Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements (Tables)

v2.4.0.8
Fair Value Measurements (Tables)
 9 Months Ended
Sep. 26, 2014
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 table summarizes those assets and liabilities measured at fair value on a recurring basis as of September 26, 2014 (in millions):
 
Level 1

Level 2

Level 3

 
Netting
Adjustment1

Fair Value
Measurements

 
Assets
 
 
 
 
 
 
 
Trading securities2
$
217

$
174

$
4

 
$
—

$
395

 
Available-for-sale securities2
4,196

3,373

127

3 
—

7,696

 
Derivatives4
22

1,141

—

 
(207
)
956

5 
Total assets
$
4,435

$
4,688

$
131

 
$
(207
)
$
9,047

 
Liabilities
 
 
 
 
 
 
 
Derivatives4
$
2

$
265

$
—

 
$
(207
)
$
60

5 
Total liabilities
$
2

$
265

$
—

 
$
(207
)
$
60

 
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. 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.
2 
Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities.
3 Primarily related to long-term debt securities that mature in 2018.
4 Refer to Note 5 for additional information related to the composition of our derivative portfolio.
5 The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows: $443 million in the line item prepaid expenses and other assets; $513 million in the line item other assets; $3 million in the line item accounts payable and accrued expenses; and $57 million in the line item other liabilities. Refer to Note 5 for additional information related to the composition of our derivative portfolio.
The following table summarizes those assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 (in millions):
 
Level 1

Level 2

Level 3

 
Netting
Adjustment1

Fair Value
Measurements

 
Assets
 
 
 
 
 
 
 
Trading securities2
$
206

$
163

$
3

 
$
—

$
372

 
Available-for-sale securities2
1,453

3,281

108

3 
—

4,842

 
Derivatives4
17

822

—

 
(150
)
689

5 
Total assets
$
1,676

$
4,266

$
111

 
$
(150
)
$
5,903

 
Liabilities
 
 
 
 
 
 
 
Derivatives4
$
10

$
165

$
—

 
$
(151
)
$
24

5 
Total liabilities
$
10

$
165

$
—

 
$
(151
)
$
24

 
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. 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.
2 
Refer to Note 3 for additional information related to the composition of our trading securities and available-for-sale securities.
3 Primarily related to long-term debt securities that mature in 2018.
4 Refer to Note 5 for additional information related to the composition of our derivative portfolio.
5 The Company's derivative financial instruments are recorded at fair value in our condensed consolidated balance sheet as follows: $129 million in the line item prepaid expenses and other assets; $560 million in the line item other assets; $12 million in the line item accounts payable and accrued expenses; and $12 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 or losses on assets measured at fair value on a nonrecurring basis for the three and nine months ended September 26, 2014 and September 27, 2013 are summarized in the table below (in millions):
 
Gains (Losses)  
  
 
Three Months Ended
 
Nine Months Ended
  
 
September 26,
2014

 
September 27,
2013

 
September 26,
2014

 
September 27,
2013

  
Assets held for sale
$
(236
)
1 
$
—

 
$
(236
)
1 
$
—

 
Intangible assets
—

 
(190
)
2 
—

 
(190
)
2 
Valuation of shares in equity method investee
—

 
—

 
—

 
139

4 
Exchange of investment in equity securities
—

 
30

3 
—

 
(114
)
5 
Total
$
(236
)
 
$
(160
)
 
$
(236
)
 
$
(165
)
 
1 
As of September 26, 2014, the Company had entered into agreements to refranchise additional territories in North America. These operations met the criteria to be classified as held for sale in our condensed consolidated balance sheet as of September 26, 2014, and we were required to record their assets and liabilities at the lower of carrying value or fair value less any costs to sell based on the agreed-upon sale price. The Company recognized a noncash loss of $236 million during the three and nine months ended September 26, 2014 as a result of writing down the assets to their fair value less costs to sell. The loss was calculated based on Level 3 inputs. Refer to Note 2.
2 
The Company recognized a loss of $190 million due to impairment charges on certain intangible assets. The charges were primarily determined by comparing the fair value of the assets to the current carrying value. The fair value of the assets was derived using discounted cash flow analyses based on Level 3 inputs. Refer to Note 10.
3 
The Company recognized a gain of $30 million on the exchange of shares it previously owned in certain equity method investees for shares in CCEJ, a newly formed entity. The gain represents the difference between the carrying value of the shares the Company relinquished and the fair value of the CCEJ shares received as a result of the transaction. The gain and the initial carrying value of the Company's investment were calculated based on Level 1 inputs. The Company accounts for its investment in CCEJ under the equity method of accounting. Refer to Note 10.
4 
The Company recognized a gain of $139 million during the nine months ended September 27, 2013. This gain resulted from Coca-Cola FEMSA 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 the Company had sold a proportionate share of its investment in Coca-Cola FEMSA. This gain was determined using Level 1 inputs. Refer to Note 10.
5 
The Company recognized a net loss of $114 million on the exchange of shares it previously owned in certain equity method investees for shares in the newly formed entity CCEJ. CCEJ is also an equity method investee. The net loss represents the difference between the carrying value of the shares the Company relinquished and the fair value of the CCEJ shares received as a result of the transaction. The net loss and the initial carrying value of the Company's investment were calculated based on Level 1 inputs. Refer to Note 10.