mature in 2018. |
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3 |
Refer to Note 5 for additional information related to the composition of our derivative portfolio.
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December 31, 2011 |
|
Level 1 |
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Level 2 |
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Level 3 |
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|
Netting
Adjustment1
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|
Fair Value
Measurements
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Assets: |
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Trading securities |
$ |
166 |
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|
$ |
41 |
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|
$ |
4 |
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|
$ |
— |
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|
$ |
211 |
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Available-for-sale securities |
1,071 |
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|
214 |
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|
116 |
|
2 |
— |
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|
1,401 |
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Derivatives3
|
39 |
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|
467 |
|
|
— |
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|
(117 |
) |
|
389 |
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Total assets |
$ |
1,276 |
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|
$ |
722 |
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|
$ |
120 |
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|
$ |
(117 |
) |
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$ |
2,001 |
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Liabilities: |
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Derivatives3
|
$ |
5 |
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$ |
201 |
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|
$ |
— |
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|
$ |
(121 |
) |
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$ |
85 |
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Total liabilities |
$ |
5 |
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$ |
201 |
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|
$ |
— |
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|
$ |
(121 |
) |
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$ |
85 |
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1 |
Amounts represent the impact of legally enforceable master netting agreements that allow the Company to settle positive and negative positions and also cash collateral held or placed with the same counterparties. Refer to Note 5.
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2 |
Primarily related to long-term debt securities that mature in 2018. |
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3 |
Refer to Note 5 for additional information related to the composition of our derivative portfolio.
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| Assets measured at fair value on a nonrecurring basis |
Assets measured at fair value on a nonrecurring basis for the years ended December 31, 2012 and 2011, are summarized below (in millions):
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Gains (Losses) |
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December 31, |
2012 |
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|
2011 |
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Exchange of investment in equity securities |
$ |
185 |
|
1 |
$ |
418 |
|
5 |
Assets held for sale |
(108 |
) |
2 |
— |
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Valuation of shares in equity method investee |
10 |
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3 |
122 |
|
6 |
Cost method investments |
(16 |
) |
4 |
— |
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Equity method investments |
— |
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(41 |
) |
7 |
Available-for-sale securities |
— |
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|
(17 |
) |
8 |
Inventories |
— |
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(11 |
) |
9 |
Cold-drink equipment |
— |
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|
(1 |
) |
9 |
Total |
$ |
71 |
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$ |
470 |
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1 |
As a result of the merger of Andina and Polar, the Company recognized a gain of $185 million on the exchange of shares we previously owned in Polar for shares in Andina. This gain primarily represents the difference between the carrying value of the Polar shares we relinquished and the fair value of the Andina shares we received as a result of the transaction. The gain was calculated based on Level 1 inputs. Refer to Note 17.
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2 |
The Company and Coca-Cola FEMSA executed a share purchase agreement for the sale of a majority ownership interest in our consolidated Philippine bottling operations. As a result of this agreement, the Company was required to classify our Philippine bottling operations as held for sale in our consolidated balance sheet as of December 31, 2012. We also recognized a loss of $108 million during the year ended December 31, 2012, based on the agreed upon sale price and related transaction costs. The loss was calculated based on Level 3 inputs. Refer to Note 17.
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3 |
The Company recognized a gain of $92 million as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its own stock at a per share amount greater than the carrying value of the Company's per share investment. Accordingly, the Company is required to treat this type of transaction as if we sold a proportionate share of our investment in Coca-Cola FEMSA. This gain was partially offset by a loss of $82 million the Company recognized due to the Company acquiring an ownership interest in Mikuni for which we paid a premium over the publicly traded market price. This premium was expensed on the acquisition date. Subsequent to this transaction, the Company accounts for our investment in Mikuni under the equity method of accounting. The gain and loss described above were determined using Level 1 inputs. Refer to Note 17.
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4 |
The Company recognized impairment charges of $16 million due to other-than-temporary declines in the fair values of certain cost method investments. These charges were determined using Level 3 inputs. Refer to Note 17.
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5 |
As a result of the merger of Arca and Contal, the Company recognized a gain of $418 million on the exchange of the shares we previously owned in Contal for shares in the newly formed entity Arca Contal. The gain represents the difference between the carrying value of the Contal shares we relinquished and the fair value of the Arca Contal shares we received as a result of the transaction. The gain and initial carrying value of our investment were calculated based on Level 1 inputs. Refer to Note 17.
