Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.8.0.1
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 29, 2017
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):
September 29, 2017
Level 1

Level 2

Level 3

 
Other4

Netting
Adjustment5

 
Fair Value
Measurements

 
Assets:
 
 
 
 
 
 
 
 
 
Trading securities1
$
233

$
123

$
4

 
$
67

$
—

 
$
427

 
Available-for-sale securities1
1,892

6,532

167

3 
—

—

 
8,591

 
Derivatives2
7

458

—

 
—

(358
)
6 
107

8 
Total assets
$
2,132

$
7,113

$
171

 
$
67

$
(358
)
 
$
9,125

 
Liabilities:
 
 
 
 
 
 
 
 
 
Derivatives2
$
(12
)
$
(301
)
$
—

 
$
—

$
232

7 
$
(81
)
8 
Total liabilities
$
(12
)
$
(301
)
$
—

 
$
—

$
232

 
$
(81
)
 
1 
Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities.
2 Refer to Note 5 for additional information related to the composition of our derivative portfolio.
3 Primarily related to debt securities that mature in 2018.
4 
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 3.
5 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. 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.
6 The Company is obligated to return $138 million in cash collateral it has netted against its net asset derivative position.
7 
The Company has the right to reclaim $1 million in cash collateral it has netted against its net liability derivative position.
8 
The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheets as follows: $107 million in the line item other assets and $81 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.
December 31, 2016
Level 1

Level 2

Level 3

 
Other4

Netting
Adjustment5

 
Fair Value
Measurements

 
Assets:
 
 
 
 
 
 
 
 
 
Trading securities1
$
202

$
115

$
4

 
$
63

$
—

 
$
384

 
Available-for-sale securities1
1,655

4,619

139

3 
—

—

 
6,413

 
Derivatives2
4

878

—

 
—

(369
)
6 
513

8 
Total assets
$
1,861

$
5,612

$
143

 
$
63

$
(369
)
 
$
7,310

 
Liabilities:
 
 
 
 
 
 
 
 
 
Derivatives2
$
11

$
276

$
—

 
$
—

$
(192
)
7 
$
95

8 
Total liabilities
$
11

$
276

$
—

 
$
—

$
(192
)
 
$
95

 
1 
Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities.
2 Refer to Note 5 for additional information related to the composition of our derivative portfolio.
3 Primarily related to long-term debt securities that mature in 2018.
4 
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 3.
5 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. 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.
6 The Company is obligated to return $201 million in cash collateral it has netted against its derivative position.
7 
The Company has the right to reclaim $17 million in cash collateral it has netted against its derivative position.
8 
The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheets as follows: $347 million in the line item prepaid expenses and other assets; $166 million in the line item other assets; $42 million in the line item accounts payable and accrued expenses; and $53 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.
Assets and liabilities 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 table below (in millions):
 
Gains (Losses)  
 
Three Months Ended
Nine Months Ended
 
September 29, 2017

 
September 30,
2016

September 29, 2017

 
September 30,
2016

Assets held for sale1
$
(307
)
 
$
(1,044
)
$
(1,819
)
 
$
(1,490
)
Intangible assets
—


—

(442
)
2 
—

Other long-lived assets
—

 
—

(329
)
3 
—

Valuation of shares in equity method investee
—

 
—

25

4 
—

Other-than-temporary impairment charge
(50
)
5 
—

(50
)
5 
—

Total
$
(357
)
 
$
(1,044
)
$
(2,615
)
 
$
(1,490
)
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. These losses related to refranchising activities in North America, which were calculated based on Level 3 inputs. Refer to Note 2.
2 The Company recognized an impairment charge of $375 million related to CCR goodwill. This impairment charge was determined by comparing the fair value of the reporting unit, based on Level 3 inputs, to its carrying value. The Company also recognized an impairment charge of $33 million related to certain U.S. bottlers' franchise rights. This charge was determined by comparing the fair value of the asset to its current carrying value. Each of these impairment charges were primarily a result of refranchising activities in North America and management's estimates of the proceeds that are expected to be received for the remaining bottling territories upon their refranchising. Additionally, the Company recorded impairment charges of $34 million related to Venezuelan intangible assets due to weaker sales and the volatility of foreign currency exchange rates resulting from continued political instability. The fair value of these assets was derived using discounted cash flow analyses based on Level 3 inputs.
3 The Company recognized impairment charges of $310 million related to CCR property, plant and equipment and $19 million related to CCR other assets primarily as a result of refranchising activities in North America. The fair value of these assets was derived using management's estimate of the proceeds that are expected to be received for the remaining bottling territories upon their refranchising.
4 The Company recognized a gain of $25 million as a result of Coca-Cola FEMSA, an equity method investee, issuing additional shares of its 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 the Company had sold a proportionate share of its investment in Coca-Cola FEMSA. These gains were determined using Level 1 inputs.
5 The Company recognized an other-than-temporary impairment charge of $50 million related to one of our international equity method investees, primarily driven by foreign currency exchange rate fluctuations. The fair value of this investment was derived using discounted cash flow analyses based on Level 3 inputs.