THE COCA-COLA COMPANY AND SUBSIDIARIES

Table of Contents



		Page ~~Number~~
	Forward-Looking Statements	1

	Part I. Financial Information

Item 1.	Financial Statements (Unaudited)	2

	Condensed Consolidated Statements of Income Three and ~~nine months ended~~Nine Months Ended September ~~29, 2017~~27, 2019 and September ~~30, 2016~~28, 2018	2

	Condensed Consolidated Statements of Comprehensive Income Three and ~~nine months ended~~Nine Months Ended September ~~29, 2017~~27, 2019 and September ~~30, 2016~~28, 2018	3

	Condensed Consolidated Balance Sheets September ~~29, 2017~~27, 2019 and December 31, ~~2016~~2018	4

	Condensed Consolidated Statements of Cash Flows Nine ~~months ended~~Months Ended September ~~29, 2017~~27, 2019 and September ~~30, 2016~~28, 2018	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4142

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6563

Item 4.	Controls and Procedures	6563

	Part II. Other Information

Item 1.	Legal Proceedings	63

Item 1A.	Risk Factors	64

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65

Item ~~1A.~~6.	~~Risk Factors~~Exhibits	66

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	66

~~Item 6.~~	~~Exhibits~~	6765
	Signatures	7168

FORWARD-LOOKING STATEMENTS

This report contains information that may constitute "forward-looking statements." Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will" and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future — including statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results — are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. ~~Our Company undertakes~~We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our ~~Company's~~ historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part II, "Item 1A. Risk Factors" and elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

Part I. Financial Information

Item 1. Financial Statements (Unaudited)

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

(In millions except per share data)



	Three Months Ended						Nine Months Ended
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Net Operating Revenues	$	9,507		$	8,775		$	28,198		$	26,494
Cost of goods sold	3,767			3,346			11,053			9,965
Gross Profit	5,740			5,429			17,145			16,529
Selling, general and administrative expenses	3,116			2,660			8,879			8,286
Other operating charges	125			155			344			916
Operating Income	2,499			2,614			7,922			7,327
Interest income	153			171			428			510
Interest expense	230			214			711			697
Equity income (loss) — net	346			348			808			813
Other income (loss) — net	324			(546		)	(81		)	(693		)
Income Before Income Taxes	3,092			2,373			8,366			7,260
Income taxes	503			555			1,446			1,711
Consolidated Net Income	2,589			1,818			6,920			5,549
Less: Net income (loss) attributable to noncontrolling interests	(4		)	(62		)	42			(15		)
Net Income Attributable to Shareowners of The Coca-Cola Company	$	2,593		$	1,880		$	6,878		$	5,564
Basic Net Income Per Share¹	$	0.61		$	0.44		$	1.61		$	1.31
Diluted Net Income Per Share¹	$	0.60		$	0.44		$	1.60		$	1.29
Average Shares Outstanding	4,280			4,255			4,273			4,258
Effect of dilutive securities	41			40			38			39
Average Shares Outstanding Assuming Dilution	4,321			4,295			4,311			4,297

Three Months Ended Nine Months Ended
September 29,
2017
September 30,
2016
September 29,
2017
September 30,
2016
NET OPERATING REVENUES $ 9,078
$ 10,633
$ 27,898
$ 32,454
Cost of goods sold 3,395
4,131
10,567
12,671
GROSS PROFIT 5,683
6,502
17,331
19,783
Selling, general and administrative expenses 3,203
4,009
9,660
11,682
Other operating charges 360
222
1,491
830
OPERATING INCOME 2,120
2,271
6,180
7,271
Interest income 175
164
495
472
Interest expense 208
182
631
485
Equity income (loss) — net 358
281
883
678
Other income (loss) — net (771 ) (1,106 ) (1,122 ) (315 )
INCOME BEFORE INCOME TAXES 1,674
1,428
5,805
7,621
Income taxes 230
378
1,805
1,618
CONSOLIDATED NET INCOME 1,444
1,050
4,000
6,003
Less: Net income (loss) attributable to noncontrolling interests (3 ) 4
0 26
NET INCOME ATTRIBUTABLE TO SHAREOWNERS OF
THE COCA-COLA COMPANY
$ 1,447
$ 1,046
$ 4,000
$ 5,977
BASIC NET INCOME PER SHARE¹
$ 0.34
$ 0.24
$ 0.94
$ 1.38
DILUTED NET INCOME PER SHARE¹
$ 0.33
$ 0.24
$ 0.92
$ 1.37
DIVIDENDS PER SHARE $ 0.37
$ 0.35
$ 1.11
$ 1.05
AVERAGE SHARES OUTSTANDING 4,266
4,315
4,275
4,322
Effect of dilutive securities 54
49
52
52
AVERAGE SHARES OUTSTANDING ASSUMING DILUTION 4,320
4,364
4,327
4,374

¹Calculated based on net income attributable to shareowners of The Coca-Cola Company.

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In millions)

Three Months Ended Nine Months Ended
September 29,
2017
September 30,
2016
September 29,
2017
September 30,
2016
CONSOLIDATED NET INCOME $ 1,444
$ 1,050
$ 4,000
$ 6,003
Other comprehensive income:

Net foreign currency translation adjustment 693
86
1,511
415
Net gain (loss) on derivatives (96 ) (101 ) (394 ) (666 )
Net unrealized gain (loss) on available-for-sale securities 1
(82 ) 165
79
Net change in pension and other benefit liabilities 49
39
82
128
TOTAL COMPREHENSIVE INCOME (LOSS) 2,091
992
5,364
5,959
Less: Comprehensive income (loss) attributable to noncontrolling interests (2 ) 2
2
17
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY $ 2,093
$ 990
$ 5,362
$ 5,942



	Three Months Ended						Nine Months Ended
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Consolidated Net Income	$	2,589		$	1,818		$	6,920		$	5,549
Other Comprehensive Income:
Net foreign currency translation adjustments	(960		)	(210		)	(679		)	(1,635		)
Net gains (losses) on derivatives	46			(30		)	30			22
Net change in unrealized gains (losses) on available-for-sale debt securities	16			10			46			(91		)
Net change in pension and other benefit liabilities	32			56			100			372
Total Comprehensive Income	1,723			1,644			6,417			4,217
Less: Comprehensive income (loss) attributable to noncontrolling interests	(145		)	60			(88		)	9
Total Comprehensive Income Attributable to Shareowners of The Coca-Cola Company	$	1,868		$	1,584		$	6,505		$	4,208

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In millions except par value)

September 29,
2017
December 31,
2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 12,528
$ 8,555
Short-term investments 9,691
9,595
TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS 22,219
18,150
Marketable securities 5,138
4,051
Trade accounts receivable, less allowances of $488 and $466, respectively 3,664
3,856
Inventories 2,608
2,675
Prepaid expenses and other assets 2,993
2,481
Assets held for sale 1,782
2,797
TOTAL CURRENT ASSETS 38,404
34,010
EQUITY METHOD INVESTMENTS 21,644
16,260
OTHER INVESTMENTS 1,117
989
OTHER ASSETS 4,480
4,248
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation of
$8,424 and $10,621, respectively
8,306
10,635
TRADEMARKS WITH INDEFINITE LIVES 6,575
6,097
BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES 138
3,676
GOODWILL 9,473
10,629
OTHER INTANGIBLE ASSETS 378
726
TOTAL ASSETS $ 90,515
$ 87,270
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 10,212
$ 9,490
Loans and notes payable 13,398
12,498
Current maturities of long-term debt 3,231
3,527
Accrued income taxes 355
307
Liabilities held for sale 437
710
TOTAL CURRENT LIABILITIES 27,633
26,532
LONG-TERM DEBT 32,471
29,684
OTHER LIABILITIES 3,946
4,081
DEFERRED INCOME TAXES 4,313
3,753
THE COCA-COLA COMPANY SHAREOWNERS' EQUITY
Common stock, $0.25 par value; Authorized — 11,200 shares;
Issued — 7,040 and 7,040 shares, respectively
1,760
1,760
Capital surplus 15,699
14,993
Reinvested earnings 64,759
65,502
Accumulated other comprehensive income (loss) (9,843 ) (11,205 )
Treasury stock, at cost — 2,778 and 2,752 shares, respectively (50,256 ) (47,988 )
EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY 22,119
23,062
EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS 33
158
TOTAL EQUITY 22,152
23,220
TOTAL LIABILITIES AND EQUITY $ 90,515
$ 87,270



	September 27, 2019			December 31, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	7,531		$	9,077
Short-term investments	2,001			2,025
Total Cash, Cash Equivalents and Short-Term Investments	9,532			11,102
Marketable securities	3,456			5,013
Trade accounts receivable, less allowances of $525 and $501, respectively	4,353			3,685
Inventories	3,266			3,071
Prepaid expenses and other assets	2,510			2,059
Total Current Assets	23,117			24,930
Equity method investments	18,689			19,412
Other investments	878			867
Other assets	5,750			4,148
Deferred income tax assets	2,452			2,674
Property, plant and equipment, less accumulated depreciation of $8,267 and $8,013, respectively	10,217			9,598
Trademarks with indefinite lives	9,167			6,682
Bottlers' franchise rights with indefinite lives	109			51
Goodwill	16,465			14,109
Other intangible assets	589			745
Total Assets	$	87,433		$	83,216
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	12,727		$	9,533
Loans and notes payable	10,972			13,835
Current maturities of long-term debt	492			5,003
Accrued income taxes	909			411
Total Current Liabilities	25,100			28,782
Long-term debt	31,012			25,376
Other liabilities	8,057			7,646
Deferred income tax liabilities	2,581			2,354
The Coca-Cola Company Shareowners' Equity
Common stock, $0.25 par value; authorized — 11,200 shares; issued — 7,040 and 7,040 shares, respectively	1,760			1,760
Capital surplus	17,039			16,520
Reinvested earnings	65,481			63,234
Accumulated other comprehensive income (loss)	(13,706		)	(12,814		)
Treasury stock, at cost — 2,756 and 2,772 shares, respectively	(51,861		)	(51,719		)
Equity Attributable to Shareowners of The Coca-Cola Company	18,713			16,981
Equity attributable to noncontrolling interests	1,970			2,077
Total Equity	20,683			19,058
Total Liabilities and Equity	$	87,433		$	83,216

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In millions)


	Nine Months Ended						Nine Months Ended
	September 29, 2017			September 30, 2016			September 27, 2019			September 28, 2018
OPERATING ACTIVITIES
Operating Activities
Consolidated net income	$	4,000		$	6,003		$	6,920		$	5,549
Depreciation and amortization	926			1,323			965			807
Stock-based compensation expense	167			191			146			167
Deferred income taxes	606			(98		)	(326		)	26
Equity (income) loss — net of dividends	(559		)	(417		)	(336		)	(385		)
Foreign currency adjustments	322			193			79			(169		)
Significant (gains) losses on sales of assets — net	942			364
Significant (gains) losses — net							(389		)	541
Other operating charges	918			277			147			662
Other items	(9		)	(205		)	444			130
Net change in operating assets and liabilities	(1,395		)	(908		)	121			(1,638		)
Net cash provided by operating activities	5,918			6,723
INVESTING ACTIVITIES
Net Cash Provided by Operating Activities							7,771			5,690
Investing Activities
Purchases of investments	(12,925		)	(12,733		)	(4,113		)	(6,809		)
Proceeds from disposals of investments	12,161			13,210			5,674			11,079
Acquisitions of businesses, equity method investments and nonmarketable securities	(538		)	(767		)	(5,376		)	(598		)
Proceeds from disposals of businesses, equity method investments and nonmarketable securities	2,790			745			266			1,354
Purchases of property, plant and equipment	(1,194		)	(1,561		)	(1,206		)	(1,048		)
Proceeds from disposals of property, plant and equipment	72			92			944			97
Other investing activities	(122		)	(319		)	(90		)	33
Net cash provided by (used in) investing activities	244			(1,333		)
FINANCING ACTIVITIES
Net Cash Provided by (Used in) Investing Activities							(3,901		)	4,108
Financing Activities
Issuances of debt	24,899			22,667			19,598			21,422
Payments of debt	(22,424		)	(20,406		)	(21,716		)	(23,595		)
Issuances of stock	1,320			1,295			923			891
Purchases of stock for treasury	(3,087		)	(2,509		)	(690		)	(1,596		)
Dividends	(3,165		)	(3,028		)	(3,419		)	(3,321		)
Other financing activities	(42		)	198			(33		)	(184		)
Net cash provided by (used in) financing activities	(2,499		)	(1,783		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	310			231
CASH AND CASH EQUIVALENTS
Net increase (decrease) during the period	3,973			3,838
Balance at beginning of period	8,555			7,309
Balance at end of period	$	12,528		$	11,147
Net Cash Provided by (Used in) Financing Activities							(5,337		)	(6,383		)
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents							(75		)	(249		)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period							(1,542		)	3,166
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period							9,318			6,373
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents at End of Period							7,776			9,539
Less: Restricted cash and restricted cash equivalents at end of period							245			318
Cash and Cash Equivalents at End of Period							$	7,531		$	9,221

Refer to Notes to Condensed Consolidated Financial Statements.

THE COCA-COLA COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited ~~Condensed Consolidated Financial Statements~~condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by U.S. GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of The Coca-Cola Company for the year ended December 31, ~~2016~~2018.

When used in these notes, the terms "The Coca-Cola Company," "Company," "we," "us" and "our" mean The Coca-Cola Company and all entities included in our ~~Condensed Consolidated Financial Statements.~~condensed consolidated financial statements. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September ~~29, 2017~~27, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017~~2019. Sales of our nonalcoholic ready-to-drink beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales volumes. The volume of sales in the beverage business may be affected by weather conditions.

Each of our interim reporting periods, other than the fourth interim reporting period, ends on the Friday closest to the last day of the corresponding quarterly calendar period. The third quarter of ~~2017~~2019 and the third quarter of ~~2016~~2018 ended on September ~~29, 2017~~27, 2019 and September ~~30, 2016~~28, 2018, respectively. Our fourth interim reporting period and our fiscal year end on December 31 regardless of the day of the week on which December 31 falls.

Operating Segments

In January 2019, we established a new operating segment, Global Ventures, which includes the results of Costa Limited ("Costa"), which we acquired in January 2019, and the results of our innocent and doğadan businesses as well as fees earned pursuant to distribution coordination agreements between the Company and Monster Beverage Corporation ("Monster"). Additionally, during the second quarter of 2019, the Company updated its plans for Coca-Cola Beverages Africa Proprietary Limited ("CCBA") and now intends to maintain its majority stake in CCBA for the foreseeable future. As a result, the Company now presents the financial results of CCBA within its results from continuing operations and includes the results of CCBA in the Bottling Investments operating segment. Accordingly, all prior period operating segment and Corporate information presented herein has been adjusted to reflect these changes. Refer to Note 2 and Note 17.

As of September 27, 2019, our organizational structure consisted of the following operating segments: Europe, Middle East and Africa; Latin America; North America; Asia Pacific; Global Ventures; and Bottling Investments. Our operating structure also included Corporate, which consists of two components: (1) a center focused on strategic initiatives, policy and governance, and (2) an enabling services organization focused on both simplifying and standardizing key transactional processes and providing support to business units through global centers of excellence.

Advertising Costs

The Company's accounting policy related to advertising costs for annual reporting purposes ~~as disclosed in Note 1 of our~~ ~~2016~~ ~~Annual Report on Form 10-K,~~ is to expense production costs of print, radio, television and other advertisements as of the first date the advertisements take place. All other marketing expenditures are expensed in the annual period in which the expenditure is incurred.

For interim reporting purposes, we allocate our estimated full year marketing expenditures that benefit multiple interim periods to each of our interim reporting periods. We use the proportion of each interim period's actual unit case volume to the estimated full year unit case volume as the basis for the allocation. This methodology results in our marketing expenditures being recognized at a standard rate per unit case. At the end of each interim reporting period, we review our estimated full year unit case volume and our estimated full year marketing expenditures that benefit multiple interim periods in order to evaluate if a change in estimate is necessary. The impact of any changes in these full year estimates is recognized in the interim period in which the change in estimate occurs. Our full year marketing expenditures are not impacted by this interim accounting policy.

~~Hyperinflationary Economies~~Leases

~~A hyperinflationary economy is one that~~Effective January 1, 2019, we adopted Accounting Standards Codification 842, Leases ("ASC 842"). We determine if an arrangement contains a lease at inception based on whether or not the Company has ~~cumulative inflation of 100 percent or more over~~the right to control the asset during the contract period and other facts and circumstances.

Lessee

We are the lessee in a ~~three-year period. In accordance with U.S. GAAP, local subsidiaries~~lease contract when we obtain the right to control the asset. Operating leases are included in ~~hyperinflationary economies are required~~the line items other assets, accounts payable and accrued expenses, and other liabilities in our consolidated balance sheet. Operating lease right-of-use ("ROU") assets represent our right to use an underlying asset for the ~~U.S. dollar as their functional currency~~lease term, and ~~remeasure~~lease liabilities represent our obligation to make lease payments arising from the ~~monetary assets and liabilities not denominated in U.S. dollars using the rate applicable to conversion~~lease, both of ~~a currency for purposes of dividend remittances. All exchange gains and losses resulting from remeasurement~~which are recognized ~~currently~~based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on our consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income.

~~Venezuela has been designated~~ We determine the lease term by assuming the exercise of renewal options that are reasonably certain. As most of our leases do not provide an implicit interest rate, we use our local incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. When our contracts contain lease and non-lease components, we account for both components as a ~~hyperinflationary economy. During~~single lease component. Refer to Note 8 for further discussion.

Lessor

We have various arrangements for certain fountain equipment under which we are the ~~nine~~lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material.

Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents

We classify time deposits and other investments that are highly liquid and have maturities of three months ~~ended September 30, 2016,~~or less at the ~~Venezuelan government devalued its currency~~date of purchase as cash equivalents or restricted cash equivalents, as applicable. Restricted cash and ~~changed its official and most preferential exchange rate, which should be used for purchases~~restricted cash equivalents generally consist of certain essential goods, to 10 bolivars per U.S. dollar from 6.3. The official and most preferential rate is now known as DIPRO. The Venezuelan government also announced a new rate known as DICOM, which is allowed to float freely and is expected to fluctuate based on supply and demand. Management determined that the DICOM rate was the most appropriate legally available rate to remeasure the net monetary assets of our Venezuelan subsidiary.

In addition to the foreign currency exchange exposure related to our Venezuelan subsidiary's net monetary assets, we also sell concentrate to our bottling partner in Venezuela from outside the country. These sales are denominated in U.S. dollars. As a result of the continued lack of liquidity and our revised assessment of the U.S. dollar value we expected to realize upon the conversion of Venezuelan bolivars into U.S. dollarsamounts held by our ~~bottling partner to pay our concentrate sales receivables, we recorded a write-down of $76 million during the three and nine months ended September 30, 2016~~captive insurance companies, which are included in the line item other ~~operating charges~~assets on our consolidated balance sheet, and amounts classified in assets held for sale. We manage our exposure to counterparty credit risk through specific minimum credit standards, diversification of counterparties and procedures to monitor our concentrations of credit risk.

The following table provides a summary of cash, cash equivalents, restricted cash and restricted cash equivalents that constitute the total amounts shown in the condensed consolidated statements of ~~income.~~cash flows (in millions):



	September 27, 2019		December 31, 2018
Cash and cash equivalents	$	7,531	$	9,077
Cash and cash equivalents included in other assets¹	245		241
Cash, cash equivalents, restricted cash and restricted cash equivalents	$	7,776	$	9,318
	September 28, 2018		December 31, 2017
Cash and cash equivalents	$	9,221	$	6,102
Cash and cash equivalents included in assets held for sale	—		13
Cash and cash equivalents included in other assets¹	318		258
Cash, cash equivalents, restricted cash and restricted cash equivalents	$	9,539	$	6,373

~~We also have certain U.S. dollar-denominated intangible assets associated with products sold in Venezuela. As a result of weaker sales~~¹Amounts represent cash and the volatility of foreign currency exchange rates resulting from continued political instability, we recorded impairment charges of $34 million during the nine months ended September 29, 2017 in the line item other operating chargescash equivalents in our ~~condensed consolidated statement~~solvency capital portfolio set aside primarily to cover pension obligations in certain of ~~income. As a result of these impairment charges, the remaining carrying value of all U.S. dollar-denominated intangible assets associated with products sold in Venezuela is zero.~~

our European and Canadian pension plans. Refer to Note 4.

Recently Issued Accounting Guidance

~~In May 2014, the Financial~~Recently Adopted Accounting ~~Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09,~~ ~~Revenue from Contracts with Customers~~, which will replace most existing revenue recognition guidance in U.S. GAAP and is intended to improve and converge with international standards the financial reporting requirements for revenue from contracts with customers. The core principle of ASU 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU 2014-09 also requires additional disclosures about the nature, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU 2014-09 allows for adoption either on a full retrospective basis to each prior reporting period presented or on a modified retrospective basis with the cumulative effect of initially applying the new guidance recognized at the date of initial application, which will be effective for the Company beginning January 1, 2018.Guidance

The Company plans to adopt ASU 2014-09 and its amendments on a modified retrospective basis. We expect that ASU 2014-09's broad definition of variable consideration will require the Company to estimate and record certain variable payments resulting from collaborative funding arrangements, rebates and other pricing allowances earlier than it currently does. While we do not expect this change to have a material impact on our net operating revenues on an annual basis, we do expect that it will have an impact on our revenue in interim periods. Additionally, as a result of electing certain of the practical expedients available under the ASU, the Company expects there will be some reclassifications to or from net operating revenues, cost of goods sold, and selling, general and administrative expenses. As we continue our assessment, the Company is also identifying and preparing to implement changes to our accounting policies and practices, business processes, systems and controls to support the new revenue recognition and disclosure requirements. We are in the process of quantifying the impacts that will result from applying the new guidance. Our assessment will be completed during fiscal year 2017.

~~In November 2015, the FASB issued ASU 2015-17,~~ ~~Balance Sheet Classification of Deferred Taxes~~. The amendments in this update are intended to simplify the presentation of deferred income taxes and require that deferred tax liabilities and assets be classified as noncurrent in a consolidated statement of financial position. The standard was prospectively adopted by the Company on January 1, 2017. Had the Company retrospectively adopted the standard as of December 31, 2016, the line items prepaid expenses and other assets and accounts payable and accrued expenses in our condensed consolidated balance sheet would have been reduced by $80 million and $692 million, respectively, as a result of reclassifying the current deferred tax assets and liabilities. The offsetting impact for the reclassifications as of December 31, 2016 would have increased the noncurrent line items other assets and deferred income taxes in our condensed consolidated balance sheet by $54 million and $666 million, respectively.

~~In January 2016, the FASB issued ASU 2016-01,~~ ~~Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities~~, which addresses certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. The amendment will be effective for the Company beginning January 1, 2018 and will require us to recognize any changes in the fair value of certain equity investments in net income. These changes are currently recognized in other comprehensive income ("OCI").

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases, which~~ASC 842 requires lessees to recognize ~~on the balance sheet a right-of-use asset,~~operating lease ROU assets, representing their right to use the underlying asset for the lease term, and aoperating lease ~~liability~~liabilities on the balance sheet for all leases with lease terms greater than 12 months. The guidance also requires qualitative and quantitative disclosures designed to assess the amount, timing and uncertainty of cash flows arising from leases. ~~The standard requires~~We adopted ASC 842 using the ~~use of a~~ modified retrospective method and utilized the optional transition ~~approach,~~method under which ~~includes a number~~we continue to apply the legacy guidance in ASC 840, Leases, including its disclosure requirements, in the comparative period presented. In addition, we elected the package of ~~optional~~ practical expedients ~~that entities may elect~~permitted under the transition guidance which permits us to ~~apply. ASU 2016-02 is effective for~~carry forward the ~~Company beginning January 1, 2019~~historical lease classification, among other things. As a result of the adoption, our operating lease ROU assets and ~~we are currently evaluating the~~operating lease liabilities were $1,310 million and $1,329 million, respectively, as of September 27, 2019. The adoption of this standard did not impact ~~that ASU 2016-02 will have on our consolidated financial statements.~~

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting~~.The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The Company adopted ASU 2016-09 on January 1, 2017 by prospectively recognizing excess tax benefits and tax deficiencies in our consolidated statement of income ~~as the awards vested~~ or ~~were settled. Effective January 1, 2017, the Company also prospectively presented excess tax benefits as an operating activity, rather than a financing activity, in~~ our consolidated statement of cash flows. ~~Had these changes been required~~Refer to be adopted retrospectively, during the three and nine months ended September 30, 2016, the Company would have recognized an additional $20 million and $140 million, respectively, of excess tax benefits in our condensed consolidated statements of income. Additionally, during the nine months ended September 30,Note 8 for further discussion.

2016, the Company would have reduced our financing activities and increased our operating activities by $140 million in our condensed consolidated statement of cash flows. The Company has elected, consistent with past practice, to estimate the number of awards that are expected to vest to determine the amount of stock-based compensation expense recognized in earnings.

~~In June 2016, the FASB issued ASU 2016-13,~~ ~~Financial Instruments — Measurement of Credit Losses on Financial Instruments~~, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning January 1, 2020 and we are currently evaluating the impact that ASU 2016-13 will have on our consolidated financial statements.

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Intra-Entity Transfers of Assets Other Than Inventory~~, which requires the Company to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU 2016-16 is effective for the Company beginning January 1, 2018 and will be applied using a modified retrospective basis. We currently expect the cumulative-effect adjustment will result in a net deferred tax asset of approximately $2.8 billion. This amount will primarily be recorded as a deferred tax asset in the line item other assets in our consolidated balance sheet.

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Restricted Cash~~. The amendments in this update address diversity in practice that exists in the classification and presentation of changes in restricted cash and require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. ASU 2016-18 is effective for the Company beginning January 1, 2018 and is required to be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact that ASU 2016-18 will have on our consolidated statement of cash flows.

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Clarifying the Definition of a Business~~, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is required to be applied prospectively and will be effective for the Company beginning January 1, 2018. The impact on our consolidated financial statements will depend on the facts and circumstances of any specific future transactions.

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~, which requires that the service cost component of the Company's net periodic pension cost and net periodic postretirement benefit cost be included in the same line item as other compensation costs arising from services rendered by employees, with the other components of net periodic benefit cost being classified outside of a subtotal of income from operations. Of the components of net periodic benefit cost, only the service cost component will be eligible for asset capitalization. ASU 2017-07 is effective for the Company beginning January 1, 2018 and is required to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in our income statement. ASU 2017-07 allows a practical expedient for the estimation basis for applying the retrospective presentation requirements and requires the prospective adoption, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit cost in assets.

In August 2017, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued ~~ASU~~Accounting Standards Update ("ASU") 2017-12, Targeted Improvements to Accounting for Hedging Activities,which eliminates the requirement to separately measure and report hedge ineffectiveness and requires companies to recognize all elements of hedge accounting that impact earnings in

the same ~~income~~line item in the statement ~~line item~~of income where the hedged item resides. The amendments in this update include new alternatives for measuring the hedged item for fair value hedges of interest rate risk and ease the requirements for effectiveness testing, hedge documentation and applying the critical terms match method. ~~Finally,~~We adopted ASU 2017-12 effective January 1, 2019 using the ~~standard introduces new alternatives~~modified retrospective method. We recognized a cumulative effect adjustment to decrease the opening balance of reinvested earnings as of January 1, 2019 by $12 million, net of tax. Refer to Note 6 for additional disclosures required by this ASU.

In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which permits entities to reclassify the disproportionate income tax effects of the Tax Cuts and Jobs Act of 2017 (the "Tax Reform Act") on items within accumulated other comprehensive income (loss) ("AOCI") to reinvested earnings. These disproportionate income tax effect items are referred to as "stranded tax effects." The amendments in this update only relate to the reclassification of the income tax effects of the Tax Reform Act. Other accounting guidance that ~~permit companies~~requires the effect of changes in tax laws or rates to ~~reduce~~be included in net income is not affected by this update. We adopted ASU 2018-02 effective January 1, 2019. We recognized a cumulative effect adjustment to increase the ~~risk~~opening balance of ~~material error if~~reinvested earnings as of January 1, 2019 by $513 million.

Accounting Guidance Not Yet Adopted

In June 2016, the ~~shortcut method is misapplied.~~FASB issued ASU ~~2017-12~~2016-13, Financial Instruments — Measurement of Credit Losses onFinancial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 is effective for the Company beginning January 1, ~~2019~~2020 and is required to be applied prospectively. ~~The Company is~~For our trade receivables, certain other receivables and certain other financial instruments, we will be required to use a new forward-looking "expected" credit loss model based on historical loss rates that will replace the existing "incurred" credit loss model, which will generally result in earlier recognition of allowances for credit losses. We are currently evaluating the impact that ASU ~~2017-12~~2016-13 will have on our consolidated financial ~~statements.~~statements and do not expect it will have a material impact on our financial statements or disclosures.

NOTE 2: ACQUISITIONS AND DIVESTITURES

Acquisitions

During the nine months ended September ~~29, 2017,~~27, 2019, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled ~~$538~~$5,376 million, which primarily related to the acquisition of ~~AdeS, a plant-based beverage business, by~~Costa and the Company and several of its bottling partners in Latin America. Additionally, in conjunction with the refranchising of Coca-Cola Refreshments' ("CCR") Southwest operating unit ("Southwest Transaction"), we obtained anremaining equity ownership interest in ~~AC Bebidas, S. de R.L. de C.V.~~C.H.I. Limited ("~~AC Bebidas"~~CHI"), a ~~subsidiary~~Nigerian producer of ~~Arca Continental, S.A.B. de C.V. ("Arca").~~value-added dairy and juice beverages and iced tea.

During the nine months ended September ~~30, 2016,~~28, 2018, our Company's acquisitions of businesses, equity method investments and nonmarketable securities totaled ~~$767~~$598 million, which included the acquisition of a minority interest in BA Sports Nutrition, LLC ("BodyArmor"). We account for our minority interest in BodyArmor as an equity method investment based on our equity ownership percentage and our representation on their Management Committee. We obtained an option to acquire the remaining ownership interests in BodyArmor based on an agreed-upon formula, which becomes exercisable in 2021. Upon the expiration of the Company's option, BodyArmor has the option to sell their remaining interests to the Company based on the same agreed-upon formula. The Company also acquired additional ownership interests in the Company's franchise bottlers in the United Arab Emirates and in Oman, both of which were previously equity method investees of the Company. As a result of the additional interest acquired in the Oman bottler, we obtained a controlling interest, resulting in its consolidation.

Costa Limited

In January 2019, the Company acquired Costa in exchange for $4.9 billion of cash, net of cash acquired. Costa is a coffee company with retail outlets in over 30 countries, the Costa Express vending system and a state-of-the-art roastery. We believe this acquisition will allow us to increase our presence in the hot beverage market as Costa has a scalable platform across multiple formats and channels, including opportunities to introduce ready-to-drink products. As of September 27, 2019, $2.4 billion of the purchase price was preliminarily allocated to the Costa trademark and $2.5 billion was preliminarily allocated to goodwill. The goodwill recognized as part of this acquisition is primarily related to synergistic value created from the opportunity for additional expansion as well as our ~~acquisition~~ability to market and distribute Costa in ready-to-drink form throughout our bottling system. It also includes certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. The goodwill is not tax deductible and has been assigned to the Global Ventures operating segment, except for $108 million, which was allocated to the Europe, Middle East and Africa operating segment. The preliminary allocation of ~~Xiamen Culiangwang Beverage~~the purchase price is subject to refinement when valuations are finalized. As of September 27, 2019, the valuations that have not been finalized primarily relate to operating lease ROU assets and operating lease liabilities and certain fixed assets. The final purchase price allocation will be completed as soon as possible, but no later than the first quarter of 2020.

~~Technology Co., Ltd. ("China Green"), a maker of plant-based protein beverages in China, and a minority investment~~C.H.I. Limited

In January 2019, the Company acquired the remaining 60 percent interest in CHI ~~Limited ("CHI"), a Nigerian producer~~in exchange for $260 million of ~~value-added dairy and juice beverages, which is accounted for~~cash, net of cash acquired, under ~~the equity method of accounting. Under~~ the terms of the agreement for our original investment in CHI. Upon consolidation, we recognized a net charge of $121 million, which included the remeasurement of our previously held equity interest in CHI to fair value and the ~~Company is obligated to acquire~~reversal of the ~~remaining ownership interest from the existing shareowners in 2019~~related cumulative translation adjustments. The fair value of our previously held equity investment was determined using a discounted cash flow model based on ~~an agreed-upon formula.~~Level 3 inputs. The net charge was recorded in the line item other income (loss) — net in our condensed consolidated statement of income.