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6 |
The Company recognized a net gain of $122 million, primarily as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its own stock at per share amounts greater than the carrying value of the Company's per share investment. Accordingly, the Company is required to treat this type of transaction as if we sold a proportionate share of our investment in Coca-Cola FEMSA. The gains the Company recognized as a result of the previous transactions were partially offset by charges associated with certain of the Company's equity method investments in Japan. The gains and charges were determined using Level 1 inputs. Refer to Note 17.
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7 |
The Company recognized impairment charges of $41 million related to an investment in an entity accounted for under the equity method of accounting. Subsequent to the recognition of these impairment charges, the Company's remaining financial exposure related to this entity is not significant. This charge was determined using Level 3 inputs. Refer to Note 17.
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8 |
The Company recognized impairment charges of $17 million due to the other-than-temporary decline in the fair values of certain available-for-sale securities. These charges were determined using Level 1 inputs. Refer to Note 17.
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9 |
These assets primarily consisted of Company-owned inventory as well as cold-drink equipment that were damaged or lost as a result of the natural disasters in Japan on March 11, 2011. We recorded impairment charges of $11 million and $1 million related to Company-owned inventory and cold-drink equipment, respectively. These charges were determined using Level 3 inputs based on the carrying value of the inventory and cold-drink equipment prior to the disasters. Refer to Note 17.
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| Summary of the fair value of pension plan assets for U.S. and non-U.S. pension plans |
The following table summarizes the levels within the fair value hierarchy used to determine the fair value of our pension plan assets for our U.S. and non-U.S. pension plans as of December 31, 2012 and 2011 (in millions):
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December 31, 2012 |
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December 31, 2011 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Level 1 |
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Level 2 |
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Level 3 |
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Total |
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Cash and cash equivalents |
$ |
187 |
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$ |
199 |
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|
$ |
— |
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$ |
386 |
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$ |
152 |
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$ |
75 |
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$ |
— |
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$ |
227 |
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Equity securities: |
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U.S.-based companies |
1,847 |
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|
20 |
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|
14 |
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1,881 |
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|
1,366 |
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|
15 |
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|
14 |
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|
1,395 |
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International-based companies |
910 |
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|
54 |
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— |
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|
964 |
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|
865 |
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|
82 |
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|
6 |
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|
953 |
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Fixed-income securities: |
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Government bonds |
— |
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|
562 |
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|
— |
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|
562 |
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— |
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|
773 |
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— |
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|
773 |
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Corporate bonds and debt securities |
— |
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|
982 |
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— |
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|
982 |
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— |
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|
718 |
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— |
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|
718 |
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Mutual, pooled and commingled funds |
504 |
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|
1,006 |
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— |
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|
1,510 |
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|
167 |
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|
557 |
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|
5 |
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|
729 |
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Hedge funds/limited partnerships |
— |
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|
125 |
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|
400 |
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|
525 |
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|
— |
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|
140 |
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|
349 |
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|
489 |
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Real estate |
— |
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|
— |
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|
257 |
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|
257 |
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|
— |
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|
— |
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|
270 |
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|
270 |
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Other |
— |
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|
7 |
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|
510 |
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1 |
517 |
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— |
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|
99 |
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|
518 |
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1 |
617 |
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Total |
$ |
3,448 |
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$ |
2,955 |
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$ |
1,181 |
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$ |
7,584 |
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$ |
2,550 |
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$ |
2,459 |
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$ |
1,162 |
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$ |
6,171 |
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1 |
Includes $510 million and $514 million of purchased annuity contracts as of December 31, 2012 and 2011, respectively.
