Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v3.19.1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 29, 2019
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):
March 29, 2019
Level 1

Level 2

Level 3

 
Other3

Netting
Adjustment

4 
Fair Value
Measurements

 
Assets:
 
 
 
 
 
 
 
 
 
Equity securities with readily determinable values1
$
1,831

$
201

$
7

 
$
63

$
—

 
$
2,102

 
Debt securities1
—

4,768

19


—

—

 
4,787

 
Derivatives2
3

490

—

 
—

(314
)
5 
179

6 
Total assets
$
1,834

$
5,459

$
26

 
$
63

$
(314
)
 
$
7,068

 
Liabilities:
 
 
 
 
 
 
 
 
 
Derivatives2
$
(6
)
$
(123
)
$
—

 
$
—

$
115

 
$
(14
)
6 
Total liabilities
$
(6
)
$
(123
)
$
—

 
$
—

$
115

 
$
(14
)
 
1Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.
2 Refer to Note 6 for additional information related to the composition of our derivative portfolio.
3 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 4.
4 Amounts 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 6.
5 
The Company is obligated to return $205 million in cash collateral it has netted against its derivative position.
6 
The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows: $177 million in the line item other assets; $2 million in the line item assets held for sale — discontinued operations; and $14 million in the line item other liabilities. Refer to Note 6 for additional information related to the composition of our derivative portfolio.
December 31, 2018
Level 1

Level 2

Level 3

 
Other3

Netting
Adjustment

4 
Fair Value
Measurements

 
Assets:
 
 
 
 
 
 
 
 
 
Equity securities with readily determinable values1
$
1,681

$
186

$
6

 
$
61

$
—

 
$
1,934

 
Debt securities1
—

5,018

19

 
—

—

 
5,037

 
Derivatives2
2

313

—

 
—

(261
)
5 
54

7 
Total assets
$
1,683

$
5,517

$
25

 
$
61

$
(261
)
 
$
7,025

 
Liabilities:
 

 

 

 
 
 

 
 

 
Derivatives2
$
(14
)
$
(221
)
$
—

 
$
—

$
182

6 
$
(53
)
7 
Total liabilities
$
(14
)
$
(221
)
$
—

 
$
—

$
182

 
$
(53
)
 
1 
Refer to Note 4 for additional information related to the composition of our equity securities with readily determinable values and debt securities.
2 Refer to Note 6 for additional information related to the composition of our derivative portfolio.
3 
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 4.
4 Amounts 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 6.
5 The Company is obligated to return $96 million in cash collateral it has netted against its derivative position.
6 
The Company has the right to reclaim $4 million in cash collateral it has netted against its derivative position.
7 
The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows:$54 million in the line item other assets; $3 million in the line item liabilities held for sale — discontinued operations; and $50 million in the line item other liabilities. Refer to Note 6 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
 
 
March 29, 2019

 
March 30,
2018

 
Other-than-temporary impairment charges
$
(343
)
1 
$
—

 
Investment in former equity method investee
(121
)
2 
—

 
Other long-lived assets
—

 
(252
)
3 
Intangible assets
—

 
(138
)
3 
Total
$
(464
)
 
$
(390
)
 

1 Based on the length of time and the extent to which the market value of our investment in CCBJHI, an equity method investee, has been 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. As a result, the Company recognized an other-than-temporary impairment charge of $286 million. This impairment charge was determined using the quoted market price (a Level 1 measurement) of CCBJHI. The Company also recognized an other-than-temporary impairment charge of $57 million related to one of our equity method investees in North America. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results.
2 The Company recognized a loss of $121 million in conjunction with our acquisition of the remaining equity ownership interest in CHI, 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.
3 The Company recognized charges of $252 million related to CCR's property, plant and equipment and $138 million related to CCR's intangible assets. These charges were a result of management's revised estimate of the proceeds that were expected to be received for the remaining bottling territories upon their refranchising. These charges were determined by comparing the fair value of the reporting unit, based on Level 3 inputs, to its carrying value.