Divestitures

During the nine months ended September ~~29, 2017,~~27, 2019, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled ~~$2,790~~$266 million, which primarily related to ~~proceeds from~~ the ~~refranchising~~sale of ~~certain bottling territories~~a portion of our equity method investment in ~~North America~~Embotelladora Andina S.A. ("Andina"). We recognized a gain of $39 million as a result of the sale, which was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. We continue to account for our remaining interest in Andina as an equity method investment as a result of our representation on Andina's Board of Directors and ~~our China bottling operations.~~other governance rights.

During the nine months ended September ~~30, 2016,~~28, 2018, proceeds from disposals of businesses, equity method investments and nonmarketable securities totaled ~~$745~~$1,354 million, which primarily related to the proceeds from the refranchising of ~~certain~~our Canadian and Latin American bottling ~~territories~~operations, as well as the sale of our equity ownership in ~~North America.~~Corporación Lindley S.A. ("Lindley").

Corporación Lindley S.A.

On September 26, 2018, we sold our equity ownership in Lindley to AC Bebidas, an equity method investee. We received net

cash proceeds of $507 million and recognized a net gain of $370 million during the three and nine months ended September 28, 2018, which was included in the line item other income (loss) — net in our condensed consolidated statements of income.

Refranchising of ~~China~~Latin American Bottling Operations

~~In November 2016,~~During the nine months ended September 28, 2018, the Company entered into definitive agreements for the sale of the Company-owned bottling operations in China to the two existing local franchise bottlers, one of which is an equity method investee, and to sell a related cost method investment to one of the franchise bottlers. As a result, the Company's bottling operations in China and a related cost method investment were classified as held for sale as of December 31, 2016. On April 1, 2017, the Company sold ~~a substantial portion of~~ its bottling operations in ~~China~~Latin America to ~~the two local franchise bottlers. The remaining bottling operations and cost~~Coca-Cola FEMSA, S.A.B. de C.V. ("Coca-Cola FEMSA"), an equity method ~~investment were sold on July 1, 2017.~~investee. We received net cash proceeds of ~~$963~~$289 million as a result of these sales and recognized net gains of ~~$79~~$11 million and ~~$88~~$47 million during the three and nine months ended September ~~29, 2017,~~28, 2018, respectively, which were included in the line item other income (loss) — net in our condensed consolidated statements of income.

North America Refranchising— United States

In conjunction with implementing a new beverage partnership model in North America, in 2018 the Company ~~refranchised~~completed the refranchising of all of our bottling territories in the United States that were previously managed by ~~CCR~~Coca-Cola Refreshments

("CCR") to certain of our unconsolidated bottling partners. ~~These territories generally border these bottlers' existing territories, allowing each bottler to better service local customers~~We recognized net gains of $19 million and ~~provide more efficient execution. By entering into comprehensive beverage agreements ("CBAs") with each of~~$15 million during the ~~bottlers, we granted certain exclusive territory rights for the distribution, promotion, marketing~~three and ~~sale of Company-owned and licensed beverage products as defined by the CBA.~~ In some cases, the Company has entered into, or agreed to enter into, manufacturing agreements that authorize certain bottlers that have executed a CBA to manufacture certain beverage products. If a bottler has not entered into a specific manufacturing agreement, then under the CBA for these territories, CCR retains the rights to produce these beverage products, and the bottlers will purchase from CCR (or other Company-authorized manufacturing bottlers) substantially all of the related finished products needed in order to service the customers in these territories.

Each CBA generally has a term of 10 years and is renewable, in most cases by the bottler and in some cases by the Company, indefinitely for successive additional terms of 10 years each. Under the CBA, except for the CBA entered into in conjunction with the Southwest Transaction and for additional territories sold to AC Bebidas, the bottlers will make ongoing quarterly payments to the Company based on their gross profit in the refranchised territories throughout the term of the CBA, including renewals, in exchange for the grant of the exclusive territory rights.

Contemporaneously with the grant of these rights, the Company sold the distribution assets, certain working capital items, and the exclusive rights to distribute certain beverage brands not owned by the Company, but distributed by CCR, in each of these territories, excluding the territory included in the Southwest Transaction, to the respective bottlers in exchange for cash.

In 2016, the Company formed a new National Product Supply System ("NPSS") to facilitate optimal operation of the U.S. product supply system. Under the NPSS, the Company and several of its existing independent producing bottlers administer key national product supply activities for these bottlers. Additionally, we have sold or are in the process of selling certain production facilities from CCR to these independent producing bottlers in exchange for cash, excluding production facilities included in the Southwest Transaction.

~~During the~~ nine months ended September ~~29, 2017~~27, 2019, respectively, and ~~September 30, 2016, cash proceeds from these sales totaled $1,814~~net gains of $10 million and ~~$732~~net charges of $94 million ~~respectively. Included in~~during the ~~cash proceeds for the~~three and nine months ended September 29, 2017 and September 30, 2016, was $279 million and $181 million, respectively, from Coca-Cola Bottling Co. Consolidated ("CCBCC"), an equity method investee. Also included in the cash proceeds for the nine months ended September 29, 2017, was $216 million from AC Bebidas, an equity method investee.

Under the applicable accounting guidance, we were required to derecognize all of the tangible assets sold as well as the intangible assets transferred, including distribution rights, customer relationships and an allocated portion of goodwill related to these territories. We recognized losses of $762 million and $1,089 million during the three months ended September 29, 2017 and September 30, 2016, respectively. During the nine months ended September 29, 2017 and September 30, 2016, the

~~Company recognized losses of $2,533 million and $1,657 million,~~28, 2018, respectively. These ~~losses primarily related to the derecognition of the intangible assets transferred or reclassified as held for sale~~net gains and net charges were included in the line item other income (loss) — net in our condensed consolidated statements of ~~income. See further discussion of assets~~income and ~~liabilities held for sale below. In total, we expect~~were primarily related to ~~recover the value of the intangible assets transferred to the bottlers under the CBAs through the future quarterly payments; however,~~post-closing adjustments as ~~the payments for the territory rights are dependent on the bottlers' future gross profit in these territories, they are considered a form of contingent consideration.~~

~~There is diversity in practice as it relates to the accounting for contingent consideration~~contemplated by the ~~seller. The seller can account for the future contingent payments received as a gain contingency, recognizing the amounts in the income statement only after the~~ related contingencies are resolved and the gain is realized, which in this arrangement will be quarterly as the bottlers earn gross profit in the transferred territories. Alternatively, the seller can record a receivable for the contingent consideration at fair value on the date of sale and record any future differences between the payments received and this receivable in the income statement as they occur. We elected the gain contingency treatment since the quarterly payments will be received throughout the terms of the CBAs, including all subsequent renewals, regardless of the cumulative amount received as compared to the value of the intangible assets transferred.agreements.

During the three ~~and nine~~ months ended September ~~29, 2017,~~28, 2018, the Company recorded charges of ~~$72~~$12 million ~~and $287 million, respectively,~~ primarily related to payments made to certain of our unconsolidated bottling partners in order to convert the bottling agreements for their legacy territories and any previously refranchised territories to a single form of ~~CBA~~comprehensive beverage agreement ("CBA") with additional requirements. During the nine months ended September 27, 2019 and September 28, 2018, the Company recorded charges of $4 million and $33 million, respectively, related to such payments. The additional requirements generally include a binding national governance model, mandatory incidence pricing and additional core performance requirements, among other things. As a result of these conversions, the legacy territories and any previously refranchised territories for each of the related bottling partners will be governed under similar CBAs, which will provide consistency across each such bottler's respective territory, ~~and~~as well as consistency with other U.S. bottlers that have been granted or converted to this form of CBA. The ~~expense~~charges related to these payments ~~was~~were included in the line item other income (loss) — net in our condensed consolidated ~~statement~~statements of ~~income~~income.

North America Refranchising — Canada

On September 28, 2018, the Company completed its North America refranchising with the sale of its Canadian bottling

operations. We received initial net cash proceeds of $518 million and recognized a net charge of $285 million during the three and nine months ended September ~~29, 2017.~~

~~On April 1, 2017,~~28, 2018. During the ~~Company refranchised the Southwest operating unit~~three and nine months ended September 27, 2019 we recognized an additional charge of ~~CCR, which includes Texas and parts of~~

~~Oklahoma, New Mexico and Arkansas, in the Southwest Transaction. In conjunction with the Southwest Transaction, Arca contributed its existing beverage business~~$122 million primarily related to AC Bebidas. CCR contributed its Southwest operating unit, including all of its assets and liabilities, to AC Bebidas in exchange for an approximate 20 percent interest in AC Bebidas. Arca owns the remaining interest in AC Bebidas. After post-closing adjustments ~~CCR will have made cash payments of approximately $112 million, net of cash received. As a result of~~as contemplated by the Southwest Transaction, the Company recognized a gain of $1,060 million due to the difference in the recorded carrying value of the net assets transferred compared to the value of the interest it obtained in AC Bebidas of $2,960 million, which was determined using an income and market approach (a Level 3 measurement). This gain was recordedrelated agreements. These charges were included in the line item other income (loss) — net in our condensed consolidated ~~statement~~statements of income.AC Bebidas will participate in the NPSS as it relates to its U.S. territory. The Company accounts for its interest in AC Bebidas as an equity method investment based on our equity ownership percentage, our representation on AC Bebidas' Board of Directors, material intercompany transactions and other governance rights.

~~Coca-Cola European Partners~~

In August 2015, the Company entered into an agreement to merge our German bottling operations with Coca-Cola Enterprises, Inc. ("CCE") and Coca-Cola Iberian Partners, S.A.U., formerly known as Coca-Cola Iberian Partners, S.A. ("CCIP"), to create Coca-Cola European Partners plc ("CCEP"). On May 28, 2016, the transaction closed and we exchanged our German bottling operations for an 18 percent interest in CCEP. As a result of recording our interest in CCEP at fair value based on its quoted market price, the deconsolidation of our German bottling operations, and the related reversal of its cumulative translation adjustments, we recognized a gain of $1,400 million. This gain was partially offset by a $77 million loss incurred as a result of reclassifying losses related to our net investment hedges of our German bottling operations from accumulated other comprehensive income (loss) ("AOCI") into earnings as well as transaction costs incurred resulting in a net gain of $1,288 million during the nine months ended September 30, 2016.

Refer to Note ~~8. With~~17 for the exception of the transaction costs, the net gain was recorded in the line item other income (loss) — net in our condensed consolidated statement of income. The Company accounts for its 18 percent interest in CCEP as an equity method investment basedimpact these items had on our ~~equity ownership percentage, our representation on CCEP's Board of Directors, material intercompany transactions~~operating segments and ~~other governance rights.~~Corporate.

Coca-Cola Beverages Africa Proprietary Limited

~~In November 2014,~~Due to the ~~Company, SABMiller plc and Gutsche Family Investments entered into an agreement~~Company's original intent to combine the bottling operations of each of the parties' nonalcoholic ready-to-drink beverage businesses in Southern and East Africa. In connection with the July 2, 2016 closing of the transaction to form the new bottler, which is called Coca-Cola Beverages Africa Proprietary Limited ("CCBA"), the Company: (1) contributed its South African bottling operations torefranchise CCBA, ~~which included certain wholly owned subsidiaries and an equity method investment, (2) paid $150 million in cash, (3) obtained a 12 percent~~

~~interest in CCBA~~it was accounted for as held for sale and a ~~3 percent interest in CCBA's South African subsidiary and (4) acquired several trademarks that are generally indefinite-lived.~~discontinued operation

from October 2017 through the first quarter of 2019. As ~~a result of recording our interests in~~ CCBA and its South African subsidiary at fair value, the deconsolidation of our South African bottling operations, the derecognition of the equity method investment, and the reversal of related cumulative translation adjustments, we recognized a loss of $21 million. The fair values of the equity investments in CCBA and CCBA's South African subsidiary, along with the acquired trademarks, were determined using income approaches, including discounted cash flow models, and the Company believes the inputs and assumptions used are consistent with those hypothetical marketplace participants would use. The loss recognized resulted primarily from the reversal of the related cumulative translation adjustments. This loss is recorded in the line item other income (loss) — net in our condensed consolidated statement of income during the three and nine months ended September 30, 2016.

Through the Company's 12 percent interest in CCBA, the Company is represented by two directors on CCBA's 10-member Board of Directors. Based on the level of equity ownership, the Company’s representation on the Board of Directors and other governance rights, the Company is accounting for its interests in CCBA and CCBA's South African subsidiary as equity method investments. The Company’s interest in CCBA provides it with a call option to acquire the ownership interest of SABMiller plc at fair value upon the occurrence of certain events, including upon a change in control of SABMiller plc. Refer to Note 16 for more information.

~~Keurig Green Mountain, Inc.~~

In March 2016, a JAB Holding Company-led investor group acquired Keurig Green Mountain, Inc. ("Keurig"), including the shares held by the Company, for $92 per share. As a result of the transaction, the Company received proceeds of $2,380 million, which were recorded in the line item proceeds from disposals of investments in our condensed consolidated statement of cash flows, and recorded a gain of $18 million related to the disposal of our shares of Keurig in the line item other income (loss) — net in our condensed consolidated statement of income during the ~~nine months ended~~ ~~September 30, 2016.~~

~~Assets and Liabilities Held for Sale~~

~~As of September 29, 2017, the Company had entered into agreements, or otherwise approved plans, to refranchise its remaining U.S. bottling territories. For bottling territories that~~ met the criteria to be classified as held for sale, we were

required to record their assets and liabilities at the lower of carrying value or fair value less any costs to ~~sell~~sell. As a result, during

the three and nine months ended September 28, 2018, we recorded an impairment charge of $554 million, reflecting management's view of the proceeds that were expected to be received upon the sale based on revised projections of future operating results and foreign currency exchange rate fluctuations. This charge was previously reflected in the ~~agreed-upon~~line item income (loss) from discontinued operations in our condensed consolidated statements of income, and the corresponding reduction to assets was reflected as an allowance for reduction of assets held for sale ~~price and present the related assets and liabilities as separate line items~~— discontinued operations in our condensed consolidated balance sheet. ~~The~~Additionally, CCBA's property, plant and equipment was not depreciated and its definite-lived intangible assets were not amortized.

While the Company ~~expects that these bottling territories will be refranchised by December 31, 2017.~~had discussions with a number of potential partners throughout the period CCBA was held for sale, during

the second quarter of 2019 the Company updated its plans for CCBA and now intends to maintain its controlling stake in

~~The following table presents information related to~~CCBA for the ~~major classes of assets and liabilities that were classified~~foreseeable future. As a result, CCBA no longer qualifies as held for sale or as a discontinued operation, and

CCBA's financial results are now presented within the Company's continuing operations for all periods presented. As a result of

this change in presentation, the Company reflected the impairment charge in other income (loss) — net in our consolidated

statements of income and reallocated the allowance for reduction of assets held for sale — discontinued operations balance to

reduce the carrying value of CCBA's property, plant and equipment by $225 million and CCBA's definite-lived intangible

assets by $329 million based on the relative amount of depreciation and amortization that would have been recognized during

the period CCBA was held for sale. We also recorded a $160 million adjustment to reduce the carrying value of CCBA's property, plant and equipment and definite-lived intangible assets by an additional $34 million and $126 million, respectively, during the nine months ended September 27, 2019. These additional adjustments were included in the line item other income (loss) — net in our condensed consolidated ~~balance sheets (in millions):~~statement of income.

September 29,
2017
December 31, 2016

Cash, cash equivalents and short-term investments $ 10
$ 49

Trade accounts receivable, less allowances 300
43

Inventories 181
264

Prepaid expenses and other assets 34
114

Equity method investments —
1

Other investments —
42

Other assets 7
17

Property, plant and equipment — net 1,145
1,780

Bottlers' franchise rights with indefinite lives 1,121
1,388

Goodwill 296
390

Other intangible assets 154
51

Allowance for reduction of assets held for sale (1,466 ) (1,342 )
Total assets $ 1,782
¹
$ 2,797
²
Accounts payable and accrued expenses $ 381
$ 393

Accrued income taxes 4
13

Other liabilities 52
1

Deferred income taxes —
303

Total liabilities $ 437
¹
$ 710
³
NOTE 3: REVENUE RECOGNITION

¹~~Consists~~Our Company markets, manufactures and sells:

beverage concentrates, sometimes referred to as "beverage bases," and syrups, including fountain syrups (we refer to this part of ~~total assets~~our business as our "concentrate business" or "concentrate operations"); and ~~total liabilities relating~~

finished sparkling soft drinks and other nonalcoholic beverages (we refer to ~~North America refranchising~~this part of ~~$1,782 million~~our business as our "finished product business" or "finished product operations").

Generally, finished product operations generate higher net operating revenues but lower gross profit margins than concentrate operations.

In our domestic and ~~$437 million, respectively,~~international concentrate operations, we typically generate net operating revenues by selling concentrates, syrups and certain finished beverages to authorized bottling operations (which we typically refer to as our "bottlers" or our "bottling partners"). Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or sparkling water, or combine the syrups with sparkling water to produce finished beverages. The finished beverages are packaged in authorized containers, such as cans and refillable and nonrefillable glass and plastic bottles, bearing our trademarks or trademarks licensed to us and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers. In addition, outside the United States, our bottling partners are typically authorized to manufacture fountain syrups, using our concentrate, which they sell to fountain retailers for use in producing beverages for immediate consumption, or to authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers. Our concentrate operations are included in our geographic operating segments and our Global Ventures operating segment.

Our finished product operations generate net operating revenues by selling sparkling soft drinks and a variety of other finished nonalcoholic beverages, such as water, enhanced water and sports drinks; juice, dairy and plant-based beverages; tea and coffee; and energy drinks, to retailers or to distributors and wholesalers who distribute them to retailers or Company-owned Costa retail outlets. These operations consist primarily of Company-owned or -controlled bottling, sales and distribution operations, which are included in ~~the~~our Bottling Investments operating segment.

² ~~Consists~~ In certain markets, the Company also operates non-bottling finished product operations in which we sell finished beverages to distributors and wholesalers that are generally not one of ~~total assets relating~~the Company's bottling partners. These operations are generally included in one of our geographic operating segments or our Global Ventures operating segment. In the United States, we manufacture fountain syrups and sell them to ~~North America refranchising of $1,247 million, China~~fountain retailers, who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling ~~operations of $1,533 million and other assets held for sale of $17 million, which~~partners who resell the fountain syrups to fountain retailers. These fountain syrup sales are included in our North America operating segment.

We adopted Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606") effective January 1, 2018 using the ~~Bottling Investments~~modified retrospective method. We have applied this standard to all contracts at the effective date and contracts entered into thereafter. Revenue is recognized when performance obligations under the terms of the contracts with our customers are satisfied. Our performance obligation generally consists of the promise to sell concentrates or finished products to our bottling partners, wholesalers, distributors or retailers. Control of the concentrates or finished products is transferred upon shipment to, or receipt at, our customers' locations, as determined by the specific terms of the contract. Once control is transferred to the customer and we have completed our performance obligation, revenue is recognized. Our sales terms generally do not allow for a right of return except for matters related to any manufacturing defects on our part. After completion of our performance obligation, we have an unconditional right to consideration as outlined in the contract. Our receivables will generally be collected in less than six months, in accordance with the underlying payment terms. All of our performance obligations under the terms of contracts with our customers have an original duration of one year or less.

Our customers and bottling partners may be entitled to cash discounts, funds for promotional and marketing activities, volume-based incentive programs, support for infrastructure programs and other similar programs. In some markets, in an effort to allow our Company and our bottling partners to grow together through shared value, aligned financial objectives and the flexibility necessary to meet consumers' always changing needs and tastes, we work with our bottling partners to develop and implement an incidence-based concentrate pricing model. Under this model, the price we charge bottlers for concentrate they use to prepare and package finished products is impacted by a number of factors, including, but not limited to, the prices charged by the bottlers for such finished products, the channels in which they are sold and package mix. The amounts associated with the arrangements described above are defined as variable consideration under ASC 606, an estimate of which is included in the transaction price as a component of net operating revenues in our consolidated statement of income upon completion of our performance obligations. The total revenue recorded, including any variable consideration, cannot exceed the amount for which it is probable that a significant reversal will not occur when uncertainties related to variability are resolved. As a result, we are recognizing revenue based on our faithful depiction of the consideration that we expect to receive. In making our estimates of variable consideration, we consider past results and make significant assumptions related to: (1) customer sales volumes; (2) customer ending inventories; (3) customer selling price per unit; (4) selling channels; and (5) discount rates, rebates and other pricing allowances, as applicable. In gathering data to estimate our variable consideration, we generally calculate our estimates using a portfolio approach at the country and product line level rather than at the individual contract level. The result of making these estimates will impact the line items trade accounts receivable and accounts payable and accrued expenses in our consolidated balance sheet. The actual amounts ultimately paid and/or received may be different from our estimates. The change in the amount of variable consideration recognized during the three and nine months ended September 27, 2019 related to performance obligations satisfied in prior periods was immaterial.

The following tables present net operating revenues disaggregated between the United States and International and further by line of business (in millions):



	United States		International		Total
Three Months Ended September 27, 2019
Concentrate operations	$	1,414	$	4,026	$	5,440
Finished product operations	1,676		2,391		4,067
Total	$	3,090	$	6,417	$	9,507
Three Months Ended September 28, 2018
Concentrate operations	$	1,191	$	4,039	$	5,230
Finished product operations	1,776		1,769		3,545
Total	$	2,967	$	5,808	$	8,775



	United States		International		Total
Nine Months Ended September 27, 2019
Concentrate operations	$	4,014	$	11,782	$	15,796
Finished product operations	4,824		7,578		12,402
Total	$	8,838	$	19,360	$	28,198
Nine Months Ended September 28, 2018
Concentrate operations	$	3,563	$	11,961	$	15,524
Finished product operations	5,035		5,935		10,970
Total	$	8,598	$	17,896	$	26,494

Refer to Note 17 for additional revenue disclosures by operating segment and Corporate.


³	Consists of total liabilities relating to North America refranchising of $224 million, China bottling operations of $483 million and other liabilities held for sale of $3 million, which are included in the Bottling Investments operating segment and Corporate.

~~We determined that the operations included in the table above did not meet the criteria to be classified as discontinued operations under the applicable guidance.~~

NOTE 34: INVESTMENTS

~~Investments~~We measure all equity investments that do not result in ~~debt~~consolidation and ~~marketable securities, other than investments~~are not accounted for under the equity method at fair value and recognize any changes in earnings. We use quoted market prices to determine the fair value of equity securities with readily determinable fair values. For equity securities without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Management assesses each of these investments on an individual basis.

Our investments in debt securities are classified as trading, available-for-sale or held-to-maturity. Our marketable equity investments are classified as either trading or available-for-sale with their cost basis determined by the specific identification method. Our investments in debt securities areheld-to-maturity and carried at either amortized cost or fair value. The cost basis is determined by the specific identification method. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are carried at amortized cost and classified as held-to-maturity. Investments in debt securities that are not classified as held-to-maturity are carried at fair value and classified as either trading or available-for-sale. Realized and unrealized gains and losses on debt securities classified as trading securities ~~and~~are included in net income. For debt securities classified as available-for-sale, realized gains and losses ~~on available-for-sale securities~~ are included in net income. Unrealized gains and losses, net of ~~deferred taxes,~~tax, on available-for-sale debt securities are included in our ~~condensed~~ consolidated balance ~~sheets~~sheet as a component of AOCI, except for the change in fair value attributable to the currency risk being ~~hedged.~~hedged, if applicable, which is included in net income. Refer to Note 56 for additional information related to the Company's fair value hedges of available-for-sale debt securities.

~~Trading Securities~~

~~As of September 29, 2017~~Equity securities with readily determinable fair values that are not accounted for under the equity method and ~~December 31, 2016, our~~debt securities classified as trading ~~securities had a~~are not assessed for impairment, since they are carried at fair value of ~~$427 million~~ ~~and $384 million, respectively, and consisted primarily of equity securities. The Company had net unrealized gains on trading securities of $74 million~~ ~~and $39 million~~ ~~as of~~ ~~September 29, 2017~~ ~~and~~ ~~December 31, 2016, respectively.~~

~~The Company's trading securities were~~with the change in fair value included in ~~the following line items in our condensed consolidated balance sheets (in millions):~~

September 29,
2017
December 31, 2016
Marketable securities $ 318
$ 282
Other assets 109
102
Total $ 427
$ 384

~~Available-for-Sale~~net income. Equity method investments, equity securities without readily determinable fair values and ~~Held-to-Maturity Securities~~

~~As of~~ ~~September 29, 2017~~ ~~and~~ ~~December 31, 2016, the Company did not have any held-to-maturity securities. As of~~ ~~September 29, 2017, available-for-sale~~debt securities ~~consisted of the following (in millions):~~

Gross Unrealized Estimated
Cost
Gains
Losses
Fair Value
Available-for-sale securities:¹

Equity securities $ 1,326
$ 602
$ (35 ) $ 1,893
Debt securities 6,550
169
(21 ) 6,698
Total $ 7,876
$ 771
$ (56 ) $ 8,591

¹~~Refer to Note 14 for additional information related to the estimated fair value.~~

~~As of December 31, 2016, available-for-sale securities consisted of the following (in millions):~~

Gross Unrealized Estimated
Cost
Gains
Losses
Fair Value
Available-for-sale securities:¹

Equity securities $ 1,252
$ 425
$ (22 ) $ 1,655
Debt securities 4,700
89
(31 ) 4,758
Total $ 5,952
$ 514
$ (53 ) $ 6,413

¹~~Refer to Note 14 for additional information related to the estimated fair value.~~

~~The sale and/or maturity of available-for-sale securities resulted in the following realized activity (in millions):~~

Three Months Ended Nine Months Ended
September 29,
2017
September 30,
2016
September 29,
2017
September 30,
2016
Gross gains $ 11
$ 21
$ 51
$ 131
Gross losses (7 ) (6 ) (21 ) (42 )
Proceeds 4,210
2,072
10,760
8,889

~~As of September 29, 2017 and December 31, 2016, the Company had investments~~ classified as available-for-sale or held-to-maturity are reviewed each reporting period to determine whether a significant event or change in ~~which our cost basis exceeded~~circumstances has occurred that may have an adverse effect on the fair value of ~~our~~each investment. ~~Management assessed each~~When such events or changes occur, we evaluate the fair value of the ~~available-for-sale securities~~investment to determine whether or not an impairment exists. We also perform this evaluation every reporting period for each investment for which an impairment indicator exists. The fair values of most of our Company's investments in publicly traded companies are often readily available based on quoted market prices. For investments in nonpublicly traded companies, management's assessment of fair value is based on valuation methodologies including discounted cash flows, estimates of sales proceeds and appraisals, as appropriate. We consider the assumptions that ~~were~~we believe a hypothetical marketplace participant would use in ~~a gross unrealized loss position on~~evaluating estimated future cash flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies. The ability to accurately predict future cash flows, especially in emerging and developing markets, may impact the determination of fair value. In the event the fair value of an ~~individual~~investment declines below our cost basis, management is required to determine if the decline in fair value ~~was~~is other than temporary. If management determines the decline is other than temporary, an impairment charge is recorded. Management's assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value has been less than our cost basis; the financial condition and near-term prospects of the issuer; and our intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value. ~~As a result~~

Equity Securities

The carrying values of our equity securities were included in the following line items in our condensed consolidated balance sheets (in millions):



	Fair Value with Changes Recognized in Income		Measurement Alternative — No Readily Determinable Fair Value
September 27, 2019
Marketable securities	$	310	$	—
Other investments	796		82
Other assets	989		—
Total equity securities	$	2,095	$	82
December 31, 2018
Marketable securities	$	278	$	—
Other investments	787		80
Other assets	869		—
Total equity securities	$	1,934	$	80

The calculation of net unrealized gains and losses recognized during the period related to equity securities still held at the end of the period is as follows (in millions):



	Three Months Ended
	September 27, 2019		September 28, 2018
Net gains (losses) recognized during the period related to equity securities	$	29	$	62
Less: Net gains (losses) recognized during the period related to equity securities sold during the period	—		5
Net unrealized gains (losses) recognized during the period related to equity securities still held at the end of the period	$	29	$	57



	Nine Months Ended
	September 27, 2019		September 28, 2018
Net gains (losses) recognized during the period related to equity securities	$	163	$	21
Less: Net gains (losses) recognized during the period related to equity securities sold during the period	16		13
Net unrealized gains (losses) recognized during the period related to equity securities still held at the end of the period	$	147	$	8

Debt Securities

Our debt securities consisted of the following (in millions):



			Gross Unrealized					Estimated Fair Value
	Cost		Gains		Losses			Estimated Fair Value
September 27, 2019
Trading securities	$	45	$	1	$	—		$	46
Available-for-sale securities	3,445		150		(2		)	3,593
Total debt securities	$	3,490	$	151	$	(2	)	$	3,639
December 31, 2018
Trading securities	$	45	$	—	$	(1	)	$	44
Available-for-sale securities	4,901		119		(27		)	4,993
Total debt securities	$	4,946	$	119	$	(28	)	$	5,037

The fair values of our debt securities were included in the following line items in our condensed consolidated balance sheets (in millions):



	September 27, 2019				December 31, 2018
	Trading Securities		Available-for-Sale Securities		Trading Securities		Available-for-Sale Securities
Cash and cash equivalents	$	—	$	155	$	—	$	—
Marketable securities	46		3,100		44		4,691
Other assets	—		338		—		302
Total debt securities	$	46	$	3,593	$	44	$	4,993

The contractual maturities of these ~~assessments, management determined~~available-for-sale debt securities as of September 27, 2019 were as follows (in millions):



	Cost		Estimated Fair Value
Within 1 year	$	2,145	$	2,200
After 1 year through 5 years	1,038		1,102
After 5 years through 10 years	72		85
After 10 years	190		206
Total	$	3,445	$	3,593

The Company expects that actual maturities may differ from the ~~decline~~contractual maturities above because borrowers have the right to call or prepay certain obligations.

The sale and/or maturity of available-for-sale debt securities resulted in ~~fair value~~the following realized activity (in millions):



	Three Months Ended						Nine Months Ended
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Gross gains	$	9		$	11		$	37		$	19
Gross losses	(1		)	(8		)	(5		)	(21		)
Proceeds	1,284			3,421			3,074			9,744

Captive Insurance Companies

In accordance with local insurance regulations, our captive insurance companies are required to meet and maintain minimum solvency capital requirements. The Company elected to invest a majority of ~~these investments was not other than temporary~~its solvency capital in a portfolio of marketable equity and ~~did not record any impairment charges.~~

debt securities. These securities are included in the disclosures above. The Company uses ~~two~~one of its consolidated captive insurance ~~captives~~companies to reinsure group annuity insurance contracts that cover the pension obligations of certain of our European and Canadian pension plans. ~~In accordance with local insurance regulations, our insurance captives are required to meet and maintain minimum~~This captive's solvency capital ~~requirements. The Company elected to invest its solvency capital in a portfolio~~funds included equity and debt securities of ~~available-for-sale securities,~~$1,197 million as of September 27, 2019 and $1,056 million as of December 31, 2018, which are classified in the line item other assets in our condensed consolidated balance sheets because the assets are not available to satisfy our current obligations. ~~As of~~ ~~September 29, 2017~~ ~~and~~ ~~December 31, 2016, the Company's available-for-sale securities included solvency capital funds of $1,112 million~~ ~~and $985 million, respectively.~~

~~The Company's available-for-sale securities were included in the following line items in our condensed consolidated balance sheets (in millions):~~

September 29,
2017
December 31,
2016
Cash and cash equivalents $ 1,682
$ 682
Marketable securities 4,820
3,769
Other investments 971
849
Other assets 1,118
1,113
Total $ 8,591
$ 6,413

~~The contractual maturities of these available-for-sale securities as of~~ ~~September 29, 2017, were as follows (in millions):~~

Cost
Estimated Fair Value
Within 1 year $ 2,301
$ 2,353
After 1 year through 5 years 3,722
3,799
After 5 years through 10 years 208
223
After 10 years 319
323
Equity securities 1,326
1,893
Total $ 7,876
$ 8,591

~~The Company expects that actual maturities may differ from the contractual maturities above because borrowers have the right to call or prepay certain obligations.~~

~~Cost Method Investments~~

Cost method investments are initially recorded at cost, and we record dividend income when applicable dividends are declared. Cost method investments are reported as other investments in our condensed consolidated balance sheets, and dividend income from cost method investments is reported in other income (loss) — net in our condensed consolidated statements of income. We review all of our cost method investments quarterly to determine if impairment indicators are present; however, we are not required to determine the fair value of these investments unless impairment indicators exist. When impairment indicators exist, we generally use discounted cash flow analyses to determine the fair value. We estimate that the fair values of our cost method investments approximated or exceeded their carrying values as of ~~September 29, 2017~~ ~~and~~ ~~December 31, 2016. Our cost method investments had carrying values of $146 million~~ ~~and $140 million~~ ~~as of~~ ~~September 29, 2017~~ ~~and~~ ~~December 31, 2016, respectively.~~

NOTE 45: INVENTORIES

Inventories consist primarily of raw materials and packaging (which include ingredients and supplies) and finished goods (which include concentrates and syrups in our concentrate operations and finished beverages in our finished product operations). Inventories are valued at the lower of cost or net realizable value. We determine cost on the basis of the average cost or first-in, first-out methods. Inventories consisted of the following (in millions):



	September 27, 2019		December 31, 2018
Raw materials and packaging	$	2,044	$	2,025
Finished goods	881		773
Other	341		273
Total inventories	$	3,266	$	3,071

September 29,
2017
December 31,
2016
Raw materials and packaging $ 1,639
$ 1,565
Finished goods 741
844
Other 228
266
Total inventories $ 2,608
$ 2,675

NOTE 56: HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS

The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company's financial performance and are referred to as "market risks." When deemed appropriate, our Company uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risks managed by the Company through the use of derivative and non-derivative financial instruments are foreign currency exchange rate risk, commodity price risk and interest rate risk.

