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

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

Fair Value Measurements (Tables)

6 Months Ended

Jul. 02, 2021

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 assets and liabilities measured at fair value on a recurring basis (in millions):


July 2, 2021	Level 1		Level 2		Level 3			Other3		Netting Adjustment		4	Fair Value Measurements
Assets:
Equity securities with readily determinable values1	$	2,427	$	224	$	18		$	103	$	—		$	2,772
Debt securities1	—		1,640		35			—		—			1,675
Derivatives2	133		708		—			—		(567)		6	274		8
Total assets	$	2,560	$	2,572	$	53		$	103	$	(567)		$	4,721
Liabilities:
Contingent consideration liability	$	—	$	—	$	472	5	$	—	$	—		$	472
Derivatives2	—		118		—			—		(97)		7	21		8
Total liabilities	$	—	$	118	$	472		$	—	$	(97)		$	493

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 derivatives 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 Refer to Note 2 for additional information related to the contingent consideration liability resulting from the fairlife acquisition.

6 The Company is obligated to return $405 million in cash collateral it has netted against its derivative positions.

7 The Company has the right to reclaim $16 million in cash collateral it has netted against its derivative positions.

8 The Company’s derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows:

$274 million in the line item other assets and $21 million in the line item other liabilities. Refer to Note 6 for additional information related to the composition of our derivatives portfolio.


December 31, 2020	Level 1		Level 2		Level 3			Other3		Netting Adjustment		4	Fair Value Measurements
Assets:
Equity securities with readily determinable values1	$	2,049	$	210	$	12		$	103	$	—		$	2,374
Debt securities1	4		2,267		32			—		—			2,303
Derivatives2	63		835		—			—		(669)		6	229		8
Total assets	$	2,116	$	3,312	$	44		$	103	$	(669)		$	4,906
Liabilities:
Contingent consideration liability	$	—	$	—	$	321	5	$	—	$	—		$	321
Derivatives2	—		91		—			—		(81)		7	10		8
Total liabilities	$	—	$	91	$	321		$	—	$	(81)		$	331

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 derivatives portfolio.

5 Refer to Note 2 for additional information related to the contingent consideration liability resulting from the fairlife acquisition.

6 The Company is obligated to return $546 million in cash collateral it has netted against its derivative positions.

7 The Company does not have the right to reclaim any cash collateral it has netted against its derivative positions.

8 The Company’s derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows: $229 million in the line item other assets, $9 million in the line item accounts payable and accrued expenses, and $1 million in the line item other liabilities. Refer to Note 6 for additional information related to the composition of our derivatives 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 following table (in millions):


	Gains (Losses)
	Three Months Ended					Six Months Ended
	July 2, 2021		June 26, 2020			July 2, 2021		June 26, 2020
Impairment of intangible assets	$	—	$	(63)	1	$	—	$	(215)	1
Other-than-temporary impairment charges	—		(38)		2	—		(38)		2
Impairment of equity investment without a readily determinable fair value	—		—			—		(26)		3
Total	$	—	$	(101)		$	—	$	(279)

1 The Company recorded impairment charges of $8 million and $160 million during the three and six months ended June 26, 2020, respectively, related to its Odwalla trademark, as the Company decided in June 2020 to discontinue its Odwalla juice business. The Company recorded an impairment charge of $55 million during the three and six months ended June 26, 2020 related to a trademark in North America, which was primarily driven by the impact of the COVID-19 pandemic, revised projections of future operating results and a change in brand focus in the Company’s portfolio. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs.

2 The Company recognized an other-than-temporary impairment charge of $38 million during the three and six months ended June 26, 2020 related to one of our equity method investees in Latin America, primarily driven by revised projections of future operating results. The fair value of this investment was derived using discounted cash flow analyses based on Level 3 inputs.

3 The Company recorded an impairment charge of $26 million related to an investment in an equity security without a readily determinable fair value. This impairment charge was derived using Level 3 inputs and was primarily driven by revised projections of future operating results.