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| 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 for the years ended December 31, 2012 and 2011 (in millions):
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Hedge
Funds/Limited
Partnerships
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Real Estate |
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Equity
Securities
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Mutual,
Pooled and
Commingled
Funds
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Other |
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Total |
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2011 |
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Balance at beginning of year |
$ |
317 |
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|
$ |
242 |
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$ |
15 |
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$ |
20 |
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$ |
303 |
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$ |
897 |
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Actual return on plan assets: |
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Related to assets still held at the reporting date |
9 |
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|
35 |
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|
4 |
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|
(5 |
) |
|
61 |
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|
104 |
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Related to assets sold during the year |
(3 |
) |
|
(5 |
) |
|
— |
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|
6 |
|
|
— |
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|
(2 |
) |
Purchases, sales and settlements — net |
26 |
|
|
(2 |
) |
|
(1 |
) |
|
(16 |
) |
|
146 |
|
|
153 |
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Transfers in or out of Level 3 — net |
1 |
|
|
— |
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|
2 |
|
|
— |
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|
2 |
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|
5 |
|
Foreign currency translation |
(1 |
) |
|
— |
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|
— |
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|
— |
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|
6 |
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|
5 |
|
Balance at end of year |
$ |
349 |
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|
$ |
270 |
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$ |
20 |
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$ |
5 |
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$ |
518 |
|
1 |
$ |
1,162 |
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2012 |
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Balance at beginning of year |
$ |
349 |
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$ |
270 |
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$ |
20 |
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$ |
5 |
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$ |
518 |
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$ |
1,162 |
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Actual return on plan assets: |
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Related to assets still held at the reporting date |
(8 |
) |
|
13 |
|
|
— |
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|
— |
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|
1 |
|
|
6 |
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Related to assets sold during the year |
24 |
|
|
3 |
|
|
— |
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|
— |
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|
— |
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|
27 |
|
Purchases, sales and settlements — net |
35 |
|
|
(27 |
) |
|
— |
|
|
(5 |
) |
|
(2 |
) |
|
1 |
|
Transfers in or out of Level 3 — net |
— |
|
|
(2 |
) |
|
(6 |
) |
|
— |
|
|
(4 |
) |
|
(12 |
) |
Foreign currency translation |
— |
|
|
— |
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|
— |
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|
— |
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|
(3 |
) |
|
(3 |
) |
Balance at end of year |
$ |
400 |
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|
$ |
257 |
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|
$ |
14 |
|
|
$ |
— |
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|
$ |
510 |
|
1 |
$ |
1,181 |
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1 |
Includes $510 million and $514 million of purchased annuity contracts as of December 31, 2012 and 2011, respectively.
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| Summary of the fair value of postretirement benefit plan assets |
The following table summarizes the levels within the fair value hierarchy used to determine the fair value of our other postretirement benefit plan assets as of December 31, 2012 and 2011 (in millions):
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December 31, 2012 |
|
December 31, 2011 |
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Level 1 |
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Level 2 |
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Level 3 1
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Total |
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Level 1 |
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Level 2 |
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Level 3 1
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Total |
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Cash and cash equivalents |
$ |
1 |
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|
$ |
12 |
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|
$ |
— |
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|
$ |
13 |
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|
$ |
— |
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|
$ |
86 |
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|
$ |
— |
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|
$ |
86 |
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Equity securities: |
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U.S.-based companies |
81 |
|
|
— |
|
|
— |
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|
81 |
|
|
70 |
|
|
— |
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|
— |
|
|
70 |
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International-based companies |
4 |
|
|
— |
|
|
— |
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|
4 |
|
|
13 |
|
|
— |
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|
— |
|
|
13 |
|
Fixed-income securities: |
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|
|
|
|
|
|
|
|
|
|
|
|
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|
Government bonds |
75 |
|
|
3 |
|
|
— |
|
|
78 |
|
|
— |
|
|
2 |
|
|
— |
|
|
2 |
|
Corporate bonds and debt securities |
— |
|
|
5 |
|
|
— |
|
|
5 |
|
|
— |
|
|
6 |
|
|
— |
|
|
6 |
|
Mutual, pooled and commingled funds |
11 |
|
|
5 |
|
|
— |
|
|
16 |
|
|
— |
|
|
3 |
|
|
— |
|
|
3 |
|
Hedge funds/limited partnerships |
— |
|
|
1 |
|
|
2 |
|
|
3 |
|
|
— |
|
|
— |
|
|
2 |
|
|
2 |
|
Real estate |
— |
|
|
— |
|
|
2 |
|
|
2 |
|
|
— |
|
|
— |
|
|
2 |
|
|
2 |
|
Other |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
Total |
$ |
172 |
|
|
$ |
26 |
|
|
$ |
4 |
|
|
$ |
202 |
|
|
$ |
83 |
|
|
$ |
98 |
|
|
$ |
4 |
|
|
$ |
185 |
|
|
|
1 |
Level 3 assets are not a significant portion of other postretirement benefit plan assets. |
|