The Company uses various types of derivative instruments including, but not limited to, forward contracts, commodity futures contracts, option contracts, collars and swaps. Forward contracts and commodity futures contracts are agreements to buy or sell a quantity of a currency or commodity at a predetermined future date and at a predetermined rate or price. An option contract is an agreement that conveys the purchaser the right, but not the obligation, to buy or sell a quantity of a currency or commodity at a predetermined rate or price during a period or at a time in the future. A collar is a strategy that uses a combination of options to limit the range of possible positive or negative returns on an underlying asset or liability to a specific range, or to protect expected future cash flows. To do this, an investor simultaneously buys a put option and sells (writes) a call option, or alternatively buys a call option and sells (writes) a put option. A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices. We do not enter into derivative financial instruments for trading purposes. The Company may also designate certain non-derivative instruments, such as our ~~foreign-denominated~~foreign currency denominated debt, in hedging relationships.

All derivative instruments are carried at fair value in our condensed consolidated balance ~~sheets~~sheet, primarily in the following line items, as applicable: prepaid expenses and other assets; other assets; accounts payable and accrued expenses; and other liabilities. The carrying values of the derivatives reflect the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. These master netting agreements allow the Company to net settle positive and negative positions (assets and liabilities) arising from different transactions with the same counterparty.

The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the type of hedging relationships. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. The changes in the fair

values of derivatives that have been designated and qualify for fair value hedge accounting are recorded in the same line item in our condensed consolidated statement of income as the changes in the fair values of the hedged items attributable to the risk being hedged. The changes in the fair values of derivatives that have been designated and qualify as cash flow hedges or hedges of net investments in foreign operations are recorded in AOCI and are reclassified into the line item in our condensed consolidated statement of income in which the hedged items are recorded in the same period the hedged items affect earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the ~~value~~values of the derivative instruments are generally offset by changes in the fair values or cash flows of the underlying exposures being hedged. The changes in the fair values of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized into earnings.

For derivatives that will be accounted for as hedging instruments, the Company formally designates and documents, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, the Company formally assesses, both at the inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. ~~Any ineffective portion of a financial instrument's change in fair value is immediately recognized into earnings.~~

The Company determines the fair values of its derivatives based on quoted market prices or pricing models using current market rates. Refer to Note ~~14.~~16. The notional amounts of the derivative financial instruments do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the financial risks described above. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange rates, commodity rates or other financial indices. The Company does not view the fair values of its derivatives in isolation but rather in relation to the fair values or cash flows of the underlying hedged transactions or other exposures. Virtually all of our derivatives are straightforward over-the-counter instruments with liquid markets.

On January 1, 2019, we adopted ASU 2017-12. For highly effective cash flow hedges, this ASU requires the entire change in fair value of the hedging instrument included in the assessment of hedge effectiveness to be recorded in other comprehensive income. No components of the Company's hedging instruments were excluded from the assessment of hedge effectiveness. To reflect the adoption of the new hedging standard on our cash flow hedging relationships at January 1, 2019, we recorded a $6 million increase, net of taxes, to the opening balance of reinvested earnings and a corresponding decrease to AOCI. For fair value hedges of interest rate risk, this ASU allows entities to elect to use the benchmark interest rate component of the contractual coupon cash flows to calculate the change in fair value of the hedged item attributable to changes in the benchmark interest rate. As a result of applying the new hedging standard to our fair value hedges on January 1, 2019, we recorded a $24 million increase to our hedged long-term debt balances, with a corresponding decrease to the opening balance of reinvested earnings of $18 million, net of taxes.

The following table presents the fair values of the Company's derivative instruments that were designated and qualified as part of a hedging relationship (in millions):


		Fair Value^1,2					Fair Value^1,2
Derivatives Designated as Hedging Instruments	Balance Sheet Location¹	September 29, 2017		December 31, 2016		Balance Sheet Location¹	September 27, 2019		December 31, 2018
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	210	$	400	Prepaid expenses and other assets	$	80	$	43
Foreign currency contracts	Other assets	95		60		Other assets	103		114
Interest rate contracts	Other assets	71		105		Other assets	695		88
Total assets		$	376	$	565		$	878	$	245
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	120	$	40	Accounts payable and accrued expenses	$	38	$	19
Foreign currency contracts	Other liabilities	8		54		Other liabilities	36		15
Commodity contracts	Accounts payable and accrued expenses	—		1		Accounts payable and accrued expenses	—		1
Interest rate contracts	Accounts payable and accrued expenses	33		36		Other liabilities	—		40
Interest rate contracts	Other liabilities	34		47
Total liabilities		$	195	$	178		$	74	$	75

¹All of the Company's derivative instruments are carried at fair value in our condensed consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 1416 for the net presentation of the Company's derivative instruments.

²Refer to Note 1416 for additional information related to the estimated fair value.

The following table presents the fair values of the Company's derivative instruments that were not designated as hedging instruments (in millions):


		Fair Value^1,2					Fair Value^1,2
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location¹	September 29, 2017		December 31, 2016		Balance Sheet Location¹	September 27, 2019		December 31, 2018
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	39	$	284	Prepaid expenses and other assets	$	52	$	61
Foreign currency contracts	Other assets	25		—
Commodity contracts	Prepaid expenses and other assets	15		27
Commodity contracts	Other assets	1		1		Prepaid expenses and other assets	1		2
Other derivative instruments	Prepaid expenses and other assets	8		4		Prepaid expenses and other assets	10		7
Other derivative instruments	Other assets	1		1		Other assets	2		—
Total assets		$	89	$	317		$	65	$	70
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	59	$	60	Accounts payable and accrued expenses	$	33	$	101
Foreign currency contracts	Other liabilities	41		16		Other liabilities	4		—
Commodity contracts	Accounts payable and accrued expenses	16		16		Accounts payable and accrued expenses	60		38
Commodity contracts	Other liabilities	1		1		Other liabilities	4		8
Interest rate contracts	Accounts payable and accrued expenses	—		8
Interest rate contracts	Other liabilities	—		1
Other derivative instruments	Accounts payable and accrued expenses	1		2
Other derivative instruments	Other liabilities	—		5		Accounts payable and accrued expenses	—		13
Total liabilities		$	118	$	109		$	101	$	160

²Refer to Note 1416 for additional information related to the estimated fair value.

Credit Risk Associated with Derivatives

We have established strict counterparty credit guidelines and enter into transactions only with financial institutions of investment grade or better. We monitor counterparty exposures regularly and review any downgrade in credit rating immediately. If a downgrade in the credit rating of a counterparty were to occur, we have provisions requiring collateral for substantially all of our transactions. To mitigate presettlement risk, minimum credit standards become more stringent as the

duration of the derivative financial instrument increases. In addition, the Company's master netting agreements reduce credit risk by permitting the Company to net settle for transactions with the same counterparty. To minimize the concentration of credit risk, we enter into derivative transactions with a portfolio of financial institutions. Based on these factors, we consider the risk of counterparty default to be minimal.

Cash Flow Hedging Strategy

The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates, commodity prices or interest rates. The changes in the fair values of derivatives designated as cash flow hedges are recorded in AOCI and are reclassified into the line item in our condensed consolidated statement of income in which the hedged items are recorded in the same period the hedged items affect earnings. The changes in fair values of hedges that are determined to be ineffective are immediately reclassified from AOCI into earnings. The maximum length of time for which the Company hedges its exposure to the variability in future cash flows is typically three years.

The Company maintains a foreign currency cash flow hedging program to reduce the risk that our eventual U.S. dollar net cash inflows from sales outside the United States and U.S. dollar net cash outflows from procurement activities will be adversely affected by fluctuations in foreign currency exchange rates. We enter into forward contracts and purchase foreign currency options (principally euros and Japanese yen) and collars to hedge certain portions of forecasted cash flows denominated in foreign currencies. When the U.S. dollar strengthens against the foreign currencies, the decline in the present value of future foreign currency cash flows is partially offset by gains in the fair value of the derivative instruments. Conversely, when the U.S. dollar weakens, the increase in the present value of future foreign currency cash flows is partially offset by losses in the fair value of the derivative instruments. The total notional values of derivatives that were designated and qualify for the Company's foreign currency cash flow hedging program were $~~4,495~~7,833 million and $~~6,074~~3,175 million as of September ~~29, 2017~~27, 2019 and December 31, ~~2016~~2018, respectively.

The Company uses cross-currency swaps to hedge the changes in cash flows of certain of its foreign currency denominated debt and other monetary assets or liabilities due to changes in foreign currency exchange rates. For this hedging program, the Company records the change in carrying value of ~~the~~these foreign currency denominated ~~debt~~assets and liabilities due to changes in exchange rates into earnings each period. The changes in fair value of the cross-currency swap derivatives are recorded in AOCI with an immediate reclassification into earnings for the change in fair value attributable to fluctuations in foreign

currency exchange rates. The total notional values of derivatives that have been designated as cash flow hedges for the Company's ~~cross-currency swaps~~foreign currency denominated assets and liabilities were ~~$1,851~~$3,028 million as of ~~both~~ September ~~29, 2017~~27, 2019 and December 31, ~~2016.~~2018.

The Company has entered into commodity futures contracts and other derivative instruments on various commodities to mitigate the price risk associated with forecasted purchases of materials used in our manufacturing process. These derivative instruments have been designated and qualify as part of the Company's commodity cash flow hedging program. The objective of this hedging program is to reduce the variability of cash flows associated with future purchases of certain commodities. The total notional values of derivatives that have been designated and qualify for this program were $2 million and $129 million as of September ~~29, 2017~~27, 2019 and December 31, ~~2016~~2018, respectively.

Our Company monitors our mix of short-term debt and long-term debt regularly. From time to time, we manage our risk to interest rate fluctuations through the use of derivative financial instruments. The Company has entered into interest rate swap agreements and has designated these instruments as part of the Company's interest rate cash flow hedging program. The objective of this hedging program is to mitigate the risk of adverse changes in benchmark interest rates on the Company's future interest payments. ~~The total notional values~~As of ~~these~~September 27, 2019 and December 31, 2018, we did not have any interest rate ~~swap agreements that were~~swaps designated ~~and qualified for the Company's interest rate~~as a cash flow ~~hedging program were $500~~hedge. During the nine months ended September 28, 2018, we discontinued a cash flow hedge relationship related to these swaps. We reclassified a loss of $8 million ~~and $1,500 million~~into earnings as a result of ~~September 29, 2017~~ ~~and~~ ~~December 31, 2016, respectively.~~

the discontinuance.

The following ~~table presents~~tables present the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on other comprehensive income ("OCI"), AOCI and earnings ~~during the three months ended September 29, 2017~~ (in millions):



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)²			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)		²
Three Months Ended September 27, 2019
Foreign currency contracts	$	71		Net operating revenues	$	(5	)	$	—
Foreign currency contracts	3			Cost of goods sold	2			—
Foreign currency contracts	—			Interest expense	(3		)	—
Foreign currency contracts	(46		)	Other income (loss) — net	(46		)	—
Interest rate contracts	(30		)	Interest expense	(10		)	—
Commodity contracts	1			Cost of goods sold	—			—
Total	$	(1	)		$	(62	)	$	—
Three Months Ended September 28, 2018
Foreign currency contracts	$	2		Net operating revenues	$	43		$	—	³
Foreign currency contracts	3			Cost of goods sold	4			—		³
Foreign currency contracts	—			Interest expense	(2		)	—
Foreign currency contracts	20			Other income (loss) — net	23			2
Interest rate contracts	—			Interest expense	(9		)	—
Total	$	25			$	59		$	2

Gain (Loss) Recognized
in OCI

Location of Gain (Loss)
Recognized in Income¹
Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)

Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)

Foreign currency contracts $ (35 ) Net operating revenues $ 116
$ —
²
Foreign currency contracts (11 ) Cost of goods sold (4 ) —
²
Foreign currency contracts —
Interest expense (2 ) —

Foreign currency contracts 100
Other income (loss) — net 100
7

Interest rate contracts (1 ) Interest expense (9 ) —

Commodity contracts —
Cost of goods sold (1 ) —

Total $ 53
$ 200
$ 7

¹The Company records gains and losses reclassified from AOCI into income for the effective portion and the ineffective portion, if any, to the same line items in our condensed consolidated ~~statements~~statement of income.

²Effective January 1, 2019, ASU 2017-12 eliminated the requirement to separately measure and report hedge ineffectiveness for cash flow hedges. No components of the Company’s hedging instruments were excluded from the assessment of hedge effectiveness.

³Includes a de minimis amount of ineffectiveness in the hedging relationship.

The following table presents the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on AOCI and earnings during the nine months ended September 29, 2017 (in millions):



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)²			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)			²
Nine Months Ended September 27, 2019
Foreign currency contracts	$	44		Net operating revenues	$	2		$	—
Foreign currency contracts	1			Cost of goods sold	9			—
Foreign currency contracts	—			Interest expense	(7		)	—
Foreign currency contracts	(99		)	Other income (loss) — net	(139		)	—
Interest rate contracts	(47		)	Interest expense	(30		)	—
Commodity contracts	1			Cost of goods sold	—			—
Total	$	(100	)		$	(165	)	$	—
Nine Months Ended September 28, 2018
Foreign currency contracts	$	10		Net operating revenues	$	97		$	1
Foreign currency contracts	13			Cost of goods sold	5			(3		)
Foreign currency contracts	—			Interest expense	(6		)	—
Foreign currency contracts	46			Other income (loss) — net	3			4
Interest rate contracts	22			Interest expense	(29		)	(8		)
Commodity contracts	—			Cost of goods sold	—			(5		)
Total	$	91			$	70		$	(11	)

Gain (Loss) Recognized
in OCI

Location of Gain (Loss)
Recognized in Income¹
Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)

Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)

Foreign currency contracts $ (216 ) Net operating revenues $ 339
$ (1 )
Foreign currency contracts (27 ) Cost of goods sold 1
—
²
Foreign currency contracts —
Interest expense (7 ) —

Foreign currency contracts 113
Other income (loss) — net 152
7

Interest rate contracts (25 ) Interest expense (26 ) 2

Commodity contracts (1 ) Cost of goods sold —
—

Total $ (156 ) $ 459
$ 8

²~~Includes a de minimis amount of~~Effective January 1, 2019, ASU 2017-12 eliminated the requirement to separately measure and report hedge ineffectiveness ~~in the hedging relationship.~~

~~The following table presents the pretax impact that changes in the fair values of derivatives designated as~~for cash flow ~~hedges had on AOCI and earnings during~~hedges. No components of the ~~three months ended September 30, 2016 (in millions):~~Company’s hedging instruments were excluded from the assessment of hedge effectiveness.

Gain (Loss)
Recognized
in OCI

Location of Gain (Loss)
Recognized in Income¹
Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)

Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)

Foreign currency contracts $ (48 ) Net operating revenues $ 141
$ (2 )
Foreign currency contracts 9
Cost of goods sold 8
—

Foreign currency contracts —
Interest expense (2 ) —

Foreign currency contracts 36
Other income (loss) — net 40
—

Interest rate contracts 26
Interest expense (2 ) 3

Commodity contracts (1 ) Cost of goods sold —
—

Total $ 22
$ 185
$ 1

Gain (Loss)
Recognized
in OCI

Location of Gain (Loss)
Recognized in Income¹
Gain (Loss)
Reclassified from
AOCI into Income
(Effective Portion)

Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)

Foreign currency contracts $ (348 ) Net operating revenues $ 419
$ (3 )
Foreign currency contracts (34 ) Cost of goods sold 41
(1 )
Foreign currency contracts —
Interest expense (6 ) —

Foreign currency contracts 25
Other income (loss) — net 38
—

Interest rate contracts (226 ) Interest expense (6 ) 3

Commodity contracts —
Cost of goods sold —
—

Total $ (583 ) $ 486
$ (1 )

As of September ~~29, 2017~~,27, 2019, the Company estimates that it will reclassify into earnings during the next 12 months ~~$175 million~~net losses of ~~gains~~$16 million from the pretax amount recorded in AOCI as the anticipated cash flows occur.

Fair Value Hedging Strategy

The Company uses interest rate swap agreements designated as fair value hedges to minimize exposure to changes in the fair value of fixed-rate debt that results from fluctuations in benchmark interest rates. The Company also uses cross-currency interest rate swaps to hedge the changes in the fair value of foreign currency denominated debt relating to changes in foreign currency exchange rates and benchmark interest rates. The changes in fair values of derivatives designated as fair value hedges and the offsetting changes in fair values of the hedged items are recognized in earnings. The ineffective portions of these hedges are immediately recognized in earnings. ~~As of~~ ~~September 29, 2017, such adjustments had cumulatively increased the carrying value of our long-term debt by $25 million~~. When a derivative is no longer designated as a fair value hedge for any reason, including termination and maturity, the remaining unamortized difference between the carrying value of the hedged item at that time and the face value of the hedged item is amortized to earnings over the remaining life of the hedged item, or immediately if the hedged item has matured. The total notional values of derivatives ~~that~~ related to our fair value hedges of this type were $~~8,123~~12,655 million and ~~$6,158~~$8,023 million as of September ~~29, 2017~~27, 2019 and December 31, ~~2016~~2018, respectively.

The Company also uses fair value hedges to minimize exposure to changes in the fair value of certain available-for-sale securities from fluctuations in foreign currency exchange rates. The changes in fair values of derivatives designated as fair value hedges and the offsetting changes in fair values of the hedged items due to changes in foreign currency exchange rates are recognized in earnings. As a result, any difference is reflected in earnings as ineffectiveness. ~~The total notional values~~As of ~~derivatives that related to our~~September 27, 2019 and December 31, 2018, we did not have any fair value hedges of this ~~type were $1,002 million~~ ~~and $1,163 million~~ ~~as of~~ ~~September 29, 2017~~ ~~and~~ ~~December 31, 2016, respectively.~~type.

The following ~~table summarizes~~tables summarize the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings (in millions):



Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Three Months Ended
		September 27, 2019			September 28, 2018
Interest rate contracts	Interest expense	$	206		$	(38	)
Fixed-rate debt	Interest expense	(200		)	41
Net impact to interest expense		$	6		$	3
Net impact of fair value hedging instruments		$	6		$	3



Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Nine Months Ended
		September 27, 2019			September 28, 2018
Interest rate contracts	Interest expense	$	647		$	(57	)
Fixed-rate debt	Interest expense	(637		)	50
Net impact to interest expense		$	10		$	(7	)
Foreign currency contracts	Other income (loss) — net	$	—		$	(6	)
Available-for-sale securities	Other income (loss) — net	—			6
Net impact to other income (loss) — net		$	—		$	—
Net impact of fair value hedging instruments		$	10		$	(7	)

Hedging Instruments and Hedged Items
Location of Gain (Loss)
Recognized in Income
Gain (Loss)
Recognized in Income¹
Three Months Ended
September 29,
2017
September 30,
2016
Interest rate contracts Interest expense $ 19
$ —
Fixed-rate debt Interest expense (15 ) (1 )
Net impact to interest expense $ 4
$ (1 )
Foreign currency contracts Other income (loss) — net $ (23 ) $ (67 )
Available-for-sale securities Other income (loss) — net 26
66
Net impact to other income (loss) — net

$ 3
$ (1 )
Net impact of fair value hedging instruments
$ 7
$ (2 )

¹~~The net impacts represent the ineffective portions of the hedge relationships and the amounts excluded from the assessment of hedge effectiveness.~~

The following table summarizes the ~~pretax impact that changes~~amounts recorded in the ~~fair values of derivatives designated as~~condensed consolidated balance sheets related to hedged items in fair value ~~hedges had on earnings~~hedging relationships (in millions):

Hedging Instruments and Hedged Items
Location of Gain (Loss)
Recognized in Income
Gain (Loss)
Recognized in Income¹
Nine Months Ended
September 29,
2017
September 30,
2016
Interest rate contracts Interest expense $ (46 ) $ 398
Fixed-rate debt Interest expense 42
(364 )
Net impact to interest expense $ (4 ) $ 34
Foreign currency contracts Other income (loss) — net $ (66 ) $ (37 )
Available-for-sale securities Other income (loss) — net 72
34
Net impact to other income (loss) — net

$ 6
$ (3 )
Net impact of fair value hedging instruments
$ 2
$ 31



	Carrying Value of the Hedged Item				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Value of the Hedged Item¹
	September 27, 2019		December 31, 2018		September 27, 2019		December 31, 2018
Long-term debt	$	13,091	$	8,043	$	710	$	62

¹~~The net impacts represent the ineffective portions~~Cumulative amount of ~~the hedge relationships and the amounts excluded from the assessment of hedge effectiveness.~~fair value hedging adjustments does not include changes due to foreign currency exchange rates.

Hedges of Net Investments in Foreign Operations Strategy

The Company uses forward contracts and a portion of its foreign currency denominated debt, a non-derivative financial instrument, to protect the value of our net investments in a number of foreign ~~subsidiaries.~~operations. For derivative instruments that are designated and qualify as hedges of net investments in foreign operations, the changes in fair values of the derivative instruments are recognized in net foreign currency translation ~~adjustment,~~adjustments, a component of AOCI, to offset the changes in the values of the net investments being hedged. For non-derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations, the change in the carrying value of the designated portion of the non-derivative financial instrument due to changes in foreign currency exchange rates is recorded in net foreign currency translation ~~adjustment.~~adjustments. Any ineffective ~~portions of~~ net investment hedges are reclassified from AOCI into earnings during the period of change.

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions):



	Notional Amount				Gain (Loss) Recognized in OCI
	as of				Three Months Ended				Nine Months Ended
	September 27, 2019		December 31, 2018		September 27, 2019		September 28, 2018		September 27, 2019		September 28, 2018
Foreign currency contracts	$	325	$	—	$	13	$	6	$	42	$	6
Foreign currency denominated debt	12,034		12,494		476		53		444		347
Total	$	12,359	$	12,494	$	489	$	59	$	486	$	353

Notional Amount Gain (Loss) Recognized in OCI
as of Three Months Ended Nine Months Ended
September 29,
2017
December 31, 2016
September 29,
2017
September 30,
2016
September 29,
2017
September 30,
2016
Foreign currency contracts $ 170
$ 100
$ (4 ) $ (9 ) $ (19 ) $ (235 )
Foreign currency denominated debt 13,118
11,113
(549 ) (67 ) (1,475 ) (323 )
Total $ 13,288
$ 11,213
$ (553 ) $ (76 ) $ (1,494 ) $ (558 )

The Company did not reclassify any gains or losses related to net investment hedges from AOCI into earnings during the three and nine months ended September ~~29, 2017.~~27, 2019 and September 28, 2018. In addition, the Company did not have any ineffectiveness related to net investment hedges during the three and nine months ended September ~~29, 2017.~~27, 2019 and September 28, 2018. The cash inflows and outflows associated with the Company's derivative contracts designated as net investment hedges are classified in the line item other investing activities in our condensed consolidated ~~statements~~statement of cash flows.

The Company reclassified net deferred losses of $77 million related to the deconsolidation of our German bottling operations from AOCI into earnings during the nine months ended September 30, 2016. Refer to Note 2.

Economic (Nondesignated) Hedging Strategy

In addition to derivative instruments that are designated and qualify for hedge accounting, the Company also uses certain derivatives as economic hedges of foreign currency, interest rate and commodity exposure. Although these derivatives were not designated and/or did not qualify for hedge accounting, they are effective economic hedges. The changes in the fair value of economic hedges are immediately recognized into earnings.

The Company uses foreign currency economic hedges to offset the earnings impact that fluctuations in foreign currency exchange rates have on certain monetary assets and liabilities denominated in nonfunctional currencies. The changes in fair value of economic hedges used to offset those monetary assets and liabilities are immediately recognized into earnings in the

line item other income (loss) — net in our condensed consolidated ~~statements~~statement of income. In addition, we use foreign currency economic hedges to minimize the variability in cash flows associated with fluctuations in foreign currency exchange ~~rates.~~rates, including those related to certain acquisition and divestiture activities. The changes in fair values of economic hedges used to offset the variability in U.S. dollar net cash flows are recognized into earnings in the line items net operating revenues, or cost of goods sold or other income (loss) — net in our condensed consolidated ~~statements~~statement of income, as applicable. The total notional values of derivatives related to our foreign currency economic hedges were $~~6,026~~4,655 million and $~~5,276~~10,939 million as of September ~~29, 2017~~27, 2019 and December 31, ~~2016~~2018, respectively.

The Company also uses certain derivatives as economic hedges to mitigate the price risk associated with the purchase of materials used in the manufacturing process and for vehicle fuel. The changes in fair values of these economic hedges are immediately recognized into earnings in the line items net operating revenues, cost of goods sold, ~~and~~or selling, general and administrative expenses in our condensed consolidated ~~statements~~statement of income, as applicable. The total notional values of derivatives related to our economic hedges of this type were $~~402~~552 million and $~~447~~373 million as of September ~~29, 2017~~27, 2019 and December 31, ~~2016~~2018, respectively.

The following ~~table presents~~tables present the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions):


		Three Months Ended
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	September 29, 2017			September 30, 2016			Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
Derivatives Not Designated as Hedging Instruments									Three Months Ended
									September 27, 2019			September 28, 2018
	Net operating revenues	$	(5	)	$	(6	)	Net operating revenues	$	15		$	8
Foreign currency contracts	Other income (loss) — net	47			—			Cost of goods sold	2			9
Interest rate contracts	Interest expense	—			2
Commodity contracts	Net operating revenues	12			—
Commodity contracts	Cost of goods sold	(15		)	(9		)
Foreign currency contracts								Other income (loss) — net	(21		)	29
Commodity contracts	Selling, general and administrative expenses	3			(1		)	Cost of goods sold	(60		)	3
Other derivative instruments	Selling, general and administrative expenses	8			3			Selling, general and administrative expenses	4			18
Other derivative instruments	Other income (loss) — net	1			—			Other income (loss) — net	5			—
Total		$	51		$	(11	)		$	(55	)	$	67

~~The following table presents the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions):~~



Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Nine Months Ended
		September 27, 2019			September 28, 2018
Foreign currency contracts	Net operating revenues	$	2		$	34
Foreign currency contracts	Cost of goods sold	4			3
Foreign currency contracts	Other income (loss) — net	(46		)	(87		)
Interest rate contracts	Interest expense	—			(1		)
Commodity contracts	Cost of goods sold	(58		)	15
Other derivative instruments	Selling, general and administrative expenses	32			11
Other derivative instruments	Other income (loss) — net	39			—
Total		$	(27	)	$	(25	)

Nine Months Ended
Derivatives Not Designated
as Hedging Instruments Location of Gain (Loss)
Recognized in Income September 29,
2017
September 30,
2016
Foreign currency contracts Net operating revenues $ (23 ) $ (34 )
Foreign currency contracts Cost of goods sold —
4
Foreign currency contracts Other income (loss) — net 149
(116 )
Interest rate contracts Interest expense —
2
Commodity contracts Net operating revenues 7
3
Commodity contracts Cost of goods sold 13
68
Commodity contracts Selling, general and administrative expenses —
3
Other derivative instruments Selling, general and administrative expenses 33
11
Other derivative instruments Other income (loss) — net 2
(14 )
Total $ 181
$ (73 )

NOTE 6:7: DEBT AND BORROWING ARRANGEMENTS

During the nine months ended September ~~29, 2017,~~27, 2019, the Company issued euro- and U.S. ~~dollar- and euro-denominated~~dollar-denominated debt of ~~$1,000~~€3,500 million and ~~€2,500~~$2,000 million, respectively. The carrying value of this debt as of September ~~29, 2017,~~27, 2019 was ~~$3,967~~$5,793 million. The general terms of the notes issued are as follows:

~~$500~~€750 million total principal amount of notes due ~~May 25,~~March 8, 2021, at a variable interest rate equal to the three month Euro Interbank Offered Rate ("EURIBOR") plus 0.20 percent;

€1,000 million total principal amount of notes due September 22, 2022, at a fixed interest rate of ~~2.20~~0.125 percent;

~~$500~~€1,000 million total principal amount of notes due ~~May 25, 2027,~~September 22, 2026, at a fixed interest rate of ~~2.90~~0.75 percent;

€750 million total principal amount of notes due March 8, 2031, at a fixed interest rate of 1.25 percent;

$1,000 million total principal amount of notes due September 6, 2024, at a fixed interest rate of 1.75 percent; and

$1,000 million total principal amount of notes due September 6, 2029, at a fixed interest rate of 2.125 percent.

During the nine months ended September 27, 2019, the Company retired upon maturity:

€1,500 million total principal amount of notes due March 8, 2019, at a variable interest rate equal to the ~~three-month Euro Interbank Offered Rate ("EURIBOR")~~three month EURIBOR plus 0.25 percent;

~~€500~~$1,000 million total principal amount of notes due ~~March 9, 2021,~~May 30, 2019, at a fixed interest rate of ~~0.00~~1.375 percent; and

€~~500~~2,000 million total principal amount of notes due ~~March 8, 2024, at a fixed interest rate of 0.50 percent.~~

~~During the nine months ended~~ September 29, 2017, the Company retired upon maturity $206 million total principal amount of notes due August 1, 2017, at a fixed interest rate of 7.125 percent and €2,000 million total principal amount of notes due March 9, ~~2017,~~2019, at a variable interest rate equal to the ~~three-month~~three month EURIBOR plus ~~0.15~~0.23 percent. The Company also extinguished a portion of the long-term debt that was assumed in connection with our acquisition of CCE's former North America business ("Old CCE"). The extinguished notes had a carrying value of $417 million, which included fair value adjustments recorded

NOTE 8: LEASES

We have operating leases primarily for real estate, vehicles, and manufacturing and other equipment.

Balance sheet information related to operating leases is as ~~part of purchase accounting. The general terms of the notes extinguished were as follows:~~follows (in millions):

~~$95.6 million~~ ~~total principal amount of notes due August 15, 2019, at a fixed interest rate of 4.50 percent;~~



	September 27, 2019
Operating lease ROU assets¹	$	1,310
Current portion of operating lease liabilities²	$	253
Noncurrent portion of operating lease liabilities³	1,076
Total operating lease liabilities	$	1,329

~~$38.6 million~~ ~~total principal amount of notes due February~~ ^{1 2022, at a fixed interest rate of}~~8.50 percent~~;

~~$11.7 million total principal amount of notes due September 15, 2022, at a fixed interest rate of 8.00 percent;~~

~~$36.5 million total principal amount of notes due September 15, 2023, at a fixed interest rate of 6.75 percent;~~

~~$9.9 million total principal amount of notes due October 1, 2026, at a fixed interest rate of 7.00 percent;~~

~~$53.8 million total principal amount of notes due November 15, 2026, at a fixed interest rate of 6.95 percent;~~

~~$41.3 million total principal amount of notes due September 15, 2028, at a fixed interest rate of 6.75 percent;~~

~~$32.0 million total principal amount of notes due October 15, 2036, at a fixed interest rate of 6.70 percent;~~

~~$3.4 million total principal amount of notes due March 18, 2037, at a fixed interest rate of 5.71 percent;~~

~~$24.3 million total principal amount of notes due January 15, 2038, at a fixed interest rate of 6.75 percent; and~~

~~$4.7 million total principal amount of notes due May 15, 2098, at a fixed interest rate of 7.00 percent.~~

~~The Company~~Operating lease ROU assets are recorded ~~a net charge of $38 million~~ in the line item ~~interest expense~~other assets in our condensed consolidated ~~statement~~balance sheet.

²The current portion of ~~income~~operating lease liabilities is recorded in the line item accounts payable and accrued expenses in our condensed

consolidated balance sheet.

³The noncurrent portion of operating lease liabilities is recorded in the line item other liabilities in our condensed consolidated balance sheet.

We had operating lease costs of $78 million and $236 million for the three and nine months ended September 27, 2019, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $257 million during the nine months ended September ~~29, 2017. This net charge was due~~27, 2019. Operating lease ROU assets obtained in exchange for operating lease obligations were $214 million during the nine months ended September 27, 2019.

Information associated with the measurement of our remaining operating lease obligations as of September 27, 2019 is as follows:



Weighted-average remaining lease term	7 years
Weighted-average discount rate	3	%

The following table summarizes the maturity of our operating lease liabilities as of September 27, 2019 (in millions):



2019	$	72
2020	272
2021	236
2022	201
2023	163
Thereafter	521
Total operating lease payments	1,465
Less: Imputed interest	136
Total operating lease liabilities	$	1,329

Our leases have remaining lease terms of 1 year to ~~the extinguishment~~25 years, inclusive of ~~long-term debt described above.~~renewal or termination options that we are reasonably certain to exercise.

NOTE 79: COMMITMENTS AND CONTINGENCIES

Guarantees

As of September ~~29, 2017,~~27, 2019, we were contingently liable for guarantees of indebtedness owed by third parties of ~~$690~~$595 million, of which ~~$351~~$244 million was related to variable interest entities. ~~These~~Our guarantees are primarily related to third-party customers, bottlers, vendors and container manufacturing operations and have arisen through the normal course of business. These guarantees have various terms, and none of these guarantees ~~was~~is individually significant. ~~The amount represents~~These amounts represent the maximum potential future payments that we could be required to make under the guarantees; however, we do not consider it probable that we will be required to satisfy these guarantees.

We believe our exposure to concentrations of credit risk is limited due to the diverse geographic areas covered by our operations.

Legal Contingencies

The Company is involved in various legal proceedings. We establish reserves for specific legal proceedings when we determine that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management has also identified certain other legal matters where we believe an unfavorable outcome is reasonably possible and/or for which no estimate of possible losses can be made. Management believes that the total liabilities toof the Company that may arise as a result of currently pending legal proceedings will not have a material adverse effect on the Company taken as a whole.

Tax Audits

The Company is involved in various tax matters, ~~with respect to~~ some of which the outcome is uncertain. We establish reserves to remove some or all of the tax benefit of any of our tax positions at the time we determine that it becomes uncertain based upon one of the following conditions: (1) the tax position is not "more likely than not" to be ~~sustained,~~sustained; (2) the tax position is "more likely than not" to be sustained but for a lesser ~~amount,~~amount; or (3) the tax position is "more likely than not" to be sustained but not in the financial period in which the tax position was originally taken. For purposes of evaluating whether or not a tax position is uncertain, (1) we presume the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information; (2) the technical merits of a tax position are derived from authorities such as legislation and statutes, legislative intent, regulations, rulings and case law and their applicability to the facts and circumstances of the tax position; and (3) each tax position is evaluated without consideration of the possibility of offset or aggregation with other tax positions taken. A number of years may elapse before a particular uncertain tax position is audited and finally ~~resolved or when a tax assessment is raised.~~resolved. The number of years subject to tax audits or tax assessments varies depending on the tax jurisdiction. The tax benefit that has been previously reserved because of a failure to meet the "more likely than not" recognition threshold would be recognized in our income tax expense in the first interim period when the uncertainty disappears under any one of the following conditions: (1) the tax position is "more likely than not" to be ~~sustained,~~sustained; (2) the tax position, amount, and/or timing is ultimately settled through negotiation or ~~litigation,~~litigation; or (3) the statute of limitations for the tax position has expired. Refer to Note ~~13.~~15.

On September 17, 2015, the Company received a Statutory Notice of Deficiency ~~("Notice"~~(the "Notice") from the Internal Revenue Service ("IRS") for the tax years 2007 through 2009 after a five-year audit. In the Notice, the IRS ~~claims~~claimed that the Company's ~~United States~~U.S. taxable income should be increased by an amount that creates a potential additional federal income tax liability of approximately $3.3 billion for the period plus interest. No penalties were asserted in the Notice. The disputed amounts largely relate to a transfer pricing matter involving the appropriate amount of taxable income the Company should report in the United States in connection with its licensing of intangible property to certain related foreign licensees regarding the manufacturing, distribution, sale, marketing, and promotion of products in ~~overseas~~certain foreign markets.

~~The~~During the 2007-2009 audit period, the Company ~~has~~ followed the same transfer pricing methodology for these licenses that had consistently been followed since the methodology was agreed with the IRS in a 1996 closing agreement (the "Closing Agreement") that applied back to 1987. The ~~closing agreement provides~~Closing Agreement provided prospective penalty protection ~~as long as~~conditioned on the ~~Company follows~~Company's continued adherence to the prescribed methodology ~~and~~absent a change in material facts ~~and~~or circumstances ~~and~~or relevant federal tax ~~law have not changed. On February 11, 2016,~~law. Although the IRS ~~notified the Company,~~subsequently asserted, without ~~further~~ explanation, ~~that the IRS has determined~~ that material facts and circumstances and relevant federal tax law ~~have~~had changed, ~~and that~~ it ~~may assert~~has not asserted penalties. ~~The Company does not agree with this determination.~~ The Company's compliance with the ~~closing agreement~~Closing Agreement was audited and confirmed by the IRS in five successive audit cycles covering the subsequent 11 years through 2006, with the last audit concluding as recently as 2009.

The Notice represents a repudiation of the methodology previously adopted in the ~~1996 closing agreement.~~Closing Agreement. The IRS designated the matter for litigation on October 15, 2015. ToDue to the ~~extent~~fact that the matter remains designated, the Company ~~will be~~is prevented from pursuing any administrative settlement at IRS Appeals or under the IRS Advance Pricing and Mutual Agreement Program.

The Company firmly believes that the IRS' claims are without merit and ~~plans~~is pursuing, and will continue to pursue, all available administrative and judicial remedies necessary to ~~resolve this matter.~~vigorously defend its position. To that end, the Company filed a petition in the U.S. Tax Court on December 14, 2015, and the IRS filed its answer on February 12, 2016. On October 4, 2017, the IRS filed an amended answer to the Company's petition in which it increased its transfer pricing adjustment by $385 million resulting in an additional ~~potential~~ tax ~~liability~~adjustment of $135 million. This increases the potential additional federal income tax liability to approximately $3.4 billion for the period, plus interest. A trial date has been set for March 5, 2018. The Company intends to vigorously defend its position and is confident in its ability to prevail on the merits.

On June 20, 2017, the Company filed a motion for summary judgment on the portion of the IRS' adjustments related to our licensee in Mexico. ~~That~~On December 14, 2017, the U.S. Tax Court issued a decision on the summary judgment motion ~~is still pending.~~in favor of the Company. This decision effectively reduced the IRS' potential tax adjustment by approximately $138 million.

The U.S. Tax Court trial was held from March 8, 2018 through May 11, 2018. The Company ~~regularly assesses~~and the ~~likelihood~~IRS filed and exchanged final post-trial briefs in April 2019. It is not known how much time will elapse thereafter prior to the issuance of ~~adverse outcomes resulting from examinations such as this~~the court's opinion. In the interim, or subsequent to ~~determine~~ the ~~adequacy of its tax reserves. The~~court's opinion, the IRS may propose similar adjustments for years subsequent to the 2007-2009 litigation period. While the Company ~~believes~~continues to strongly disagree with the IRS' position, there is no assurance that the ~~final adjudication~~court will rule in the Company's favor, and it is possible that all or some portion of ~~this matter will not have a material impact on its consolidated financial position, results of operations or cash flows. However,~~ the ~~ultimate outcome of disputes of this nature is uncertain,~~adjustment proposed by the Notice ultimately could be sustained. In that event, the Company may be subject to significant additional liabilities for the years at issue and ~~if the IRS were to prevail on its assertions, the additional tax, interest and any potential penalties~~potentially also for subsequent periods, which could have a material adverse impact on the Company's financial position, results of operations, and cash flows.

The Company regularly assesses the likelihood of adverse outcomes resulting from tax disputes such as this and other examinations for all open years to determine the adequacy of its tax reserves. Any such adjustments related to years prior to 2018, either in the litigation period or later, may have an impact on the transition tax payable as part of the Tax Reform Act.

Risk Management Programs

The Company has numerous global insurance programs in place to help protect the Company from the risk of loss. In general, we are self-insured for large portions of many different types of claims; however, we do use commercial insurance above our self-insured retentions to reduce the Company's risk of catastrophic loss. Our reserves for the Company's self-insured losses are estimated using actuarial methods and assumptions of the insurance industry, adjusted for our specific expectations based on our claim history. Our self-insurance reserves totaled ~~$514~~$308 million and ~~$527~~$362 million as of September ~~29, 2017~~27, 2019 and December 31, ~~2016,~~2018, respectively.

NOTE 810: OTHER COMPREHENSIVE INCOME

AOCI attributable to shareowners of The Coca-Cola Company is separately presented in our condensed consolidated balance ~~sheets~~sheet as a component of The Coca-Cola Company's shareowners' equity, which also includes our proportionate share of equity method investees' AOCI. OCI attributable to noncontrolling interests is allocated to, and included in, our condensed consolidated balance ~~sheets~~sheet as part of the line item equity attributable to noncontrolling interests.

AOCI attributable to shareowners of The Coca-Cola Company consisted of the following, net of tax (in millions):



	September 27, 2019			December 31, 2018
Foreign currency translation adjustments¹	$	(11,803	)	$	(11,045	)
Accumulated derivative net gains (losses)^{1, 2}	(125		)	(126		)
Unrealized net gains (losses) on available-for-sale debt securities¹	103			50
Adjustments to pension and other benefit liabilities¹	(1,881		)	(1,693		)
Accumulated other comprehensive income (loss)	$	(13,706	)	$	(12,814	)

September 29,
2017
December 31, 2016
Foreign currency translation adjustments $ (8,271 ) $ (9,780 )
Accumulated derivative net gains (losses) (80 ) 314
Unrealized net gains (losses) on available-for-sale securities 470
305
Adjustments to pension and other benefit liabilities (1,962 ) (2,044 )
Accumulated other comprehensive income (loss) $ (9,843 ) $ (11,205 )
¹The change in the balance from December 31, 2018 includes a portion of a $513 million reclassification to reinvested earnings from AOCI

upon the adoption of ASU 2018-02. Refer to Note 1.

²The change in the balance from December 31, 2018 includes a $6 million reclassification to reinvested earnings from AOCI upon the

adoption of ASU 2017-12. Refer to Note 1 and Note 6.

The following table summarizes the allocation of total comprehensive income between shareowners of The Coca-Cola Company and noncontrolling interests (in millions):


	Nine Months Ended September 29, 2017								Nine Months Ended September 27, 2019
	Shareowners of The Coca-Cola Company			Noncontrolling Interests		Total			Shareowners of The Coca-Cola Company			Noncontrolling Interests			Total
Consolidated net income	$	4,000		$	—	$	4,000		$	6,878		$	42		$	6,920
Other comprehensive income:
Net foreign currency translation adjustments	1,509			2		1,511			(549		)	(130		)	(679		)
Net gain (loss) on derivatives¹	(394		)	—		(394		)
Net change in unrealized gain (loss) on available-for-sale securities²	165			—		165
Net change in pension and other benefit liabilities³	82			—		82
Net gains (losses) on derivatives¹									30			—			30
Net change in unrealized gains (losses) on available-for-sale debt securities²									46			—			46
Net change in pension and other benefit liabilities									100			—			100
Total comprehensive income	$	5,362		$	2	$	5,364		$	6,505		$	(88	)	$	6,417

¹Refer to Note 56 for additional information related to the net ~~gain~~gains or ~~loss~~losses on derivative ~~instruments designated and qualifying as cash flow hedging~~ instruments.

²Refer to Note 34 for additional information related to the net unrealized ~~gain~~gains or ~~loss~~losses on available-for-sale debt securities.


³	~~Refer to Note 12 for additional information related to the Company's pension and other postretirement benefit liabilities.~~

The following tables present OCI attributable to shareowners of The Coca-Cola Company, including our proportionate share of equity method investees' OCI (in millions):


Three Months Ended September 29, 2017	Before-Tax Amount			Income Tax			After-Tax Amount
Three Months Ended September 27, 2019										Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period	$	162		$	(174	)	$	(12	)	$	(256	)	$	(6	)	$	(262	)
Reclassification adjustments recognized in net income	(17		)	—			(17		)
Gains (losses) on intra-entity transactions that are of a long-term-investment nature	1,063			—			1,063
Gains (losses) on intra-entity transactions that are of a long-term investment nature										(924		)	—			(924		)
Gains (losses) on net investment hedges arising during the period¹	(553		)	211			(342		)	489			(122		)	367
Net foreign currency translation adjustments	655			37			692			$	(691	)	$	(128	)	$	(819	)
Derivatives:
Gains (losses) arising during the period	54			(19		)	35			$	(2	)	$	1		$	(1	)
Reclassification adjustments recognized in net income	(207		)	76			(131		)	62			(15		)	47
Net gains (losses) on derivatives¹	(153		)	57			(96		)	$	60		$	(14	)	$	46
Available-for-sale securities:
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period	20			(17		)	3			$	29		$	(7	)	$	22
Reclassification adjustments recognized in net income	(4		)	2			(2		)	(8		)	2			(6		)
Net change in unrealized gain (loss) on available-for-sale securities²	16			(15		)	1
Net change in unrealized gains (losses) on available-for-sale debt securities²										$	21		$	(5	)	$	16
Pension and other benefit liabilities:
Net pension and other benefit liabilities arising during the period	(120		)	49			(71		)	$	4		$	—		$	4
Reclassification adjustments recognized in net income	193			(73		)	120			37			(9		)	28
Net change in pension and other benefit liabilities³	73			(24		)	49
Net change in pension and other benefit liabilities										$	41		$	(9	)	$	32
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company	$	591		$	55		$	646		$	(569	)	$	(156	)	$	(725	)


¹	Refer to Note 56 for additional information related to the net ~~gain~~gains or ~~loss~~losses on derivative ~~instruments designated and qualifying as cash flow hedging~~ instruments.


²	~~Includes reclassification adjustments related to divestitures of certain available-for-sale securities. Refer to Note 3 and Note 10 for additional information related to these divestitures.~~


³	Refer to Note ~~12 for additional information related to the Company's pension and other postretirement benefit liabilities.~~

Nine Months Ended September 29, 2017 Before-Tax Amount
Income Tax
After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period $ (793 ) $ (142 ) $ (935 )
Reclassification adjustments recognized in net income 103
(6 ) 97
Gains (losses) on intra-entity transactions that are of a long-term-investment nature 3,270
—
3,270
Gains (losses) on net investment hedges arising during the period¹
(1,494 ) 571
(923 )
Net foreign currency translation adjustments 1,086
423
1,509
Derivatives:

Gains (losses) arising during the period (159 ) 56
(103 )
Reclassification adjustments recognized in net income (466 ) 175
(291 )
Net gains (losses) on derivatives¹
(625 ) 231
(394 )
Available-for-sale securities:

Unrealized gains (losses) arising during the period 365
(123 ) 242
Reclassification adjustments recognized in net income (117 ) 40
(77 )
Net change in unrealized gain (loss) on available-for-sale securities²
248
(83 ) 165
Pension and other benefit liabilities:

Net pension and other benefit liabilities arising during the period (161 ) 73
(88 )
Reclassification adjustments recognized in net income 266
(96 ) 170
Net change in pension and other benefit liabilities³
105
(23 ) 82
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ 814
$ 548
$ 1,362


¹	~~Refer to Note 5~~4 for additional information related to the net ~~gain~~unrealized gains or ~~loss~~losses on available-for-sale debt securities.



Nine Months Ended September 27, 2019	Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period	$	(141	)	$	(77	)	$	(218	)
Reclassification adjustments recognized in net income	192			—			192
Gains (losses) on intra-entity transactions that are of a long-term investment nature	(888		)	—			(888		)
Gains (losses) on net investment hedges arising during the period¹	486			(121		)	365
Net foreign currency translation adjustments	$	(351	)	$	(198	)	$	(549	)
Derivatives:
Gains (losses) arising during the period	$	(119	)	$	24		$	(95	)
Reclassification adjustments recognized in net income	166			(41		)	125
Net gains (losses) on derivatives¹	$	47		$	(17	)	$	30
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period	$	88		$	(17	)	$	71
Reclassification adjustments recognized in net income	(32		)	7			(25		)
Net change in unrealized gains (losses) on available-for-sale debt securities²	$	56		$	(10	)	$	46
Pension and other benefit liabilities:
Net pension and other benefit liabilities arising during the period	$	11		$	5		$	16
Reclassification adjustments recognized in net income	111			(27		)	84
Net change in pension and other benefit liabilities	$	122		$	(22	)	$	100
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company	$	(126	)	$	(247	)	$	(373	)


¹	Refer to Note 6 for additional information related to the net gains or losses on derivative ~~instruments designated and qualifying as cash flow hedging~~ instruments.


²	~~Includes reclassification adjustments related to divestitures of certain available-for-sale securities. Refer to Note 3 and Note 10 for additional information related to these divestitures.~~


³	Refer to Note ~~12 for additional information related to the Company's pension and other postretirement benefit liabilities.~~

Three Months Ended September 30, 2016 Before-Tax Amount
Income Tax
After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period $ (130 ) $ 41
$ (89 )
Reclassification adjustments recognized in net income 242
(18 ) 224
Gains (losses) on net investment hedges arising during the period¹
(76 ) 29
(47 )
Net foreign currency translation adjustments 36
52
88
Derivatives:

Gains (losses) arising during the period 22
(8 ) 14
Reclassification adjustments recognized in net income (186 ) 71
(115 )
Net gains (losses) on derivatives¹
(164 ) 63
(101 )
Available-for-sale securities:

Unrealized gains (losses) arising during the period (98 ) 31
(67 )
Reclassification adjustments recognized in net income (19 ) 4
(15 )
Net change in unrealized gain (loss) on available-for-sale securities²
(117 ) 35
(82 )
Pension and other benefit liabilities:

Net pension and other benefit liabilities arising during the period 13
(2 ) 11
Reclassification adjustments recognized in net income 43
(15 ) 28
Net change in pension and other benefit liabilities³
56
(17 ) 39
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (189 ) $ 133
$ (56 )


¹	~~Refer to Note 5~~4 for additional information related to the net ~~gain~~unrealized gains or ~~loss~~losses on available-for-sale debt securities.



Three Months Ended September 28, 2018	Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period	$	(446	)	$	19		$	(427	)
Reclassification adjustments recognized in net income	170			—			170
Gains (losses) on intra-entity transactions that are of a long-term investment nature	(119		)	—			(119		)
Gains (losses) on net investment hedges arising during the period¹	59			(15		)	44
Net foreign currency translation adjustments	$	(336	)	$	4		$	(332	)
Derivatives:
Gains (losses) arising during the period	$	19		$	(7	)	$	12
Reclassification adjustments recognized in net income	(58		)	16			(42		)
Net gains (losses) on derivatives¹	$	(39	)	$	9		$	(30	)
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period	$	(13	)	$	24		$	11
Reclassification adjustments recognized in net income	(3		)	2			(1		)
Net change in unrealized gains (losses) on available-for-sale debt securities²	$	(16	)	$	26		$	10
Pension and other benefit liabilities:
Net pension and other benefit liabilities arising during the period	$	7		$	—		$	7
Reclassification adjustments recognized in net income	65			(16		)	49
Net change in pension and other benefit liabilities	$	72		$	(16	)	$	56
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company	$	(319	)	$	23		$	(296	)


¹	Refer to Note 6 for additional information related to the net gains or losses on derivative ~~instruments designated and qualifying as cash flow hedging~~ instruments.


²	~~Includes reclassification adjustments related to divestitures of certain available-for-sale securities. Refer to Note 3 for additional information related to these divestitures.~~


³	Refer to Note ~~12 for additional information related to the Company's pension and other postretirement benefit liabilities.~~

Nine Months Ended September 30, 2016 Before-Tax Amount
Income Tax
After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period $ 332
$ 39
$ 371
Reclassification adjustments recognized in net income 368
(18 ) 350
Gains (losses) on net investment hedges arising during the period¹
(558 ) 214
(344 )
Reclassification adjustments for net investment hedges recognized in net income¹
77
(30 ) 47
Net foreign currency translation adjustments 219
205
424
Derivatives:

Gains (losses) arising during the period (585 ) 221
(364 )
Reclassification adjustments recognized in net income (485 ) 183
(302 )
Net gains (losses) on derivatives¹
(1,070 ) 404
(666 )
Available-for-sale securities:

Unrealized gains (losses) arising during the period 196
(46 ) 150
Reclassification adjustments recognized in net income (93 ) 22
(71 )
Net change in unrealized gain (loss) on available-for-sale securities²
103
(24 ) 79
Pension and other benefit liabilities:

Net pension and other benefit liabilities arising during the period 1
(1 ) —
Reclassification adjustments recognized in net income 192
(64 ) 128
Net change in pension and other benefit liabilities³
193
(65 ) 128
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company $ (555 ) $ 520
$ (35 )


¹	~~Refer to Note 5~~4 for additional information related to the net ~~gain~~unrealized gains or ~~loss~~losses on available-for-sale debt securities.



Nine Months Ended September 28, 2018	Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period	$	(1,431	)	$	(66	)	$	(1,497	)
Reclassification adjustments recognized in net income	268			—			268
Gains (losses) on intra-entity transactions that are of a long-term investment nature	(695		)	—			(695		)
Gains (losses) on net investment hedges arising during the period¹	353			(88		)	265
Net foreign currency translation adjustments	$	(1,505	)	$	(154	)	$	(1,659	)
Derivatives:
Gains (losses) arising during the period	$	84		$	(21	)	$	63
Reclassification adjustments recognized in net income	(56		)	15			(41		)
Net gains (losses) on derivatives¹	$	28		$	(6	)	$	22
Available-for-sale debt securities:
Unrealized gains (losses) arising during the period	$	(139	)	$	45		$	(94	)
Reclassification adjustments recognized in net income	2			1			3
Net change in unrealized gains (losses) on available-for-sale debt securities²	$	(137	)	$	46		$	(91	)
Pension and other benefit liabilities:
Net pension and other benefit liabilities arising during the period	$	278		$	(62	)	$	216
Reclassification adjustments recognized in net income	209			(53		)	156
Net change in pension and other benefit liabilities	$	487		$	(115	)	$	372
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company	$	(1,127	)	$	(229	)	$	(1,356	)


¹	Refer to Note 6 for additional information related to the net gains or losses on derivative ~~instruments designated and qualifying as cash flow hedging~~ instruments.


²	~~Includes reclassification adjustments related to divestitures of certain available-for-sale securities. Refer to Note 3 for additional information related to these divestitures.~~


³	Refer to Note 124 for additional information related to the ~~Company's pension and other postretirement benefit liabilities.~~net unrealized gains or losses on available-for-sale debt securities.

The following table presents the amounts and line items in our condensed consolidated statements of income where adjustments reclassified from AOCI into income were recorded (in millions):


		Amount Reclassified from AOCI into Income							Amount Reclassified from AOCI into Income
Description of AOCI Component	Financial Statement Line Item	Three Months Ended September 29, 2017			Nine Months Ended September 29, 2017			Financial Statement Line Item	Three Months Ended September 27, 2019			Nine Months Ended September 27, 2019
Foreign currency translation adjustments:
Divestitures, deconsolidations and other¹	Other income (loss) — net	$	(17	)	$	103		Other income (loss) — net	$	—		$	192
	Income before income taxes	(17		)	103			Income before income taxes	—			192
	Income taxes	—			(6		)	Income taxes	—			—
	Consolidated net income	$	(17	)	$	97		Consolidated net income	$	—		$	192
Derivatives:
Foreign currency contracts	Net operating revenues	$	(116	)	$	(338	)	Net operating revenues	$	5		$	(2	)
Foreign currency and commodity contracts	Cost of goods sold	5			(1		)
Foreign currency contracts	Other income (loss) — net	(107		)	(159		)	Cost of goods sold	(2		)	(9		)
Divestitures, deconsolidations and other¹	Other income (loss) — net	—			1
Foreign currency contracts								Other income (loss) — net	46			139
Divestitures, deconsolidations and other								Other income (loss) — net	—			1
Foreign currency and interest rate contracts	Interest expense	11			31			Interest expense	13			37
	Income before income taxes	(207		)	(466		)	Income before income taxes	62			166
	Income taxes	76			175			Income taxes	(15		)	(41		)
	Consolidated net income	$	(131	)	$	(291	)	Consolidated net income	$	47		$	125
Available-for-sale securities:
Divestitures, deconsolidations and other¹	Other income (loss) — net	$	—		$	(87	)
Sale of securities	Other income (loss) — net	(4		)	(30		)
Available-for-sale debt securities:
Sale of debt securities								Other income (loss) — net	$	(8	)	$	(32	)
	Income before income taxes	(4		)	(117		)	Income before income taxes	(8		)	(32		)
	Income taxes	2			40			Income taxes	2			7
	Consolidated net income	$	(2	)	$	(77	)	Consolidated net income	$	(6	)	$	(25	)
Pension and other benefit liabilities:
Curtailment charges (credits)²	Other operating charges	$	1		$	(17	)
Settlement charges (credits)²	Other operating charges	150			150
Divestitures, deconsolidations and other¹	Other income (loss) — net	—			7
Recognized net actuarial loss (gain)	*	46			139
Recognized net actuarial loss								Other income (loss) — net	$	39		$	116
Recognized prior service cost (credit)	*	(4		)	(13		)	Other income (loss) — net	(2		)	(5		)
	Income before income taxes	193			266			Income before income taxes	37			111
	Income taxes	(73		)	(96		)	Income taxes	(9		)	(27		)
	Consolidated net income	$	120		$	170		Consolidated net income	$	28		$	84

¹~~Primarily related to the integration of Coca-Cola West Co., Ltd. ("CCW") and Coca-Cola East Japan Co., Ltd. ("CCEJ") to establish~~

~~Coca-Cola Bottlers Japan Inc. ("CCBJI"). Refer to Note 10.~~

² ~~The curtailment charges (credits) and settlement charges (credits) were primarily related to North America refranchising and the~~

~~Company's productivity, restructuring and integration initiatives.~~

*~~This component of AOCI is included in the Company's computation of net periodic benefit cost and is not reclassified out of AOCI into a~~

~~single line item in our condensed consolidated statements of income in its entirety. Refer to Note 12 for additional information.~~


¹	Primarily related to our previously held equity ownership interest in CHI and the sale of a portion of our equity ownership interest in Andina. Refer to Note 2.

NOTE 911: CHANGES IN EQUITY

The following ~~table provides~~tables provide a reconciliation of the beginning and ending carrying amounts of total equity, equity attributable to shareowners of The Coca-Cola Company and equity attributable to noncontrolling interests (in millions):



					Shareowners of The Coca-Cola Company
Three Months Ended September 27, 2019	Common Shares Outstanding	Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock		Capital Surplus		Treasury Stock			Non- controlling Interests
June 28, 2019	4,275	$	20,295		$	64,602		$	(12,981	)	$	1,760	$	16,833	$	(52,033	)	$	2,114
Comprehensive income (loss)	—	1,723			2,593			(725		)	—		—		—			(145		)
Dividends paid/payable to shareowners of The Coca-Cola Company ($0.40 per share)	—	(1,714		)	(1,714		)	—			—		—		—			—
Dividends paid to noncontrolling interests	—	(7		)	—			—			—		—		—			(7		)
Business combinations including purchase accounting adjustments	—	8			—			—			—		—		—			8
Impact related to stock-based compensation plans	9	378			—			—			—		206		172			—
September 27, 2019	4,284	$	20,683		$	65,481		$	(13,706	)	$	1,760	$	17,039	$	(51,861	)	$	1,970

Shareowners of The Coca-Cola Company

Common Shares Outstanding
Total
Reinvested
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Common
Stock

Capital
Surplus

Treasury
Stock

Non-
controlling
Interests

December 31, 2016 4,288
$ 23,220
$ 65,502
$ (11,205 ) $ 1,760
$ 14,993
$ (47,988 ) $ 158
Comprehensive income (loss) —
5,364
4,000
1,362
—
—
—
2
Dividends paid/payable to shareowners of The Coca-Cola Company —
(4,743 ) (4,743 ) —
—
—
—
—
Dividends paid to noncontrolling interests —
(15 ) —
—
—
—
—
(15 )
Deconsolidation of certain entities —
(153 ) —
—
—
—
—
(153 )
Purchases of treasury stock (69 ) (3,012 ) —
—
—
—
(3,012 ) —
Impact related to stock compensation plans 43
1,453
—
—
—
709
744
—
Other activities —
38
—
—
—
(3 ) —
41
September 29, 2017 4,262
$ 22,152
$ 64,759
$ (9,843 ) $ 1,760
$ 15,699
$ (50,256 ) $ 33



						Shareowners of The Coca-Cola Company
Nine Months Ended September 27, 2019	Common Shares Outstanding		Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock		Capital Surplus		Treasury Stock			Non- controlling Interests
December 31, 2018	4,268		$	19,058		$	63,234		$	(12,814	)	$	1,760	$	16,520	$	(51,719	)	$	2,077
Adoption of accounting standards¹	—		(18		)	501			(519		)	—		—		—			—
Comprehensive income (loss)	—		6,417			6,878			(373		)	—		—		—			(88		)
Dividends paid/payable to shareowners of The Coca-Cola Company ($1.20 per share)	—		(5,132		)	(5,132		)	—			—		—		—			—
Dividends paid to noncontrolling interests	—		(27		)	—			—			—		—		—			(27		)
Business combinations including purchase accounting adjustments	—		8			—			—			—		—		—			8
Purchases of treasury stock	(14	)	(635		)	—			—			—		—		(635		)	—
Impact related to stock-based compensation plans	30		1,012			—			—			—		519		493			—
September 27, 2019	4,284		$	20,683		$	65,481		$	(13,706	)	$	1,760	$	17,039	$	(51,861	)	$	1,970

¹Refer to Note 1 and Note 6.



						Shareowners of The Coca-Cola Company
Three Months Ended September 28, 2018	Common Shares Outstanding		Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock		Capital Surplus		Treasury Stock			Non-controlling Interests
June 29, 2018	4,253		$	20,176		$	63,808		$	(11,774	)	$	1,760	$	16,117	$	(51,588	)	$	1,853
Comprehensive income (loss)	—		1,644			1,880			(296		)	—		—		—			60
Dividends paid/payable to shareowners of The Coca-Cola Company ($0.39 per share)	—		(1,660		)	(1,660		)	—			—		—		—			—
Dividends paid to noncontrolling interests	—		(6		)	—			—			—		—		—			(6		)
Purchases of treasury stock	(6	)	(241		)	—			—			—		—		(241		)	—
Impact related to stock-based compensation plans	9		258			—			—			—		149		109			—
Other activities	—		7			—			—			—		—		—			7
September 28, 2018	4,256		$	20,178		$	64,028		$	(12,070	)	$	1,760	$	16,266	$	(51,720	)	$	1,914



						Shareowners of The Coca-Cola Company
Nine Months Ended September 28, 2018	Common Shares Outstanding		Total			Reinvested Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock		Capital Surplus		Treasury Stock			Non-controlling Interests
December 31, 2017	4,259		$	18,977		$	60,430		$	(10,305	)	$	1,760	$	15,864	$	(50,677	)	$	1,905
Adoption of accounting standards¹	—		2,605			3,014			(409		)	—		—		—			—
Comprehensive income (loss)	—		4,217			5,564			(1,356		)	—		—		—			9
Dividends paid/payable to shareowners of The Coca-Cola Company ($1.17 per share)	—		(4,980		)	(4,980		)	—			—		—		—			—
Dividends paid to noncontrolling interests	—		(19		)	—			—			—		—		—			(19		)
Business combinations	—		13			—			—			—		—		—			13
Purchases of treasury stock	(33	)	(1,451		)	—			—			—		—		(1,451		)	—
Impact related to stock-based compensation plans	30		810			—			—			—		402		408			—
Other activities	—		6			—			—			—		—		—			6
September 28, 2018	4,256		$	20,178		$	64,028		$	(12,070	)	$	1,760	$	16,266	$	(51,720	)	$	1,914

¹Refer to Note 1, Note 3 and Note 4.

NOTE 1012: SIGNIFICANT OPERATING AND NONOPERATING ITEMS

Other Operating Charges

During the three months ended September ~~29, 2017,~~27, 2019, the Company recorded other operating charges of ~~$360~~$125 million. These charges primarily consisted of ~~$213~~$61 million related to the Company's productivity and reinvestment program and $42 million related to the impairment of a trademark in Asia Pacific. In addition, other operating charges included $21 million for costs incurred to refranchise certain of our North America bottling operations. Costs related to refranchising include, among other items, internal and external costs for individuals directly working on the refranchising efforts, severance, and costs associated with the implementation of information technology systems to facilitate consistent data standards and availability throughout our North America bottling system. ~~In addition,~~Refer to Note 13 for additional information on the Company's productivity and reinvestment program. Refer to Note 16 for information on how the Company determined the trademark impairment charge. Refer to Note 17 for the impact these charges had on our operating segments and Corporate.

During the nine months ended September 27, 2019, the Company recorded other operating charges ~~included $129~~of $344 million. These charges primarily consisted of $184 million related to the Company's productivity and reinvestment program and ~~$18~~$42 million related to ~~tax litigation expense.~~the impairment of a trademark in Asia Pacific. In addition, other operating charges included $46 million of transaction costs associated with the purchase of Costa, which we acquired in January 2019, and $61 million for costs incurred to refranchise certain of our North America bottling operations. Refer to Note 112 for additional information on the acquisition of Costa. Refer to Note 13 for additional information on the Company's productivity ~~integration~~ and ~~restructuring initiatives.~~reinvestment program. Refer to Note 1516 for information on how the Company determined the trademark impairment charge. Refer to Note 17 for the impact these charges had on our operating ~~segments.~~segments and Corporate.

During the ~~nine~~three months ended September ~~29, 2017,~~28, 2018, the Company recorded other operating charges of ~~$1,491~~$155 million. These charges primarily consisted of ~~$737 million of CCR asset impairments and $355~~$107 million related to the Company's productivity and reinvestment program. In addition, other operating charges included ~~$314~~$38 million related to costs incurred to refranchise certain of our North America bottling ~~operations, $43~~operations. Other operating charges also included $4 million related to tax litigation ~~expense~~expense. Refer to Note 2 for additional information on the refranchising of our bottling operations. Refer to Note 9 for additional information related to the tax litigation. Refer to Note 13 for additional information on the Company's productivity and ~~$34~~reinvestment program. Refer to Note 17 for the impact these charges had on our operating segments and Corporate.

During the nine months ended September 28, 2018, the Company recorded other operating charges of $916 million. These charges primarily consisted of $450 million of CCR asset impairments and $313 million related to ~~impairments~~the Company's productivity and reinvestment program. In addition, other operating charges included $117 million related to costs incurred to refranchise certain of ~~Venezuelan intangible assets.~~our North America bottling operations. Other operating charges also included $31 million related to tax litigation expense. Refer to Note 12 for additional information ~~about~~on the ~~Venezuelan intangible assets~~refranchising of our bottling operations. Refer to Note 9 for additional information related to the tax litigation. Refer to Note 13 for additional information on the Company's productivity and reinvestment program. Refer to Note 1416 for information on how the Company determined the asset impairment charges. Refer to Note ~~11 for additional information on the Company's productivity, integration and restructuring initiatives. Refer to Note 15~~17 for the impact these charges had on our operating ~~segments.~~

During the three months ended September 30, 2016, the Company incurred other operating charges of $222 million. These charges primarily consisted of a charge of $76 million due to the write-down we recorded related to our receivables from our bottling partner in Venezuela due to changes in exchange ratessegments and charges of $73 million related to costs incurred to refranchise certain of our North America bottling territories. These costs include, among other items, internal and external costs for individuals directly working on the refranchising efforts, severance and costs associated with the implementation of information technology systems to facilitate consistent data standards and availability throughout the North America bottling system. In addition, the Company recorded charges of $59 million due to the Company's productivity and reinvestment program. Refer to Note 1 for additional information on the Venezuelan exchange rates and Note 11 for additional information on the Company's productivity, integration and restructuring initiatives. Refer to Note 15 for the impact these charges had on our operating segments.

During the nine months ended September 30, 2016, the Company incurred other operating charges of $830 million. These charges primarily consisted of $187 million due to the Company's productivity and reinvestment program and $240 million due to the integration of our German bottling operations. In addition, the Company recorded charges of $170 million related to

costs incurred to refranchise certain of our North America bottling territories. The Company also recorded a charge of $100 million related to a cash contribution we made to The Coca-Cola Foundation, a charge of $76 million due to the write-down we recorded related to our receivables from our bottling partner in Venezuela due to changes in exchange rates, and charges of $37 million related to noncapitalizable transaction costs associated with pending and closed transactions. Refer to Note 11 for additional information on the Company's productivity, integration and restructuring initiatives and Note 1 for additional information on the Venezuelan exchange rates. Refer to Note 15 for the impact these charges had on our operating segments.Corporate.

Other Nonoperating Items

~~Interest Expense~~

~~During the nine months ended September 29, 2017, the Company recorded a net charge of $38 million related to the extinguishment of long-term debt. Refer to Note 6.~~

Equity Income (Loss) — Net

During the three and nine months ended September ~~29, 2017,~~27, 2019, the Company recorded net charges of ~~$16~~$39 million and ~~$37~~$107 million, respectively. During the three and nine months ended September ~~30, 2016,~~28, 2018, the Company recorded a net ~~charges~~gain of ~~$14~~$19 million and ~~$35~~a net charge of $65 million, respectively. These amounts represent the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Refer to Note 1517 for the impact these items had on our operating ~~segments.~~segments and Corporate.

Other Income (Loss) — Net

During the three months ended September ~~29, 2017,~~27, 2019, the Company recognized a gain of $739 million on the sale of a retail and office building in New York City. The Company also recognized a net gain of $38 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities. In addition, the Company recorded an other-than-temporary impairment charge of $120 million related to Coca-Cola Bottlers Japan Holdings Inc. ("CCBJHI"), an equity method investee, and other-than-temporary impairment charges of ~~$762~~$255 million ~~due~~related to certain equity method investees in the Middle East. The Company also recorded net charges of $103 million primarily related to post-closing adjustments as contemplated by the related agreements associated with the refranchising of certain bottling territories in North America. Refer to Note 2 for additional information on refranchising activities. Refer to Note 4 for additional information on equity and debt securities. Refer to Note 16 for information on how the Company determined the impairment charges. Refer to Note 17 for the impact these items had on our operating segments and Corporate.

During the nine months ended September 27, 2019, the Company recognized a gain of $739 million on the sale of a retail and office building in New York City. The Company also recognized a net gain of $197 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities and a gain of $39 million related to the sale of a portion of our equity ownership interest in Andina. These gains were partially offset by other-than-temporary impairment charges of $406 million related to CCBJHI, an equity method investee, $57 million related to one of our equity method investees in North America, $255 million related to certain equity method investees in the Middle East and $49 million related to one of our equity method investees in Latin America. The Company also recorded an adjustment to reduce the carrying amount of CCBA's fixed assets and definite-lived intangible assets by $160 million and recognized a $121 million loss in conjunction with our acquisition of the remaining equity ownership interest in CHI. Additionally, the Company recognized net charges of $107 million primarily related to post-closing adjustments as contemplated by the related agreements associated with the refranchising of certain bottling territories in North America and charges of ~~$72~~$4 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. The Company also recorded 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. These charges were partially offset by a gain of $79 million related to the refranchising of our remaining China bottling operations and related cost method investment. Refer to Note 2 for additional information on the refranchising of our China bottling operations, North America refranchising and the conversion payments. Refer to Note 15 for the impact these items had on our operating segments.

During the nine months ended September 29, 2017, the Company recognized a net charge of $1,473 million due to the refranchising of certain bottling territories in North America and charges of $287 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. The Company also recorded 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. Additionally, the Company incurred a charge of $26 million related to our former German bottling operations. These charges were partially offset by a gain of $445 million related to the integration of CCW and CCEJ to establish CCBJI. In exchange for our previously existing equity interests in CCW and CCEJ, we received an approximate 17 percent equity interest in CCBJI. The Company also recognized a gain of $88 million related to the refranchising of our China bottling operations and related cost method investment and a gain of $25 million as a result of Coca-Cola FEMSA, S.A.B. de C.V. ("Coca-Cola FEMSA"), an equity method investee, issuing additional shares of its stock during the period at a per share amount greater than the carrying value of the Company's per share investment. Refer to Note 2 for additional information on the North America refranchising, the conversion payments and the refranchising of our China bottling operations. Refer to Note 15 for the impact these items had on our operating segments.

During the three months ended September 30, 2016, the Company recognized losses of $1,089 million due to the refranchising of certain bottling territories in North America and a loss of $21 million due to the deconsolidation of our South African bottling operations in exchange for investments in CCBA and CCBA's South African subsidiary. Additionally, the Company incurred charges of $17 million related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. Refer to Note 2 for additional information on the CCBA asset adjustment, refranchising activities, the North America ~~refranchising,~~conversion payments, the ~~deconsolidation~~acquisition of the remaining equity ownership interest in CHI and the sale of a portion of our ~~South African bottling operations and the conversion payments.~~equity ownership interest in Andina. Refer to Note 154 for additional information on equity and debt securities. Refer to Note 16 for information on how the Company determined the adjustment to CCBA's assets, impairment charges and the loss recognized in conjunction with our acquisition of the remaining equity ownership interest in CHI. Refer to Note 17 for the impact these items had on our operating ~~segments.~~segments and Corporate.

During the ~~nine~~three months ended September ~~30, 2016,~~28, 2018, the Company ~~recognized a gain~~recorded an impairment charge of ~~$1,323~~$554 million ~~due~~related to ~~the deconsolidation~~assets held by CCBA, net charges of ~~our German bottling operations and a gain of $18 million resulting from the Company's disposal of its investment in Keurig. These gains were offset by losses of $1,657~~$275 million due to the refranchising of certain bottling territories in North America and ~~a loss~~an other-than-temporary impairment charge of ~~$21~~$205 million ~~due~~related to ~~the deconsolidation of~~ our ~~South African bottling operations~~equity method investee in ~~exchange for investments in CCBA and CCBA's South African subsidiary. Additionally, the~~Indonesia. The Company ~~incurred~~also recorded charges of ~~$17~~$35 million related to pension settlements and charges of $12 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of

CBA with additional requirements. These charges were partially offset by a net gain of $370 million related to the sale of our equity ownership in Lindley and a net gain of $11 million related to the refranchising of our Latin American bottling operations. The Company also recognized a net gain of $41 million related to economic hedging activity associated with certain acquisition and divestiture activities, and a net gain of $64 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities. Refer to Note 2 for additional information on the ~~deconsolidation~~CCBA asset impairment, refranchising activities, North America conversion payments and the sale of our ~~German bottling operations, the Keurig investment disposal, the deconsolidation of our South African bottling operations, the North America refranchising and the conversion payments.~~equity ownership in Lindley. Refer to Note 154 for additional information on equity and debt securities. Refer to Note 6 for additional information on our hedging activities. Refer to Note 16 for information on how the Company determined the impairment charges. Refer to Note 17 for the impact these items had on our operating ~~segments.~~segments and Corporate.

During the nine months ended September 28, 2018, the Company recorded an impairment charge of $554 million related to assets held by CCBA, net charges of $379 million due to the refranchising of certain bottling territories in North America and other-than-temporary impairment charges of $257 million related to two of our equity method investees. The Company also recorded charges of $121 million related to pension settlements, charges of $33 million primarily related to the reversal of the cumulative translation adjustments resulting from the substantial liquidation of the Company's former Russian juice operations and charges of $33 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. These charges were partially offset by a net gain of $370 million related to the sale of our equity ownership in Lindley and a net gain of $47 million related to the refranchising of our Latin American bottling operations. The Company also recognized a net gain of $41 million related to economic hedging activity associated with certain acquisition and divestiture activities, and a net gain of $15 million related to realized and unrealized gains and losses on equity securities and trading debt securities as well as realized gains and losses on available-for-sale debt securities. Refer to Note 2 for additional information on the CCBA asset impairment, refranchising activities, North America conversion payments and the sale of our equity ownership in Lindley. Refer to Note 4 for additional

information on equity and debt securities. Refer to Note 6 for additional information on our hedging activities. Refer to Note 16 for information on how the Company determined the impairment charges. Refer to Note 17 for the impact these items had on our operating segments and Corporate.

NOTE 1113: PRODUCTIVITY ~~INTEGRATION~~ AND ~~RESTRUCTURING INITIATIVES~~

~~Productivity and Reinvestment~~REINVESTMENT PROGRAM

In February 2012, the Company announced a productivity and reinvestment program designed to further enable our efforts to strengthen our brands and reinvest our resources to drive long-term profitable growth. This program is focused on the following initiatives: global supply chain optimization; global marketing and innovation effectiveness; operating expense leverage and operational excellence; data and information technology systems standardization; and the integration of ~~Old CCE.~~Coca‑Cola Enterprises Inc.'s former North America business.

In February 2014, the Company announced the expansion of our productivity and reinvestment program to drive incremental productivity that will primarily be redirected into increased media investments. Our incremental productivity goal consists of two relatively equal components. First, we will expand savings through global supply chain optimization, data and information technology systems standardization, and resource and cost reallocation. Second, we will increase the effectiveness of our marketing investments by transforming our marketing and commercial model to redeploy resources into more consumer-facing marketing investments to accelerate growth.

In October 2014, the Company announced that we were further expanding our productivity and reinvestment program and extending it through 2019. The expansion of the productivity initiatives ~~will focus~~focuses on four key areas: restructuring the Company's global supply chain; implementing zero-based work, an evolution of zero-based budget principles, across the organization; streamlining and simplifying the Company's operating model; and further driving increased discipline and efficiency in direct marketing investments.

In April 2017, the Company announced ~~its plans to transition~~another expansion of our productivity and reinvestment program. This expansion is focused on achieving additional efficiencies in both our supply chain and our marketing expenditures as well as transitioning to a new, more agile operating model to enable growth. Under this operating model, our business units will be supported by an expanded enabling services organization and a corporate center focused on a few strategic initiatives, policy and governance. The expanded enabling services organization will focus on both simplifying and standardizing key transactional processes and providing support to business units through global centers of excellence. Certain productivity initiatives included in this program, primarily related to our enabling services organization, will continue beyond 2019.

The Company has incurred total pretax expenses of ~~$2,763~~$3,750 million related to ~~this~~our productivity and reinvestment program since it commenced. These expenses were recorded in the line ~~item~~items other operating charges and other income (loss) — net in our condensed consolidated statements of income. Refer to Note 1517 for the impact these charges had on our operating ~~segments.~~segments and Corporate. Outside services reported in the ~~table~~tables below primarily relate to expenses in connection with legal, outplacement and consulting activities. Other direct costs reported in the ~~table~~tables below include, among other items, internal and external costs associated with the development, communication, administration and implementation of these initiatives; accelerated depreciation on certain fixed assets; contract termination fees; and relocation costs.

The following table summarizes the balance of accrued expenses related to these productivity and reinvestment initiatives and the changes in the accrued amounts as of and for the three months ended September ~~29, 2017~~27, 2019 (in millions):



	Accrued Balance June 28, 2019		Costs Incurred Three Months Ended September 27, 2019		Payments			Noncash and Exchange			Accrued Balance September 27, 2019
Severance pay and benefits	$	49	$	6	$	(10	)	$	—		$	45
Outside services	8		23		(26		)	—			5
Other direct costs	8		32		(26		)	(6		)	8
Total	$	65	$	61	$	(62	)	$	(6	)	$	58

Accrued
Balance
June 30, 2017

Costs
Incurred
Three Months Ended
September 29, 2017

Payments
Noncash
and
Exchange

Accrued
Balance
September 29, 2017

Severance pay and benefits $ 162
$ 43
$ (88 ) $ 2
$ 119
Outside services 11
19
(20 ) (1 ) 9
Other direct costs 16
67
(69 ) (3 ) 11
Total $ 189
$ 129
$ (177 ) $ (2 ) $ 139

The following table summarizes the balance of accrued expenses related to these productivity and reinvestment initiatives and the changes in the accrued amounts as of and for the nine months ended September ~~29, 2017~~27, 2019 (in millions):



	Accrued Balance December 31, 2018		Costs Incurred Nine Months Ended September 27, 2019		Payments			Noncash and Exchange			Accrued Balance September 27, 2019
Severance pay and benefits	$	76	$	18	$	(50	)	$	1		$	45
Outside services	10		73		(78		)	—			5
Other direct costs	4		93		(66		)	(23		)	8
Total	$	90	$	184	$	(194	)	$	(22	)	$	58

Accrued
Balance
December 31, 2016

Costs
Incurred
Nine Months Ended
September 29, 2017

Payments
Noncash
and
Exchange

Accrued
Balance
September 29, 2017

Severance pay and benefits $ 123
$ 143
$ (146 ) $ (1 ) $ 119
Outside services 6
62
(58 ) (1 ) 9
Other direct costs 22
150
(154 ) (7 ) 11
Total $ 151
$ 355
$ (358 ) $ (9 ) $ 139

~~Integration of Our German Bottling Operations~~

In 2008, the Company began the integration of our German bottling operations acquired in 2007. The Company incurred pretax expenses of $240 million related to this initiative during the nine months ended September 30, 2016 and has incurred total pretax expenses of $1,367 million related to this initiative since it commenced. These charges were recorded in the line item other operating charges in our condensed consolidated statements of income and impacted the Bottling Investments operating segment. The expenses recorded in connection with these integration activities were primarily due to involuntary terminations. During the year ended December 31, 2016, the Company deconsolidated our German bottling operations. Therefore, there was no remaining accrual balance as of December 31, 2016.

NOTE 1214: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

Net periodic benefit cost (income) for our pension and other postretirement benefit plans consisted of the following (in millions):

Pension Benefits Other Benefits
Three Months Ended
September 29,
2017
September 30,
2016
September 29,
2017
September 30,
2016
Service cost $ 49
$ 59
$ 4
$ 6
Interest cost 76
79
7
8
Expected return on plan assets¹
(163 ) (161 ) (3 ) (3 )
Amortization of prior service cost (credit) —
—
(4 ) (5 )
Amortization of net actuarial loss 44
46
2
2
Net periodic benefit cost 6
23
6
8
Curtailment charges (credits)²
2
—
—
—
Settlement charges (credits)²
150
—
—
—
Special termination benefits²
15
4
—
—
Other —
—
—
31
Total cost recognized in condensed consolidated statements of income $ 173
$ 27
$ 6
$ 39



	Pension Benefits						Other Benefits
	Three Months Ended
	September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Service cost	$	26		$	30		$	2		$	3
Interest cost	73			75			7			6
Expected return on plan assets¹	(138		)	(160		)	(3		)	(3		)
Amortization of prior service credit	(1		)	(1		)	(1		)	(4		)
Amortization of net actuarial loss	38			29			1			1
Net periodic benefit cost (income)	(2		)	(27		)	6			3
Curtailment charges²	—			5			—			—
Settlement charges²	—			35			—			—
Special termination benefits²	—			8			—			—
Total cost (income) recognized in condensed consolidated statements of income	$	(2	)	$	21		$	6		$	3

¹The weighted-average expected long-term rates of return on plan assets used in computing ~~2017~~2019 net periodic benefit cost (income) are ~~8.0~~7.7 percent for pension ~~benefits~~benefit plans and ~~4.5~~4.6 percent for other ~~benefits.~~


²	The curtailment charges (credits), settlement charges (credits) and special termination benefits were primarily related to North America refranchising and the Company's productivity, restructuring and integration initiatives. Refer to Note 2 and Note 11.

benefit plans.

²The curtailment charges, settlement charges and special termination benefits in 2018 were related to North America refranchising and the Company's productivity and reinvestment program.


	Pension Benefits						Other Benefits						Pension Benefits						Other Benefits
	Nine Months Ended												Nine Months Ended
	September 29, 2017			September 30, 2016			September 29, 2017			September 30, 2016			September 27, 2019			September 28, 2018			September 27, 2019			September 28, 2018
Service cost	$	149		$	178		$	13		$	17		$	78		$	93		$	7		$	8
Interest cost	232			239			22			23			218			221			20			18
Expected return on plan assets¹	(487		)	(490		)	(9		)	(9		)	(414		)	(490		)	(10		)	(10		)
Amortization of prior service cost (credit)	—			(1		)	(13		)	(14		)	(3		)	3			(2		)	(11		)
Amortization of net actuarial loss	133			138			6			5			114			92			2			3
Net periodic benefit cost	27			64			19			22
Curtailment charges (credits)²	2			—			(42		)	—
Settlement charges (credits)²	150			—			—			—
Net periodic benefit cost (income)													(7		)	(81		)	17			8
Curtailment charges²													—			5			—			—
Settlement charges²													—			121			—			—
Special termination benefits²	72			17			—			—			—			8			—			—
Other	—			—			—			31
Total cost recognized in condensed consolidated statements of income	$	251		$	81		$	(23	)	$	53
Total cost (income) recognized in condensed consolidated statements of income													$	(7	)	$	53		$	17		$	8

¹The weighted-average expected long-term rates of return on plan assets used in computing ~~2017~~2019 net periodic benefit cost (income) are ~~8.0~~

7.7 percent for pension ~~benefits~~benefit plans and ~~4.5~~4.6 percent for other ~~benefits.~~benefit plans.


²	The curtailment charges (credits), settlement charges (credits) and special termination benefits were primarily related to North America refranchising and the Company's productivity, restructuring and integration initiatives. Refer to Note 2 and Note 11.

²The curtailment charges, settlement charges and special termination benefits in 2018 were related to North America refranchising and the Company's productivity and reinvestment program.

All of the amounts in the tables above, other than service cost, were recorded in the line item other income (loss) — net in our condensed consolidated statements of income. During the nine months ended September ~~29, 2017,~~27, 2019, the Company contributed ~~$88~~$29 million to our pension ~~plans, and we~~trusts. We do not anticipate making additional contributions ~~of approximately $85 million during~~for the remainder of ~~2017.~~2019. The Company contributed ~~$519~~$98 million to our pension ~~plans~~trusts during the nine months ended September ~~30, 2016.~~28, 2018.

NOTE 1315: INCOME TAXES

~~Our~~The Company recorded income taxes of $503 million (16.3 percent effective tax rate) and $555 million (23.4 percent effective tax rate) during the three months ended September 27, 2019 and September 28, 2018, respectively. The Company recorded income taxes of $1,446 million (17.3 percent effective tax rate) and $1,711 million (23.6 percent effective tax rate) during the nine months ended September 27, 2019 and September 28, 2018, respectively.

The Company's effective tax rates for the three and nine months ended September 27, 2019 and September 28, 2018 vary from the statutory U.S. federal income tax rate ~~reflects~~of 21.0 percent primarily due to the tax impact of significant operating and nonoperating items, along with the tax benefits of having significant operations outside the United States ~~which are generally taxed at rates lower than the U.S. statutory rate of 35.0 percent. As a result of employment actions~~ and capital investments made by the Company, certain tax jurisdictions provide income tax incentive grants, including Brazil, Costa Rica, Singapore and Swaziland. The terms of these grants expire from 2017 to 2036. We anticipate that we will be able to extend or renew the grants in these locations. In addition, our effective tax rate reflects the benefits of having significant earnings generated in investments accounted for under the equity method, both of ~~accounting,~~ which are generally taxed at rates lower than the statutory U.S. ~~statutory~~ rate.

~~At the end of each interim period, we make our best estimate of the~~The Company's effective tax ~~rate expected to be applicable~~rates for the ~~full fiscal year. This estimate reflects, among other items, our best estimate~~three and nine months ended September 27, 2019 included $213 million and $245 million, respectively, of ~~operating results and foreign currency exchange rates. Based on current~~net tax ~~laws,~~benefit recorded, primarily associated with return to provision adjustments. Also included are excess tax benefits associated with the Company's ~~estimated~~stock-based compensation arrangements and net tax charges for changes to our uncertain tax positions, including interest and penalties, as well as for agreed-upon tax matters. The Company's effective tax rate for ~~2017 is 24.0 percent. However, in arriving at this estimate we do not include~~ the ~~estimated impact~~nine months ended September 27, 2019 also included $199 million of ~~significant operating~~tax benefit recorded as a result of CCBA no longer qualifying as a discontinued operation.

The Company's effective tax rates for the three and ~~nonoperating items, which may cause significant variations in the customary relationship between income~~nine months ended September 28, 2018 included $125 million of tax benefit and $9 million of tax expense, ~~and income before income taxes.~~respectively, to adjust our provisional tax estimate recorded as of December 31, 2017 related to the Tax Reform Act signed into law on December 22, 2017.

On September 17, 2015, the Company received a Statutory Notice of Deficiency from the IRS for the tax years 2007 through 2009, after a five-year audit. Refer to Note 7.

The Company recorded income tax expense of $230 million (13.7 percent effective tax rate) and $378 million (26.5 percent effective tax rate) during the three months ended September 29, 2017 and September 30, 2016, respectively. The Company recorded income tax expense of $1,805 million (31.1 percent effective tax rate) and $1,618 million (21.2 percent effective tax rate) during the nine months ended September 29, 2017 and September 30, 2016, respectively.

~~The following table illustrates the income tax expense (benefit) associated with significant operating and nonoperating items for the interim periods presented (in millions):~~

Three Months Ended Nine Months Ended
September 29,
2017
September 30,
2016
September 29,
2017
September 30,
2016

Asset impairments $ —
¹
$ —

$ (164 )
¹
$ —

Productivity and reinvestment program (44 )
²
(20 )
⁹
(127 )
²
(65 )
⁹
Other productivity, integration and restructuring initiatives —

—

—

—
¹⁰
Transaction gains and losses (361 )
³
(246 )
¹¹
172
⁴
(363 )
¹²
Certain tax matters (40 )
⁵
7
¹³
(110 )
⁶
84
¹³
Other — net (12 )
⁷
8
¹⁴
(41 )
⁸
(38 )
¹⁵


¹	~~Related to charges of $50 million and $821 million during the three and nine months ended September 29, 2017, respectively, due to the impairment of certain assets. Refer to Note 10 and Note 14.~~


²	Related to charges of $129 million and $355 million during the three and nine months ended September 29, 2017, respectively. These charges were due to the Company's productivity and reinvestment program. Refer to Note 11.

Related to a net charge of $968 million which primarily consisted of $762 million of charges as a result of the refranchising of certain bottling territories in North America, $213 million related to costs incurred to refranchise certain of our bottling operations and $72 million primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. These charges were partially offset by a $79 million gain related to the refranchising of our remaining China bottling operations and related cost method investment. Refer to Note 2 and Note 10.

⁴

Related to a net charge of $1,551 million which primarily consisted of $1,473 million of net charges as a result of the refranchising of certain bottling territories in North America, $314 million of charges related to costs incurred to refranchise certain of our bottling operations, $287 million of charges primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements and a $26 million charge related to our former German bottling operations. These charges were partially offset by a $445 million gain related to the merger of CCW and CCEJ, an $88 million gain related to the refranchising of our China bottling operations and related cost method investment and a $25 million gain related to Coca-Cola FEMSA, an equity method investee, issuing additional shares of its stock. Refer to Note 2 and Note 10.


⁵	~~Related to $40 millionof excess tax benefits associated with the Company's share-based compensation arrangements.~~

⁶Related to $122 million of excess tax benefits associated with the Company's share-based compensation arrangements and the tax benefit associated with the reversal of valuation allowances in certain of the Company's foreign jurisdictions, both of which were partially offset by changes to our uncertain tax positions, including interest and penalties.

⁷ Related to charges of $35 million which primarily consisted of an $18 million charge related to tax litigation expense and a $16 million net charge due to our proportionate share of unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 10.

⁸ Related to charges of $121 million which primarily consisted of a net charge of $38 million related to the extinguishment of long-term debt, a $43 million charge related to tax litigation expense and a net charge of $37 million due to our proportionate share of unusual or infrequent items recorded by certain of our equity method investees. Refer to Note 10.

⁹ Related to charges of $59 million and $187 million during the three and nine months ended September 30, 2016, respectively. These charges were due to the Company's productivity and reinvestment program. Refer to Note 10 and Note 11.

¹⁰ ~~Related to charges of $240 million during the nine months ended September 30, 2016. These charges were due to the integration of our German bottling operations. Refer to Note 10 and Note 11.~~

¹¹ Related to charges of $1,204 million which primarily consisted of $1,089 million of charges due to the refranchising of bottling territories in North America, $73 million related to costs incurred to refranchise our North America bottling territories, charges of $17 million related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements, a loss of $21 million related to the deconsolidation of our South African bottling operations and the $80 million tax impact resulting from the accrual of tax on temporary differences related to the investment in foreign subsidiaries that are now expected to reverse in the foreseeable future. Refer to Note 2 and Note 10.

¹²Related to a net charge of $561 million which primarily consisted of $1,657 million of charges due to the refranchising of bottling territories in North America, $170 million related to costs incurred to refranchise our North America bottling territories, charges of $17 million related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements, a loss of $21 million related to the deconsolidation of our South African bottling operations and the $80 million tax impact resulting from the accrual of tax on temporary differences related to the investment in foreign subsidiaries that are now expected to reverse in the foreseeable future. These charges were partially offset by a $1,288 million net gain related to the deconsolidation of our German bottling operations and an $18 million net gain related to the disposal of our investment in Keurig. Refer to Note 2 and Note 10.

¹³~~Primarily related to changes to our uncertain tax positions, including interest and penalties. The components of the net change in uncertain tax positions were individually insignificant.~~

¹⁴Related to charges of $99 million which included a $76 million write-down we recorded related to receivables from our bottling partner in Venezuela, a $14 million charge due to our proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees and a $9 million charge due to tax litigation expense. Refer to Note 10.

¹⁵Related to charges of $230 million which included a $100 million cash contribution to The Coca-Cola Foundation, a $76 million charge due to the write-down we recorded related to receivables from our bottling partner in Venezuela, a $35 million net charge due to our proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees and a $19 million charge due to tax litigation expense. Refer to Note 10.

The Company evaluates the recoverability of our deferred tax assets in accordance with U.S. GAAP. We perform our recoverability tests on a quarterly basis, or more frequently, to determine whether it is more likely than not that any of our deferred tax assets will not be realized within their life cycle based on the available evidence. The Company's deferred tax asset valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on tax loss carryforwards from operations in various jurisdictions.9.

NOTE 1416: FAIR VALUE MEASUREMENTS

U.S. GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1. We value assets and liabilities included in this level using dealer and broker quotations, certain pricing models, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Recurring Fair Value Measurements

In accordance with U.S. GAAP, certain assets and liabilities are required to be recorded at fair value on a recurring basis. For our Company, the only assets and liabilities that are adjusted to fair value on a recurring basis are investments in equity ~~and~~securities with readily determinable fair values, debt securities classified as trading or available-for-sale and derivative financial instruments. Additionally, the Company adjusts the carrying value of certain long-term debt as a result of the Company's fair value hedging strategy.

Investments in ~~Trading~~Debt and ~~Available-for-Sale~~Equity Securities

The fair values of our investments in ~~trading~~debt and ~~available-for-sale~~equity securities using quoted market prices from daily exchange traded markets are based on the closing price as of the balance sheet date and are classified as Level 1. The fair values of our investments in ~~trading~~debt and ~~available-for-sale~~equity securities classified as Level 2 are priced using quoted market prices for similar instruments or ~~non-binding~~nonbinding market prices that are corroborated by observable market data. Inputs into these valuation techniques include actual trade data, benchmark yields, broker/dealer quotes and other similar data. These inputs are obtained from quoted market prices, independent pricing vendors or other sources.

Derivative Financial Instruments

The fair values of our futures contracts are primarily determined using quoted contract prices on futures exchange markets. The fair values of these instruments are based on the closing contract price as of the balance sheet date and are classified as Level 1.

The fair values of our derivative instruments other than futures are determined using standard valuation models. The significant inputs used in these models are readily available in public markets, or can be derived from observable market transactions, and therefore have been classified as Level 2. Inputs used in these standard valuation models for derivative instruments other than futures include the applicable exchange rates, forward rates, interest rates, discount rates and commodity prices. The standard valuation model for options also uses implied volatility as an additional input. The discount rates are based on the historical

U.S. Deposit or U.S. Treasury rates, and the implied volatility specific to options is based on quoted rates from financial institutions.

Included in the fair values of derivative instruments is an adjustment for nonperformance risk. The adjustment is based on current credit default swap ("CDS") rates applied to each contract, by counterparty. We use our counterparty's CDS rate when we are in an asset position and our own CDS rate when we are in a liability position. The adjustment for nonperformance risk did not have a significant impact on the fair values of our derivative instruments.

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
September 27, 2019																				Level 1			Level 2			Level 3		Other³		Netting Adjustment			⁴	Fair Value Measurements
Assets:
Trading securities¹	$	233		$	123		$	4		$	67	$	—			$	427
Available-for-sale securities¹	1,892			6,532			167		³	—		—				8,591
Equity securities with readily determinable values¹																				$	1,815		$	210		$	11	$	59	$	—			$	2,095
Debt securities¹																				—			3,620			19		—		—				3,639
Derivatives²	7			458			—			—		(358		)	⁶	107			⁸	6			937			—		—		(537		)	⁵	406			⁷
Total assets	$	2,132		$	7,113		$	171		$	67	$	(358	)		$	9,125			$	1,821		$	4,767		$	30	$	59	$	(537	)		$	6,140
Liabilities:
Derivatives²	$	(12	)	$	(301	)	$	—		$	—	$	232		⁷	$	(81	)	⁸	$	(38	)	$	(137	)	$	—	$	—	$	147		⁶	$	(28	)	⁷
Total liabilities	$	(12	)	$	(301	)	$	—		$	—	$	232			$	(81	)		$	(38	)	$	(137	)	$	—	$	—	$	147			$	(28	)


¹	~~Refer to~~ ~~Note 3~~ ~~for additional information related to the composition of our trading securities and available-for-sale securities.~~

²¹Refer to Note 54 for additional information related to the composition of our equity securities with readily determinable values and debt securities.

²Refer to Note 6 for additional information related to the composition of our derivative portfolio.

³~~Primarily related~~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 ~~debt securities that mature~~reconcile to the amounts presented in ~~2018.~~Note 4.


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~~.

⁵⁴Amounts 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.~~6.


⁷⁵	The Company ~~has the right~~is obligated to ~~reclaim $17~~return $430 million in cash collateral it has netted against its derivative position.


⁸⁶	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 ~~sheets~~sheet as follows: ~~$347 million in the line item prepaid expenses and other assets; $166~~$406 million in the line item other ~~assets; $42 million in the line item accounts payable~~assets and ~~accrued expenses; and $53~~$28 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.

²Refer 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.

⁴Amounts 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.

⁵The 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 accounts payable and accrued expenses and $50 million in the line item other liabilities. Refer to Note 6 for additional information related to the composition of our derivative portfolio.

Gross realized and unrealized gains and losses on Level 3 assets and liabilities were not significant for the three and nine months ended September ~~29, 2017~~27, 2019 and September ~~30, 2016.~~28, 2018.

The Company recognizes transfers between levels within the hierarchy as of the beginning of the reporting period. Gross transfers between levels within the hierarchy were not significant for the three and nine months ended September ~~29, 2017~~27, 2019 and September ~~30, 2016.~~

28, 2018.

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the Company records assets and liabilities at fair value on a nonrecurring basis as required by U.S. GAAP. Generally, assets are recorded at fair value on a nonrecurring basis as a result of impairment ~~charges.~~charges, or as a result of observable changes in equity securities using the measurement alternative. Refer to Note 4.

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 27, 2019				September 28, 2018				September 27, 2019				September 28, 2018
Other-than-temporary impairment charges	$	(375	)	¹	$	(205	)	¹	$	(767	)	¹	$	(257	)	¹
CCBA asset adjustments	—				(554		)	³	(160		)	³	(554		)	³
Investment in former equity method investee	—				—				(121		)	⁴	—
Other long-lived asset impairment charges	—				—				—				(312		)	⁵
Intangible asset impairment charges	(42		)	²	—				(42		)	²	(138		)	⁵
Total	$	(417	)		$	(759	)		$	(1,090	)		$	(1,261	)

¹During the three and nine months ended September 27, 2019, the Company recorded other-than-temporary impairment charges of $120 million and $406 million, respectively, related to CCBJHI, an equity method investee. Based on the extent to which the market value of our investment in CCBJHI 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. These impairment charges were determined using the quoted market prices (a Level 1 measurement) of CCBJHI. During the three and nine months ended September 27, 2019, we also recorded other-than-temporary impairment charges of $255 million related to certain equity method investees in the Middle East. These impairment charges were derived using Level 3 inputs and were primarily driven by revised projections of future operating results largely related to instability in the region and recent changes in local excise taxes. During the nine months ended September 27, 2019, we recorded 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. During the nine months ended September 27, 2019, we also recorded an other-than-temporary impairment charge of $49 million related to one of our equity method investees in Latin America. This impairment charge was primarily driven by revised projections of future operating results based on Level 3 inputs. During the three and nine months ended September 28, 2018, we recognized an other-than-temporary impairment charge of $205 million related to our equity method investee in Indonesia. This impairment was primarily driven by revised projections of future operating results reflecting unfavorable macroeconomic conditions and foreign currency exchange rate fluctuations. This impairment charge was derived using discounted cash flow analyses based on Level 3 inputs. During the nine months ended September 28, 2018, we recognized an other-than-temporary impairment charge of $52 million related to one of our equity method investees in Latin America. This impairment was primarily driven by revised projections of future operating results. This impairment charge was derived using discounted cash flow analyses based on Level 3 inputs.

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~~During the three and nine months ended September 27, 2019, the Company ~~recognized~~recorded an impairment charge of ~~$375~~$42 million related to ~~CCR goodwill. This~~a trademark in Asia Pacific, which was primarily driven by revised projections of future operating results for the trademark. The fair value of this trademark was derived using discounted cash flow analyses based on Level 3 inputs.

³During the three and nine months ended September 28, 2018, the Company recorded an impairment charge of $554 million related to assets held by CCBA. This charge was incurred primarily as a result of management's view of the proceeds that were expected to be received upon the sale of CCBA based on revised projections of future operating results and foreign currency exchange rate fluctuations. The fair value of these assets was derived using discounted cash flow analyses based on Level 3 inputs. As a result of CCBA no longer being classified as held for sale, during the nine months ended September 27, 2019, the Company was required to measure CCBA's property, plant and equipment and definite-lived intangible assets at the lower of their current fair values or their carrying amounts before they were classified as held for sale, adjusted for depreciation and amortization expense that would have been recognized had the business been classified as held and used during the period that CCBA was classified as held for sale. As a result, we reduced the carrying value of CCBA's property, plant and equipment and definite-lived intangible assets by $34 million and $126 million, respectively, based on Level 3 inputs. Refer to Note 2.

⁴During the nine months ended September 27, 2019, 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. Refer to Note 2.

⁵The Company recorded charges of $312 million and $138 million related to CCR's property, plant and equipment and intangible assets, respectively, during the nine months ended September 28, 2018. 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. 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.~~

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents; short-term investments; trade accounts ~~receivables;~~receivable; accounts payable and accrued expenses; and loans and notes payable approximate their fair values because of the short-term maturities of these ~~instruments.~~

The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments. Where quoted prices are not available, fair value is estimated using discounted cash flows and market-based expectations for interest rates, credit risk and the contractual terms of the debtfinancial instruments. As of September ~~29, 2017,~~27, 2019, the carrying amount and fair value of our long-term debt, including the current portion, were ~~$35,702~~$31,504 million and ~~$36,375~~$32,436 million, respectively. As of December 31, ~~2016,~~2018, the carrying amount and fair value of our long-term debt, including the current portion, were ~~$33,211~~$30,379 million and ~~$33,752~~$30,456 million, respectively.

NOTE 1517: OPERATING SEGMENTS

Effective January 1, 2019, we established a new operating segment, Global Ventures, which includes the results of Costa, which we acquired in January 2019, and the results of our innocent and doğadan businesses as well as fees earned pursuant to distribution coordination agreements between the Company and Monster. Additionally, in the second quarter of 2019, the Company updated its plans for CCBA and now intends to maintain its majority stake in CCBA for the foreseeable future. As a result, the Company now presents the financial results of CCBA within its results from continuing operations and includes the results of CCBA in the Bottling Investments operating segment. Accordingly, all prior period operating segment and Corporate information presented herein has been adjusted to reflect these changes.

Information about our Company's operations by operating segment and Corporate is as follows (in millions):



	Europe, Middle East & Africa		Latin America		North America		Asia Pacific		Global Ventures		Bottling Investments			Corporate			Eliminations			Consolidated
As of and for the Three Months Ended September 27, 2019
Net operating revenues:
Third party	$	1,672	$	1,045	$	3,137	$	1,319	$	629	$	1,681		$	24		$	—		$	9,507
Intersegment	156		—		1		143		—		3			—			(303		)	—
Total net operating revenues	1,828		1,045		3,138		1,462		629		1,684			24			(303		)	9,507
Operating income (loss)	886		603		641		594		77		7			(309		)	—			2,499
Income (loss) before income taxes	651		605		658		603		80		55			440			—			3,092
Identifiable operating assets	8,363		1,895		17,895		2,118		6,935		10,456			20,204			—			67,866
Noncurrent investments	483		719		365		223		14		13,892			3,871			—			19,567
As of and for the Three Months Ended September 28, 2018
Net operating revenues:
Third party	$	1,702	$	1,001	$	2,972	$	1,348	$	183	$	1,552		$	17		$	—		$	8,775
Intersegment	124		1		119		72		—		13			—			(329		)	—
Total net operating revenues	1,826		1,002		3,091		1,420		183		1,565			17			(329		)	8,775
Operating income (loss)	933		640		663		614		44		24			(304		)	—			2,614
Income (loss) before income taxes	943		636		662		628		47		(152		)	(391		)	—			2,373
Identifiable operating assets	7,884		1,685		17,693		2,254		969		8,647			25,790			—			64,922
Noncurrent investments	1,158		760		404		220		—		15,703			3,710			—			21,955
As of December 31, 2018
Identifiable operating assets	$	7,414	$	1,715	$	17,519	$	1,996	$	968	$	10,525		$	22,800		$	—		$	62,937
Noncurrent investments	789		784		400		216		—		14,372			3,718			—			20,279

Europe, Middle East & Africa
Latin
America
North
America
Asia Pacific
Bottling
Investments
Corporate
Eliminations
Consolidated
As of and for the three months ended September 29, 2017
Net operating revenues:
Third party $ 1,959
$ 1,009
$ 2,308
$ 1,345
$ 2,409
$ 48
$ —
$ 9,078
Intersegment —
26
442
87
23
—
(578 ) —
Total net revenues 1,959
1,035
2,750
1,432
2,432
48
(578 ) 9,078
Operating income (loss) 936
563
646
577
(217 ) (385 ) —
2,120
Income (loss) before income taxes 962
561
583
588
(673 ) (347 ) —
1,674
Identifiable operating assets 5,475
1,909
17,224
2,146
6,433
34,567
—
67,754
Noncurrent investments 1,261
908
105
178
16,800
3,509
—
22,761
As of and for the three months ended September 30, 2016
Net operating revenues:
Third party $ 1,852
$ 949
$ 1,661
$ 1,315
$ 4,809
$ 47
$ —
$ 10,633
Intersegment —
16
1,003
145
31
—
(1,195 ) —
Total net revenues 1,852
965
2,664
1,460
4,840
47
(1,195 ) 10,633
Operating income (loss) 914
435
666
583
124
(451 ) —
2,271
Income (loss) before income taxes 922
447
653
589
(734 ) (449 ) —
1,428
Identifiable operating assets 4,337
1,964
16,406
2,257
17,390
33,546
—
75,900
Noncurrent investments 1,315
823
123
166
12,223
3,377
—
18,027
As of December 31, 2016
Identifiable operating assets $ 4,067
$ 1,785
$ 16,566
$ 2,024
$ 15,973
$ 29,606
$ —
$ 70,021
Noncurrent investments 1,302
804
109
164
11,456
3,414
—
17,249

During the three months ended September ~~29, 2017,~~27, 2019, the results of our operating segments and Corporate were impacted by the following items:

Operating income (loss) and income (loss) before income taxes were reduced by $6$12 million for North America, $1 million for Europe, Middle East and Africa ~~$2 million for Latin America, $47 million for North America, $1 million for Asia Pacific, $15 million for Bottling Investments~~ and ~~$58~~$48 million for Corporate due to the Company's productivity and reinvestment program. Refer to Note ~~11.~~13.

Operating income (loss) and income (loss) before income taxes were reduced by ~~$213~~$42 million for Asia Pacific due to an impairment charge related to a trademark. Refer to Note 16.

Operating income (loss) and income (loss) before income taxes were reduced by $21 million for Bottling Investments due to costs incurred to refranchise certain of our North America bottling operations. ~~Refer to Note 2 and Note 10.~~

~~Operating income (loss) and income (loss) before income taxes were reduced by $18 million for Corporate due to tax litigation expense. Refer to Note 7.~~

Income (loss) before income taxes was reduced by ~~$14~~$255 million for Europe, Middle East and Africa due to other-than-temporary impairment charges related to certain of our equity method investees in the Middle East. Refer to Note 16.

Income (loss) before income taxes was reduced by $120 million for Bottling Investments ~~and $2~~due to an other-than-temporary impairment charge related to CCBJHI, an equity method investee. Refer to Note 16.

Income (loss) before income taxes was reduced by $103 million for ~~Corporate~~Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 12.

Income (loss) before income taxes was reduced by $39 million for Bottling Investments due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

Income (loss) before income taxes was increased by $739 million for Corporate as a result of the sale of a retail and office building in New York City.

During the three months ended September 28, 2018, the results of our operating segments and Corporate were impacted by the following items:

Operating income (loss) and income (loss) before income taxes were reduced by $39 million for North America, $10 million for Bottling Investments, and $65 million for Corporate due to the Company's productivity and reinvestment program. Operating income (loss) and income (loss) before income taxes were increased by $4 million for Europe, Middle East and Africa, $1 million for Latin America, and $2 million for Asia Pacific due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. In addition, income (loss) before income taxes was reduced by $35 million for Corporate due to pension settlements related to the Company's productivity and reinvestment program. Refer to Note ~~10.~~13 and Note 14.

Operating income (loss) and income (loss) before income taxes were reduced by $38 million for Bottling Investments due to costs incurred to refranchise certain of our bottling operations. Refer to Note 2.

Operating income (loss) and income (loss) before income taxes were reduced by $4 million for Corporate due to tax litigation expense.

Income (loss) before income taxes was reduced by ~~$72~~$554 million for Corporate as a result of an impairment charge related to assets held by CCBA. Refer to Note 16.

Income (loss) before income taxes was reduced by $275 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2.

Income (loss) before income taxes was reduced by $205 million for Bottling Investments due to an other-than-temporary impairment charge related to our equity method investee in Indonesia. Refer to Note 16.

Income (loss) before income taxes was reduced by $12 million for North America primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. Refer to Note 2.

Income (loss) before income taxes was ~~reduced~~increased by ~~$762~~$370 million for ~~Bottling Investments due~~Corporate related to the ~~refranchising~~sale of ~~certain bottling territories~~our equity ownership in ~~North America.~~Lindley. Refer to Note 2.

Income (loss) before income taxes was increased by ~~$79~~$27 million for Corporate ~~due~~related to a net gain ~~recognized upon refranchising our remaining China bottling operations and related cost method investment. Refer to Note 2.~~on the extinguishment of long-term debt.

Income (loss) before income taxes was increased by $21 million for Bottling Investments and reduced by ~~$50~~$2 million for Corporate due to ~~an other-than-temporary impairment charge~~the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

Income (loss) before income taxes was increased by $11 million for Corporate related to ~~one~~the refranchising of our ~~international equity method investees.~~Latin American bottling operations. Refer to Note ~~10.~~2.



	Europe, Middle East & Africa		Latin America		North America		Asia Pacific		Global Ventures		Bottling Investments			Corporate			Eliminations			Consolidated
Nine Months Ended September 27, 2019
Net operating revenues:
Third party	$	5,110	$	2,944	$	8,976	$	3,729	$	1,847	$	5,513		$	79		$	—		$	28,198
Intersegment	420		—		7		460		2		7			—			(896		)	—
Total net operating revenues	5,530		2,944		8,983		4,189		1,849		5,520			79			(896		)	28,198
Operating income (loss)	2,902		1,687		1,938		1,867		216		226			(914		)	—			7,922
Income (loss) before income taxes	2,701		1,636		1,924		1,891		223		348			(357		)	—			8,366
Nine Months Ended September 28, 2018
Net operating revenues:
Third party	$	5,123	$	2,990	$	8,580	$	3,853	$	586	$	5,277		$	85		$	—		$	26,494
Intersegment	397		39		243		296		2		17			—			(994		)	—
Total net operating revenues	5,520		3,029		8,823		4,149		588		5,294			85			(994		)	26,494
Operating income (loss)	2,940		1,804		1,814		1,879		110		(318		)	(902		)	—			7,327
Income (loss) before income taxes	2,984		1,742		1,822		1,909		119		(274		)	(1,042		)	—			7,260

During the ~~three~~nine months ended September ~~30, 2016,~~27, 2019, the results of our operating segments and Corporate were impacted by the following items:

Operating income (loss) and income (loss) before income taxes were reduced by $2 million for Europe, Middle East and Africa, ~~$22~~$42 million for North America, ~~$22~~$3 million for Bottling Investments and ~~$14~~$137 million for Corporate due to the Company's productivity and reinvestment program as well as other restructuring initiatives. Operating income (loss) and income (loss) before income taxes were increased by $1 million for Latin America due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note ~~11.~~13.

Operating income (loss) and income (loss) before income taxes were reduced by ~~$76 million for Latin America due to the write-down we recorded related to our receivables from our bottling partner in Venezuela due to changes in exchange rates. Refer to Note 1.~~

~~Operating income (loss) and income (loss) before income taxes were reduced by $73~~$61 million for Bottling Investments due to costs incurred to refranchise certain of our North America bottling ~~territories.~~operations. Refer to Note ~~10.~~2.

Operating income (loss) and income (loss) before income taxes were reduced by $46 million for Corporate related to transaction costs associated with the purchase of Costa, which we acquired in January 2019. Refer to Note 2.

Operating income (loss) and income (loss) before income taxes were reduced by $42 million for Asia Pacific due to an impairment charge related to a trademark. Refer to Note 16.

Income (loss) before income taxes was reduced by ~~$14~~$406 million for Bottling Investments due to ~~the Company's proportionate share of significant operating and nonoperating items recorded by certain of our~~other-than-temporary impairment charges related to CCBJHI, an equity method ~~investees.~~investee. Refer to Note ~~10.~~16.

Income (loss) before income taxes was reduced by ~~$17~~$255 million for ~~North America~~Europe, Middle East and Africa due to other-than-temporary impairment charges related to ~~payments made~~certain of our equity method investees in the Middle East. Refer to ~~convert the bottling agreements~~Note 16.

Income (loss) before income taxes was reduced by $160 million for ~~certain North America bottling partners' territories to~~Corporate as a ~~single form~~result of ~~CBA with additional requirements.~~CCBA asset adjustments. Refer to Note 2.

Income (loss) before income taxes was reduced by ~~$1,089~~$121 million for ~~Bottling Investments primarily due to~~Corporate resulting from a loss in conjunction with our acquisition of the ~~refranchising of certain bottling territories~~remaining equity ownership interest in ~~North America.~~CHI. Refer to Note ~~2 and Note 10.~~2.

Income (loss) before income taxes was reduced by ~~$21 million for Corporate due to the deconsolidation of our South African bottling operations in exchange for investments in CCBA and CCBA's South African subsidiary. Refer to Note 2.~~

~~During the three months ended September 29, 2017 and September 30, 2016, our operating segments were impacted by acquisition and divestiture activities. Refer to Note 2.~~

Europe, Middle East & Africa
Latin
America
North
America
Asia Pacific
Bottling
Investments
Corporate
Eliminations
Consolidated
Nine Months Ended September 29, 2017
Net operating revenues:
Third party $ 5,628
$ 2,857
$ 6,216
$ 3,807
$ 9,268
$ 122
$ —
$ 27,898
Intersegment —
54
1,799
340
69
—
(2,262 ) —
Total net revenues 5,628
2,911
8,015
4,147
9,337
122
(2,262 ) 27,898
Operating income (loss) 2,884
1,625
1,967
1,835
(979 ) (1,152 ) —
6,180
Income (loss) before income taxes 2,958
1,627
1,711
1,853
(1,730 ) (614 ) —
5,805
Nine Months Ended September 30, 2016
Net operating revenues:
Third party $ 5,369
$ 2,787
$ 4,759
$ 3,818
$ 15,631
$ 90
$ —
$ 32,454
Intersegment 264
50
2,978
437
116
5
(3,850 ) —
Total net revenues 5,633
2,837
7,737
4,255
15,747
95
(3,850 ) 32,454
Operating income (loss) 2,897
1,470
1,982
1,892
222
(1,192 ) —
7,271
Income (loss) before income taxes 2,950
1,485
1,978
1,903
(897 ) 202
—
7,621

~~During the nine months ended September 29, 2017, the results of our operating segments were impacted by the following items:~~

Operating income (loss) and income (loss) before income taxes were reduced by $2 million for Europe, Middle East and Africa, $3 million for Latin America, $131 million for North America, $4 million for Asia Pacific, $39$105 million for Bottling Investments and ~~$176 million for Corporate due to the Company's productivity and reinvestment program. Refer to Note 11.~~

Operating income (loss) and income (loss) before income taxes were reduced by $314 million for Bottling Investments due to costs incurred to refranchise certain of our bottling operations. Refer to Note 2 and Note 10.

Operating income (loss) and income (loss) before income taxes were reduced by $737 million for Bottling Investments and $34 million for Corporate due to asset impairment charges. Refer to Note 1 and Note 10.

~~Operating income (loss) and income (loss) before income taxes were reduced by $43 million for Corporate due to tax litigation expense. Refer to Note 7.~~

Income (loss) before income taxes was reduced by $50 million for Corporate due to an other-than-temporary impairment charge related to one of our international equity method investees. Refer to Note 10.

~~Income (loss) before income taxes was reduced by $4 million for Europe, Middle East and Africa, $29 million for Bottling Investments and $4~~$2 million for Corporate due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. ~~Refer to Note 10.~~

Income (loss) before income taxes was reduced by ~~$287~~$107 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2.

Income (loss) before income taxes was reduced by $57 million for North America due to an other-than-temporary impairment charge related to one of our equity method investees. Refer to Note 16.

Income (loss) before income taxes was reduced by $49 million for Latin America due to an other-than-temporary impairment charge related to one of our equity method investees. Refer to Note 16.

Income (loss) before income taxes was increased by $739 million for Corporate as a result of the sale of a retail and office building in New York City.

Income (loss) before income taxes was increased by $39 million for Corporate related to the sale of a portion of our equity ownership interest in Andina. Refer to Note 2.

During the nine months ended September 28, 2018, the results of our operating segments and Corporate were impacted by the following items:

Operating income (loss) and income (loss) before income taxes were reduced by $2 million for Latin America, $138 million for North America, $32 million for Bottling Investments and $144 million for Corporate due to the Company's productivity and reinvestment program. Operating income (loss) and income (loss) before income taxes were increased by $2 million for Europe, Middle East and Africa and $1 million for Asia Pacific due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. In addition, income (loss) before income taxes was reduced by $74 million for Corporate due to pension settlements related to the Company's productivity and reinvestment program. Refer to Note 13 and Note 14.

Operating income (loss) and income (loss) before income taxes were reduced by $450 million for Bottling Investments due to asset impairment charges. Refer to Note 16.

Operating income (loss) and income (loss) before income taxes were reduced by $117 million for Bottling Investments due to costs incurred to refranchise certain of our bottling operations. Refer to Note 12.

Operating income (loss) and income (loss) before income taxes were reduced by $31 million for Corporate due to tax litigation expense.

Income (loss) before income taxes was reduced by $554 million for Corporate as a result of an impairment charge related to assets held by CCBA. Refer to Note 16.

Income (loss) before income taxes was reduced by $379 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2.

Income (loss) before income taxes was reduced by $78 million for Bottling Investments and was increased by $13 million for Corporate due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees.

Income (loss) before income taxes was reduced by $52 million for Latin America due to an other-than-temporary impairment charge related to one of our equity method investees. Refer to Note 16.

Income (loss) before income taxes was reduced by $47 million for Bottling Investments due to pension settlements related to the refranchising of North America bottling operations. Refer to Note 14.

Income (loss) before income taxes was reduced by $33 million for Bottling Investments primarily due to the reversal of the cumulative translation adjustments resulting from the substantial liquidation of the Company's former Russian juice operations.

Income (loss) before income taxes was reduced by $33 million for North America primarily related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. Refer to Note 2.

Income (loss) before income taxes was ~~reduced~~increased by ~~$1,473~~$370 million for ~~Bottling Investments due~~Corporate related to the ~~refranchising~~sale of ~~certain bottling territories~~our equity ownership in ~~North America.~~Lindley. Refer to Note 2.

Income (loss) before income taxes was increased by ~~$445~~$47 million for Corporate ~~due~~related to ~~a gain recognized resulting from~~ the ~~merger~~refranchising of ~~CCW and CCEJ. Refer to Note 10.~~

~~Income (loss) before income taxes was increased by $88 million for Corporate due to a gain recognized upon refranchising~~ our ~~China~~Latin American bottling ~~operations and related cost method investment.~~operations. Refer to Note 2.

Income (loss) before income taxes was increased by ~~$25~~$27 million for Corporate ~~due to Coca-Cola FEMSA, an equity method investee, issuing additional shares of its stock during the period at a per share amount greater than the carrying value of the Company's per share investment.~~

~~Income (loss) before income taxes was reduced by $26 million for Corporate due~~related to a ~~charge related to our former German bottling operations.~~

~~Income (loss) before income taxes was reduced by $38 million for Corporate due to~~net gain on the extinguishment of long-term debt. ~~Refer to Note 6.~~

~~During the nine months ended September 30, 2016, the results of our operating segments were impacted by the following items:~~

Operating income (loss) and income (loss) before income taxes were reduced by $6 million for Europe, Middle East and Africa, $80 million for North America, $1 million for Asia Pacific, $300 million for Bottling Investments and $42 million for Corporate due to the Company's productivity and reinvestment program as well as other restructuring initiatives. Operating income (loss) and income (loss) before income taxes were increased by $2 million for Latin America due to the refinement of previously established accruals related to the Company's productivity and reinvestment program. Refer to Note 11.

Operating income (loss) and income (loss) before income taxes were reduced by $76 million for Latin America due to the write-down we recorded related to our receivables from our bottling partner in Venezuela due to changes in exchange rates. Refer to Note 1.

Operating income (loss) and income (loss) before income taxes were reduced by $170 million for Bottling Investments due to costs incurred to refranchise our North America bottling territories. Refer to Note 10.

Operating income (loss) and income (loss) before income taxes were reduced by $8 million for Bottling Investments and $29 million for Corporate related to noncapitalizable transaction costs associated with pending and closed transactions. Refer to Note 10.

~~Operating income (loss) and income (loss) before income taxes were reduced by $100 million for Corporate as a result of a cash contribution to The Coca-Cola Foundation. Refer to Note 10.~~

Income (loss) before income taxes was reduced by $32 million for Bottling Investments and $3 million for Corporate due to the Company's proportionate share of significant operating and nonoperating items recorded by certain of our equity method investees. Refer to Note 10.

Income (loss) before income taxes was reduced by $17 million for North America related to payments made to convert the bottling agreements for certain North America bottling partners' territories to a single form of CBA with additional requirements. Refer to Note 2.

~~Income (loss) before income taxes was reduced by $1,657 million for Bottling Investments due to the refranchising of certain bottling territories in North America. Refer to Note 2 and Note 10.~~

~~Income (loss) before income taxes was increased by $1,323 million for Corporate as a result of the deconsolidation of our German bottling operations. Refer to Note 2.~~

~~Income (loss) before income taxes was increased by $18 million for Corporate as a result of the disposal of our investment in Keurig. Refer to Note 2.~~

Income (loss) before income taxes was reduced by $21 million for Corporate due to the deconsolidation of our South African bottling operations in exchange for investments in CCBA and CCBA's South African subsidiary. Refer to Note 2.

~~During the nine months ended September 29, 2017 and September 30, 2016, our operating segments were impacted by acquisition and divestiture activities. Refer to Note 2.~~

~~NOTE 16: SUBSEQUENT EVENTS~~

On October 4, 2017, the Company and Anheuser-Busch InBev ("ABI") completed the transition of ABI's 54.5 percent majority interest in CCBA to the Company for $3.15 billion. CCBA, the largest Coca-Cola bottler in Africa, was formed in 2016 through the combination of African nonalcoholic ready-to-drink bottling interests of the Company, SABMiller plc, and Gutsche Family Investments. ABI later acquired SABMiller including its 54.5 percent equity stake in CCBA. We plan to hold our controlling interest in CCBA temporarily and are currently in discussions with several potential buyers. We will account for CCBA as a discontinued operation.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

When used in this report, the terms "The Coca-Cola Company," "Company," "we," "us" and "our" mean The Coca-Cola Company and all entities included in our ~~Condensed Consolidated Financial Statements.~~condensed consolidated financial statements.

Effective January 1, 2019, we established a new operating segment, Global Ventures, which includes the results of Costa Limited ("Costa"), which we acquired in January 2019, and the results of our innocent and doğadan businesses as well as fees earned pursuant to distribution coordination agreements between the Company and Monster Beverage Corporation ("Monster"). Additionally, during the second quarter of 2019, the Company updated its plans for Coca-Cola Beverages Africa Proprietary Limited ("CCBA") and now intends to maintain its majority stake in CCBA for the foreseeable future. As a result, the Company now presents the financial results of CCBA within its results from continuing operations and includes the results of CCBA in the Bottling Investments operating segment. Accordingly, all prior period operating segment and Corporate information presented herein has been adjusted to reflect these changes.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Recoverability of Current and Noncurrent Assets

Our Company faces many uncertainties and risks related to various economic, political and regulatory environments in the countries in which we operate, particularly in developing and emerging markets. Refer to the heading "Item 1A. Risk Factors" in Part I and "Our Business — Challenges and Risks" in Part II of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018. As a result, management must make numerous assumptions which involve a significant amount of judgment when completing recoverability and impairment tests of current and noncurrent assets in various regions around the world.

We perform recoverability and impairment tests of current and noncurrent assets in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). For certain assets, recoverability and/or impairment tests are required only when conditions exist that indicate the carrying value may not be recoverable. For other assets, impairment tests are required at least annually, or more frequently if events or circumstances indicate that an asset may be impaired.

Our equity method investees also perform such recoverability and/or impairment tests. If an impairment charge is recorded by one of our equity method investees, the Company records its proportionate share of such charge as a reduction of equity income (loss) — net in our condensed consolidated statement of income. However, the actual amount we record with respect to our proportionate share of such ~~charges~~charge may be impacted by items such as basis differences, deferred taxes and deferred gains.

Investments in Equity and Debt Securities

~~Investments classified as trading securities are not assessed for~~During the three and nine months ended September 27, 2019, the Company recorded other-than-temporary impairment ~~since they are carried at fair value with the change in fair value included in net income. We review our investments in equity~~charges of $120 million and ~~debt securities that are accounted for using the~~$406 million, respectively, related to Coca-Cola Bottlers Japan Holdings Inc. ("CCBJHI"), an equity method or cost method or that are classified as available-for-sale or held-to-maturity each reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effectinvestee. Based on the fair value of each investment. When such events or changes occur, we evaluate the fair value compared to our cost basis in the investment. We also perform this evaluation every reporting period for each investment for which our cost basis has exceeded the fair value. The fair values of most of our Company's investments in publicly traded companies are often readily available based on quoted market prices. For investments in nonpublicly traded companies, management's assessment of fair value is based on valuation methodologies including discounted cash flows, estimates of sales proceeds and appraisals, as appropriate. We consider the assumptions that we believe a hypothetical marketplace participant would use in evaluating estimated future cash flows when employing the discounted cash flow or estimates of sales proceeds valuation methodologies. The ability to accurately predict future cash flows, especially in emerging and developing markets, may impact the determination of fair value.

In the event the fair value of an investment declines below our cost basis, management is required to determine if the decline in fair value is other than temporary. If management determines the decline is other than temporary, an impairment charge is recorded. Management's assessment as to the nature of a decline in fair value is based on, among other things, the length of time and the extent to which the market value of our investment in CCBJHI has been less than our ~~cost basis;~~carrying value and the financial condition and near-term prospects of the ~~issuer; and our intent and ability to retain~~issuer, management determined that the ~~investment for a period of time sufficient to allow for any anticipated recovery~~decline in ~~market value.~~fair value was other than temporary in nature. During the three and nine months ended September ~~29, 2017,~~27, 2019, we ~~recognized~~also recorded other-than-temporary impairment charges of $255 million related to certain equity method investees in the Middle East. These impairment charges were primarily driven by revised projections of future operating results largely related to instability in the region and recent changes in local excise taxes.

During the nine months ended September 27, 2019, we recorded an other-than-temporary impairment charge of ~~$50~~$57 million related to one of our ~~international~~equity method investees in North America. This charge was primarily driven by revised projections of future operating results. During the nine months ended September 27, 2019, we also recorded an other-than-temporary impairment charge of $49 million related to one of our equity method investees in Latin America. This impairment charge was primarily driven by revised projections of future operating results.

During the three and nine months ended September 28, 2018, the Company recorded other-than-temporary impairment charges of $205 million and $257 million, respectively, related to certain of our equity method investees, primarily driven by ~~foreign currency exchange rate fluctuations.~~revised projections of future operating results. Refer to Note 16 of Notes to Condensed Consolidated Financial Statements.

The following table presents the difference between calculated fair values, based on quoted closing prices of publicly traded shares, and our Company's ~~cost basis~~carrying value in investments in publicly traded companies accounted for under the equity method (in millions):

September 29, 2017
Fair
Value

Carrying
Value

Difference
Monster Beverage Corporation $ 5,642
$ 3,352
$ 2,290
Coca-Cola FEMSA, S.A.B. de C.V. 4,648
1,819
2,829
Coca-Cola European Partners plc ¹
3,661
3,674
(13 )
Coca-Cola HBC AG 2,776
1,295
1,481
Coca-Cola Amatil Limited 1,370
713
657
Coca-Cola Bottlers Japan Inc.¹
1,126
1,162
(36 )
Embotelladora Andina S.A. 618
289
329
Coca-Cola İçecek A.Ş. 553
263
290
Coca-Cola Bottling Co. Consolidated 536
118
418
Corporación Lindley S.A.
283
125
158
Total $ 21,213
$ 12,810
$ 8,403

¹~~The carrying values of our investments exceeded their fair values as of September 29, 2017. Based on the length of time and the extent to~~

~~which the market values have been less than our cost basis; the financial condition and near-term prospects of the issuers; and our intent and~~

~~ability to retain the investments for a period of time sufficient to allow for any anticipated recovery in market value, management~~

~~determined that the declines in fair values were temporary in nature. Therefore, we did not record any impairment charges.~~



September 27, 2019	Fair Value		Carrying Value		Difference
Monster Beverage Corporation	$	5,904	$	3,736	$	2,168
Coca-Cola European Partners plc	4,841		3,519		1,322
Coca-Cola FEMSA, S.A.B. de C.V.	3,500		1,798		1,702
Coca-Cola HBC AG	2,768		1,056		1,712
Coca-Cola Amatil Limited	1,625		575		1,050
Coca-Cola Bottlers Japan Holdings Inc.	788		788		—
Coca-Cola Consolidated, Inc.	748		144		604
Coca-Cola İçecek A.Ş.	303		203		100
Embotelladora Andina S.A.	202		118		84
Total	$	20,679	$	11,937	$	8,742

As of September ~~29, 2017,~~27, 2019, gross unrealized gains and losses on available-for-sale debt securities were ~~$771~~$150 million and ~~$56~~$2 million, respectively. Management assessed each of the available-for-sale debt securities that ~~were~~was in a gross unrealized loss position on an individual basis to determine if the decline in fair value was other than temporary. As a result of these assessments, management determined that the decline in fair value of these investments was temporary and did not record any impairment charges. We will continue to monitor these investments in future periods. Refer to Note 34 of Notes to Condensed Consolidated Financial Statements.

~~Other Assets~~

~~Our Company invests in infrastructure programs with our bottlers that are directed at strengthening our bottling system~~Property, Plant and increasing unit case volume. Additionally, our Company advances payments to certain customers for distribution rights as well as to fund future marketing activities intended to generate profitable volume and we expense such payments over the periods benefited. Payments under these programs are generally capitalized and reported in the line items prepaid expenses and other assets or other assets, as appropriate, in our condensed consolidated balance sheets. When facts and circumstances indicate that the carrying value of these assets or asset groups may not be recoverable, management assesses the recoverability of the carrying value by preparing estimates of sales volume and the resulting gross profit and cash flows. These estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value.Equipment

During the nine months ended September ~~29, 2017,~~27, 2019, the Company was required to measure CCBA's property, plant and equipment at the lower of their current fair values or their carrying amounts before they were classified as held for sale, adjusted for depreciation expense that would have been recognized had the business been classified as held and used during the period that CCBA was classified as held for sale. As a result, we reduced the carrying value of CCBA's property, plant and equipment by $34 million. Refer to Note 2 of Notes to Condensed Consolidated Financial Statements.

During the nine months ended September 28, 2018, the Company recorded an impairment ~~charge~~charges of ~~$19~~$312 million related to Coca-Cola Refreshments' ("CCR") other assets as a result of current year refranchising activities in North America and management's estimate of the proceeds that are expected to be received for the remaining bottling territories upon their refranchising. This charge was recorded in our Bottling Investments operating segment in the line item other operating charges in our condensed consolidated statement of income and was determined by comparing the fair value of the asset to its carrying value.

~~Property, Plant and Equipment~~

As of September 29, 2017, the carrying value of our property, plant and equipment, net of depreciation, was $8,306 million, or 9 percent of our total assets. Certain events or changes in circumstances may indicate that the recoverability of the carrying amount or remaining useful life of property, plant and equipment should be assessed, including, among others, the manner or length of time in which the Company intends to use the asset, a significant decrease in market value, a significant change in the business climate in a particular market, or a current period operating or cash flow loss combined with historical losses or projected future losses. When such events or changes in circumstances are present and an impairment review is performed, we estimate the future cash flows expected to result from the use of the asset or asset group and its eventual disposition. These estimated future cash flows are consistent with those we use in our internal planning. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value. We use a variety of

methodologies to determine the fair value of property, plant and equipment, including appraisals and discounted cash flow models, which are consistent with the assumptions we believe a hypothetical marketplace participant would use.

~~During the nine months ended September 29, 2017, the Company recorded impairment charges of $310 million related to CCR's~~ property, plant and equipment as a result of ~~current year refranchising activities in North America and~~ management's estimate of the proceeds that ~~are~~were expected to be received for the remaining bottling territories upon their refranchising. These charges were recorded in our Bottling Investments operating segment in the line item other operating charges in our condensed consolidated statement of income and were determined by comparing the fair value of the assets to their carrying value. Refer to Note 1416 of Notes to Condensed Consolidated Financial Statements.

Goodwill, Trademarks and Other Intangible Assets

~~Intangible assets are classified into one~~During the three and nine months ended September 27, 2019, the Company recorded an impairment charge of three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. For intangible assets with definite lives, tests for impairment must be performed if conditions exist that indicate the carrying value may not be recoverable. For intangible assets with indefinite lives and goodwill, tests for impairment must be performed at least annually, or more frequently if events or circumstances indicate that an asset may be impaired.

The assessment of recoverability and the performance of impairment tests of intangible assets involve critical accounting estimates. These estimates require significant management judgment, include inherent uncertainties and are often interdependent; therefore, they do not change in isolation. Factors that management must estimate include, among others, the economic life of the asset, sales volume, pricing, cost of raw materials, delivery costs, inflation, cost of capital, marketing spending, foreign currency exchange rates, tax rates, capital spending and proceeds from the sale of assets. These factors are even more difficult to predict when global financial markets are highly volatile. The estimates we use when assessing the recoverability of intangible assets are consistent with those we use in our internal planning. When performing impairment tests, we estimate the fair values of the assets using management's best assumptions, which we believe would be consistent with what a hypothetical marketplace participant would use. Estimates and assumptions used in these tests are evaluated and updated as appropriate. The variability of these factors depends on a number of conditions, including uncertainty about future events, and thus our accounting estimates may change from period to period. If other assumptions and estimates had been used when these tests were performed, impairment charges could have resulted. As mentioned above, these factors do not change in isolation and, therefore, we do not believe it is practicable or meaningful to present the impact of changing a single factor. Furthermore, if management uses different assumptions or if different conditions exist in future periods, future impairment charges could result. Refer to the heading "Operations Review" below for additional information$42 million related to ~~our present business environment. Certain factors discussed above are impacted~~a trademark in Asia Pacific, which was primarily driven by ~~our current business environment and are discussed throughout this report, as appropriate.~~

Intangible assets acquired in recent transactions are naturally more susceptible to impairment, primarily due to the fact that they are recorded at fair value based on recent operating plans and macroeconomic conditions present at the timerevised projections of ~~acquisition. Consequently, if~~future operating results and/or macroeconomic conditions deteriorate shortly after an acquisition, it could result in the impairment of the acquired assets. A deterioration of macroeconomic conditions may not only negatively impact the estimated operating cash flows used in our cash flow models but may also negatively impact other assumptions used in our analyses, including, but not limited to, the estimated cost of capital and/or discount rates. Additionally, as discussed above, in accordance with U.S. GAAP, we are required to ensure that assumptions used to determine fair value in our analyses are consistent with the assumptions that we believe a hypothetical marketplace participant would use. As a result, the cost of capital and/or discount rates used in our analyses may increase or decrease based on market conditions and trends, regardless of whether our Company's actual cost of capital has changed. Therefore, if the cost of capital and/or discount rates change, our Company may recognize an impairment of an intangible asset in spite of realizing actual cash flows that are approximately equal to, or greater than, our previously forecasted amounts.

We perform impairment tests of goodwill at our reporting unit level, which is one level below our operating segments. Our operating segments are primarily based on geographic responsibility, which is consistent with the way management runs our business. Our operating segments are subdivided into smaller geographic regions or territories that we sometimes refer to as "business units." These business units are also our reporting units. The Bottling Investments operating segment includes all Company-owned or consolidated bottling operations, regardless of geographic location, including CCR's bottling and associated supply chain operations in the United States and Canada. Generally, each Company-owned or consolidated bottling operation within our Bottling Investments operating segment is its own reporting unit. Goodwill is assigned to the reporting unit or units that benefit from the synergies arising from each business combination.

In order to test for goodwill impairment, the Company compares the fair value of the reporting unit to its carrying value, including goodwill. If the fair value of the reporting unit is lower than its carrying amount, goodwill impairment is indicated and goodwill is written down for the amount by which the carrying amount exceeds the reporting unit's fair value. However, the loss recognized cannot exceed the carrying amount of goodwill. We typically use discounted cash flow models to determine the

~~fair value of a reporting unit. The assumptions used in these models are consistent with those we believe a hypothetical marketplace participant would use.~~trademark.

During the nine months ended September ~~29, 2017,~~27, 2019, the Company was required to measure CCBA's definite-lived intangible assets at the lower of their current fair values or their carrying amounts before they were classified as held for sale, adjusted for amortization expense that would have been recognized had the business been classified as held and used during the period that CCBA was classified as held for sale. As a result, we reduced the carrying value of CCBA's definite-lived intangible assets by $126 million. Refer to Note 2 of Notes to Condensed Consolidated Financial Statements.

During the nine months ended September 28, 2018, the Company recorded impairment charges of ~~$442~~$138 million related to certain intangible assets. These charges included ~~$375 million related to goodwill and $33~~$100 million related to bottlers' franchise rights with indefinite ~~lives. The impairment charges~~lives and $38 million related to goodwill were determined by comparing the fair value of the reporting unit, based on Level 3 inputs, to its carrying value. As a result of these charges, the carrying value of CCR's goodwill is zero. The impairment charge related to bottlers' franchise rights with indefinite lives was determined by comparing the fair value of the assets, based on Level 3 inputs, to the current carrying value.definite-lived intangible assets. These impairment charges were incurred ~~primarily~~ as a result of ~~current year refranchising activities in North America and~~ management's revised estimate of the proceeds that ~~are~~were expected to be received for the remaining North America bottling territories upon their refranchising. These charges were recorded in our Bottling Investments operating segment in the line item other operating charges in our condensed consolidated statement of income. Additionally, we recorded impairment charges related to Venezuelan intangible assets for the nine months ended September 29, 2017, of $34 million. The Venezuelan intangible assets were written down due to weaker sales and the volatility of foreign currency exchange rates resulting from continued political instability. These charges were recorded in Corporate in the line item other operating charges in our condensed consolidated statement of income and were determined by comparing the fair value of the assets, derived using discounted cash flow analyses, to the respective carrying values.

~~The Company did not record any significant impairment charges related to intangible assets during the three and nine months ended September 30, 2016.~~

If macroeconomic conditions worsen or our current financial projections are not achieved, it is possible that we may experience significant impairments of some of our intangible assets, including goodwill, which would require us to recognize impairment charges. On June 7, 2007, our Company acquired Energy Brands Inc., also known as glacéau, for approximately $4.1 billion. The total combined fair value of the various trademarks in the glacéau portfolio significantly exceeds the remaining combined carrying value of $2.9 billion as of September 29, 2017. However, the fair value of one of the individual trademarks in the portfolio currently approximates its carrying value. If the future operating results of this trademark do not support the current financial projections, or if macroeconomic conditions change causing the cost of capital and/or discount rate to increase without an offsetting increase in the operating results, it is likely that we would be required to recognize an additional impairment charge related to this trademark. Management will continue to monitor the fair value of our intangible assets in future periods.

OPERATIONS REVIEW

Sales of our nonalcoholic ready-to-drink beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales volumes. The volume of sales in the beverage business may be affected by weather conditions.

Structural Changes, Acquired Brands and Newly Licensed Brands

In order to continually improve upon the Company's operating performance, from time to time, we engage in buying and selling ownership interests in bottling partners and other manufacturing operations. In addition, we also acquire brands or enter into license agreements for certain brands to supplement our beverage offerings. These items impact our operating results and certain key metrics used by management in assessing the Company's performance.

Unit case volume growth is a metric used by management to evaluate the Company's performance because it measures demand for our products at the consumer level. The Company's unit case volume represents the number of unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners to customers and, therefore, reflects unit case volume for both consolidated and unconsolidated bottlers. Refer to the heading "Beverage Volume" below.

Concentrate sales volume represents the amount of concentrates, syrups, beverage bases, source waters and powders/minerals (in all instances expressed in equivalent unit cases) sold by, or used in finished products sold by, the Company to its bottling partners or other customers. Refer to the heading "Beverage Volume" below.

Our Bottling Investments operating segment and our other finished product operations typically generate net operating revenues by selling sparkling soft drinks and a variety of other beverages, such as juices, juice drinks, sports drinks, waters, teas and coffees, to retailers or to distributors, wholesalers and bottling partners who distribute them to retailers. In addition, in the United States, we manufacture fountain syrups and sell them to fountain retailers such as restaurants and convenience stores who use the fountain syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners who resell the fountain syrups to fountain retailers. For these consolidated finished product operations, we recognize the associated concentrate sales volume at the time the unit case or unit case equivalent is sold to the customer. Our concentrate operations typically generate net operating revenues by selling concentrates and syrups to authorized bottling ~~and canning~~

operations. For these concentrate operations, we recognize concentrate revenue and concentrate sales volume when we sell ~~concentrates~~concentrate and syrups to the authorized unconsolidated bottling ~~and canning~~ operations, and we typically report unit case volume when finished products manufactured from the concentrates and syrups are sold to the customer. When we analyze our net operating ~~revenues~~revenue growth rates, we ~~generally~~ consider the following four factors: (1) volume growth (concentrate sales volume or unit case volume, as ~~appropriate),~~applicable); (2) changes in price, product and geographic mix; (3) foreign currency fluctuations; and (4) acquisitions and divestitures (including structural changes defined below), as ~~applicable, (3) changes in price, product and geographic mix and (4) foreign currency fluctuations.~~applicable. Refer to the heading "Net Operating Revenues" below.

We generally refer to acquisitions and divestitures of bottling ~~distribution or canning operations and consolidation or deconsolidation of bottling~~ and distribution ~~entities for accounting purposes~~operations as structural changes, which are a component of acquisitions and ~~divestitures ("structural changes").~~divestitures. Typically, structural changes do not impact the Company's unit case volume or concentrate sales volume on a consolidated basis or at the geographic operating segment level. We recognize unit case volume for all sales of Company beverage products, with the exception of Costa non-ready-to-drink products, regardless of our ownership interest in the bottling partner, if any. However, the unit case volume reported by our Bottling Investments operating segment is generally impacted by structural changes because it only includes the unit case volume of our consolidated bottling

operations. Refer to Note 2 of Notes to Condensed Consolidated Financial Statements for additional information on the Company's acquisitions and divestitures.

"Acquired brands" refers to brands acquired during the past 12 months. Typically, the Company has not reported unit case volume or recognized concentrate sales volume related to acquired brands in periods prior to the closing of a transaction. Therefore, the unit case volume and concentrate sales volume from the sale of these brands is incremental to prior year volume. We do not generally consider acquired brands to be structural changes.

"Licensed brands" refers to brands not owned by the Company, but for which we hold certain rights, generally including, but not limited to, distribution rights, and from which we derive an economic benefit when these brands are ultimately sold. Typically, the Company has not reported unit case volume or recognized concentrate sales volume related to these brands in periods prior to the beginning of the term of a license agreement. Therefore, in the year that the licenses are entered into, the unit case volume and concentrate sales volume from the sale of these brands is incremental to prior year volume. We do not generally consider newly licensed brands to be structural changes.

In ~~2017,~~2019, the Company ~~refranchised its bottling operations in China to the two local franchise bottlers.~~acquired Costa. The impact of ~~these refranchising activities~~this acquisition has been included ~~as a structural change~~in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the Global Ventures operating segment. With the exception of ready-to-drink products, we do not report unit case volume or concentrate sales volume for Costa.

In 2019, the Company acquired the remaining equity ownership interest in C.H.I. Limited ("CHI"). The impact of this acquisition has been included in acquisitions and divestitures in our ~~Asia Pacific~~analysis of net operating revenues on a consolidated basis as well as for the Europe, Middle East and Africa operating segment.

In 2019, the Company acquired controlling interests in bottling operations in Zambia and Eswatini. The impact of these acquisitions has been included in structural changes in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments operating ~~segments.~~segment.

~~During 2017~~In 2018, the Company acquired a controlling interest in the Philippine bottling operations, which was previously accounted for as an equity method investee. The impact of this acquisition has been included in structural changes in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments and ~~2016,~~Asia Pacific operating segments. The Company also acquired a controlling interest in the franchise bottler in Oman. The impact of this acquisition has been included in acquisitions and divestitures in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments operating segment.

In 2018, the Company acquired controlling interests in bottling operations in Zambia and Botswana. The impact of these acquisitions has been included in structural changes in our analysis of net operating revenues on a consolidated basis as well as for the Bottling Investments operating segment.

In 2018, the Company refranchised our Canadian and Latin American bottling ~~territories in North America that were previously managed by CCR to certain of our unconsolidated bottling partners.~~operations. The impact of these refranchising activities has been included ~~as a~~in structural ~~change~~changes in our analysis of net operating revenues on a consolidated basis as well as for our North America, Latin America and Bottling Investments operating segments. In addition, for non-Company-owned and licensed ~~beverage products~~brands sold in the Canadian refranchised territories for which the Company no longer reports unit case volume, we have eliminated the unit case volume from the base year when calculating ~~2017~~2019 versus ~~2016~~2018 volume growth rates on a consolidated basis as well as for the North America and Bottling Investments operating segments. Refer to the headings "Beverage Volume" and "Net Operating Revenues" below.

During 2016, the Company deconsolidated its South African bottling operations and disposed of its related equity method investment in exchange for equity method investments in Coca-Cola Beverages Africa Proprietary Limited ("CCBA") and CCBA's South African subsidiary. As part of the transaction, the Company also acquired and licensed several brands. The impacts of the deconsolidation, the disposal of the related equity method investment and the new equity method investments have been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for our Europe, Middle East and Africa and Bottling Investments operating segments. The brands and licenses that the Company acquired impacted the Company's unit case volume and concentrate sales volume and therefore, in addition to being included as a structural change, they are also considered acquired brands. Refer to the headings "Beverage Volume" and "Net Operating Revenues" below.

During 2016, the Company also deconsolidated our German bottling operations as a result of their being combined to create Coca-Cola European Partners plc ("CCEP"). As a result of the transaction, the Company now owns an equity method investment in CCEP. Accordingly, the impact of the deconsolidation and new equity method investment has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for our Europe, Middle East and Africa and Bottling Investments operating segments. The Company also changed our funding arrangement with our bottling partners in China, which resulted in a reduction in net operating revenues with an offsetting reduction in direct marketing expense. The impact of the change in the arrangement has been included as a structural change in our analysis of net operating revenues on a consolidated basis as well as for our Asia Pacific operating segment. Refer to the headings "Beverage Volume" and "Net Operating Revenues" below.

The Company sells concentrates and syrups to both consolidated and unconsolidated bottling partners. The ownership structure of our bottling partners impacts the timing of recognizing concentrate revenue and concentrate sales volume. When we sell concentrates or syrups to our consolidated bottling partners, we are not able to recognize the concentrate revenue or concentrate sales volume until the bottling partner has sold finished products manufactured from the concentrates or syrups to a third party or independent customer. When we sell concentrates or syrups to our unconsolidated bottling partners, we recognize the concentrate revenue and concentrate sales volume when the concentrates or syrups are sold to the bottling partner. The subsequent sale of the finished products manufactured from the concentrates or syrups to a third party or independent customer does not impact the timing of recognizing the concentrate revenue or concentrate sales volume. When we account for an unconsolidated bottling partner as an equity method investment, we eliminate the intercompany profit related to these transactions to the extent of our ownership interest until the equity method investee has sold finished products manufactured from the concentrates or syrups to a third party or independent customer.

The Company is currently pursuing certain transactions that, if completed, will be included as structural changes for the applicable periods. We intend to refranchise 100 percent of Company-owned bottling operations in the United States by the end of 2017. Additionally, on October 4, 2017, the Company and Anheuser-Busch InBev ("ABI") completed the transition of ABI's 54.5 percent majority interest in CCBA to the Company for $3.15 billion. We will account for CCBA as a discontinued operation.~~Refer to Note 16 of Notes to Condensed Consolidated Financial Statements for additional information.~~

Beverage Volume

We measure the volume of Company beverage products sold in two ways: (1) unit cases of finished products and (2) concentrate sales. As used in this report, "unit case" means a unit of measurement equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings); and "unit case volume" means the number of unit cases (or unit case equivalents) of Company beverage products directly or indirectly sold by the Company and its bottling partners to customers. Unit case

volume primarily consists of beverage products bearing Company trademarks. Also included in unit case volume are certain products licensed to, or distributed by, our Company, and brands owned by Coca-Cola system bottlers for which our Company provides marketing support and from the sale of which we derive economic benefit. In addition, unit case volume includes sales by certain joint ventures in which the Company has an equity interest. We believe unit case volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level. The unit case volume numbers used in this report are derived based on estimates received by the Company from its bottling partners and distributors. Concentrate sales volume represents the amount of concentrates, syrups, beverage bases, source waters and powders/minerals (in all instances expressed in equivalent unit cases) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers. Unit case volume and concentrate sales volume growth rates are not necessarily equal during any given period. Factors such as seasonality, bottlers' inventory practices, supply point changes, timing of price increases, new product introductions and changes in product mix can ~~impact unit case volume and concentrate sales volume and can~~ create differences between unit case volume and concentrate sales volume growth rates. In addition to the items mentioned above, the impact of unit case volume from certain joint ventures in which the Company has an equity interest but to which the Company does not sell concentrates, syrups, beverage bases, source waters or ~~powders~~powders/minerals may give rise to differences between unit case volume and concentrate sales volume growth rates. With the exception of ready-to-drink products, the Company does not report unit case volume or concentrate sales volume for Costa, a component of the Global Ventures operating segment.

Information about our volume growth worldwide and by operating segment is as follows:


	Percent Change 2017 versus 2016										Percent Change 2019 versus 2018
	Three Months Ended September 29, 2017					Nine Months Ended September 29, 2017					Three Months Ended September 27, 2019						Nine Months Ended September 27, 2019
	Unit Cases^1,2,3		Concentrate Sales⁴			Unit Cases^1,2,3		Concentrate Sales⁴			Unit Cases^1,2,3			Concentrate Sales⁴			Unit Cases^1,2,3			Concentrate Sales⁴
Worldwide	—		—	%	⁵	—	%	(1	)%		2	%		(1	)%	⁶	2	%		2	%	⁶
Europe, Middle East & Africa	1	%	4	%		2	%	3	%	⁸	1	%		1	%		2	%		3	%	¹⁰
Latin America	(3	)	(4	)		(3	)	(4	)		1			(8	)		—			(2	)
North America	—		2		⁶	—		1		⁹	1			(2	)	⁷	—			(2	)
Asia Pacific	3		3		⁷	2		3		¹⁰	4			2		⁸	6			4		⁸
Global Ventures											15			18		⁹	7			7
Bottling Investments	(53	)	N/A			(42	)	N/A			24		⁵	N/A			23		⁵	N/A

¹Bottling Investments operating segment data reflects unit case volume growth for consolidated bottlers only.

²Geographic and Global Ventures operating segment data reflects unit case volume growth for all bottlers, both consolidated and unconsolidated, and distributors in the applicable geographic ~~areas, both consolidated and unconsolidated.~~areas.

³Unit case volume percent change is based on average daily sales. Unit case volume growth based on average daily sales is computed by comparing the average daily sales in each of the corresponding periods. Average daily sales are the unit cases sold during the period divided by the number of days in the period.

⁴Concentrate sales volume represents the amount of concentrates, syrups, beverage bases, source waters and powders/minerals (in all instances expressed in equivalent unit cases) sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers and is not based on average daily sales. Each of our interim reporting periods, other than the fourth interim reporting period, ends on the Friday closest to the last day of the corresponding quarterly calendar period. As a result, the first quarter of ~~2017~~2019 had ~~two fewer days~~one less day when compared to the first quarter of ~~2016,~~2018, and the fourth quarter of ~~2017~~2019 will have one additional day when compared to the fourth quarter of ~~2016.~~2018.


⁵	After considering the impact of acquisitions and divestitures, unit case volume for Bottling Investments grew 7 percent and 9 percent for the three and nine months endedSeptember 27, 2019, respectively.


⁶	After considering the impact of ~~structural changes,~~acquisitions and divestitures, worldwide concentrate sales volume declined 2 percent and grew 1 percent for the three and nine months ended September ~~29, 2017 grew 1 percent.~~27, 2019, respectively.

⁶⁷After considering the impact of ~~structural changes,~~acquisitions and divestitures, concentrate sales volume for North America declined 1 percent for the three months ended September ~~29, 2017 grew 1 percent.~~27, 2019.


⁷	~~After considering the impact of structural changes, concentrate sales volume for Asia Pacific for the three months ended September 29, 2017 grew 2 percent.~~


⁸	~~After considering the impact of structural changes, concentrate sales volume for Europe, Middle East and Africa for the nine months ended September 29, 2017 grew 2 percent.~~


⁹	~~After considering the impact of structural changes, concentrate sales volume for North America for the nine months ended September 29, 2017 was even.~~

^{10 8}After considering the impact of ~~structural changes,~~acquisitions and divestitures, concentrate sales volume for Asia Pacific grew 3 percent and 5 percent for the three and nine months ended September 27, 2019, respectively.


⁹	After considering the impact of acquisitions and divestitures, concentrate sales volume for Global Ventures grew 17 percent for the three months endedSeptember 27, 2019.

¹⁰Due to uncertainties related to the United Kingdom's impending withdrawal from the European Union ("Brexit"), our bottling partners in certain European markets increased their concentrate inventory levels above their normal optimal levels. We estimate that approximately 1 percent of Europe, Middle East and Africa's concentrate sales volume growth for the nine months ended September ~~29, 2017 grew 1 percent.~~27, 2019 was a result of this activity. While the Brexit situation remains uncertain, we currently expect the timing difference resulting from the additional concentrate sales to reverse by the end of 2019.

Unit Case Volume

Although a significant portion of our Company's revenues is not based directly on unit case volume, we believe unit case

volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at the consumer level. The unit case volume for ~~2017 and 2016~~2018 reflects the impact of the transfer of distribution rights with respect to non-Company-owned brands that were previously licensed to us in ~~North America~~our Canadian bottling territories that have since been refranchised. The Company eliminated the unit case volume related to ~~these~~this structural ~~changes~~change from the base year when calculating the volume growth rates. Refer to the heading "Structural Changes, Acquired Brands and Newly Licensed Brands" above.

Three Months Ended September ~~29, 2017~~27, 2019 versus Three Months Ended September ~~30, 2016~~28, 2018

Unit case volume in Europe, Middle East and Africa grew 1 percent, which included growth of 41 percent in ~~both~~sparkling soft drinks and 2 percent in water, enhanced water and sports drinks, partially offset by a 5 percent decline in juice, dairy and plant-based beverages and a 2 percent decline in tea and coffee. ~~Sparkling~~Growth in sparkling soft drinks ~~volume~~ was ~~even~~ primarily ~~due to 12~~driven by 3 percent growth in ~~Coca-Cola Zero, offset by an 11 percent decline in Diet Coke.~~Trademark Coca-Cola. The group reported increases in unit case volume in the ~~Central~~South & ~~Eastern Europe, Turkey & Caucasus Central Asia~~East Africa; West Africa; and Middle East & North Africa business units. The increases in these business units were partially offset by decreases in the

Western Europe and ~~West Africa~~Central & Eastern Europe business units. The Turkey, Caucasus & Central Asia business unit's volume performance was even.

In Latin America, unit case volume ~~declined~~grew 1 percent, which included growth of 8 percent in water, enhanced water and sports drinks and 4 percent in tea and coffee, with even performance in both sparkling soft drinks and juice, dairy and plant-based beverages. The group's volume reflected growth of 3 percent in the Brazil business unit, 1 percent in the Mexico business unit and 9 percent in the Latin Center business unit, partially offset by a 5 percent decline in the South Latin business unit.

Unit case volume in North America grew 1 percent, which ~~reflected declines~~included growth of 41 percent in sparkling soft drinks, 2 percent in juice, dairy and plant-based beverages, 1 percent in water, enhanced water and sports drinks, and even performance for tea and coffee. The group's sparkling soft drinks volume reflected growth of 2 percent in Trademark Coca-Cola.

In Asia Pacific, unit case volume grew 4 percent, reflecting 7 percent growth in sparkling soft drinks, 4 percent growth in both juice, dairy and plant-based beverages and tea and coffee, and a decline of 3 percent in water, enhanced water and sports ~~drinks partially offset by growth~~drinks. Growth in juice, dairy and plant-based beverages driven by incremental volume from the recently acquired AdeS brand of plant-based beverages. The group's volume decline reflected declines of 8 percent in the Latin Center business unit and 7 percent in the Brazil business unit as a result of continued macroeconomic challenges in these regions. The Mexico business unit declined 1 percent due to a 2 percent decline in

~~sparkling soft drinks and a 5 percent decline in tea and coffee partially offset by 7 percent growth in juice, dairy and plant-based beverages.~~

Unit case volume in North America was even, reflecting even sparkling soft drinks volume, a 2 percent decline in juice, dairy and plant-based beverages as well as a 2 percent decline in water, enhanced water and sports drinks, offset by growth in energy drinks. The group's sparkling soft drinks volume included ~~a 5 percent decline in Diet Coke, offset by 4~~11 percent growth in Trademark ~~Sprite and 2 percent growth in Trademark Fanta.~~

~~In Asia Pacific, unit case volume increased 3 percent, reflecting~~Coca‑Cola, 5 percent growth in sparkling soft drinks and 4 percent growth in juice, dairy and plant-based beverages, partially offset by a 3 percent decline in water, enhanced water and sports drinks. Sparkling soft drinks volume included 8 percent growth in Trademark Coca-Cola, 3 percent growth in Trademark Fanta and 24 percent growth in Trademark Sprite. The group's volume reflects growth of 10 percent in both the India & South West Asia and ASEAN business units and 3 percent in the Greater China & Korea business unit. The growth in these business units was partially offset by a decline of 2 percent in the Japan business unit. The South Pacific business unit's volume performance was even.

Unit case volume for Global Ventures grew 15 percent, which included growth of 45 percent in tea, 5 percent in juice, dairy and plant-based beverages and growth in energy drinks.

Unit case volume for Bottling Investments grew 24 percent. This increase primarily reflects the impact of the acquisition of a controlling interest in the Philippine bottling operations as well as growth in India and South Africa.

Nine Months Ended September 27, 2019 versus Nine Months Ended September 28, 2018

Unit case volume in Europe, Middle East and Africa grew 2 percent, which included growth of 2 percent in sparkling soft drinks, 4 percent in water, enhanced water and sports drinks and 2 percent in tea and coffee, partially offset by a 3 percent decline in juice, dairy and plant-based beverages. Growth in sparkling soft drinks was primarily driven by 3 percent growth in Trademark Coca-Cola. The group reported increases in unit case volume in the Western Europe; Central & Eastern Europe; Turkey, Caucasus & Central Asia; West Africa; and South & East Africa business units. Growth in these business units was partially offset by a decline in the Middle East & North Africa business unit.

In Latin America, unit case volume was even, which included a 1 percent decline in sparkling soft drinks, offset by growth of 5 percent in water, enhanced water and sports drinks and 1 percent in tea and coffee. The group reported an increase in unit case volume of 4 percent in the ~~ASEAN~~Brazil business 7unit, 1 percent in the Mexico business unit and 2 percent in the Latin Center business unit. The growth in these business units was partially offset by a decline of 6 percent in the South Latin business unit.

Unit case volume in North America was even, with even performance in sparkling soft drinks; juice, dairy and plant-based beverages and water, enhanced water and sports drinks. Tea and coffee volume declined 1 percent.

In Asia Pacific, unit case volume grew 6 percent, reflecting 8 percent growth in sparkling soft drinks, 2 percent growth in water, enhanced water and sports drinks, 4 percent growth in juice, dairy and plant-based beverages and 3 percent growth in tea and coffee. Growth in sparkling soft drinks volume included 10 percent growth in Trademark Coca‑Cola, 8 percent growth in Trademark Fanta and 6 percent growth in Trademark Sprite. The group's volume reflects growth of 13 percent in the India & South West Asia business unit, 12 percent in the ASEAN business unit and 24 percent in the Greater China & Korea business unit. ~~Unit case volume~~The growth in these business units was ~~even~~partially offset by a decline of 3 percent in the Japan business unit. The South Pacific business unit's volume performance was even.

Unit case volume for Global Ventures grew 7 percent, which included growth of 9 percent in juice, dairy and plant-based beverages and growth in energy drinks, partially offset by a 5 percent decline in tea.

Unit case volume for Bottling Investments ~~declined 53~~grew 23 percent. This ~~decrease~~increase primarily reflects the ~~North America refranchising activities and~~impact of the ~~refranchising~~acquisition of ~~our Chinese~~a controlling interest in the Philippine bottling ~~operations.~~

~~Nine Months Ended September 29, 2017 versus Nine Months Ended September 30, 2016~~

In Europe, Middle East and Africa, unit case volume grew 2 percent, including 1 point of growth from acquired brands, which were primarily water brands in Africa. The group's growth reflected an increase of 1 percent in sparkling soft drinks, an increase of 7 percent in water, enhanced water and sports drinks and a 10 percent increase in tea and coffee. These increases were partially offset by a decrease of 1 percent in juice, dairy and plant-based beverages. All business units within the group reportedoperations as well as growth in ~~unit case volume.~~

~~Unit case volume in Latin America declined 3 percent, which reflected a decline of 4 percent in sparkling soft drinks partially offset by growth in juice, dairy~~India and plant-based beverages. The group's volume reflects declines of 13 percent in the Latin Center business unit and 9 percent in the Brazil business unit. These declines were partially offset by unit case volume growth of 2 percent in the Mexico business unit, which reflected 1 percent growth in sparkling soft drinks, 3 percent growth in water, enhanced water and sports drinks, and 10 percent growth in juice, dairy and plant-based beverages.

In North America, unit case volume was even, reflecting even volume for sparkling soft drinks and juice, dairy and plant-based beverages, growth in energy drinks and a 2 percent decline in water, enhanced water and sports drinks. The group's sparkling soft drinks unit case volume included a 4 percent decline in Diet Coke, offset by 4 percent growth in both Trademark Sprite and Trademark Fanta.

Unit case volume in Asia Pacific grew 2 percent, reflecting an increase of 2 percent in sparkling soft drinks and 5 percent growth in juice, dairy and plant-based beverages. The increase in sparkling soft drinks volume included 4 percent growth in Trademark Coca-Cola and 1 percent growth in Trademark Sprite. Unit case volume in our Greater China & Korea and India & South ~~West Asia business units grew 4 percent and 1 percent, respectively. Unit case volume in the Japan business unit was even.~~

~~Unit case volume for Bottling Investments declined 42 percent. This decrease primarily reflects the North America refranchising activities and the refranchising of our Chinese bottling operations.~~Africa.

Concentrate Sales Volume

During the three months ended September ~~29, 2017,~~27, 2019, worldwide unit case volume ~~and concentrate sales volume were even compared to the three months ended September 30, 2016. During the nine months ended September 29, 2017, worldwide unit case volume was even~~grew 2 percent and concentrate sales volume declined 1 percent compared to the three months ended September 28, 2018. During the nine months ended September ~~30, 2016. The difference between the consolidated~~27, 2019, worldwide unit case volume and concentrate sales volume ~~growth rates during~~both grew 2 percent compared to the nine months ended September ~~29, 2017, was primarily due to having two fewer days during the first quarter of 2017 when compared to the first quarter of 2016.~~28, 2018. Concentrate sales volume growth is calculated based on the amount of concentrate sold during the reporting periods, which is impacted by the number of days. Conversely, unit case volume growth is calculated based on average daily sales, which is not impacted by the number of days in the reporting periods. ~~In addition~~The first quarter of 2019 had one less

day when compared to the ~~impact~~first quarter of ~~two fewer days,~~2018, which contributed to the differences between unit case volume and concentrate sales volume growth rates infor the individual operating segments during the nine months ended September 27, 2019.

The differences between unit case volume and concentrate sales volume growth rates during the three and nine months ended September ~~29, 2017~~27, 2019 were due to ~~the timing of concentrate shipments,~~acquisitions, divestitures and structural changes and the impact of unit case volume from certain joint ventures in which the Company has an equity interest but to which the Company does not sell concentrates, syrups, beverage bases, source waters or ~~powders.~~powders/minerals. In addition, the differences during the three and nine months ended September 27, 2019 were impacted by the timing of concentrate shipments in Brazil in the prior year and the differences during the nine months ended September 27, 2019 were impacted by the timing of concentrate shipments resulting from uncertainties due to Brexit. We expect the Brexit timing difference to reverse by the end of 2019.

Net Operating Revenues

Three Months Ended September ~~29, 2017~~27, 2019 versus Three Months Ended September ~~30, 2016~~28, 2018

~~The Company's~~During the three months ended September 27, 2019, net operating revenues ~~decreased $1,555~~were $9,507 million compared to $8,775 million during the three months ended September 28, 2018, an increase of $732 million, or 158 percent.

The following table illustrates, on a percentage basis, the estimated impact of key factors resulting in the increase (decrease) in net operating revenues on a consolidated basis and for each of our operating segments:


	Percent Change 2017 versus 2016										Percent Change 2019 versus 2018
	Volume¹		Acquisitions & Divestitures		Price, Product & Geographic Mix		Currency Fluctuations		Total		Volume¹		Price, Product & Geographic Mix		Foreign Currency Fluctuations		Acquisitions & Divestitures²		Total
Consolidated	1	%	(18	)%	3	%	—	%	(15	)%	(2	)%	6	%	(3	)%	6	%	8	%
Europe, Middle East & Africa	4	%	—	%	1	%	1	%	6	%	1	%	3	%	(7	)%	3	%	—
Latin America	(4	)	—		10		1		7		(8	)	20		(8	)	—		4
North America	1		1		2		—		3		(1	)	3		—		(1	)	2
Asia Pacific	2		—		1		(5	)	(2	)	3		—		1		—		3
Global Ventures											17		(3	)	(14	)	243		243
Bottling Investments	(1	)	(53	)	4		—		(50	)	7		2		(3	)	2		8



Delaware		58-0628465
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
One Coca-Cola Plaza
Atlanta	Georgia	30313
(Address of principal executive offices)		(Zip Code)



~~Delaware~~ ~~(State or other jurisdiction~~Title of ~~incorporation or organization)~~ each class	Trading Symbol(s)	~~58-0628465~~ ~~(I.R.S. Employer~~ ~~Identification No.)~~ Name of each exchange on which registered
~~One Coca-Cola Plaza~~ ~~Atlanta, Georgia~~ ~~(Address of principal executive offices)~~ Common Stock, $0.25 Par Value	KO	~~30313~~ ~~(Zip Code)~~ New York Stock Exchange
0.000% Notes Due 2021	KO21B	New York Stock Exchange
Floating Rate Notes Due 2021	KO21C	New York Stock Exchange
1.125% Notes Due 2022	KO22	New York Stock Exchange
0.125% Notes Due 2022	KO22B	New York Stock Exchange
0.75% Notes Due 2023	KO23B	New York Stock Exchange
0.500% Notes Due 2024	KO24	New York Stock Exchange
1.875% Notes Due 2026	KO26	New York Stock Exchange
0.750% Notes Due 2026	KO26C	New York Stock Exchange
1.125% Notes Due 2027	KO27	New York Stock Exchange
1.250% Notes Due 2031	KO31	New York Stock Exchange
1.625% Notes Due 2035	KO35	New York Stock Exchange
1.100% Notes Due 2036	KO36	New York Stock Exchange



Class of Common Stock		Shares Outstanding as of October ~~23, 2017~~21, 2019
$0.25 Par Value		~~4,260,667,316 Shares~~4,284,491,377



	September 29, 2017			December 31, 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	12,528		$	8,555
Short-term investments	9,691			9,595
TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS	22,219			18,150
Marketable securities	5,138			4,051
Trade accounts receivable, less allowances of $488 and $466, respectively	3,664			3,856
Inventories	2,608			2,675
Prepaid expenses and other assets	2,993			2,481
Assets held for sale	1,782			2,797
TOTAL CURRENT ASSETS	38,404			34,010
EQUITY METHOD INVESTMENTS	21,644			16,260
OTHER INVESTMENTS	1,117			989
OTHER ASSETS	4,480			4,248
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation of $8,424 and $10,621, respectively	8,306			10,635
TRADEMARKS WITH INDEFINITE LIVES	6,575			6,097
BOTTLERS' FRANCHISE RIGHTS WITH INDEFINITE LIVES	138			3,676
GOODWILL	9,473			10,629
OTHER INTANGIBLE ASSETS	378			726
TOTAL ASSETS	$	90,515		$	87,270
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	10,212		$	9,490
Loans and notes payable	13,398			12,498
Current maturities of long-term debt	3,231			3,527
Accrued income taxes	355			307
Liabilities held for sale	437			710
TOTAL CURRENT LIABILITIES	27,633			26,532
LONG-TERM DEBT	32,471			29,684
OTHER LIABILITIES	3,946			4,081
DEFERRED INCOME TAXES	4,313			3,753
THE COCA-COLA COMPANY SHAREOWNERS' EQUITY
Common stock, $0.25 par value; Authorized — 11,200 shares; Issued — 7,040 and 7,040 shares, respectively	1,760			1,760
Capital surplus	15,699			14,993
Reinvested earnings	64,759			65,502
Accumulated other comprehensive income (loss)	(9,843		)	(11,205		)
Treasury stock, at cost — 2,778 and 2,752 shares, respectively	(50,256		)	(47,988		)
EQUITY ATTRIBUTABLE TO SHAREOWNERS OF THE COCA-COLA COMPANY	22,119			23,062
EQUITY ATTRIBUTABLE TO NONCONTROLLING INTERESTS	33			158
TOTAL EQUITY	22,152			23,220
TOTAL LIABILITIES AND EQUITY	$	90,515		$	87,270



	September 29, 2017				December 31, 2016
Cash, cash equivalents and short-term investments	$	10			$	49
Trade accounts receivable, less allowances	300				43
Inventories	181				264
Prepaid expenses and other assets	34				114
Equity method investments	—				1
Other investments	—				42
Other assets	7				17
Property, plant and equipment — net	1,145				1,780
Bottlers' franchise rights with indefinite lives	1,121				1,388
Goodwill	296				390
Other intangible assets	154				51
Allowance for reduction of assets held for sale	(1,466		)		(1,342		)
Total assets	$	1,782		¹	$	2,797		²
Accounts payable and accrued expenses	$	381			$	393
Accrued income taxes	4				13
Other liabilities	52				1
Deferred income taxes	—				303
Total liabilities	$	437		¹	$	710		³



			Gross Unrealized					Estimated
	Cost		Gains		Losses			Fair Value
Available-for-sale securities:¹
Equity securities	$	1,326	$	602	$	(35	)	$	1,893
Debt securities	6,550		169		(21		)	6,698
Total	$	7,876	$	771	$	(56	)	$	8,591



	Gain (Loss) Recognized in OCI			Location of Gain (Loss) Recognized in Income¹	Gain (Loss) Reclassified from AOCI into Income (Effective Portion)			Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Foreign currency contracts	$	(48	)	Net operating revenues	$	141		$	(2	)
Foreign currency contracts	9			Cost of goods sold	8			—
Foreign currency contracts	—			Interest expense	(2		)	—
Foreign currency contracts	36			Other income (loss) — net	40			—
Interest rate contracts	26			Interest expense	(2		)	3
Commodity contracts	(1		)	Cost of goods sold	—			—
Total	$	22			$	185		$	1



Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income¹
		Three Months Ended
		September 29, 2017			September 30, 2016
Interest rate contracts	Interest expense	$	19		$	—
Fixed-rate debt	Interest expense	(15		)	(1		)
Net impact to interest expense		$	4		$	(1	)
Foreign currency contracts	Other income (loss) — net	$	(23	)	$	(67	)
Available-for-sale securities	Other income (loss) — net	26			66
Net impact to other income (loss) — net		$	3		$	(1	)
Net impact of fair value hedging instruments		$	7		$	(2	)



Three Months Ended September 30, 2016	Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period	$	(130	)	$	41		$	(89	)
Reclassification adjustments recognized in net income	242			(18		)	224
Gains (losses) on net investment hedges arising during the period¹	(76		)	29			(47		)
Net foreign currency translation adjustments	36			52			88
Derivatives:
Gains (losses) arising during the period	22			(8		)	14
Reclassification adjustments recognized in net income	(186		)	71			(115		)
Net gains (losses) on derivatives¹	(164		)	63			(101		)
Available-for-sale securities:
Unrealized gains (losses) arising during the period	(98		)	31			(67		)
Reclassification adjustments recognized in net income	(19		)	4			(15		)
Net change in unrealized gain (loss) on available-for-sale securities²	(117		)	35			(82		)
Pension and other benefit liabilities:
Net pension and other benefit liabilities arising during the period	13			(2		)	11
Reclassification adjustments recognized in net income	43			(15		)	28
Net change in pension and other benefit liabilities³	56			(17		)	39
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company	$	(189	)	$	133		$	(56	)



Nine Months Ended September 30, 2016	Before-Tax Amount			Income Tax			After-Tax Amount
Foreign currency translation adjustments:
Translation adjustments arising during the period	$	332		$	39		$	371
Reclassification adjustments recognized in net income	368			(18		)	350
Gains (losses) on net investment hedges arising during the period¹	(558		)	214			(344		)
Reclassification adjustments for net investment hedges recognized in net income¹	77			(30		)	47
Net foreign currency translation adjustments	219			205			424
Derivatives:
Gains (losses) arising during the period	(585		)	221			(364		)
Reclassification adjustments recognized in net income	(485		)	183			(302		)
Net gains (losses) on derivatives¹	(1,070		)	404			(666		)
Available-for-sale securities:
Unrealized gains (losses) arising during the period	196			(46		)	150
Reclassification adjustments recognized in net income	(93		)	22			(71		)
Net change in unrealized gain (loss) on available-for-sale securities²	103			(24		)	79
Pension and other benefit liabilities:
Net pension and other benefit liabilities arising during the period	1			(1		)	—
Reclassification adjustments recognized in net income	192			(64		)	128
Net change in pension and other benefit liabilities³	193			(65		)	128
Other comprehensive income (loss) attributable to shareowners of The Coca-Cola Company	$	(555	)	$	520		$	(35	)



	Accrued Balance June 30, 2017		Costs Incurred Three Months Ended September 29, 2017		Payments			Noncash and Exchange			Accrued Balance September 29, 2017
Severance pay and benefits	$	162	$	43	$	(88	)	$	2		$	119
Outside services	11		19		(20		)	(1		)	9
Other direct costs	16		67		(69		)	(3		)	11
Total	$	189	$	129	$	(177	)	$	(2	)	$	139



	Accrued Balance December 31, 2016		Costs Incurred Nine Months Ended September 29, 2017		Payments			Noncash and Exchange			Accrued Balance September 29, 2017
Severance pay and benefits	$	123	$	143	$	(146	)	$	(1	)	$	119
Outside services	6		62		(58		)	(1		)	9
Other direct costs	22		150		(154		)	(7		)	11
Total	$	151	$	355	$	(358	)	$	(9	)	$	139


¹	Related to charges of $50 million and $821 million during the three and nine months ended September 29, 2017, respectively, due to the impairment of certain assets. Refer to Note 10 and Note 14 of Notes to Condensed Consolidated Financial Statements.


	September 29, 2017		December 31, 2016		Increase (Decrease)				Percent Change		September 27, 2019		December 31, 2018		Increase (Decrease)				Percent Change
Cash and cash equivalents	$	12,528	$	8,555	$	3,973			46	%	$	7,531	$	9,077	$	(1,546	)		(17	)%
Short-term investments	9,691		9,595		96				1		2,001		2,025		(24		)		(1	)
Marketable securities	5,138		4,051		1,087				27		3,456		5,013		(1,557		)		(31	)
Trade accounts receivable — net	3,664		3,856		(192		)		(5	)	4,353		3,685		668				18
Inventories	2,608		2,675		(67		)		(3	)	3,266		3,071		195				6
Prepaid expenses and other assets	2,993		2,481		512				21		2,510		2,059		451				22
Assets held for sale	1,782		2,797		(1,015		)		(36	)
Equity method investments	21,644		16,260		5,384				33		18,689		19,412		(723		)		(4	)
Other investments	1,117		989		128				13		878		867		11				1
Other assets	4,480		4,248		232				5		5,750		4,148		1,602				39
Deferred income tax assets											2,452		2,674		(222		)		(8	)
Property, plant and equipment — net	8,306		10,635		(2,329		)		(22	)	10,217		9,598		619				6
Trademarks with indefinite lives	6,575		6,097		478				8		9,167		6,682		2,485				37
Bottlers' franchise rights with indefinite lives	138		3,676		(3,538		)		(96	)	109		51		58				114
Goodwill	9,473		10,629		(1,156		)		(11	)	16,465		14,109		2,356				17
Other intangible assets	378		726		(348		)		(48	)	589		745		(156		)		(21	)
Total assets	$	90,515	$	87,270	$	3,245			4	%	$	87,433	$	83,216	$	4,217			5	%
Accounts payable and accrued expenses	$	10,212	$	9,490	$	722			8	%	$	12,727	$	9,533	$	3,194			34	%
Loans and notes payable	13,398		12,498		900				7		10,972		13,835		(2,863		)		(21	)
Current maturities of long-term debt	3,231		3,527		(296		)		(8	)	492		5,003		(4,511		)		(90	)
Accrued income taxes	355		307		48				16		909		411		498				121
Liabilities held for sale	437		710		(273		)		(38	)
Long-term debt	32,471		29,684		2,787				9		31,012		25,376		5,636				22
Other liabilities	3,946		4,081		(135		)		(3	)	8,057		7,646		411				5
Deferred income taxes	4,313		3,753		560				15
Deferred income tax liabilities											2,581		2,354		227				10
Total liabilities	$	68,363	$	64,050	$	4,313			7	%	$	66,750	$	64,158	$	2,592			4	%
Net assets	$	22,152	$	23,220	$	(1,068	)	¹	(5	)%	$	20,683	$	19,058	$	1,625		¹	9	%


•	Other assets increased primarily as a result of our adoption of Accounting Standards Codification 842, Leases ("ASC 842") and the acquisition of Costa, which required us to record $1,310 million of operating lease right-of-use assets.


•	Other liabilities increased primarily as a result of our adoption of ASC 842 and the acquisition of Costa, which required us to record $1,076 million related to the noncurrent portion of operating lease liabilities, partially offset by the reclassification of the current portion of the one-time transition tax required by the Tax Reform Act and other taxes to accrued income taxes.



Period	Total Number of Shares Purchased¹	Average Price Paid Per Share		Total Number of Shares Purchased as Part of the Publicly Announced Plan²	Maximum Number of Shares That May Yet Be Purchased Under the Publicly Announced Plan
July 1, 2017 through July 28, 2017	5,090,332	$	44.87	5,085,523	96,517,216
July 29, 2017 through August 25, 2017	6,229,283	$	45.76	5,626,668	90,890,548
August 26, 2017 through September 29, 2017	7,378,095	$	45.78	7,378,095	83,512,453
Total	18,697,710	$	45.53	18,090,286



	EXHIBIT INDEX
Exhibit No.
(With regard to applicable cross-references in the list of exhibits below, the Company's Current, Quarterly and Annual Reports are filed with the Securities and Exchange Commission (the "SEC") under File No. 001-02217; and Coca-Cola Refreshments USA, Inc.'s (formerly known as Coca-Cola Enterprises Inc.) Current, Quarterly and Annual Reports are filed with the SEC under File No. 001-09300).
3.1	Certificate of Incorporation of the Company, including Amendment of Certificate of Incorporation, dated July 27, 2012 — incorporated herein by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2012.



3.2	By-Laws of the Company, as amended and restated through September 2, 2015 — incorporated herein by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K filed on September 3, 2015.
4.1	As permitted by the rules of the SEC, the Company has not filed certain instruments defining the rights of holders of long-term debt of the Company or consolidated subsidiaries under which the total amount of securities authorized does not exceed 10 percent of the total assets of the Company and its consolidated subsidiaries. The Company agrees to furnish to the SEC, upon request, a copy of any omitted instrument.
4.2	Amended and Restated Indenture, dated as of April 26, 1988, between the Company and Deutsche Bank Trust Company Americas, as successor to Bankers Trust Company, as trustee — incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on May 25, 2017.
4.3	First Supplemental Indenture, dated as of February 24, 1992, to Amended and Restated Indenture, dated as of April 26, 1988, between the Company and Deutsche Bank Trust Company Americas, as successor to Bankers Trust Company, as trustee — incorporated herein by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed on May 25, 2017.
4.4	Second Supplemental Indenture, dated as of November 1, 2007, to Amended and Restated Indenture, dated as of April 26, 1988, as amended, between the Company and Deutsche Bank Trust Company Americas, as successor to Bankers Trust Company, as trustee — incorporated herein by reference to Exhibit 4.3 of the Company's Current Report on ~~Form��~~Form 8-K filed on May 25, 2017.
4.5	Form of Note for 3.150% Notes due November 15, 2020 — incorporated herein by reference to Exhibit 4.7 to the Company's Current Report on Form 8-K filed on November 18, 2010.
4.6	Form of Exchange and Registration Rights Agreement among the Company, the representatives of the initial purchasers of the Notes and the other parties named therein — incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on August 8, 2011.
~~4.7~~	Form of Note for 3.30% Notes due September 1, 2021 — incorporated herein by reference to Exhibit 4.14 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011.
~~4.8~~ 4.7	~~Form of Note for 1.650% Notes due March 14, 2018 — incorporated herein by reference to Exhibit 4.6 to the Company's Current Report on Form 8-K filed on March 14, 2012.~~
~~4.9~~	~~Form of Note for 1.150% Notes due 2018 — incorporated herein by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed on March 5, 2013.~~
~~4.10~~	Form of Note for 2.500% Notes due 2023 — incorporated herein by reference to Exhibit 4.6 to the Company's Current Report on Form 8-K filed on March 5, 2013.
~~4.11~~ 4.8	~~Form of Note for 1.650% Notes due 2018 — incorporated herein by reference to Exhibit 4.6 to the Company's Current Report on Form 8-K filed on November 1, 2013.~~
~~4.12~~	Form of Note for 2.450% Notes due 2020 — incorporated herein by reference to Exhibit 4.7 to the Company's Current Report on Form 8-K filed on November 1, 2013.
~~4.13~~ 4.9	Form of Note for 3.200% Notes due 2023 — incorporated herein by reference to Exhibit 4.8 to the Company's Current Report on Form 8-K filed on November 1, 2013.
~~4.14~~ 4.10	Form of Note for 1.875% Notes due 2026 — incorporated herein by reference to Exhibit 4.4 to the Company's Registration Statement on Form 8-A filed on September 19, 2014.
~~4.15~~ 4.11	Form of Note for 1.125% Notes due 2022 — incorporated herein by reference to Exhibit 4.5 to the Company's Registration Statement on Form 8-A filed on September 19, 2014.
~~4.16~~ 4.12	Form of Note for ~~Floating Rate Notes due 2019 — incorporated herein by reference to Exhibit 4.5 to the Company's Registration Statement on Form 8-A filed on March 6, 2015.~~
~~4.17~~	~~Form of Note for 0.750%~~0.75% Notes due 2023 — incorporated herein by reference to Exhibit 4.6 to the Company's Registration Statement on Form 8-A filed on March 6, 2015.
~~4.18~~ 4.13	Form of Note for 1.125% Notes due 2027 — incorporated herein by reference to Exhibit 4.7 to the Company's Registration Statement on Form 8-A filed on March 6, 2015.
~~4.19~~ 4.14	Form of Note for 1.625% Notes due 2035 — incorporated herein by reference to Exhibit 4.8 to the Company's Registration Statement on Form 8-A filed on March 6, 2015.



~~4.20~~	~~Form of Note for 0.875% Notes due 2017 — incorporated herein by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed on October 27, 2015.~~
~~4.21~~ 4.15	Form of Note for 1.875% Notes due 2020 — incorporated herein by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed on October 27, 2015.
~~4.22~~ 4.16	Form of Note for 2.875% Notes due 2025 — incorporated herein by reference to Exhibit 4.6 to the Company's Current Report on Form 8-K filed on October 27, 2015.
~~4.23~~ 4.17	Form of Note for ~~Floating Rate Notes due 2017 — incorporated herein by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed on May 31, 2016.~~
~~4.24~~	~~Form of Note for 1.375% Notes due 2019 — incorporated herein by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed on May 31, 2016.~~
~~4.25~~	~~Form of Note for 2.550%~~2.55% Notes due 2026 — incorporated herein by reference to Exhibit 4.6 to the Company's Current Report on Form 8-K filed on May 31, 2016.
~~4.26~~ 4.18	Form of Note for 1.550% Notes due 2021 — incorporated herein by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed on September 1, 2016.
~~4.27~~ 4.19	Form of Note for 2.250% Notes due 2026 — incorporated herein by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed on September 1, 2016.
~~4.28~~ 4.20	Form of Note for 1.100% Notes due 2036 — incorporated herein by reference to Exhibit 4.4 to the Company’s Registration Statement on Form 8-A filed on September 2, 2016.
~~4.29~~ 4.21	~~Form of Note for Floating Rate Notes due 2019 — incorporated herein by reference to Exhibit 4.4 to the Company’s Registration Statement on Form 8-A filed on March 9, 2017.~~
~~4.30~~	Form of Note for 0.000% Notes due 2021 — incorporated herein by reference to Exhibit 4.5 to the Company’s Registration Statement on Form 8-A filed on March 9, 2017.
~~4.31~~ 4.22	Form of Note for 0.500% Notes due 2024 — incorporated herein by reference to Exhibit 4.6 to the Company’s Registration Statement on Form 8-A filed on March 9, 2017.
~~4.32~~ 4.23	Form of Note for 2.200% Notes due 2022 — incorporated herein by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on May 25, 2017.
~~4.33~~ 4.24	Form of Note for 2.900% Notes due 2027 — incorporated herein by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on May 25, 2017.



4.25	Form of Note for Floating Rate Notes due 2021 — incorporated herein by reference to Exhibit 4.4 to the Company's Registration Statement on Form 8-A filed on March 8, 2019.
~~4.34~~ 4.26	Form of Note for 0.125% Notes due 2022 — incorporated herein by reference to Exhibit 4.5 to the Company's Registration Statement on Form 8-A filed on March 8, 2019.
4.27	Form of Note for 0.750% Notes due 2026 — incorporated herein by reference to Exhibit 4.6 to the Company's Registration Statement on Form 8-A filed on March 8, 2019.
4.28	Form of Note for 1.250% Notes due 2031 — incorporated herein by reference to Exhibit 4.7 to the Company's Registration Statement on Form 8-A filed on March 8, 2019.
4.29	Form of Note for 1.750% Notes due 2024 — incorporated herein by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K filed on September 9, 2019.
4.30	Form of Note for 2.125% Notes due 2029 — incorporated herein by reference to Exhibit 4.5 to the Company's Current Report on Form 8-K filed on September 9, 2019.
4.31	Indenture, dated as of July 30, 1991, between Coca-Cola Refreshments USA, Inc. and Deutsche Bank Trust Company Americas, as trustee — incorporated herein by reference to Exhibit 4.1 to Coca-Cola Refreshments USA, Inc.'s Current Report on Form 8-K dated July 30, 1991.
~~4.35~~4.32	First Supplemental Indenture, dated as of January 29, 1992, to the Indenture, dated as of July 30, 1991, between ~~the~~ Coca-Cola Refreshments USA, Inc. and Deutsche Bank Trust Company Americas, as trustee — incorporated herein by reference to Exhibit 4.01 to Coca-Cola Refreshments USA, Inc.'s Current Report on Form 8-K dated January 29, 1992.
~~4.36~~ 4.33	Second Supplemental Indenture, dated as of June 22, 2017, to ~~Amended and Restated~~the Indenture, dated as of July 30, 1991, as amended, ~~between the~~ among Coca-Cola Refreshments USA, Inc., ~~The~~the Company and Deutsche Bank Trust Company Americas, as trustee — incorporated herein by reference to Exhibit 4.1 to ~~Coca-Cola Refreshments USA, Inc.'s~~the Company's Current Report on Form 8-K ~~dated~~filed on June 23, 2017.
~~4.37~~ 4.34	Third Supplemental Indenture, dated as of July 5, 2017, to the Indenture, dated as of July 30, 1991, as amended, among Coca-Cola Refreshments USA, Inc., the Company and Deutsche Bank Trust Company Americas, as ~~Trustee~~trustee — incorporated herein by reference to Exhibit 4.3 to the Company's Current Report on Form 8-K filed on July 6, 2017.
~~12.1~~ 31.1	~~Computation of Ratio of Earnings to Fixed Charges.~~
~~31.1~~	Rule 13a-14(a)/15d-14(a) Certification, executed by James Quincey, ~~President~~Chairman of the Board of Directors and Chief Executive Officer of The Coca-Cola Company.
31.2	Rule 13a-14(a)/15d-14(a) Certification, executed by ~~Kathy N. Waller,~~John Murphy, Executive Vice President and Chief Financial Officer ~~and President of Enabling Services~~ of The Coca-Cola Company.
32.1	Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350), executed by James Quincey, ~~President~~Chairman of the Board of Directors and Chief Executive Officer of The Coca-Cola Company, and by ~~Kathy N. Waller,~~John Murphy, Executive Vice President and Chief Financial Officer ~~and President of Enabling Services~~ of The Coca-Cola Company.



101	The following financial information from The Coca-Cola Company's Quarterly Report on Form 10-Q for the quarter ended September ~~29, 2017,~~27, 2019, formatted in ~~XBRL (eXtensible~~iXBRL (Inline Extensible Business Reporting Language): (i) Condensed Consolidated Statements of Income for the three and nine months ended September ~~29, 2017~~27, 2019 and September ~~30, 2016,~~28, 2018, (ii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September ~~29, 2017~~27, 2019 and September ~~30, 2016,~~28, 2018, (iii) Condensed Consolidated Balance Sheets as of September ~~29, 2017~~27, 2019 and December 31, ~~2016,~~2018, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September ~~29, 2017~~27, 2019 and September ~~30, 2016,~~28, 2018, and (v) Notes to Condensed Consolidated Financial Statements.
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded within the iXBRL document).



		THE COCA-COLA COMPANY ~~(REGISTRANT)~~(Registrant)

		/s/ LARRY M. MARK
Date:	October ~~26, 2017~~24, 2019	Larry M. Mark Vice President and Controller (On behalf of the Registrant)

		/s/ MARK RANDAZZA
Date:	October ~~26, 2017~~24, 2019	Mark Randazza Vice President, Assistant Controller and Chief Accounting Officer (As Principal Accounting Officer)

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